Top Banner
http://economictimes.indiatimes.com/icici-bank-ltd/ infocompanyhistory/companyid-9194.cms Company History - SBI 1955 - On 1st July State Bank of India was constituted under the State Bank of India Act 1955, for the purpose of taking over the undertaking and business of the Imperial Bank of India. The Imperial Bank of India was founded in 1921 under the Imperial Bank of India Act 1920. The Bank transacts general banking business of every description including, foreign exchange, merchant banking and mutual funds. 1959 - On September State Bank of India (Subsidiary Bank) Act was passed. On October State Bank of Hyderabad become the first subsidiary of SBI. 1960 - During this period, State Bank of Jaipur, State Bank of Bikaner, State Bank of Indore, State Bank of Travancore, State Bank of Mysore, State Bank Patiala and State Bank of Saurashtra became subsidiaries of the bank. 1962 - The Bhor State Bank Ltd was Amalgamated with the Bank bring the total number of minor State associated banks so amalgamated to five. A scheme for amalgamation of the Bank of Aundh Ltd., was also approved. On 20th August, the Unit Bank Ltd. Chennai was taken over by the Bank. 1963 -
580

company history of SBI, ICICI

Nov 01, 2014

Download

Documents

muruganvg

DETAILS OF FEW BANKS
Welcome message from author
This document is posted to help you gain knowledge. Please leave a comment to let me know what you think about it! Share it to your friends and learn new things together.
Transcript
Page 1: company history of SBI, ICICI

http://economictimes.indiatimes.com/icici-bank-ltd/infocompanyhistory/companyid-9194.cms

Company History - SBI

1955 -

On 1st July State Bank of India was constituted under the State Bank of India Act 1955, for the purpose of taking over the undertaking and business of the Imperial Bank of India. The Imperial Bank of India was founded in 1921 under the Imperial Bank of India Act 1920. The Bank transacts general banking business of every description including, foreign exchange, merchant banking and mutual funds. 1959 -

On September State Bank of India (Subsidiary Bank) Act was passed. On October State Bank of Hyderabad become the first subsidiary of SBI.

1960 -

During this period, State Bank of Jaipur, State Bank of Bikaner, State Bank of Indore, State Bank of Travancore, State Bank of Mysore, State Bank Patiala and State Bank of Saurashtra became subsidiaries of the bank.

1962 -

The Bhor State Bank Ltd was Amalgamated with the Bank bring the total number of minor State associated banks so amalgamated to five. A scheme for amalgamation of the Bank of Aundh Ltd., was also approved. On 20th August, the Unit Bank Ltd. Chennai was taken over by the Bank.

1963 -

In october Branch in London become bankers to the Indian High Commission, thereby taking over a function till then performed by the office of RBI. Of the other business transacted by the Branch, an important aspect was medium term loans mostly to Indian shipping companies.

1969 -

On November 8th the Bank of Behar Ltd was amalgamated.

1972 -

A merchant banking division was set up in the central office to cater to promotional needs of the corporate sector.

Page 2: company history of SBI, ICICI

1977 -

During the year bank introduced the Perennial Pension Plan Scheme under which if the depositors make a regular monthly payment of a fixed amount for a period of 84 to 132 months, they become eligible from the 86th and 134th months respectively for getting a monthly pension of predetermined amount forever.

In order to meet all the developmental needs of the villages including their social and cultural needs, the bank launched an integrated rural developement programme, aimed at not only covering the credit needs of agriculture and agricultural activities and village industries, but also housing and social activities.

1980 -

Bank introduced the cash Certificate Scheme under which deposit certificate are issued for a fixed period on payment of the issue price specified for the respective maturity period and the face value corresponding to the issue price plus interest compounded at quarterly intervals is paid on maturity. The certificates are issued for the face value of Rs 100, Rs 1000, Rs 10,000 and Rs 50,000 maturing after 29,65,84 and 120 months.

1982 -

The Non-Resident Investment Cell was set up, which had streamlined the working operations of the non-resident investment sections at important centers.

1983 -

SBI launched self employment scheme, for providing self-employment to educated unemployed youth. Educated unemployed youths are encouraged to undertake self-employment ventures in industry, services and business.

1984 -

The bank provide need-based rehabitation assistance to large and medium sick industrial units.

1985 -

During the year, company set up a data bank of sick units available for taken over by healthy units. With effect from 26th August, the Bank of Cochin Ltd with 108 branches was also amalgamated with the Bank.

Page 3: company history of SBI, ICICI

(i) All shares in the Capital of the Imperial Bank of India was vested in the RBI. The SBI was registered with an Authorised capital of Rs.20 crores, and an issued and paid up capital of Rs.562,50,000 divided into 562,500 shares of Rs.100 each.

(ii) Every person who on the 30th June, 1955, was registered as a holder of shares in the Imperial Bank of India was paid by the Reserve Bank of India.

44,37,500 No. of shares issued at a premium of Rs 160 per share.

1986 -

At the end of the year 324 sick units with an outstanding of Rs 1069 crores were assisted. Of these, 107 units were considered viable and 60 from them were placed under regular nursing programme.

On 1st August a new subsidiary named SBI Capital Market was functioning independently, took up leasing business and certain other new services.

100,00,00 No. of shares issued at a prem. of Rs 160 per share.

1987 -

Up to the end of the year the bank had sponsored 30 Regional Rural Banks covering 66 backward and underbanked districts in the country.

In terms of deployment, the advances portfolio of overseas offices rose to Rs 5,767 crores. Investments in inter-bank money markets and also in prime securities amounted to Rs 2,670 crores by the end of the year.

1988 -

During the year bank initiated UPTECH an Industrial Technology Group to direct and guide programmes aimed at facilitating technology upgradation.

Also a scheme to develop enterpreneurship among woman under the name "Stree Shakti" was launched. Several concessions in respect of margin and and rate of interest have been built into the package. Three pilot programmes were launched at Chennai, Calcutta, and Hyderabad.

On 20th September, the bank inaugurated `SBINET,' an integrated communication project aimed at improving customer service, operational efficiency and administrative convenience. The network has been designed to handle voice, fax data and manages through the trunk routes and exchanges in important centres.

Page 4: company history of SBI, ICICI

The bank sponsored 30 RRB's covering 66 divisions in the country. 74 branches were opened raising the branch network to 2,306.

1989 -

SBICAP, in their capacity as Trustee and Manager of Mutual Fund, launched two scheme viz., Mangnum Monthly Income Scheme 1989 and Magnum Tax Service Scheme 1990.

During the same period SBI in association with Morgan Stanley Asset Management Inc. of USA, launched the India Magnum Fund.

1990 -

New products launched during the year included a Regular Income Scheme, offering an assured return in excess of 12% and the first Pure Growth Scheme aimed at capital appreciation. A Second offshore fund of US $ 12 million called Asian Convertible and Indian Fund was launched in association with Asian Development Bank, Manila.

During Kharif 1990, the bank introduced an agricultural credit card, known as SBI Green Card to give greater liquidity and flexibility to farmers in procuring agricultural inputs. The scheme was introduced on a pilot basis in 125 intensive centre branches.

As at on 31st March, SBIMF had over 3,40,000 Indian investors and about Rs 475 crores by way of investible domestic funds.

50,00,000 No. of shares issued at a prem. of Rs 160 per share. 1991 -

During February the bank set up a new subsidiary called the SBI Factors and Commercial Serviced Pvt. Ltd. for rendering factoring services to the industrial and commercial units in Western India.

1992 -

The bank sponsored 30 RRBs with a network of 3189 offices covering 102 backward and under banked districts of the country. A sum of Rs 15.25 crores was contributed towards the share capital of the RRBs.

During the period bank intoduced `Stockinvest' scheme. Also introduced a `Gyan Jyoti' that replaced earlier education loan schemes and offers substantial augmented assistance to students pursuing higher studies. Moreover dedicated NRI branches equipped with State-of-the-art technology was set up at Mumbai and Delhi to cater to the special needs of NRI residents.

Page 5: company history of SBI, ICICI

1993 -

During the year as a part of its overseas expansion the bank established representative office in Tashkent.

During December, the bank issued 124,000,000 equity shares of Rs.10 each for cash at a premium of 90 per share of which 245,00,000 shares each were reserved for allotment on a preferential basis to Indian Financial Institutions and Indian Mutual Funds. Balance issued to the public.

Simultaneously it came out with another issue of 50,00,000 12% unsecured redeemable floating rate bonds in the nature of promisory notes of the face value of 1000 each. Oversubscription upon a further amount of Rs 500 crores (in all Rs 1000 crores) was to be allowed. The face value of each bond would be redeemed at par at the expiry of 10 years from the date of allotment. In the event that the State Bank decides to exercise its option to call up the bonds they would be redeemed at the rate of 5% at the end of 5th year, at 3% at the end of 7th year and 1% at the end of 9th year.

It was proposed to issue 1200,00,000 right equity shares of Rs.10 each at a premium of Rs.50 per share in the proportion of 3:5. Also another 120,00,000 equity shares of Rs.10 each were to be issued at a premium of Rs.50 per share to employees on an equitable basis.

250 sick units with the bank were referred to the BIFR including 31 public sector units. Approved rehabilitation packages being implemented in 85 units and 41 have been recommended to be wound up. The bank continued to be appointed as the operating agency and rehabilitation packages were submitted to BIFR in 48 cases.

Equity shares subdivided. 1418,50,000 No. of Equity Shares of Rs. 10 each issued at a prem. of Rs 90 per share to the public. Another 1319,78,726 shares of Rs 10 each offered at a prem. of Rs 90 per share on Rights basis and to employees.

1994 -

358 sick units with the bank were referred to the BIFR including 55 public sector units. Approved rehabilitation packages implemented in 87 units.

1,80,463 No. of Shares kept in abeyance were issued.

1995 -

351 sick units with the bank were referred to the BIFR including 66 public sector units. Approved rehabilitation packages implemented in 112 units.

Page 6: company history of SBI, ICICI

683 No. of shares kept in abeyance were allotted.

1996 -

On 3rd October the Bank Issued 261,45,000 GDRs amounting to 5,22,90,000 equity shares. 1 GDR is issued to 2 equity shares. The issue price of GDR was US $ 14.15 per GDR.

1997 -

Shares issued to employees of the bank bearing distinctive numbers 46,26,00,001 to 47,46,00,000 will not be good delivery. The rights issue was for 12 crore equity shares at a premium of Rs.50 aggregating Rs.720 crore in addition to a further issue of 1.2 crore equity shares of Rs.10 at a premium of Rs.50 aggregating Rs.72 crore for State Bank employees. The price of the rights had been Rs.60 per share.

After SBI Capital Markets, Manila-based Asian Development bank will pick up 15 per cent equity stake in the new stock broking subsidiary of State Bank of India to be made operational by mid-1997. The balance 85 per cent will be subscribed to by SBI.

SBI Securities Ltd the 100 per cent stockbroking subsidiary of SBI, has recently received the much-awaited letter of incorporation from the Registrar of Companies. Following this, both SBI and ADB will pick up their respective shares in the new stockbroking firm. SSL will have an equity base of Rs.50 crore.

The State Bank of India has tied up with GE Capital to float a venture in Mumbai. State Bank signed the memorandum of understanding with GE Caps in March.

State Bank will tie up with either VISA or Mastercard or even both for the franchise network. GE Caps through this joint venture will be imparting technology, credit card expertise and payment card mechanism.

The Reserve bank of India has directed the SBI to set up a $300 million stand-by facility for the Indian oil corporation.

State Bank of India (SBI) signed an agreement with the National Securities Depository Ltd (NSDL) for dematerialisation of its shares. Besides, SBI has also become an equity stake holder in NSDL to the extent of 4.76%.

SBI Commercial and International Bank, has become the country's first public sector bank to introduce optical disk (OD) facilities for data storage.

Page 7: company history of SBI, ICICI

1998 -

State Bank of India will kick-start its credit card business on July 1 by floating two joint ventures with GE Capital. The largest financial intermediary in the country will sign the joint venture agreement with GE Caps in the last week of January.

The State Bank of India on Jan 27 kicked off its foray into the payment cards business with a joint venture agreement with US-based financial services giant, General Electric Capital Corporation (GE Capital).

State Bank of India (SBI) on June 24 signed an exclusive agreement with the world's largest payment system - Visa International - for payment cards in India. The agreement was signed in Mumbai between the SBI managing director, Mr O P Sethia, and the general manager and executive vice president (South East Asia) of Visa, Mr James G Murray.

1999 -

State Bank of India (SBI) has bagged the mandate to syndicate the $ 120 million loan for the National Thermal Power Corporation (NTPC).

The State Bank of India (SBI) proposes to take up the life insurance and general insurance business once the sector is opened up.

State Bank of India has tied up with its associate banks to market the SBI Card. The SBI has tied up with State Bank of Patiala in Chandigarh and State Bank of Mysore in Bangalore to help market its credit card.

SBI proposes to introduce a value-added service for cardholders whereby the credit card can also be used as an ATM card.

The State Bank of India will tie up with international investment banker Credit SuisseFirst Boston and three domestic public sector banks to form a gold assaying venture.

The State Bank of India (SBI) has decided to take over SBI Home Finance (SBIHF), with its assets and liabilities. Having the largest stake, SBI has been weighing various options for bailing out the joint venture company which has slipped into huge losses.

The State Bank of India (SBI) has signed up with Central Depository Services (I) (CDSIL) for the dematerialisation of its shares.

Page 8: company history of SBI, ICICI

SBI shares have already been admitted as security with National Securities Depository (NSDL). Besides, SBI also has a stake (Rs 10 cr) in the equity of CSDL.

According to an agreement entered into with the development bank, State Bank of India (SBI) was to reduce its stake in its investment banking subsidiary to below 50 per cent by March 31.

The State Bank of India (SBI) has entered into an agreement with Moody's Investor Service and Icra, under which SBI will pick up Moody's 11 per cent stake in Icra in case the global rating firm wants to get out of its investment in India.

State Bank of India (SBI) has taken the lead in `convenience banking' by becoming the first public sector bank to offer its `savings bank' account holders the benefits of fixed deposits (higher interest rates) and current accounts (overdraft facility).

2000 -

The Bank has embarked upon the expansion of its ATM network in the twin cities of Hyderabad and Secunderfabad.

The Bank has become the first government owned financial institution to join the rank of companies declaring interim dividend.

The Bank has proposed to come out with an issue under private placement of unsecured, non-convertible, subordinated bonds in the nature of promissory notes of Rs 1 lakh each aggregating Rs 600 crores with an option to retain oversubscription of up to Rs 40 crores.

The Bank launched the "Metal (Gold) Loan Scheme" in Coimbatore. This is the third scheme to be introduced by SBI.

SBI is also forming a subsidiary - SBI Gold and Precious Metals Pvt. Ltd. with 50 per cent equity participation.

Mr. Vepa Kamesam, Deputy Managing Director, has been appointed as Managing Director with effect from 1st June.

SBI board cleared the setting up of a separate subsidiary for information technology.

KC Raut has recently taken charge as general manager at State Bank of India, Chennai.

The Bank has become the first public sector bank to offer fixed-rate home loans.

Page 9: company history of SBI, ICICI

The State Bank of India has tied up with State Bank of Mysore to launch co-branded credit cards as part its strategy to collaborate with associate banks to expand its cardholder base.

Central Depository Services (India) Ltd has signed an agreement with State Bank of India as its Depository participant.

State Bank of India and the Exim Bank of the US have signed amemorandum of understanding, involving $500 million, to support the small and medium-sized ndian companies to purchase US goods and services.

Mr. Suresh Kumar Mehra, Workmen Directors, ceased to be a member of the Central Board of the bank effect from October 1, due to his retirement at the close of the business on September 30.

The Bank has launched an international credit cards for doctors, the frist of its kind in the country, offering facilities including special discounts on medical equipment and personal loans from GE countrywide.

The State Bank of India has introduced a new scheme to boost exports.

The CRISIL has assigned a triple-A (AAA) rating to the State Bank of India's Rs 3,000 crore bonds programme.

The Bank have decided to close down its fully-owned foreign subsidiary - SBI European Bank Ltd., in London.

Mr. S. Mukerji, Managing Director, of the bank retired from the bank on 30th of November.

State Bank of India Mutual Fund has launched the Magnum Gilt Fund, dedicated to investing in government securities.

2001 -

The Bank has signed an MoU with Cardif S.A. for the bank's life insurance business.

The Bank has introduced Voluntary Retirement Scheme for eligible employees, open from the 15th January 2001 to the 31st January 2001.

The Bank has incorporated a subsidiary `SBI Life Insurance Company Ltd.,' for doing life insurance business.

The Bank will install 10 more Automated Teller Machines in the north-eastern region in addition to

Page 10: company history of SBI, ICICI

the one already commissioned at Guwahati.

State Bank of India launched three more ATMs i n Bangalore.

Mr Y Radhakrishnan has been promoted to the post of managing director of State Bank of India.

SBI Cards has set up a special insurance cell in Ahmedabad for facilitating the claims of SBI cardholders affected by the tragic earthquake in Gujarat.

SBI has assigned the Delhi-based HCL Com Net to provide it ATM teller inter-connectivity which could involve investments running into several hundred crores.

SBI chief general manager Madhav M Mehta, who is currently the operational head in Gujarat, has been transferred to its corporate office in Mumbai as chief general manager (CGM).

July 3- Announces the launch of the SBI International card and the SBI Global Card for global travelers in India. SBI International cards and SBI Gold Cards would be accepted at over 20 million Visa outlets worldwide and one lakh outlets in India.

State Bank of India has embarked upon an ambitious Rs 800-crore technology upgradation programme. The bank has appointed KPMG, a consultant in computer technology, to provide inter connectivity networking to the computerised branches and also to the ATMs across the country enabling its customers to transact any kind of business from anywhere

State Bank of India was presented the award for JD Power Asia Pacific’s 2001 India Sales Satisfaction Index (SSI) and Consumer Financing Satisfaction (CFS)

State Bank of India has added three more ATMs to its network. The new ATMs were installed at SBI's Andheri (west),Goregaon (east),and Borivili (east) branches on September 22

State Bank Of India (SBI) has informed BSE that Shri K.J.Udeshi, ED, RBI has been nominated on the Central Board of the Bank as nominee of RBI in place of Dr.Y.V.Reddy, w.e.f. September 22, 2001 under Sec.19(f) of SBI Act.

State Bank of India has slashed the interest rate on home loans by 0.5 per cent to 12 per cent, effective from September 15.

IN A significant move, the State Bank of India has decided to distance itself from its subsidiaries - SBI Capital Markets, SBI Gilts, SBI AMC and State Bank of Credit and Commerce International. They will have the autonomy, independent chairmen and external executives at the senior management level at market-related salaries. At present, the SBI chairman is the ex-officio chairperson of all the

Page 11: company history of SBI, ICICI

subsidiaries, including the associate banks.

The new scheme will be aimed only at the award staff, a category that was included with officers in the January 2001 voluntary retirement scheme.

SBI Cards on July 3, announced the launch of the SBI International card and the SBI Global Card for global travelers in India.

- VRS implemented in which around 21,000 employees, including officers, were permitted to retire

- The Bank has crossed another milestone by making a successful foray into insurance. SBI is the only Bank to have been permitted a 74% stake in the insurance business. The Bank's insurance subsidiary, SBI Life Insurance Company, a joint venture with the Bank holding 74% and Cardif S.A., the Joint venture partner, the balance 26%, was incorporated to undertake life insurance and pension business. Cardif S.A. is a wholly-owned subsidiary of BNP-Paribas, which is the largest bank in France and one of the top ten banks in the world. Cardif S.A. is the largest bancassurance company in France.

- The bank's efforts to establish a world -class credit information bureau in India culminated in the successful setting up of the Credit Information Bureau (India) Ltd., a joint venture of the Bank with HDFC Ltd., Dun and Bradstreet Information Services India Pvt. Ltd. and Trans Union International Inc.

2002

- In order to reduce risk and develop a transparent and active debt market in general and government securities market in particular, the Clearing Corporation of India Ltd. has been set up in Mumbai with the Bank as the chief promoter.

-E K Thakur resigns from Directorship of SBI.

-TCS bags order of Rs 500 crore from SBI.

-SBI has informed that the following change in Directors. 1. Shri A C Kalita, Director on the Bank's Central Board ceased to be a Director on the Board wef May 13, 2002 on expiry of his term on May 12, 2002.2. Shri Y Radhakrishnan Managing Director & GE (CB) has relinquished office of the Managing Director as on June 30, 2002 and ceased to be Director on the Board wef July 01, 2002.

-State Bank of India has informed BSE that Mr D C Gupta IAS Secretary (Financial Sector), Ministry of Finance, Department of Economic Affairs, New Delhi has been nominated as Director on the Board of State Bank of India with effect from July 17, 2002 vice Mr S K Purkayastha.

Page 12: company history of SBI, ICICI

-State Bank of India has informed BSE that Mr S Govindarajan, Managing Director & GE (NB) has relinquished office of the Managing Director as on July 31, 2002 and ceased to be Director on the Board w e f August 01, 2002.Further Mr P R Khanna, Director on the Bank's Central Board ceased to be a Director on the Board w e f August 20, 2002 consequent upon his resignation.

-State Bank of India has informed BSE that the Bank has decided to close SBI Securities Ltd (SBISL), a subsidiary of the Bank, following a Directive in this regard from the RBI.

-State Bank of India has informed that the Central Government appointed Mr A K Batra, Deputy Managing Director, State Bank of India as Managing Director, State Bank of India for the period from the date of his taking charge and upto August 31, 2003. Also, Mr P N Venkatachalam, Deputy Managing Director, State Bank of India, has been appointed as Managing Director, State Bank of India for the period from the date of his taking charge and upto March 31, 2004.

-State Bank Of India has informed that Shri Prithvi Raj Khanna and Shri Kumar Bery have been duly elected as Directors under Section 19(c) of SBI Act at the General Meeting of the -State Bank of India has informed that it has appointed Mr Ananta Chandra Kalita, as a Director on the Central Board of the Bank from amongst the employees of the Bank, who are workmen, for a period not exceeding six months commencing from October 03, 2002 or until his successor is appointed or till he ceases to be workmen employee of State Bank of India, or until further orders, whichever event occurs earlier.shareholders of the bank held on September 09, 2002.

-State Bank of India has informed BSE that Shri Janki Ballabh, Chairman has relinquished office of Chairman at the close of business hours on his attaining superannuation on October 31, 2002.

-State Bank of India has informed that Smt Vineeta Rai, Secretary (Banking & Insurance), Ministry of Finance and Company Affairs, Department of Economic Affairs (Banking Division), New Delhi has been nominated as Director of the Board with effect from October 30, 2002.

-State Bank of India has informed that the Central Government, after consultation with the Reserve Bank of India, appointed Shri A K Purwar, Deputy Managing Director, State Bank as Chairman, State Bank of India from the date of his taking charge of the post and upto May 31, 2003 i.e. date of his superannuation or until further orders whichever is earlier. Shri A K Purwar assumed the charge of Chairman, State Bank of India, on November 13, 2002.

2003- State Bank of India (SBI) and Maruti Udyog Ltd have announced a joint initiative aimed at making car finance affordable to middle and lower middle class customers. Customers will now have transparent car finance involving no hidden charges and pre-closure penalties, and also get the dealers' margins, Mr S.K. Bhattacharya, Chief General Manager, SBI, told newspersons. "It will help both the bank and Maruti to aggressively tap the Andhra Pradesh market," he said. SBI offers finance facility even for lifetime tax, insurance and accessories of the vehicle.

Page 13: company history of SBI, ICICI

- State Bank of India has informed that the Bank has appointed Shri Ananta Chandra Kalita, Head Assistant, State Bank of India as a Director on the Central Board of the Bank amongst the employees of the Bank, who are workmen for a period of 3 years commencing from July 15, 2003 or until he ceases to be a workmen employee of the Bank or until further orders, whichever is earlier provided that he shall not hold the office continously for a period exceeding six year.

- SBI group's total profit identified at Rs 3,354 cr in '02

- Mr. D C Gupta nominated as Director on the Board of SBI

- SBI introduces IT upgradation plan with KPMG help

- SBI Cards and Payment Services Private Ltd, the credit card subsidiary of the State Bank of India, introduces two new schemes recently- SBI Advantage Card to the bank's fixed deposit customers and SBI International Card for its home loan borrowers

- Launches a new credit appraisal system targeting the small and medium enterprises (SME) for loans up to Rs 25 lakh

- SBI selects TCS to execute trade finance solution

- SBI and ICICI Bank among the top 100 banks in Asia in 2001 as per the study by Asian Banker Journal

- Introduces SBI Cash Plus, its Maestro Debit Card that allows customers to access their deposit accounts from ATMs and merchant establishments

2003

- Promotes three Chief General Managers (CGM) to the posts of Deputy Managing Directors (DMDs). They are: A D Kalmankar, CGM in charge of Staff College of Hyderabad, A K Das, CGM, Hyderabad; and R K Sinha, CGM, Chandigarh

- SBI appoints Mr. S K Bhattacharya as the new Chief General Manager for Hyderabad circle

- Increases its equity stake in Discount and Finance House of India Ltd (DFHIL) to 51%

- Ties up with Maruti Udyog Ltd. (MUL) for car finance

- Receives permission from Insurance Regulatory and Development Authority (IRDA) to sell

Page 14: company history of SBI, ICICI

healthcare products to individuals

- Increases its Equity Stake in DFHIL to 55.30%

- Starts new 'Plus schemes' loans such as Justice Plus intended for the judges and court employees, Police Plus for the police personnel, Teacher Plus for the teaching community and Doctor Plus for the medical practitioners

- Receives RBI licence to set up offshore banking units (OBUs) in special economic zones (SEZs)

- Launches SBI Bangalore card meant for a broad-based target audience in the 25 plus age group ranging from upwardly mobile professionals and middle class segments

- SBI unveils Hyderabad card, an exclusive initiative for the citizens of Hyderabad

- Ananta Chandra Kalita ceases to be a Director of SBI

- Christens the tieup with Maruti Udyog Ltd. as SBI-Maruti Finance

- Orders For 1,500 ATMs With NCR Corporation

- Orange, the cellular service operator of the Hutch group for the Mumbai circle, ties up with State Bank of India for prepaid card refill options

- Ropes in US-based consultant McKinsey & Co to undertake Business Process Re-engineering (BPR) exercise for the bank

- Launches charter for Small Scale Industries (SSIs)

- NPA (Non Performing Assets) slashed to 4.5 pc, writes off Rs 4,000 crore worth of assets

- Forays into stock market

- Stock price crosses the Rs 400 mark for the first time since listing on BSE

- Mr. A K Batra, Managing Director & Group Executive (Corporate Banking) of the Bank ceases to be a Director on the Board with effect from July 8, 2003

- Plans a new scheme to attract Resurgent India Bonds (RIB)

- N S Sisodia, Secretary (Banking & Insurance), Ministry of Finance and Company Affairs,

Page 15: company history of SBI, ICICI

Department of Economic Affairs (Banking Division), has been nominated as a Director on the Board of State Bank of India w.e.f. July 11, 2003

- Mr. Ananta Chandra Kalita, Head Assistant, State Bank of India, appointed as a Director on the Central Board of the Bank amongst the employees of the Bank

- Inks two important agreements with its employees' unions and officers' associations. According to the contract SBI's staff will be having no rights to interfere in bank's computerisation plans

- SBI, AirTel launch mobility service at Rs 299

- Central government nominates Mr. Arun Singh as a director on the board of the bank wef July 25, 2003 for a period of three years.

- State Bank of India along with ANZ Investment Bank have consummated 5 year syndicate loan facility of $100 million to Indian Petrochemicals Corporation (IPCL)

- Opens cheque clearing cente at Kolkata

- Inks pact with Mahindra & Mahindra (M&M) for co-branded tractor scheme SBI-Mahindra Tractor Plus

- Joins hands with Tractors and Farm Equipment Ltd (TAFE) for tractor loans

- Launches insurance scheme in Kerala

- Unveils new retail bank loan product Credit Khazana, which targets the bank's housing loan account holders

- Unveils online ticket reservation system 'e-Rail'

- Reserve Bank of India nominates Dr Rakesh Mohan, Deputy Governor, RBI, on the Central Board of the bank

- Appoints Mr C. Narasimhan as the Chief General Manager of the SBI's Kerala Circle

-Unveils Credit Khazana, retail bank loan product, to target the bank's housing loan account holders

- MRO-TEK Ltd has secured State Bank of India's order of Rs 15-crore to provide networking solutions of 2Mbps and 64 Kbps high-end leased line modems for SBI to connect more than 800 branches across the country.

Page 16: company history of SBI, ICICI

-SBI joins hands with LIC to dentify long-term investment proposals for LIC

-Tied with bajaj Auto to finance its two wheelers.

-SBI granted Rs 125-cr loan to Nethaji Apparel park to set up units and buy machinery for the first batch of 54 garment plants in the 65-acre special apparel park.

-The bank has tied up with TVS motor company to finance two wheeler loans

-Tied up with apollo hospital enterprise to finance for the hospital treatement.

-The company launched mobile pre-paid cards recharge facility at its ATM's

-Tied up with ICICI Bank and HDFC for sharing ATM networks

2003-Bank has entered into MOU with both ICICI Bank and HDFC Bank for sharing Bank's ATM Network with them on bilateral terms.

-The Central Government after consultation with the Reserve Bank of India, appointed Shri Chandan Bhattacharya, Deputy Managing Director State Bank Of India as Managing Director State Bank Of India for the period from December 17, 2003 to January 31, 2005.

-The State Bank of India has announced a special package to BSNL employees by allowing concessional interest rates for different types of loans to be availed by the BSNL staff.

2004

-Former KCCI President nominated to SBI Bangalore Local Board

-State Bank Of India has informed that Reserve Bank of India has nominated Shri A V Sardesai, Executive Director, Reserve Bank of India on the Central Board of State Bank of India vice Dr. Rakesh Mohan.

-SBI sets up ATM counter in Ernakulam

-Bahrain Monetary Agency (BMA) grants in-principle licence to Statte Bank of India (SBI)

-SBI sets up India's first drive-in ATM in Hyderabad

-State Bank of India has entered into an alliance with HDFC Bank for sharing ATM networks to be

Page 17: company history of SBI, ICICI

operationalised from February 3, this year.

2004

-SBI unveils new branch in Manjeri

-Bank awarded special prize for lending to self help group run by women

-SBI unveils floating ATM

-State Bank of India appointed six new Deputy Managing Directors on February 11, 2004. The new DMDs are: Mr T.S. Bhattacharya, CGM, Product Development and Marketing, Mr M.M.Lateef, Managing Director, SBI Gilts, Mr Yogesh Agarwal, CGM, Chandigarh, Mr Krishnamurthy, CGM, Madras LHO and Mr R.Ramanathan, CGM, Technology and Mr Vijay Anand, CGM, Corporate Account group. These top level appointments follow the appointment of the new Managing Director for the bank, Mr Chandan Bhattacharya, in December.

-GAIL ties up SBI for e-banking system

-SBI join hands with Visa for travel card

-SBI enters into ATM sharing agreements with UTI Bank & HDFC Bank

-Signs a Memorandum of Understanding (MoU) under which the bank will provide term loans to farmers for purchasing capital inputs from Jain Irrigation Systems Ltd (JISL)

-Join hands with Siemens for financing the medical equipments sold by Siemens

-Joins hands with VST Tillers to launch SBI-VST Shakti, a new loan scheme for farm mechanisation programme

-Unveils Vishwa Yatra foreign travel card, a prepaid card which offers the traveller a convenient and secure way to carry cash

-Ties up with Same Deutz-Fahr India for tractor financing

-In ally with Sikkim govt to beef up SMEs

-The government has chosen State Bank of India (SBI) for channelising government credit to other countries which runs into billions of dollar

Page 18: company history of SBI, ICICI

-SBI opens MICR cheque processing center

-Signs MoU with HMT Ltd. for financing their tractors

-State Bank of India deploys Flexcube as core banking solution at Frankfurt

-Mr Ashok K. Kini appointed as new Managing Director of State Bank of India with effect from April 1, 2004 to December 31, 2005

-SBI unveils Foreign Travel card in Orissa

-ICICI Bank, SBI, LIC in pact for Rs 20,000-cr projects

-Reliance Info in ATM pact with SBI

-State Bank of India, Bangalore Circle, has announced its tie-up with New India Assurance Company Ltd (NIAC), for distribution of NIAC's general insurance products in Karnataka

- SBI unveils new credit card in Ahmedabad

-State Bank of India joined the billion dollar club

-THE State Bank of India opened its 236th branch in the State at Tripunithura on June 16

-SBI inaugurates first Internet shoppe in Kochi

-State Bank of India has opened a fully computerised branch at Karunagappally in Kollam district

-L&T-John Deere Private Ltd has signed a memorandum of understanding (MoU) with State Bank of India for tractor finance

-Buys 10% stake in Multi Commodity Exchange of India Ltd. (MCDEX) for Rs 2.1 crore

-SBI join hands with Hero Honda to unveil co-branded credit card

-State Bank of India launched its first mobile ATM for increasing the banking convenience of its customers

-State Bank of India has signed a Memorandum Of Understanding (MOU) with the Societe Generale Asset Management of France (SGAM) for inducting Societe Generale Asset Management as a stake holding partner for SBI's mutual fund arm, SBI Fund Management Private Ltd (SBIFMPL)

Page 19: company history of SBI, ICICI

-State Bank of India, (SBI) with a view to expand the ambit of its educational loan schemes, has unveiled a unique educational loan scheme, christened "Nursing Plus," for the nursing students of the country

-SBI forges alliance with Hero Honda

-SBI offers new scheme`School Plus' for schools

-SBI Card has launched 'Instant Card' offering customers in need of instant credit opportunity. With this, the customers will get an opportunity to get ready to use credit card within a few hours of filing in their application form

-SBI selects Finacle for international ops

-SBI enters ATM tie up with Andhra Bank

-SBI join hands with LIC for funding infrastructure projects

-Tata Motors on December 7, 2004, signs an MoU with State Bank of India (SBI)

-SBI partners with Eicher Motors on December 27, 2004

2005

-Raj Travels joins hands with SBI for travel loans

-SBI opens branch at Vadakara

-SBI join hands with Apollo Health to offer loans

-SBI rolls out new loan scheme

-SBI opens first branch in Lakshadweep island of Kavaratti

-SBI enters into agreement for bilateral sharing of ATMs with PNB on May 10, 2005

-SBI signs MOU with Corporation Bank for ATM sharing

-State Bank of India and 8 associate banks have entered into an agreement with Bharat Petroleum Corporation Ltd (BPCL) for enhancing card usage at fuel stations

Page 20: company history of SBI, ICICI

-SBI launches new mortgage loan scheme for traders

-SBI launches SBI card in Madurai

-SBI inaugurates RBO in Thrissur

-SBI signed a memorandum of understanding with Small Industries Development Bank of India for co-financing small and medium enterprises in Andhra Pradesh, Tamil Nadu, Uttar Pradesh, Jammu & Kashmir, Jharkhand, Delhi and Bihar

-State Bank of India and Crisil have signed a memorandum of understanding under which latter will assign ratings to small-scale industries that are borrowers of SBI

-NSIC join hands with SBI to offer credit to SSI

2006

-SBI teams up with Nihilent to unveil feedback system

-Bhatt to become SBI's new MD

-State Bank of India (SBI) has informed that Shri. Yogesh Agarwal has been appointed as Managing Director on the Board of the Bank with effect from October 10, 2006 to the June 30, 2010

2007

-State Bank of India (SBI) has appointed Shri. S K Bhattacharya as Managing Director on the Board of the Bank with effect from October 08, 2007 to the October 31, 2010, as per the Notification dated October 08, 2007, by the Government of India.

- The State Bank of India (SBI) has become the first foreign bank to set up a branch in the Israel's diamond exchange. Besides diamonds, they also see huge potential in telecommunications, hi-tech, chemicals, textiles, agriculture and water management, food processing, pharma and health care.

2008

-State Bank of India (SBI) has informed that the Government of India in pursuance of clause (e) of Section 19 of the State Bank of India Act, 1955 (23 of 1955) has nominated Shri. Arun Ramanathan, Secretary, Ministry of Finance, Department of Financial Services, New Delhi as a Director on the Central Board of State Bank of India with effect from January 18, 2008, vice Shri. Vinod Rai.

Page 21: company history of SBI, ICICI

-State Bank of India (SBI) has informed that the Central Government, in consultation with the Reserve Bank of India and in pursuance of clause (d) of Section 19 of the State Bank of India Act, 1955 (23 of 1955), has nominated Dr. (Mrs.) Vasantha Bharucha as a part-time non-official Director on the Central Board of State Bank of India for a period of three years with effect from February 25, 2008, vice Shri Piyush Goel.

- State Bank of India (SBI) has informed that the Central Government, in consultation with the Reserve Bank of India and in pursuance of clause (d) of Section 19 of the State Bank of India Act, 1955 (23 of 1955), has nominated Dr. Rajiv Kumar as part-time non-official director on the Central Board of Directors of State Bank of India for a period of three years with effect from September 08, 2008 or until further orders, whichever is earlier.

- State Bank of India (SBI) has signed a Joint Venture Agreement with Insurance Australia Group to form a Joint Venture Company which will be engaged in General Insurance business in India.

- State Bank of India has rolled out a micro insurance scheme 'Grameen Shakti', for its Self Help Group (SHG) members. The product was launched on Nov 26 at the Tamil Nadu Agricultural University. The bank is hopeful to cover at least five lakh SHG members by December 31.

-The company has issued rights in the ratio of 1:5 at a premium of Rs.1580/- Per Share.

2009

- State Bank of India yesterday slashed its benchmark lending rate by half a percentage point to 11.75 per cent. The Benchmark Prime Lending Rate (BPLR) was revised down by 50 basis points with effect from June 29, SBI informed the Bombay Stock Exchange. This move would benefit home, car and corporate loan customers

- State Bank of India on June 30 launched two new home loan products called as SBI Easy Home Loan and SBI Advantage Home Loan, with zero processing fees for both waived off till September 30. While SBI Easy Home is for loans amount up to Rs 30-lakh while the SBI Advantage Home is for loans above Rs 30-lakh, a press release issued here said.

- State Bank of India, entered into an agreement with the government of Gujarat to create a fund of Rs 5,000 crore for investing in equity of infrastructure projects.

2010

- State Bank of India, with a debit card base of over 70 million, comprising SBI Cash Plus, SBI Gold Debit Card and SBI Yuva Card, has added chip and PIN-based Platinum Debit Card to its bouquet on

Page 22: company history of SBI, ICICI

March 26.

- Mr Arun Kumar Agarwal has taken over charge as General Manager at State Bank of India, Kerala Circle. Until now, he has been General Manager at the Lucknow Circle of the bank. Mr Agarwal is Certified Associate of Indian Institute of Bankers and joined State Bank of India as a Probationary Officer in 1977. An expert in credit and foreign exchange, he has held several assignments ranging from Branch Manager to Regional Manager in the Patna and Delhi circles. He also served in the bank's foreign department at Kolkata handling investment of the FCNB portfolio, derivatives and correspondent relations. He has headed the Pune Module of the bank and has also served as the Deputy General Manager and Business Head for Network-1 of the Mumbai Circle.

- State Bank of India (SBI) has signed a pact with Unique Identification Authority of India (UIDAI) to work as a registrar for the UID registration of residents. It has become the first bank to take up registration work for the UIDAI project. As a registrar, SBI will capture through empanelled enrolment agencies, the biometric characters such as finger prints, iris and so on and send the information to UIDAI.

- Stata Bank of India (SBI) has come up with an exclusive branch in Hyderabad, for their ultra high networth individual (HNIs) which is by far is first of its kind in the country.

- State Bank of India acquired State Bank of Indore.

- SBI - Joint Venture agreement with State General Reserve Fund (SGRF), Sultanate of Oman

- State Bank of India has consortium of Elavon Incorporation, USA and Visa International, USA as its Joint Venture (JV) Partner for Merchant Acquiring Business.

- State Bank of India launched a special concessional banking scheme for the Air Force personnel.

- State Bank of India (SBI) has signed an agreement with Unique Identification Authority of India (UIDAI) in order to work as a registrar for the UID registration of residents.

2011

- State Bank of India, with a debit card base of over 70 million, comprising SBI Cash Plus, SBI Gold Debit Card and SBI Yuva Card, has added chip and PIN-based Platinum Debit Card to its bouquet on March 26.

- Witnessed a joint venture between the nation's largest lender, State Bank of India and the telecom lead, Bharti Airtel with an aim to provide the banking services amongst the unbanked population of the country.

Page 23: company history of SBI, ICICI

- SBI - Acquisition of SBICI Bank

- State Bank of India shifted from Varma Chambers, Fort, Mumbai to the following address with effect from September 28, 2011.Shares & Bonds Dept., State Bank of India,Corporate Centre,8th Floor, State Bank Bhavan, Madam Cama Road, Mumbai - 400 021Telephone nos.: 022-22740841-48 (eight lines) Fax number(s): 022-22855348.

- P Choudhary has been appointed as the new chairman of State Bank of India after getting clearance from the government.

- Experian Credit Information Company of India Private Limited, the first CICRA licensed credit bureau in India on September 23, 2011 said it has signed a membership agreement with State Bank of India (SBI), the largest consumer lender in India to contribute data to Experian’s credit bureau and enhance the effectiveness of company's range of products and services.

2012

- State Bank of India signed a Preliminary Non-Binding Memorandum of Understanding with Russian Direct Investment Fund (RDIF), to facilitate advancing bilateral economic cooperation and trade between Russia and India aimed at exploring investment opportunities in both the countries.

- India's largest public sector lender, State Bank of India (SBI) has entered into an agreement with StarAgri Warehousing Ltd (StarAgri), India's leading agri-services & solutions provider, for Warehousing Receipt Financing and Collateral Management Services.

- SBI launched virtual debit cards to check online fraud and promote ecommerce

- SBI, ICICI Bank leading m-banking revolution in India. With the advent of smartphones and 3G services, the Mobile Banking (m-Banking) services have been fast catching up with Indian customers for conducting balance inquiries, account transactions, utility payments, and other banking activities using a mobile handset

- India's largest lender State Bank of India (SBI) has been planning to cut the processing and conversion fee for home loans to leverage the approaching festival season when Indians usually spur buying as businesses offer healthy discounts.

2013

- India's leading Public Sector lender the State Bank of India (SBI) is stepping up efforts to expand its

Page 24: company history of SBI, ICICI

presence in the world's second biggest economy with the lender set to launch its second branch in China.

Company History - ICICI Bank

1994

- The Bank was Incorporated on 5th January at Baroda. ICICI Bank was promoted by ICICI and erstwhile SCICI Ltd. and received the Certificate for Commencement of Business on 24th February. It does banking business of all kinds. It was founded as an institution to provide quality banking services using state-of-the-art technology.

- The Bank has established a well diversified branch network with 24 branches in 15 centres covering 12 states. The bank set up a fully computerised environment with the State-of-the-art technology at all offices continuously upgrading its strong systems and procedures with special emphasis on risk management.

1996

- The deposit products and other services of the bank were branded with names such as `Maxicash' for services accounts, `Money Plus' for Current Account, `Quantum' for fixed deposit account, `Power Pay' for payroll accounts treasure chest for locker facilities and `Trice' for automated teller machine facility.

- The Bank had, in compliance with a directive issued by RBI, deposited in aggregate Rs 88.16 crores with small Industrial Development Bank of India and National Bank for Agricultural & Rural Development.

Page 25: company history of SBI, ICICI

- The `B' category branches were authorised to handle full range of foreign exchange transaction of customers and five other branches were placed in `C' category to handle limited foreign exchange transactions.

- Seven branches of the bank with substantial foreign exchange business were linked to the society for worldwide Interbank Telecommunication (SWIFT) network which enables them to transmit Letter of Credit and fund transfer messages promptly world wide.

- 700 No. of equity shares subscribed for by signatories to the Memorandum of Association. 1500,00,000 No. of equity shares allotted to ICICI Ltd.

1997

- The bank introduced electronic funds transfer facility. The bank has a full fledged vigilance and inspection department.

- The bank opened 11 branches and 2 extension counters thereby increasing the total network of branches to 33 and extension counters to 4.

- The Bank offered 150,00,000 No. of equity shares of Rs 10 each at a prem., of Rs 25 per share to ICICI.

- The Bank offered for sale 412,50,200 No. of equity shares of Rs 10 each at a price of Rs 35 per share.

- Sicom Ltd. has entered into an agreement with ICICI Bank and Dresdner Bank for providing a counter guarantee against letters of credits (LCs) opened by its clients.

- The merger of SCICI with ICICI effective from April 1, the bank has become a wholly-owned subsidiary of ICICI.

- ICICI Banking Corporation, a fully-owned subsidiary of Industrial Credit & Investment Corp of India Ltd, has finalised an offer for sale of 4 crore equity shares of Rs.10 each at a premium of Rs.30 per share, according to merchant banking sources.

1998

- ICICI Bank, which introduced Internet banking in India, is set to launch various technology-based new services in the near future. Some of the new services include setting up of call centres and the introduction of fund transfers between own accounts in its branches.

- ICICI Banking Corporation Ltd, the first bank in the country to go in for Internet banking, is now all

Page 26: company history of SBI, ICICI

set to provide its account-holders with the facility of transferring funds across their accounts on the Net.

1999 - ICICI Bank has signed an agreement to use the NCR switchmark technology for online-networking all its ATMs, the officials said they network would come into place in September.

- ICICI Bank recently restructured its organisational structure by setting up strategic business units for retail banking, corporate banking and forex and treasury operations, as independent profit centres.

- ICICI is all set to launch a 60-second television commercial on August 15, 1999.

2000

- ICICI Bank became the first Indian bank to list on the New York Stock Exchange with its $175-million American depository shares issue generating a demand book 13 times its size at $2.2 billion.

- The Bank proposes to bring credit cards to the "large, underserved population" in rural and semi-urban areas.

- SkyCell Communications Ltd, one of the two cellular service providers in Chennai, has launched `Sky Banking', for which the company has tied up with ICICI Bank and HDFC Bank.

- The ICICI has announced the launch of mobile banking services for its customers, using the wireless application protocol (WAP) technology.

- Ford India has tied up with ICICI Bank to introduce a scheme, enabling non-resident Indians (NRIs) to purchase a Ford Ikon car for their friends and relatives in India.

- ICICI Bank has set up a ATM facility at a Indian Oil Corporation petrodiesel outlet at Chennai.

- ICICI Bank has tied up with Chennai Telephones to provide Internet bill payment facility to its customers.

- ICICI Bank has tied up with the Siddhivinayak temple trust to enable the bank's infinity (Internet banking) customers to order and pay for a pooja online, on the occasion of "Aangaraki Chaturthi".

- The Bank proposes to extend its area of operation by opening about 35 to 40 offices and extension counters during the current fiscal subject to the Reserve Bank of India's approval.

- ICICI Bank will launch a slew of new schemes in the personal segment ranging from launch of co-branded credit cards to providing loans against share within the next three months. - The Company has offered higher rates of interest on its regular income bonds and multiplier bonds while pruning it on tax

Page 27: company history of SBI, ICICI

saving bonds. - The Finance portal India Infoline has tied up with ICICI Bank and HDFC Bank for banking back-ends.

- Tata Teleservices Ltd. has tied up with ICICI Bank and Global Trust Bank to enable its customers to use Internet banking facilities for the payment of telephone bills.

- ICICI Bank will provide credit for online transactions over chem-B.com, the online trading site for chemicals and chemical products, launched by Chembazaar Online Pvt. Ltd.

- ICICI became the first financial institution to go for placement of dematerialised debt securities.

- Mumbai-based ICICI Bank launched its Kid-e-bank facility in Bangalore. - ELECTRICMELA.com, the B2B portal for the electrical industry is entering into an alliance with ICICI Bank for payment gateways.

- Spice Cell has tied up with Citibank N A, HDFC Bank and ICICI Bank for mobile bill settlements

- ICICI Bank and UAE Exchange Centre have entered into a wire transfer arrangement, for electronic and telex transfer of funds.

- The Bank has tied up with MunshiKaka.com to provide value added services to its customers.

- ICICI has signed a tripartite agreement with Amitabh Bachchan Corporation Ltd. and Mr. Amitabh Bachchan, appointing him as its brand ambassador.

- The new generation ICICI Bank has extended its business multiplier scheme to current account holders in Coimbatore.

- ICICI Bank has launched the Business Multiplier Account in Kerala.

- The swap ratio for the merger of Bank of Madura (BoM) with ICICI Bank has been pegged at 1:2 i.e., two shares of ICICI Bank for every one share of BoM.

- The Kerala Government has joined hands with ICICI Bank to introduce Internet banking facility in the State's public sector undertakings.

- ICICI Bank launched its debit card under the brand name "ICICIN-cash."

2001

- ICICI Is all set to become the first domestic financial institution to get a financial strength rating by

Page 28: company history of SBI, ICICI

the Moody's Interbank Credit Services, the bank credit rating arm of the international credit rating agency Moody's Investors Services.

- The Bank of Madura (BOM) got merged with ICICIBK. The share exchange ratio was fixed at two shares of ICICIBK for one share of BOM. With this merger ICICIBK has become one of the largest private sector banks in India. Commenting on the merger Shri H N Sinor, Managing Director and CEO ICICIBK said that "This merger would lead to considerable synergies in the operations of the merged entity and would benefit the customers and other stakeholders.

- ICICI Bank and Deutsche Bank have entered into a long-term rupee interest rate swap benchmarked to Government bond yields.

- ICICI Bank has tied up with Advantage E- Accounting to offer an on-line taxation and personal finance services along with off-line services like filing.

- The Bank has entered into a wire-transfer arrangement called `Money2India' with the United Arab Emirates largest foreign exchange house for transfer of funds to India.

- ICICI emerged as the largest fund mobiliser during 2000-01 by privately placing debts with more than one year tenure for Rs 6,413 crore, even as public sector State Bank of India placed the single largest placement of the year for Rs 2,500 crore, according to Prime Database.

- ICICI Bank and BPL Mobile have tied-up to launch a co-branded credit card. To be named ICICI bank-BPL Mobile Credit Card, the card will be operational by the end of August this year.

-ICICI Bank has launched its interactive touch screen kiosk 'Sparsh' at its automated teller machine (ATM) centres and branches allowing free access to its online services.

- ICICI Bank has introduced a Web-based product that facilitates on-line conclusion of forex deals in the city.

- ICICI Bank has launched its hundredth ATM in Mumbai. With this, the bank will have a network of 574 ATMs spread across 54 cities. According to a press release, ICICI Bank continues to focus attention on newer functions that will enable the ATM network to be a key tool of its customer acquisition and retention strategy.

- ICICI Bank launched its 100th ATM in Mumbai at the bank's branch in Nariman Point. The bank now has a network of 574 ATMs spread over 54 cities in India.

- Visa international and ICICI bank on September 10 announced a pilot programme for facilitating e-commerce in the country.

Page 29: company history of SBI, ICICI

- As part of its drive to introduce alternate delivery channels, ICICI Bank has launched mobile banking facilities in conjunction with Spice Communications.

- ICICI Bank has aligned the compensation structure of officers of Bank of Madura and made it performance-linked in line with ICICI Bank - The ICICI Bank, Teynampet, Chennai, has been directed by the District Consumer Disputes Redressal Forum, Chennai (South) to pay a compensation of Rs 50,000 to a credit-card holder of the bank for `deficiency in service'.

- In the run-up to the reverse merger with ICICI Bank, ICICI has slashed its management grades to have an identical administrative structure like that of the banking subsidiary. ICICI had changed its management structure by combining two levels and cutting down the management structure to eight levels.

- ICICI Bank plans to tap the debt market to raise Rs 350 crore for meeting Tier-II capital requirements.

- ICICI Bank and BPL Mobile have tied-up to launch a co-branded credit card. To be named ICICI Bank-BPL Mobile Credit Card.

- The bank has developed multiple access channels comprising lean brick and mortar branches, ATMs, call centers and Internet banking. As on June 2001, the bank had a network of 357 branches and 37 extension counters. Its network of 546 ATMs is the largest in the country accounting for nearly 18% of all ATMs in the country. Customers in 37 cities can now access account information over the telephone. These investments in channel infrastructure have enabled the bank to achieve rapid growth in its retail business.

2002

- CICI Bank Ltd has informed that the Board of Directors inducted Shri N Vaghul, as an Additional Director on the Board of the Bank. non-executive whole-time director and also the non-executive Chairman of ICICI Ltd.

- The board of directors of ICICI Bank and ICICI in separate meeting at Mumbai, approved the merger of ICICI with ICICI Bank. The merger of two wholly-owned subsidiaries of ICICI, ICICI Personal Financial Services and ICICI Capital Services, with ICICI Bank was also approved by the respective Boards.The high courts of Mumbai and Gujarat, and the Government of India (GOI) as may be required. Consequently, the appointed date of merger is proposed to be March 31, 2002, or the date from which RBI's approval becomes effective, whichever is later.

- The scheme of amalgamation envisages a share exchange ratio of one domestic equity share of ICICI Bank for two domestic equity shares of ICICI. As each American Depositary Share (ADS) of ICICI

Page 30: company history of SBI, ICICI

represents five domestic equity shares while each ADS of ICICI Bank represents two domestic equity shares, the ADS holders of ICICI would be issued five ADS of ICICI Bank in exchange for four ADS of ICICI.

-ICICI Bank Ltd has informed BSE that Reserve Bank of India on April 26, 2002 approved the merger of ICICI Ltd and two of its wholly owned subsidiaries, ICICI Personal Financial Services Ltd and ICICI Capital Services Ltd with ICICI Bank Ltd.

-ICICI Bank acquires Shimla and Darjeeling Branches from Standard Chartered Grindlays Bank.

2002-ICICI Bank sells 3 million equity shares of Bhushan Steel.

-ICICI Bank Ltd has sold 2,75,000 equity shares of Bhushan Steel & Strips Ltd on August 07, 2002 at Rs 35 per share on spot delivery basis.

-S&S Power Switchgear Ltd has informed BSE that ICICI bank has appointed Mr S C Bhatia as Nominee director on Board of the Company with effect October 24, 2002.Further the Board has accepted the resignation of Mr A R Santhanakrishna as director with effect from August 18, 2002.

-BPL Ltd has informed BSE that ICICI Bank Ltd has nominated Mr V A Raghu as their nominee on the Board of the Company with effect from September 30, 2002.

-ICICI Bank Ltd has informed that the Government of India has nominated Ms Vinita Rai, Secretary (Banking & Insurance) as the Government Nominee on the Board of the Bank in place of Mr D C Gupta with effect from October 31, 2002.

-Launches eCheques facility for its internet banking

-Moody's upgrades ICICI's Rating above India's Rating

-Enters into agreement with Bharti Cellular paving consumers to recharge the Bharti's pre-paid cash cards (Magic) at ICICI ATM machines

-Launches a scheme called `Mutual Fund Sweep Account' which enables its customers to invest surplus funds in their current accounts in high-liquidity mutual funds through an automatic sweep facility

-Clinches a deal with the govt. of Karnataka for partial payment of services

-High Court approves ICICI, ICICI Bank merger

-RBI approves ICICI Bank--ICICI merger

Page 31: company history of SBI, ICICI

-Deposits Rs 3,000 cr with RBI to meet Cash Reserve Ratio (CRR) requirements

-Placed itself as a one-stop financial solutions supplier with a branch out and de-risked business model. ICICI Bank - with ICICI, ICICI Personal Finance Services and ICICI Capital merged with itself - is the biggest private sector bank in the nation with a balance sheet size of Rs 1,04,000 crore, capital adequacy of 11.44 per cent, 500 outlets and 1,005 ATMs

-Ties up with Bharti for pre-paid mobile cards via ATMs

-BPL Mobile and ICICI Bank tie up to enable to recharge BPL's prepaid cellular service ability (branded `mots') at any of the bank's 1000 plus ATMs across the nation

-K V Kamat appointed MD and CEO, Lalita D.Gupte Joint MD

-Ties up with NCR Corporation, ATM manufacturer

-Merged ICICI Bank makes debut on BSE and NSE

-Rallis terminates contract farming agreement with ICICI Bank

-Allots equity shares to erstwhile equity shareholders of ICICI

-ICICIdirect.com, the brokerage arm, launches online trading in derivatives

-Put on sale the land held by Pal Peugeot - the defunct joint venture between Premier Automobiles and Peugeot

-Introduces first home loan securitisation scheme of Rs 58 crore

-Buys 190 Ajmera reisdential flats for Rs 37 cr

-Sanctions debt restructuring package to Alufluoride Ltd.

-Takes over Shimla and Drajeeling branches of Standard Chartered Bank

-Bank of India (BoI) ties up with ICICI Bank to utilize former's wide branch network covering 1,000 branches for the latter's cash management services

-ICICIdirect.com unveils Direct Alerts

Page 32: company history of SBI, ICICI

-AirTel, in tie-up with the ICICI Bank, declares the launch of re-charge facility for the AirTel Magic pre-paid cards on ICICI Bank's ATM network in the twin cities of Hyderabad & Secunderbad in Andhra Pradesh

-Replaces Rs 7000 cr high cost borrowings of ICICI

-Sets up Private Banking Division to target high net worth individuals

-Bags Best Internet Bank award by Global Finance, organiser of the World's Best Internet Bank Awards 2002

-Ties up with IL&FS Mutual Fund to offer to mutual fund products online

-Gets Debt Recovery Appellate Tribunal (DRAT) approval to divest Daewoo's Surajpur assets

-Figures among the Top 1000 world banks

-Soma Textile Board allots Optionally Fully Convertible Debentures (OFCD) to ICICI Bank aggregating Rs 3.22 cr.

- Classifies loans to Dabhol Power Company as NPAs

-Unveils mobile banking alerts

-Srei International Finance Ltd (Srei) forays into debt securitisation alliance with ICICI Bank

-ICICI Bank bags UK Banker Magazine award

-Introduces Roaming Current Account, a new current account product

-Launches call centre in Hyderabad

-Hamblin Watsa Investment Council acquires 42.31 million equity shares of ICICI Bank

-101.4 million shares of ICICI Bank held by ICICI Ltd. transferred to the ICICI Bank Shares Trust

-ICICI Bank divests 16.5% stake for Rs 1,320 crore

-Foreign holding in ICICI Bank reaches 62%

-Lalbhais acquire ICICI's 10% stake in Amtrex Hitachi

Page 33: company history of SBI, ICICI

-Orcasia acquires 42.31 million equity shares of ICICI Bank

-SBI, ICICI Bank feature among top 100 banks in Asia

-ICICI Knowledge Park, Apollo Hospitals ink MoU

-Launches chip-based credit card for transporters

-ICICI Bank launches `Drivesmart' credit card for transporters

-Buys 'Sobha Pearl' property in Bangalore owned by Sobha Developers for Rs 20 crore

-Launches new initiative called '180 degree feedback'

-Unveils 'eTransfer' for NRI's

-ICICI Knowledge Park ties up with Apollo Hospitals

-HDFC MF ties up with ICICI Bank for Any Time Mutual Fund (ATMF) service

-Signs MoU with Food Ministry for optimal utilisation of Plan funds and to bring in professional appraisal in project financing

-SBI divests 10 lakh shares of ICICI Bank

-ICICI Bank, RPG Cellular Services Ltd. in alliance for recharge facility at ATMs

-Takes posession of Mardia Chemicals Unit under NPA Act

-Ties up with co-operative banks for free-float funds

-Introduces ATM in Bengali language

-Takes over Patheja group assets under securitisation law

-ICICI Bank Home Shoppe starts operations in Pune

-Launches 'ATM on Wheels' in Mumbai

-Euromoney Asia poll reports ICICI Bank as the best managed bank in Asia in the category of banking

Page 34: company history of SBI, ICICI

and finance

-Skoda Auto ties up with ICICI Bank to offer Skoda Monthly Instalment (SMI), rather than an equated monthly instalment, for its cars

-Secures special one-time approval from RBI for issuing tax-free bonds worth Rs 2500 crore

-Becomes the first Indian bank to launch a Resident Foreign Currency (RFC) account

-ICICI Bank chairman Mr. N Vaghul heads Asset Reconstruction Company (ARC)

-ICICI Bank, HPCL launch co-branded Visa Electron Debit Card

-Launches `Welcome Kit' which will help the person, who opens an account with ICICI Bank to operate his account immediately

2003

-Launches micro-finance programmes

-ICICI Onesource deploys new recruitment system

-Sets up NRI advisory service

-Singapore govt offloads 2-cr shares of ICICI Bank

-Bank chief K V Kamath appointed head of finance panel for river linking project

-Launches 'Give2India' to facilitate donations by NRIs

-Comes out with a bond issue of Rs 400 crore

-Installs Telugu language ATMs in Hyderabad

-Launches 'ICICI Bank Pure Gold'-certified and tamper proof 24-carat pure gold coins in Chennai

-Collects over Rs 1,200-cr via first bond issue

-Obtains 'excellence in retail banking' award instituted by the Singapore-based Asian Bankers Journal

-ICICI Bank-led combine gets approval for Nationwide Multi Commodity Exchange (NMCE) set up

Page 35: company history of SBI, ICICI

-BioServe takes up about 3,000 sq.ft space at the ICICI Knowledge Park to set up a contract research lab

-Sets up integrated currency management center in Pune

-Rama Newsprint & Papers Ltd allots 5632129 no. of Equity shares to ICICI Bank Ltd on conversion right exercised by them

-HDFC, ICICI buy 33-pc stake in Hindustan Coca-Cola Beverages, the Indian bottling subsidiary of the Atlanta-based carbonated soft drinks giant Coca-Cola

-Reliance Info forges alliance with ICICI for bill receivables

-Ties up with Employees Provident Fund Organisation to distribute pension across the country

-Ties up with TeNet for micro-banking

-Starts 12-hours banking services

-ICICI Bank restructures organisational structure

-Acquires the Credit Card Division of Tata Finance

-Air India ropes in ICICI Bank as authorised dealers for hedging

-ICICI Bank along with others set up Rs 800-cr "India Advantage Fund"

-Records Rs 8000-cr securitisation during '02-03

-Enters deal with Pramati Technologies to deploy Pramati Server Software

-Tops NPA recovery list among domestic lenders

-Unveils Pure Gold coins in Karnataka

-Decides to scrap '97 series deep discount bonds

-Obtains approval to set up Overseas Banking Units (OBU)

-Communication ministry engages ICICI Bank, IIT to study viability of telecom firms

Page 36: company history of SBI, ICICI

-Unveils NRI remittance product in Canada

-ICICI Bank, Amway launch co-branded international credit card

-Picks up 25% shares in NCDEX (National Commodities & Derivatives Exchange)

-ICICIdirect introduces tax-free Savings Bond '03 online

-Videsh Sanchar Nigam Limited (VSNL) and ICICI Bank have announced a tie-up for the distribution of Tata Indicom`s dial-up Internet services

-ICICI Bank offers rail ticket booking facility to its customers

-Buys Apple Credit's 30-pc stake in Transamerica Apple Distribution Finance Ltd. (TADFL)

-Takes over 100-pc of TADFL

-Outgoing ICICI Bank Joint Managing Director Mr. H N Sinor becomes new chief executive and secretary of Indian Banks Association (IBA)

-ICICI Bank, HDFC Bank tie up with Indian Railway Catering and Tourism Corporation (IRCTC) for online rail bookings

-ICICI Bank, DaimlerChrysler team up for new finance scheme

-Gets Insurance Regulatory Development Authority (IRDA) nod for India Advantage Fund

-Announces VRS, the first for the new generation private sector banks

-Bags DM Review World Class Solution Award 2003

-Enters into an institutional agreement with Dubai Bank wherein ICICI Bank would be the principal correspondent bank of Dubai Bank in India

-Discontinues the contract with Bollywood Superstar Amitabh Bachchan since it finds him too expensive

-Embarks on market making securitised instruments

-Global Finance Magazine awards ICICI Bank as the "Best consumer internet Bank in India"

Page 37: company history of SBI, ICICI

-ICICI Bank empanelled for JNPT's Electronic Data Interchange (EDI) project

-Signs option contract with BHEL

-ICICI Bank's 1350 employees opt for VRS

-Textile sector leads ICICI Bank's NPA

-Approves 7.3 million options to its employees

-Birla Tyres ties up with with ICICI bank to offer Rs 2 lakh life insurance benefit to the truck drivers on the purchase of every pair of tyres

-Inaugurates its first Offshore Banking Unit (OBU) at SEEPZ Special Economic Zone, Mumbai

-ICICI implements NCR solution (Cheque Mark PDC Module) for post dated cheques

-ICICI Bank picks up Timesofmoney.com's e-filing service

-ICICI Bank acquires 17.75% stake in NDTV

-Launches 'Instra Transfer', an NRI remittance product, which will enable NRIs in the Gulf to transfer funds to India within two hours

-Acquires 36,000,000 shares amounting to 12.65% of Himachal Futuristic Communications Ltd (HFCL)

-Divests 0.31% shares in Federal Bank

-Converts part of HFCL loan into equity shares giving 12.65% stake in the company

-Inaugurates Singapore branch

-Decides to take the service of Bollywood Superstar Amitabh Bachchan (Big B) on purely case-to-case basis

-ICICI Bank in alliance with Federation of Automobile Dealers Association (FADA) unveils credit card for vendors to dealers and opens a business-to-business (B2B) section in FADA's Web site

-West Coast signs agreement to acquire ICICI's 34 percent stake in Rama Newsprint & Papers Ltd.

Page 38: company history of SBI, ICICI

(RNPL)

-Investmentz.com forges alliance with ICICI Bank for offering payment gateway to its customers for real-time transfer of funds

-Banker Magazine of UK confers its 'Best Multi-Channel Strategy 2003' and Bank of the Year 2003' awards to ICICI Bank

-Instanex Skindia depository receipts index increases the index percentage of market capitalisation used for ICICI Bank to 95 per cent from 75 per cent

-ICICI Bank in association with the Federation of Automobile Dealers Association (FADA) unveils a credit card for vendors to dealers and opens a business-to-business (B2B) section in FADA's Web site

-Issues notice to Ponni Sugars (Orissa) Ltd. to take possession of the Balangir Sugar Mill

- Allottment 287774 equity shares of face value of Rs.10/- each on October 13, 2003 under the Employee Stock Option Scheme.

-ICICI bank gets Banker magazine awards for the year

-Crisil assings highest ratings to instruments issued under ICICI Bank's securitisation programme

-ICICI bank gets 'Best emerging market Bank ' award from the Global Finance Magazine

-Mr. R Seshasayee who was appointed as Director on the Bank on May 03, 2002 has tendered his resignation as a Director of the Bank.

-ActionAid has signed up with ICICI to launch the Karm Mitra credit card

-The trading of icici issued bond October 2000- Tax Saving Bond - Option I ICICI1100 N1 (benefit u/s 88) was suspended

-ICICI Bank introduced foreign currency term deposit scheme for non-residents including NRI's at its offshore banking unit (OBU) in mumbai

-ICICI tie up with Big Bazaar to introduce Co-branded Card specifically for Big Bazaar customers.

-The company's asset-backed securities (ABS) worth Rs 835 crore on october 09 obtained highest safety ratings from Icra.

Page 39: company history of SBI, ICICI

-The company unveiled its global deposits scheme for individuals from its Singapore branch.

-Tied up with SBI and HDFC to share ATM networks

- Has set up representative office in Dubai

-Allotted 166857 equity shares of face value of Rs.10/- each on October 20, 2003 under the Employee Stock Option Scheme.

-ICICI Bank unveils global deposits

-Five persons have been arrested on the charge of duping ICICI Bank of Rs 1.34 crore by encashing a cheque purported to have been issued by Fortis Banque of France..

2004

-ICICI bank credit cards cross two million mark

- ICICI Banks 300 million dollar Eurobond has been awarded for being the best bond issue of India and emerging Asian market during 2003, by two foreign magazines.

-ICICI ePayments Ltd. has informed that they have acquired 8008357 shares amounting to 69.99% of the total paid up capital of Tata Infomedia Limited

-ICICI Bank Ltd has informed that the Bank has allotted 1,25,444 equity shares of the face value of Rs 10/- each on December 22, 2003 under the Employees Stock Option Scheme, 2000 (ESOS).

-The government has allowed ICICI Bank to keep the Rs 350 crore 20-year preference shares (subscribed to by ITC) in its books for five years.

-ICICI Bank Ltd has informed that the Bank has allotted 73,980 equity shares of the face value of Rs 10/- each on December 29, 2003 under the Employees Stock Option Scheme, 2000 (ESOS).

-Bahrain Monetary Agency issues licence to ICICI Bank's overseas unit. It also extended a special concession for offering NRI banking services in the island nation as well as in the international markets

2004

-ICICI Bank inks pact with Mohan Bagan to unveil co-branded credit card

-ICICI-Overdrive awards for Honda City, Bajaj Pulsar

Page 40: company history of SBI, ICICI

-ICICI Bank ties up with Air Deccan

-ICICI Bank opens new premises in Mangalore

-ICICI Bank unveils mobile ATM in Kerala

-ICICI Bank unveils International fixed deposit scheme at Singapore branch

-ICICI Bank acquires numero uno position in new remittance shceme

-ICICI Bank sets up ATM in Thiruvananthapuram

-ICICI Bank launches its new home Loan Scheme With Variable EMI

-ICICI Bank Ltd has informed that the shares of the Bank are delisted from The Delhi Stock Exchange Association Limited with effect from February 11, 2004.

-ICICI Bank, Mohun Bagan launch co-branded credit card

-The world's largest micro-finance securitisation deal of $4.3mn completed between ICICI Bank and Share Microfin Ltd., a Hyderabad based microfinancing organisation

-ICICI Bank signs a memorandum of understaning with Jammu and Kashmir Bank to share the ATM network.

-ICICI Bank and Andhra Bank have announced a tie-up, that enables sharing of their ATM networks.

-Global Finance magazine has named ICICI Bank as one of the "Best Emerging Market Banks Asia" in an exclusive survey to be published in the May 2004 issue.

-Comes out with a public offering of equity shares at a price of Rs 280 to raise Rs 3500 crore with a greenshoe option of Rs 450 crore

-ICICI Emerging Sector, the private equity arm of ICICI Bank, has acquired a 54 per cent stake in the Bangalore-based Arvind Brands, the apparel arm of the Sanjay Lalbhai-promoted Arvind Mills,

-ICICI Bank unveils Car Overdraft facility

-ICICI Bank, SBI, LIC in pact for Rs 20,000-cr projects

Page 41: company history of SBI, ICICI

-ICICI Bank and Punjab National Bank have signed a memorandum of understanding (MoU) for ATM network sharing, giving customers an access to over 2,200 ATMs in India.

- ICICI Bank unveils co-branded credit card ICICI Bank Ebony

-ICICI Bank has won the best bank award instituted by Asia money in the category of best domestic commercial bank in India

-ICICI Bank has bagged the prestigious award of 'Best Retail Bank in India' in the category 'The Asian Banker Excellence in Retail Financial Services Program 2003'

-ICICI Bank-Aircel jointly unveil new co-branded credit card

-Life Insurance Corporation acquires 16,370,009 shares constituting 2.23% of voting rights in the company, increases its stake to 73,382,324 shares constituting 10.09% of voting rights

-Punjab and Sind Bank (PSB) and ICICI Bank on July 02 announced the launch of co-branded credit card that will be available in three variants - Gold, Silver and Blue credit card

-ICICI Bank in association with Reliance Infocomm has launched an interactive mobile banking service in India

-ICICI Bank unveils multi-branded card

-ICICI Bank has introduced a pre-approved personal loan product for Global Trust Bank (GTB) customers

-ICICI Bank bags Internet awards from Global Finance magazine

-ICICI Bank Home Loans and ICICI Bank Home Search have launched `Home Utsav', a property exhibition at the Institute of Engineers

-ICICI Bank Ltd on August 9, 2004, opened its representative office in Dhaka further increasing its international presence. In light of the significant bilateral trade links between the two countries, the bank greatly values the need to have an on-the-ground presence

-ICICI Bank offers new service to Canada emigrants

- Launches 'Hello Canada Newcomers Account' designed to provide instant access to banking services in Canada for Indians migrants on August 23

Page 42: company history of SBI, ICICI

- ICICI Bank introduces an easy deposit card at an interest rate of 0.99 per cent

-ICICI Bank rolls out kisan credit card in AP

- Launches `Easy Deposit Card', which charges an interest of 0.99 per cent per month

-ICICI Bank launches new mobile phone banking service

-Sets up offshore banking unit (OBU) in Bahrain

-Launches a new service for pre-paid subscribers of Airtel, Hutch, Orange and IDEA in association with Euronet to recharge cards through bank's ATMs or by sending SMS.

-ICICI Bank has signed a deal with SunTec Business Solutions Private Ltd

-ICICI Bank unveils Visa Card in UK

-ICICI Bank in ally with CESC launches new co-branded credit card

-Godrej Sara Lee ties up with ICICI Bank to finance distributors across the country through the channel financing model

-Hindustan Petroleum Corporation Ltd (HPCL), ICICI Bank on December 23rd launches Drivesmart

2005

- ICICI Bank overtakes Citibank in credit cards with 3 mn credit cards while Citibank says it has 2.5 mn cards

-ICICI inks pact with Godrej Sara Lee for channel financing

-Merc joins hands with ICICI Bank to offer loans

-ICICI Bank unveils office in Johannesburg

- Britain's Lloyds TSB, in association with ICICI Bank, on April 18, 2005, launches new services offering free money transfers between India and the UK, as well as access to rupee mortgage for Indian property purchases.

-ICICI Bank-Air Deccan credit card unveiled

Page 43: company history of SBI, ICICI

-ICICI Bank acquires bank in Russia

-ICICI Bank, HLN jointly launch co-branded credit card

-ICICI Bank launches online Public Provident Fund (PPF) scheme on July 01, 2005

-ICICI Bank forges alliance with Fortis to serve NRIs on July 22, 2005

-ICICI Bank buys Apnaloan

-ICICI Bank Home Loans launched a `Home Utsav' property exhibition on August 18th

-Bharti Tele-Ventures on September 19 announced a tie-up with ICICI Bank and Visa to launch credit card on the mobile phone

--ICICI Bank rolls out travel smart mastercard

--ICICI wins Microsoft Corporate Challenge

-ICICI Bank teams up with Hong Kong's Bank of East Asia to offer services to its clients with operations in greater China.

-ICICI Bank inaugurates 1st branch in Hong Kong

-ICICI bank ties up with Grameen Foundation USA to set up Grameen Capital India.

-ICICI Bank's $500 million American depository shares (ADS) issue has been subscribed six times the issue size. The issue closes tomorrow concurrently with the Rs 5,750 crore public issue of equity shares in the domestic market. The domestic issue has received subscriptions for 1.86 times the 9.90 crore shares on offer.

-ICICI Bank sets up pilot project in Guntur dist

-ICICI Bank as outperformer: CLSA report

2006

-ICICI Bank sets up Russian subsidiary

-ICICI Bank sets up new branch at Banjara Hills

Page 44: company history of SBI, ICICI

-ICICI bank teams up with Spanish MNC.

-ICICI Bank sets up branch in Belgium

-JBIC inks agreement with ICICI Bank

-Indian inks deal with ICICI Bank

-Dishman inks $60mn deal with ICICI Bank

-ICICI Bank inks MoU with Mitsubishi UFJ Securities

-NIIT partners with ICICI Bank on 26, September, 2006 to enter Financial Services Training. - ICICI Bank has rolled out a new product `NRI SmartSave Deposits', a fixed deposit scheme for non-resident Indians

-ICICI Bank has inked a memorandum of understanding with Export Development Canada (EDC), a Canadian export credit agency, for financing support to Indian purchasers of capital goods and professional services from Canada.

-ICICI Bank opens 3 represetatives offices abroad.

2007

-ICICI Bank has come out with loan-on-the-spot (LOTS) product for car loans.

-ICICI Bank launches card-based remittance product in Kerala

-ICICI Bank is looking at increasing its share of the growing Indian remittance market. ICICI Bank on February 8 rolled out a rupee-denominated remittance card that is primarily targeted at beneficiaries of non-resident Indians (NRIs).

-Mumbai: ICICI Bank has inked a co-operation pact with Austria-based Raiffeisenlandesbank Oberösterreich (RLB) for covering several business areas and increasing co-operation in funding commercial and syndicated credit business, and cash management services.

-ICICI bank sets up first branch in Madikeri.

-Indian Railways and ICICI Bank inked a memorandum of understanding for extending the sale of e-tickets via merchant establishments located in 125 cities across the country.

Page 45: company history of SBI, ICICI

-ICICI bank mops up $500mn through five-year bond.

-BMW India and ICICI Bank on February 23 signed an agreement for offering financing solutions that will benefit the prospective buyers.

-Thomas Cook (I) Ltd (TCIL) has joined hands with ICICI Bank to introduce a first of its kind premium card named Thomas Cook Titanium Mastercard.

- ICICI Bank, India's second largest Bank, and Export Development Canada (EDC), Canada's Export Credit Agency, on March 13, signed a USD 50 million Line of Credit (LoC) agreement.

-ICICI Bank inks agreement with Emirates Bank.

-CRISIL assigns highest ratings to ICICI Bank's loan receivables securitisation programme.

- ICICI Bank and apparel discount chain Megamart April 10, joined hands to unveil a co-branded credit card.

-ICICI Bank Ltd has informed that Reserve Bank of India, has approved the Scheme of Amalgamation of The Sangli Bank Ltd with the Bank. The Scheme of Amalgamation shall come into effect from April 19, 2007.

- ICICI Bank on declared a Rs 100-crore fund to support innovation and development of green businesses in India.

-SOTC has joined hands with ICICI bank to offer-holiday now pay later (HNPL) facility to travelers.

- ICICI Bank offers cheaper loans for cutting down CFC. -ICICI sets up branch in Birmingham.

History and Major Events

We were incorporated in 1994 as a part of the ICICI group. Our initial equity capital was contributed 75.0% by ICICI and 25.0% by SCICI Limited, a diversified finance and shipping finance lender of which ICICI owned 19.9% at December 1996. Pursuant to the merger of SCICI into ICICI, we became a wholly owned subsidiary of ICICI.

The chronology of events since we were incorporated in 1994 is as follows:

Change of name

Our name was changed from ICICI Banking Corporation Limited to ICICI Bank Limited on September

Page 46: company history of SBI, ICICI

10, 1999. The change of name was effected on account of our being widely known by the name "ICICI Bank".

Merger of Bank of Madura

Bank of Madura was merged with us effective March 10, 2001. The share exchange ratio fixed for the transaction was two of our equity shares of Rs. 10 each for every equity share of Bank of Madura of Rs. 10 each.

Amalgamation of ICICI

ICICI, ICICI Capital Services and ICICI Personal Financial Services amalgamated with us with effect from May 3, 2002. The Appointed Date for the merger specified in the Scheme of Amalgamation, which was the date of the amalgamation for accounting purposes under Indian GAAP, was March 30, 2002. The amalgamation was approved by the High Court of Judicature at Bombay vide its order dated April 11, 2002 and by the High Court of Gujarat at Ahmedabad vide its order dated March 7, 2002. The share exchange ratio was one of our equity shares of Rs. 10 each for every two equity shares of ICICI of Rs. 10 each.

Amalgamation of The Sangli Bank Limited

The Board of Directors of ICICI Bank Limited and the Board of Directors of The Sangli Bank Limited (Sangli Bank) at their respective Meetings held on December 9, 2006, approved an allstock amalgamation of Sangli Bank with ICICI Bank. The amalgamation was subsequently approved by the Members of both banks. RBI (RBI) approved the scheme of amalgamation effective April 19, 2007.

Source date - Prospects - 19/06/2007

- ICICI Bank mops up $4.9bn in via share sale in India.

- ICICI mops up Rs 1,294cr through green-shoe option.

- ICICI Bank signs pact with Korea Exim Bank.

- ICICI Bank has slashed the rates on special deposit schemes by 50 basis points from 9.5 per cent to 9 per cent.

- ICICI Bank awarded as the Outstanding Regional Private Bank.

-The Department of Commerce, PSG College of Arts and Science, Coimbatore, is all set to conduct a training programme for students in association with the ICICI Bank.

Page 47: company history of SBI, ICICI

- ICICI Bank, under its-Industry-Academia Partnership- programme, is in talks with three leading universities of the West Bengal to launch banking and insurance courses.

2008

- ICICI Bank Ltd has informed that the Government of India has nominated Shri. Arun Ramanathan, on the Board of the Bank effective January 18, 2008 in place of Shri. Vinod Rai who has resigned effective January 06, 2008.

- ICICI Bank Ltd has informed that the Government of India has nominated Shri. Arun Ramanathan, on the Board of the Bank effective January 18, 2008 in place of Shri. Vinod Rai who has resigned effective January 06, 2008.

- ICICI Bank has forayed into Rs 1,150-crore equity-cum-debt deal with Jaypee Infratech, which is to build and operate the 165-km six lane Taj Expressway linking Noida with Agra.

-Standard & Poor's Ratings Services lowered ICICI Bank Ltd.'s $300 million U.S. commercial paper program's short-term issue credit rating to 'A-1' from 'A-1+', following the agency's downgrade of Fortis Bank SA/NV.

2009

- ICICI Bank appointed N S Kannan as the Executive Director and Chief Financial Officer on the board with effect from May 1 following the vacancy caused by the elevation of Chanda Kochhar as Managing Director and CEO of the bank, with effect from May 1.

- ICICI Bank has announced the cut in the interest rates on floating home loans for new borrowers by 25-50 basis points, with immediate effect. The interest rates on existing home loans would reduce only if the floating reference rate is cut.

- ICICI Bank with Singapore Airlines launched “ICICI Bank Singapore Airlines Visa Platinum Credit Card”, the Card has exclusive privileges especially designed for the members.

- ICICI Bank Limited acting through its Hong Kong Branch (ICICI Bank) signed a loan agreement with the Export-Import Bank of China (China Exim) for USD 98 million under the Two- step Buyer Credit (Export Credit) arrangement. ICICI Bank is the first Indian Bank to have entered into this arrangement with China Exim.

2010

Page 48: company history of SBI, ICICI

- ICICI Bank has increased deposit rates on select maturities. The bank has raised the interest rate on deposits maturing in 270 days to less than one year by 25 basis points to 5.75 per cent for deposits of Rs 15 lakh to Rs 1 crore.

- ICICI Bank increased its deposit rates in select tenures by up to 0.50% with instant effect, signaling hardening of interest rates in the industry.

- ICICI Bank has announced the appointment of Mr Rajiv Sabharwal as a whole-time director of the bank. The bank said Mr Sabharwal is designated as an Executive Director effective June 24. Mr Sabharwal was heading the bank's retail banking operations.

- ICICI Bank announced the appointment of Mr Rajiv Sabharwal as a whole-time director of the bank.

- ICICI Bank has received the World Finance Awards 2010 in three categories. The three categories are Excellence in NRI services- Worldwide, Excellence in Remittance Business-Worldwide and Excellence in Private Banking Business-Asia-Pacific Region awards at the prestigious World Finance Awards, UK, 2010.

- ICICI Bank launches website in Hindi.

- ICICI Bank opens first retail branch in Singapore.

- RBI approves the amalgamation of Bank of Rajasthan Ltd with ICICI Bank Ltd.

- First private sector Bank to inaugurate its 2000 Branch.

- ICICI Bank gets Qualified Full Banking privileges in Singapore.

2011

- ICICI Bank offers cash withdrawal at POS terminals

- ICICI Bank & Vodafone Essar ink pact for financial inclusion

- ICICI Bank & Aircel sign MoU for financial inclusion

- ICICI Bank & Indian Army sign MoU for banking services

- ICICI Bank and Intuit launch "Money Manager"

- ICICI Bank launches EMV Standard Cards

Page 49: company history of SBI, ICICI

- ICICI Bank Limited Opens Second Retail Branch in Singapore

- ICICI Bank launches the first dual Platinum Credit Card

- ICICI Bank closes the first rupee Credit Default Swap transaction

2012

- ICICI Bank opens its second branch in Hong Kong

- ICICI Bank rolls out 25 electronic branches and launches many next generation banking solutions

- ICICI Bank was the first private sector bank in India to offer PPF account facility at all bank branches.

- Among the first banks to introduce account portability and also the only bank to offer portability on two additional channels - Internet Banking and Phone Banking.

- ICICI Bank launches first Electronic Toll Collection project on NH-1. A first of its kind project initiated by the Ministry of Road, Transport & Highways, National Highway Authority of India (NHAI) and - ICICI Bank.

- ICICI Bank receives approval from RBI to set up an Infrastructure Debt Fund. It is the first debt fund to get government's go ahead.

- ICICI Bank launches its official Facebook Page. First bank in India to offer one-of-its kind "Your Bank Account" Applications, which allows access to bank account information on Facebook.

2013

- CLSA maintains ICICI Bank as its top pick in banking space; scrip rallies to 4-year high

Company History - Bank of India

1969

- The Bank was brought into existence by an Ordinance issued on 19th July by the Central

Page 50: company history of SBI, ICICI

Government. In terms of the Ordinance, the Undertaking of `The Bank of India Ltd.' was transferred to and vested in the new bank. The Ordinance was replaced by the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1969.

1970

- The Acquisition and Transfer of Undertakings Act was declared null and valid by the Supreme Court on 10th February. An ordinance was thereupon promulgated which was later replaced by the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 which was made effective restrospectively from 19th July, 1969.

- Under the `Lead Bank Scheme' the Bank was allotted 30 districts in 5 states - 9 in Maharashtra, 9 in Madhya Pradesh, 2 in Orissa, 4 in Bihar and 6 in U.P.

1985

- Rs 43 crores capital contributed by Government.

1986

- Rs 27 crores capital contributed by Government.

1988

- Rs 35 crores capital contributed by Government.

1989

- The Bank of India Finance Ltd. was incorporated in June as a subsidiary of Bank of India to extend a complete package of professional financial services to the corporate sector, including merchant banking, leasing and investment banking.

- Rs 140 crores capital contributed by Government.

1990

- BOI Mutual Fund was estabished, to provide direct services to investors by pooling their resources and investing in capital market securities.

- Rs 100 crores capital contributed by Government.

Page 51: company history of SBI, ICICI

1991

- Rs 110 crores capital contributed by Government.

1993

- Rs 6357 crore capital contributed by Government.

1994

- A new subsidiary of the bank was formed to manage the investment operations of BOI Mutual Fund. It received Certificate of Commencement of Business on 21st February.

- Rs 848.38 crores capital contributed by Government.

1995

- In terms of Ministry of Finance the accumulated loss of Rs 1369.91 crores adjusted against paid-up capital.

1996

- Rs 93.47 crores returned to Government as a part of capital restructuring. 1500,00,000 equity shares (prem. of Rs 35 per share) issued to public through prospectus.

1997

- The BOIFIN was associated with 12 issues as Lead Managers/Co-Manager/Arranger.

- The Company became Depository Participate of National Securities Depository Ltd., for the purpose of clearing and settlement of trades in the dematerialised segment of BSE.

1998

- As on 31st March, the Bank had sponsered 16 Regional Rural Banks with capital of 5.60 crores and a total branch network of 992 in five states.

- Bank of India has been awarded the Gem & Jewellery Export Promotion Council Award.

- Bank of India (BOI) has set up a full fledged risk management department at its corporate office. The bank has already integrated its money market and forex operations to set up global treasury which will

Page 52: company history of SBI, ICICI

be better equipped to manage the types of risks arising from capital recent convertibility.

- Four Banks - State Bank of India (SBI), Bank of India (BoI), Oriental Bank of Commerce (OBC) and Hongkong Bank - have introduced term deposits with a minimum maturity of 15 days.

- Bank of India (BoI) has tied up with Equifax Venture Infotek Ltd (EVI) to automate its credit card operations to provide electronic solutions to its customers. EVI is a 50:50 joint venture between the US-based Equifax Inc and Venture Infotek. According to the agreement, BoI would provide point-of-sale (POS) terminals at its leading card acceptance establishments all over the country.

- Mr. A.M. Ahmadi, former Chief Justice of India, on Monday presented the Bank of India Excellence Awards to five personalities in the fields of finance, literature, management, music and arts and media.

- The public sector Bank of India has launched the BOI Navy Card with MasterCard International on the occasion of Navy Day.

1999

- The Mumbai Stock Exchange (BSE) and the Bank of India (BoI) have set up an internal working committee to review the working of the BoI Shareholding and also make it a `self sustaining unit'.

- The public sector, Bank of India (BoI), is currently on an exercise of restructuring its subsidiaries. As a part of the restructuring, the bank will be taking stock of the viability of the subsidiaries and try to turn them around.

- BoI will enter the insurance partnership with a foreign insurance company.

2000

- Bank of India has introduced floating interest rate on deposits for select customers, besides advancing on Mumbai Inter Bank Offer Rate (MIBOR).

- Bank of India (BoI) has unveiled major business initiatives like the introduction of a centralised banking system, floating deposit schemes and cash management services.

- Bank of India (BoI) plans to introduce a centralised banking programme which will facilitate anytime and anywhere banking for its customers.

- Bank of India and Andhra Bank have become the first public sector banks to receive an in-principle approval to dilute government shareholding in them to 33 per cent through mobilisation of fresh capital via a public issue.

Page 53: company history of SBI, ICICI

- The Bank has offered a special deposit scheme for investors in BoI Mutual Fund's Double Square Plus (1990) Scheme, which would be redeemed on September 1.

- Bank of India has revised its FCNR, NRE and NRNR deposit rate effective from 11th September.

- Bank of India has hiked the rates on foreign currency non-resident Indian (FCNR) account effective 2nd October.

- Venugopalan, general manager, Bank of India (BoI) has been appointed as the new executive director of Union Bank of India (UBI).

- Mr. Onkar Nath Singh has been named executive director of Bank of India for a period of five years.

- The Bank has joined Central Depository Services as depository participant.

- Bank of India will close down its merchant banking arm, BoI Finance.

2001

- State-Run Bank of India has suspended bullion trading in Ahmedabad after being hit by a payment crisis involving a troubled cooperative bank.

-Bank of India has passed a resolution to return Rs 300 crore capital to the government. Chairman K V Krishnamurthy said the depressed share value has been a matter of concern to the management.

- Bank of India (BoI) has finalised a comprehensive human resource development (HRD) package for its employees. The scheme is believed to provide impetus to banks’ business growth and will cost the bank around Rs 30 lakh per annum.

- Bank of India (BoI) has reported a 63 per cent rise in net profit at Rs 135.16 crore in the second-quarter ended September 30, 2001.

- Bank of India proposes to convert its fully-owned subsidiary in Kenya into a full-fledged bank. The two existing BoI branches in Kenya will also be merged into the entity. According to Mr S.A. Bhat, General Manager, International, BoI.

- Bank of India has informed that Shri S.R. Sengupta and Shri A.B. Telang have relinquished their office from Directorship of the Bank with effect from January 01, 2002. This is pursuant to their attaining age of superannuation.

Page 54: company history of SBI, ICICI

2002

- Bank of India on March 30th returned Rs 150 crore capital to the government, bringing down its capital base from Rs 639 crore to Rs 489 crore.

-Bank of India has informed that it has decided to exit from the Mutual Fund Business and therefore the remaining two current Mutual Fund Schemes have been sold to Taurus Mutual Fund.

-Deveshwar Kumar nominated by GOI as non official Director of BOI.

-Bank of India has informed BSE that the Government of India has nominated Mr Deepak Prabhakar Patil as a Workmen Employee Director on the Board of Directors of Bank of India for a period of three years with effect from August 29, 2002 and thereafter until his successor is appointed or till he ceases to be an Workman Employee of the Bank of India.

-Bank of India has informed that the following four persons who have polled the majority votes have been elected as Directors in the EGM held on October 10, 2002.Mr Sadagopan Sowmyanarayanan,Mr Sheth Tarun,Mr Shastri Girish Ramanugrah,Mr Chandra Bhagwantrao Govindrao

-Extends its Multi-Branch Banking (MBB) facility to all its branches in Mumbai

-Enters film financing sector, becomes the first commercial bank to enter the sector

-High Court at Mumbai sanctions amalgamation of BOI Finance Pvt. Ltd. (100% subsidiary) with Bank of India (BOI)

-Slashes interest rates on FCNR deposits by 20-35 basis points (bp)

-Ties up with ICICI Bank to utilise wide branch network covering 1,000 branches for ICICI Bank's cash management services

-Prunes the number of training centres from 14 to 5

-Becomes the bank with third highest Non Performing Assets (NPA)

-Reduces deposit rates by 40 to 75 basis points

-Decides to merge BOI Asset Management Co. Ltd. (BOIAMC), a wholly owned subsidiary, with the Bank

-IBA gives its nod for second phase of BoI VRS

Page 55: company history of SBI, ICICI

-Reduces Prime Lending Rate (PLR), deposit rates by 50 basis points

-Changes the maturity buckets for interest rates on domestic as well as non-resident external rupee (NRE) term deposits

-Slashes deposit rates across all maturities

-Appoints Deloitte Touche Tohmatsu India Pvt Ltd. as a special recovery agent for recovery of NPAs

-Slashes interest rate on Euro-denominated FCNR deposits

2003

-Introduces mobile ATM in Mumbai

-Slashes the rate of interest on FCNR US dollar and euro deposits by 10-25 basis points across maturitie effective January 4

-Approves insurance referral business at Hong Kong Centre

-Enters into a tie-up with leading information technology players CMC Ltd. and Infrasoft Technologies to extend its multi-branch banking (MBB) facility to another 450 branches in 21 cities

-High Court approves Scheme of Amalgamation of BOI AMC with Bank of India

-Four state-owned banks (Bank of India (BoI), Indian Bank, Syndicate Bank and United Bank of India) enter into an agreement to share their respectime ATM (automated teller machine) networks

-Government clears Bank of India's (BoI) proposal to settle Rs 137 crore outstanding with Ketan Parekh

-Introduces 'Starlinks' global debit card in partnership with Visa International and India Switch Company

-Finance Ministry, RBI approve compromise formula for bank's due recovery from stock broker Ketan Parekh

-Networks 275 out of 2541 branches at a cost of Rs 14 crore

-Launches its first off-site ATM in Sathy Main Road in Coimbatore on September 11

Page 56: company history of SBI, ICICI

-The bank has taken possession of a tea factory in Coonoor under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, 2002.

-Bank of India divested Silverline's 45 lakh shares at Rs 8

-Revises interest rates on domestic term deposits with effect from Dec 1

-The Company has tied up with insurers for Bankassurance products - both life insurance and general insurance. The bank launched some of the products on December 09, said it had tied up with ICICI Prudential Life Insurance Company and National Insurance Company.

-Bank of India ties up with ICICI prudential

2004

-Board approves increase in Tier II Capital by issue of subordinated bonds

-Bank of India & Canara Bank acquire 4% in Mercator Lines Ltd.

-Bank Of India has informed that the Govt of India vide its notification dated January 09, 2004 has nominated Mr. V S Das, Chief General Manager-in-charge, Department of Government and Bank Accounts, RBI as Director on the Board of the Bank w.e.f. January 09, 2004 in place of Mr. M P Kothari, Regional Director, RBI.

-BoI signs tractor finance agreement with L&T-John Deere

-Launches IPO financing, becomes the first public sector bank to do so

-Revises interest rates on its FCNR deposits in dollar and euro currencies

-Launches Star IPO, a demand loan for investors interested in subscribing to initial public offerings (IPO) approved by the bank

-Bank of India (BoI) has raised Rs 200 crore by way of issuing Tier II subordinated bonds.

-BoI inks pact with Escort Tractors

-BoI inks pact with Punjab Tractors

-Bank of India opens first off-site ATM in Tiruchi

Page 57: company history of SBI, ICICI

-Bank of India introduces new Kisan Samadhan card

-BoI ties up with Greaves Cotton

2005

- Bank of India (BoI) enters collaboration with ACIL-Navasarjan Rural Development Foundation (ANARDE), a non-government organisation (NGO) to increase rural penetration and boost lending to the agriculture sector.

- Launches an international gold credit card in association with Visa International on January 5, 2005

-BoI unveils new 'Star Diamond Saving Account'

-Bank of India appoints Shri M Balachandran as Chairman & Managing Director (CMD) up to April 30, 2007

-BOI signs MoU with LG to finance consumer durables

-Bank of India teams up with Nabard arm for agri projects

-Bank of India ties up with ICICI Prudential Life Insurance to provide cover to housing loan borrowers against risk of death during the loan tenure.

-Bank of India and Banco Popolare Di Verona E Novara signed a Memorandum of Understanding (MoU) for supporting their respective customers doing business in each other's countries.

2006

-BoI inks MoU with Exim Bank

-BoI join hands with Andhra Bank to set up Dai-ichi Mutual

-Change of address: the Company Secretary Bank of India Share Department, 8th Floor, Star House, C - 5, G. Block, Bandra Kurla Complex, Bandra (East), Mumbai - 400 051.

-BoI joins hand with SIDBI to train jewellers

2007

Page 58: company history of SBI, ICICI

- Bank of India has appointed Shri. A D Parulkar as Executive Director of the Bank.

2008

-Bank of India has informed that the Government of India, Ministry of Finance, Department of Financial Services vide its Notification has nominated Shri. Amit Kumar Motayed as Officer Employee Director in place of Shri. V Eswaran for a period upto January 31, 2011 from the date of notification or until he ceases to be an officer of the Bank of India or until further orders, whichever is the earliest.

- Bank of India has appointed Shri. B A Prabhakar as Executive Director of the Bank. He has taken over charge on October 15, 2008.

-BoI launches debt waiver scheme

-Bank of India on July 23 opened the first branch of its Tanzanian subsidiary, BoI Tanzania at Dar-es-Salaam.

2009

- Alok K. Misra was appointed as Chairman and Managing Director succeeding T. S. Narayanasami of Bank of India by the centre. He was the CMD of Oriental Bank of Commerce till now.

- Bank of India has informed that the Government of India, Ministry of Finance, Department of Financial Services vide their Notification dated August 05, 2009 has appointed Shri. Alok Kumar Mishra as Chairman and Managing Director of the Bank. He has taken over charge on August 05, 2009.

-BoI launches new home loan plan for new borrowers

-Bank of India has signed a memorandum of understanding with Tata Motors to provide financing for Tata's entire range of commercial vehicles.

Company History - Canara Bank

The Bank is a Government of India undertaking, and carries on all banking business. The Bank was brought into existence by an ordinance passed on the 19th July 1969 by the Central Government. In terms of the ordinance the undertaking of the Canara Bank Ltd was vested to and transferred to the new bank. This ordinance was replaced by the Banking Companies (Acquisition and Transfer of Undertaking) Act, 1969. This Act was declared null & void by the Supreme Court on the 10th of

Page 59: company history of SBI, ICICI

February 1970 and subsequently the Ordinance was promulgated. Then the Banking Companies(Acquisition and Transfer of Undertaking) Act, 1970 was passed and it was made effective retrospectively from 19th July 1969.

2000 - Canara Bank became the first public sector bank to join the MasterCard ATM network.

- Canara Bank has launched its gold deposit scheme in Bangalore, offering 3-3.5 per cent interest on the deposits.

- The Canara Bank and Bank of India have envinced interest to provide loan to the Rs 6,500 crore joint venture Bharat Oman Refineries project in Madhya Pradesh.

- Public Sector Canara Bank has hiked prime lending rate and MTLR to 12.25 per cent from 11.75 per cent and 12 per cent respectively with effect from 10th August.

- The Bank came up with a vanilla bonds issue of Rs 300 crore to increase the tier-II capital before september 30.

- Bangalore - based Canara Bank has set up four corporate service branches in Bangalore, Mumbai, Delhi and Chennai and is likely to covert more branches for specialised services. - Canara Bank, the 100 per cent government-owned public sector bank will be roping in an overseas joint venture partner for its mutual fund subsidiary in the next three months.

- Canara Bank has entered into an agreement with the Al Mirza group in Oman for opening an exchange house that will be managed by officers deputed by the bank.

- Canara Bank will introduce its voluntary retirement scheme on January 1, 2001.

- Canbank Factors Ltd., a subsidiary of Canara Bank, has launched its export-factoring activity and has appointed GE Capital International Finance, SPA as is import factor.

2001 - Canbank Factors Ltd., a subsidiary of Canara Bank, has opened its eighth branch in New Delhi.

- The Public Sector Canara Bank has entered into an arrangement with the Infrastructure Development Finance Company for financing core sector projects.

- Canara Bank has named RV Shastri as its new chairman and Managing Director.

2002

-Drops plan to bring in a joint venture partner in its proposed credit card subsidiary

Page 60: company history of SBI, ICICI

-Canbank Computer Services Ltd, a subsidiary of Canara Bank, awarded the revised ISO certification, ISO 9001:2000, by BVQI

-Launches Laghu Udhyami Credit Card to give its small borrowers credit facilities

-Reduces interest rates on NRE and domestic term deposits

-Launches 3 ATMs at Nanganallur, Annanagar and Valmikinagar of Tamil Nadu

-Reduces interest on housing loan

-Slashes Prime Lending Rate to 11.5% from 11.75%

-Eight Regional Rural Banks (RRBs) sponsored by Canara Bank report total business of Rs 4,030 crore

-Hands over dividend of Rs 80 crore to the Union Government

-Reduces its equity capital to Rs 300 crore

-Returns 48 per cent (Rs 277.87 crore) of its capital of Rs 577.87 crore to Central Government

-Launches 'Anywhere Banking' facility in Hyderabad making it the fifth city in the country to have the facility in addition to Bangalore, Mumbai, Delhi, Kolkata & Chennai

-Comes out with public issue of 110,000,000 equity shares of Rs 10 each at a premium of Rs 25 per share aggregating Rs 385 crore

2003

-SBI and Canara Bank tie up to kick off full fledged operations in Moscow

-Launches a new credit scheme to encourage solar home lighting systems in Karnataka with assistance from the United Nations Environment Programme (UNEP)

-Ties up with Aviva Life Insurance Company to act as Corporate Agent for selling the Life Insurance products of AVIVA without risk participation

-Aviva Life Insurance launches sale of its products through Canara Bank

-Issues Tier II Capital (Unsecured Redeemable Non-Convertible Subordinated Bonds) aggregating Rs

Page 61: company history of SBI, ICICI

400 crore

-Launches a floating rate deposit scheme (FRDS) for high networth individuals

-Raises Rs 500 cr via Tier II bonds

-Strikes a structured deal with Central Board of Trustees (CBoT) to privately place its tier-2 bond issue for Rs 250 crore at 7.25 per cent

-Canara Bank Regional Rural Banks witness 16 % growth for 2002-03

-Adds seven more ATMs in Kerala

-Tops the recovery list of Non Performing Assets (NPA) among nationalised banks

-Reduces interest rates by 2 pc for SSI loans

-Ties up with Mahindra & Mahindra for tractor financing

-Canara Bank, Central Bank of India (CBI), Indian Overseas Bank (IOB), UCO Bank and Union Bank of India (UBI) form an alliance to launch `Cash Online' ATM network

-Eicher Tractors sign MoU with Canara Bank for providing financing solution to farmers buying Eicher Tractors and other farm implements

-- Canara Bank along withCentral Bank of India (CBI) , Indian Overseas Bank (IOB), UCO Bank and Union Bank of India (UBI) have formed an alliance to launch `Cash Online' ATM network

-Canara Bank has signed a memorandum of understanding (MoU) with the Small Industries Development Bank of India (SIDBI) for co-financing small-scale industries, service sector and for undertaking related infrastructure projects.

-Canara Bank unveils special loan scheme for women

-Canara Bank raises Rs.250 crore Tier-II capital

2004

-Central Government nominates Smt Supriya Pattnaik, General Manager, Reserve Bank of India, as a Director on the Board of Directors of the Bank with immediate effect in place of Shri C S Murthy

Page 62: company history of SBI, ICICI

-Canara Bank & Bank of India acquire 4% stake in Mercator Lines

-Canara Bank enters into strategic tie-up with Western Union and its primary agent AFL WIZ

-Introduces a loan scheme for individuals to subscribe to initial public offers at five cities - Bangalore, Chennai, Kolkata, Delhi and Mumbai - with an aim to cater to the needs of retail investors

-Canara Bank opens its first Mahila Banking Branch in Kerala

-Canara Bank announced the launch of `E-kisan credit card', an ATM enabled card for farmers

-Canara Bank has launched a loan scheme for the medical fraternity - Doctor's Choice - in Bangalore

- Canara Bank unveils 2 new ATMs in Thiruvananthapuram

- Canara Bank ties up with BAL for auto finance

-Canara Bank unveils new ATM in Hayatnagar

-Canara Bank unveils new branch in Udupi

- Canara Bank signs a Memorandum of Understanding (MoU) with M/s Tractor & Farm Equipment Manufacturers Ltd (TAFE).

-Canara Bank has announced the launch of a housing loan scheme designed exclusively for the employees of the Kerala Water Authority (KWA)

-Canara Bank has entered into a franchise agreement with Western Union Financial Services for money transfer facility

-Canara Bank has launched a 'gold card' scheme for exporters, under which it will offer a three-year credit period with an automatic renewal clause, and with competitive interest and charges

-Canara Bank, one of the premier Banks in the country has signed a Memorandum of Understanding (MoU) with M/s Kerala Agro Machinery Corporation Limited (KAMCO), one of the largest manufacturers of power tillers

-Canara Bank, one of the premier Banks in the country has signed a Memorandum of Understanding (MoU) with M/s Plastro Plasson Industries (India) Ltd, one of the leading Companies which specializes in manufacturing of micro-irrigation equipments and also undertakes projects on turnkey basis, for financing of micro-irrigation equipments to farmers

Page 63: company history of SBI, ICICI

-Canara Bank and HDFC Mutual Fund on August 12 signed an agreement for the bank to distribute HDFC's MF products through its network

-Canara Bank has informed that the Bank vide agreement dated August 12, 2004 with HDFC Asset Management Company Ltd has entered into a strategic alliance for cross selling of the schemes/products of HDFC Mutual Fund, launched from time to time

-Canara Bank, TVS Motor rolls out TVS Canmobile

-Canara Bank forges alliance with New Holland Tractors

-Al Razouki partners with Canara Bank

-Canara Bank launches new schemes 'Cantravel', 'Cantech'

-Canara Bank signs agreement with Russian Bank

2005

- On January 3, 2004, launches multi-point interactive video conferencing as a means to review the performances of its circles from its headquarters in Bangalore.

-Canara Bank inks bancassurance pact with United India Insurance Co Ltd (UIICL).

-Canara Bank signs MoU with NCMSL

-Canfin Homes launches three new loan products

-Canara Bank appoints Shri M B N Rao as Chairman & Managing Director (CMD) up to June 30, 2008

-Canara Bank sets up ATM

-Canara Bank begins operation in Shanghai on August 08,2005.

-Canara Bank tied up with i-flex Solutions for core-banking project and IBM will be the systems integration partner.

-Canara Bank joins hand with Dakshina Kannada milk co-op

2006

Page 64: company history of SBI, ICICI

-Canara Bank has signed a memorandum of understanding (MoU) with Tata BP Solar India Ltd, to extend a soft loan for the purchase of water heaters

-Canara Bank has informed that in exercise of the powers conferred by clause (b) of sub-section (3) of section 9 of the Banking Companies (Acquisition and transfer of Undertakings) Act, 1970 / 1980 read with sub clause (1) of clause 3 of the Nationalized Banks (Management and Miscellaneous Provisions) Scheme, 1970 / 1980, the Central Government, nominated Shri Amitabh Verma, Joint Secretary (BOA), Ministry of Finance Banking Division, as a Director of the Bank in the place of Shri G C Chaturvedi, vide notification Dated October 31, 2006, with immediate effect and until further orders.

-Retained Number One Position in Aggregate Business among Nationalized Banks. -Signed MoUs for Commissioning Two JVs in Insurance and Asset Management with international majors viz., HSBC -(Asia Pacific) Holding and Robeco Groep N.V respectively

2007

- Canara Bank has inked a memorandum of understanding with the ICRA Ltd for credit rating small and medium enterprises. The MoU will facilitate extending comprehensive rating services to all the bank's SME customers. This was especially since Canara Bank was aiming to expand its advances to the sector.

-Canara Bank has appointed Shri. Alok Kumar Misra, Executive Director of the Bank as Chairman & Managing Director of Oriental Bank of Commerce by the Government of India, Ministry of Finance, Department of Economic Affairs, Banking Division, vide its Notification dated June 04, 2007.

- Canara Bank has appointed Shri D L Rawal, General Manager, Punjab National Bank, as a whole time director (designated as the Executive Director) of the Bank from the date of his taking charge i.e. from June 06, 2007 and until further orders or till the date of his superannuation i.e. upto October 31, 2011, vide notification dated June 06, 2007.

- Canara Bank has rolled out two new schemes for their High Networth Individuals - SB Gold (Savings Bank) and Can-Premium Current Account. The schemes offer various services like free debit and credit cards, anywhere banking facility, internet and mobile banking facility with free funds transfer, telebanking and issue of demand drafts at concessional charges, among others. SB Gold scheme, which was first launched in Bangalore last year, has been extended to the bank's customers across the country.

- Canara Bank, HSBC Insurance (Asia-Pacific) Holdings and Oriental Bank of Commerce have formally signed agreement to jointly establish life insurance company in India.

Page 65: company history of SBI, ICICI

- Canara Bank announced a 0.50 per cent cut in floating interest rates on home loans, indicating easing cost of funds that prompted segment leader HDFC too to rollback rates last week.

2008

- Canara Bank has informed that in exercise of the powers conferred by clause (e) Sub-Section 3 of Section 9 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970, read with sub- clause (2)(a) of clause 9 of the Nationalized Banks (Management and Miscellaneous Provisions) Scheme, 1970, the Central Government has appointed Shri. Devender Dass Rustagi, Special Assistant, Canara Bank, Recovery Section, Circle Office, Nehru Place, New Delhi as Workmen Employee Director on the Board of Directors of Canara Bank, vide Notification dated September 15, 2008, for a period of three years from the date of Notification or until further orders whichever is earlier.

-The Bank crossed the coveted Rs. 3 lakh crore in aggregate business -The Bank’s 3rd foreign branch at Shanghai commissioned

2009

- Canara Bank has appointed Shri. Jagdish Pai K L, General Manager, Bank of India as a whole time director (designated as Executive Director) of Canara Bank with effect from the date of his taking over charge and up to June 30, 2011 i.e. the date of his superannuation or until further orders, whichever is earlier, vide notification dated February 04, 2009.

- Canara Bank has entered into an alliance with Hyundai Motor India Ltd to finance the passenger vehicles manufactured by the company. The bank will extend the finance facility to the buyers through its branches across the country as well as through the 251 Hyundai dealers.

- Canara Bank has informed BSE that in exercise of the powers conferred by clause (a) of sub-section (3) of section 9 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970/1980, read with sub-clause (1) of clause 3, sub-clause (1) clause 8 of the Nationalized Banks (Management and Miscellaneous Provisions) Scheme, 1970/1980, the Central Government, after consultation with the Reserve Bank of India, has appoints Shri. H S U Kamath, General Manager Union Bank of India as a whole time director (designated as Executive Director) of Canara Bank with effect from the date of his taking over charge and up to December 31, 2013 i.e., the date of his superannuation or until further orders, whichever is earlier, vide notification dated March 26, 2009.

He has taken charge as Executive Director of the Bank w.e.f. March 26, 2009.

- Canara Bank has has appointed the following six audit firms as Statutory Central Auditors of the Bank for the year 2009-10: 1. M/s. M Anandam & Co., Chartered Accountants, Secunderabad.2. M/s. N Sankaran & Co., Chartered Accountants, Chennai.3. M/s. S Bhandari & Co., Chartered Accountants,

Page 66: company history of SBI, ICICI

Jaipur.4. M/s. Manubhai & Co., Chartered Accountants, Ahmedabad.5. M/s. R K Kumar & Co., Chartered Accountants, Chennai.6. M/s. Nandy Halders & Ganguly, Chartered Accountants, Kolkata.Out of the above, the first two firms are continuing Statutory Central Auditors, while the remaining firms have been appointed in place of M/s. S N Mukherji & Co.,, M/s. De Chakraborty & Sen, M/s. Satyanarayana & Co., and M/s. Parakh & Co., who have completed their term.

2010

- Canara Bank has nominated Shri Khalid Luqman Bilgrami as part-time non-official Director under Chartered Accountant category, on the Board of Directors of Canara Bank.

Company History - IDBI Bank Ltd.

1964

- The Company was Incorporated on 1st July, at Mumbai. The Bank was established as a wholly owned subsidiary of the Reserve Bank of India on 1st July, under a special statute, viz., Industrial Development Bank of India Act.

1965

- With effect from 1st April, the Bank introduced a scheme for rediscounting usance bills/promissory notes arising out of sale of indigenous machinery on deferred payment basis.

- The Bank decided to supplement its refinance operations with a measure of risk-sharing with other institutions on a systematic basis and introduced a participation scheme for this purpose, with effect from 1st April, 1966.

- The Development Assistance Fund was established on 27th March, in terms of Notification dated 16th March, issued by the Government of India.

Page 67: company history of SBI, ICICI

1972

- The IDBI took initiative in establishing a technical consultancy service centre at the State level in Kerala in February called the Kerala Industrial and Technical Consultancy Organisation and contributed 51% to its paid-up capital of Rs 2 lakhs.

1973

- North Eastern Industrial and Technical Consultancy Organisation, Ltd. (NEITCO), was sponsored by the IDBI in May. Another technical consultancy organisation, viz., Bihar Industrial and Technical Consultancy Organisation, Ltd. (BITCO), was set up.

- Refinance facilities are provided to eligible banks, which are authorised dealers in foreign exchange, against medium-term export credits granted to exporters in the private sector, who are manufacturers, recognised export houses or other exporters of standing.

- The Bank as a apex institution, has also been vested with the responsibility of strengthening the resources position of the term financing institutions with a view to enabling them to expand and diversify their activities.

- The Bank received various lines of credit from IDA/World Bank from time to time beginning from the year in US Dollars.

1976

- With a veiw to promoting fuller utilisation of capacity, technological upgradation and export development, the Government of India established in March, the Technical Development Fund (TDF).

- Two Seed Capital Assistance Schemes were introduced by IDBI during the year viz. (i) SFC's Special Share Capital Scheme and (ii) IDBI's own scheme.

1977

- IDBI introduced in January, at the instance of the Government of India, a scheme for providing rupee assistance, to industrial units receiving import licences, under the TDF.

- IDBI, apart from giving resource support for setting up of IFCI, UTI and SFCs, helped in establishing Shipping Credit and Investment Corporation of India, Ltd., Stock Holding Corporation of India Ltd., Securities and Exchange Board of India, Discount and Finance House of India, Ltd., Tourism Finance Corporation of India Ltd., Over The Counter (OTC) Exchange of India, Biotech Consortium India Ltd.,

Page 68: company history of SBI, ICICI

and Indian Investment Management Company Ltd.

1982

- 55,00,000 shares issued.

1983

- 130,00,000 shares issued.

1984

- IDBI introduced equipment finance scheme in September.

- 30,00,000 shares issued.

1985

- A new scheme known as Equipment Refinance Scheme was introduced with effect from July 1st.

- The Bank introduced a new scheme called the Foreign Currency Refinance scheme. Under this Scheme, the Bank would extend foreign currency refinance facility to SIDCs/SIICs under the Bank's Normal Refinance Scheme.

- A special scheme of assistance for installing in-house quality testing facilities was introduced under SIDF. Presently, this scheme is being operated by SIDBI.

- 30,00,000 shares issued.

1986

- Small industries development fund was set up in May to pay concentrated attention to the provision of financial and non-financial inputs to the small scale sector.

- 30,00,000 shares issued.

1987

- The National Equity Fund Scheme was introduced in August for providing equity type support to new tiny and small scale industrial units which are engaged in manufacturing activities and also for rehabilitation of potentially viable sick SSI units.

Page 69: company history of SBI, ICICI

- 20,00,000 shares issued.

1988

- 45,00,000 shares issued.

1989

- 97,00,000 shares issued.

1991

- With effect from 1st April, DAF was merged with the General Fund.

- The Bank's resources can be augmented through issue of bonds and debentures with or without Government guarantee.

- IDBI introduced 3-year 9% capital for sale to the public in the domestic market.

- 66,00,000 shares issued.

1992

- The Bank issued unsecured bonds for a minimum aggregate amount of Rs 300 crores as follows: Deep Discount Bond had a face value of Rs 1,00,000 was issued at a deeply discounted price of Rs 2,700 with a maturity period of 25 years from the date of allotment, Double Option Bond had a face value of Rs 5,000 bears an interest of 15% payable at the end of 10th year on redemption with a premium of Rs 250 per bond. Part A of Rs 5,000 and Part B of Rs 16,500 are tradable separately on Stock Exchanges at Ahmedabad Mumbai, Bangalore, Calcutta, Delh and Mumbai and Regular Return Bond had a face value of Rs 5,000 where interest on principal sum is payable half-yearly. These bonds are redeemable at a premium of 5% at the end of 10 years from the date of allotment.

- The bank entered the area of merchant banking to provide professional advice and services to industry for raising resources from capital market, acquisition of assets on lease and mergers/take-overs of existing units.

- The Bank set up a foreign exchange dealing room to deal with all foreign exchange transactions. The bank had set up Investor Services of India Ltd. with a view to providing registrar and transfer services based on high technology system. - In order to provide wider range of direct finance to meet the specific requirements of clients, the bank introduced new products such as Asset Credit and Equipment

Page 70: company history of SBI, ICICI

Finance. Also introduce equipment leasing to meet the increasing demand for such services.

- 50,00,000 shares issued.

1993

- Authorised Capital reclassified. Equity Shares sub-divided. 2530,00,000 Pref. shares issued. Under Section 4 of IDBI Act, 1964, Government of India by the notification in Official Gazette date 16.11.1994 converted 2530,00,000 No. of equity shares into Preference shares.

1994

- The Bank obtained the membership of National Stock Exchange. IDBI Bank Ltd. promoted and incorporated in September as a commercial bank with an authorised capital of Rs 500.

- The Bank had set up a Mutual Fund as a trust with a view to offering innovative investment products to investors backed by high quality servicing.

- 17,30,93,300 shares allotted to public.

1995

- 17 New ventures were sanctioned. The beneficiary industries were electronics, industrial automation, industrial products and machinery, computer software etc.

- The bank entered into an Umbrella Grant Agreement with the World Bank for US $ 50 million aimed at phasing out use of ozone Depleting Substances in industry as part of ongoing efforts to reduce environmental degradation.

- Loan was approved by the World Bank as part of the financial sector development of select commercial banks underwrite the bank acts as pass through Agent.

- The Bank offered 16,80,00,000 No. of Equity shares of Rs 10 each to Public at a premium of Rs 120 each along with 1,44,20,000 No. of equity shares of Rs 10 each at a price of Rs 130 per share was offered for sale by Government of India. Out of the above 3,36,00,000 shares offered to UTI, Exim Bank and IRBI.

- 5,80,000 shares offered to employees, 10,02,20,000 shares were offered to public along with 19,78,000 shares not taken up in various categories (all were taken up along with unsubscribed portion of shares offered to other categories).

Page 71: company history of SBI, ICICI

1997

- The Bank accepted 68 debenture trusteeship assignments in respect of bonds and debentures aggregating to Rs 2,743 crores.

1997

- IDBI, became the first financial institution to apply NSDL as DP.

- IDBI has signed an agreement with National Securities Depository Ltd (NSDL) to get its equity shares admitted for dematerialisation.

- IDBI has signed a $50-million bilateral seven-year loan facility arranged by Asahi Finance Ltd with Asahi Bank Ltd, Hong Kong as the lender.

- The Reserve Bank of India has shot down the IDBI's proposal to privately place equity shares of its subsidiary, IDBI Bank, with the shareholders of the financial institution.

- The largest financial institution of the country IDBI has merged its foreign exchange and domestic treasury operations following rapid deregulation of the money and foreign exchange markets in the country.

- The 500 MW Pench thermal power project, promoted by Pench Power Ltd, has tied up its financing arrangement with IDBI.

- The IDBI has signed a $150 million line of credit with the Export-Import Bank of Japan (EXIM-J) at Tokyo.

- IDBI is set to become the first all-India financial institution to float capital gains bonds.

1998

- The Industrial Development Bank of India (IDBI) has commissioned a study on the country's debt market.

- The IDBI has tied up a $150 million line of credit with the Export Import Bank of Japan for financing Indo-Japanese joint venture projects in India.

- The IDBI is set to enter the capital market with a mega Rs 1,000-1,500 crore debt issue (Flexibond 4). This will be IDBI's maiden retail issue in the current fiscal.

Page 72: company history of SBI, ICICI

- American Express Bank, the travel related and financial services company, has entered into a strategic alliance for financial services with IDBI Bank.

- IDBI Bank has entered into a strategic alliance with leading travel and financial service company American Express Bank.

- The Industrial Development Bank of India would enter the capital market with a public issue of four crore shares with a face value of Rs 40 crore.

- IDBI may tie the knot with US based $75.9 billion Principal Financial Group for management of provident & pension funds in the country.

- The Industrial Development Bank of India has tied up with 8 commercial banks for extension of loans against its Flexibonds V issue slated to be launched from December 21.

1999

- IDBI Bank Ltd, came out with a maiden public offering of four crore equity shares of Rs 10 each at a premium of Rs 8 per share aggregating Rs 72 crore, said four lakh shares were reserved for its employees and another 40 lakh shares were reserved for IDBI's equity holders on a competitive basis. The issue will close on February 16, 1999. The shares are proposed to be listed on BSE, NSE, and the Indore Stock Exchange.

- IDBI Bank, promoted by two premier financial institutions - Industrial Development Bank of India (IDBI) and Small Industries Development Corporation of India (SIDBI) - is coming out with a public issue of 40 million equity shares of Rs.10 each at a premium of Rs.8 per share aggregating Rs.72 crores.

- THE IDBI is all set to launch the sixth issue of Flexibonds, from February 22 to mobilise Rs. 1,500 crores, inclusive of a greenshoe option of Rs. 750 crores.

- American Express Bank (Amex) has entered into a strategic alliance with IDBI Bank for its personal financial services (PFS) division to jointly explore the development of products such as smart card and debit card, and market complementary products and services to customers of both the banks.

- The Board for Industrial and Financial Reconstruction (BIFR) has declared ATV Projects a sick company and appointed IDBI as operating agency (OA) for preparing the rehabilitation package for the company.

- IDBI has succeeded in entering into one-time settlement for 77 cases for fiscal year 1998-99 as compared to 45 cases in the previous year. - The IDBI has decided to enter the market for the first time

Page 73: company history of SBI, ICICI

this fiscal to borrow Rs 1500 crore through its Flexibond-VII issue.

- A Memorandum of Understanding (MoU) between IDBI and Principal Financial Group was signed in Mumbai.

2000

- The Company proposal for the forfeiture of 3,03,100 No. of equity shares of Rs. 10/- each for non-payment of allotment money. - The Bank has been made the nodal agency for disbursing the Montreal Protocol-approved $80 million compensation package to four Indian companies, including SRF Ltd., and Gujarat Flurocarbonds.

- IDBI and CIDC would set up a joint working group to chalk out modalities for lending to the construction industry and risk assessment of the business.

- The Company has proposed to undertake a capital restructuring exercise to reduce the Government stake to 51 per cent through an American Depository Share issue.

- IDIB Principal Asset Management Company, the 50:50 joint venture between Industrial Development Bank of India and Principal Financial Group-USA, has brought about several changes in its top management.

- The company is launching a special deposit scheme- IDBI Suvidha - to mop-up Rs 2,200 crore worth of outflow on account of premature redemption of the discount bonds issued five years back.

- Crisil has assigned the highest safety rating of `AAA' to various bonds issue of the company.

- Crisil has assigned the highest safety rating of `AAA' to various bonds issue of the company.

- IDBI has become the first all-India financial institution to qualify for the ISO 9002 certification for its treasury operations.

- Industrial Development Bank of India and the Export-Import bank of the United States have signed an memorandum of understanding for financing in the amount of $300 million to support import of US-sourced goods for Indian borrowers.

- Hughes Tele.com (India) has tied up a Rs 250-crore loan with the Industrial Development Bank of India.

- The Industrial and Development Bank of India has sold 36,500 No. of equity shares of Pan Foods Ltd. to the promoters at a price of Rs 10 per share.

Page 74: company history of SBI, ICICI

- Industrial Development Bank of India (IDBI), one of the country's leading financial institutions, launched a novel investment concept of asset allocation "future goals" in a 50:50 joint venture with the US-based principal Financial group.

- IDBI has appointed I-Flex Solutions Ltd, the information technology arm of Citibank, to implement an integrated banking solutions package in a phased manner over 12-18 months.

- Industrial Development Bank of India has set up two internal task forces, one to explore opportunities to enter the insurance sector, while the other to lead IDBI Intech, a newly form IT subsidiary.

- Industrial Development Bank of India is considering hiving off its venture capital scheme as a separate company before the end of the year.

- 18,074,300 partly paid up equity shares of face value of Rs 10/- each were forfeited on August 25. Consequently, (i) the aggregate face value of Rs 180,743,000 has been reduced from the Subscribed and Paid up equity capital, (ii) allotment money in Arrears of Rs 135,557,250 has been written down fully and (iii) Forfeited shares account has been credited by Rs 45,185,750 being the amount actually paid up on the forfeited shares.

- The Bank is re-entering the retail market after about eight months, with its Flexibonds-9 issue.

- The Company proposes to exercise the call option and redeem Easy Exit Bond and Regular Income Bond at face value plus interest accrued and outstanding at the end of 5 years from the date of allotment, i.e. March 18, 2001.

- IDBI issued bonus equity shares in the ratio of 3:5 that is, three bonus shares for every five equity shares held.

2001

- India Post and Industrial Development Bank of India (IDBI) Principal Asset Management Company have entered into a joint partnership to make available current and future investment opportunities through post offices across India.

- The Industrial Development Bank of India and Morgan Guaranty Trust Company of New York have entered into a long-term rupee interest rate swap.

- The Industrial Development Bank of India has launched a new company - "IDBI Trusteeship Services Ltd." for carrying out trusteeships and other related business.

Page 75: company history of SBI, ICICI

- Industrial Development Bank of India has formed a new company -- IDBI Trusteeship Services Ltd. for carrying out trusteeship and related businesses.

- IDBI has sold 1,40,845 No. of equity shares for Rs 15 each of Pennar Profiles to P Udaya Bhaskara Reddy, a strategic investor, as part of the arrangements enteredinto by the promoters of Pennar Profiles with IDBI.

- The Bank has launched a non-convertible debentures issue to raise at least Rs 500 crore.

- The Government has re-appointed Mr S.K. Chakraborty as the acting Chairman and Managing Director of Industrial Development Bank of India (IDBI). Mr Chakraborty has been given an extension of three months beginning May 1 or till a regular CMD is appointed.

-Credit Rating and Information Services of India Ltd (Crisil) has downgraded the outstanding bond issues and the certificate of deposit programme of the Industrial Development Bank of India.

-Industrial Development Bank of India has picked up over 30 per cent equity stake in a Chennai-based high-end animation and motion graphics company, MUV Technologies, by investing Rs 2.7 crore. MUV Technologies, which has already set up the studio, is engaged in the development, production and creation of high concept, professional computer animation, visual effects and motion graphics.

- The Credit Rating Information Services of India Ltd (Crisil) has assigned a rating of ‘AA+’, indicating high safety to the the Industrial Development Bank of India’s (IDBI) Rs 2,500-crore ‘Flexibonds’ and Rs 6,343 crore ‘Omni bonds’ programme

- IDBI bank has plans to open over200 atms soon in a bid to expand its operations in India and thus position itself to become a fast growing entity.

-The Finance Ministry did a last-minute volte face on July 30, asking Mr S.K. Kapur to temporarily head the Industrial Development Bank of India (IDBI). This is the fourth time that the Ministry has hesitated from appointing a full-time Chairman for the top term-lender.

2001

- India's largest term lender Industrial Development Bank of India raised Rs 55 crore ($11.68 million) through a private placement of 90-day commercial paper, debt dealers said.

2002

- Industrial Development Bank of India has informed that Mr T M Nagarajan has been appointed as Whole Time Director (designated as Deputy Managing Director) of IDBI for the period from the date

Page 76: company history of SBI, ICICI

of taking charge and upto September 30,2002.

-Industrial Development Bank of India has informed that Govt of India, vide notification dated July 19, 2002 has appointed Shri D C Gupta, Secretary Financial Sector, Ministry of Finance, Dept of Economic Affairs as a Director on the Board of Industrial Development Bank of India wef July 19, 2002.

-Industrial Development Bank of India has informed BSE that the shareholders other than Central Government have elected the following three Directors in the AGM held on August 02, 2002

Mr Ravi Veera Gupta Mr Manohar Gopal Bhide Mr Jamshed J Irani

-Appointed as the lead manager to the 1000 mw Maithon Power Company

-Board accords in-principal approval for group's entry into non-life/reinsurance broking business

-Receives from the Asian Development Bank a line of credit worth $100 million

-Slashes interest rates on Flexibonds by 25 basis points

-Gives revamping package for Natco Pharma Ltd.

-Enters domestic market with Omni bonds worth Rs 250 cr

-Sets up a body of Rs 100 crore exclusively for providing support to the film industry

-Promoters of Visaka Industries Ltd buy-back 4,63,858 equity shares of face value Rs.10/- each held by Industrial Development Bank of India at a price of Rs.23/- per share

-ICRA assigns downward rating to IDBI long-term programmes

-FIs, banks given more power to recover NPAs through Asset Reconstruction Ordinance

-Comes out with the issue of Flexibonds-14 with four bonds on July 26 to collect a total of Rs 200 crore

-Refuses to accept GE-Bechtel offer to restart Dabhol Power Company (DPC)

-Mops up Rs 337 cr by securitising loans to three firms

-Buys back Float Rate Notes of $250 mn

-Hits market with 9.4% interest for five-year retail bonds

Page 77: company history of SBI, ICICI

-Reports drop in non-performing assets (NPAs) at Rs 1,300 crore

-Raises Rs 415 cr through Flexibonds-15

-Government gives nod for the restructuring package for the company by repealing the IDBI Act and facilitating the conversion of the development financial institution into a stand-alone bank

-Endorses proposal to purchase DPC power at Rs 2.80/unit

-Reduces Flexibonds interest rate by 25-85 basis points

-Sells 2,98,174 fully paid equity shares of Rs 10/- each of Infotech Enterprises, reduces the holding in the company to 4.51%

2003

-Refunds $100,000 deposit amount to DPC bidders with a view to sell assets of DPC

-IDBI board okays 50 % Asset Management Company (AMC) stake sell off to Principal Financial Group of the USA

-Offloads 25 lakh Discount and Finance House of India (DFHI) equity shares to State Bank of India (SBI)

-Seizes salt refinery of Ganesh Benzoplast under Securitisation Act

-Centre permits IDBI to reissue Statutory Liquidity Ratio (SLR) bonds

-Divests its 50% stake in AMC & trustee company in favour of Principal Financial Group of the USA for Rs 94 crore

-Takes possession on the second resort of Suman Motels Ltd. under the Securitisation Act

-Modifies its financing pattern for films by doing away with profit-sharing or overflow, and the completion bond guarantee

-Acquires entire stake of Tata Finance Ltd. in Tata Homefinance Ltd. for Rs 49.98 crore, enters housing finance sector

-Offloads its stake in Gujarat Borosil Ltd. to Vulcan Exports Ltd.

Page 78: company history of SBI, ICICI

-Sells 7.56 crore shares in Mangalore Refinery & Petrochemicals Ltd. (MRPL) to Oil & Natural Gas Corporation Ltd. (ONGC)

-Signs a formal subscription Agreement on July 7, 2003 with Nepal Development Bank Ltd. (NDBL), a private sector development bank in Nepal. Buys 10% stake in NDBL

-Acquires the knit processing unit of Suditi Industries Ltd on July 4 which is situated close to Navi Mumbai under the Securitisation Act

-Sues Spectrum Power Generation Limited (SPGL) for allotment of shares worth Rs 23.25 crore in SPGL

-J K Corp allots 26,53,500 shares to IDBI by way of conversion of part of rupee term loans into equity shares of the company under restructuring scheme

-IDBI, IFCI ink deal to launch SLR bonds

-Lok Sabha introduces IDBI (Transfer of Undertaking and Repeal) Bill, 2002 on August 14 which will pave the way for the transformation of the institution into a bank

-Acquires CMM Studios under Securitisation Act

-Appointed P P Vora, chairman and managing director, IDBI, as the chairman of it's new housing finance arm

-IDBI Homefinance mops up $20 million through external commercial borrowings

-Clears restructuring package for Stone India Ltd.

-IDBI Homefinance reduces home loan rates up to 150 basis points

-Ties up with Andhra Bank to sell Governtment of India (GOI) saving bonds

-Acquires 1,62,87,668 shares amounting to 5.51% of the total paid up capital of Recron Synethetics Ltd.

-UTI Chairman & Managing Director (CMD) Mr. M Damodaran takes charge as CMD of IDBI and holds concurrent charge from October 1 as part of an interim arrangement

-Mr P P Vora has withdrawn from the board of IDBI Bank wef November 4, 2003.

Page 79: company history of SBI, ICICI

Further, Industrial Development Bank of India (IDBI) has notified nomination of Mr M Damodaran, CMD, IDBI as its nominee director on the Board of the bank wef November 4, 2003 in place of Mr P P Vora.

-Lok Sabha clears Industrial Development Bank (transfer of undertaking & repeal) Bill of 2002

2004

-IDBI rejigs debt borrowing program

-IDBI gets a bonanza out of IFCI-PNB amalgamation

-Industrial Development Bank of India (IDBI) has informed that the Government of India, Ministry of Finance vide notification dated February 4, 2004 states that in supersession to the notification dated September 29, 2003 and consequent upon the approval of the Appointment Committee of the Cabinet, it has decided to entrust the additional charge of the post of Chairman and Managing Director (CMD), IDBI to Shri M. Damodaran, Chairman, Unit Trust of India w.e.f. October 1, 2003 to May 31, 2004.

-Standard & Poor's (S&P) Ratings Services on February 19 assigned Industrial Development Bank of India's (IDBI) proposed $300 million senior unsecured notes a 'BB' rating. An obligation rated "BB" is less vulnerable to non-payments and other speculative issues. However, it faces major ongoing uncertainties or exposures to adverse business, financial or economic conditions, which could lead to obligour's inadequate capacity to meet its financial commitments on the obligation.

--Industrial Development Bank of India [IDBI] has acquired 17,60,000 shares amounting to 12.11% of the total paid up capital of Soma Textiles Limited.

2004

-The promoters of Eastern Threads Ltd (ETL) have purchased 4 lakh equity shares of face value of Rs 10 each of ETL, from Industrial Development Bank of India, at a price of Re 1 per share. The transaction constituted over one per cent of the paid up capital of the ETL.

-IDBI acquires 46 lakh shares of Mysore Cements

-Mr Damodaran has been appointed CMD at IDBI with effect from June 1, 2004 till May 31, 2007

-IDBI - Launch of sixth tranche of IDBI Omni bonds (2004-2005)

Page 80: company history of SBI, ICICI

2005

-Industrial Development Bank of India Ltd (IDBI) has informed that the Public Issue of IDBI Flexibonds - 23, which was opened for subscription on March 21, 2005 has been closed on March 29, 2005.

-IDBI enters into CO-Financing tie-up with SIDBI.

2006

-IDBI signs MoU with Fortis

-IDBI bags "IT Team of the Year Award 2005".

-IDBI sets up new branch in Andheri

-IDBI - Tripartite MOU with Federal Bank & Forties Insurance International

-IDBI bags Asiamoney's "Best India Deal of the Year Award 2005.

-IDBI Launches No Frills 'Sabka' Savings Bank Account.

2007

- Industrial Development Bank Of India Limited has informed that as per provisions of Article 134 to 138 of the Articles of Association of IDBI Ltd., read with Sections 255 and 256 of the Companies Act, 1956, the shareholders have re-appointed the following two directors after retirement by rotation on the Board of Directors of IDBI Ltd. in the 3rd Annual General Meeting of IDBI Ltd. held on June 22, 2007.

(1) Shri Hira Lal Zutshi and

(2) Shri A. Sakthivel

-IDBI Wins Three Awards at the ABCI

-IDBI signs MOU with IFC for co-operation in Clean Development Mechanism (CDM) Projects

-IDBI, Federal Bank and Fortis Sign Joint Venture Agreement To Establish A New Life Insurance Company In India

Page 81: company history of SBI, ICICI

-IDBI Launches new 600 days ‘Suvidha Plus’ FD Scheme

2008

-Industrial Development Bank Of India Limited has submitted to a copy of the Resolution passed by the Board by circulation on March 12, 2008 in respect of change of name of the Bank to "IDBI Bank Limited" by passing a Special Resolution through Postal Ballot in terms of Section 192A of the Companies Act, 1956.

-Company name has been changed from Industrial Development Bank of India Ltd to IDBI Bank Ltd.

-IDBI bags two Special IT Awards from IBA

-IDBI ties up with Motilal Oswal Securities for online trading

2009

- IDBI Bank has slashed its benchmark prime-lending rate (BPLR) by 25 basis points to 12.75 per cent. The reduction will come into effect from July 1 and will apply to all loans linked to the BPLR, including home loans, according to a press release from the bank. The bank cut deposit rates by 25-50 basis points earlier this week.

-IDBI Bank bags IBA's prestigious Banking Technology award

-IDBI Bank Ltd and Tata Motors Limited (TML) sign MoU for Vehicle Loan Financing

2010

- IDBI Bank has opened its first overseas branch at the Dubai International Financial Centre.

Company History - Axis Bank Ltd.

1993

- The Bank was incorporated on 3rd December and Certificate of business on 14th December. The Bank transacts banking business of all description. UTI Bank Ltd. was promoted by Unit Trust of India, Life Insurance Corporation of India, General Insurance Corporation of India and its four subsidiaries.

Page 82: company history of SBI, ICICI

- The bank was the first private sector bank to get a license under the new guidelines issued by the RBI.

1997

- The Bank obtained license to act as Depository Participant with NSDL and applied for registration with SEBI to act as `Trustee to Debenture Holders'.

- Rupees 100 crores was contributed by UTI, the rest from LIC Rs 7.5 crores, GIC and its four subsidiaries Rs 1.5 crores each.

1998

- The Bank has 28 branches in urban and semi urban areas as on 31st July. All the branches are fully computerised and networked through VSAT. ATM services are available in 27 branches.

- The Bank came out with a public issue of 1,50,00,000 No. of equity shares of Rs 10 each at a premium of Rs 11 per share aggregating to Rs 31.50 crores and Offer for sale of 2,00,00,000 No. of equity shares for cash at a price of Rs 21 per share. Out of the public issue 2,20,000 shares were reserved for allotment on preferencial basis to employees of UTI Bank. Balance of 3,47,80,000 shares were offered to the public.

- The company offers ATM cards, using which account-holders can withdraw money from any of the bank's ATMs across the country which are inter-connected by VSAT.

- UTI Bank has launched a new retail product with operational flexibility for its customers.

- UTI Bank will sign a co-brand agreement with the market, leader, Citibank NA for entering into the highly promising credit card business.

- UTI Bank promoted by India's pioneer mutual fund Unit Trust of India along with LIC, GIC and its four subsidiaries.

1999

- UTI Bank and Citibank have launched an international co-branded credit card.

- UTI Bank and Citibank have come together to launch an international co-branded credit card under the MasterCard umbrella.

- UTI Bank Ltd has inaugurated an off site ATM at Ashok Nagar here, taking the total number of its off

Page 83: company history of SBI, ICICI

site ATMs to 13.m

2000

- The Bank has announced the launch of Tele-Depository Services for its depository clients.

- UTI Bank has launch of `iConnect', its Internet banking Product.

- UTI Bank has signed a memorandum of understanding with equitymaster.com for e-broking activities of the site.

- Infinity.com financial Securities Ltd., an e-broking outfit is typing up with UTI Bank for a banking interface.

- Geojit Securities Ltd, the first company to start online trading services, has signed a MoU with UTI Bank to enable investors to buy\sell demat stocks through the company's website.

- Indiabulls has signed a memorandum of understanding with UTI Bank.

- UTI Bank has entered into an agreement with Stock Holding Corporation of India for providing loans against shares to SCHCIL's customers and funding investors in public and rights issues.

- ICRA has upgraded the rating og UTI Bank's Rs 500-crore certificate of deposit programme to A1+.

- UTI Bank has tied up with L&T Trade.com for providing customised online trading solution for brokers.

2001

- UTI Bank launched a private placement of non-convertible debentures to raise up to Rs 75 crore. - UTI Bank has opened two offsite ATMs and one extension counter with an ATM in Mangalore, taking its total number of ATMs across the country to 355.

- UTI Bank has recorded a 62 per cent rise in net profit for the quarter ended September 30, 2001, at Rs 30.95 crore. For the second quarter ended September 30, 2000, the net profit was Rs 19.08 crore. The total income of the bank during the quarter was up 53 per cent at Rs 366.25 crore.

2002

- UTI Bank Ltd has informed BSE that Shri B R Barwale has resigned as a Director of the Bank w.e.f. January 02, 2002. A C Shah, former chairman of Bank of Baroda, also retired from the bank’s board in

Page 84: company history of SBI, ICICI

the third quarter of last year. His place continues to be vacant. M Damodaran took over as the director of the board after taking in the reins of UTI. B S Pandit has also joined the bank’s board subsequent to the retirement of K G Vassal.

- UTI Bank Ltd has informed that Shri Paul Fletcher has been appointed as an Additional Director Nominee of CDC Financial Service (Mauritius) Ltd of the Bank.And Shri Donald Peck has been appointed as an Additional Director (nominee of South Asia Regional Fund) of the Bank.

- UTI Bank Ltd has informed that on laying down the office of Chairman of LIC on being appointed as Chairman of SEBI, Shri G N Bajpai, Nominee Director of LIC has resigned as a Director of the Bank.

2002

- B Paranjpe & Abid Hussain cease to be the Directors of UTI Bank.

- UTI Bank Ltd has informed that in the meeting of the Board of Directors following decisions were taken: Mr Yash Mahajan, Vice Chairman and Managing Director of Punjab Tractors Ltd was appointed as an Additional Director with immediate effect. Mr N C Singhal former Vice Chairman and Managing Director of SCICI was appointed as an Additional Director with immediate effect.

-ABN Amro, UTI Bank in pact to share ATMs.

-UTI Bank Ltd has informed BSE that a meeting of the Board of Directors of the Bank is scheduled to be held on October 24, 2002 to consider and take on record the unaudited half yearly/quarterly financial results of the Bank for the half year/Quarter ended September 30, 2002.

-UTI Bank Ltd has informed that Shri J M Trivedi has been appointed as an alternate director to Shri Donald Peck with effect from November 2, 2002.

2003

-UTI Bank Ltd has informed BSE that at the meeting of the Board of Directors of the company held on January 16, 2003, Shri R N Bharadwaj, Managing Director of LIC has been appointed as an Additional Director of the Bank with immediate effect.

- UTI Bank, the private sector bank has opeaned a branch at Nellore. The bank's Chairman and Managing Director, Dr P.J. Nayak, inaugurating the bank branch at GT Road on May 26. Speaking on the occasion, Dr Nayak said, "This marks another step towards the extensive customer banking focus that we are providing across the country and reinforces our commitment to bring superior banking services, marked by convenience and closeness to customers.

Page 85: company history of SBI, ICICI

-UTI Bank Ltd. has informed the Exchange that at its meeting held on June 25, 2003 the BOD have decided the following: 1) To appoint Mr. A T Pannir Selvam, former CMD of Union Bank of India and Prof. Jayanth Varma of the Indian Institute of Management, Ahmedabad as additional directors of the Bank with immediate effect. Further, Mr. Pannir Selvam will be the nominee director of the Administrator of the specified undertaking of the Unit Trust of India (UTI-I) and Mr. Jayanth Varma will be an Independent Director. 2) To issue Non-Convertible Unsecured Redeemable Debentures upto Rs.100 crs, in one or more tranches as the Bank's Tier - II capital.

-UTI has been authorised to launch 16 ATMs on the Western Railway Stations of Mumbai Division.

-UTI filed suit against financial institutions IFCI Ltd in the debt recovery tribunal at Mumbai to recover Rs.85cr in dues.

-UTI bank made an entry to the Food Credit Programme, it has made an entry into the 59 cluster which includes private sector, public sector, old private sector and co-operative banks.

-Shri Ajeet Prasad, Nminee of UTI has resigned as the director of the bank.

-Banks Chairman and MD Dr.P.J.Nayak inaugurated a new branch at Nellore.

-UTI bank allots shares under Employee Stock Option Scheme to its employees.

-Unveils pre-paid travel card 'Visa Electron Travel Currency Card'

-Allotment of 58923 equity shares of Rs 10 each under ESOP.

-UTI Bank ties up with UK govt fund for contract farming

-Shri B S Pandit, nominee of the Administrator of the Specified Undertaking of the Unit Trust of India (UTI-I) has resigned as a director from the Bank wef November 12, 2003.

-UTI Bank unveils new ATM in Sikkim

2004

-Comes out with Rs. 500 mn Unsecured Redeemable Non-Convertible Debenture Issue, issue fully subscribed

-UTI Bank Ltd has informed that Shri Ajeet Prasad, Nominee of the Administrator of the Specified Undertaking of the Unit Trust of India (UTI - I) has been appointed as an Additional Director of the Bank w.e.f. January 20, 2004.

Page 86: company history of SBI, ICICI

-UTI Bank opens new branch in Udupi

-UTI Bank, Geojit in pact for trading platform in Qatar

-UTI Bank ties up with Shriram Group Cos

-Unveils premium payment facility through ATMs applicable to LIC & UTI Bank customers

-Metaljunction (MJ)- the online trading and procurement joint venture of Tata Steel and Steel Authority of India (SAIL)- has roped in UTI Bank to start off own equipment for Tata Steel.

-DIEBOLD Systems Private Ltd, a wholly owned subsidiary of Diebold Incorporated, has secured a major contract for the supply of ATMs and services to UTI Bank

-HSBC completes acquisition of 14.6% stake in UTI Bank for $67.6 m

-UTI Bank installs ATM in Thiruvananthapuram

-Launches `Remittance Card' in association with Remit2India, a Web site offering money-transfer services

2005

- UTI Bank enters into a bancassurance partnership with Bajaj Allianz General for selling general insurance products through its branch network.

-UTI Bank launches its first Satellite Retail Assets Centre (SRAC) in Karnataka at Mangalore.

2006

-UTI Bank unveils priority banking lounge

- UTI Bank launches operations of UBL Sales, its Sales Subsidiary - Inaugurates its first office in Bengaluru

-UTI Bank announces the launch of its Credit Card Business

- UTI Bank becomes the first Indian Bank to successfully issue Foreign Currency Hybrid Capital in the International Market

Page 87: company history of SBI, ICICI

- UTI Bank Business Gold Debit Card MasterCard Launched - Designed for business related spending by SMEs and self employed professionals

2007

-AXIS Bank Ltd has informed that consequent upon handing over charge as Administrator of the Specified Undertaking of the Unit Trust of India (SUUTI), Shri. S B Mathur, the Nominee Director of SUUTI has resigned as a Director of the Bank w.e.f. December 06, 2007.

-AXIS Bank Ltd has informed that Fitch Ratings on December 14, 2007, has upgraded the Bank's National Long-term rating to 'AAA(ind)' from 'AA+(ind)'.

-AXIS Bank Ltd hasappointed Shri K N Prithviraj as an Additional Director on the Board at Directors of the Bank.

- Company name has been changed from UTI Bank Ltd toAxis Bank Ltd.

2008

- Axis Bank launches Platinum Credit Card, India's first EMV chip based card

- Axis Bank set up its branch at Ilanji at Meenakshi Nagar on the Coutralam-Madurai road on April 16.

2009

- Axis Bank today said its board has recommended the appointment of Shikha Sharma, currently chief of ICICI group's life insurance business, as its next managing director and CEO.

- Axis Bank has set up a new branch at Perumbavoor. The bank has a network of 832 branches along with 8 extension counters and 3622 ATMs across the country.

- Axis Bank, on Wednesday entered into a strategic alliance with Motilal Oswal, the financial services firm, in order to facilitate the online trading for the bank's customers.

- AXIS Bank Ltd has informed that the Board of Directors of the Bank at its meeting held on June 01, 2009, inducted Smt. Shikha Sharma as an Additional Director of the Bank.

- Axis bank has received final clearance from the Securities and Exchange Board of India (SEBI) to begin its mutual fund operations and will launch debt and equity schemes soon whereas IDBI Bank is awaiting the regulator's permit for an entry.

Page 88: company history of SBI, ICICI

- Axis Bank opened the new branch at Irinjalakuda while it has a network of 892 branches, 8 extension counters and 3,806 ATMs across the country.

2010

- Axis Bank Limited has informed that at the meeting of the Board of Directors held on January 15, 2010, the following decisions were taken: (1) To appoint Dr. Adarsh Kishore, former Finance Secretary, Government of India and former Executive Director, International Monetary Fund representing Bangladesh, Bhutan, India and Sri Lanka, as the Non-Executive Chairman of the Bank, subject to RBI approval; (2) To appoint Shri S.B. Mathur, former Chairman, LIC and the National Stock Exchange of India, as an Additional Independent Director, with immediate effect.

- AXIS Bank Ltd has appointed Shri M. S. Sundara Rajan, former CMD, Indian Bank as an Additional Independent Director with immediate effect.

- Axis bank acquires 4 percent stake in Max New York Life

- Axis Bank has bought a property in central Mumbai from Bombay Dyeing where it will shift its corporate headquarters. Its worth Rs.782 crore.

- Axis Bank is acquiring investment banking and securities unit of Enam Securities Pvt Ltd in an all stock deal for Rs.2,067 Cr (around $456 Mn) in order to expand its broking and investment banking business.

2011 - Axis Bank launches online trading platform AxisDirect

- Axis Bank has launches pre-paid VISA card i.e. MY MONEY CARD.

- Axis Bank opens new representative office in Abu Dhabi

2012

- Axis Bank partners with NIIT IFBI to introduce PG Diploma in Retail Banking.

- Axis Bank inducts Schroders as a 25% partner in Axis AMC.

- Axis Bank, Axis Capital, joined hands with Baird, an international, employee-owned financial services firm, to ofer investment banking services.

Page 89: company history of SBI, ICICI

Axis bank

Director ReportMar2011   Mar 2012

The Board of Directors is pleased to present the Eighteenth Annual Report of the Bank together with the Audited Statement of Accounts, Auditors'' Report and the report on business and operations of the Bank for the financial year ended 31st March 2012.FINANCIAL PERFORMANCE

The financial highlights for the year under review are presented below:

(Rs in crores)

PARTICULARS 2011-12 2010-11 GROWTH

Deposits 220,104.30 189,237.80 16.31%

Out of which

- Savings Bank Deposits 51,667.96 40,850.31 26.48%

- Current Account Deposits 39,754.07 36,917.09 7.68%

Advances 169,759.54 142,407.83 19.21% Out of which

- Retail Advances 37,570.33 27,759.23 35.34%

- Non-retail Advances 132,189.21 114,648.60 15.30%

Total Assets/Liabilities 285,627.79 242,713.37 17.68%

Net Interest Income 8,017.75 6,562.99 22.17%

Other Income 5,420.22 4,632.13 17.01% Out of which

- Trading Profit (1) 361.56 496.97 (27.25%)

- Fee and other income 5,058.66 4,135.16 22.33%

Operating Expenses(excluding depreciation) 5,664.86 4,489.84 26.17%

Profit before depreciation,provisions and tax 7,773.11 6,705.28 15.93%

Depreciation 342.24 289.59 18.18%

Page 90: company history of SBI, ICICI

Provision for Tax 2,045.63 1,747.17 17.08%

Other Provisions and Write offs 1,143.03 1,280.03 (10.70%)

Net Profit 4,242.21 3,388.49 25.19%

Appropriations:

Transfer to Statutory Reserve 1,060.55 847.12 25.19%

Transfer to/(from) Investment Reserve - (14.94) -

Transfer to Capital Reserve 51.90 4.76 -

Transfer to/(from) General Reserve - 338.85 -

Proposed Dividend 770.08 670.36 14.88%

Surplus carried over to Balance Sheet 2,359.68 1,542.34 52.99%

(1) Excluding Merchant Exchange Profit

KEY PERFORMANCE INDICATORS 2011-12 2010-11

Interest Income as a percentage of working funds* 8.71% 7.49%

Non-Interest Income as a percentage of working funds* 2.15% 2.29%

Net Interest Margin 3.59% 3.65%

Return on Average Net Worth 21.22% 20.13%

Operating Profit as a percentage of working funds* 2.94% 3.17%

Return on Average Assets 1.68% 1.68%

Profit per employee** Rs 14.34 lacs Rs 14.35 lacs

Business (Deposits less inter-bank deposits Advances)per employee** Rs 12.76 crores Rs 13.66 crores

Net non-performing assets as a percentage of net

Page 91: company history of SBI, ICICI

customer assets*** 0.25% 0.26%

- Working funds represent average total assets.

** Productivity ratios are based on average number of employees for theyear.

*** Customer assets include advances and credit substitutes.

Previous year figures have been regrouped wherever necessary.

The Bank continued to show a steady growth both in business andearnings with a net profit of Rs4,242.21 crores for the year ended 31stMarch 2012, registering a growth of 25.19% over the net profit ofRs3,388.49 crores last year. The strong growth in earnings was a resultof robust business growth across all banking segments indicative of aclear strategic focus. During the year, the Basic Earnings Per Share(EPS) was at Rs102.94 and a Return on Equity (ROE) at 21.22%.

During the year, the total income of the Bank increased by 38.55% toreach Rs27,414.87 crores as compared to Rs19,786.94 crores last year.Operating revenue increased by 20.03% to Rs13,437.97 crores whileoperating profit increased by 15.82% to Rs7,430.87 crores. The growth inearnings was mainly due to a rise in core income streams such as netinterest income (NII) and fee income. NII increased by 22.17% toRs8,017.75 crores as compared to Rs6,562.99 crores last year. Fee,trading and other income increased by 17.01 % to Rs5,420.22 crores fromRs4,632.13 crores last year. The strong growth in income was partlyoffset by an increase in operating expenses including depreciation by25.69% to Rs6,007.10 crores.

During the year, the growth in NII may be attributed to an expansion inthe balance sheet size and healthy low-cost Current Account and SavingsBank (CASA) deposits. The total earning assets on a daily average basisincreased by 24.30% to Rs223,206 crores, as compared to Rs179,573 croreslast year. This was partly offset by a rise in funding costs due tohardening of general interest rates, particularly on term depositsduring the year. The steady growth of low-cost CASA deposits, which ona daily average basis increased by 18.96% to Rs70,845 crores fromRs59,551 crores last year, helped in containing the cost of funds.Overall, the daily average cost of funds in the year increased to 6.28%from 4.96% last year. During the year, the cost of deposits increasedto 6.47% from 4.96% last year primarily due to an increase in cost ofterm deposits by 211 basis points (from 6.81 % to 8.92%) as well as thecost of savings bank deposits. During the year, the yield on earningassets increased by 125 basis points to 9.66% from 8.41% last year.

Other income comprising fees, trading profit and miscellaneous incomeincreased by 17.01% to Rs5,420.22 crores in 2011-12 from Rs4,632.13crores last year and constituted 40.34% of operating revenue of theBank. Fee income is a significant part of the earnings and is generatedfrom a diverse set of businesses in the Bank. The main sources of feeincome are client- based merchant foreign exchange trade, servicecharges from account maintenance, transaction banking (including cashmanagement services), syndication and placement fees, processing fees

Page 92: company history of SBI, ICICI

from loans and commission on non- funded products (such as letters ofcredit and bank guarantees), inter-change fees on ATM-sharingarrangements and fee income from the distribution of third-partypersonal investment products. During the year, proprietary tradingprofits fell by 27.25% to Rs361.56 crores from Rs496.97 crores last year,owing to adverse market conditions in the debt and equity markets.Miscellaneous income dropped by 3.79%, mainly due to lower recoveriesof loans written-off in earlier years. During the year, such recoveriesaccounted to Rs291.84 crores.

During the year, the operating revenue of the Bank increased by 20.03%to Rs13,437.97 crores, as compared to Rs11,195.12 crores last year. Thecore income streams (NII, fee and miscellaneous income) constituted97.31% of the operating revenue, reflecting the stability andsustainability of the Bank''s earnings. Operating expenses increased by25.69% to Rs6,007.10 crores from Rs4,779.43 crores last year, as a resultof the growth of the Bank''s network and other infrastructure requiredfor supporting the existing and new businesses. The Cost to Incomeratio of the Bank was 44.70% compared to 42.69% last year.

During the year, the operating profit of the Bank increased by 15.82%to Rs7,430.87 crores from Rs6,415.69 crores last year. During thisperiod, the Bank created total provisions (excluding provisions fortax) of Rs1,143.03 crores compared to Rs1,280.03 crores last year. Ofthis, the Bank provided Rs860.43 crores towards loan/investment lossescompared to Rs955.12 crores last year, while the provision for standardassets was Rs150.30 crores. The Bank also provided Rs88.86 crorescompared to Rs15.06 crores last year against restructured assets. Duringthe year, the Bank restructured loans of Rs1,300.29 crores. The Bankcontinued to maintain a healthy asset-quality with a ratio of GrossNPAs to gross customer assets of 0.94%, as compared to 1.01 % lastyear, and a Net NPA ratio (Net NPAs as percentage of net customerassets) of 0.25% compared to 0.26% last year. With higher levels ofprovisions built over and above regulatory norms during the year, theBank has maintained its provision coverage to 80.91% (after consideringprudential write-offs).

The Bank has also shown an all-round improvement in various financialparameters and ratios during the year. Basic Earnings Per Share (EPS)was Rs102.94 as compared to Rs82.95 last year, while the Diluted EarningsPer Share was Rs102.20 compared to Rs81.61 last year. Return on Equity(RoE) improved to 21.22% from 20.13% last year and Book Value Per Shareincreased from Rs462.77 to Rs551.99. Return on Assets (RoA) is maintainedat 1.68% as last year. The hardening of interest rates led to acontraction in the net interest margin (NIM) by 6 basis points for theyear to 3.59% from 3.65% last year. On quarter-on- quarter basis, theNIM was 3.28% in Q1, 3.78% in Q2, 3.75% in Q3 and 3.55% in Q4.

The Bank has shown robust growth in several key balance sheetparameters for the year ended 31st March 2012. The total assetsincreased by 17.68% to Rs285,628 crores on 31st March 2012 from Rs242,713crores on 31st March 2011. Total deposits increased by 16.31% and stoodat Rs220,104 crores. Savings Bank deposits increased by 26.48% toRs51,668 crores, while Current Account deposits increased by 7.68% toRs39,754 crores. Low-cost demand deposits: Current Accounts and SavingsBank (CASA) deposits were Rs91,422 crores as on 31st March 2012, as

Page 93: company history of SBI, ICICI

compared to Rs77,767 crores last year. As on 31st March 2012, CASAdeposits constituted 41.54% of total deposits as compared to 41.10%last year. On a daily average basis, Savings Bank deposits increased by20.43% to Rs43,442 crores, while Current Account deposits increased by16.71 % to Rs27,403 crores. The percentage share of CASA in totaldeposits, on a daily average basis, was 37.65% compared to 39.40% lastyear. The total advances of the Bank increased by 19.21% to Rs169,760crores. Out of this, corporate advances (comprising large,infrastructure and mid-corporate accounts) increased by 19.93% toRs91,053 crores and SME loans increased by 11.16% to Rs23,795 crores.Agricultural lending (including micro finance) stood at Rs17,340 crores,increasing 0.11% over the last year. Retail loans increased by 35.34%to Rs37,570 crores. The percentage share of retail loans to totaladvances has increased to 22.13% from 19.49% last year. The totalinvestments of the Bank increased by 29.45% to Rs93,192 crores andinvestments in government and approved securities, held mainly for SLRrequirement, increased by 32.43% to Rs58,533 crores. Other investments,including corporate debt securities, increased by 24.70% to Rs34,659crores. As on 31st March 2012, the total assets of the Bank''s overseasbranches stood at Rs32,302 crores, constituting 11.31% of the Bank''stotal assets.

During the year, the Bank continued to expand its distribution networkto enlarge its reach in geographical centres with potential for growth,especially in the areas with potential for low-cost CASA deposits,lending to retail, agriculture and SME segments and the distribution ofthird-party products. This year, the Bank has added 231 new branchesand 1 extension counter, taking the total number of branches andextension counters (ECs) to 1,622, of which 674 branches/ECs are insemi-urban and rural areas and 948 branches are in metropolitan andurban areas. The Bank is present in all the States and UnionTerritories (except Lakshadweep), covering a total of 1,050 centres.The Bank has also increased its ATM network to 9,924, as compared to6,270 ATMs last year. In addition to domestic branches, during the yearthe Bank opened an international branch office in Colombo, Sri Lanka tofinance cross-border trade and manufacturing activities. This is inaddition to the existing branches at Singapore, Hong Kong and DIFC(Dubai International Finance Centre) and representative offices atShanghai, Dubai and Abu Dhabi.

CAPITAL & RESERVES

During the year, the Bank has raised capital of Rs3,425 crores by way ofsub-ordinated bonds (unsecured redeemable non-convertible debentures)qualifying as Tier II capital. The raising of this non- equity capitalhas helped the Bank continue its growth strategy and has strengthenedits capital adequacy ratio. The Bank is well capitalised with anoverall capital adequacy ratio (CAR) of 13.66% at the end of the year,well above the benchmark requirement of 9% stipulated by Reserve Bankof India (RBI). Of this, Tier I CAR was 9.45%, as against 9.41 % lastyear, while the Tier II CAR was at 4.21%, as against 3.24% last year.

During the year, a total of 2,658,109 equity shares were allotted toemployees of the Bank pursuant to the exercise of options under itsEmployee Stock Option Scheme. The paid-up capital of the Bank rose toRs413.20 crores, as compared to Rs410.55 crores last year. The

Page 94: company history of SBI, ICICI

shareholding pattern of the Bank as of 31st March 2012 was as under:

Sr. No. Name of Shareholders % of Paid-up Capital

i. Administrator of the Specified Undertaking of the Unit Trust of India (SUUTI) 23.53

ii. Life Insurance Corporation of India (LIC) 9.69(1)

iii. General Insurance Corporation and four PSU insurance companies 4.16

iv. Overseas investors (including FIIs/OCBs/NRIs) 33.19

v. Foreign Direct Investment (GDR issue) 8.54

vi. Other Indian financial institutions/mutual funds/banks 6.45

vii. Others 14.44

Total 100.00

(1) Save and except 4,00,40,156 shares equivalent to 9.69% of the totalpaid up capital of the Bank held by LIC, all other holdings are notconsidered for arriving at the Promoter''s shareholding.

The Bank''s shares are listed on the NSE and the BSE. The GDRs issued bythe Bank are listed on the London Stock Exchange (LSE). The Bondsissued by the Bank under the MTN programme are listed on the SingaporeStock Exchange. The listing fees relating to all stock exchanges forthe current year have been paid.

DIVIDEND

The Diluted Earnings Per Share (EPS) for 2011-12 has risen to Rs102.20from Rs81.61 last year. In view of the overall performance of the Bankand the objective of rewarding shareholders with cash dividends whileretaining capital to maintain a healthy capital adequacy ratio tosupport future growth, the Board of Directors has recommended a higherdividend of Rs16.00 per equity share, compared to Rs14.00 per equityshare declared last year. This dividend shall be subject to tax ondividend to be paid by the Bank. This increase reflects our confidencein the Bank''s ability to consistently grow earnings over time.

BOARD OF DIRECTORS

During the year, some changes in the composition of the Board ofDirectors have taken place. Shri J. R. Varma ceased to be a Director ofthe Bank at the conclusion of the last Annual General Meeting witheffect from 17th June 2011. Shri S. K. Roongta, resigned as a Directorof the Bank with effect from 20th June 2011. Shri R. B. L. Vaish

Page 95: company history of SBI, ICICI

tendered his resignation as a Director on completion of his tenure asLIC Nominee with effect from 5th September 2011. Shri S. K.Chakrabarti, Deputy Managing Director, retired from the services of theBank on 30th September 2011 and accordingly ceased to be a Director ofthe Bank with effect from 1st October 2011. Shri M. V. Subbiah resignedas a director with effect from 26th April, 2012. Prof. Samir K. Barua,Director, Indian Institute of Management, Ahmedabad was appointed as anAdditional Independent Director of the Bank with effect from 22nd July2011. Shri A. K. Dasgupta was nominated by LIC as its Nominee Directorin place of Shri R. B. L. Vaish and was accordingly appointed as anAdditional Director of the Bank with effect from 5th September 2011.Shri Som Mittal, President of NASSCOM was appointed as an AdditionalIndependent Director of the Bank with effect from 22nd October 2011. Wereport with sadness the demise of Dr. R. H. Patil who passed away on12th April 2012. The Board of Directors places on record its deepappreciation and gratitude to Dr. R. H. Patil, Shri M. V. Subbiah, ShriJ. R. Varma, Shri S. K. Roongta, Shri R. B. L. Vaish and Shri S. K.Chakrabarti for the valuable services rendered by them during theirtenure as Directors of the Bank.

In accordance with the provisions of the Companies Act, 1956 and theArticles of Association of the Bank, Smt. Rama Bijapurkar and Shri V.R. Kaundinya retire by rotation at the Eighteenth Annual GeneralMeeting and, being eligible, offer themselves for re-appointment asDirectors of the Bank.

The Board of Directors of the Bank at its meeting held on 13th February2012, has re-appointed Smt. Shikha Sharma as Managing Director & CEOfor a further period of three years i.e. from 1st June 2012 till 31stMay 2015. The re-appointment is subject to approval of Reserve Bank ofIndia and the shareholders. Further, the Board of Directors of the Bankat its meeting held on 27th April, 2012, has decided to appoint Shri V.Srinivasan and Shri Somnath Sengupta, Executive Directors of the Bankas the Whole-time Directors of the Bank with effect from the date asmay be approved by RBI.

SUBSIDIARIES

The Bank has set up six wholly-owned subsidiaries: Axis Securities andSales Ltd., Axis Private Equity Ltd., Axis Trustee Services Ltd., AxisAsset Management Company Ltd., Axis Mutual Fund Trustee Ltd., and AxisU.K. Ltd.

Axis Securities and Sales Ltd. is primarily in the business ofmarketing of credit cards and retail asset products and also providesretail broking services. The primary objective of Axis Securities andSales Ltd. is to build a specialised force of sales personnel andoptimise operational efficiency by providing greater control over thesales functions, as compared to a Direct Sales Agent (DSA) model aswell as undertake retail broking business. Axis Private Equity Ltd.primarily carries on the activities of managing equity investments andprovides venture capital support to businesses. Axis Trustee ServicesLtd. is engaged in trusteeship activities (e.g. acting as debenturetrustee and as trustee to various securitisation trusts). Axis AssetManagement Company Ltd. undertakes the activities of managing themutual fund business. Axis Mutual Fund Trustee Ltd. was formed to act

Page 96: company history of SBI, ICICI

as the trustee for the mutual fund business. Axis U.K. Ltd. is aprivate limited company registered in the UK. It was formed with themain purpose of filing an application with Financial Services Authority(FSA), UK for a banking license in the UK and for the creation ofnecessary infrastructure for the subsidiary to commence bankingbusiness in the UK. As of 31st March 2012, Axis U.K. Ltd. has notcommenced operations.

In terms of the General Circular No. 2/2011 dated 8th February 2011issued by the Ministry of Corporate Affairs, Government of India, thecopies of Directors'' Reports, Auditors'' Reports and the financialstatements of the six subsidiaries have not been attached to theaccounts of the Bank for the financial year ended 31st March 2012. Anyshareholder who may be interested in obtaining a copy of the aforesaiddocuments may write to the Company Secretary at the Registered Officeof the Bank. These documents will also be available for examination byshareholders of the Bank at its Registered Office. The documentsrelated to individual subsidiaries will similarly be available forexamination at the respective registered offices of the companies. Inline with the Accounting Standard 21 (AS-21) issued by the Institute ofChartered Accountants of India, the consolidated financial results ofthe Bank along with its subsidiaries for the year ended 31st March 2012are enclosed as an Annexure to this report.

PROPOSED ACQUISITION OF ENAM SECURITIES PVT. LTD.

On 17th November, 2010, the Board of Directors of the Bank had approvedthe acquisition of certain financial services business undertaken byEnam Securities Private Limited (ESPL) directly and through its whollyowned subsidiaries, by Axis Securities and Sales Limited (ASSL), awholly owned subsidiary of the Bank by way of a demerger. However,pursuant to conditions prescribed by the Reserve Bank of India, certainmodifications have been carried out to the demerger structure in termsof a revised Scheme of Arrangement under Sections 391-394 and otherrelevant provisions of the Companies Act, 1956. Accordingly, theacquisition will now comprise (a) a demerger of the financial servicesbusinesses from ESPL to the Bank, in consideration of which the Bankwill issue shares to the shareholders of ESPL, and (b) immediately uponcompletion of the demerger under the Scheme, a simultaneous sale of thefinancial services businesses will be undertaken from the Bank to ASSLfor a cash consideration, with both the aforesaid steps occurringsimultaneously. The Reserve Bank of India has on 30th March, 2012,conveyed its no objection to the Scheme. Further, on 27th April, 2012,the Board of Directors of the Bank have approved the reassessment ofthe valuation of the ESPL business at Rs1,396 crores and consequently,in consideration for the demerger of the financial services business ofESPL, the Bank will issue shares in the ratio of 5 equity shares of theBank (aggregating 12,090,000 equity shares) of the face value of Rs10each for every 1 equity share (aggregating 2,418,000 equity shares) ofRs10 each held by the shareholders of ESPL. The sale of the financialservices business will be simultaneously undertaken from the Bank toASSL for a cash consideration of Rs274 crores only. The appointed dateunder the Scheme is 1st April, 2010, and the parties shall proceed withfiling the Revised Scheme and other necessary documents with therelevant High Courts and other regulatory authorities for theirapproval.

Page 97: company history of SBI, ICICI

EMPLOYEE STOCK OPTION PLAN (ESOP)

The Bank has instituted an Employee Stock Option Scheme to enable itsemployees and the employees of its subsidiaries including Whole-timeDirectors, to participate in the future growth and financial success ofthe Bank. Under the Scheme 40,517,400 options can be granted toemployees. The employee stock option scheme is in accordance with theSecurities and Exchange Board of India (Employee Stock Option andEmployee Stock Purchase Scheme) Guidelines, 1999. The eligibility andnumber of options to be granted to an employee is determined on thebasis of the employee''s work performance and is approved by the Boardof Directors.

The Bank''s shareholders approved plans for the issuance of stockoptions to employees in February 2001, June 2004, June 2006, June 2008and June 2010. Under the first two plans and upto the grant made on29th April 2004, the option conversion price was set at the averagedaily high-low price of the Bank''s equity shares traded during the 52weeks preceding the date of grant at the Stock Exchange which has hadthe maximum trading volume of the Bank''s equity share during thatperiod. Under the third plan and with effect from the grant made by theBank on 10th June 2005, the pricing formula has been changed to theclosing price on the day previous to the grant date. The Remunerationand Nomination Committee granted options under these plans on elevenoccasions: 1,118,925 during 2000-01, 1,779,700 during 2001-02,2,774,450 during 2003-04, 3,809,830 during 2004-05, 5,708,240 during2005-06, 4,695,860 during 2006-07, 6,729,340 during 2007-08, 2,677,355during 2008-09, 4,413,990 during 2009-10, 2,915,200 during 2010-11 and3,268,700 during 2011-12. The options granted, which arenon-transferable, vest at rates of 30%, 30% and 40% on each of threesuccessive anniversaries following the grant, subject to standardvesting conditions, and must be exercised within three years of thedate of vesting. As of 31st March 2012, 24,368,087 options had beenexercised and 11,428,248 options were in force.

Other statutory disclosures as required by the revised SEBI guidelineson ESOPs are given in the Annexure to this report.

CORPORATE GOVERNANCE

The Bank is committed to achieve the highest standards of corporategovernance, and it aspires to benchmark itself with international bestpractices in this regard. The corporate governance practices followedby the Bank are enclosed as an Annexure to this report.

The Bank has adopted a major part of the recommendations contained inthe Corporate Governance Voluntary Guidelines 2009 issued by theMinistry of Corporate Affairs and is examining the possibility ofimplementing the remaining recommendations.

DIRECTORS'' RESPONSIBILITY STATEMENT

The Board of Directors hereby declares and confirms that:

Page 98: company history of SBI, ICICI

- The applicable accounting standards have been followed in thepreparation of the annual accounts and proper explanations have beenfurnished, relating to material departures.

- Accounting policies have been selected and applied consistently andreasonably, and prudent judgements and estimates have been made so asto give a true and fair view of the state of affairs of the Bank and ofthe Profit and Loss of the Bank for the financial year ended 31st March2012.

- Proper and sufficient care has been taken for the maintenance ofadequate accounting records, in accordance with the provisions of theCompanies (Amendment) Act, 2000, for safeguarding the assets of theBank, and for preventing and detecting fraud and other irregularities.

- The annual accounts have been prepared on a going concern basis.

- The Bank has in place a system to ensure compliance of all lawsapplicable to the Bank.

STATUTORY DISCLOSURE

Considering the nature of activities of the Bank, the provisions ofSection 217(1 )(e) of the Companies Act, 1956 relating to conservationof energy and technology absorption do not apply to the Bank. The Bankis, however, constantly pursuing its goal of technological upgradationin a cost-effective manner for delivering quality customer service.

The statement containing particulars of employees as required underSection 217(2A) of the Companies Act, 1956 and the rules hereunder isgiven in an Annexure appended hereto and forms part of this report. Interms of Section 219(1 )(iv) of the Act, the Report and Accounts arebeing sent to the shareholders excluding the aforesaid Annexure. Anyshareholder interested in obtaining a copy of the Annexure may write tothe Company Secretary at the Registered Office of the Bank.

AUDITORS

M/s Deloitte Haskins & Sells, Chartered Accountants, Statutory Auditorsof the Bank will retire on the conclusion of the Eighteenth AnnualGeneral Meeting and are eligible for re-appointment, subject to theapproval of Reserve Bank of India and the shareholders. As recommendedby the Audit Committee of the Board, the Board of Directors hasproposed the appointment of M/s Deloitte Haskins & Sells, CharteredAccountants as Statutory Auditors for the financial year 2012-13. Theshareholders are requested to consider their appointment on theremuneration to be decided by the Audit Committee of the Board.

ACKNOWLEDGEMENTS

The Board of Directors places on record its gratitude to the ReserveBank of India, other government and regulatory authorities, financialinstitutions and correspondent banks for their strong support and

Page 99: company history of SBI, ICICI

guidance. The Board acknowledges the support of the shareholders andalso places on record its sincere thanks to its valued clients andcustomers for their continued patronage. The Board also expresses itsappreciation to all employees of the Bank for their strong work ethic,excellent performance, professionalism, teamwork, commitment andinitiative, which has led to the Bank making commendable progress intoday''s challenging environment.

For and on behalf of the Board of Directors

Place : Mumbai Adarsh Kishore

Date : 27th April, 2012 Chairman

Company History - Punj. NationlBak

YEAR EVENTS

1996 - A package was developed for corporate customers for fast remittance of funds from different up-country branches to the controlling office.

- The concept of 'Chief Host' introduced by the bank for resolving customers' complaints in the minimum possible time, has resulted in substantial improvement in customer service.

- The company also entered into new activity of arranging Mergers, Acquisitions and Takeovers which has been quite rewarding in terms of return.

2000 - The Credit Rating Information Services of India has suspended its rating for the fixed deposit programmes of Amruntanjan Finance.

- The Bank has introduced a scheme for providing finance against mortgage of immovable property.

- Punjab National Bank and Bank of Baroda will tie up to form a subsidiary for a foray into life insurance business, banking industry.

- PNB has launched a gold import scheme. The gold will be imported through an arrangement with Commerzbank.

- ICRA has assigned an `LAAA' rating to Punjab National Bank's (PNB) Rs 240 crore long-term

Page 100: company history of SBI, ICICI

subordinated bond issue (Series V).

- The Bank is the first amongst the public sector banks to come out with Voluntary Retirement Scheme.

- Punjab National Bank has become the latest big player to enter the credit card market. The card will have two variants -- Gold and Classic.

- An International Co-branded Credit Card of Punjab National Bank and Hongkong & Shanghai Banking Corporation has been launched in New Delhi.

- Primary market dealers PNB Gilts Ltd is launching a retail scheme in the first week of January to rope in individuals as investors for govt. securities. It has recently tied up with Punjab National Bank and will be using the huge network of 2000 branches of the bank all over the country for distribution and receipt of forms for investment in govt. securities.

- Mr. T S Narayansami has taken over as executive director of Punjab National Bank.

2002

- Punjab National Bank incorporated its branch in M.G. Road, Bangalore named as Mid-Corporate Branch (MCD) to provide its corporate clients with a credit limit of Rs 3.5 crore and above.

- Punjab National Bank is in a joint venture with Infosys for the implementation of a Centralised Banking Solution for it. The bank plans to implement Centralised Banking Solutions establishing connectivity between its branches to cover 1,500 to 2,000 branches and all ATMs by 2004.

- -Punjab National Bank has informed that the first AGM of the shareholders of the Bank was held on August 05, 2002. The Chairman declared the following candidates elected as Directors: Dr Pritam Singh , Sh Mohanjit Singh.

- Punjab National Bank has informed that Ms. Malathi Mohan, Asstt. General Manager has been nominated as Company Secretary in place of Mr. Ramesh Kumar Kochar.

- Punjab National Bank has launched a special loan scheme called 'Fin-Basket', a composite package of retail loans, for a minimum size of Rs 5 lakhs.

- Punjab National Bank (PNB) has been presented with the `Best Bank Award' for excellence in banking technology.

- Punjab National Bank (PNB) tied up with Cisco Systems for networking 3,870 branches as part of its Rs 150 crore plan.

Page 101: company history of SBI, ICICI

2003

- Punjab National Bank (PNB) has taken over Kozhikode-based Nedungadi Bank Ltd (NBL) on Feb 1. All the 174 branches of the previous private bank are now working as PNB branches

- Punjab National Bank (PNB) has entered into an alliance with New India Assurance for selling its general insurance products.

- Punjab National Bank has informed that Shri V K Sibal, a director on the Board of the Bank has resigned from the Board. Ministry of Finance, Govt. of India, vide its letter dated May 09, 2003 has conveyed the acceptance of resignation w.e.f. May 07, 2003.

- Punjab National Bank has informed the Exchange that the Bank has signed a Memorandum of Understanding (MOU) on June 24, 2003 with Principal Financial Services Inc. (USA) and Vijaya Bank for joint venture partnership in Life Insurance, Pensions and Asset Managements (MF) business.

- Punjab National Bank (PNB) has formed a strategic alliance with Infrastructure Leasing and Financial Services Ltd (IL&FS) to set up a private equity fund for investing in domestic companies.

- Punjab National Bank has informed that it is setting up its Representative Office at London. The office was scheduled to be inaugurated on August 21, 2003. Further, the Bank has been granted license to open Offshore Banking Unit at Seepz, Mumbai.

- New Delhi: Punjab National Bank has entered an agreement with Oriental Bank of Commerce, Indian Bank, UTI Bank and Global Trust Bank for sharing ATMs spread across the country.

-Inks pact with Principal Financial Group of USA to foray into insurance business and pension fund

-Principal Financial Group (Mauritius) Limited enters into a joint venture agreement with Punjab National Bank (PNB) and Vijaya Bank to sell long-term mutual funds and related financial services in India. The new company to be called Principal PNB Asset Management Company (in association with Vijaya Bank)

-Receives approval from RBI for opening an Offshore Banking Unit (OBU) at SEZ, Noida (U.P)

-Punjab National Bank (PNB) has decided to amalgamate its merchant banking arm 'PNB Caps' with itself.

-PNB unveils a scheme to help SSIs to get ISO 9000.

Page 102: company history of SBI, ICICI

- Board of Directors approved investment of Rs 250 million in the units of 'Leverage India Fund' managed by IL&FS Investments Managers Ltd, and has entered into MoU with IL&FS and IL&FS Investment Managers to sponsor the Fund.

-Shri K D Khera, Director representing Non Workmen Employees of the bank, ceases to be Director on the Board of the Bank wef October 31, 2003 on attaining age of superannuation.

-The Ministry of Finance, Government of India, vide their notification dated November 25, 2003, Shri Anand Swarup Agarwal has been nominated as part-time non official Director of the bank for a period of 3 years from the date of notification.

2004

-Ministry of Finance, Government of India vide their notification dated January 9, 2004 has informed that Dr. K.V. Rajan, Chief General Manager, RBI, Kanpur has been nominated as RBI nominee director of the Bank in place of Sh. V.K. Sharma with immediate effect.

-PNB acquires Hindustan Transmission Product Limited (HTPL) assets under Sarfaesi

-IFCI merger with PNB's would help each other

-Delhi based Punjab National Bank (PNB) and Bangalore-based Vijaya Bank enter into a four-way partnership with Principal Financial of the US and Berger Paints to set up an insurance broking company

--Export Credit Guarantee Corporation of India Ltd (ECGC) and Punjab National Bank (PNB) sign a corporate agency agreement for marketing ECGC's export credit insurance products through the network of PNB branches

-Punjab National Bank has informed that the bank has signed agreement with M/s NCR Corporation India Pvt Ltd for providing clearance of Intercity cheques within 48 hours after the cheque is presented, at selected centers using cheque truncation, where there is Image based Cheque Clearing System.

-Punjab National Bank (PNB) has enlisted the services of computer industry giant Intel to evaulate its current and future technolgical requirements. An MoU was signed for the deployment of various IT-related solutions today between the bank and Intel.

-ICICI Bank and Punjab National Bank have signed a memorandum of understanding (MoU) for ATM network sharing, giving customers an access to over 2,200 ATMs in India

- PNB accomplishes RTGS installation

Page 103: company history of SBI, ICICI

- PNB implements Loans and Advances Data Desk for Evaluations and Reports, (LADDER) system for rationalisation of returns, asset classification and provisioning, credit monitoring and NPA management

- LP Agrwal, Ranjan Dhawan, I D Singh, P K Mitra, K S Bajwa, V P Chowdhary and B P Chopra appointed as General Managers on June 9, 2004

- PNB mandates TCS to deploy HR Solutions

-Tata Consultancy Services (TCS) has joined hands with PeopleSoft to handle a Rs 5-10 crore worth project mandated by Punjab National Bank (PNB) to implement human capital management and payroll solution.

-Punjab National Bank has informed that the Bank has entered into money transfer arrangement with Western Union Through their agent M/s Weizmann Forex Ltd

-Punjab National Bank has informed that the Bank branch at Kabul, Afghanistan has commenced soft opening on July 26, 2004

-PNB in ally with NMCE launches new loan scheme

-PNB JV with Principal Financial Group of USA

-Tractor manufacturer Escorts tied up with Punjab National Bank for sponsorship of a farmer training centre in Haryana

-Launches corporate internet banking facility on November 18, 2004.

2005 -Government of India, Ministry of Finance (Banking Division), New Delhi vide its Notification dated April 30, 2005, appoints Shri S C Gupta as Chairman & Managing Director (CMD) of the Bank.

-PNB unveils ATM at Edappal

2006

-Punjab National Bank today tied up with MasterCard International to launch a signature-based debit card.

-PNB opens branch in Uttaranchal

-Punjab National Bank (PNB) has tied up with Indian Airlines for online booking of air tickets.

Page 104: company history of SBI, ICICI

-Punjab National Bank has informed that Shri Rakesh Singh, Joint Secretary (IF), Ministry of Finance has been appointed Government nominee Director on the Board of the Bank w.e.f. October 20, 2006 under Clause 9(3)(b) of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970.

-PNB ties up with IDBI Capital

-Punjab National Bank has informed that Sh. A S Agarwal, Government nominee Director on the Board of the Bank w.e.f. November 25, 2003, has demitted the office on November 24, 2006 on completion of his tenure of 3 years.

2007

-Punjab National Bank has appointed Shri Ramesh Kumar Kochar as Company Secretary of the Bank.

- Punjab National Bank has informed that the Government of India, Ministry of Finance, Department of Economic Affairs (Banking Division), New Delhi vide Notification dated June 06, 2007 has appointed Shri. Jag Mohan Garg as a Whole-time-Director (designated as Executive Director) on the Board of Punjab National Bank from the date of his taking over charge of his post or until further orders or till the date of his superannuation i.e. upto July 31, 2010 whichever is earlier.

-Punjab National Bank is entering into an MoU with India Infrastructure Finance Co. (IIFC) on October 17, 2007 with an aim to extend its cooperation and support to IIFC in areas of creating a deal flow of infrastructure projects.

2008

- Punjab National Bank entered into a memorandum of understanding (MoU) with IL&FS Cluster Development Initiative Ltd in order to provide impetus to financing of industrial infrastructure projects.

-Punjab National Bank (PNB), has tied up with Networth Stock Broking Ltd (NSBL) for an Internet trading alliance.

- Punjab National Bank cut its prime lending rate by 50 bps.

- Punjab National Bank has opened its 69th branch at Khammam.

- Punjab National Bank has announced the opening of its 133rd branch in Kerala at Sana Towers, Medical College Junction, Kozhikode. All 133 branches in the State are networked under the core banking solution including this branch.

Page 105: company history of SBI, ICICI

- Punjab National Bank has informed that Government of India has nominated Shri Vinod Kumar Mishra as part-time non-official Director on the Board of the Bank for a period of three years from the date of Notification of his appointment or until further orders, whichever is earlier.

2009

- The Punjab National Bank has opened a new branch at Leicester in Britain. Leicester has a large section of people of Indian origin. The branch has been opened this week in the Belgrave Commercial Centre, in the heart of what is called the Golden Mile - the heart of Asians business and culture. It is also popularly known as 'Little India'.

- Punjab National Bank has informed that Government of India, Ministry of Finance, Deptt. of Financial Services vide notification No. F. No. 9/22/2008-BO.I dated March 26, 2009 has appionted Shri Nagesh Pydah and Shri M. V. Tanksale as Executive Directors (Whole time Directors) on the Board of the Bank. The said Executive Directors will hold office from the date of taking charge up to the date of superannuation or until further orders, whichever is earlier. 1) Name : Shri Nagesh Pydah, Date of taking charge : March 26, 2009, Date of superannuation : February 29, 2012. 2) Name : Shri M.V. Tanksale, Date of taking charge : March 26, 2009, Date of superannuation : July 31, 2013.

- Punjab National Bank (PNB) has set up its second branch in Hong Kong, which will focus on retail banking operations.

2009

- Punjab National Bank (PNB) has entered into a pact with Ashok Leyland to extend finance to the latter's commercial vehicle customers.

- Sh. K R Kamath, has been appointed as Chairman and Managing Director (MD) of the Bank by Government of India, Ministry of Finance, Deptt. Of Economic Affairs (Banking Division) vide notification dated October 27, 2009 for a period of 5 years from the date of taking charge and / or until further orders, whichever is earlier. Accordingly, Shri. K R Kamath has taken charge of Chairman and Managing Director on October 28, 2009.

2010

- Punjab National Bank has appointed Shri Mohinder Paul Singh as Workmen Employees Director on the Board of the Bank w.e.f. January 28, 2010.

- Punjab National Bank has forged an alliance with Oriental Insurance Company Limited, to offer a floater Health Insurance Policy covering the proposer and family under one sum insured .

Page 106: company history of SBI, ICICI

- Punjab National Bank has unveiled a festival bonanza offering home loan at 8.5 per cent, a teaser rate to attract new customer. The concessional rate of 8.5 per cent has been fixed for three years for housing loans up to Rs. 50 lakh. As per the existing rate-card, loans up to Rs. 30 lakh attract a lowest rate of 9.25 per cent with a repayment period of 5 years while loans above Rs. 30 lakh is available at 10 per cent for similar maturity.

- Oriental Insurance Company (OICL) and Punjab National Bank launched 'PNB-oriental Royal Mediclaim Policy', exclusively for the bank customers

- Punjab National Bank has completed the transaction for acquisition of 63.64% stake in JSC Dana Bank Kazakhstan.

- Punjab National Bank - Reserve Bank of India has issued Certificate of Registration No. N-13.01980 in the name of INDIA FACTORING & FINANCE SOLUTIONS PVT. LTD. (Joint Venture Company) permitting to commence & carry on the business of Non-Banking Financial Institution.

- Punjab National Bank signed a Memorandum of Agreement with Principal Financial Group of Mauritius and Vijaya Bank for restructuring of their existing joint ventures subject to statutory approvals.

2011

- Acquistion Of 33% Stake In Metlife By Punjab National Bank

- PNB - Agreement with Weizmann Forex Ltd & BFC Forex & Financial Services Ltd

- PNB has launched two new deposit schemes- FCNR Premium Linked Deposit Scheme and NRE Rupee Flexible Deposit Scheme- which would provide special benefits to the NRIs.

- PNB & Metlife partner for life insurance venture.

- PNB's Mega Recovery Camps receives excellent response from small agricultural borrowerr in recovering the loan amount.

- PNB Bagged Golden Peacock National Training Award 2011

- PNB bags Most Socially Responsive Bank Award 2011

2012

- In a move to bring cheers for the loan seekers, India's second largest public sector lender, Punjab

Page 107: company history of SBI, ICICI

National Bank (PNB) has reduced interest rates on housing and car loans by up to 50 basis point

- PNB raised interest rates on domestic and NRE term deposits

- PNB sold stake to LIC for Rs 1,590 cr

- PNB Awarded Overall Best Corporate Social Responsibility Awards 2012

- PNB Awarded SKOCH Award on Financial Inclusion 2012

2013

India's second largest public sector lender Punjab National Bank (PNB) acquired 30 per cent stake in Metlife India Insurance Co. Ltd.

Director ReportMar2011   Mar 2012

PNB remained frontrunner in the Indian Banking with its Total Business, Total Deposits and Total Advances growing over 21% on YoY basis. This is higher than the growth achieved by the Banking System in India. This performance is combined with the consistently higher Book Value per Share and Earnings per Share. This impressive performance was largely due to the Bank''s focus on ''Building a Customer Experience'' with thrust on Retail, SMEs, Agriculture, Students, Inclusive approach to Banking, Cost effective Organizational Structure, Better Asset Liability Management, prudent Risk Management, strengthening Recovery Mechanisms and various Cost Control Measures.We believe that Customer Experience is not just about Customer Service.It is also about physical as well as emotional elements. When boththese elements are measured against customers'' expectations, one canhave the Best Customer Experience. For this, ''Customer Loyalty'' is ourwatchword. Today PNB has a country wide presence with a network of 5670branches and more than 6000 ATMs that provide its 7.2 crore customers aunique banking experience. This has also earned the Bank a strong brandequity and customers'' loyalty.

PNB is amongst India''s most trusted brands and features at the 25thplace amongst the Top 50 most valuable corporate brands by BrandFinance-ET and 195th amongst top 500 global banks as per Brand FinanceGlobal Banking 500 for 2011. More importantly, during 2011-12, PNB hasbeen recognized as the ''Best in Corporate Social Responsibility (CSR)Overall'' by World HRD Congress and been recognized as the ''BestSocially Responsive Bank'' by Business World & PwC. Besides, GoldenPeacock National Training Award has also been conferred upon the Bankby the Institute of Directors. Above all, the Bank was recognized asthe ''Best Bank'' by Business India.

In this backdrop, your Directors take pleasure in placing the Bank''sAnnual Report for 2011-12 along with its audited annual financialstatements.

Page 108: company history of SBI, ICICI

OUR PERFORMANCE

1. FINANCIAL HIGHLIGHTS

1.1. BALANCE SHEET

(Crore)

Particulars 2010-11 2011-12 (%)/Growth (%)

21509 27818 29.3

Capital & Reserves

555005 673363 21.3

Total Business

312899 379588 21.3

Deposits

120325 134129 11.5

Low cost Deposits (Savings and Current)

242107 293775 21.3

Advances

23621 29196 23.6

Retail Credit

75652 95898 26.8

Priority Sector Credit

40.67 40.70 -

-% of Adjusted Net Bank Credit (ANBC)

35462 45917 29.5

Agricultural credit

- 19.30 19.34 -

Page 109: company history of SBI, ICICI

-% of Adjusted Net Bank Credit (ANBC)

1.2. PROFIT

(Crore) 2010-11 2011-12 Particulars FY 2010-11 FY 2011-12 Growth (%)

9056 10614 17.2

Operating profit

4622 5730 24.0

Provisions

4433 4884 10.2

Net profit

1.3. INCOME & EXPENDITURE

(Crore)

2010-11 2011-12 (%)

Particulars FY 2010-11 FY 2011-12 Growth (%)

26986 36428 35.0

Interest income

- 21105 28447 34.8

- Interest/discount on advances/bills

- 5638 7692 36.4

- Income on investments

3613 4203 16.3

Non-interest income

2045 2375 16.1

Commission, Exchange & Brokerage

Page 110: company history of SBI, ICICI

11807 13414 13.6

Net Interest Income

30599 40631 32.8

Total Income

15179 23014 51.6

Interest expended

- 13795 21396 55.1

- Interest paid on deposits

6364 7003 10.0

Total Operating expenses

- 4461 4723 5.9

- Establishment expenses

21543 30016 39.3

Total Expenses

9056 10614 17.2

Operating profit

4622 5730 24.0

Provisions and contingencies

4433 4884 10.2

Net profit

Note: Difference in totals is due to rounding off

1.4 KEY RATIOS

(Percentage)

PARTICULARS 2010-11 2011-2012

4.57 5.62

Average cost of funds

Page 111: company history of SBI, ICICI

8.12 8.89

Average yield on funds

22.13 18.52

Return on Equity

3.96 3.84

Net Interest Margin

1.34 1.19

Return on Assets

41.27 39.75

Cost to Income Ratio

1.91 1.71

Operating expenses to Average Working Funds

2.72 2.59

Operating profit to Average Working Funds

140.6 154.2

Earnings per share (Rs)

632.5 777.4

Book value per share (Rs)

0.85 1.52

Net NPAs to Net advances

73.21 62.73

Provision Coverage Ratio

12.42 12.63

CRAR - Basel II

Page 112: company history of SBI, ICICI

2. OPERATIONAL HIGHLIGHTS DURING THE YEAR

- Bank has expanded its wealth management services by foraying intoLife Insurance business and tie-up with Metlife India Insurance CompanyLtd.

- Bank has expanded its international foray to 10th destination viz.Sydney, Australia. Further we are exploring possibilities for presencein Maldives, South Africa, Bangladesh, Myanmar, Singapore and Brazil.

- Taking forward its mission of "Banking for the unbanked", underFinancial Inclusion Plan, Bank has covered all its 4588 villagesallotted under the Swabhiman campaign of Govt. of India throughBusiness Correspondents.

- Bank has made a positive contribution towards community by furtherstreamlining its CSR activities. Towards this, ''PNB Prerna'', anassociation/body of wives of top executives of the Bank to carryforward the CSR agenda of the Bank, has completed one year of itsexistence.

- Bank is establishing e-lobbies for providing 24 x 7 bankingServices and is also opening GenNext Branches to cater to the needs ofyounger generation.

- Bank has made its technology platform more robust with necessaryup-gradations. It has successfully migrated to next version of Finacle(7.0.25) for better Customer service.

- Various customer friendly initiatives were introduced by the Bankto provide quality experience to our esteemed customers, likeIntroduction of Cash Deposit machines, Self Service passbook printingterminals, SMS alerts, ''PNB Welcome Kit'' for HNI / salaried accountholders, etc.

- Bank continued its expansion by adding over 450 branches and 950ATMs during the year.

- Bank introduced many new customized offers targeting specialcustomer segments like new education loan scheme ''PNB Pratibha'', MSMEschemes like ''PNB weavers Credit card'' and ''PNB Super Trade'', new termdeposit product like ''PNB 1111 days'', ''prospective senior citizenscheme'', etc.

3. DIVIDEND

The Board of Directors has recommended a dividend of 220% for the year2011-12.

4. CORPORATE GOVERNANCE

The Bank is committed to best practices in Corporate Governance byadhering to high standards of transparency, accountability, ethicalbusiness practices, operational efficiencies and social responsiveness

Page 113: company history of SBI, ICICI

for maximizing interest of all the stakeholders.

As a listed entity, Bank is complying with various regulatoryrequirements. Bank has complied with the guidelines of Reserve Bank ofIndia and SEBI on the matters relating to Corporate Governance, whichhas been examined by the Statutory Central Auditors.

PNB follows practices that provide its financial stakeholders a highlevel of assurance on the quality of Corporate Governance. These bestpractices are reaffirmed by CGR-2 rating of the rating agency, ICRA Ltdreflecting a high level of assertion on the quality of corporategovernance of the Bank.

5. BOARD OF DIRECTORS

As on 31.03.2012, there are 12 Directors on the Board of the Bankincluding 3 whole time Directors, i.e Chairman and Managing Directorand two Executive Directors.

During the Year 2011-12, the following changes took place in thecomposition of Board of Directors:

- Shri M.A. Antulay, part time non official Director was re-appointed on 20.05.2011.

- Shri M.V. Tanksale, Executive Director demitted the office on

28.06.2011 on his elevation as Chairman & Managing Director of CentralBank of India.

- Smt. Usha Ananthasubramanian was appointed as Executive Director ofthe Bank on 18.07.2011.

- Shri Anurag Jain, GOI Nominee Director was nominated by the Govt.of India on 03.08.2011 in the position earlier held by Smt. RavneetKaur.

- Shri B.B. Choudhary, Director under Chartered Accountant category,was appointed by the Govt. of India on 23.09.2011.

- Shri V.K. Mishra, part time non official Director ceased to beDirector on the Board of the Bank w.e.f. 05.12.2011 on completion ofhis tenure.

- Shri D.K. Singla, Shri T.N. Chaturvedi and Shri G.R.Sundaravadivel, Shareholder Directors, demitted their offices on27.12.2011 on completion of their tenure on the Board of the Bank.

- 3 new Shareholder Directors namely, Shri M.N. Gopinath, Shri D.K.Singla and Dr. Sunil Gupta have been elected as Shareholder Directorsin the EGM held on 20.03.2012.

The Board welcomes Smt. Usha Ananthasubramanian, Executive Director,

Page 114: company history of SBI, ICICI

Shri Anurag Jain, Shri B.B. Choudhary and Shri M.A. Antulay(re-nominated), Shri M.N. Gopinath, Shri D.K. Singla (re-elected) andDr. Sunil Gupta, as Directors on the Board of the Bank. The Board alsowishes to place on record its appreciation for the valuablecontributions made by Shri M.V. Tanksale, the then Executive Director,Shri V.K. Mishra, Shri T.N. Chaturvedi and Shri G.R. Sundaravadivel,the Directors.

6. Details of various meetings held up to 31st March, 2012:

S. Meeting Number of S. Meeting Number ofNo. Meetings No. Meetings held upto held upto March, 2012 March, 2012

1 Board Meeting 13 11 Share Transfer 24 Committee

2 Management 19 12 Shareholders''/ Investors'' 6 Committee Grievances Committee

3 Committee of Directors 4 13 Directors Promotion 1 to review vigilance & Committee non-vigilance cases

4 Audit Committee of Board 11 14 Appellate & Reviewing - Authority

5 Risk Management 4 15 Steering Committee 4 Committee Vision 2013

6 Special Committee of 9 16 Nomination Committee 1 Board to Monitor and

Follow Fraud cases of Rs. 1.00 crore and above

7 IT Committee of the Board 4 17 Insurance Joint Venture 5

Committee

8 PA. Committee 6 18 Organisational 2

Transformation &

Business Excellence

Programme

Page 115: company history of SBI, ICICI

9 Remuneration Committee 1 19 Credit Approval Committee 8

10 Customer Service Committee 4

7. ACKNOWLEDGMENTS

The Board of Directors thank the Government of India, Reserve Bank ofIndia, Securities and Exchange Board of India, Stock Exchanges, Bank''scustomers, public and the shareholders for valuable support, continuedpatronage and confidence reposed in the bank.

The Board also wishes to place on record its appreciation for thevaluable contribution of the members of the Bank''s staff at all levelsand look forward to their continued involvement in achieving the futuregoals.

For and on behalf of Board of Directors CHAIRMAN AND MANAGING DIRECTOR

J.2 Associate BanksSBIs five Associate Banks had a market share of 5.88% in deposits and6.00% in advances as on last Friday of March 2011.

Table : Performance Highlights of Associate Banks (ABs)

Page 116: company history of SBI, ICICI

(Rs. in Crs)

As on As on Change 31.03.2010 31.03.2011 (%)

Total Assets 3,18,580 3,68,283 15.60

Agg. Deposits 2,72,790 3,11,645 14.24

Total Advances 2,04,573 2,40,423 17.52

Operating Profit 5,841.90 7,568.68 29.56

Net Profit 2,958.80 3,598.43 21.62

Credit Deposit Ratio 74.15% 77.29% 4.23

Capital Adequacy Ratio 13.66 13.25 -0.41

Gross NPA 3,504.68 5,066.50 44.56

Net NPA 1,692.96 2,443.69 44.34

Return on Equity 18.97% 19.08% 0.11

J.3 SBI Commercial & International Bank Ltd. (SBICI)

As at the end of March 2011, the aggregate Deposits and total Advancesof SBICI stood at Rs. 453.27 crores and Rs. 271.43 crores respectively.The Bank recorded an operating and net profit of Rs. 5.25 crores andRs. 4.21 crores respectively. The net NPA as at the end of March 2011was NIL.

J.4 SBI Capital Markets Limited (SBICAP)

SBICAP is a full service investment banking outfit offering ProjectAdvisory Services, arrangement of Structured Finance, Capital MarketServices like Equity Issuances, Mergers & Acquisitions and arrangementof Private Equity, etc. SBICAP is a leader in India in Project Financewith over 40% market share.

The following are some of the many awards / recognitions won by theCompany during the year:

- Bank of the year award 2010 for Asia Pacific Region for the 3rdconsecutive year by Thomson Reuters.

- Loan House of the Year Award for the 2nd consecutive year by IFRAsia.

- Euromoney Project Finance Indian Deals awards –

Page 117: company history of SBI, ICICI

- Indian Petrochemical Deal of the Year 2010- ONGC MangalorePetrochemicals

- Indian Industrial Deal of the Year 2010 – Dungsam Cement

- Indian Oil & Gas Deal of the Year 2010- GSPC KG Offshore

- Ranked No 1 Global Mandated Lead Arrangers for 2010 by PFI ( ThomsonReuters) for the second successive year.

- Ranked No 1 Global Lead Arrangers for the second successive year byDealogic.

- Ranked 1st with an impressive market share of 13.3% for the 1stquarter of calendar 2011 on the Asia Ex-Japan Syndicated Loans Table asper Bloomberg.

- Ranked 2nd in terms of issues handled and 3rd in terms of amountraised during the financial year 2010-11.

- Ranked 1st in Rights Issues- both in terms of number of issues andamount raised

- Ranked 1st in number of PSU Divestment Issues.

The company has posted PAT of Rs. 374.72 crores as on 31.03.2011 asagainst Rs. 137.12 crores as on 31.03.2010 thus recording YoY growth of173%. Also declared an interim dividend of 400%.

J.4.1 SBICAP Securities Limited (SSL)

SSL, a wholly owned subsidiary of SBI Capital Markets Ltd., besidesoffering equity broking services to retail and institutional clientsboth in cash as well as in Futures and Options segments, is alsoengaged in Sales & Distribution of other financial products like MutualFunds, etc. SSL has 100 branches and offers Demat, e-broking, e-IPO ande-MF services to both retail and institutional clients. SSL currentlyhas more than 1.89 lac customers in their books. The Company has posteda profit of Rs.4.59 crores as on 31.03.2011 during the current year.

J.4.2 SBICAPS Ventures Limited (SVL)

SVL is a wholly owned subsidiary of SBI Capital Markets Ltd. SVL earneda net profit of Rs. 0.59 crore during 2010-11.

SVL sold its stake in SS Ventures Services Ltd., a venture capital fundset up jointly by SVL and SBI Holdings Inc (Softbank), Japan and itsstake in India Japan Fund to SBI Holdings Inc and Knowledge Investments(Mauritius) Ltd at a total consideration of Rs. 3.47 crores and Rs.2.60 lac respectively.

J.4.3 SBICAP (UK) Ltd. ( SUL)

Page 118: company history of SBI, ICICI

SUL is a wholly owned subsidiary of SBI Capital Markets Ltd. During theyear SUL has booked a revenue of Rs. 2.16 crores and has posted a netprofit of Rs. 0.20 crore despite the global recessionary scenario.

SUL is positioning itself as a Relationship outfit for SBI CapitalMarkets in UK and Europe. Relationships are being built with FIIs,Financial Institutions, Law Firms, Accounting Firms, etc to market thebusiness products of SBICAP.

J.4.4 SBICAP TRUSTEE Co. Ltd. (STCL)

SBICAP TRUSTEE Co Ltd (STCL), a wholly owned subsidiary of SBI CapitalMarkets Ltd., which has commenced security trustee business with effectfrom 1st August 2008 has earned a gross income of 8.31 Rs.crores and aNet Profit of Rs. 4.43 crores during 2010-11 as against Gross Income ofRs. 3.78 crores and Net Profit of Rs. 1.94 crores during 2009-10.

J.5 SBI DFHI Ltd. (SBI DFHI)

- SBI acquired Asian Development Banks and Industrial Investment Bankof Indias stake (4.69% and 0.47% respectively) in SBI DFHI during thecourse of the year.

- SBI group holds 72.17 % share in the Company, which is a primarydealer.

- For the period ended 31st March 2011, the Companys PAT was Rs. 56.94crores as against Rs. 89.23 crores during March 2010. The lower profitis mainly attributed to the impact of hikes in Repo rates by RBI andyield on investments remaining stagnant.

- The market share of SBIDFHI has increased from 2.71% as on 31.03.2010to 3.41% as on 31.03.2011.

- The secondary market turnover during the year was Rs. 97,885 croresas against Rs. 78,911 crores during the corresponding period in 2010(YoY growth of 24%).

J.6 SBI Cards & Payments Services Pvt. Ltd. (SBICSPL)

- SBI Cards, the only stand-alone credit card issuing company in India,is a joint venture between State Bank of India and GE CapitalCorporation, wherein SBI holds 60% stake.

- The "Cards in Force" (CIF) of the Company stands at 23 lac and thereceivables are at Rs. 1,795 crores at the end of March 2011.

- The Company has posted a net profit of Rs. 7.10 crores as on March2011 as against a loss of Rs. 152.4 crores as on 31.03.2010.

- SBI Card has emerged as the most trusted brand by being theundisputed Gold Award winner in Readers Digest Trusted Brands Survey2010 for the third year in a row.

Page 119: company history of SBI, ICICI

Table : The Performance Highlights of the Associate Banks as on31.03.2011 are as under:

(Rs. in Crs)

Name of the Bank SBIs share Deposits Advances Operating Net in the Profit Profit capital (%)

State Bank of

Bikaner & Jaipur 75.00 53319 41744 1140.25 550.88

Hyderabad 100.00 90178 65437 2319.47 1166.24

Mysore 92.33 42779 34440 1173.75 500.62

Patiala 100.00 67771 52331 1759.24 652.96

Travancore 75.00 57598 46471 1175.97 727.73

All 5 Banks 311645 240423 7568.68 3598.43

- SBI Card has won the CNBC Awaaz Consumer Awards 2010.

J.7 SBI Life Insurance Company Limited (SBILIFE)

- SBI Life is Joint Venture Company between SBI and BNP Paribas inwhich SBI holds 74% stake.

- SBI Life has a unique multi-distribution model comprisingBancassurance, Retail Agency & Institutional Alliances and GroupCorporate Channels for distribution of insurance products.

- Gross Premium of the Company Crossed Rs. 12,000 crores with YoYgrowth of 28%.

- SBI Life has a market share of 19.22% of the total market share ofprivate insurers which stood at 31.30% as on 31.03.2011. Overall marketshare (including Life Insurance Corporation of India) of SBI Life stoodat 6.02% as at 31st March 2011.

- Recorded a PAT of Rs. 366.30 crores as on 31.03.2011 as against Rs.276.46 crores as on 31.03.2010.

- The ‘Assets under Management of SBI Life recorded a growth of 40%YoY to reach Rs. 40,162 crores as on 31st March 2011.

- SBI Life expanded its branch network by adding 135 branches duringthe year bringing the total number of branches to 629.

Page 120: company history of SBI, ICICI

- ICRA has reaffirmed iAAA rating to the company indicating highestclaim paying ability.

- CRISIL has reaffirmed its highest financial rating AAA/ Stable.

The following are some of the awards / recognitions achieved by theCompany during 2010-11:

- NDTV Profit business leadership 2010-11 award for organizationalexcellence.

- Bloomberg UTV Award for Financial Excellence 2010-11.

- Outlook Money Award Runner Up for the Best Life Insurance Company2010-11.

- ICS Quality Champion Award 2010-11.

- IS0 9001:2000 certification for superior claim process.

J.8 SBI Funds Management (P) Ltd. (SBIFMPL)

- SBIFMPL, the Mutual Fund arm of SBI, is the 6th largest Fund House interms of "Assets Under Management" and a leading player in the marketwith 6 million investors.

- The schemes of the Fund House have performed consistently over theyears and have emerged as the preferred investment for investors.

- The company has posted a PAT of Rs. 78.85 crores as on 31.03.2011registering a YoY growth of 4%.

- The average "Assets Under Management" (AUM) of the company stood atRs. 41,672 crores as against Rs. 37,417 crores as on March 2010achieving a YoY growth of 11% as against the growth of 6% for theMutual Fund Industry.

J.9 SBI Global Factors Ltd. (SBIGFL)

- SBIGFL is one of the leading factoring companies in India which hasthe highest market share (over 90%) in export & import factoring.

- During the year ended 31st March 2011, the turnover of the companydecreased to Rs. 7,605 crores from Rs. 12,978 crores as on 31st March2010 due to the sluggish growth in industrial production during theyear impacting the top line growth.

- The company incurred a loss of Rs. 125.62 crores during the yearended 31.03.2011 as against a profit of Rs. 6.58 crores earned on31.03.2010 mainly on account of slow down in economy and due to higherprovisioning for NPAs and Write-offs.

J.10 SBI Pension Funds Pvt. Ltd. (SBIPF)

Page 121: company history of SBI, ICICI

SBIPF is one of the three Fund Managers appointed by Pension FundRegulatory & Development Authority (PFRDA) for management of PensionFunds under the New Pension System for Central Government (except

Armed Forces) and State Government Employees. SBIPF, a wholly ownedsubsidiary of the State Bank Group, commenced its operations from April2008. The total "Assets Under Management" of the company as on 31stMarch 2011 were Rs. 3,764.11 crores (YoY growth of 65%). As at 31stMarch 2011, SBIPF was managing 44% of the corpus under the Central GovtScheme, 39 % under State Govt scheme and 64% under the informal sector.The Company recorded a net profit of Rs. 0.32 lac.

Important Developments during the year in Associates & Subsidiaries:

- State Bank of Indore, one of the Associate Banks, was acquired on26th August 2010 after the final approval from RBI and GoI.

- State Bank of Mysore raised Rs. 583.20 crores equity through a RightsIssue during the year.

- State Bank of Bikaner & Jaipurs Rights Issue for raising Rs. 780crores was open from 28th March to 11th April 2011.

Support & Control Operations

K Information Technology

L Risk Management & Internal Controls

M Customer Service & Corporate Social Responsibility

N Corporate Communication & Change

O Right to Information Act

P Human Resources

Q Business Process Re-engineering

R Official Language

S KYC/AML/CFT Measures

T Fraud Prevention & Monitoring

U Compensation Policy for deficiency in Service

V Banks Outsourcing Policy

W Super Circle of Excellence

Page 122: company history of SBI, ICICI

X Green Banking Initiatives

K. INFORMATION TECHNOLOGY

Networking: The Bank has implemented a secure, robust scalable WANarchitecture network built with equipments owned by SBI, connecting19,347 Branches/Offices and 25,005 ATMs of State Bank Group throughleased lines, VSATs and CDMA technology.

Core Banking: CBS roll out across the domestic branches is supportedwith a state-of-the-art centralized infrastructural setup and a robustPrimary / DR setup, providing uninterrupted continuity of Banksoperations. It facilitates the scalability for future growth,interfacing with multiple alternate channels, reduction in transactioncosts, improved operating efficiency. Milestones of 52 millions peaktransactions in a day, 1,861 Transactions per second and managing 258million accounts have been achieved in recent months. Operatives havebeen provided with tools for on-line real time transactionverification. E-Trade – internet based front end application has beenrolled out for corporate customers for processing various trade financetransactions.

ATM: State Bank Group crossed an important milestone of rolling out25,000th ATM during the year. Apart from Cash Withdrawal, Balanceenquiry, Mini statement and Card to Card transfer, several value addedservices such as Utility Bill Payment, Temple/Trust Donations, FeePayment, Mobile top up, Cash/ Cheque deposit (at select ATMs), Chequebook request, Payment of Insurance premium, SBI Credit Card BillPayment etc. are also being offered at 25,005 ATMs of the State BankGroup. Usage of debit cards at PoS terminal has increasedsignificantly. Bunch Note Acceptor (for direct acceptance of cash),Multifunction kiosks (for offering non-cash ATM transactions, InternetBanking transaction, passbook printing etc.),

low cost rural ATMs and solar powered ATMs have also been rolled out.

Internet Banking: The Banks Internet Banking solution is acomprehensive suite of products for both Retail and Corporate users.Some of the new features enabled during the year include onlinenomination and closure of e-TDR/STDR, opening closing of e-RD, viewingof Form 26 (Annual statement 26 for income tax credits), stop paymentof cheques, request for multicity cheque book, registration of mobilenumber in Core Banking account for SMS alerts of core transactions,online issuance of gift cards and top up, online validation of PANwhile making tax payment, display of notional interest in housing loanaccount etc.

Payment Systems Group: The volume of RTGS and NEFT transactions hasincreased significantly.

Contact Centre operates on 24x7 basis from two locations Bengaluru andVadodara. Contact Centre is currently providing the following services:Complaint Management System, Pension Management System, Lead ManagementSystem, Account Enquiry Services, Payment Tracking System, CardTracking Services, Hotlisting of Cards, ATM PIN Regeneration, Providing

Page 123: company history of SBI, ICICI

MMID (Mobile Money Identifier) information under IMPS (Interbank MobilePayment Services), Balance and Statement on mobile.

In respect of Prepaid Cards, the facility of placing request andfunding for procurement of Gift Card has been enabled through InternetBanking portal (www.onlinesbi.com).

Mobile Banking: A host of Mobile Banking services, such as FundTransfers, Enquiry

Services, Demat Account Enquiry, Cheque book request, Bill payment,Mobile top up, DTH recharge, SBI Life Premium Payment, E-tag rechargeto pay toll tax, Merchant payments and Inter Bank Mobile PaymentServices (IMPS) are currently being offered. IMPS has been added duringthe year.

Mobile Banking Services are currently offered under five channels viz.SMS, GPRS, WAP, USSD and SMS banking. SMS Banking has been introducedduring the last quarter of the year. The Mobile Banking user base hascrossed one million by the end of the year.

Enterprise Data Warehouse: The Phase II of the Enterprise DataWarehouse Project (EDWP) has commenced. While a few business criticalreports are already provided by EDWP, the end users will have access toall regular and ad hoc reports required for operational and decisionmaking requirements through a web portal in a phased manner.

Information Security: Bank has implemented a robust IT Policy andInformation System Security Policy which is in line with theinternational best practices. These policies are reviewed periodicallyand suitably strengthened in order to address emerging threats. Regularsecurity drills and employee awareness programs are conducted to ensuresecurity and increase awareness among staff. Business ContinuityManagement System (BCMS) has been implemented at Global IT centre,Belapur.

Foreign Offices: 131 branches in 23 countries, including 2 OBUs inIndia, run their operations on common banking application softwareFinacle, with their databases connected to a central Data Centre backedup by a

synchronized Disaster Recovery site. The Rupee remittances from foreigncentres are routed through the central Payment Hub for credit toaccounts maintained with State Bank Group. The NEFT mechanism is usedfor credits to accounts with other banks. The foreign offices also usethe centralized SWIFT infrastructure for their financial messages. Allforeign offices use Internet Banking channel, and 113 ATMs at variouslocations abroad cater to the Banks overseas customers with most ofthe ATMs connected to centralized ATM Switch in India.

RRB Computerisation:

Out of 18 RRBs sponsored by the Bank, 10 RRBs have been computerised onCBS platform using BaNCS application software through the ASP model.

Page 124: company history of SBI, ICICI

Awards & Accolades:

During the year, The Bank has received the following national andinternational awards in recognition of its technology implementation:

- The Banker – Innovation in Banking Technology Awards 2010 – StateBank of India was declared Winner in ‘Innovation in Eco-IT categoryfor its GREEN ATM installation.

- The NASSCOM CNBC IT User Award 2010 – in the Banking Vertical for itsvarious IT initiatives.

- IDRBT Banking Technology Excellence Awards 2009: The Bank won twoawards in ‘Best Use of Technology for Financial Inclusion and ‘MobileBanking and Payment Applications.

- Best IT Implementation Awards 2010 by PC Quest: SBIs Project ‘GreenIT @ SBI was rated as the Best Green IT Project for its GREEN ATMinstallation.

- Skoch Award 2010- in the "Virtual Corporation Award" category for itsproject – ‘E-Payment Solution which covers all our E-Governanceinitiatives on Corporate Internet Banking Platform.

- Silver EDGE Award – for its "Data Centre Consolidation Project" ofForeign Offices Department.

- Amaron Quanta Express Uptime Champion Awards 2010 (Banking andFinance Category) – the award recognizes organizations who haveimplemented solutions that guarantee an optimal infrastructure uptime24x7.

- VISA 2009 Global Service Award-the Banks ATM cum debit card wasdeclared to have the lowest transaction response time.

- IBA Technology Award: Best Customer Initiative, Counter, Best OnlineBanking, Best Risk Management (Runner up).

L. RISK MANAGEMENT & INTERNAL CONTROLS Risk Management in SBI

L.1 Risk Management Structure

- An independent Risk Governance Structure is in place for IntegratedRisk Management covering Credit, Market, Operational and Group Risks.This framework visualises empowerment of Business Units at theoperating level, with technology being the key driver, enablingidentification and management of risk at the place of origination.

- The Risk Management Committee of the

Board (RMCB) has the overall responsibility to monitor and manageEnterprise Wide Risk. The Credit Risk Management Committee (CRMC),

Page 125: company history of SBI, ICICI

Market Risk Management Committee (MRMC), Operational Risk ManagementCommittee (ORMC), Group Risk Management Committee (GRMC) and AssetLiability Management Committee (ALCO) support RMCB.

- MD & Group Executive (Associates & Subsidiaries) and MD & GroupExecutive (International Banking) are the members of RMCB, while MD &Group Executive (National Banking) and MD & Chief Financial Officer areinvited to attend all the meetings of the Committee. The DeputyManaging Director & Chief Credit and Risk Officer head CRMC, MRMC, ORMCand GRMC. ALCO is headed by the Managing Director & Chief FinancialOfficer.

- Risk Management is perceived as an enabler for business growth and instrategic business planning, by aligning business strategy to theunderlying risks. This is achieved by constantly re-assessing theinter-dependencies / interfaces amongst each silo of Risk and businessfunctions.

- Bank is in the process of implementing Enterprise Risk Management(ERM) that will integrate all the Risk Management functions of theBank, explore inter-dependencies amongst various risk types and act asa support system to strategic decision-making process.

L.2 Basel II Implementation

- In accordance with RBI guidelines, the Bank has migrated to the BaselII framework, with the Standardised Approach for Credit Risk and BasicIndicator approach for Operational Risk w.e.f. March 31, 2008, havingalready implemented the Standardised Duration Method for Market Riskw.e.f. March 31, 2006.

- Simultaneously, the Bank is updating and fine- tuning its Systems andProcedures, Information Technology (IT) capabilities, Risk Assessmentand Risk Governance structure to meet the requirements of the AdvancedApproaches under Basel II.

- Various initiatives such as new Credit Risk Assessment Models,independent validation of Internal Ratings, loss data collection andcomputation of market risk Value at Risk (VaR) and improvement in LoanData Quality would facilitate efficient use of Capital as well assmooth transition to Advanced Approaches.

- Risk Awareness exercises are being conducted across the Bank toenhance the degree of awareness at the Operating levels, in alignmentwith better risk management practices, Basel II requirements andover-arching aim of conservation and optimum use of capital.

- Keeping in view the changes that the Banks portfolios may undergo instressed situations, the Bank has in place a policy, which provides a

framework for conducting the Stress Tests at periodic intervals andinitiating remedial measures wherever warranted. The scope of the testsis constantly reviewed to include more stringent and new scenarios.

Page 126: company history of SBI, ICICI

L.3 Credit Risk Management

- Credit Risk Management process encompasses identification,assessment, measurement, monitoring and control of the CreditExposures. Well-defined basic risk measures such as CRA (Credit RiskAssessment) models, Industry Exposure norms, Counter-party Exposurelimits, Substantial Exposure limits, etc., have been put in place.

- Credit Risk components such as Probability of Default (PD), LossGiven Default (LGD) and Exposure at Default (EAD) are being computed.

- Frequency of Stress Tests in respect of Credit Risk has beenincreased from Annual to Half-yearly, to identify Credit Risk at anearly stage and to initiate appropriate measures to contain/ mitigateCredit Risk.

L.4 Market Risk Management

- Market Risk Management is governed by the Board approved policies forinvestment, Private Equity & Venture Capital, trading in Bonds,Equities, Foreign Exchange and Derivatives.

- Exposure, Stop Loss, Modified Duration, PV01 and Value at Risk (VaR)limits have been prescribed. These limits, along with other ManagementAction Triggers, are tracked daily and necessary action initiated, asrequired, to keep Market Risk within approved limits.

L.5 Operational Risk Management

- The Bank manages operational risks by having in place and maintaininga comprehensive system of internal controls and policies.

- The main objectives of the Banks Operational Risk Management are tocontinuously review systems and control mechanisms, create awareness ofoperational risk throughout the Bank, assign risk ownership, alignmentof risk management activities with business strategy and ensuringcompliance with regulatory requirements.

- The Operational Risk Management policy of the Bank establishes aconsistent framework for systematic and pro-active identification,assessment, measurement, monitoring and mitigation of operational risk.The Policy applies to all business and functional areas within theBank, and is supplemented by operational systems, procedures andguidelines which are periodically updated.

L.6 Group Risk Management

- The State Bank Group is recognised as a major Financial Conglomerateand as a systemically important financial intermediary, withsignificant presence in various financial markets.

- Accordingly, it is imperative, both from the regulatory point of viewas well as from the Groups own internal control and risk managementpoint of view, to oversee the functioning of individual entities in the

Page 127: company history of SBI, ICICI

Group and periodically assess the overall level of risk in the Group.This facilitates optimal utilization of capital resources and adoptionof a uniform set of risk practices across the Group Entities.

- The Group Risk Management Policy applies to all Associate Banks,Banking and Non-banking Subsidiaries and Joint Ventures of the StateBank Group under the jurisdiction of specified regulators and complyingwith the relevant Accounting Standards, where the SBI has

investment in equity shares of 30% and more with control overmanagement.

- With a view to enabling the Group Entities to assess their materialrisks and adequacy of the risk management processes and capital, allGroup members, including Non-banking Subsidiaries are encouraged toalign their policies and practices with the Group, follow Baselprescriptions and international best practices.

L.7 Asset Liability Management

- The Asset Liability Management Committee (ALCO) of the Bank isentrusted with the evolvement of appropriate systems and procedures inorder to identify and analyse balance sheet risks and setting ofbenchmark parameters for efficient management of these risks.

- ALM Department, being the support group to ALCO, monitors the Banksmarket risk such as liquidity risk, interest rate risk etc., byanalysing various ALM reports / returns. The ALM department reviews theALM Policy and complies with the Banks / RBIs policy guidelines on anongoing basis.

- The Market Related Fund Transfer Pricing Mechanism has beenimplemented for evaluating the business performance of the branches ofthe Bank.

L.8 Internal Controls

The Bank has in-built internal control systems with well-definedresponsibilities at each level. The Bank carries out mainly twostreams of audits - Inspection & Audit and Management Audit coveringdifferent facets of Internal Audit requirement. Apart from these,Credit Audit is conducted for units with large credit limits andConcurrent Audit is carried out at branches having

large deposits, advances and other risk exposures and selected BPROutfits. Expenditure Audit, involving scrutiny of accounts andcorrectness of expenditure incurred, is conducted at Corporate CentreEstablishments, Local Head Offices, Zonal Offices, On Locale RegionalOffices, Regional Business Offices, Lead Bank Offices, etc. To verifythe level of rectification of irregularities by branches, audit ofcompliance at select branches is also undertaken. The InformationSystem Audit (IS Audit) of the centralised IT establishments is beingconducted.

Page 128: company history of SBI, ICICI

L.8.1 Risk Focussed Internal Audit (RFIA)

The inspection system plays an important and critical role ofintroducing international best practices in the internal audit functionwhich is regarded as a critical component of Corporate Governance.Inspection & Management Audit Department undertakes a critical reviewof the entire working of auditee units. Risk Focussed Internal Audit,an adjunct to risk based supervision as per RBI directives, is in voguein the Banks audit system.

L.8.2 Inspection & Audit of branches

All domestic branches have been segregated into 3 groups on the basisof business profile and risk exposures. While audit of Group I branchesand credit oriented BPR entities (excepting SARC) is administered byCentral Audit Unit (CAU) at Inspection & Management Audit Departmentheaded by a General Manager (CAU), audit of branches in Group II &Group III category and other BPR entities are conducted by ten ZonalInspection Offices, located at various Centres, each of which is headedby a General Manager (I&A). The audit of branches and BPR entities isconducted as per the periodicity approved by Audit Committee of theBoard (ACB) which is well within RBI norms. During the period from

01.04.2010 to 31.03.2011, 7,871 domestic branches (Group I: 86 GroupII: 1,421; & Group III: 6,364) were audited.

L.8.3 Audit of BPR entities

In the wake of introducing various BPR initiatives, audit process forthe BPR entities has been developed and introduced. Taking into accountthe processes involved in each of the entities, exclusive Audit ReportFormats, with appropriate audit queries, have been introduced. Theseentities are being evaluated on risk parameters. During the period from01.04.2010 to 31.03.2011, 323 BPR entities (Group I: 138 & Group II:185) were audited.

L.8.4 Cluster Audit

A number of Centres have been brought under the gamut of BPR andseveral branches are linked with BPR entities. To be able to identifyand mitigate the risk at such branches, where the process is stillunderway, the department has introduced an initiative called ‘ClusterAudit wherein a simultaneous audit of BPR entities and identifiedbranches linked to the BPR in a particular centre is taken up . Duringthe period from 01.04.2010 to 31.03.2011, Cluster Audit was conductedin 46 Centres covering 1,188 Branches & 125 BPR entities. This broughtto light the audit health of the centre.

L.8.5 Management Audit

With the introduction of Risk Focussed Internal Audit, Management Audithas been reoriented to focus on the effectiveness of risk management inthe processes and the procedures followed in the Bank. Management Audituniverse comprises of Corporate Centre Establishments; Circles / Apex

Page 129: company history of SBI, ICICI

Training Institutions, Associate Banks; Subsidiaries (Domestic /Foreign); Joint Ventures

(Domestic / Foreign), Regional Rural Banks sponsored by the Bank(RRBs). During the period from 01.04.2010 to 31.03.2011, ManagementAudit of 45 domestic offices/establishments was carried out.

L.8.6 Credit Audit

Credit Audit aims at achieving continuous improvement in the quality ofCommercial Credit portfolio of the Bank through critically examiningindividual large commercial loans with exposures of Rs. 5 crores andabove. Credit Audit System (CAS), which has been aligned with RiskFocussed Internal Audit, assesses whether the Banks laid down policiesin the area of credit appraisal, sanction of loans and creditadministration are meticulously complied with. CAS also providesfeedback to the business unit by way of warning signals about thequality of advance portfolio in the unit and suggests remedialmeasures. It also comments on the risk rating awarded and whether it isin order. Credit Audit carries out a review of all individual advancesabove the cut off limit within 6 months of sanction/enhancement/renewal as off-site audit and a post sanction audit once in 12 monthsas on-site. During the period 01.04.2010 to 31.03.2011, Credit Audit(on-site) was conducted in 456 Branches, covering 5,733 accounts withaggregate exposures of Rs. 5,72,958 crores. Credit Audit (Off-site)was conducted in 14 Circles (including MCROs/CAG functioning in thegeographical area of the respective Circles) during the same period,covering 6,875 proposals (domestic) with aggregate exposure of Rs.8,43,864 crores.

L.8.7 Information System Audit:

Since April 2006, all the Branches are being subjected to InformationSystems (IS) audit to

assess the IT related risks as part of audit of the branch. A ‘Handbookon Self Audit of Information Systems was introduced to facilitatebranches for evaluating the efficiency level of IT systems. IS Audit ofcentralised IT establishments has commenced in January 2007. During theperiod from 01.04.2010 to 31.03.2011, IS Audit of 40 centralised ITestablishments was completed.

L.8.8 Foreign Offices Audit:

Home Office Audit was carried out at 40 Branches / offices during01.04.2010 to 31.03.2011, which included Inspection and Audit of 31Branches, Management Audit of 4 Representative offices, 1 Subsidiaryand 4 Regional Offices.

L.8.9 CONCURRENT AUDIT SYSTEM:

Concurrent Audit system is essentially a control process integral tothe establishment of sound internal accounting functions, effectivecontrols and overseeing of operations. It works as a tool for the

Page 130: company history of SBI, ICICI

Controllers of operations for scrutiny of day-to-day operations.Concurrent Audit System is reviewed on an on-going basis as per the RBIdirectives so as to cover 30-40% of the Banks Deposits and 60-70% ofthe Banks Advances and other risk exposures. Inspection & Auditdepartment prescribes the processes, guidelines and formats for theconduct of concurrent audit at branches and BPR entities. As on31.03.2011, the system covers 30.15 % of deposits and 75.21 % ofadvances and other risk exposures of the Bank.

L.9 Vigilance

The main objective of vigilance activity in the Bank is not to reducebut enhance the level of managerial efficiency and effectiveness in theorganization. Risk taking is integral part of the

banking business. Therefore, every loss does not necessarily becomesubject matter of vigilance enquiry. Motivated or reckless decisionsthat cause damage to the Bank are essentially dealt as vigilance ones.While vigilance aims at punishing the delinquent employees, it alsoprotects the legitimate and bonafide business decisions taken by themand any other action devoid of malafides. The Vigilance Department inthe Bank functions on these principles.

Based on the principle "Prevention is Better Than Cure", the VigilanceDepartment is actively involved in the preventive measures, which aimat taking steps, which are essential for avoiding recurrence of similarnature of frauds in the Bank. At the same time, Vigilance departmentis taking proactive measures to prevent the incidences of fraudsarising in CBS environment.

Considering the size of the Organization, we have set up vigilancedepartments at each of the 14 Circles, headed by Deputy GeneralManagers. At Corporate Centre, Vigilance set up is headed by ChiefVigilance Officer of the rank of Chief General Manager. The departmentreports to the Chairman directly and conducts its affairsindependently. The guidelines of the Central Vigilance Commission (CVC)are followed in letter and spirit in its functioning.

M. CUSTOMER SERVICE & CORPORATE SOCIAL RESPONSIBILITY

M.1. CUSTOMER SERVICE

- Several transformation exercises for different categories ofemployees were conducted such as ‘Parivartan, ‘SBI Citizen, ‘Udan,‘Jagruti etc. towards better understanding of interpersonalrelationships mainly with the customers.

- The Grievance Redressal Policy of the Bank is formulated on the basisof the Model Policy

Framed by Indian Banks Association and provisions of the revised Codeof Commitments to Customers released by Banking Codes and StandardsBoard of India in August 2009. Branches are required to redresscustomer grievances within three weeks of receipt against the time

Page 131: company history of SBI, ICICI

limit of 30 days prescribed in the Code.

- The Standing Committee on Customer Service constituted at the LocalHead Offices with representatives from customers including SeniorCitizens review the overall position of Customer Service in the Circle.Analysis of the consolidated data for Customer Grievances for allCircles is being put up to the Customer Service Committee of theCentral Board every quarter to identify common systemic issues thatrequire rectification, and also review the remedial measures taken bythe Bank for improving the Customer Service.

- The Contact Centre of the Bank has been enhanced to provide wholesomehelp to customers including

- Enquiries on products and services,

- Account related information, balance enquiry,

- ATM card related information including blocking of cards,

- Income tax refund related queries,

- Demat account information,

- Pension related information to pensioners.

- A web based Complaint Management System (CMS) launched in December2009 helps customers to register their ATM related complaints at theToll Free number of Contact Centre. The complaints are resolved by theATM Switch Centre and branches within RBI stipulated time limit of 12days. As pension

related complaints continue to be the major area of complaints, CMSfacility has now also been extended for acceptance of complaintsrelating to pensions, deceased accounts, Lockers and NRI accounts.

- The Bank has launched a mobile and web based service for customergrievance redressal - ‘SMS Unhappy Service. Any customer, who wants tolodge a complaint, sends an SMS "UNHAPPY" to a specified number. TheBank responds to the SMS by calling back to the customer on the samemobile number and records the details of the complaint and sends torespective Branches who are required to advise resolution within 48hours.

M.2. CORPORATE SOCIAL RESPONSIBILITY (CSR)

Corporate Social Responsibility has been a part of the State Bank ofIndia since 1973 under the name of Community Service Banking coveringvarious social, environmental and welfare activities.

The stated CSR Philosophy is as follows:

- The Bank is a corporate citizen, with resources at its command and

Page 132: company history of SBI, ICICI

benefits which it derives from operating in society in general. It,therefore, owes a solemn duty to the less fortunate andunder-privileged members of the same society.

- Staff members are encouraged to make their contribution byunderstanding the aspirations of the public around them and byendeavouring to evolve measures to remove indisputable social anddevelopmental lacunae. This will lead to their self-development andimprovement of the Banks image besides development of the Community.

During the financial year 2010-2011, numerous welfare and socialactivities were implemented

both in Banking and Non-Banking areas with the basic aim of raising thequality of life in the community, especially in and around the area ofoperation of the branches. Particular attention was given toameliorating the condition of the downtrodden and under- privilegedcommon man.

Currently, the focus areas under Community Service Banking are:

- Health

- Education

- Adoption of the Girl Child

- Womens empowerment

- Child development

- Welfare and rehabilitation of poor and handicapped

- Assistance to poor and under privileged

- Entrepreneur development programmes

- Vocational guidance

- Thrust for assistance to IT education in Rural/Tribal/unreached areas

- Environment Protection

- Assistance during natural calamities

Projects during 2010-11

a) Natural Calamities

Donations amounting to Rs. 2 crores were made to UP Chief MinistersRelief Fund for providing relief and rehabilitation to victims ofNatural Calamities.

Page 133: company history of SBI, ICICI

b) Community Service Banking

2,547 projects have been assisted with Rs. 25.95 crores covering theareas of Health, Education, Assistance for Sports, Handicapped,Environment and Assistance to tribals & other underprivileged membersof society.

c) Adoption of the Girl Child

Societys preference for the boy child has resulted in a large numberof instances when the girl child is deprived of familial attention,education, affection, healthcare and in extreme cases, even food. Inorder to supplement the efforts of the Govt., to change this concept,branches adopt Girl Children in the age group of 6 to 14 years, who areorphans / destitute / physically handicapped / belong to poor families.

This initiative started in 2008 with 8,338 children has in its role17,627 girl children at present with an assistance of Rs. 3.49 croresextended during the year 2010-11 under Community Service Banking.

Apart from financial assistance, individual employees from the Bank /spouses of employees adopt one or two children for care, mentoring,counselling, to try and fulfil the role of a guide. This includesperiodic visits to the schools by Staff Members, talking to the girlchild to understand her difficulties, academic or otherwise, andoffering solutions. A close liaison is also maintained with theteachers and the academic progress of the girl child is monitored. Iffelt necessary, timely corrective action is suggested.

While gradually increasing the coverage, the Bank has emphasised thatindividual care and attention to the adopted children as originallyenvisaged, should not be diluted.

d) Research & Development Fund

The Bank set up the Research & Development Fund in 1977 with theprimary objective of supporting research work relevant broadly to theactivities of the Bank.

In the year 2010, State Bank of India Chair on Energy and Environmenthas been instituted for

Rs. 50 lac in IIT Kanpur with particular emphasis towards innovationsin the field of solar energy. This step demonstrates Banks concernfor energy and environmental issues.

Besides, the Bank has also made an annual contribution of GBP 100,000towards a Chair set up by the Bank jointly with RBI at the AsiaResearch Centre at London School of Economics. An amount of Rs. 2crores has been earmarked for ‘SBI Chair for Public Leadership set upin Indian School of Business, Hyderabad.

M.3. SBI CHILDRENS WELFARE FUND

Page 134: company history of SBI, ICICI

The Fund was set up with donations from the employees of SBI withmatching contributions from the Bank to assist underprivileged and poorchildren in their overall development. During the year 2010-11, 6projects were assisted with Rs. 5.62 lac.

M.4. EDUCATION PARTNERING WITH MCGM

The Municipal Corporation of Greater Mumbai (MCGM) has launched aproject to transform and upgrade the outcome of education in schoolsrun by the Municipal Corporation. The Bank has agreed to support thisproject as a partner for a period of 2 years as this project may evolveas a model for replication across the country. Contribution to the tuneof Rs. 3.97 crores has been made by the Bank towards this project in2010-11.

M.5. SBI YOUTH FOR INDIA

(Harnessing Youth Power for Rural Development)

SBI Youth for India is a fellowship programme initiated, funded andmanaged by the State Bank of India in partnership with reputed NGOs.

The Programme seeks to help India secure an equitable and sustainablegrowth path by:

- Providing educated Indian youth with an opportunity to touch livesand create positive change at the grass root level in rural India.

- Providing NGOs working on development projects in rural India witheducated manpower whose skill sets can be used to catalyze ruraldevelopment.

- Promoting a forum for the Programme alumni to share ideas andcontribute to rural development throughout their professional life.

Project Work

- The selected candidates are assigned a project according to theirinterest/skill and as per the need of the respective NGO.

- Throughout the project, they will be provided a mentor from thepartner NGO who will help them to address the challenges in the projectassigned.

- In consultation with their mentor, they will have to define anoutcome that they intend to achieve at the end of the project and willthen have to work towards it.

The programme offers the candidates a wide variety of projects tochoose from. The project will cover a whole gamut of areas like ClusterDevelopment, Watershed Development, Environment Protection,Biotechnology, Computer Literacy, Womens Empowerment, Dairy Husbandry,

Page 135: company history of SBI, ICICI

Bio-Diversity,

Eco-Technology, Insurance, Coastal Research Systems etc.

The Bank seeks to make a lasting impact in the rural scenario throughthis program.

N. CORPORATE COMMUNICATION & CHANGE

- Following the earlier Parivaritan initiatives, Intervention II & IIIunder Citizen SBI, were implemented during the year. While InterventionII emphasized on the collective fulfillment, Intervention III was aboutidentifying opportunities, thereby paving the way for businessdevelopment and lasting relationships.

- The Intervention IV was conceived as a Senior Management CitizenshipVision Programme to bring about recognition of the critical changesrequired in SBI by way of policies/processes.

O. RIGHT TO INFORMATION ACT 2005 (RTI ACT 2005)

Suitable structure has been put in place at Branches/ AdministrativeOffices/ Regional Business Offices/Local Head Offices for handlingrequests and appeals under RTI Act 2005. Further, an exclusive ‘RTIDepartment has been created in Corporate Centre to handle andco-ordinate various issues under the Act. For convenience of thepublic, the Bank has also created an RTI link on its websitehttp://www.statebankofindia.com and http://www.sbi.co.in.

P. HUMAN RESOURCES (HR)

HR INITIATIVES

A number of key initiatives have been taken by the Bank during thecurrent year to motivate the employees to perform better so as toachieve the Banks growth plans.

PERSONNEL MANAGEMENT

- Defined Contribution Pension Scheme (DCPS) was introduced for allcategories of employees recruited w.e.f 01.08.2010.

- Pursuant to Industry-wise settlement / Joint Note dated 27.04.2010,pension benefits will be extended to the Retirees of e-SBS and e- SBIN,who opt for pension as the second option.

- Revision made in Terms & Conditions of Contractualofficers-Management Trainees, Chartered Accountants, Credit Analysts(WB/CAG) and Customer Relationship Executives (WB/MCG).

CADRE MANAGEMENT

- Policy for recruitment of Probationary Officers (POs) reviewed and

Page 136: company history of SBI, ICICI

methodology of one-tier written examination in respect of POs for SBI &Associate Banks was made applicable to reduce the cycle of recruitment.

- 3,746 Probationary Officers were recruited during the year, out ofwhich 2,294 POs have joined the Bank till 31.03.2011.

- Contractual employees viz. CRE(PB), CRE(ME), OMRs etc. were absorbedin the Bank as permanent officers in Junior Management Grade as onetime measure.

- 487 Management Executives recruited directly in MMGS-II grade to meetthe specialized needs of the Bank.

Recruitment

- 25,327 clerical staff were recruited during the year out of which18,628 have joined the Bank till 31.03.2011. This is the largestrecruitment exercise undertaken in the Banking sector and will furtheraugment the staff strength in tandem with the Banks branch expansiondrive and manpower requirement on account of promotion and retirementetc. This will not only help in reducing the age profile of staff butwill also provide an opportunity for greater mobility and marketingthrust across the Bank to achieve its growth plans.

Industrial Relations

- Excellence in Industrial Relations was maintained with both theOfficers and Staff Federations by maintaining healthy dialogue /discussions with them during the year. Issues raised by the Federationswere properly examined and adequately responded to.

HRMS

- Salary processing for 2.05 lac employees across SBI and pensionprocessing of 1.12 lac IBI/SBI Pensioners have been centralised.

- The Training Management System, Centralised PF accounting &processing, leave and attendance management, fixed assets managementetc. will improve the employee management and also make the HRprocesses more efficient.

STRATEGIC TRAINING UNIT

The Strategic Training Unit (STU), operationalized on 5th April 2010,has taken a number of initiatives towards giving a new dimension to thetraining philosophy of the Bank. Some of the major initiatives in thisregard are as follows:

- A website of STU has been launched to which the entire trainingsystem has been linked.

- Under the leadership Pipeline, Jagriti Programme was launchedcovering all AGMs having more than 2 years of residual service.

Page 137: company history of SBI, ICICI

- E-learning through HRMS portal has been expanded over 158 coursescurrently.

- A new initiative in Distance Learning has been taken by SBSC byintroducing Mobile Learning.

STAFF STRENGTH AS ON 31.03.2011

Category Total %

Officers 79,728 35.77

Clerical 1,02,701 46.07

Sub-staff 40,504 18.16

TOTAL 2,22,933 100.00

IMPLEMENTATION OF PERSONS WITH DISABILITIES (PWD) ACT 1995

Our Bank provides reservation to persons with disabilities (PWDs) asper the guidelines of the Government of India and section 33 of the PWDAct 1995. The total number of persons with

disabilities who were employed as on 31.03.2011 was 2,525, consistingof 530 officers, 1,754 clerical and 241 sub-staff.

REPRESENTATION OF SCHEDULED CASTES AND SCHEDULED TRIBES

As on the 31st March 2011, 43,657 (19.58%) of the Banks total staffstrength, belonged to Scheduled Caste and 15,812 (7.09%) belonged toScheduled Tribes.

In order to discuss issues relating to reservation policy andeffectively redress the grievances of the SC/ST employees, LiaisonOfficers have been designated at all Local Head Offices of the Bank asalso at the Corporate Centre at Mumbai.

Senior officials of the Bank hold regular meetings at periodicintervals with the representatives of National Federation of SBI SC/STEmployees at Corporate Centre as also with the representatives ofCircle level SC/ST Welfare Associations at the Local Head Offices andAdministrative Offices where issues pertaining to implementation ofreservation policies are discussed. This has ensured redressal ofgrievances to a large extent.

Government of India representative inspected the reservation roastersfor SCs/STs/OBCs/ PWDs at all the 14 Circles and found this maintainedsatisfactorily.

The Bank has been conducting workshops on reservation policy forSCs/STs/OBCs to impart up-to-date knowledge/ latest operatives about

Page 138: company history of SBI, ICICI

the reservation policy and related areas to the SC/ST cell officers,representatives of SC/ST welfare Association and the Liaison officers.

Pre-recruitment and pre-promotion training programmes are beingconducted to enable SC/ST candidates to achieve the prescribedstandards to effectively compete with other candidates.

Q. BUSINESS PROCESS RE-ENGINEERING (BPR)

Following various BPR initiatives carried out during the last fewyears, the Bank was able to improve performance in key business areasand quality of customer service. Many of the large sized branches havebeen split into smaller branches to enable them to offer focusedservice to specific segment of customers.

The endeavour of BPR initiatives in the Bank is to continuously usherin changes / uniform business processes to ensure prompt, efficientdelivery of products and services to our customers. All theseinitiatives have helped the Bank in creating a new operatingarchitecture capable of meeting global competition.

R. OFFICIAL LANGUAGE

The implementation of official language policy in the Bank is not onlya statutory requirement but also a business need. The Bank made allpossible efforts to comply with the statutory provisions relating tothe official language policy of the Govt. of India during the year andtook several initiatives to provide benefit of Banks different schemesto the masses through Hindi and other Indian languages.

Many special workshops were conducted for newly recruited clericalstaff and Probationary Officers to equip them with functional knowledgeof the official language Hindi. In order to encourage the staff to useHindi in their day to day work, Quarterly Shabdavali

Smaran and many more competitions were organised during the year.

Bank has enhanced the amount of honorarium paid to staff members onpassing different Hindi exams. Many staff members have taken advantageof these incentive schemes which will help in encouraging the use ofHindi in the Bank.

Bank hosted quarterly meetings of the Ministry of Finance and ReserveBank of India and an Annual Conference of all the public sector banksand financial institutions successfully during the year which receivedlavish appreciation from these two regulatory authorities.

On the other hand, the Bank took various initiatives in its endeavourto deliver its products and services to the masses in Hindi and otherIndian languages. These include advertisements through Newspapers/Magazines, pamphlets (Print Media) through Electronic Medium (TV/Filmsetc.) and also by way of Exhibition (Banner, Hoardings etc.) in Hindiand other Indian regional languages.

Page 139: company history of SBI, ICICI

The Committee of Parliament on Official Language also appreciated theefforts being made by the Bank for promoting the use of Hindi.

Banks In-House Hindi magazine ‘Prayas has once again bagged firstprize for the year 2009-10. Banks Hindi House Journal ‘Prayas hasbagged first prize in this competition for the fifth time in recentyears.

S. KYC/AML/CFT MEASURES

- The Bank has put in place the Board approved revised policy on KnowYour Customer (KYC) / Anti Money Laundering (AML) / Combating Financingof the Terrorism (CFT) measures in line with Master Circular issued byReserve

Bank of India on the subject. The main components of the Policy are asfollows:

- Customer Acceptance

- Customer Identification

- Monitoring of Transactions

- Training of personnel

- Preservation of Records

- Procedural Guidelines to facilitate implementation of the Policy havealso been circulated after approval of the Central Board.

- Monitoring of Transactions is done with a view to submit undernotedreports to Financial Intelligence Unit-India mandated by rules ofPrevention of Money Laundering Act, 2002.

- Cash Transaction Reports (CTRs)

- Counterfeit Currency Reports (CCRs)

- Suspicious Transaction Reports (STRs)

- Training on KYC/AML is being imparted on an ongoing basis in theBank. In addition to exclusive KYC/AML programmes, all trainingprogrammes/seminars/workshops, have a KYC/AML session included in theprogramme. Further, the Bank has decided to observe 1st August everyyear as "KYC Compliance and Fraud Prevention day" to maintainappropriate awareness and involvement levels across the Bank as also tocreate proper understanding of KYC issues among the members of public.

T. FRAUD PREVENTION AND MONITORING

The measures taken for prevention of frauds are as under :

Page 140: company history of SBI, ICICI

- The KYC Compliance and Fraud Prevention day was observed on 2ndAugust 2010, as 1st August was Sunday.

- The Bank has introduced detailed process of tallying Admin CashBalance with Physical Cash balance in ATM.

- SBIMF Warrants are being paid through ‘Dividend Warrant PaymentModule on CBS and not by purchasing Warrants as DDP

- The Preventive Vigilance Committees are formed at the branches havingstaff strength of 10 or more (including SAM branches) and at CPCs/Cellsirrespective of their staff strength, as per the revised schemeapproved by the Vigilance Department at Corporate Centre.

- Encourage/popularize ‘Whistle Blower concept.

- Advise Controllers to ensure that secrecy of passwords is notcompromised.

- Fraud Analysis Cell (FAC) has been created at Jaipur to monitortransactions through alerts being thrown by the software.

- Ensure swift conclusion of staff accountability exercise, especiallyin cases with insider involvement.

U. COMPENSATION POLICY FOR DEFICIENCY IN SERVICE

As a premier Bank of the nation, SBI always strives to create andmaintain highest standards of customer service and in any unlikelyevent of any slippage in services extended to customers, the Bank hasput in place a Board approved Compensation Policy to compensate forsuch slippages. The policy ensures that appropriate financialcompensation is provided to the recipients to these services, withoutrequesting for it.

V. BANKS OUTSOURCING POLICY

RBI have permitted banks to outsource non-core functions and the Bankhas accordingly put in place a Board approved Outsourcing Policy.

W. SUPER CIRCLE OF EXCELLENCE (SCE)

The concept of Super Circle of Excellence (SCE) has been conceived toimpart focus on a subset of branches to deliver high growth, improveefficiency, ensure high quality of customer service and also act as aforum for sharing of best practices.

As on 31.03.2011, there were 703 branches in Super Circle ofExcellence, which include 592 NBG branches (339 Metro branches + 253Urban branches) and 111 RBG branches (27 Rural + 84 Semi Urban).

The SCE branches focus mainly on Retail business and the performance inall focus areas is benchmarked with the performance of non-SCE branches

Page 141: company history of SBI, ICICI

of the Bank as well as competitor banks. The focus of this subset isalso on marketing and promotion of technological products, increasingcross selling and other income, containment of overheads & NPAs,providing customer service of the highest order, strengthening HNIcustomer base, pushing for Financial Planning & Advisory Services anddevising strategies to improve the Banks Market Share. The performanceof SCE branches is measured every month on a multi dimensionalefficiency matrix.

While the share of SCE branches in terms of number of branches has comedown from 5.64% in March 2010 to 5.22% in March 2011, the contributionto overall Bank business has increased from 12.34% to 12.41% in PERDomestic deposits, 16.44% to 17.98% in PER advances and 13.11% to16.11% in cross selling income.

X. GREEN BANKING INITIATIVES

- As part of the Banks on going Green Banking initiatives, windmillproject has been successfully commissioned and power thus generated isbeing consumed by our branches/offices in the States of Maharashtra,Gujarat and Tamilnadu. This reduces dependence on polluting thermalpower to the extent of renewable power generated by the Bankswindmills.

- The imperatives of sustainable usage of resources, including energyand efficient disposal of wastes have been effectively propagatedamongst the stakeholders, in the form of adopting energy efficiencymeasures, efficient usage of paper and water, installation of SolarATMs, introduction of Green Channel Banking (Paperless Banking).

- The Bank has been encouraging customers by extending project loans onconcessionary interest rates to reduce Green House gases (GHGs)emissions; by adopting efficient manufacturing practices throughacquisition of latest technology. The Bank also arranges consultancyservices by roping in the services of empanelled CDM consultants in CDM(Clean Development Mechanism) registration process. The Bank has alsolaunched a loan product to facilitate upfront finance to the projectdevelopers by way of securitisation of Carbon Emission Reduction (CER)receivables.

- The Bank has initiated a pilot project to determine its Carbonfootprint levels, which will help in determining the Banks resourceconsumption pattern and enable the Bank to take effective steps toimplement various measures for sustainable usage in a cost effectiveway.

- Special drive for fruit bearing tree plantation during monsoons wastaken up across all Circles, which has been very successful andsustained efforts are being made to ensure the survival of the plantsas well.

RESPONSIBILITY STATEMENT

The Board of Directors hereby states :

Page 142: company history of SBI, ICICI

i. that in the preparation of the annual accounts, the applicableaccounting standards have been followed along with proper explanationrelating to material departures;

ii. that they have selected such accounting policies and applied themconsistently and made judgements and estimates as are reasonable andprudent, so as to give a true and fair view of the state of affairs ofthe Bank as on the 31st March 2011, and of the profit and loss of theBank for the year ended on that date;

iii. that they have taken proper and sufficient care for themaintenance of adequate accounting records in accordance with theprovisions of the Banking Regulation Act, 1949 and State Bank of IndiaAct, 1955 for safeguarding the assets of the Bank and preventing anddetecting frauds and other irregularities; and

iv. that they have prepared the annual accounts on a going concernbasis.

ACKNOWLEDGEMENT

During the year, Shri S.K. Bhattacharyya, Managing Director, (undersection 19(b)) ceased to be a director on the Banks Board consequentto his superannuation on 31st October 2010. Further, consequent to theamendment to Section 20(3A) of SBI Act, 1955 restricting the term ofoffice of Directors nominated under section 19(d) by Govt. of India tothree years coming into force with effect from 15th September 2010, Dr.Deva Nand Balodhi and Prof. Md. Salahuddin Ansari ceased to bedirectors from the Central Board as on that date. Shri Ashok Chawla,Govt. Nominee, ceased to be a director on the Banks Central Boardconsequent to his superannuation on 31st January 2011.

Dr. (Mrs.) Vasantha Bharuchas term of three years, as Director on theCentral Board, ended on 24th February 2011. Shri O.P Bhatt, Chairman,retired on attaining superannuation, as at the close of business on31.03.2011.

Shri G.D. Nadaf was nominated to the Board under Section 19 (cb) witheffect from 4th November 2010 as Officer Employee Director. ShriShashi Kant Sharma was nominated as Govt. Nominee Director, underSection 19(e), vide Notification dated 18th February 2011 vice ShriAshok Chawla. Shri Rashpal Malhotra was nominated to the Board underSection 19(d) with effect from 10th May 2011 by Central Govt.

The Directors place on record their appreciation of the contributionmade by Shri O.P. Bhatt, Shri S.K. Bhattacharyya, Dr. Deva NandBalodhi, Prof. Md. Salahuddin Ansari, Shri Ashok Chawla & Dr. (Mrs.)Vasantha Bharucha to the deliberations of the Board and welcome ShriG.D. Nadaf, Shri Shashi Kant Sharma and Shri Rashpal Malhotra on theBoard.

The Directors also express their gratitude for the guidance andcooperation received from the Government of India, RBI, SEBI, IRDA and

Page 143: company history of SBI, ICICI

other government and regulatory agencies.

The Directors also thank all the valued clients, shareholders, banksand financial institutions, stock exchanges, rating agencies and otherstakeholders for their patronage and support, and take this opportunityto express their appreciation of the dedicated and committed team ofemployees of the Bank.

For and on behalf of the Central Board of Directors

Pratip Chaudhuri Chairman

Date : 17th May, 2011

Icici bank

The Directors have pleasure in presenting the Eighteenth Annual Report of ICICI Bank Limited along with the audited statement of accounts for the year ended March 31, 2012.FINANCIAL HIGHLIGHTS

The financial performance for fiscal 2012 is summarised in thefollowing table:

Rs billion, except percentages Fiscal 2011 Fiscal 2012 % Change

Net interest income and otherincome 156.65 182.36 16.4%

Provisions & contingencies1 22.87 15.83 (30.8)%

Profit before tax 67.61 88.03 30.2%

Profit after tax 51.51 64.65 25.5%

1. Excludes provision for taxes.

Rs billion, except percentage Fiscal 2011 Fiscal 2012 % Change

Consolidated profit after tax 60.93 76.43 25.4%

Appropriations

The profit after tax of the Bank for fiscal 2012 is Rs 64.65 billionafter provisions and contingencies of Rs 15.83 billion, provision fortaxes of Rs 23.38 billion and all expenses. The disposable profit is Rs

Page 144: company history of SBI, ICICI

114.83 billion, taking into account the balance of Rs 50.18 billionbrought forward from the previous year. Your Directors have recommendeda dividend at the rate of Rs 16.50 per equity share of face value Rs 10for the year and have appropriated the disposable profit as follows:

Rs billion Fiscal 2011 Fiscal 2012

To Statutory Reserve, making in all Rs 89.92 billion1 12.88 16.17

To Special Reserve, created and maintained in terms of Section 36(1) 5.25 6.50 (viii) of the Income Tax Act, 1961, making in all Rs 38.19 billion

To Capital Reserve, making in all Rs 21.84 billion 0.83 0.38

To/(from) Investment Reserve (1.16) -

To General Reserve, making in all Rs 49.87 billion2 - 0.02

Dividend for the year (proposed)

- On equity shares @ Rs 16.50 per share (@ Rs 14 per share for fiscal 16.15 19.022011)3

- On preference shares (Rs) 35,000 35,000

- Corporate dividend tax 2.02 2.20

Leaving balance to be carriedforward to the next year 50.18 70.54

1. Includes Rs 2.00 billion at March 31, 2011 on account ofamalgamation of erstwhile The Bank of Rajasthan Limited with ICICI BankLimited.

2. Includes transfer to Reserve Fund and Investment Fund account Rs10.7 million for fiscal 2012 (Rs 0.4 million for fiscal 2011) inaccordance with regulations applicable to Sri Lanka branch and transferto General Reserve Rs 3.2 million for fiscal 2012 (Rs 2.6 million forfiscal 2011).

3. Includes dividend for the prior year paid on shares issued afterthe balance sheet date and prior to the record date.

SUBSIDIARY COMPANIES

At March 31, 2012, ICICI Bank had 17 subsidiaries as listed in thefollowing table:

Page 145: company history of SBI, ICICI

Domestic Subsidiaries Intermational Subsidiaries

ICICI Prudential Life Insurance ICICI Bank UK PLC Company Limited

ICICI Lombard General Insurance ICICI Bank Canada Company Limited

ICICI Prudential Asset ICICI Bank Eurasia LimitedManagement Company Limited Liability Company

ICICI Prudential Trust Limited ICICI Securities Holdings Inc.2

ICICI Securities Limited ICICI Securities Inc.3

ICICI Securities Primary ICICI International LimitedDealership Limited

ICICI Venture Funds ManagementCompany Limited

ICICI Home FinanceCompany Limited

ICICI Investment ManagementCompany Limited

ICICI Trusteeship Services Limited

ICICI Prudential Pension FundsManagement Company Limited1

1. Subsidiary of ICICI Prudential Life Insurance Company Limited.

2. Subsidiary of ICICI Securities Limited.

3. Subsidiary of ICICI Securities Holdings Inc.

The Ministry of Corporate Affairs (MCA) vide its CircularNo.51/12/2007-CL-III dated February 8, 2011 has granted generalexemption under Section 212(8) of the Companies Act, 1956 to companiesfrom attaching the accounts of their subsidiaries in their annualreports subject to fulfilment of certain conditions prescribed. TheBoard of Directors of the Bank at its Meeting held on April 27, 2012noted the provisions of the circular of MCA and passed the necessaryresolution granting the requisite approvals for not attaching thebalance sheet, profit & loss account, report of the board of directorsand report of the auditors of each of the subsidiary companies to theaccounts of the Bank. The Bank will make available thesedocuments/details upon request by any Member of the Bank. Thesedocuments/details will be available on the Bank''s website(www.icicibank.com) and will also be available for inspection by any

Page 146: company history of SBI, ICICI

Member of the Bank at its Registered Office and Corporate Office andalso at the registered offices of the concerned subsidiaries. Asrequired by Accounting Standard-21 (AS-21) issued by the Institute ofChartered Accountants of India, the Bank''s consolidated financialstatements included in this Annual Report incorporate the accounts ofits subsidiaries and other consolidating entities. A summary of keyfinancials of the Bank''s subsidiaries is also included in this AnnualReport.

DIRECTORS

RBI, vide its letter dated January 3, 2012, approved the re-appointment of K. Ramkumar as an Executive Director of the Bank for afurther period of two years, i.e. from February 1, 2012 till January31, 2014. The Members approved his appointment at the Fifteenth AnnualGeneral Meeting (AGM) held on June 29, 2009 for a period of five yearsfrom February 1, 2009 up to January 31, 2014.

RBI, vide its letter dated April 19, 2012, approved the re- appointmentof K. V. Kamath, Chanda Kochhar and N. S. Kannan as Chairman, ManagingDirector & CEO and Executive Director & CFO of the Bank respectivelyfor a further period of two years i.e. from May 1, 2012 till April 30,2014. The Members approved the appointment of K. V Kamath as Chairmanand Chanda Kochhar as Managing Director & CEO through postal ballot onFebruary 13, 2009 for a period of five years from May 1, 2009 up toApril 30, 2014. The appointment of N. S. Kannan as Executive Director &CFO was approved by the Members at the Annual General Meeting held onJune 29, 2009 for a period of five years from May 1, 2009 up to April30, 2014.

With effect from May 1, 2012, K. V Kamath, Chairman is classified as anon-executive independent Director. In terms of the definition ofindependent director as defined in Clause 49 of the Listing Agreementexecuted with the stock exchanges, a director who has been an executiveof the Company in the immediately preceding three financial years wouldnot be classified as an independent director. Pursuant to the saidclause, K. V Kamath who was appointed as a Chairman with effect fromMay 1, 2009 was classified as a non-executive, non-independent Directoras he had been an executive of the Bank upto April 30, 2009 in hiscapacity as Managing Director & CEO of the Bank.

V. Prem Watsa retired by rotation on June 27, 2011 at the last AGM anddid not seek re-appointment. The Board placed on record itsappreciation of the valuable guidance provided by Prem Watsa to theBank.

The Board, at its Meeting held on January 31, 2012, appointed SwatiPiramal, Director-Strategic Alliances and Communications in PiramalHealthcare Limited as an additional Director effective January 31,2012. Swati Piramal holds office up to the date of the forthcoming AGMand is eligible for appointment.

The Government of India has nominated Arvind Kumar, Joint Secretary,Department of Financial Services, Ministry of Finance, Government ofIndia, as a Director on the Board of the Bank effective July 22, 2011,

Page 147: company history of SBI, ICICI

in place of Anup K. Pujari. The Board placed on record its appreciationof the valuable guidance provided by Anup K. Pujari to the Bank. Interms of Article 128A of the Articles of Association of the Bank,Arvind Kumar is not liable to retire by rotation.

In terms of the provisions of the Companies Act, 1956 and the Articlesof Association of the Bank, Homi Khusrokhan, V Sridar and N. S. Kannanwould retire by rotation at the forthcoming AGM and are eligible forre-appointment. Homi Khusrokhan, V Sridar and N. S. Kannan have offeredthemselves for re-appointment.

AUDITORS

The auditors, S. R. Batliboi & Co., Chartered Accountants, will retireat the ensuing AGM. As recommended by the Audit Committee, the Boardhas proposed the appointment of S. R. Batliboi & Co., CharteredAccountants as statutory auditors for fiscal 2013. Their appointmenthas been approved by RBI vide its letter dated April 9, 2012. You arerequested to consider their appointment.

PERSONNEL

As required by the provisions of Section 217(2A) of the Companies Act,1956, read with Companies (Particulars of Employees) Rules, 1975, asamended, the names and other particulars of the employees are set outin the Annexure to the Directors'' Report.

APPOINTMENT OF NOMINEE DIRECTORS ON THE BOARDS OF ASSISTED COMPANIES

Erstwhile ICICI Limited (ICICI) had a policy of appointing nomineedirectors on the boards of certain borrower companies based on loancovenants, with a view to enable monitoring of the operations of thosecompanies. Subsequent to the merger of ICICI with ICICI Bank, the Bankcontinues to nominate directors on the boards of assisted companies.Apart from the Bank''s employees, experienced professionals from variousfields are appointed as nominee directors. At March 31, 2012, ICICIBank had 15 nominee directors of whom 13 were employees of the Bank, onthe boards of 25 assisted companies. The Bank has a Nominee DirectorCell for maintaining records of nominee directorships.

RISK MANAGEMENT FRAMEWORK

The Bank''s risk management strategy is based on a clear understandingof various risks, disciplined risk assessment and measurementprocedures and continuous monitoring. The policies and proceduresestablished for this purpose are continuously benchmarked withinternational best practices. The Board of Directors has oversight onall the risks assumed by the Bank. Specific Committees have beenconstituted to facilitate focused oversight of various risks, asfollows:

- The Risk Committee of the Board reviews risk management policies ofthe Bank in relation to various risks. The Risk Committee reviewsvarious risk policies pertaining to credit, market, liquidity,

Page 148: company history of SBI, ICICI

operational and outsourcing risks, review of the Bank''s stress testingframework and group risk management framework. The Committee reviewsthe risk profile of the Bank through periodic review of the key riskindicators and risk profile templates and annual review of the InternalCapital Adequacy Assessment Process (ICAAP). The Committee also reviewsthe risk profile of its overseas banking subsidiaries annually. TheRisk Committee reviews the Bank''s compliance with risk managementguidelines stipulated by the Reserve Bank of India and of the status ofimplementation of the advanced approaches under the Basel framework.The Risk Committee also reviews the stress-testing framework as part ofthe ICAAP The stress-testing framework included a wide range ofBank-specific and market (systemic) scenarios. Linkage of macroeconomicfactors to stress test scenarios was documented as a part of ICAAP TheICAAP exercise covers the domestic and overseas operations of the Bank,the banking subsidiaries and the material non- banking subsidiaries.The Risk Committee also reviews the Liquidity Contingency Plan (LCP)for the Bank and the threshold limits. During the year the Bank hasalso finalised the approach towards Enterprise Risk Managementframework.

- Apart from sanctioning credit proposals, the Credit Committee ofthe Board reviews developments in key industrial sectors and the Bank''sexposure to these sectors as well as to large borrower accounts. TheCredit Committee also reviews the non-performing loans, accounts underwatch, overdues and incremental sanctions.

- The Audit Committee of the Board provides direction to and monitorsthe quality of the internal audit function and also monitors compliancewith inspection and audit reports of Reserve Bank of India andstatutory auditors.

- The Asset Liability Management Committee is responsible formanaging liquidity and interest rate risk and reviewing asset-liabilityposition of the Bank.

A summary of reviews conducted by these Committees are reported to theBoard on a regular basis.

Policies approved from time to time by the Board ofDirectors/Committees of the Board form the governing framework for eachtype of risk. The business activities are undertaken within this policyframework. Independent groups and sub-groups have been constitutedacross the Bank to facilitate independent evaluation, monitoring andreporting of various risks. These groups function independently of thebusiness groups/sub-groups.

The Bank has dedicated groups, namely, the Risk Management Group,Compliance Group, Corporate Legal Group, Internal Audit Group and theFinancial Crime Prevention & Reputation Risk Management Group, with amandate to identify, assess and monitor all of the Bank''s principalrisks in accordance with well-defined policies and procedures. RiskManagement Group is further organised into the Credit Risk ManagementGroup, Market Risk Management Group and Operational Risk ManagementGroup. These groups are completely independent of all businessoperations and coordinate with representatives of the business units to

Page 149: company history of SBI, ICICI

implement ICICI Bank''s risk management policies and methodologies. Theinternal audit and compliance groups are responsible to the AuditCommittee of the Board.

DIRECTORS'' RESPONSIBILITY STATEMENT

The Directors confirm:

1. that in the preparation of the annual accounts, the applicableaccounting standards have been followed, along with proper explanationrelating to material departures;

2. that they have selected such accounting policies and applied themconsistently and made judgements and estimates that are reasonable andprudent, so as to give a true and fair view of the state of affairs ofthe Bank at the end of the financial year and of the profit or loss ofthe Bank for that period;

3. that they have taken proper and sufficient care for the maintenanceof adequate accounting records, in accordance with the provisions ofthe Banking Regulation Act, 1949 and the Companies Act, 1956 forsafeguarding the assets of the Bank and for preventing and detectingfraud and other irregularities; and

4. that they have prepared the annual accounts on a going concernbasis.

ACKNOWLEDGEMENTS

ICICI Bank is grateful to the Government of India, RBI, SEBI, IRDA andoverseas regulators for their continued co-operation, support andguidance. ICICI Bank wishes to thank its investors, the domestic andinternational banking community, rating agencies and stock exchangesfor their support.

ICICI Bank would like to take this opportunity to express sincerethanks to its valued clients and customers for their continuedpatronage. The Directors express their deep sense of appreciation ofall the employees, whose outstanding professionalism, commitment andinitiative has made the organisation''s growth and success possible andcontinues to drive its progress. Finally, the Directors wish to expresstheir gratitude to the Members for their trust and support.

For and on behalf of the Board

K. V Kamath

May 14, 2012 Chairman

Page 150: company history of SBI, ICICI

Director ReportMar2010   Mar 2011 Mar2012

The Directors have pleasure in presenting the Seventeenth Annual Report of ICICI Bank Limited with the audited statement of accounts for the year ended March 31, 2011.FINANCIAL HIGHLIGHTS

The financial performance for fiscal 2011 is summarised in thefollowing table:

Rs. billion, except percentages Fiscal 2010 Fiscal 2011 % change

Net interest income and other income 155.92 156.65 0.5%

Provisions & contingencies1 43.87 22.87 (47.9)%

Profit before tax 53.45 67.61 26.5%

Profit after tax of the Bank 40.25 51.51 28.0%

1. Excludes provision for taxes.

Rs. billion, except percentages Fiscal 2010 Fiscal 2011 % change

Consolidated profit after tax 46.70 60.93 30.5%

Appropriations

The profit after tax of the Bank for fiscal 2011 is Rs. 51.51 billionafter provisions and contingencies (excluding provision for taxes) of Rs.22.87 billion and all expenses. The disposable profit is Rs. 86.15billion, taking into account the balance of Rs. 34.64 billion broughtforward from the previous year. Your Directors have recommended adividend at the rate of Rs. 14 per equity share of face value Rs. 10 forthe year and have appropriated the disposable profit as follows:

Rs. billion Fiscal 2010 Fiscal 2011

To Statutory Reserve, making in all Rs. 73.75 billion1 10.07 12.88

To Special Reserve created and maintained in terms of Section 36(1) (viii) of 3.00 5.25the Income-tax Act, 1961, making in all Rs. 31.69 billion

To Capital Reserve, making in allRs. 21.46 billion 4.44 0.83

To/(from) Investment Reserve, making in all Nil 1.16 (1.16)

Page 151: company history of SBI, ICICI

To General Reserve, making in all Rs. 49.80 billion 0.01 --

Dividend for the year (proposed)

- On equity shares @ Rs. 14 per share (@ Rs. 12 per share for fiscal 2010)2 13.38 16.15

- On preference shares (Rs.) 35,000 35,000

- Corporate dividend tax 1.64 2.02Leaving balance to be carried forward to the next year3 34.64 50.18

1. Includes Rs. 2.00 billion on amalgamation of The Bank of RajasthanLimited with ICICI Bank Limited.

2. Includes dividend for the prior year paid on shares issued afterthe balance sheet date and prior to the record date.

3. After taking into account transfer to Reserve Fund Rs. 0.4 millionfor fiscal 2011, making in all Rs. 11.3 million.

Internet Banking

Our comprehensive Internet Banking service is designed to give ourcustomers a convenient banking experience from the comfort of theirhomes or offices.

Our Internet Banking offering has evolved over time not only to enablebasic online transactions but also to provide cutting edge features.

Innovative features, such as applying for a new account, opening afixed deposit and the Money Manager, help our customers to managealmost all their financial needs online. Further, our Internet Bankingservice goes beyond fulfilling the routine banking needs of customersby enabling them to buy mutual funds, insurance, forex and gold online.

MERGER OF THE BANK OF RAJASTHAN LIMITED WITH ICICI BANK

The Bank of Rajasthan Limited (Bank of Rajasthan), a banking companyincorporated within the meaning of Companies Act, 1956 and licensed byReserve Bank of India (RBI) under the Banking Regulation Act, 1949 wasamalgamated with ICICI Bank Limited (ICICI Bank/the Bank) with effectfrom close of business on August 12, 2010 in terms of the Scheme ofAmalgamation (the Scheme) approved by RBI vide its order DBOD No. PSBD2599/16.01.056/2010-11 dated August 12, 2010 under sub section (4) ofsection 44A of the Banking Regulation Act, 1949. The consideration forthe amalgamation was 25 equity shares of ICICI Bank of the face valueof T 10 each fully paid-up for every 118 equity shares of Rs. 10 each ofBank of Rajasthan. Accordingly, ICICI Bank allotted 31,323,951 equityshares to the shareholders of Bank of Rajasthan on August 26, 2010 and2,860,170 equity shares, which were earlier kept in abeyance pendingcivil appeal, on November 25, 2010.

Page 152: company history of SBI, ICICI

SUBSIDIARY COMPANIES

At March 31, 2011, ICICI Bank had 17 subsidiaries as listed in thefollowing table:

Domestic Subsidiaries International Subsidiaries

ICICI Prudential Life Insurance ICICI Bank UK PLCCompany Limited

ICICI Lombard General Insurance ICICI Bank CanadaCompany Limited

ICICI Prudential Asset Management ICICI Bank EurasiaCompany Limited Limited Liability Company

ICICI Prudential Trust Limited ICICI Securities Holdings Inc.2

ICICI Securities Limited ICICI Securities Inc.3

ICICI Securities Primary Dealership Limited ICICI International Limited

ICICI Venture Funds ManagementCompany Limited

ICICI Home Finance Company Limited

ICICI Investment ManagementCompany Limited

ICICI Trusteeship Services Limited

ICICI Prudential Pension FundsManagement Company Limited1

1. Subsidiary of ICICI Prudential Life Insurance Company Limited.

2. Subsidiary of ICICI Securities Limited.

3. Subsidiary of ICICI Securities Holdings Inc.

The Ministry of Corporate Affairs (MCA) vide its CircularNo.51/12/2007-CL-lll dated February 8, 2011 has granted generalexemption under Section 212(8) of the Companies Act, 1956 to companiesfrom attaching the accounts of their subsidiaries in their annualreports subject to fulfillment of certain conditons prescribed. TheBoard of Directors of the Bank at its Meeting held on April 28, 2011noted the provisions of the circular of MCA and passed the necessaryresolution granting the requisite approvals for not attaching the

Page 153: company history of SBI, ICICI

balance sheet, profit & loss account, report of the board of directorsand report of the auditors of each of the subsidiary companies to theaccounts of the Bank for fiscal 2011. The

Bank will make available these documents/details upon request by anyMember of the Bank. These documents/details will be available on theBanks website (www.icicibank.com) and will also be available forinspection by any Member of the Bank at its Registered Office andCorporate Office and also at the registered offices of the concernedsubsidiaries. As required by Accounting Standard-21 (AS-21) issued bythe Institute of Chartered Accountants of India, the Banksconsolidated financial statements included in this Annual Reportincorporate the accounts of its subsidiaries and other consolidatingentities. A summary of key financials of the Banks subsidiaries isalso included in this Annual Report.

DIRECTORS

The RBI vide its letter dated June 24, 2010 approved the appointment ofRajiv Sabharwal as an Executive Director of the Bank. The Membersapproved his appointment at the Sixteenth Annual General Meeting (AGM)held on June 28, 2010.

Narendra Murkumbi retired by rotation on June 28, 2010 at the last AGMand did not seek re-appointment. The valuable guidance and contributionmade by Narendra Murkumbi was recognised by the Board.

Pursuant to the provisions of the Banking Regulation Act, 1949, M. K.Sharma retired from the Board effective January 31, 2011 on completionof eight years as a non-executive Director of the Bank. The Boardplaced on record its deep appreciation and gratitude for his guidanceand contribution to the Bank.

In terms of the provisions of the Companies Act, 1956 and the Articlesof Association of the Bank, V Prem Watsa, M. S. Ramachandranand K.Ramkumar would retire by rotation at the forthcoming AGM and areeligible for re-appointment. M. S. Ramachandran and K. Ramkumar haveoffered themselves for re-appointment. V. Prem Watsa has expressed hisdesire not to seek re-appointment as a Director as his maximumpermissible tenure of eight years as a non-executive Director of theBank would end on January 28, 2012. A Resolution is proposed to theMembers in the Notice of the current AGM to this effect and also not tofill up the vacancy caused by the retirement of V Prem Watsa at thismeeting or any adjourned meeting thereof.

AUDITORS

The auditors, S.R. Batliboi & Co., Chartered Accountants, will retireat the ensuing AGM. As recommended by the Audit Committee, the Boardhas proposed the appointment of S.R. Batliboi & Co., CharteredAccountants as statutory auditors for fiscal 2012. Their appointment issubject to approval of RBI. You are requested to consider theirappointment.

PERSONNEL

Page 154: company history of SBI, ICICI

As required by the provisions of Section 217(2A) of the Companies Act,1956, read with Companies (Particulars of Employees) Rules, 1975, asamended, the names and other particulars of the employees are set outin the Annexure to the Directors Report.

APPOINTMENT OF NOMINEE DIRECTORS ON THE BOARDS OF ASSISTED COMPANIES

Erstwhile ICICI Limited (ICICI) had a policy of appointing nomineedirectors on the boards of certain borrower companies based on loancovenants, with a view to enable monitoring of the operations of thosecompanies. Subsequent to the merger of ICICI with ICICI Bank, the Bankcontinues to nominate directors on the boards of assisted companies.Apart from the Banks employees, experienced professionals from variousfields are appointed as nominee directors. At March 31, 2011, ICICIBank had 19 nominee directors of whom 16 were employees of the Bank, on

Mobile Banking

Our innovations in Mobile Banking have transformed the mobile phoneinto a personal banking assistant for our customers. Be it simple SMSalerts, service requests using Instant Messaging or the iMobileapplication, our wide range of Mobile Banking services takes care ofour customers varied needs.

Today, customers can use their mobile phones not only to check accountbalances and transfer funds but also to apply for a loan. Ourinnovative Mobile Banking service takes convenience to a differentlevel by enabling customers to buy flight and movie tickets and alsoshop for apparels, books and flowers.

ATM

The ICICI Bank ATM is much more than just a money-dispensing machine.Our state-of-the-art technology has led to redefining convenience forthe customer. With newly introduced innovative features, our ATM is nowequipped to take care of banking needs that go beyond basic cashwithdrawal. Today our ATMs offer services such as opening fixeddeposits, payment of credit card & utility bills, payment of insurancepremium, mobile re-charges and Ultra Fast Cash which facilitateswithdrawal of Rs. 5,000 in a single click.

We have used technology to transform our vast network of ATMs toprovide greater convenience & efficiency to our customers, therebyalmost making them a network of mini branches. the boards of 34assisted companies. The Bank has a Nominee Director Cell formaintaining records of nominee directorships.

RISK MANAGEMENT FRAMEWORK

The Banks risk management strategy is based on a clear understandingof various risks, disciplined risk assessment and measurementprocedures and continuous monitoring. The policies and proceduresestablished for this purpose are continuously benchmarked with

Page 155: company history of SBI, ICICI

international best practices. The Board of Directors has oversight onall the risks assumed by the Bank. Specific Committees have beenconstituted to facilitate focused oversight of various risks, asfollows:

- The Risk Committee of the Board reviews risk management policies ofthe Bank in relation to various risks. The Risk Committee reviewsvarious risk policies pertaining to credit, market, liquidity,operational and outsourcing risks, review of the Banks stress testingframework and group risk management framework. The Committee reviewsthe risk profile of the Bank through periodic review of the key riskindicators and risk profile templates and annual review of the InternalCapital Adequacy Assessment Process. The Committee also reviews therisk profile of its overseas banking subsidiaries annually. The RiskCommittee reviews the Banks compliance with risk management guidelinesstipulated by the Reserve Bank of India and of the status ofimplementation of the advanced approaches under the Basel framework.The Risk Committee also reviews the stress-testing framework as part ofthe Internal Capital Adequacy Assessment Process (ICAAP). The stresstesting frame work included a wide range of Bank-specific and market(systemic) scenarios. Linkage of macroeconomic factors to stress testscenarios was documented as a part of ICAAP The ICAAP exercise coversthe domestic and overseas operations of the Bank, the bankingsubsidiaries and the material non- banking subsidiaries. The RiskCommittee also reviews the Liquidity Contingency Plan (LCP) for theBank and the threshold limits.

- Apart from sanctioning credit proposals, the Credit Committee of theBoard reviews developments in key industrial sectors and the Banksexposure to these sectors as well as to large borrower accounts. TheCredit Committee also reviews the non-performing loans, accounts underwatch, overdues and incremental sanctions.

- The Audit Committee of the Board provides direction to and alsomonitors the quality of the internal audit function and also monitorscompliance with inspection and audit reports of RBI and statutoryauditors.

- The Asset Liability Management Committee is responsible for managingliquidity and interest rate risk and reviewing the asset-liabilityposition of the Bank.

A summary of reviews conducted by these committees are reported to theBoard on a regular basis.

Policies approved from time to time by the Board ofDirectors/Committees of the Board form the governing framework for eachtype of risk. The business activities are undertaken within this policyframework. Independent groups and sub-groups have been constitutedacross the Bank to facilitate independent evaluation, monitoring andreporting of various risks. These groups function independently of thebusiness groups/sub-groups.

The Bank has dedicated groups namely the Risk Management Group (RMG),Compliance Group, Corporate Legal Group, Internal Audit Group and the

Page 156: company history of SBI, ICICI

Financial Crime Prevention and Reputation Risk Management Group(FCPRRMG), with a mandate to identify, assess and monitor all of theBanks principal risks in accordance with well-defined policies andprocedures. RMG is further organised into Credit Risk Management Group,Market Risk Management Group and Operational Risk

Management Group. These groups are completely independent of allbusiness operations and coordinate with representatives of the businessunits to implement ICICI Banks risk management policies andmethodologies. The internal audit and compliance groups are responsibleto the Audit Committee of the Board.

CORPORATE GOVERNANCE

The corporate governance framework in ICICI Bank is based on aneffective independent Board, the separation of the Boards supervisoryrole from the executive management and the constitution of BoardCommittees, generally comprising a majority ofindependent/non-executive Directors and chaired byindependent/non-executive Directors, to oversee critical areas.

EMPLOYEE STOCK OPTION SCHEME

In fiscal 2000, ICICI Bank instituted an Employee Stock Option Scheme(ESOS) to enable the employees and Directors of ICICI Bank and itssubsidiaries to participate in future growth and financial success ofthe Bank. As per the ESOS, as amended from time to time, the maximumnumber of options granted to any employee/Director in a year is limitedto 0.05% of ICICI Banks issued equity shares at the time of the grant,and the aggregate of all such options is limited to 5% of ICICI Banksissued equity shares on the date of the grant (equivalent to 57.59million shares at April 28, 2011).

Options granted for fiscal 2003 and earlier years vest in a gradedmanner over a three-year period, with 20%, 30% and 50% of the grantsvesting in each year, commencing not earlier than 12 months from thedate of grant. Options granted lot fiscal 2004 to 2008 vest >n agraded manner over.a four year period, with 20%, 20%, 30% and 30% ofthe grants vesting in each year, commencing not earlier than 12 monthsfrom the date of grant. Options granted in April 2009 vest in a gradedmanner over a five year period with 20%, 20%, 30% and 30% of grantvesting each year commencing from the end of 24 months from the date ofgrant.

Options granted in April 2010 vest in a graded manner over a four yearperiod with 20%, 20%, 30% and 30% of the grant vesting each yearcommencing from the end of 12 months from the date of grant.

On the basis of the recommendation of the Board Governance,Remuneration and Nomination Committee (BGRNC), the Board at its Meetingheld on October 29, 2010 approved a grant of approximately 3.1 millionoptions as a special measure to eligible employees and wholetimeDirectors of ICICI Bank and certain of its subsidiaries. Each optionconfers on the beneficiary a right to apply for one equity share offace value of Rs. 10 of ICICI Bank at Rs. 967.00 which was the average

Page 157: company history of SBI, ICICI

closing price of the ICICI Bank stock on the stock exchange during thesix months up to October 28, 2010. 50% of the options granted wouldvest on April 30, 2014 and the balance 50% on April 30, 2015. The Bankhas received approval of RBI for the above grant of options towholetime Directors of the Bank.

The Board further at its meeting held on April 28, 2011 approved agrant of approximately 4.25 million options for fiscal 2011 to eligibleemployees and wholetime Directors (options granted to wholetimeDirectors being subject to RBI approval). Each option confers on theemployee a right to apply for one equity share of face value of Rs. 10 ofICICI Bank atRs. 1,106.85 which was closing puce on the stock exchangewhich recorded the highest trading volume in ICICI Bank shares on April27, 2011. These options would vest over a four year period, with 20%,20%, 30% and 30% respectively of the grant of vesting each yearcommencing from the end of 12 months from the date of grant.

Options can be exercised within 10 years from the date of grant or fiveyears from the date of vesting, whichever is later. The price of theoptions granted prior to June 30, 2003 is the closing market price onthe stock exchange, which recorded the highest trading volume on thedate of grant. The price for options granted on or after June 30, 2003till July 21, 2004 is equal to the average of the high and low marketprice of the equity shares in the two week period preceding the date ofgrant of the options, on the stock exchange which recorded the highesttrading volume during the two week period. The price for optionsgranted on or after July 22, 2004 (other than the grants made onOctober 29, 2010) is equal to the closing price on the stock exchangewhich recorded the highest trading volume preceding the date of grantof options. The above disclosure is in line with the SEBI guidelines,as amended from time to time.

No employee was granted options during any one year equal to orexceeding 0.05% of the issued equity shares of ICICI Bank at the timeof the grant.

The diluted earnings per snare :US) pursuant to Issue of shares onexercise of options calculated in accordance with AS-20 was Rs. 45.06 infiscal 2011 against basic EPS of Rs. 45.27. The Bank recognised acompensation cost of Rs. 2.9 million in fiscal 2011 based on theintrinsic value of options. However if ICICI Bank had used the fairvalue of options based on binomial tree model, compensation cost in theyear ended March 31, 2011 would have been higher by Rs. 905.8 million andproforma profit after tax would have been Rs. 50.60 billion. On aproforma basis, ICICI Banks basic and diluted earnings per share wouldhave been Rs. 44.47 and Rs. 44.27 respectively.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGEEARNINGS AND OUTGO, UNDER SECTION 217(1)(e) OF THE COMPANIES ACT, 1956.

The provisions of Section 217(1)(e) of the Companies Act, 1956 relatingto conservation of energy and technology absorption do not apply to theBank. The Bank has, however, used information technology extensively inits operations.

Page 158: company history of SBI, ICICI

IMPLEMENTATION OF CIRCULAR ISSUED BY MINISTRY OF CORPORATE AFFAIRS ON"GREEN INITIATIVES IN CORPORATE GOVERNANCE"

The Bank has implemented the Green Initiative as per Circular No.17/2011 dated April 21, 2011 and Circular No. 18/2011 dated April 29,2011 issued by the Ministry of Corporate Affairs to enable electronicdelivery of notices/documents and annual reports to shareholders.

DIRECTORS RESPONSIBILITY STATEMENT

The Directors confirm:

1. that in the preparation of the annual accounts, the applicableaccounting standards have been followed, along with proper explanationrelating to material departures;

2. that they have selected such accounting policies and applied themconsistently and made judgements and estimates that are reasonable andprudent, so as to give a true and fair view of the state of affairs ofthe Bank at the end of the financial year and of the profit or loss ofthe Bank for that period;

3. that they have taken proper and sufficient care for the maintenanceof adequate accounting records, in accordance with the provisions ofthe Banking Regulation Act, 1949 and the Companies Act, 1956 forsafeguarding the assets of the Bank and for preventing and detectingfraud and other irregularities; and

4. that they have prepared the annual accounts on a going concernbasis.

ACKNOWLEDGEMENTS

ICICI Bank is grateful to the Government of India, RBI, SEBI andoverseas regulators for their continued co- operation, support andguidance. ICICI Bank wishes to thank its investors, the domestic andinternational banking community, rating agencies and stock exchangesfor their support.

ICICI Bank would like to take this opportunity to express sincerethanks to its valued clients and customers for their continuedpatronage. The Directors express their deep sense of appreciation ofall the employees, whose outstanding professionalism, commitment andinitiative has made the organisations growth and success possible andcontinues to drive its progress. Finally, the Directors wish to expresstheir gratitude to the Members for their trust and support.

For and on behalf of the Board

K. V. Kamath

May 13, 2011 Chairman

Director ReportMar2009   Mar 2010 Mar2011

Page 159: company history of SBI, ICICI

The Directors have pleasure in presenting the Sixteenth Annual Report of ICICI Bank Limited with the audited statement of accounts for the year ended March 31, 2010.FINANCIAL HIGHLIGHTS

The financial performance for fiscal 2010 is summarised in thefollowing table:

Rs. billion, except percentages Fiscal 2009 Fiscal 2010 % change

Net interest income and other income 159.70 155.92 (2.4)

Operating profit 89.25 97.32 9.0

Provisions & contingencies1 38.08 43.87 15.2

Profit before tax 51.17 53.45 4.5

Profit after tax 37.58 40.25 7.1

Consolidated profit after tax 35.77 46.70 30.6 Excludes provisionfor taxes.

Appropriations

The profit & loss account shows a profit after tax of Rs. 40.25 billionafter provisions and contingencies of Rs. 43.87 billion and allexpenses. The disposable profit is Rs. 68.35 billion, taking intoaccount the balance of Rs. 28.10 billion brought forward from theprevious year. Your Directors have recommended a dividend at the rateof Rs. 12 per equity share of face value Rs. 10 for the year and haveappropriated the disposable profit as follows:

Rs. billion Fiscal 2009 Fiscal 2010

To Statutory Reserve, making in all Rs. 58.86 billion 9.40 10.07

To Special Reserve created and maintained in terms of Section 36(1)(viii) of the Income-tax Act, 1961, making in all Rs. 26.44 billion 2.50 3.00

To Capital Reserve, making in all Rs. 20.63 billion 8.18 4.44

To Investment Reserve, making in all Rs. 1.16 billion -- 1.16To General Reserve, making in all Rs. 49.79 billion -- 0.01Dividend for the year (proposed)

Page 160: company history of SBI, ICICI

- On equity shares @ Rs. 12 per share (@ Rs. 11 per share for fiscal 2009) 12.25 13.38

- On preference shares (Rs.) 35,000 35,000

- Corporate dividend tax 1.51 1.64

Leaving balance to be carried forward to the next year2 28.10 34.64

1. Includes dividend for the prior year paid on shares issued afterthe balance sheet date and prior to the record date.

2. After taking into account transfer to Reserve Fund Rs. 2.2 millionfor fiscal 2010, making in all Rs. 10.9 million.

MERGER OF THE BANK OF RAJASTHAN LIMITED WITH

ICICI BANK

The Board of Directors of ICICI Bank and the Board of Directors of TheBank of Rajasthan Limited (Bank of Rajasthan) at their respectiveMeetings held on May 23, 2010, approved the scheme of amalgamation ofBank of Rajasthan with ICICI Bank. The amalgamation is subject toapproval of RBI and Members of both the Banks. Approval of the Membersof ICICI Bank is being sought at an extraordinary general meetingscheduled on June 21, 2010.

The proposed amalgamation would substantially enhance ICICI Bank’sbranch network, already the largest among Indian private sector banks,and especially strengthen its presence in northern and western India.It would combine Bank of Rajasthan’s branch franchise with ICICI Bank’sstrong capital base, to enhance the ability of the merged entity tocapitalise on the growth opportunities in the Indian economy.

About Bank of Rajasthan

Bank of Rajasthan is a listed old Indian private sector bank with itscorporate office at Mumbai in Maharashtra and registered office atUdaipur in Rajasthan. At March 31, 2009, Bank of Rajasthan had 463branches and 111 ATMs, total assets of Rs. 172.24 billion, deposits ofRs. 151.87 billion and advances of Rs. 77.81 billion. It made a netprofit of Rs. 1.18 billion in fiscal 2009 and a net loss of Rs. 0.10billion in the nine months ended December 31, 2009. Around 40% of thebranches of the Bank of Rajasthan are located in rural and semi-urbanareas.

SUBSIDIARY COMPANIES

At March 31, 2010, ICICI Bank had 17 subsidiaries as listed in thefollowing table:

Page 161: company history of SBI, ICICI

Domestic Subsidiaries International Subsidiaries

ICICI Prudential Life Insurance ICICI Bank UK PLCCompany Limited

ICICI Lombard General Insurance ICICI Bank CanadaCompany Limited

ICICI Prudential Asset Management ICICI Bank Eurasia LimitedCompany Limited Liability Company

ICICI Prudential Trust Limited ICICI Securities Holdings Inc.2

ICICI Securities Limited ICICI Securities Inc.3

ICICI Securities Primary Dealership ICICI International LimitedLimited

ICICI Venture Funds ManagementCompany Limited

ICICI Home Finance Company Limited

ICICI Investment ManagementCompany Limited

ICICI Trusteeship Services Limited

ICICI Prudential Pension FundsManagement Company Limited1

1. Subsidiary of ICICI Prudential Life Insurance Company Limited.

2. Subsidiary of ICICI Securities Limited.

3. Subsidiary of ICICI Securities Holdings Inc.

ICICI Wealth Management Inc., a subsidiary of ICICI Bank Canada, hasbeen dissolved effective December 31, 2009.

As approved by the Central Government vide letter dated April 9, 2010under Section 212(8) of the Companies Act, 1956, copies of the balancesheet, profit & loss account, report of the board of directors andreport of the auditors of each of the subsidiary companies have notbeen attached to the accounts of the Bank for fiscal 2010. The Bankwill make available these documents/details upon request by any Memberof the Bank. These documents/details will be available on the Bank’swebsite www.icicibank. com and will also be available for inspectionby any Member of the Bank at its Registered Office and Corporate Officeand also at the registered offices of the concerned subsidiaries. Asrequired by Accounting Standard-21 (AS-21) issued by the Institute of

Page 162: company history of SBI, ICICI

Chartered Accountants of India, the Bank’s consolidated financialstatements included in this Annual Report incorporate the accounts ofits subsidiaries and other entities. A summary of key financials ofthe Bank’s subsidiaries is also included in this Annual Report.

DIRECTORS

The Members at their Fifteenth Annual General Meeting held on June 29,2009, approved the appointment of Sandeep Bakhshi, Deputy ManagingDirector, N. S. Kannan, Executive Director & CFO and K. Ramkumar,Executive Director. Reserve Bank of India (RBI) vide its letter datedJuly 2, 2009 approved the appointment of Sandeep Bakhshi. RBI vide itsletter dated June 16, 2009 approved the appointment of N. S. Kannan andK. Ramkumar.

T. S. Vijayan, Chairman, Life Insurance Corporation of India, and anon-executive Director of the Bank resigned from the Board effectiveNovember 24, 2009. Pursuant to the provisions of the Banking RegulationAct, 1949, P. M. Sinha retired from the Board effective January 22,2010 and L. N. Mittal, Anupam Puri and Marti Subrahmanyam retired fromthe Board effective May 3, 2010 on completion of eight years asnon-executive Directors of the Bank. The Board placed on record itsdeep appreciation and gratitude for their guidance and contribution tothe Bank.

The Board at its Meeting held on January 21, 2010 appointed Homi R.Khusrokhan, former Managing Director, Tata Chemicals Limited and V.Sridar, former Chairman, National Housing Bank and former Chairman &Managing Director, UCO Bank, as additional Directors effective January21, 2010. Further, the Board at its Meeting held on April 30, 2010appointed Tushaar Shah, Senior Fellow at the International WaterManagement Institute and former Director of the Institute of RuralManagement as an additional Director effective May 3, 2010. Homi R.Khusrokhan, Tushaar Shah and V. Sridar hold office upto the date of theforthcoming Annual General Meeting (AGM) and are eligible forappointment.

Sonjoy Chatterjee, Executive Director resigned from the services of theBank effective April 30, 2010.

The Board at its Meeting held on April 30, 2010 approved a proposal forthe appointment of Rajiv Sabharwal as a wholetime Director of the Banksubject to approval of RBI. Approval of the Members is being sought atthe current AGM for the appointment of Rajiv Sabharwal as a wholetimeDirector of the Bank for a period of five years effective only from thedate of receipt of RBI approval.

In terms of the provisions of the Companies Act, 1956 and the Articlesof Association of the Bank, K. V. Kamath, Sridar Iyengar and NarendraMurkumbi would retire by rotation at the forthcoming AGM and areeligible for re-appointment. K. V. Kamath and Sridar Iyengar haveoffered themselves for re-appointment. Narendra Murkumbi has expressedhis desire not to seek re-appointment as a Director. A resolution isproposed to the Members in the Notice of the current AGM to this effectand also not to fill up the vacancy caused by the retirement of

Page 163: company history of SBI, ICICI

Narendra Murkumbi at this meeting or any adjourned meeting thereof.

AUDITORS

The auditors, B S R & Co., Chartered Accountants, will retire at theensuing AGM. They had been statutory auditors of the Bank for the lastfour years, which is the maximum term of appointment of auditorspermitted by RBI. As recommended by the Audit Committee, the Board hasproposed the appointment of S. R. Batliboi & Co., Chartered Accountantsas statutory auditors for fiscal 2011. Their appointment has beenapproved by RBI vide its letters dated April 20, 2010 and May 13, 2010.You are requested to consider their appointment.

PERSONNEL

As required by the provisions of Section 217(2A) of the Companies Act,1956, read with Companies (Particulars of Employees) Rules, 1975, asamended, the names and other particulars of the employees are set outin the Annexure to the Directors’ Report.

APPOINTMENT OF NOMINEE DIRECTORS ON THE BOARDS OF ASSISTED COMPANIES

Erstwhile ICICI Limited (ICICI) had a policy of appointing nomineedirectors on the boards of certain borrower companies based on loancovenants, with a view to enable monitoring of the operations of thosecompanies. Subsequent to the merger of ICICI with ICICI Bank, the Bankcontinues to nominate directors on the boards of assisted companies.Apart from the Bank’s employees, experienced professionals from variousfields are appointed as nominee Directors. At March 31, 2010, ICICIBank had 24 nominee directors, of whom 20 were employees of the Bank,on the boards of 39 assisted companies. The Bank has a Nominee DirectorCell for maintaining records of nominee directorships.

RISK MANAGEMENT FRAMEWORK

The Bank’s risk management strategy is based on a clear understandingof various risks, disciplined risk assessment and measurementprocedures and continuous monitoring. The policies and proceduresestablished for this purpose are continuously benchmarked withinternational best practices.

The key principles underlying our risk management framework are asfollows:

- The Board of Directors has oversight on all the risks assumed by theBank. Specific Committees of the Board have been constituted tofacilitate focused oversight of various risks. The Risk Committeereviews risk management policies of the Bank in relation to variousrisks and regulatory compliance issues. It reviews key risk indicatorscovering areas such as credit risk, interest rate risk, liquidity risk,and foreign exchange risk and the limits framework, including stresstest limits, for various risks. It also carries out an assessment ofthe capital adequacy based on the risk profile of the Bank’s balancesheet and reviews the status with respect to implementation of Basel II

Page 164: company history of SBI, ICICI

norms. The Credit Committee reviews developments in key industrialsectors and Bank’s exposure to these sectors as well as to largeborrower accounts. The Audit Committee provides direction to and alsomonitors the quality of the internal audit function. The AssetLiability Management Committee is responsible for managing the balancesheet and reviewing asset-liability position of the Bank.

- Policies approved from time to time by the Board ofDirectors/Committees of the Board form the governing framework for eachtype of risk. The business activities are undertaken within this policyframework.

- Independent groups and sub-groups have been constituted across theBank to facilitate independent evaluation, monitoring and reporting ofvarious risks. These groups function independently of the businessgroups/sub-groups.

The Bank has dedicated groups namely the Global Risk Management Group(GRMG), Compliance Group, Corporate Legal Group, Internal Audit Groupand the Financial Crime Prevention and Reputation Risk Management Group(FCPRRMG), with a mandate to identify, assess and monitor all of theBank’s principal risks in accordance with well-defined policies andprocedures. GRMG is further organised into the Global Credit RiskManagement Group, the Global Market Risk Management Group and theGlobal Operational Risk Management Group. These groups are completelyindependent of all business operations and coordinate withrepresentatives of the business units to implement ICICI Bank’s riskmanagement methodologies. The internal audit and compliance groups areresponsible to the Audit Committee of the Board.

DIRECTORS’ RESPONSIBILITY STATEMENT

The Directors confirm:

1. that in the preparation of the annual accounts, the applicableaccounting standards have been followed, along with proper explanationrelating to material departures;

2. that they have selected such accounting policies and applied themconsistently and made judgements and estimates that are reasonable andprudent, so as to give a true and fair view of the state of affairs ofthe Bank at the end of the financial year and of the profit or loss ofthe Bank for that period;

3. that they have taken proper and sufficient care for the maintenanceof adequate accounting records, in accordance with the provisions ofthe Banking Regulation Act, 1949 and the Companies Act, 1956 forsafeguarding the assets of the Bank and for preventing and detectingfraud and other irregularities; and

4. that they have prepared the annual accounts on a going concernbasis.

ACKNOWLEDGEMENTS

Page 165: company history of SBI, ICICI

ICICI Bank is grateful to the Government of India, RBI, SEBI andoverseas regulators for their continued co-operation, support andguidance. ICICI Bank wishes to thank its investors, the domestic andinternational banking community, rating agencies and stock exchangesfor their support.

ICICI Bank would like to take this opportunity to express sincerethanks to its valued clients and customers for their continuedpatronage. The Directors express their deep sense of appreciation ofall the employees, whose outstanding professionalism, commitment andinitiative has made the organisation’s growth and success possible andcontinues to drive its progress. Finally, the Directors wish to expresstheir gratitude to the Members for their trust and support.

For and on behalf of the Board

K. V. Kamath May 24, 2010 Chairman

Page 166: company history of SBI, ICICI

Director ReportMar2008   Mar 2009 Mar2010

The Directors have pleasure in presenting the Fifteenth Annual Report of ICICI Bank Limited with the audited statement of accounts for the year ended March 31, 2009.FINANCIAL HIGHLIGHTS

The financial performance for fiscal 2009 is summarised in thefollowing table:

Rs. billion, except percentages Fiscal 2008 Fiscal 2009 % change

Net interest income and other income 161.15 159.70 -0.9Operating profit 79.61 89.25 12.1Provisions & contingencies1 29.05 38.08 31.1Profit before tax 50.56 51.17 1.2Profit after tax 41.58 37.58 -9.6Consolidated profit after tax 33.98 35.77 5.3

1. Excludes provision for taxes.

Appropriations

The profit & loss account shows a profit after tax of Rs. 37.58 billionafter provisions and contingencies of Rs. 38.08 billion and allexpenses. The disposable profit is Rs. 61.94 billion, taking intoaccount the balance of Rs. 24.36 billion brought forward from theprevious year. Your Directors have recommended a dividend at the rateof Rs. 11.00 per equity share of face value Rs. 10 for the year andhave appropriated the disposable profit as follows:

Rs. billion Fiscal 2008 Fiscal 2009

To Statutory Reserve, making in all Rs. 48.79 billion 10.40 9.40To Special Reserve created and maintained in terms of Section 36(1) (viii) ofthe Income-tax Act, 1961, making in all Rs. 23.44 billion 1.75 2.50To Capital Reserve, making in all Rs. 16.19 billion 1.27 8.18Dividend for the year (proposed)On equity shares @ Rs. 11 per share (@ Rs. 11 per share for fiscal 2008)2 12.28 12.25On preference shares (Rs.) 35,000 35,000Corporate dividend tax 1.50 1.51Leaving balance to be carried forward to the next year3 24.36 28.10

1. Includes Rs. 0.20 billion transferred on amalgamation of The SangliBank Limited with the Bank.

2. Includes dividend for the prior year paid on shares issued afterthe balance sheet date and prior to the record date.

Page 167: company history of SBI, ICICI

3. After taking into account transfer to Reserve Fund Rs. 4.2 millionfor fiscal 2009, making in all Rs. 8.8 million.

SUBSIDIARY COMPANIES

At March 31, 2009, ICICI Bank had 17 subsidiaries as listed below:

Domestic Subsidiaries

ICICI Prudential Life Insurance Company LimitedICICI Lombard General Insurance Company LimitedICICI Prudential Asset Management Company LimitedICICI Prudential Trust LimitedICICI Securities LimitedICICI Securities Primary Dealership LimitedICICI Venture Funds Management Company LimitedICICI Home Finance Company LimitedICICI Investment Management Company LimitedICICI Trusteeship Services Limited

International Subsidiaries

ICICI Bank UK PLCICICI Bank CanadaICICI Wealth Management Inc.1ICICI Bank Eurasia LimitedLiability CompanyICICI Securities Holdings Inc.2ICICI Securities Inc.3ICICI International Limited

1. Subsidiary of ICICI Bank Canada.

2. Subsidiary of ICICI Securities Limited.

3. Subsidiary of ICICI Securities Holdings Inc.

ICICI Prudential Pension Funds Management Company Limited has beenincorporated on April 22, 2009 as a 100% subsidiary of ICICI PrudentialLife Insurance Company Limited.

As approved by the Central Government vide letter dated April 20, 2009under Section 212(8) of the Companies Act, 1956, copies of the balancesheet, profit & loss account, report of the board of directors andreport of the auditors of each of the subsidiary companies have notbeen attached to the accounts of the Bank for fiscal 2009. The Bankwill make available these documents/details upon request by any Memberof the Bank. These documents/details will be available on the Bankswebsite www.icicibank.com and will also be available for inspection byany Member of the Bank at its Registered Office and Corporate Officeand also at the registered offices of the concerned subsidiaries. Asrequired by Accounting Standard-21 (AS-21) issued by the Institute ofChartered Accountants of India, the Banks consolidated financialstatements included in this Annual Report incorporate the accounts of

Page 168: company history of SBI, ICICI

its subsidiaries and other entities. A summary of key financials of theBanks subsidiaries is also included in this Annual Report.

DIRECTORS

N. Vaghul retired as non-executive Chairman of the Board of Directorson completion of his term on April 30, 2009. He assumed office asChairman & Managing Director of erstwhile ICICI Limited (ICICI) in1985. ICICI Bank was established in 1994 as a subsidiary of ICICI underhis leadership. He laid down his executive position and becamenon-executive Chairman of ICICI in 1996. He became Chairman of ICICIBank in 2002 following the merger of ICICI with the Bank. The Boardplaced on record its deep appreciation for his guidance and leadershipto the ICICI Group for over two decades, as it transformed itself froma project finance company into a diversified financial services group.

K. V. Kamath completed his term as Managing Director & CEO on April 30,2009. He assumed office as Managing Director & CEO of ICICI in 1996 andbecame Managing Director & CEO of ICICI Bank in 2002 following themerger of ICICI with the Bank. The Board placed on record its deepappreciation for his outstanding leadership of the ICICI Group since1996, and of the growth and successful diversification achieved by theGroup during his tenure as Managing Director & CEO.

The Board at its Meeting held on December 19, 2008 appointed K. V.Kamath as non-executive Chairman for a period of five years effectiveMay 1, 2009. Further, the Board also appointed Chanda D. Kochhar asManaging Director & CEO for a period of five years effective May 1,2009. Her term as Joint Managing Director & CFO expired on March 31,2009 and the Board approved extension of her term till April 30, 2009.Reserve Bank of India (RBI) vide its letter dated March 12, 2009approved the appointments/re-appointment of the following Directors ofthe Bank:

- Appointment of K. V. Kamath as non-executive Chairman for a period ofthree years w.e.f. May 1, 2009.

- Re-appointment of Chanda D. Kochhar as Joint Managing Director & CFOfor a period of one month w.e.f. April 1,2009.

- Appointment of Chanda D. Kochhar as Managing Director & CEO for aperiod of three years w.e.f. May 1,2009.

Approval of the Members to the above appointments was sought andobtained by way of postal ballot, the result of which was declared onFebruary 13, 2009.

Madhabi Puri Buch, Executive Director resigned from the Board on herappointment as Managing Director & CEO of ICICI Securities Limitedeffective February 1, 2009. The Board placed on record its appreciationof her contribution to the Bank.

The Board at its Meeting held on January 24, 2009 appointed N. S.Kannan as additional Director of the Bank effective May 1, 2009 and K.

Page 169: company history of SBI, ICICI

Ramkumar as additional Director of the Bank effective February 1, 2009.N. S. Kannan was Executive Director of ICICI Prudential Life InsuranceCompany Limited and K. Ramkumar was the Group Chief Human ResourcesOfficer of ICICI Bank. N. S. Kannan and K. Ramkumar have been appointedas wholetime Directors designated as Executive Director & ChiefFinancial Officer and Executive Director respectively, for a period offive years. Their appointments are subject to the approval of RBI andthe Members.

V. Vaidyanathan, Executive Director resigned from the Board on hisappointment as Managing Director & CEO of ICICI Prudential LifeInsurance Company Limited effective May 1, 2009. The Board placed onrecord its appreciation of his contribution to the Bank and hisleadership role in building the Banks retail business.

The Board at its Meeting held on April 25, 2009 appointed SandeepBakhshi as additional Director of the Bank designated as ExecutiveDirector effective May 1, 2009 for a period of five years. SandeepBakhshi was earlier Managing Director & CEO of ICICI Lombard GeneralInsurance Company Limited. The Board has vide circular resolutionpassed on May 8, 2009 designated Sandeep Bakhshi as Deputy ManagingDirector effective from the date of his appointment to the Board. Hisappointment is subject to the approval of RBI and the Members.

Government of India has nominated Anup K. Pujari, Joint Secretary,Department of Economic Affairs, Ministry of Finance, Government ofIndia, as a Director on the Board of ICICI Bank effective January 27,2009, in place of Arun Ramanathan. The Board placed on record itsappreciation of the invaluable guidance provided by Arun Ramanathan tothe Bank. In terms of Article 128A of the Articles of Association, AnupK. Pujari is not liable to retire by rotation.

The Board at its Meeting held on April 25, 2009 appointed M. S.Ramachandran, former Chairman, Indian Oil Corporation, as an additionalDirector effective April 25, 2009. M. S. Ramachandran holds office uptothe date of the forthcoming Annual General Meeting (AGM) but iseligible for appointment.

In terms of the provisions of the Companies Act, 1956 and the Articlesof Association of the Bank, Anupam Puri, M. K. Sharma, P. M. Sinha andV. Prem Watsa would retire by rotation at the forthcoming AGM and,being eligible, offer themselves for re-appointment.

AUDITORS

The auditors, B S R & Co., Chartered Accountants, will retire at theensuing AGM. As recommended by the Audit Committee, the Board hasproposed the appointment of B S R & Co. as statutory auditors forfiscal 2010. Their appointment has been approved by RBI vide its letterdated April 2, 2009. You are requested to consider their appointment.

PERSONNEL

As required by the provisions of Section 217(2A) of the Companies Act,1956, read with Companies (Particulars of Employees) Rules, 1975, as

Page 170: company history of SBI, ICICI

amended, the names and other particulars of the employees are set outin the Annexure to the Directors Report.

APPOINTMENT OF NOMINEE DIRECTORS ON THE BOARDS OF ASSISTED COMPANIES

ICICI had a policy of appointing nominee directors on the boards ofcertain borrower companies based on loan covenants, with a view toenable monitoring of the operations of those companies. Subsequent tothe merger of ICICI with ICICI Bank, the Bank continues to nominatedirectors on the boards of assisted companies. Apart from the Banksemployees, experienced professionals from various fields are appointedas nominee Directors. At March 31, 2009, ICICI Bank had 30 nomineeDirectors, of whom 23 were employees of the Bank, on the boards of 41assisted companies. The Bank has a Nominee Director Cell formaintaining records of nominee directorships.

EMPLOYEE STOCK OPTION SCHEME

In fiscal 2000, ICICI Bank instituted an Employee Stock Option Scheme(ESOS) to enable the employees and Directors of ICICI Bank and itssubsidiaries. As per the ESOS as amended from time to time, the maximumnumber of options granted to any employee/Director in a year is limitedto 0.05% of ICICI Banks issued equity shares at the time of the grant,and the aggregate of all such options is limited to 5% of ICICI Banksissued equity shares on the date of the grant (equivalent to 55.7million shares at April 25, 2009).

Options granted for fiscal 2003 and earlier years vest in a gradedmanner over a three-year period, with 20%, 30% and 50% of the grantsvesting in each year, commencing not earlier than 12 months from thedate of grant. Options granted for fiscal 2004 to 2008 vest in agraded manner over a four-year period, with 20%, 20%, 30% and 30% ofthe grants vesting in each year, commencing not earlier than 12 monthsfrom the date of grant.

Options can be exercised within 10 years from the date of grant or fiveyears from the date of vesting, whichever is later. The price of theoptions granted prior to June 30, 2003 is the closing market price onthe stock exchange, which recorded the highest trading volume on thedate of grant. The price for options granted on or after June 30, 2003till July 21, 2004 is equal to the average of the high and low marketprice of the equity shares in the two week period preceding the date ofgrant of the options, on the stock exchange which recorded the highesttrading volume during the two week period. The price for optionsgranted on or after July 22, 2004 is equal to the closing price on thestock exchange which recorded the highest trading volume preceding thedate of grant of options. The above pricing is in line with the SEBIguidelines, as amended from time to time.

On the basis of the recommendation of the Board Governance &Remuneration Committee, the Board at its Meeting held on April 25, 2009approved a grant of approximately 1.7 million options for fiscal 2009to eligible employees. Each option confers on the employee a right toapply for one equity share of face value of Rs. 10 of ICICI Bank at Rs.434.10, which was the closing price on the stock exchange, which

Page 171: company history of SBI, ICICI

recorded the highest trading volume in ICICI Bank shares on April 24,2009. These options would vest over a five year period, with 20%, 20%,30% and 30% respectively of the grant vesting each year commencing fromthe end of the second year from the date of the grant. No options havebeen granted to wholetime Directors for fiscal 2009.

Particulars of options granted by ICICI Bank upto April 25, 2009 aregiven below:

Options granted 52,668,955Options vested 32,068,304Options exercised 24,271,617Number of shares allotted pursuant to exercise of options 24,271,617Options forfeited/lapsed 7,718,099Extinguishment or modification of options NilAmount realised by exercise of options (Rs.) 4,682,588,988Total number of options in force 20,679,239

No employee was granted options during any one year equal to orexceeding 0.05% of the issued equity shares of ICICI Bank at the timeof the grant.

The diluted earnings per share (EPS) pursuant to issue of shares onexercise of options calculated in accordance with AS-20 was Rs. 33.70in fiscal 2009 against basic EPS of Rs. 33.76. Since the exercise priceof ICICI Banks options is the last closing price on the stockexchange, which recorded the highest trading volume preceding the dateof grant of options, there is no compensation cost in fiscal 2009 basedon the intrinsic value of options.

However, if ICICI Bank had used the fair value of options based on theBlack-Scholes model, compensation cost in fiscal 2009 would have beenhigher by Rs. 1,411.7 million and proforma profit after tax would havebeen Rs. 36,169.6 million. On a proforma basis, ICICI Banks basic anddiluted earnings per share would have been Rs. 32.49 and Rs. 32.43respectively. The key assumptions used to estimate the fair value ofoptions granted during the fiscal 2009 are given below:

Risk-free interest rate 7.62% - 9.24%Expected life 2 - 6.4 yearsExpected volatility 38.90% - 45.23%Expected dividend yield 1.20% - 3.57%

In respect of options granted in fiscal 2009, the weighted averageexercise price of the options and the weighted average fair value ofthe options were Rs. 912.30 per option and Rs. 331.19 per optionrespectively.

DIRECTORS RESPONSIBILITY STATEMENT

The Directors confirm:

1. that in the preparation of the annual accounts, the applicableaccounting standards have been followed, along with proper explanation

Page 172: company history of SBI, ICICI

relating to material departures;

2. that they have selected such accounting policies and applied themconsistently and made judgements and estimates that are reasonable andprudent, so as to give a true and fair view of the state of affairs ofthe Bank at the end of the financial year and of the profit or loss ofthe Bank for that period;

3. that they have taken proper and sufficient care for the maintenanceof adequate accounting records, in accordance with the provisions ofthe Banking Regulation Act, 1949 and the Companies Act, 1956 forsafeguarding the assets of the Bank and for preventing and detectingfraud and other irregularities; and

4. that they have prepared the annual accounts on a going concernbasis.

ACKNOWLEDGEMENTS

ICICI Bank is grateful to the Government of India, RBI, SEBI andoverseas regulators for their continued co-operation, support andguidance. ICICI Bank wishes to thank its investors, the domestic andinternational banking community, investment bankers, rating agenciesand stock exchanges for their support.

ICICI Bank would like to take this opportunity to express sincerethanks to its valued clients and customers for their continuedpatronage. The Directors express their deep sense of appreciation ofall the employees, whose outstanding professionalism, commitment andinitiative has made the organisations growth and success possible andcontinues to drive its progress. Finally, the Directors wish to expresstheir gratitude to the Members for their trust and support.

For and on behalf of the Board

K. V. KamathMay 8, 2009 Chairman

Director ReportMar2007   Mar 2008 Mar2009

The Directors have pleasure in presenting the Fourteenth Annual Report of ICICI Bank Limited with the audited statement of accounts for the year ended March 31, 2008.Financial Highlights

The financial performance for fiscal 2008 is summarised in thefollowing table:

Page 173: company history of SBI, ICICI

Rs. billion, except percentages Fiscal 2007 Fiscal 2008 % change

Net interest income and other income 125.65 161.15 28.3%Operating profit 58.74 79.61 35.5%Provisions & contingencies 22.26 29.05 30.5%Profit before tax 36.48 50.56 38.6%Profit after tax 31.10 41.58 33.7%Consolidated profit after tax 27.61 33.98 23.1%

1. Excludes provision for taxes.

Appropriations

The profit & loss account shows a profit after tax of Rs. 41.58 billionafter provisions and contingencies of Rs. 29.05 billion and allexpenses. The disposable profit is Rs. 51.56 billion, taking intoaccount the balance of Rs. 9.98 billion brought forward from theprevious year. Your Directors have recommended a dividend rate of 110%(Rs. 11 per equity share of face value Rs. 10) for the year and haveappropriated the disposable profit as follows:

Rs. billion Fiscal 2007 Fiscal 2008

To Statutory Reserve, making in all Rs. 39.391 billion 7.80 10.40

To Special Reserve created and maintained in terms of Section 36(1)(viii) 4.50 1.75of the Income-tax Act, 1961, making in all Rs. 20.94 billion

To Capital Reserve, making in all Rs. 8.01 billion 1.21 1.27

Dividend for the year (proposed)On equity shares @ 110% (@100% for fiscal 2007) 9.01 12.282On preference shares (Rs.) 35,000 35,000Corporate dividend tax 1.53 1.50Balance to be carried forward to the next year 9.98 24.36

1. Includes Rs. 0.20 billion transferred on amalgamation of The SangliBank Limited with the Bank.

2. Includes dividend for fiscal 2007 paid on shares issued pursuant toexercise of employee stock options after the balance sheet date andprior to the record date.

3. After taking into account transfer to Reserve Fund Rs. 3.14 millionfor fiscal 2008, making in all Rs. 4.53 million.

ISSUANCE OF EQUITY CAPITAL

Page 174: company history of SBI, ICICI

In fiscal 2008, ICICI Bank successfully concluded a capital raisingexercise, raising a total of about Rs. 200.00 billion through asimultaneous public issue in India and issue of American DepositaryShares (ADS) in the United States. The public issue in India wassubscribed 11.5 times and the ADS issue was subscribed over 5 times.The domestic issue was priced at Rs. 940, representing a premium of3.6% to the average closing price from the announcement to the pricingdate and the ADS was priced at USD 49.25, representing a premium of6.6% over the domestic issue price.

SUBSIDIARY COMPANIES

At March 31, 2008, ICICI Bank had 17 subsidiaries as listed below:

Domestic Subsidiaries

ICICI Securities LimitedICICI Securities Primary Dealership LimitedICICI Prudential Life Insurance Company LimitedICICI Lombard General Insurance Company LimitedICICI Prudential Asset Management Company LimitedICICI Prudential Trust LimitedICICI Venture Funds Management Company LimitedICICI Home Finance Company LimitedICICI Investment Management Company LimitedICICI Trusteeship Services Limited

International SubsidiariesICICI Bank UK PLCICICI Bank CanadaICICI Wealth Management Inc.1ICICI Bank Eurasia Limited Liability CompanyICICI Securities Holdings Inc.2ICICI Securities Inc.3ICICI International Limited

As approved by the Central Government vide letter dated May 15, 2008under Section 212(8) of the Companies Act, 1956, copies of the balancesheet, profit & loss account, report of the board of directors andreport of the auditors of each of the subsidiary companies have notbeen attached to the accounts of the Bank for fiscal 2008. The Bankwill make available these documents/details upon request by any Memberof the Bank. These documents/details will be available on the Bank’swebsite www.icicibank.com and will also be available for inspection byany Member of the Bank at its Registered Office and Corporate

Office and also at the registered offices of the concernedsubsidiaries. As required by Accounting Standard- 21 (AS-21) issued bythe Institute of Chartered Accountants of India, the Bank’sconsolidated financial statements included in this Annual Reportincorporate the accounts of its subsidiaries and other entities. Asummary of key financials of the Bank’s subsidiaries is also includedin this Annual Report.

DIRECTORS

Page 175: company history of SBI, ICICI

R. K. Joshi, former Chairman of General Insurance Corporation of India,and an independent Director of the Bank, passed away on July 4, 2007.The Board deeply mourns the untimely demise of R. K. Joshi and placeson record its appreciation for the contribution made by him inenriching the deliberations of the Board during his association withthe Bank.

Nachiket Mor, Deputy Managing Director, opted for early retirementeffective October 19, 2007, to dedicate himself to the socialinitiatives of the ICICI Group. He has been appointed as President ofthe ICICI Foundation for Inclusive Growth. The Board places on recordits appreciation for the contribution made by him towards the growthand development of the ICICI Group.

At its Meeting held on October 19, 2007, the Board elevated Chanda D.Kochhar, Deputy Managing Director as Joint Managing Director & ChiefFinancial Officer and appointed Sonjoy Chatterjee, Managing Director &CEO, ICICI Bank UK PLC, as an additional Director of the Bank. SonjoyChatterjee has been appointed as a wholetime Director designated asExecutive Director, for a period of five years, effective October 22,2007. Reserve Bank of India (RBI) has vide its letter dated December 3,2007, approved his appointment. Approval of the Members is beingsought at the forthcoming Annual General Meeting (AGM).

Vinod Rai, Secretary (Financial Sector), Department of FinancialServices, Ministry of Finance, Government of India was nominated as aDirector of the Bank by Government of India effective January 3, 2003.He resigned from the Board effective January 6, 2008, consequent to hisappointment as the Comptroller & Auditor General of India (CAG). TheBoard places on record its appreciation of the role played by Vinod Raiduring his tenure as a Director and his guidance and contribution as aMember of the Board.

Arun Ramanathan, Secretary (Financial Sector), Department of FinancialServices, Ministry of Finance, Government of India was nominated as aDirector of the Bank by Government of India effective January 18, 2008.In terms of Article 128A of the Articles of Association, ArunRamanathan is not liable to retire by rotation.

In terms of the provisions of the Companies Act, 1956 and the Articlesof Association of the Bank, Sridar Iyengar, T. S. Vijayan, L. N. Mittaland Narendra Murkumbi would retire by rotation at the forthcoming AGMand, being eligible, offer themselves for re-appointment.

AUDITORS

The auditors, B S R & Co., Chartered Accountants, will retire at theensuing AGM. As recommended by the Audit Committee, the Board hasproposed the appointment of B S R & Co. as stautory auditors for fiscal2009. You are requested to consider their appointment. Theirappointment has been approved by RBI vide its letter dated April 21,2008.

PERSONNEL

Page 176: company history of SBI, ICICI

As required by the provisions of Section 217(2A) of the Companies Act,1956, read with Companies (Particulars of Employees) Rules, 1975, asamended, the names and other particulars of the employees are set outin the Annexure to the Directors’ Report.

APPOINTMENT OF NOMINEE DIRECTORS ON THE BOARD OF ASSISTED COMPANIES

Erstwhile ICICI Limited (ICICI) had a policy of appointing nomineedirectors on the boards of certain borrower companies based on loancovenants, with a view to enable monitoring of the operations of thosecompanies. Subsequent to the merger of ICICI with ICICI Bank, the Bankcontinues to nominate directors on the boards of assisted companies.Apart from the Bank’s employees, experienced professionals from variousfields are appointed as nominee Directors. At March 31, 2008, ICICIBank had 60 nominee Directors, of whom 39 were employees of the Bank,on the boards of 84 assisted companies. The Bank has a Nominee DirectorCell for maintaining records of nominee directorships.

CORPORATE GOVERNANCE

ICICI Bank has established a tradition of best practices in corporategovernance. The corporate governance framework in ICICI Bank is basedon an effective independent Board, the separation of the Board’ssupervisory role from the executive management and the constitution ofBoard Committees, generally comprising a majority of independentDirectors and chaired by an independent Director, to oversee criticalareas.

I. Philosophy of Corporate Governance

ICICI Bank’s corporate governance philosophy encompasses not onlyregulatory and legal requirements, such as the terms of listingagreements with stock exchanges, but also several voluntary practicesaimed at a high level of business ethics, effective supervision andenhancement of value for all stakeholders.

Whistle Blower Policy

ICICI Bank has formulated a Whistle Blower Policy for the ICICI Group.In terms of this policy, employees of ICICI Bank and its groupcompanies are free to raise issues, if any, on breach of any law,statute or regulation by the Bank and on the accounting policies andprocedures adopted for any area or item and report them to the AuditCommittee through specified channels. This mechanism has beencommunicated and posted on the Bank’s intranet.

Prevention of Insider Trading

In accordance with the requirements of Securities and Exchange Board ofIndia (SEBI) (Prohibition of Insider Trading) Regulations, 1992, ICICIBank has instituted a comprehensive code of conduct for prevention ofinsider trading.

Page 177: company history of SBI, ICICI

Code of Business Conduct and Ethics

The Board of Directors of the Bank adopted a new Group Code of BusinessConduct and Ethics (the Group Code) primarily by strengthening andproviding illustrative guidance on the existing Code of BusinessConduct and Ethics approved earlier by the Board. The Group Code aimsat ensuring consistent standards of conduct and business ethicalpractices across the constituents of the ICICI Group. Consequently,each constituent of the ICICI Group would review their respective codesand update the same in accordance with the Group Code. This Code isalso available on the website of the Bank www.icicibank.com. In termsof Clause 49 of the Listing Agreement, a confirmation from the ManagingDirector & CEO regarding compliance with the Code by all the Directorsand senior management is given on page 32 of the Annual Report.

CEO/CFO Certification

In terms of Clause 49 of the Listing Agreement, the certification bythe Managing Director & CEO and Joint Managing Director & ChiefFinancial Officer on the financial statements and internal controlsrelating to financial reporting has been obtained.

Board of Directors

ICICI Bank has a broad-based Board of Directors, constituted incompliance with the Banking Regulation Act, 1949, Companies Act, 1956and listing agreements entered into with stock exchanges and inaccordance with best practices in corporate governance. The Boardfunctions either as a full Board or through various committeesconstituted to oversee specific operational areas. The Board hasconstituted nine committees, namely, Audit Committee, Board Governance& Remuneration Committee, Credit Committee, Customer Service Committee,Fraud Monitoring Committee, Risk Committee, Share Transfer &Shareholders’/ Investors’ Grievance Committee, Strategy Committee andCommittee of Directors.

A majority of these Board Committees are chaired by independentDirectors and mainly consist of independent Directors.

At March 31, 2008, the Board of Directors consisted of 16 members.There were five meetings of the Board during fiscal 2008 – on April 28,July 21, and October 19 in 2007 and January 19 and March 7-8 in 2008.The names of the Directors, their attendance at Board Meetings duringthe year and the number of other directorships and board committeememberships held by them at March 31, 2008 are set out in the followingtable:

Board Attendance Meetings at last AGMName of Director attended (July 21, during 2007) the year

Independent DirectorsN. Vaghul, Chairman 5 Present

Page 178: company history of SBI, ICICI

Sridar Iyengar 5 PresentR. K. Joshi (upto July 4, 2007) 1 N.A.L. N. Mittal 3 AbsentNarendra Murkumbi 5 PresentAnupam Puri 3 PresentArun Ramanathan - N.A.(w.e.f. January 18, 2008)(a)Vinod Rai (upto January 6, 2008)(a) 1 AbsentM. K. Sharma 5 PresentP. M. Sinha 4 PresentMarti G. Subrahmanyam(b) 4 PresentT. S. Vijayan 2 AbsentV. Prem Watsa 4 Present

Number of other Number directorships of other committee3Of Indian Of other 12 membershipscompanies companies

11 6 3(1)4 3 4(2)N.A. N.A. N.A.- 8 -2 5 13 - 1(1)- 5 -N.A. N.A. N.A.2 1 -3 1 3(1)2 4 17 5 1(1)- 14 -

Board MeetingsName of Director attended during the yearWholetime Directors

K. V. Kamath 5Kalpana Morparia 1(upto May 31, 2007)Chanda D. Kochhar 5Nachiket Mor 3(upto October 18, 2007)V. Vaidyanathan 5Madhabi Puri Buch 4(w.e.f. June 1, 2007)Sonjoy Chatterjee 2(w.e.f. October 22, 2007)

Number of otherAttendance Number directorships

Page 179: company history of SBI, ICICI

at last AGM of other(July 21, committee3 Of Indian Of other2007) memberships companies companies

Present 4 4 -N.A. N.A. N.A. N.A.Present 2 4 1Present N.A. N.A. N.A.Present 3 - 1Present 2 - -N.A. - 3 -

None of the Directors of the Bank were members in more than 10committees nor acted as Chairperson of more than five committees acrossall companies in which they were Directors.

II. Audit Committee

Terms of Reference

The Audit Committee provides direction to the audit function andmonitors the quality of internal and statutory audit. Theresponsibilities of the Audit Committee include overseeing thefinancial reporting process to ensure fairness, sufficiency andcredibility of financial statements, recommendation of appointment andremoval of central and branch statutory auditors and chief internalauditor and fixation of their remuneration, approval of payment tostatutory auditors for other services rendered by them, review offunctioning of Whistle Blower Policy, review of the quarterly andannual financial statements before submission to the Board, review ofthe adequacy of internal control systems and the internal auditfunction, review of compliance with inspection and audit reports andreports of statutory auditors, review of the findings of internalinvestigations, review of statement of significant related partytransactions, review of management letters/letters on internal controlweaknesses issued by statutory auditors, reviewing with the management,the statement of uses/application of funds raised through an issue(public issue, rights issue, preferential issue, etc.), the statementof funds utilised for the purposes other than those stated in the offerdocument/prospectus/notice and the report submitted by the monitoringagency, monitoring the utilisation of proceeds of a public or rightsissue and making appropriate recommendations to the Board to take stepsin this matter, discussion on the scope of audit with external auditorsand examination of reasons for substantial defaults, if any, in paymentto stakeholders. The Committee is also empowered to appoint/oversee thework of any registered public accounting firm, establish procedures forreceipt and treatment of complaints received regarding accounting andauditing matters, engage independent counsel as also provide forappropriate funding for compensation to be paid to any firm/advisors.In addition, the Audit Committee also exercises oversight on thecompliance of risk management framework by providing directions to theregulatory compliance function of the Bank.

Page 180: company history of SBI, ICICI

Composition

The Audit Committee comprises three independent Directors and ischaired by Sridar Iyengar. There were six meetings of the Committeeduring the year. The details of the composition of the Committee andattendance at its Meetings are set out in the following table:

Name of Member Number of meetings attended

Sridar Iyengar, Chairman 6M. K. Sharma, Alternate Chairman 5Narendra Murkumbi 5

III. Board Governance & Remuneration Committee

Terms of Reference

The functions of the Committee include recommendation of appointmentsto the Board, evaluation of the performance of the Managing Director &CEO and wholetime Directors on pre-determined parameters,recommendation to the Board of the remuneration (including performancebonus and perquisites) to wholetime Directors, approval of the policyfor and quantum of bonus payable to the members of the staff, framingof guidelines for the Employees Stock Option Scheme and recommendationof grant of ICICI Bank stock options to the employees and wholetimeDirectors of ICICI Bank and its subsidiary companies.

Composition

The Board Governance & Remuneration Committee comprises fiveindependent Directors and is chaired by N. Vaghul. There were fourmeetings of the Committee during the year. The details of thecomposition of the Committee and attendance at its Meetings are set outin the following table:

Name of Member Number of meetings attended

N. Vaghul, Chairman 4Anupam Puri 2M. K. Sharma 4P. M. Sinha 4Marti G. Subrahmanyam 2

1. Also participated in two meetings through tele-conference.

Remuneration policy

The Board Governance & Remuneration Committee determines and recommendsto the Board the amount of remuneration, including performance bonusand perquisites, payable to the wholetime Directors. Therecommendations of the Committee are based on evaluation of thewholetime Directors on certain parameters.

The following table sets out the details of remuneration (including

Page 181: company history of SBI, ICICI

perquisites, bonus and retiral benefits) paid to wholetime Directorsfor fiscal 2008 and details of stock options granted for the threeyears ended March 31, 2008:

K. V. Kalpana Kamath MorpariaBreak-up of remuneration (Rupees)

Basic 12,720,000 1,420,000Performance bonusfor fiscal 20085 4,324,800 482,800Allowances andperquisites 6,140,299 4,447,950

Chanda D. NachiketKochhar Mor

6,600,000 3,619,3552,244,000 1,232,3614,475,244 3,808,666

V. Madhabi SonjoyVaidyanathan Puri Buch Chatterjee4

6,000,000 5,700,000 2,483,3332,040,000 1,700,000 841,6394,562,191 6,504,225 509,418

K. V. Kalpana Kamath MorpariaContribution toprovident fund 1,526,400 170,400Contribution tosuperannuation fund 1,908,000 177,485Stock options (Numbers)Fiscal 20085 270,000 NAFiscal 2007 300,000 200,000Fiscal 2006 250,000 165,000

Chanda D. NachiketKochhar Mor

792,000 434,323990,000 -180,000 NA175,000 175,000125,000 125,000

V. Madhabi SonjoyVaidyanathan Puri Buch Chatterjee

720,000 684,000 298,000- - 372,500125,000 125,000 125,000

Page 182: company history of SBI, ICICI

150,000 100,0007 75,000775,0007 75,0007 37,5007

1. Remuneration paid upto May 31, 2007.

2. Remuneration paid upto October 18, 2007.

3. Total remuneration paid for fiscal 2008 which includes the paymentprior to her being appointed Executive Director effective June 1, 2007.Excludes performance bonus of Rs. 490,000 for the period of fiscal 2008prior to her being appointed Executive Director, which was paid inApril 2008.

4. Excludes remuneration paid by ICICI Bank UK PLC prior to his beingappointed Executive Director of ICICI Bank effective October 22, 2007.

5. Pending RBI approval.

6. Includes leave travel allowance availed during the year: K.V.Kamath – Rs. 2,650,000, Kalpana Morparia – Rs. 295,833, Chanda D.Kochhar – Rs. 2,500,000, Nachiket Mor – Rs. 753,425, V. Vaidyanathan –Rs. 1,250,000, Madhabi Puri Buch – Rs.1,950,000, leave encashment:Kalpana Morparia – Rs. 3,786,667 and Nachiket Mor – Rs. 1,080,000 andsuperannuation allowance: Kalpana Morparia – Rs. 35,515, Nachiket Mor –Rs. 542,903, V. Vaidyanathan – Rs. 900,000 and Madhabi Puri Buch – Rs.855,000.

7. Prior to appointment as wholetime Director.

Perquisites (evaluated as per Income-tax Rules wherever applicable andotherwise at actual cost to the Bank) such as the benefit of the Bank’sfurnished accommodation, gas, electricity, water and furnishings, clubfees, personal insurance, use of car and telephone at residence orreimbursement of expenses in lieu thereof; medical reimbursement, leaveand leave travel concession, education benefits, provident fund,superannuation fund and gratuity, were provided in accordance with thescheme(s) and rule(s) applicable from time to time. If accommodationowned by the Bank is not provided, the concerned wholetime Director iseligible for house rent allowance of Rs. 100,000 per month andmaintenance of accommodation, including furniture, fixtures andfurnishings provided by the Bank.

As provided under Article 132 of the Articles of Association of theBank, the fees payable to a Director (other than to the nominee ofGovernment of India) for attending a Meeting of the Board or Committeethereof are decided by the Board of Directors from time to time withinthe limits prescribed by the Companies Act, 1956 or the CentralGovernment. The Board of Directors has approved the payment of Rs.20,000 as sitting fees for each meeting of Board or Committee attended.This amount is within the limits prescribed by the Ministry ofCorporate Affairs vide its Notification dated July 24, 2003. Approvalof the Members for payment of sitting fees to the Directors wasobtained at the AGM held on August 20, 2005.

Page 183: company history of SBI, ICICI

Information on the total sitting fees paid to each of the independentDirectors during fiscal 2008 for attending Meetings of the Board andits Committees is set out in the following table:

Name of Director Amount (Rupees)

N. Vaghul 740,000Sridar Iyengar 320,000R. K. Joshi 20,000L. N. Mittal 60,000Narendra Murkumbi 820,000Anupam Puri 100,000

Name of Director Amount (Rupees)

M. K. Sharma 1,180,000P.M. Sinha 260,000Marti G. Subrahmanyam 180,000T. S. Vijayan 40,000V. Prem Watsa 160,000Total 38,80,000

The details of shares and convertible instruments of the Bank, held bythe non- wholetime Directors as on March 31, 2008 are set out in thefollowing table:

V. Customer Service Committee

Terms of reference

The functions of this Committee include review of customer serviceinitiatives, overseeing the functioning of the Customer Service Counciland evolving innovative measures for enhancing the quality of customerservice and improvement in the overall satisfaction level of customers.

Composition

The Customer Service Committee comprises five Directors including fourindependent Directors and the Managing Director & CEO. It is chaired byN. Vaghul. There were four meetings of the Committee during the year.The details of the composition of the Committee and attendance at itsMeetings are as follows:

Name of Member Number of meetings attended

N. Vaghul, Chairman 4Narendra Murkumbi 3M. K. Sharma 4P. M. Sinha 1K. V. Kamath 4

VI. Fraud Monitoring Committee Terms of reference

The Committee monitors and reviews all frauds involving an amount of

Page 184: company history of SBI, ICICI

Rs. 10.0 million and above.

Composition

The Fraud Monitoring Committee comprises five Directors, namely, M. K.Sharma, Narendra Murkumbi, K. V. Kamath, Chanda D. Kochhar and V.Vaidyanathan and is chaired by M. K. Sharma, an independent Director.There were nine meetings of the Committee during the year. The detailsof the composition of the Committee and attendance at its Meetings areas follows:

Name of Member Number of meetings attended

M. K. Sharma, Chairman 8Narendra Murkumbi 6K. V. Kamath 9Kalpana Morparia (upto May 31, 2007) 3Chanda D. Kochhar 8V. Vaidyanathan (w.e.f. June 1, 2007) 3

N. Vaghul, Sridar Iyengar, L. N. Mittal, Anupam Puri, P. M. Sinha andMarti G. Subrahmanyam attended one Meeting as invitees.

VII. Risk Committee

Terms of reference

The Committee reviews ICICI Bank’s risk management policies in relationto various risks (portfolio, liquidity, interest rate, off-balancesheet and operational risks), investment policies and strategy andregulatory and compliance issues in relation thereto. The Committeealso reviews key risk indicators covering areas such as credit risk,interest rate risk, liquidity risk, foreign exchange risk and internalaudit.

Composition

The Risk Committee comprises five Directors including four independentDirectors and the Managing Director & CEO. It is chaired by N. Vaghul.There were five meetings of the Committee during the year. The detailsof the composition of the Committee and attendance at its Meetings areset out in the following table:

Name of Member Number of meetings attended

N. Vaghul, Chairman 5Sridar Iyengar 5Marti G. Subrahmanyam 3V. Prem Watsa 3K. V. Kamath 3

1. Also participated in one meeting through tele-conference.

Narendra Murkumbi, M. K. Sharma and P. M. Sinha attended one Meeting as

Page 185: company history of SBI, ICICI

invitees.

VIII. Share Transfer & Shareholders’/Investors’ Grievance Committee

Terms of reference

The functions and powers of the Committee include approval andrejection of transfer or transmission of equity and preference shares,bonds, debentures and securities, issue of duplicate certificates,allotment of shares and securities issued from time to time, includingthose under stock options, review and redressal of shareholders’ andinvestors’ complaints, delegation of authority for opening andoperation of bank accounts for payment of interest, dividend andredemption of securities and the listing of securities on stockexchanges.

Composition

The Share Transfer & Shareholders’/Investors’ Grievance Committeecomprises four Directors and is chaired by M. K. Sharma, an independentDirector. There were 12 meetings of the Committee during the year. Thedetails of the composition of the Committee and attendance at itsMeetings are given below:

Name of Member Number of meetings attended

M. K. Sharma, Chairman 12Narendra Murkumbi 7Kalpana Morparia (upto May 31, 2007) 1Chanda D. Kochhar 12Madhabi Puri Buch (w.e.f. June 1, 2007) 6

Sandeep Batra, Senior General Manager & Company Secretary is the GroupCompliance Officer. 19,248 shareholder complaints received in fiscal2008 were processed. At March 31, 2008, 7 complaints were pending.

IX. Strategy Committee

Terms of reference

The functions of the Committee are to evaluate various strategicopportunities, including acquisitions/ divestitures, restructuring andother strategic initiatives for the Bank and its subsidiaries andrecommend the same to the Board.

Composition

The Strategy Committee comprises five Directors – N. Vaghul, M. K.Sharma, Narendra Murkumbi, K. V. Kamath and Chanda D. Kochhar. TheCommittee is chaired by N. Vaghul. The Strategy Committee wasconstituted by the Board at its Meeting held on March 7-8, 2008 and nomeetings of the Committee were held during fiscal 2008.

X. Committee of Directors

Page 186: company history of SBI, ICICI

Terms of reference

The powers of the Committee include approval of credit proposals as perauthorisation approved by the Board, approvals in respect of borrowingsand treasury operations and premises and property related matters.

Composition

The Committee of Directors comprises of all five wholetime Directorsand is chaired by K. V. Kamath, Managing Director & CEO.

XI. Other Committees

In addition to the above, the Board has from time to time constitutedvarious committees namely, Asset- Liability Management Committee,Committee for Identification of Wilful Defaulters, Grievance Redressal

Committee for borrowers identified as Wilful Defaulters (all comprisingcertain wholetime Directors and executives) and Committee ofExecutives, Compliance Committee, Product & Process Approval Committee,Regional Committees for India and overseas operations, OutsourcingCommittee, Operational Risk Management Committee and other Committees(all comprising executives). These committees are responsible forspecific operational areas like asset-liability management, approval ofcredit proposals, approval of products and processes and management ofoperational risk, under authorisation/ supervision of the Board and itsCommittees.

XII. General Body Meetings

The details of General Body Meetings held in the last three years aregiven below:

General Body Meeting Day, Date

Eleventh AGM Saturday, August 20, 2005

Twelfth AGM Saturday July 22, 2006

Extraordinary General Meeting (EGM) Saturday, January 20, 2007

Thirteenth AGM Saturday July 21, 2007

Time Venue

1.30 p.m. Professor Chandravadan

1.30 p.m. Mehta Auditorium,

Page 187: company history of SBI, ICICI

General Education Centre,

2.00 p.m. Opposite D. N. Hall Ground, The Maharaja Sayajirao University, Pratapgunj, Vadodara 390 002.1.30 p.m. Special Resolution

The details of Special Resolutions passed at the General Body Meetingof shareholders in the last three years are given below:

General Body Meeting Day

Eleventh AGM August 20, 2005Twelfth AGM July 22, 2006EGM January 20, 2007Thirteenth AGM July 21, 2007

Resolution

* Amendment to the Articles of Association of the Company forre-classification of the authorised share capital.

* Approval for issue of preference shares subject to applicable lawsand regulations.

* Merger of The Sangli Bank Limited with ICICI Bank Limited (passed bythe requisite majority as provided under Section 44A of the BankingRegulation Act, 1949).

* Approval for issue of preference shares subject to applicable lawsand regulations.

* Amendment to the Articles of Association of the Company for deletingthe reference to the definition of ‘group’

Postal Ballot

Though not mandatorily required, to facilitate wider participation inthe approval process, approval of shareholders was sought throughpostal ballot for the following Resolutions:

1. Ordinary Resolution for alteration in the authorised share capitaland consequent alteration in the Memorandum of Association.

2. Special Resolution for alteration in the Articles of Association.

3. Special Resolution for raising capital.

N. L. Bhatia, Practicing Company Secretary, NL Bhatia & Associates wasappointed as the Scrutinizer for conducting the postal ballot process.The notice dated April 28, 2007 was sent to the Members and the lastdate for receipt of postal ballot forms by the Scrutinizer was June 7,2007. Till that date, 16,589 forms were received. According to the

Page 188: company history of SBI, ICICI

Scrutinizer’s report the first two Resolutions were passed by majorityof 99.9% and the third Resolution was passed by majority of 82.9%. Theresult of the postal ballot was declared on June 8, 2007 and publishedon June 9, 2007 in the Financial Express (Ahmedabad, Bangalore,Chandigarh, Chennai, Coimbatore, Hyderabad, Kochi, Kolkata, Mumbai, NewDelhi and Pune editions) and in Vadodara Samachar (Vadodara) for theinformation of Members.

The Bank has followed the procedure as prescribed under Companies(Passing of the Resolution by Postal Ballot), Rules, 2001.

At present, no special resolution is proposed to be passed throughpostal ballot.

XIII. Disclosures

1. There are no materially significant transactions with relatedparties i.e., directors, management, subsidiaries, or relativesconflicting with the Bank’s interests. The Bank has no promoter.

2. Penalties or strictures imposed on the Bank by any of the stockexchanges, Securities & Exchange Board of India (SEBI) or any otherstatutory authority, for any non-compliance on any matter relating tocapital markets, during the last three years are detailed below:

* On April 10, 2007, the Eastern Magistrate’s Court, Hong Kong finedthe Bank a sum of HKD 40,000, details of which are given in Note 35 ofthe Notes to Accounts.

* During fiscal 2006, RBI had imposed a penalty of Rs. 0.5 million onthe Bank citing contravention of RBI instructions relating to openingof accounts, monitoring of transactions for adherence of know yourcustomer/anti money laundering norms, and non-adherence to normalbanking practices under section 47A(1)(b) of the Banking RegulationAct, 1949.

Other than the aforementioned, no penalties or strictures were imposedon the Bank by any of the stock exchanges, SEBI or any other statutoryauthority, for any non-compliance on any matter relating to capitalmarkets during the last three years.

XIV. Means of Communication

It is ICICI Bank’s belief that all stakeholders should have access tocomplete information regarding its position to enable them toaccurately assess its future potential. ICICI Bank disseminatesinformation on its operations and initiatives on a regular basis. ICICIBank‘s website (www.icicibank.com) serves as a key awareness facilityfor all its stakeholders, allowing them to access information at theirconvenience. It provides comprehensive information on ICICI Bank’sstrategy, business segments, financial performance, operationalperformance, share price movements and the latest press releases.

ICICI Banks dedicated investor relations personnel respond to specific

Page 189: company history of SBI, ICICI

queries and play a proactive role in disseminating information to bothanalysts and investors. In accordance with SEBI and Securities ExchangeCommission (SEC) guidelines, all information which could have amaterial bearing on ICICI Banks share price is released through leadingdomestic and global wire agencies. The information is also disseminatedto the National Stock Exchange of India (NSE), the Bombay StockExchange Limited (BSE), New York Stock Exchange (NYSE), LuxembourgStock Exchange, Singapore Stock Exchange and Japan Securities DealersAssociation from time to time. ICICI Bank also circulates itshalf-yearly results to all

its shareholders. As required by SEBI and the listing agreements, ICICIBank files its financial and other information on the Electronic DataInformation Filing and Retrieval (EDIFAR) website maintained by theNational Informatics Centre (NIC).

ICICI Banks quarterly financial results are published in the FinancialExpress (Ahmedabad, Bangalore, Chandigarh, Chennai, Kochi, Kolkata,Mumbai and New Delhi editions) and in Vadodara Samachar (Vadodara). Thefinancial results, official news releases and presentations are alsoavailable on the website of ICICI Bank.

The Managements Discussion & Analysis forms part of the Annual Report.

General Shareholder Information Fourteenth AGM

Day, Date Time

Saturday, 1.30 p.m.July 26, 2008

Venue

Professor Chandravadan Mehta Auditorium,General Education Centre,Opposite D. N. Hall Ground,The Maharaja Sayajirao University,Pratapgunj, Vadodara 390 002.

Financial Calendar : April 1 to March 31Book Closure : July 12, 2008 to July 26, 2008Dividend Payment Date : July 28, 2008

Listing of equity shares/ADSs on Stock Exchanges (with stock code)

Stock Exchange Code for ICICI BankBombay Stock Exchange Limited (BSE) 532174

Phiroze Jeejeebhoy Towers &Dalal Street, Mumbai 400 001 6321741

National Stock Exchange of India Limited (NSE) ICICIBANK

Exchange Plaza, Bandra-Kurla Complex

Page 190: company history of SBI, ICICI

Bandra (East), Mumbai 400 051

New York Stock Exchange (ADSs)2 IBN

11, Wall Street, New York, NY 10005, United States of America

1. FII segment of BSE.

2. Each ADS of ICICI Bank represents two underlying equity shares.

ICICI Bank has paid annual listing fees for the relevant periods on itscapital to BSE, NSE and NYSE where its equity shares and ADSs arelisted.

Share Transfer System

ICICI Banks investor services are handled by 3i Infotech Limited (3iInfotech). 3i Infotech operates in the following main areas ofbusiness: software consultancy and development, IT-enabled services, ITinfrastructure and network and facilities management services. 3iInfotech has received the ISO-9001 certification for its transactionprocessing activities.

ICICI Banks equity shares are traded only in dematerialised form.During the year, 2,343,651 equity shares of ICICI Bank involving 16,872certificates were transferred into electronic mode. At March 31, 2008,99.02% of ICICI Bank’s paid-up equity share capital (including equityshares represented by ADS constituting 28.58% of the paid-up equityshare capital) comprising 1,101,827,673 equity shares had beendematerialised.

Physical share transfers are registered and returned generally within aperiod of seven days from the date of receipt, if the documents arecorrect and valid in all respects.

The number of equity shares of ICICI Bank transferred during the lastthree years (excluding electronic transfer of shares in dematerialisedform) is given below:

Fiscal 2006 Fiscal 2007 Fiscal 2008

Number of transfer deeds 7,994 4,804 4,430Number of shares transferred 437,044 256,196 257,167

As required under Clause 47(c) of the listing agreements entered intoby ICICI Bank with stock exchanges, a certificate is obtained every sixmonths from a practising Company Secretary, with regard to, inter alia,effecting transfer, transmission, sub-division, consolidation, renewaland exchange of equity shares and bonds in the nature of debentureswithin one month of their lodgement. The certificates are forwarded toBSE and NSE, where the equity shares are listed, within 24 hours ofissuance and also placed before the Share Transfer andShareholders’/Investors’ Grievance Committee.

Page 191: company history of SBI, ICICI

In terms of SEBI’s circular no. D&CC/FITTC/CIR-16 dated December 31,2002, a Secretarial Audit is conducted on a quarterly basis by a firmof Chartered Accountants, for the purpose of, inter alia,reconciliation of the total admitted equity share capital with thedepositaries and in the physical form with the total issued/paid upequity capital of ICICI Bank. Certificates issued in this regard areplaced before the Share Transfer and Shareholders’/Investors’ GrievanceCommittee and forwarded to BSE and NSE, where the equity shares ofICICI Bank are listed.

Registrar and Transfer Agents

The Registrar and Transfer Agent of ICICI Bank is 3i Infotech Limited.Investor services related queries may be directed to Jayendra Pai ateither of the addresses below:

* Infotech Limited Infotech Limited

International Infotech Park Maratha Mandir AnnexTower 5, 3rd Floor Dr. A. R. Nair Road Navi Mumbai 400 703 Mumbai CentralTel No.: +91-22-6792 8000 Mumbai 400 008 Fax : +91-22-6792 8099E-mail : [email protected]

Queries relating to the operational and financial performance of ICICIBank may be addressed to:

Rakesh Jha/ Pankaj JainICICI Bank LimitedICICI Bank TowersBandra-Kurla ComplexMumbai 400 051Tel No. : +91-22-2653 1414Fax No. : +91-22-2653 1175E-mail : [email protected]

Information on Shareholding

COMPLIANCE CERTIFICATE OF THE AUDITORS

ICICI Bank has annexed to this report, a certificate obtained from thestatutory auditors, B S R & Co., Chartered Accountants, regardingcompliance of conditions of corporate governance as stipulated inClause 49 of the listing agreement.

EMPLOYEE STOCK OPTION SCHEME

In fiscal 2000, ICICI Bank instituted an Employee Stock Option Scheme(ESOS) to enable the employees and Directors of ICICI Bank and itssubsidiaries to participate in the future growth and financial successof the Bank. As per the ESOS as amended from time to time, the maximum

Page 192: company history of SBI, ICICI

number of options granted to any employee/director in a year is limitedto 0.05% of ICICI Bank’s issued equity shares at the time of the grant,and the aggregate of all such options is limited to 5% of ICICI Bank’sissued equity shares on the date of the grant (equivalent to 55.6million shares at April 26, 2008).

Options granted for fiscal 2003 and earlier years vest in a gradedmanner over a three-year period, with 20%, 30% and 50% of the grantsvesting in each year, commencing not earlier than 12 months from thedate of grant. Options granted for fiscal 2004 onwards vest in a gradedmanner over a four-year period, with 20%, 20%, 30% and 30% of thegrants vesting in each year, commencing not earlier than 12 months fromthe date of grant.

Options can be exercised within 10 years from the date of grant or fiveyears from the date of vesting, whichever is later. The price of theoptions granted prior to June 30, 2003 is the closing market price onthe stock exchange, which recorded the highest trading volume on thedate of grant. The price for options granted on or after June 30, 2003till July 21, 2004 is equal to the average of the high and low marketprice of the equity shares in the two week period preceding the date ofgrant of the options, on the stock exchange which recorded the highesttrading volume during the two week period. The price for optionsgranted on or after July 22, 2004 is equal to the closing price on thestock exchange which recorded the highest trading volume preceding thedate of grant of options. The above pricing is in line with the SEBIguidelines, as amended from time to time.

DIRECTORS RESPONSIBILITY STATEMENT

The Directors confirm:

1. that in the preparation of the annual accounts, the applicableaccounting standards have been followed, along with proper explanationrelating to material departures;

2. that they have selected such accounting policies and applied themconsistently and made judgements and estimates that are reasonable andprudent, so as to give a true and fair view of the state of affairs ofthe Bank at the end of the financial year and of the profit or loss ofthe Bank for that period;

3. that they have taken proper and sufficient care for the maintenanceof adequate accounting records, in accordance with the provisions ofthe Banking Regulation Act, 1949 and the Companies Act, 1956 forsafeguarding the assets of the Bank and for preventing and detectingfraud and other irregularities; and

4. that they have prepared the annual accounts on a going concernbasis.

ACKNOWLEDGEMENTS

ICICI Bank is grateful to the Government of India, RBI, SEBI and

Page 193: company history of SBI, ICICI

overseas regulators for their continued co-operation, support andadvice. ICICI Bank wishes to thank its investors, the domestic andinternational banking community, investment bankers, rating agenciesand stock exchanges for their support.

ICICI Bank would like to take this opportunity to express sincerethanks to its valued clients and customers for their continuedpatronage. The Directors express their deep sense of appreciation ofall the employees, whose outstanding professionalism, commitment andinitiative has made the organisation’s growth and success possible andcontinues to drive its progress. Finally, the Directors wish to expresstheir gratitude to the Members for their trust and support.

For and on behalf of the Board

Place : Mumbai N. VAGHULDate : May 27, 2008 Chairman

Hdfc

Director ReportMar2010   Mar 2012

The Directors have great pleasure in presenting the Eighteenth Annual Report on the business and operations of your Bank together with the audited accounts for the year ended March 31, 2012.FINANCIAL PERFORMANCE

(Rs in crore)

For the year ended March 31, 2012 March 31, 2011

Deposits and Other Borrowings 270,553.0 222,980.5

Advances 195,420.0 159,982.7

Total Income 32,530.0 24,263.4

Profit before Depreciation and Tax 8,055.7 6,316.1

Net Profit 5,167.1 3,926.4

Profit brought forward 6,174.2 4,532.8

Total Profit available for Appropriation 11,341.3 8,459.2

Appropriations:

Page 194: company history of SBI, ICICI

Transfer to Statutory Reserve 1,291.8 981.6

Transfer to General Reserve 516.7 392.6

Transfer to Capital Reserve - 0.4

Transfer to / (from) Investment Reserve (41.7) 15.6

Proposed Dividend 1,009.1 767.6

Tax Including Surcharge and Education Cess on Dividend 163.7 124.5

Dividend (including tax/cess thereon) pertaining to previous year paidduring the year 2.1 2.6

Balance carried over to Balance Sheet 8,399.6 6,174.2

The Bank posted total income and net profit of Rs 32,530.0 crore and Rs5,167.1 crore respectively for the financial year ended March 31, 2012as against Rs 24,263.4 crore and Rs 3,926.4 crore respectively in theprevious year. Appropriations from net profit have been effected as perthe table given above.

DIVIDEND

Your Bank has had a dividend policy that balances the dual objectivesof appropriately rewarding shareholders through dividends and retainingcapital in order to maintain a healthy capital adequacy ratio tosupport future growth. It has had a consistent track record of moderatebut steady increase in dividend declarations over its history with thedividend payout ratio ranging between 20% and 25%. Consistent with thispolicy and in recognition of the overall performance during thisfinancial year, your directors are pleased to recommend a dividend of Rs4.30 per equity share of Rs 2 for the year ended March 31, 2012 asagainst Rs 3.30 per equity share of Rs 2 (which was Rs 16.50 per share ofRs 10 before the share split) for the previous year ended March 31,2011. This dividend shall be subject to tax on dividend to be paid bythe Bank.

AWARDS

As in the past years, awards and recognition were conferred on yourBank by leading domestic and international organizations andpublications during the financial year ended March 31, 2012.

Some of them are:

The Asian Banker International Excellence in Retail Financial ServicesAwards 2012

- Best Retail Bank in India

Page 195: company history of SBI, ICICI

- Best Bancassurance Business in India

- Best Risk Management in India

Business World Best Bank Award 2011

- Best Bank

CNBC TV18 Best Bank and Financial Institution Awards 2011

- Best Bank

- Aditya Puri - Outstanding Finance Professional

CNBC TV18 Financial Advisor Award 2011

- Best Performing Bank (Private)

DSCI (Data Security Council of India) Excellence Awards 2011

- Security in Bank

Dun & Bradstreet Banking Awards 2011

- Best Private Sector Bank - SME Financing

Euromoney Awards for Excellence 2011

- Best Bank in India

Finance Asia Country Awards 2011

- Best Bank in India

- Best Cash Management Bank in India

- Best Trade Finance Bank in India

Financial Express Best Bank Survey 2010-11

- Best in Strength and Soundness

Institute of Chartered Accountants of India Awards 2011

- Excellence in Financial Reporting

International Data Corporation Financial Insights Innovation Awards2011

- Excellence in Customer Experience

Page 196: company history of SBI, ICICI

Skoch Foundation Financial Inclusion Awards 2012

- SHG/ JLG linkage program

RATINGS

Instrument Rating Rating Agency Comments

Fixed DepositProgram CARE AAA (FD) CARE Represents instruments considered to be ''of the best credit quality, offering highest safety for timely servicing of debt obligations, and carry minimal credit risk''.

tAAA (ind) FITCH Instruments with this rating are considered to have very strong degree of safety regarding timely payment of financial obligations. Such instruments carry lowest credit risk.

Certificate of Deposits CARE A1 CARE Instruments with this rating are considered to have very Program strong degree of safety regarding timely payment of financial obligations. Such instruments carry lowest credit risk.

A1 (ind) FITCH Instruments with this rating are considered to have very strong degree of safety regarding timely payment of financial obligations. Such instruments carry lowest credit risk.

Long term unsecured, CARE AAA CARE Represents instruments considered to be ''of the bestsubordinated credit quality, offering highest safety for timely servicing(Lower Tier II) Bonds of debt obligations, and carry minimal credit risk''.

Page 197: company history of SBI, ICICI

AAA (ind) with a FITCH Instruments with this rating are considered to have the Stable outlook highest degree of safety regarding timely servicing of financial obligations. Such instruments carry lowest credit risk.

Tier I Perpetual Bonds CARE AAA CARE Represents instruments considered to be ''of the best credit quality, offering highest safety for timely servicing of debt obligations, and carry minimal credit risk''

AAA Stable CRISIL Instruments with this rating are considered to have the Stable outlook highest degree of safety regarding timely servicing of financial obligations. Such instruments carry lowest credit risk.

Upper Tier II Bonds CARE AAA CARE Represents instruments considered to be ''of the best credit quality, offering highest safety for timely servicing of debt obligations, and carry minimal credit risk''

AAA stable CRISIL Instruments with this rating are considered to have the highest degree of safety regarding timely servicing of financial obligations. Such instruments carry lowest credit risk.

CARE - Credit Analysis & Research Limited

FITCH - Fitch Ratings India Private Limited (100% subsidiary of FitchInc.)

CRISIL - CRISIL Ltd. (A Standard & Poor''s company)

ISSUANCE OF EQUITY SHARES

Page 198: company history of SBI, ICICI

During the year under review, 205.6 lac shares (post sub- division,each equity share of Rs 2) were allotted to the employees of your Bankpursuant to the exercise of options under the Employee Stock OptionSchemes of the Bank. These include the shares allotted under theEmployee Stock Option Schemes of the erstwhile Centurion Bank ofPunjab.

EMPLOYEE STOCK OPTIONS

The information pertaining to Employee Stock Options is given in anannexure to this report.

CAPITAL ADEQUACY RATIO

Your Bank''s total Capital Adequacy Ratio (CAR) calculated in line withBasel II framework stood at 16.5%, well above the regulatory minimum of9.0%. Of this, Tier I CAR was 11.6%.

SUBSIDIARY COMPANIES

Your Bank has two subsidiaries, HDFC Securities Limited (''HSL) andHDB Financial Services Limited (''HDBFS'').

HSL is primarily in the business of providing brokerage servicesthrough the internet and other channels with a focus to emerge as afull-fledged financial services provider through a distribution of abouquet of financial services products. The company continued tostrengthen its distribution franchise and as on March 31, 2012 had anetwork of 184 branches across the country. During the year underreview, the company''s total income amounted to Rs 210.0 crore as againstRs 260.5 crore in the previous year. The operations resulted in a netprofit after tax of Rs 54.1 crore.

HDBFS is a non-deposit taking non-bank finance company (''NBFC''), thecustomer segments being addressed by HDBFS are typically underservicedby the larger commercial banks, and thus create a profitable niche forthe company to operate. Apart from lending to individuals, the companygrants loans to small and medium business enterprises and micro smalland medium enterprises, the principle businesses of HDBFS are asfollows:

- Loans - The company offers a range of loans in the secured andunsecured loans space that fulfill the financial needs of its targetsegment

- Insurance Services - HDBFS is a corporate agent for HDFC StandardLife Insurance Company and sells standalone insurance products as wellas products such as Loan Cover and Asset Cover.

- Collections - BPO Services - The Company runs 6 call centres with acapacity of over 1700 seats. These centres cover collectionrequirements at over 200 towns through its calling and field teams.Currently the company has a contract with your Bank for collectionservices.

Page 199: company history of SBI, ICICI

As on March 31, 2012, HDBFS had 180 branches in 135 cities in order todistribute its products and services. During the financial year endedMarch 31, 2012, the company''s total income increased by over 141% to Rs431.8 crore as compared to Rs 178.9 crore in the previous year. Duringthe same period the company''s net profit was Rs 51.1 crore as comparedto Rs 15.8 crore in the previous year.

In terms of the approval granted by the Government of India, theprovisions contained under Section 212 (1) of the Companies Act, 1956shall not apply in respect of the Bank''s subsidiaries. Accordingly, acopy of the balance sheet, profit and loss account, report of the Boardof Directors and the report of the auditors of HSL and HDBFS have notbeen attached to the accounts of the Bank for the year ended March 31,2012.

Shareholders who wish to have a copy of the annual accounts anddetailed information on HSL and HDBFS may write to the Bank for thesame. Further, the said documents shall also be available forinspection by shareholders at the registered offices of the Bank, HSLand HDBFS.

INTERNAL AUDIT AND COMPLIANCE

Your Bank has Internal Audit and Compliance functions which areresponsible for independently evaluating the adequacy of all internalcontrols and ensuring operating and business units adhere to internalprocesses and procedures as well as to regulatory and legalrequirements. The audit function also pro- actively recommendsimprovements in operational processes and service quality. To ensureindependence, the audit department has a reporting line to the Chairmanof the Board of Directors and the Audit and Compliance Committee of theBoard and only a dotted line to the Managing Director. To mitigateoperational risks, the Bank has put in place extensive internalcontrols including restricted access to the Bank''s computer systems,appropriate segregation of front and back office operations and strongaudit trails. The Audit and Compliance Committee of the Board alsoreviews the performance of the audit and compliance functions andreviews the effectiveness of controls and compliance with regulatoryguidelines.

CORPORATE SOCIAL RESPONSIBILITY

Your Bank has a defined guiding principle for all its socialinitiatives: ''Changing Lives by empowering individuals throughFinance, Education and Training''.

An essential element of the Bank''s Corporate Responsibility is itscommunity initiatives which aim at empowering individuals at the bottomof the pyramid through developmental initiatives such as education andlivelihood support. In the field of education its interventions areaimed at mainstreaming of school children and ensuring the quality ofeducation they receive. Your Bank has undertaken a multitude ofinitiatives for retaining children in school and arrest the rate ofdropouts. As part of this initiatives, pre-primary schools are run in

Page 200: company history of SBI, ICICI

communities with the objective of preparing and enrolling thesechildren into mainstream education. Apart from providing basicnutritional and health needs, regular parent and community meetings arean integral part of this program which is currently running in Kolkata,Hyderabad and Delhi.

Your Bank in partnership with NGOs and the government has adoptedstate-run schools by providing educational support to the children andto train staff to ensure better levels of learning and lower rate ofdrop-out in state-run schools in Pune and Mumbai. Also needy anddeserving children are identified based on set criteria and providedwith educational support to cover the cost of their education instate-run schools. In a unique initiative supported by the Bank, 30children from government schools have been integrated to DPS School inAhmedabad. Your Bank launched its Educational Crisis ScholarshipSupport (ECSS) in 2011 to reach out to students, studying in private /government-aided schools, who due to personal / family constraints, areunable to continue bearing the cost of education and are at risk ofdropping out of school.

Your Bank also undertakes programs that cover around 500 childrenthrough ''afterschool class'' and out-of school children through''bridge class'' in Pune, Delhi and Kolkata, a rehabilitation programin Kashmir, Kolkata and Mumbai, where development, training andplacement assistance is provided to differently abled individuals, sothat they can lead a life of dignity, and financial literacy programsfor children which are run in 458 schools in rural areas ofMaharashtra, Tamil Nadu and Orissa to inculcate values of money andconcept of savings.

Your Bank has also created a financial literacy module which is run byits employee volunteers. ''Power of Banking'' is a two- hour-longinteractive module designed for school children studying in Vth toVIIIth standards and covers simple concepts about money such asbudgeting, saving and banking. Power of banking has also beenredesigned to introduce financial concepts and values associated withmoney to street children.

Your Bank''s livelihood initiatives are aimed at training and capacitydevelopment of youth and women in the age group of 18-30 years fromeconomically weaker sections of society and to empower them to gainaccess to opportunities for sustainable livelihoods and growth. YourBank''s livelihood support programs are aimed at empowering competency-based, skill-oriented technical and vocational training. Such trainingprograms have been carried out in Andhra Pradesh, Maharashtra andGujarat. In Kolkata, your Bank has supported the setting up of aphysiotherapy training unit where visually challenged candidatesundergo a diploma in physiotherapy. In a pilot project undertaken inthe same city, interest-free loans were given to school drop-outs whounderwent training as laboratory technicians and were successfullyplaced in hospitals through industry interface. In addition to projectsimplemented through NGO partners, your Bank also drives directcommunity initiatives through its employees.

Changing Lives through Employee Engagement

Page 201: company history of SBI, ICICI

Employees are an integral part of all volunteering programs. With anorganization of over sixty thousand people, your Bank believes that itis in a unique position to leverage theknowledge base, skills andresources of its employees to ''Change Lives''. While employees arepart of all the community-based interventions, the Bank also providesopportunities for employees to contribute through special programs thatare centrally driven.

Payroll Giving: Under this program, employees are provided with an easyand convenient system to donate small amounts on monthly basis andaccumulate it to reach a corpus thatallows them individually to donateto a charity of their choice. Your Bank matches their contribution,thereby endorsing the charity they choose to support. Currently, wehave employees who have cumulatively supported over 50,000 individuals.

Make A Difference Day: Your Bank celebrates ''Make A Difference Day''annually as a community volunteering day where employees identify NGOsin their region and interact with beneficiaries. Employees conductactivities, competitions and workshops for the underprivilegedcommunity. ''Make A Difference Day'' is celebrated as an opportunityfor the employees to leave their laptops, conferences calls and emailsand direct their passion, determination and skills for the benefit ofcommunities.

HDFC Bank Fellowship: Your Bank supports the ''Teach for India''movement which is a nationwide campaign aiming to bridge theeducational gap in India by placing young professionals in low-incomeschools to teach full-time for two years, advocating educationalequity. Each year, two employees are selected for the fellowship andare given a two-year sabbatical, during which they continue to receivetheir basic salary.

Blood Donation: Employees of your Bank have been actively organizingblood camps at all India level since 2007. The journey started with acollection of 4,385 units of blood and today has increased to 25,758units. Identifying a need for preserving the blood especially in ruralareas, employees initiated a drive to identify and support the setup ofblood banks. This year too, your bank supported this initiative andset up four blood banks.

Environmental Sustainability

Your Bank believes in taking responsibility for the effects of itsoperations on society and on the environment. It regards climate changemitigation and environmental improvements as essential elements of asustainable business philosophy and this belief embodies the Bank''sapproach to reduction of carbon emissions.

It has conducted an inventory of energy-related emissions from itsoffice buildings and retail branches and is taking steps to manageGreen House Gas (GHG) emissions. Your Bank is also a signatory to theCarbon Disclosure Project (CDP).

An important aspect of your Bank''s GHG management strategy is

Page 202: company history of SBI, ICICI

behavioral modifications and employees are constantly being made awareof the importance of conservation. Through all these measures, the Bankhas embarked on a mission to make tangible and meaningful difference topeople''s lives. It will continue to walk the path and not rest tillthis goal is achieved.

FINANCIAL INCLUSION

Over the last few years, your Bank has been working on a number ofinitiatives to promote Financial Inclusion across identified sectionsof rural and urban, under-banked and un- banked consumers. Theseinitiatives target segments of the population that have limited or noaccess to the formal banking system for their basic banking and creditrequirements, by building a robust and sustainable model that providesrelevant services and viable and timely credit that ultimately resultsin economically uplifting its customers and substituting the borrowingsat usurious rates.

The Bank''s initiatives in the rural or deeper geography dovetails in tothe bank''s financial inclusion plans and also compliments the bank''sCorporate Social Responsibility initiative where the endeavor has beento provide banking services which are viable both for the customer andthe bank.

The Banks financial inclusion initiatives have been integrated acrossits various businesses, across product groups. By March 31, 2012 yourBank has brought over 5 million households who were hitherto excludedfrom basic banking services under the fold of this program.

Rural Initiative

The Bank offers products and services such as savings, current, fixed &recurring deposits, loans, ATM facilities, investment products such asmutual funds and insurance, electronic funds transfers, drafts andremittances etc in its branches located in rural and under bankedlocations. The Bank also leverages some of these branches as hubs forother inclusion initiatives such as direct linkages to self-help groupsand to promote Joint liability Group Loans, POS terminals andinformation technology enabled kiosks, as well as other ICT initiativessuch as mobile banking in these locations. The Bank covers over 6,000villages in the country through various distribution set ups, theseinclude branches and business correspondents. Around half of the abovevillages are those having a population of less than 2,000 that havetypically been financially excluded from the formal banking sector.

A number of retail credit products such as two-wheeler loans, carloans, mortgages etc. that are consumption products in urban centershappen to be means of income generation for rural consumers. Apart fromloans directly linked to agriculture such as pre and post harvestcredit, there are many other credit products that the Bank uses to aidfinancial betterment in rural locations. Your Bank has extendedprovision of its retail loans to large segments of the rural populationwhere the end use of the products acquired (by availing Bank''s loans)is used for income generating activities. For example, loans fortractors, commercial vehicles, two wheelers etc. supplement the

Page 203: company history of SBI, ICICI

farmer''s income by improving productivity and reducing expenses.

No Frills Savings Accounts

A savings account is the primary requirement for the provision of otherbanking services, the account promotes the habit of savings, providessecurity, and inculcates confidence among the target segment in thebanking sector.

This product was launched by the Bank with a specific objective toprovide customers a platform that enables them to inculcate the habitof savings. By not insisting on a requirement of a minimum balance, theentry barrier into the banking system has been removed, thereby givingthe hitherto unbanked person to start experiencing benefits of banking.

These accounts are offered only to customers who do not have any otherbank account (are un-banked) or who are either beneficiaries of agovernment welfare scheme or have annual incomes less than a definedthreshold (constitute the bottom of the economic pyramid). Apart fromthe basic no frills savings account your Bank also offers thesesegments other accounts such as no frills salary accounts and limitedKYC accounts.

Given the specific segment that is being targeted, being a customer whodoes not have any other Bank account, this product truly addresses thecause of Financial Inclusion. Additionally the Bank also periodicallytracks the behavior in these accounts to ensure that the accountsopened maintain a balance and are active.

The total number of No Frills Savings Accounts opened as on March 2012was at 7.60 lac accounts as against 5.53 lac accounts as on March 2011.

Sustainable Livelihood Financing

Over the last one year, your Bank has accelerated its direct linkageprogram to self-help groups, where the Bank itself works at the grassroot level with women in villages, conducts financial literacyprograms, forms groups and then funds these groups for incomegeneration activities. This enables the delivery of viable credit tothe rural poor in a sustainable manner & at the same time alsoinculcates the saving and banking habits. Till date the Bank has lentto over 73,000 Self Help Groups and over 1,10,000 Joint Liabilitygroups covering approximately 11.7 Lac households. Your Bank alsodisburses loans to its rural customers under the mutual guarantee microloan product which is now termed as Joint liability group product.This product works on the principle of group guarantees and providesclean (not backed by any collateral) loans to the borrowers based on aguarantee by other borrowers.

Agriculture and Allied Activities

A large portion of India''s un-banked population relies on agricultureas the main source of livelihood. We believe provision of credit tofarmers through various methods that your Bank has employed replaces

Page 204: company history of SBI, ICICI

the traditional money lending channel, while at the same time providingincome generating activities. The Bank provides various loans tofarmers through its suite of specifically designed products such as theKisan Gold Card, tractor and cattle loans etc. In addition, the Bankoffers post-harvest cash credit, warehouse receipt financing and billdiscounting facilities to mandi (markets for grain and otheragricultural produce) participants and farmers. These facilitiesenable the mandi participants to make timely payments to farmers. TheBank carries out this business through over 400 branches that arelocated in close proximity to mandis.

The Bank targets specific sectors to capture supply chain of certaincrops from the production stage to the sales stage. On the basis ofthese cashflows, your Bank is able to finance specific needs of thefarmers. This is further supported by using Business Correspondentscloser to their respective locations and helping them to create asavings and banking habit. This model has currently been implementedwith dairy and sugarcane farmers.

The initiative currently underway includes the appointment of dairysocieties and sugarcane co-operatives as business correspondents,through whom the Bank opens accounts of individual farmers attached tothese societies. The societies route all payments to the farmersthrough this account.

Gold Loans

The Gold loan product is an offering which allows customers a reliablesource of credit at the time of need. In the absence of this, either,credit would not have been available to these customers or would havebeen available at higher rates in form of unsecured loans. Gold loansprovide a source of monetizing the household gold and at the same timeprovides an alternate source of funds. It provides financialindependence to small traders, small entrepreneurs and house wives. Italso substitutes borrowing at usurious rates, particularly by smallborrowers and weaker sections.

Small and Micro Enterprises

The Bank offers complete banking solutions to micro, small and mediumscale enterprises across industry segments including manufacturers,retailers, wholesalers / traders and services. The entire suite offinancial products including cash credit, overdrafts, term loans, billsdiscounting, export packing credit, letter of credit, bank guarantees,cash management services and other structured products are madeavailable to these customers. One of the means to financial inclusionis by supporting small and micro enterprises which in turn provideemployment opportunities to the financially excluded. Though indirect,we believe this model may in many instances be more effective thanproviding subsidies that are often unsustainable, or never reach theintended beneficiary.

Promoting Financial Awareness

In addition to providing various products and services to the

Page 205: company history of SBI, ICICI

financially excluded, the Bank believes that imparting education andtraining to these target segments is equally essential to ensuretransparency and create awareness. To this effect the Bank has put inplace various training programs, these are conducted by Bank staff inlocal languages and cover not only the customers but also variousintermediaries such as the Bank''s business correspondents. Throughthese programs the Bank provides credit counseling and information onparameters like savings habit, better utilization of savings, featuresof savings products, credit utilization, asset creation, insurance,income generation program etc. During the financial year ended March31, 2012, over 5,400 financial awareness programs covering over1,40,000 households were conducted. The bank also facilitates needbased capacity building and market place for the customers with theobjective of sustaining their livelihood in holistic manner.

HUMAN RESOURCES

The total number of employees of your Bank was 66,076 as of March 31,2012. The Bank continued to focus on training its employees both - onthe job as well as through training programs conducted by internal andexternal faculty. The Bank has consistently believed that broaderemployee ownership of its equity shares has a positive impact on itsperformance and employee motivation.

Your Bank lists ''people'' as one of its stated core values. The Bankbelieves in empowering its employees and constantly takes variousmeasures to achieve this objective.

STATUTORY DISCLOSURES

The information required under Section 217(2A) of the Companies Act,1956 and the rules made thereunder as amended, are given in an annexureand forms part of this report. In terms of section 219(1)(iv) of theAct, the Report and Accounts are being sent to the shareholdersexcluding the aforesaid annexure. Any shareholder interested inobtaining a copy of the said annexure may write to the CompanySecretary at the Registered Office of the Bank. The Bank had 66076employees as on March 31, 2012. 120 employees employed throughout theyear were in receipt of remuneration of more than Rs 60 lac per annumand 12 employees employed for part of the year were in receipt ofremuneration of more than Rs 5 lac per month.

The provisions of Section 217(1)(e) of the Act relating to conservationof energy and technology absorption do not apply to your Bank. The Bankhas, however, used information technology extensively in itsoperations.

The report on the Corporate Governance is annexed herewith and formspart of this report.

The Ministry of Corporate Affairs has issued "Corporate GovernanceVoluntary Guidelines" in December 2009. While these guidelines arerecommendatory in nature, the Bank has adopted most of these guidelinesas detailed in the Corporate Governance Report. The Bank will examinethe possibilities of adopting the remaining guidelines in an

Page 206: company history of SBI, ICICI

appropriate manner.

RESPONSIBILITY STATEMENT

The Board of Directors hereby state that

i) In the preparation of the annual accounts, the applicable accountingstandards have been followed along with proper explanation relating tomaterial departures;

ii) We have selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable andprudent so as to give a true and fair view of the state of affairs ofthe Bank as on March 31, 2012 and of the profit of the Bank for theyear ended on that date;

iii) We have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of theCompanies Act, 1956 for safeguarding the assets of the Bank and forpreventing and detecting the fraud and other irregularities;

iv) We have prepared the annual accounts on a going concern basis.

DIRECTORS

Dr. Pandit Palande and Mr.Partho Datta will retire by rotation at theensuing Annual General Meeting and are eligible for re-appointment.

Mr. Keki Mistry, who had ceased to be a director from the closing hoursof business on March 26, 2011 on completing the permitted tenure ofeight years under the Banking Regulation Act, 1949, was re-appointed asan additional director by the Board during the year in accordance withthe relevant applicable guidelines of the Reserve Bank of India andholds office up to the conclusion of the ensuing Annual GeneralMeeting. The Bank has received a notice pursuant to Section 257 of theCompanies Act, 1956 from a shareholder proposing the candidature of Mr.Keki Mistry as Director of the Bank at the ensuing Annual GeneralMeeting.

The brief resume/details relating to Directors who are to be re-appointed are furnished in the report on Corporate Governance.

AUDITORS

The Auditors, M/s. BSR & Co., Chartered Accountants will retire at theconclusion of the forthcoming Annual General Meeting and are eligiblefor re-appointment. Members are requested to consider theirre-appointment on an annual remuneration (statutory audit fees) of Rs1,05,60,000 (Previous year: Rs 96,00,000) plus service tax asapplicable, which is approved by the Audit and Compliance Committee ofthe Board.

ACKNOWLEDGEMENT

Page 207: company history of SBI, ICICI

Your Directors would like to place on record their gratitude for allthe guidance and co-operation received from the Reserve Bank of Indiaand other government and regulatory agencies. Your Directors wouldalso like to take this opportunity to express their appreciation forthe hard work and dedicated efforts put in by the Bank''s employees andlook forward to their continued contribution in building a World ClassIndian Bank.

On behalf of the Board of Directors

Mr. C. M. Vasudev

Mumbai, April 18, 2012 Chairman

Director ReportMar2009   Mar 2010 Mar2012

The Directors have great pleasure in presenting the Sixteenth Annual Report on the business and operations of your Bank together with the audited accounts for the year ended March 31, 2010.FINANCIAL PERFORMANCE

(Rs. in crores)

For the year ended

March 31, 2010 March 31, 2009

Deposits and Other Borrowings 180,320.1 151,975.2*

Advances 125,830.6 98,883.0

Total Income 19,980.5 19,622.9

Profit before Depreciation and Income Tax 4,683.5 3,659.2

Net Profit 2,948.7 2,245.0

Profit brought forward 3,455.6 2,574.6

Total Profit available for Appropriation 6,404.3 4,819.6

Appropriations

Transfer to Statutory Reserve 737.2 561.2

Page 208: company history of SBI, ICICI

Transfer to General Reserve 294.9 224.5

Transfer to Capital Reserve 199.5 93.9

Transfer from Investment Fluctuation Reserve (1.5) (13.9)

Proposed Dividend 549.3 425.4

Tax Including Surcharge and Education Cess on Dividend 91.2 72.3

Dividend (including tax/cess thereon) pertaining to previous year paid during the year 0.9 0.6

Balance carried over to Balance Sheet 4,532.8 3,455.6

* Change pursuant to reclassification

The Bank posted total income and net profit of Rs. 19,980.5 crores andRs. 2,948.7 crores respectively for the financial year ended March 31,2010 as against Rs. 19,622.9 crores and Rs. 2,245.0 crores respectivelyin the previous year. Appropriations from net profit have beeneffected as per the table given above.

DIVIDEND

Your Bank has had a consistent dividend policy that balances the dualobjectives of appropriately rewarding shareholders through dividendsand retaining capital, in order to maintain a healthy capital adequacyratio to support future growth. It has had a consistent track record ofmoderate but steady increases in dividend declarations over its historywith the dividend payout ratio ranging between 20% and 25%. Consistentwith this policy, and in recognition of the Banks overall performanceduring this financial year, your directors are pleased to recommend adividend of Rs. 12 per share for the financial year ended March 31,2010, as against Rs. 10 per share for the year ended March 31, 2009.This dividend shall be subject to tax on dividend to be paid by theBank.

AWARDS

As in the past years, awards and recognition were conferred on yourBank by leading domestic and international organizations during thefiscal year ended March 31, 2010. Some of them are:

• Asian Banker Excellence Awards 2009

- Best retail bank in India (4th year in a row)

- Excellence in automobile lending

Page 209: company history of SBI, ICICI

• The Asset Triple A Awards

- Best cash management bank in India

• Euromoney Private Banking and Wealth Management poll 2010

- Best local bank in India (2nd year in a row)

- Best private banking services overall

• Financial Insights Innovation Awards 2010

- Innovation in branch operations

• Global Finance Award

- Best trade finance provider in India (2010)

• Business Today Best Employer Survey

- Listed in the top 10 best employers in the country

• Business World Best Bank Awards 2009

- Most tech-savvy bank

• Outlook Money NDTV Profit Awards 2009

- Best bank

• Forbes Asia

- Fab 50 companies in Asia-Pacific

• UTI MF-CNBC TV18 Financial Advisor Awards 2009

- Best performing bank

• Wall Street Journal survey of Asia’s best 200 companies 2009

- Rated amongst India’s 10 most admired companies

- Rated 3rd in terms of Financial Reputation

• FE Best Bank Awards 2009

- Best in strength and soundness award

• Asia Money 2009 awards

Page 210: company history of SBI, ICICI

- Best domestic bank in India

RATINGS

Instrument Rating Rating Agency

Fixed Deposit Program CARE AAA (FD) CARE1

tAAA (ind) with a FITCH2 stable outlook

Certificate of Deposit PR 1+ CARE

Long term unsecured, CARE AAA CAREsubordinated (Tier II)bonds

AAA (ind) with a FITCH stable outlook

Tier I perpetual Bonds CARE AAA CARE

AAA / Stable CRISIL3

Upper Tier II Bonds CARE AAA CARE

AAA / Stable CRISIL

Instrument Comments

Fixed Deposit Program Represents instruments considered to be ‘of the best quality, carrying negligible investment risk’.

Certificate of Deposit Indicates the strongest capacity for timely payment of financial commitments relative to other issuers or issues in the country.

Long term unsecured,subordinated (Tier II)bonds Representing superior capacity for repayment of short term promissory obligations

Represents instruments considered to be of the best quality, carrying negligible

Page 211: company history of SBI, ICICI

investment risk’.

Represents the best credit risk relative to all other issuers or issues in the country.

Tier I perpetual Bonds Represents instruments considered to be ‘of the best quality, carrying negligible investment risk’.

Judged to offer the highest degree of safety with regard to timely payment of financial obligations. Any adverse changes in circumstances are most unlikely to affect the payments of the instrument.

Upper Tier II Bonds Represents instruments considered to be ‘of the best quality, carrying negligible investment risk’.

Judged to offer the highest degree of safety with regard to timely payment of financial obligations. Any adverse changes in circumstances are most unlikely to affect the payments of the instrument.

1 - CARE – Credit Analysis & Research Limited

2 - FITCH – Fitch Ratings India Private Limited (100% subsidiary ofFitch Inc.)

3 - CRISIL – CRISIL Ltd. (A Standard & Poor’s company)

ISSUANCE OF EQUITY SHARES AND WARRANTS

Post merger of the erstwhile Centurion Bank of Punjab with your Bank,26,200,220 warrants convertible into an equivalent number of equityshares were issued to HDFC Limited on a preferential basis at a rate ofRs. 1,530.13 each. This was done in order to enable the promoter groupto restore its shareholding percentage in the Bank to the pre-mergerlevel in line with shareholder and regulatory approvals. On November30, 2009 the said warrants were converted by HDFC Limited andconsequently the Bank issued them 26,200,220 equity shares.

During the year under review, 61.59 lac shares were allotted to theemployees of your Bank pursuant to the exercise of options under theemployee stock option scheme of the Bank. These include the sharesallotted under the employee stock option scheme of the erstwhileCenturion Bank of Punjab.

EMPLOYEE STOCK OPTIONS

The information pertaining to Employee Stock Options is given in anannexure to this report.

Page 212: company history of SBI, ICICI

CAPITAL ADEQUACY RATIO

Your Bank’s total Capital Adequacy Ratio (CAR) calculated in line withthe Basel II framework stood at 17.4%, well above the regulatoryminimum of 9.0%. Of this, Tier I CAR was 13.3%.

SUBSIDIARY COMPANIES

Your Bank has two subsidiaries, HDFC Securities Limited (“HSL”) and HDBFinancial Services Limited (“HDBFS”). HSL is primarily in the businessof providing brokerage services through the internet and otherchannels. HDBFS is a non-deposit taking non-bank finance company(“NBFC”), for the establishment of which the Bank received Reserve Bankof India (“RBI”) approval during the fiscal year ended March 31, 2008.

In terms of the approval granted by the Government of India, theprovisions contained under Section 212(1) of the Companies Act, 1956shall not apply in respect of the Bank’s subsidiaries. Accordingly, acopy of the balance sheet, profit and loss account, report of the Boardof Directors and the report of the Auditors of HSL and HDBFS have notbeen attached to the accounts of the Bank for the year ended March 31,2010.

Shareholders who wish to have a copy of the annual accounts anddetailed information on HSL and HDBFS may write to the Bank for thesame. Further, the said documents shall also be available forinspection by shareholders at the registered offices of the Bank, HSLand HDBFS.

CORPORATE SOCIAL RESPONSIBILITY

Your Bank is a socially responsible corporate citizen committed todeliver a positive impact across social, economic and environmentalparameters. The Bank acknowledges its responsibility on the manner thatits activities influence its consumers, employees, and stake holders,as well as the environment. Your Bank strives to proactively encouragecommunity growth and development thereby contributing in building asustainaible future.

Your Bank’s CSR initiatives range across the spectrum of purelyoperational and financial parameters at one end to social andaltruistic at the other. Together, these elements go towards fulfillingits CSR objectives.

The Bank seeks to achieve its corporate and social objectives byfocusing on the following strategic areas

• Environmental Responsibility

• Employee Engagement

• Community Initiatives

Page 213: company history of SBI, ICICI

Environmental Responsibility

Your Bank is aware of its role of an influencer towards theenvironment, which is embodied in its approach to Carbon EmissionReduction. The Bank demonstrates this commitment to contributepositively to the environment and sustainable development bycalculating its carbon footprint and preparing a carbon management planto reduce it. In addition, in order to create awareness amongstemployees on climate change and the need to reduce and recycle, variousdrives to conserve the environment including tree plantation areorganized on a regular basis.

Employee Engagement

The Bank’s employees are encouraged to volunteer time and skillsthrough the ‘Corporate Volunteering Program’. This year your Bank’semployees have engaged in activities such as academic support classes,held English speaking courses and helped in organizing special eventsin order to celebrate festivals with the underprivileged. Additionallythe Bank has facilitated employee donations to charities of theirchoice through ‘Give India’, a donation platform that enablesindividuals to support social causes by donating to over 200 charitiesthat have been screened for transparency and credibility. The bankmakes a donation matching the amounts donated by its employees on amonthly basis.

Community Initiatives

As a responsible Corporate Citizen your Bank strives for communityempowerment through socio-economic development of underprivileged andmarginalized sections of society. The Bank partners with NGOs acrossIndia to support educational initiatives and livelihood trainingprograms.

In the year ended March 31, 2010 the Bank supported a variety ofeducational programs ranging from educational sponsorships for girls,adoption of state-run schools, running of academic support classes andreading classes. The Bank also supports projects that provide skillstraining to school dropouts, youth, women and other disadvantagedgroups. The Bank’s social development programs have so far touched thelives of over 73,000 children and 700 women and youth.

FINANCIAL INCLUSION

Over the last few years, your Bank has been working on a number ofinitiatives to promote Financial Inclusion across identified sectionsof rural, under-banked and un-banked consumers. These initiativestarget segments of the population that have limited or no access to theformal banking system for their basic banking and credit requirements,by building a robust and sustainable model that provides relevantservices and viable and timely credit that ultimately result in theeconomic upliftment of its customers. The Banks financial inclusioninitiatives have been integrated across its various businesses, acrossproduct groups. Over the next five years your Bank will endeavor tobring 10 million households currently excluded from basic banking

Page 214: company history of SBI, ICICI

services under the fold of this program.

Rural Initiative

The Bank has approximately 33% of its branches in rural and underbankedlocations. In these branches the Bank offers products and services suchas savings, current, fixed & recurring deposits, loans, ATM facilities,investment products such as mutual funds and insurance, electronicfunds transfers, drafts & remittances, etc. The Bank also leveragesthese branches as hubs for other inclusion initiatives such as directlinkages to self help groups and joint liability groups, bank onwheels, point of sale (POS) terminals and information technologyenabled kiosks, and other information & communication technology (ICT)backed initiatives in these locations.

A number of retail credit products such as two-wheeler loans, carloans, mortgages etc. are typically consumption products in urbancenters. These however are means of income generation for of ruralconsumers. We believe that apart from agricultural loans, there aremany other credit products that the Bank can use to aid financialbetterment in rural locations. The Bank has extended provision of itsretail loans to large segments of the rural population where the enduse of the products acquired (by availing our loans) are used forincome generating activities. For example, loans for tractors,commercial vehicles, etc. supplement the farmer’s income by improvingproductivity and reducing expenses.

No Frills Savings Accounts

A savings account is the opening requirement for the provision of otherbanking services; the account promotes the habit of saving, provides asecurity, and inculcates confidence among the target segment in thebanking sector.

The Bank provides ‘No Frills’ savings accounts through all its branchesas a stepping stone towards financial inclusion. These accounts areoffered only to customers who do not have any other bank account (areun-banked) and who are either beneficiaries of a government welfarescheme or have annual incomes less than a defined threshold (constitutethe bottom of the economic pyramid). Apart from the basic no frillssavings account your Bank also offers these segments other accountssuch as no frills salary accounts and limited KYC accounts.

Lending to self help groups and Microfinance Institutions

Your Bank has been working with various self help groups in order tocover a wider consumer base than through its own branch network. Thegroups that the Bank partners work with the objective of providingcredit for income generation activities, (often by providing training,vocational guidance, and marketing support to their members).Leveraging their distribution, credit expertise and on-groundknowledge, the Bank funds these groups who in turn lend to the endconsumer. Till date the Bank has lent to over 45,000 self help groupscovering approximately

Page 215: company history of SBI, ICICI

7 lakh households supporting their income generation activities. TheBank works with these groups either by appointing businesscorrespondents or through its own branch network. To this effect theBank has opened 27 branches catering exclusively to this targetsegment.

The Bank also extends loans to Microfinance Institutions for on-lendingto financially excluded households or in many cases to them throughself help groups. This program is currently spread across the countrycovering 18 states with tie-ups with 110 accredited microfinanceinstitutions. The above institutions typically face challenges in theareas of funding, credit underwriting and scaling up of operations. TheBank brings in the necessary expertise related to these areas andenters into a symbiotic arrangement that benefits all parties involved.As on March 31, 2010 with a micro lending book of over Rs. 1,400 croresthe Bank’s micro lending initiative has reached approximately 2 millionhouseholds.

Agriculture and Allied Activities

A large portion of India’s un-banked population relies on agricultureas their main source of livelihood. We believe provision of credit tomarginal farmers through various methods that your Bank has employedreplaces the traditional money lending channel, while at the same timeproviding income generating activities. The Bank provides various loansto farmers through its suite of specifically designed products such asthe Kisan Gold Card, tractor, cattle loans etc. In addition the Bankoffers post-harvest cash credit, warehouse receipt financing and billdiscounting facilities to mandi (markets for grain and otheragricultural produce) participants and farmers. These facilities enablethe mandi participants to make timely payments to farmers. The Bankcarries out this business through approximately 200 branches that arelocated in close proximity to mandis.

The Bank targets specific sectors to capture supply chain of certaincrops from the production stage to the sales stage. On the basis ofthese cashflows, your Bank is able to finance specific needs of thefarmers. This is further supported by using business correspondentscloser to their respective locations and helping them to create asavings and banking habit. This model has currently been implementedwith dairy and sugarcane farmers.

The initiative currently underway includes the appointment of milksocieties as BCs, through whom the Bank opens accounts of individualfarmers attached to these societies. The societies route all paymentsto the farmers through this account.

Small and Micro Enterprises

One of the means to financial inclusion is by supporting small andmicro enterprises which in turn provide employment opportunities to thefinancially excluded. Though indirect, we believe this model may inmany instances be more effective than providing subsidies that areoften unsustainable, or never reach the intended beneficiary.

Page 216: company history of SBI, ICICI

The Bank offers complete banking solutions to micro, small and mediumscale enterprises across industry segments including manufacturers,retailers, wholesalers / traders and services. The entire suite offinancial products including cash credit, overdrafts, term loans, billsdiscounting, export packing credit, letter of credit, bank guarantees,cash management services and other structured products are madeavailable to these customers.

Promoting Financial Awareness

In addition to providing various products and services to thefinancially excluded, that Bank believes that imparting education andtraining to these target segments is equally essential to ensuretransparency and create awareness. To this effect the Bank has put inplace various training programs, these are conducted by Bank staff inlocal languages and cover not only the customers but also variousintermediaries such as the Bank’s business correspondents. Throughthese programs the Bank provides credit counseling and information onparameters like savings habit, better utilization of savings, featuresof savings products, credit utilization, asset creation, insurance,income generation program etc.

HUMAN RESOURCES

The total number of employees of your bank were 51,888 as of March 31,2010. The Bank continued to focus on training its employees, bothon-the-job as well as through training programs conducted by internaland external faculty. The Bank has consistently believed that broaderemployee ownership of its shares has a positive impact on itsperformance and employee motivation.

HDFC Bank lists ‘people’ as one of its stated core values. The Bankbelieves in empowering its employees and constantly takes variousmeasures to achieve this.

STATUTORY DISCLOSURES

The information required under Section 217(2A) of the Companies Act,1956 and the rules made there under, are given in the annexure appendedhereto and forms part of this report. In terms of section 219(1)(iv) ofthe Act, the Report and Accounts are being sent to the shareholdersexcluding the aforesaid annexure. Any shareholder interested inobtaining a copy of the said annexure may write to the CompanySecretary at the Registered Office of the Bank. The Bank had 51,888employees as on March 31, 2010. 630 employees employed throughout theyear were in receipt of remuneration of Rs. 24 lacs per annum and 35employees employed for part of the year were in receipt of remunerationof more than Rs. 2 lacs per month.

The provisions of Section 217(1)(e) of the Act relating to conservationof energy and technology absorption do not apply to your Bank. The Bankhas, however, used information technology extensively in itsoperations.

The report on the Corporate Governance is annexed herewith and forms

Page 217: company history of SBI, ICICI

part of this report.

The Ministry of Corporate Affairs has issued “Corporate GovernanceVoluntary Guidelines” in December 2009. While these guidelines arerecommendatory in nature, the Bank has adopted most of these guidelinesas detailed in the Corporate Governance Report. The Bank will examinethe possibilities of adopting the remaining guidelines in anappropriate manner.

RESPONSIBILITY STATEMENT

The Board of Directors hereby state that

i) In the preparation of the annual accounts, the applicable accountingstandards have been followed along with proper explanation relating tomaterial departures;

ii) We have selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable andprudent so as to give a true and fair view of the state of affairs ofthe Bank as on March 31, 2010 and of the profit of the Bank for theyear ended on that date;

iii) We have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of theCompanies Act, 1956 for safeguarding the assets of the Bank and forpreventing and detecting the fraud and other irregularities;

iv) We have prepared the annual accounts on a going concern basis.

DIRECTORS

Mr. C.M.Vasudev and Dr. Pandit Palande will retire by rotation at theensuing Annual General Meeting and are eligible for re-appointment.

The Board at its meeting held on 15th January 2010 re-appointed Mr.Aditya Puri as Managing Director of the Bank for a period of 3 yearsfrom 1st April 2010 to 31st March 2013 subject to the approval of theshareholders at the ensuing Annual General Meeting and the Reserve Bankof India. The Reserve Bank of India has since approved there-appointment of Mr. Puri as Managing Director and the terms ofre-appointment are being placed before the shareholders for approval atthe ensuing Annual General Meeting.

The Board at its meeting held on 24th April 2010 also approved there-appointment of Mr. Harish Engineer and Mr. Paresh Sukthankar asExecutive Directors for further periods from the expiry of theircurrent terms subject to the approval of the shareholders at theensuing Annual General Meeting and the Reserve Bank of India.

The brief resume/details relating to Directors who are to beappointed/re-appointed are furnished in the report on CorporateGovernance.

Page 218: company history of SBI, ICICI

AUDITORS

M/s. Haribhakti & Co., Chartered Accountants have been the StatutoryAuditors of your Bank since 2006. As per the regulations of the ReserveBank of India, the same auditors cannot be re-appointed for a periodbeyond four years. It is proposed to appoint M/s. BSR & Co., CharteredAccountants as the new Statutory Auditors of the Bank, subject to theapproval of the members and the Reserve Bank of India. Your Directorsplace on record their sincere appreciation of the professional servicesrendered by M/s.Haribhakti & Co., as Statutory Auditors of the Bank.

ACKNOWLEDGEMENT

Your Directors would like to place on record their gratitude for allthe guidance and co-operation received from the Reserve Bank of Indiaand other government and regulatory agencies. Your Directors would alsolike to take this opportunity to express their appreciation for thehard work and dedicated efforts put in by the Bank’s employees and lookforward to their continued contribution in building a World ClassIndian Bank.

On behalf of the Board of Directors

Jagdish CapoorMumbai, April 24, 2010 Chairman

Director ReportMar2008   Mar 2009 Mar2010

The Directors have great pleasure in presenting the Fifteenth Annual Report on the business and operations of your Bank together with the audited accounts for the year ended March 31, 2009.Financial Performance (Rs. in crores) For the year ended March 31, 2009 March 31, 2008

Deposits and Other Borrowings 145,497.4 105,363.5*Advances 98,883.0 63,426.9Total Income 19,622.9 12,398.2Profit before Depreciation and Tax 3,659.2 2,552.4Net Profit 2,245.0 1,590.2Profit brought forward 2,574.6 1,932.0Total Profit available for Appropriation 4,819.6 3,522.2AppropriationsTransfer to Statutory Reserve 561.2 397.5Transfer to General Reserve 224.5 159.0

Page 219: company history of SBI, ICICI

Transfer to Capital Reserve 93.9 -Transfer to Investment Fluctuation Reserve (13.9) 38.5Proposed Dividend 425.4 301.3Tax including Surcharge and Education Cess on Dividend 72.3 51.2Education Cess on Dividend paid for Prior Year 0.6 0.1Balance carried over to Balance Sheet 3,455.6 2,574.6

* Change pursuant to reclassification

The Bank posted total income and net profit of Rs. 19,622.9 crores andRs. 2,245.0 crores respectively for the financial year ended March 31,2009 as against Rs. 12,398.2 crores and Rs. 1,590.2 crores respectivelyin the previous year. Appropriations from the net profit have beeneffected as per the table given above.

Dividend

Your Bank has had a. consistent dividend policy of balancing the dualobjectives of appropriately rewarding shareholders through dividendsand retaining capital to maintain a healthy capital adequacy ratio tosupport future growth. It has had a consistent track record of moderatebut steady increases in dividend declarations over its history with thedividend payout ratio ranging between 20% and 25%. Consistent with thispolicy, and in recognition of the overall performance during 2008-09,your directors are pleased to recommend a dividend of 100% for the yearended March 31, 2009, as against 85% for the year ended March 31, 2008.This dividend shall be subject to tax on dividend to be paid by theBank.

Awards

Your Bank continued to receive awards and gain recognition from leadingdomestic and international organizations during the fiscal 2008-09.Some of them are:

- Euromoney Annual Survey : The Best local Bank. Also Ranked 1st inRelationship Management and 2nd in private banking services overall.

- Business India : Best Bank 2008.

- Forbes Asia : One of the Fab 50 Companies in Asia Pacific.

- Nasscom IT User Award 2008: Best IT Adoption in the Banking Sector.

- Asian Banker Excellence in Retail Financial Services: Best RetailBank 2008.

- Asiamoney : Best Local Cash Management Bank Award.

- Microsoft & Indian Express Group : Security Strategist Award 2008.

- World Trade Center Award of Honour : For outstanding contribution to

Page 220: company history of SBI, ICICI

international trade services.

Ratings

The Bank has its deposit programs rated by two rating agencies

- Credit Analysis & Research Limited (CARE) and Fitch Ratings IndiaPrivate Limited. The Banks Fixed Deposit programme has been ratedCARE AAA (FD) [Triple A] by CARE, which represents instrumentsconsidered to be "of the best quality, carrying negligible investmentrisk". CARE has also rated the banks Certificate of Deposit (CD)programme "PR 1+" which represents "superior capacity for repayment ofshort term promissory obligations". Fitch Ratings India Pvt. Ltd. (100%subsidiary of Fitch Inc.) has assigned the "tAAA (ind )" rating to theBanks deposit programme, with the outlook on the rating as "stable".This rating indicates "highest credit quality" where "protectionfactors are very high".

- The Bank also has its long term unsecured, subordinated (Tier II)Bonds rated by CARE and Fitch Ratings India Private Limited and itsTier I perpetual Bonds and Upper Tier II Bonds rated by CARE and CRISILLtd. CARE has assigned the rating of "CARE AAA" for the subordinatedTier II. Bonds while Fitch Ratings India Pvt. Ltd. has assigned therating "AAA(ind)" with the outlook on the rating as "stable". CARE hasalso assigned "CARE AAA [Triple A] for the Banks Perpetual bond andUpper Tier II bond issues. CRISIL has assigned the rating "AAA/Stable"for the Banks perpetual Debt programme and Upper Tier II Bond issue.In each of the cases referred to above, the ratings awarded were thehighest assigned by the rating agency for those instruments.

Issuance of Equity Shares and Warrants

The Reserve Bank of India (RBI) approved the scheme of amalgamation ofCenturion Bank of Punjab with your Bank effective May 23, 2008.Consequently, the shareholders of the erstwhile Centurion Bank ofPunjab were allotted 69,883,956 equity shares of Rs. 10 each pursuantto the share swap ratio of one equity share of Rs. 10 each of HDFC Bankfor every twenty nine equity shares of Re. 1 each held in CenturionBank of Punjab by them as on June 16, 2008.

To enable the promoter group to restore its shareholding percentage inthe Bank to the pre-merger level and in line with shareholder andregulatory approvals, during the quarter ended June 30, 2008 your Bankissued 26,200,220 warrants convertible into an equivalent number ofequity shares to HDFC Limited on a preferential basis at a rate of Rs.1,530.13 each. HDFC Limited can exercise the said options untilDecember, 2009.

During the year under review, 10.67 lakh shares were allotted to theemployees of your Bank pursuant to the exercise of options under theemployee stock option scheme of the Bank. These include the sharesallotted under the employee stock option scheme of Centurion Bank ofPunjab.

Other Capital Raising

Page 221: company history of SBI, ICICI

During the Fiscal year 2008-2009 your bank issued Lower and Upper TierII bonds aggregating to Rs. 2,875 crores. The proceeds from these bondissuances have been included as Tier II capital.

Employee Stock Options

The information pertaining to Employee Stock Options is given in anannexure to this report.

Capital Adequacy Ratio

Your Banks total Capital Adequacy Ratio (CAR) calculated in line withthe Basel II framework stood at 15.7%, well above the regulatoryminimum of 9.0%. Of this, Tier I CAR was 10.6%. During the year underconsideration the Bank raised Tier II capital to maintain a healthyCAR. In the Fiscal year 2008-2009 the Reserve Bank of India revised therisk weights accorded to various asset classes which had a net positiveimpact on the Capital Adequacy Ratio of your Bank.

From the current Financial year the Bank has complied with thestandards set out for the standardised approach for credit risk and theBasic Indicator approach for operational risk under Basel II asdirected by the Reserve Bank of India. The implementation of the BaselII framework is in harmony with the Banks objective of adoptinginternational best practices in risk management. The Banks CAR as perBasel II is 15.7% as compared to 15.09% calculated as per Basel I.

Amalgamation of Centurion Bank of Punjab Limited with the Bank

During the year ended March 31, 2009, the Reserve Bank of Indiaaccorded its consent to the Scheme of Amalgamation of Centurion Bank ofPunjab Limited with your Bank. Pursuant to the order of amalgamationthe operations of both Banks were merged with effect from May 23, 2008.The appointed date for the merger was April 01, 2008. During the fiscalyear various facets of integration including systems, human resources,branches, operating processes and business plans have been integrated.With the result both banks currently operate as one seamlesslyintegrated entity.

SUBSIDIARY COMPANIES

In terms of the approval granted by the Government of India, theprovisions contained under Section 212(1) of the Companies Act, 1956shall not apply in respect of the Banks subsidiaries namely, HDFCSecurities Limited (HSL) and HDB Financial Services Limited (HDBFSL).Accordingly, a copy of the Balance Sheet, Profit and Loss Account,Report of the Board of Directors and Report of the Auditors of HSL andHDBFSL have not been attached to the accounts of the Bank for the yearended March 31, 2009.

Investors who wish to have a copy of the annual accounts and detailedinformation on HSL and HDBFSL may write to the Bank for the same.Further, the said documents shall also be available for inspection by

Page 222: company history of SBI, ICICI

the investors at the registered offices of the Bank, HSL and HDBFSL

MANAGEMENTS DISCUSSIONS AND ANALYSIS

Macro-economic and Industry Developments

The Indian economy faced significant slowdown in growth momentum in2008-09, driven by a severe downturn in the global economy on the backof sustained pressure on the global financial system. For India,estimates of 2008-09 GDP growth range from 6.0%-7.0% against an averagegrowth rate of 8.8% per annum over the period 2003-2008.

The key shock to Indias growth has come from external sources, largelyby way of lower exports and a marked reduction in inflow of foreigncapital. While export growth entered into negative territory in thethird quarter of the financial year 2008-2009 against a growth rate ofaround 27% during the same period last year, foreign inflows are likelyto have contracted to USD 16 billion in 2008-09 from almost USD 100billion in 2007-08. This has dampened domestic investment momentumwhich was earlier a key growth driver of the Indian economy. Growth ingross capital formation in the last quarter of the financial year2008-2009 fell to 5.3% from 13.7% a year ago.

The industrial sector has been the largest casualty of the markedslowdown in both investment and imports, slowing from a growth rate of8.9% in the year ended March 31, 2008 to possibly 4-4.5% in the yearended March 31, 2009. Services, particularly financial services andtrade & transport - have also been impacted by the cyclical downturn inindustry and the external pressure from a tough global financialenvironment. We expect growth in services to slow down from 10.8% inthe fiscal year 2007-2008 to 9.4% in the financial year ended March 31,2009.

In response to the severe pressure on global liquidity in the aftermathof the collapse of Lehman Brothers in October, 2008, liquidity withinthe domestic Indian banking system also came under substantialpressure. As international credit lines froze, pressure on the domesticbanking system intensified. Since then, a series of moves by theReserve Bank of India to slash the Cash Reserve Ratio (CRR) and the keydomestic policy rates have improved the liquidity situation within thebanking system. The central bank cut the reverse repo and repo rate bya total of 250 bps and 400 bps respectively since September 2008, andaddressed liquidity pressures by cutting the CRR and the StatutoryLiquidity Ratio by a total of 400 bps and 100 bps respectively, leadingto a liquidity surplus in the Indian banking system since November2008.

Interest rates too have mirrored the broad-based uncertainty in theglobal economy and markets and have been very volatile since the globalcrisis intensified last year. The overnight inter- bank call money rateas well as deposit and lending rates spiked up sharply during theOctober 2008 liquidity shortage spell, impacting domestic growthprospects. Since January 2009, however, inter-bank rates have easedsubstantially with the overnight call money rate ruling around 3-4%,while longer- tenor yields have moved higher by an average of 160 basis

Page 223: company history of SBI, ICICI

points (bps) in response to concerns over a widening fiscal deficitspurred by an expansionary fiscal policy. Effective lending and depositrates have broadly tracked the down-trend in policy rates, albeit at amuch slower pace. While policy rates have declined by an average of250-400 bps, the lending rates of banks have broadly scaled lower by150-225 bps and deposit rates have come down by 100-150 bps.

Despite some easing of effective lending rates, credit growth hasmoderated over the year, spiking up to a high of 29% in theOctober-November, 2008 period but falling steadily thereafter to agrowth rate of 18.1% in March 2009. While the spike in credit growth inthe third quarter of 2008-09 was largely fuelled by demand from oilmarketing and fertilizer companies reeling under losses accumulated onthe back of firm commodity prices as well as some substitution offoreign sources of funding with domestic bank credit, the decline ineconomy-wide credit demand in the fourth quarter of 2008-09 was broadlyin sync with lower domestic growth. Retail consumer borrowing slippedlower as consumer demand slowed down; pushing growth in the retailloans lower to 14.8% in the financial year ended March 31, 2009 from18-20% a year ago. Additionally, banks have been more cautious inincremental retail lending in the face of rising delinquencies andhigher credit risk perception with the economic slowdown.

On the foreign trade side, merchandise exports plummeted over thecourse of the year driven primarily by sharp deterioration in globalgrowth. Manufacturing export orders, in particular, have felt the bruntof the slowdown in the global economy. In February 2009, domesticexports fell by 2.1.3% on the back of 15% contraction in January 2009and export growth is expected to slow down from 9% in 2008-2009 toaround 3% in 2009-2010.

Both oil and non-oil imports have declined in response to a reductionin commodity prices and deceleration in the domestic growth cycle.However, the full impact of this reduction in domestic oil imports islikely to be felt of the financial year 2009- 2010. Thus, the tradedeficit position should improve significantly going forward with slowerexport performance being more than offset by sharp reductions innon-oil and oil imports. We therefore expect a reduction in the tradebalance deficit from USD 119 billion in 2008-2009 to around USD 105billion in 2009-2010. Net invisibles(software exports and privatetransfers) are another category that could remain flat or decreasemarginally in response to slackness in global growth. However, a lowertrade balance should act as the main driver in reducing the currentaccount deficit from USD 30.9 billion in the financial year ended March31, 2009 to USD 14.5 billion for the same period next year.

The total balance of payments position in the fiscal year ended March31, 2009 was in deficit due to strong portfolio outflows and a sharpreduction in foreign currency inflows in categories such as net ForeignDirect Investment (FDI) and External Commercial Borrowing (ECB) flows.In fact, for the first time in 10 years, the capital account showed anegative balance of USD 3.7 billion. The capital account balance islikely to remain under pressure in the next financial year. However,the sharp deficit seen over the last fiscal year is unlikely to berepeated. Short- term trade credit flows could revive from the lowswitnessed in the October-December 2008 period and provide some cushion

Page 224: company history of SBI, ICICI

to the capital account. FDI flows could pick up towards the latter halfof the financial year ending March 31, 2010 as global investors lookfor high yielding destinations such as India. Thus, the capital accountposition is expected to improve next year resulting in a much morecomfortable position in the total balance of payments.

Indian equity markets have fallen significantly over the course of thelast financial year due to a sharp pull out by portfolio flows and riskaversion buying in the global markets. However, the domestic equitymarkets could improve towards the latter half of the next financialyear once global investors start pricing in a global recession asIndian economic fundamentals still remain strong and attractive inabsolute terms.

(Sources : Ministry of Finance, RBI, CSO)

Risks and Concerns

While adequate capital provisioning and stringent prudentialregulations have largely shielded the domestic banking system from theglobal crisis, some cyclical deterioration in asset quality remains aconcern for the banking system. Bank credit, particularly in the retailsegment, has been an important driver of the consumption boom in Indiaand has played a significant role in pushing up the trend of the growthrate of the Indian economy in the last few years. Recent stress testshave revealed that the banking system as a whole remains robust enoughto withstand a sharp increase in asset quality slippage. An increase indelinquencies and non-performing assets will nevertheless restrict theability of the banks to grow rapidly and both the economy and thebanking system will have to align themselves to a less buoyant growthoutlook in the year ahead.

An increase in Investments has been a crucial anchor of growth inrecent years; buoyant global growth conditions have aided freshinvestment initiatives in recent years. Foreign capital has had acrucial role to play in providing ready capital specificallystreamlined to cater to financing investment initiatives. A lack ofsuch funds is likely to constrain a sustained recovery in investmentand capital growth in the year ahead.

Another risk that is likely to impact domestic growth conditions is thepossible de-stabilizing impact of a sharp fall in exports on industry.Indias export to GDP ratio rose from 12.5% in 2000-01 to 22% in2007-08. As industry scales back growth expectations, runs downinventories and builds in a lower growth outlook, it is likely toundergo significant re-adjustments and pose as a significant area ofconcern for both the banking system and the economy at large.

At present, a recovery in consumption holds the key to a more stablegrowth outlook for the Indian economy. High inflation and a tightmonetary environment acted as primary dampeners for consumption in thefirst half of 2008-09, with growth in consumption declining much beforethe financial crisis acquired global proportion. Growth in privatefinal consumption expenditure fell to 5.3% in Q2FY09 as compared to7.6% a year ago. Recent monetary easing alongside a sharp fall in

Page 225: company history of SBI, ICICI

inflation is likely to provide some support to consumption in thefinancial year 2009-10. However, the possibility of contractingpersonal disposable incomes that may dilute the positives of lowerinterest rates and prices remains a concern in the year ahead.

Opportunities

The problems of the international financial system are likely topersist in 2009-10 and this will impinge on Indias ability to attractexternal capital. The implication is that the domestic recovery willhave to be funded largely by the domestic financial system,particularly banks. This substitution of global funding sources bydomestic sources is likely to create a number of opportunities fordomestic finance. The Indian corporate sector will, for a while tocome, depend more on domestic funding both for operating needs as wellas for capacity expansion.

Infrastructure spending, for one, will continue to be used as a keycountercyclical policy tool. This creates opportunities for bankseither directly in project finance or in providing short term funds forcompanies involved in these projects. Second, the rural sector hasfared better than the urban segment in the downturn - rural markets forgoods and services (including credit) appear to have been robust. Thisis partly due to the fact that a number of the countercyclical policyinitiatives have had a rural bias (rural roads and irrigation projectsfor some). Given the dependence of a large fraction of the populationon the rural economy and the fact that a number of product markets areunder-penetrated, it provides opportunities for sustained growth for anumber of sectors.

Although growth in retail credit has moderated in the last year, thelow penetration levels of retail credit (estimated at less than 12% ofGDP), the shift in demographics towards a higher proportion of youngerworking population, the changing attitudes towards borrowings, higherincome levels amongst the growing middle class, and the large pent-updemand for housing, cars etc., all augur well for the long-term,sustainable growth of retail lending in the Indian market.

Outlook

The Indian economy is likely to continue to see further pressure in theyear ahead. Growth is likely to slowdown further from 6.7% in the yearending March 31, 2009 to around 5.8% next year as industrial growthcontinues to decelerate. Investment momentum is likely to remainsubdued amidst flat local demand even as an accommodative monetarypolicy alongside receding inflationary risks, provide some support togrowth. Demand for credit is unlikely to recover till domestic growthconditions improve. However, India will remain one of the fastestgrowing economies in the world and if risk appetite and globalstability were to stage a come-back by the end of 2009-10, India willremain an attractive foreign investment destination.

Mission and Business Strategy

Our mission is to be "a World Class Indian Bank", benchmarking

Page 226: company history of SBI, ICICI

ourselves against international standards and best practices in termsof product offerings, technology, service levels, risk management andaudit & compliance. The objective is to continue building soundcustomer franchises across distinct businesses so as to be a preferredprovider of banking services for target retail and wholesale customersegments, and to achieve a healthy growth in profitability, consistentwith the Banks risk appetite. We are committed to do this whileensuring the highest levels of ethical standards, professionalintegrity, corporate governance and regulatory compliance.

Our business strategy emphasizes the following:

Increase our market share in Indias expanding banking and financialservices industry by following a disciplined growth strategy focusingon balancing quality and volume growth while delivering high qualitycustomer service;

Leverage our technology platform and open scaleable systems to delivermore products to more customers and to control operating costs;

- Maintain high standards for asset quality through disciplined creditrisk management;

Develop innovative products and services that attract our targetedcustomers and address inefficiencies in the Indian financial sector;

Continue to develop products and services that reduce our cost offunds; and

Focus on healthy earnings growth with low volatility.

Financial Performance

The merger of Centurion Bank of Punjab Limited (CBoP) with HDFC Bankwas effected during the year with April 1, 2008 as the appointed date.The financial results for the year ended March 2009 are therefore forthe merged entity, whilst the results for the year ended March 2008 areon a standalone basis for HDFC Bank and are therefore not comparable.

The financial performance during the fiscal year 2008-09 remainedhealthy with total net revenues (net interest income plus other income)increasing by 42.6% to Rs. 10,711.8 crores from Rs. 7,511.0 crores in2007-08. The revenue growth was driven both by an increase in netinterest income and other income. Net interest income grew by 42.0%primarily due to increase in the average balance sheet size by 46.5%(including the impact of the merger of CBOP) and a net interest marginof 4.2%.

Other income registered a growth of 44.1% over that in the previousyear to Rs. 3,290.6 crores in the current year, primarily due to feesand commissions, profit/loss on revaluation and sale of investments andincome from foreign exchange and derivatives. In 2008-09, commissionincome increased by 43.3% to Rs. 2,457.3 crores with the main driversbeing commission from distribution of third party insurance and mutual

Page 227: company history of SBI, ICICI

funds, fees on debit/credit cards, transactional charges and fees ondeposit accounts, processing fees of retail assets and cards, and feesfrom cash management and trade products. With bond yields having fallenover 100 bps to 150 bps across tenors, the Bank made a profit on sale /revaluation of investments of Rs. 382.6 crores during the year. Foreignexchange and derivatives revenues grew from Rs. 319.8 crores to Rs.440.5 crores of which, over 80% came from customer foreign exchangetransactions. The Bank incurred a loss of Rs. 158.2 crores on accountof derivative transactions during the year ended March 31, 2009. Thesaid loss is primarily attributable to the unwinding of certain tradingpositions and due to contrary positions taken against bond tradingpositions as a part of risk strategy.

Operating (non-interest) expenses increased from Rs. 3,745.6 crores in2007-08 to Rs. 5,532.8 crores in 2008-09, due to the organic expansionin the Branch network and the amalgamation of Centurion Bank of Punjab(which had a significantly higher cost-income ratio than HDFC Bank)with your Bank. The Bank now has a significantly larger network andreach across the country as compared to that at the end of the previousfinancial year. This has resulted in higher infrastructure and staffingexpenses. Operating cost to net revenues increased to 51.7%, from 49.9%in the corresponding year. Staff expenses accounted for 40.5% ofnon-interest expenses in 2008-09, due to an increase in staff strengthand increase in average salary levels. Loan loss provisions andprovision for standard assets increased from Rs. 1,216.0 crores to Rs.1,726.3 crores in 2008-09 in line with the increase in non- performingassets and the Banks policy of providing aggressively in excess of theregulatory requirements. The Bank also provided Rs. 152.8 crores ascontingent provisions for tax, legal and other contingencies.

Net profit increased by 41.2% from Rs. 1,590.2 crores in 2007-08 to Rs.2,245.0 crores in 2008-09. Return on average net worth was constant at16.1% even on an enhanced equity base (due to merger with CBoP). TheBanks basic earning per share increased from Rs. 46.2 to Rs. 52.9 perequity share.

During 2008-09, the Banks total balance sheet increased by 37.6% overthat on March 31, 2008 to Rs. 183,270.8 crores. Total Depositsincreased from Rs. 100,768.6 crores (as of March 31, 2008) to Rs.142,811.6 crores (as of March 31, 2009). With Savings account depositsat Rs. 34,914.7 crores and current account deposits at Rs. 28,444.9crores, demand (CASA) deposits were around 44.4% of total deposits asof March 31, 2009. During 2008-09, gross advances grew by 48.3% to Rs.100,239.3 crores. This was driven by a growth of 38.3% in wholesaleadvances to Rs. 39,085.8 crores, and an increase of 55.5% in retailadvances to Rs. 61,153.5 crores.

Business Segments Update

Consistent with its performance in the past, this year too the bank hasachieved healthy growth across various operating and financialparameters. The performance reflects the strength and diversity of thebanks three primary business franchises - retail banking, wholesalebanking and treasury, and of its disciplined approach to risk - rewardmanagement.

Page 228: company history of SBI, ICICI

Retail Banking

The growth in your Banks retail banking business was robust during thecurrent financial year. The Banks retail deposits grew by over 63.7%to Rs. 99,276.5 crores at the end of the financial year ended March 31,2009, while its retail assets grew by 55.5% to Rs. 61,153.5 croresduring the same period.

The Bank caters to various customer segments with a wide range ofproducts and services, HDFC Bank is a one stop shop financial servicesprovider of deposit products of virtually all types, of retail loans(auto loans, personal loans, commercial vehicle loans, etc.), creditcards, debit cards, depository (custody services), investment advisory,bill payments and several transactional services. Apart from its ownproducts, the Bank sells third party financial products like mutualfunds and insurance.

Branch Banking

This year the Bank significantly expanded its distribution network -from 761 branches in 327 cities in March 2008 to 1,412 branches in 528Indian cities in March 2009. The Banks ATMs increased from 1,977 to3,295 during the same period. The expansion of the network was due toa combination of organic growth and the amalgamation of Centurion Bankof Punjab. Today your Banks branch network is deeply entrenched acrossthe country with significant density in areas conducive to the growthof its businesses. The Banks focus on semi-urban and under-bankedmarkets continued, with 64% of the Banks branches now outside the topnine Indian cities. The Banks customer base grew in line with thegrowth in its network and currently stands at over 18 millioncustomers. The number of savings accounts grew almost 70% toapproximately 10 million and savings balances which is a good indicatorof the Banks retail liability franchise grew 33.5% to Rs. 34,914.7crores at the end of the current financial year.

The Bank continues to provide unique products and services withcustomer centricity a key objective/The Banks Imperia premium,preferred and classic banking services seeks to address the diverseneeds of different customer segments in the personal banking space,with specifically trained personnel and customized products.

In order to provide its customers increased choices, flexibility andconvenience the Bank continued to make significant headway in its multichannel servicing strategy. The Bank offered its customers the use ofATMs, internet banking, phone banking and mobile banking in addition toits expanded branch network to serve their banking needs.

The Bank increased its debit card base by 57.8% this year whichtranslated to increased usage at its ATMs, providing greaterconvenience to customers while easing the load at the Banks branchesand reducing servicing costs. The Bank also made strong inroads in itsinternet banking with around 20% of its registered customers now usingnet banking facilities for their banking requirements. Your bank nowoffers phone banking in over 500 locations in addition to giving its

Page 229: company history of SBI, ICICI

customers the ease of accessing their bank accounts over their mobilephones. The success of the Banks multi-channel strategy is evidencedin the fact that almost 80% of customer initiated transactions areserviced through the non-branch channels.

Retail Assets

Your Bank continued to grow at a healthy pace in almost all the retailloan products in which it operates and remains amongst the top lendersin retail assets products in India. The Bank grew its retail assetportfolio in a well balanced manner by focusing on both returns as wellas risk. The Banks auto finance business remained a key businessdriver for its retail asset portfolio. Additionally other key retailloan products exhibited robust growth rates and asset quality.

The Bank continued its focus on internal customers for its credit cardsportfolio. Although there was an increase in delinquencies for certainsegments, credit card losses were lower than industry figures. Overallcredit cards remained a profitable business for your Bank with over 4.3million cards in force as at March 2009.

The Bank also has a significant presence in the "merchant acquiring"business with the total number of point-of-sale (POS) terminalsinstalled at over 70,000.

In addition to the above products the Bank originates home loans underits arrangement with HDFC Limited, the Bank originated approximately anaverage Rs. 3,500 crores of these products every month in the financialyear ended March 31, 2009. During the year the bank also purchased fromHDFC Ltd. under the "loan assignment" route approximately Rs. 4,000crores of AAA credit enhanced home loans which qualified as prioritysector advances. Of these, approximately Rs. 2,000 crores wereoriginated by the Bank.

The Bank also distributes life and general insurance products throughits tie-ups with insurance companies and mutual fund houses in thecountry. The success in the distribution of the above products has beendemonstrated with the growth in the Banks fee income.

The Banks data warehouse, Customer Relationship Management (CRM) andanalytics solutions have helped it target existing and potentialcustomers more effectively and cost effectively and offer them productsappropriate to their profile and needs. Reduced costs of acquisitionapart, this has also led to deepening of customer relationships andgreater efficiency in fraud control and collections resulting in lowercredit losses.

Wholesale Banking

The wholesale banking business registered a healthy growth in 2008-09.In this business, the Bank provides its corporate and institutionalclients a wide range of commercial and transactional banking products,backed by high quality service and relationship management. The Bankscommercial banking business covers not only the top end of thecorporate sector but also the emerging corporate segments and some

Page 230: company history of SBI, ICICI

small and medium enterprises (SMEs). The Bank has a number of businessgroups catering to various segments of its wholesale banking customerswith a wide range of banking services covering their working capitaland term finance, trade services, cash management, foreign exchange andelectronic banking requirements.

During financial year 2008-09, growth in the wholesale banking businesscontinued to be driven by new customer acquisition and highercross-sell with a focus on optimizing yields and increasing productpenetration. Your Banks cash management and vendor & distributor(supply chain) finance products continued to be an importantcontributor to growth in the corporate banking business. Your Bankfurther consolidated its position as a leading player in the cashmanagement business (covering all outstation collection, disbursementand electronic fund transfer products across the Banks variouscustomer segments) with volumes growing to over Rs. 22 trillion. YourBank also strengthened its market leadership in cash settlementservices for major stock exchanges and commodity exchanges in thecountry. The Bank met the overall priority sector lending requirementof 40% of net bank credit.

The Banks financial institutions and government business group (FIG)offers commercial and transaction banking products to financialinstitutions, public sector undertakings, central and state governmentdepartments. The main focus for this segment remained offering variousdeposit and transaction banking products to this segment besidesdeepening these relationships by offering funded, non-funded treasuryand foreign exchange products.

International Operations

In October 2008, your bank opened its first overseas commercial branchin Bahrain. The branch offers the banks suite of banking servicesincluding treasury and trade finance products for corporate clients andwealth management products for Non-resident Indians. The Bahrain branchwill serve as your banks gateway into the middle-east tapping thegrowth potential in this region.

Treasury

The treasury group is responsible for compliance with reserverequirements and management of liquidity and interest rate risk on theBanks balance sheet. On the foreign exchange and derivatives front,revenues are driven primarily by spreads on customer transactions basedon trade flows and customers hedging needs. During 2008-09, revenuesfrom foreign exchange and derivative transactions grew by 37.7% to Rs.440.5 crores where the revenues were distributed across largecorporate, emerging corporate, business banking and retail customersegments for plain vanilla forex products and across primarily largecorporate and emerging corporate segments for derivatives. The Bankoffers Indian rupee and foreign exchange derivative products to itscustomers, who use them to hedge their market risks. The Bank entersinto forex and derivative deals with counterparties after it has set upappropriate counterparty credit limits based on its evaluation of theability of the counterparty to meet its obligations in the event of

Page 231: company history of SBI, ICICI

crystallization of the exposure. Appropriate credit covenants arestipulated where required as trigger events to call for collaterals orterminate a transaction and contain the risk. Where the Bank entersinto foreign currency derivative contracts with its customers it laysthem off in the inter-bank market on a matched basis. For such foreigncurrency derivatives, the Bank does not have any open positions orassume any market risks but carries only the counterparty credit risk(where the customer has crystallized or mark-to- market losses). TheBank also deals in Indian rupee derivatives on its own accountincluding for the purpose of its own balance sheet risk management. TheBank recognizes changes in the market value of all rupee derivativeinstruments (other than those designated as hedges) in the profit andloss account in the period of change. Rupee derivative contractsclassified as hedge are recorded on an accrual basis.

Given the regulatory requirement of holding government securities tomeet the statutory liquidity ratio (SLR) requirement, your Bank has tonecessarily maintain a portfolio of government securities. While asignificant portion of these SLR securities are held in the"Held-to-Maturity (HTM) category, some of these are held in the"Available for Sale" (AFS) category. In the current year the Bankrealized gains on its bond portfolio in a declining interest rateenvironment.

Service Quality Initiatives

Your Bank continued to improve customer service in various spheres ofits business through Service Quality Initiatives and Quality Projectsusing Lean Sigma Tool-kit, 5S and other business excellenceinitiatives. Over 1,500 projects were executed during the year thatresulted in a significant reduction of turn around times for variousprocesses, process efficiency improvements, cost reduction, enhancedproductivity and ultimately improved customer service.

Your Bank has integrated the Customer complaints management processeswith the existing service quality initiatives to achieve greatersynergies towards driving service excellence. Service qualityinitiatives include the audit of services and improvement on the areasidentified on the basis of customer feedback on experiences at varioustouch-points. Your Bank also integrated service quality objectives withthe Business Objectives of the Bank to bring a coordinated approachtowards improving business by delighting customers. New elements wereadded and renewed improvement schemes were installed using technologyto ensure customer convenience, security of transactions and reducetransaction cost. The service quality improvement drive was implementedfor business units of the bank as well as key support departments.

The Bank plans to use this platform to drive systemic changes andprocess re-engineering using technology and Service Quality Initiativesto further enhance customer experience and business value.

Risk Management & Portfolio Quality

The Bank in the course of its business is exposed to various risks, ofwhich the most important are credit risk, market risk (including

Page 232: company history of SBI, ICICI

liquidity risk and price risk) and operational risk. Theidentification, measurement, monitoring and control of risks remain keyaspects of the Banks risk management system. Sound risk managementsupported by a balanced risk-reward trade-off is critical to achievingthe Banks business strategy for business and revenue growth. Specificto credit risk, the Bank has distinct policies and processes in placefor the retail and wholesale businesses. The credit cycle in the retailassets business is managed through appropriate front-end credit,operational and collection processes. There are programs for eachproduct, which define the target customer segments, underwritingstandards, security structure etc., to ensure consistency of creditorigination patterns. Given its granularity, the retail creditportfolio is managed largely on a portfolio basis, across variousproducts and customer segments. During the year the Bank obtained anISO 9001:2008 certification for its retail asset underwriting. Creditrisk in the wholesale business is managed through target marketdefinition, comprehensive credit assessment, appropriate approvalprocess, ongoing post-disbursement monitoring and remedial managementprocedures. The risk in the portfolio is managed and mitigated byperiodic reviews and diversification across individual borrowers,related borrowers, industries, sectors etc.

As of March 31, 2009, the Banks ratio of gross Non-Performing Assets(NPAs) to total customer assets was 1.98%. The Banks ratio of grossNPAs was 1.3% on March 31, 2008, which moved to 1.7% immediately afterthe merger of CBOP. Of the total gross NPAs on March 31, 2009 around42% were on account of the merger. Net non-performing assets (grossnon-performing assets less specific loan loss provisions, interest insuspense and ECGC claims received) were 0.6% of customer assets as ofMarch 31, 2009. The specific loan loss provisions that the Bank hasmade for its non- performing assets continue to be more conservativethan the regulatory requirement.

In accordance with the guidelines issued by Reserve Bank of India onthe New Capital Adequacy Framework (Basel II), the Bank has migrated tothe Standardised Approach for Credit Risk and the Basic IndicatorApproach for Operational Risk effective March 31, 2009. The Bank,simultaneously, progresses on its initiatives towards meeting thestandards set out for the more advanced capital approaches under BaselII. These initiatives cover enhancement of the Banks risk managementarchitecture, capabilities, processes, systems and technology in areassuch as ratings systems, borrower segmentation, exposure aggregation,risk mapping, risk estimation and capital computation.

INTERNAL AUDIT & COMPLIANCE

The Bank has Internal Audit & Compliance functions which areresponsible for independently evaluating the adequacy of all internalcontrols and ensuring operating and business units adhere to internalprocesses and procedures as well as to regulatory and legalrequirements. The audit function also pro- actively recommendsimprovements in operational processes and service quality. To ensureindependence, the Audit department has a reporting line to the Chairmanof the Board of Directors and the Audit & Compliance Committee of theBoard and only indirectly to the Managing Director. To mitigateoperational risks, the Bank has put in place extensive internal

Page 233: company history of SBI, ICICI

controls including restricted access to the Banks computer systems,appropriate segregation of front and back office operations and strongaudit trails. The Audit & Compliance Committee of the Board alsoreviews the performance of the Audit & Compliance functions and reviewsthe effectiveness of controls and compliance with regulatoryguidelines.

CORPORATE SOCIAL RESPONSIBILITY

Corporate Social Responsibility

As its operations have grown your bank has retained its focus onvarious areas of corporate sustainability that impact the socioeconomic ecosystem that we are part of. HDFC Banks focus in the areaof corporate sustainability includes social sustainability & socialwelfare and financial inclusion.

Social Sustainability & Social Welfare

Your Bank is committed to making a positive impact across the localcommunities it is present in and the society at large. The bank hasinitiated a number of programs to encourage economic, social andeducational development within the communities that it operates; whileat the same time contributing to several grass root level developmentprograms across these geographies.

The foundation of social sustainability is based on creating employmentopportunities. Your bank directly employs 52,687 people across thenation while at the same time generating opportunities for thousands ofothers through its vast network of agents, suppliers and contractors.

Your Bank believes that the benefits of economic growth shouldpercolate to all sections of society and the best means to action thisis to use education and skills training as the means of intervention toimpact its objectives for the overall development of society. In theyear 2008-2009 towards its aim of quality education the Bank hassupported a variety of educational programs ranging from educationalsponsorships for girls, adoption of state-run schools, running ofacademic support classes and reading classes. Apart from theseinitiatives the Bank also provide skills training to school dropouts,youth, women and other disadvantaged groups.

The Banks social development programs have so far touched the lives ofaround 17,000 children and 3,000 youth. The Bank has also initiated aSocial and Financial literacy Program for school children to educatethem on the importance of savings, to enable them differentiate betweenhealthy and unhealthy spending, cultivate financial best practices andto take financial decisions based on real needs.

Financial Inclusion

Microfinance has, in recent times come to be recognized as one of thekey developmental tools that can be harnessed for alleviating povertythrough social and economic empowerment of the poor. Your bank was one

Page 234: company history of SBI, ICICI

of the early movers to enter into the microfinance sector five yearsago. Considering the huge impact on the livelihoods and empowerment ofthe rural poor, the bank has adopted different business models in orderto reach segments of the rural poor. The Banks microfinance programprovides access to financial services such as credit, savings,insurance, money transfers etc. to the poor in a sustainaible andcommercially viable manner. bulk lending to Microfinance Institutions

The Bank has successfully implemented the bulk bank linkage model.Under this program which has been growing rapidly the bank extends bulkloans to micro finance institutions for onward lending to womenenabling them to undertake income generation activities. The bank inpartnership with 104 Microfinance institutions and 203 NGOs hasextended credit facilities exceeding Rs. 700 crores in 17 states andhas financially included over 2 million rural households creatinginroads to alleviate poverty that is prevalent in certain sections ofthe country.

Lending to Self Help Groups

As part of its commitment towards social banking and facilitatingcommunity development, the Bank has played an active role in providingfinancial services through Self Help Groups (SHGs) under the businesscorrespondent model and considers it as a potential initiative fordelivering financial services to the rural poor in a sustainablemanner. Under the SHG bank linkage programme, the bank has financedaround 43,000 SHGs with an amount of over Rs. 200 crores and hasbrought in approximately 6 lakh households under financial inclusionthrough business correspondent partners. These SHGs are provided withNo Frill Savings Account, Closed User Group ATM cards and Point of Saleterminals for delivering financial services using low cost technologyat their doorsteps. The bank has also facilitated a platform throughonline market linkage facility for SHGs undertaking microentrepreneurial activity.

With the view to imparting financial literacy, bank has publishedfinancial literacy booklet in regional language and has devised a shortfilm for financial counselling.

Health and Hygiene

Under its health care project, the bank has provided financialassistance to a number of villages for the construction of basicsanitation facilities. The society formed through this initiativemotivated and educated people on the importance of basic sanitation.Villagers were convinced to come together to form federations andmanage the funds and their deployment. These village level committeesundertook the sanitation project with the support of the Bank.

Water security and the provision of safe drinking water is afundamental requirement for sustainable development. The Bank providesfinancial support to village level SHG federations comprising 800families in Sivanarpuram and Keerapalayam part of the Cuddaloredistrict that lack potable water due to iron chlorosis, turbity,microbial contamination etc. This federation along with its technology

Page 235: company history of SBI, ICICI

partner plans to set up a safe drinking water plant. This grass rootsapproach of introducing applicable technology achieves the twinobjectives of providing drinking water a basic right, and also servesas an income generation program.

The employees of your Bank form the core of all its CSR programs andcontinue to contribute actively, through corporate volunteering. Underthe banks payroll contribution program amounts donated by theemployees are matched by the bank. In response to the Bihar floods theemployees of the bank donated a days basic salary to the primeministers relief fund.

Your Bank continues to focus in designing financially sustainablemodels that encourage community participation, ownership and wideoutreach. The Bank has opened 12 specialised microfinance branches inthe states of Tamilnadu, Andhra Pradesh and Orissa to cater to theneeds of the above initiatives.

HUMAN RESOURCES

The total number of employees of your bank increased from 37,836 as onMarch 31, 2008 to 52,687 as of March 31, 2009. The growth in theemployee base was in line with the growth in the banks businesses anddistribution both inorganically as well as organically. The Bankcontinues to focus on training its employees on a continuing basis,both on the job and through training programs conducted by internal andexternal faculty. The Bank has consistently believed that broaderemployee ownership of its shares has a positive impact on itsperformance and employee motivation.

HDFC Bank lists people as one of its stated values. The Bank believesin empowering its employees and constantly takes various measures toachieve this.

STATUTORY DISCLOSURES

The information required under Section 217(2A) of the Companies Act,1956 and the rules made thereunder, are given in the annexure appendedhereto and forms part of this report. In terms of section 219(1)(iv) ofthe Act, the Report and Accounts are being sent to the shareholdersexcluding the aforesaid annexure. Any shareholder interested Inobtaining a copy of the said annexure may write to the CompanySecretary at the Registered Office of the Bank. The Bank had 52,687employees as on March 31, 2009. 515 employed throughout the year werein receipt of remuneration of more than Rs. 24.0 lakhs per annum and 54employees employed for part of the year were in receipt of remunerationof more than Rs. 2.0 lakhs per month.

The provisions of Section 217(1)(e) of the Act relating to conservationof energy and technology absorption do not apply to your Bank. The Bankhas, however, used information technology extensively in itsoperations.

The report on the Corporate Governance is annexed herewith and formspart of this report.

Page 236: company history of SBI, ICICI

RESPONSIBILITY STATEMENT

The Board of Directors hereby state that

i) in the preparation of the annual accounts, the applicable accountingstandards have been followed along with proper explanation relating tomaterial departures;

ii) we have selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable andprudent so as to give a true and fair view of the state of affairs ofthe Bank as on March 31, 2009 and of the profit of the Bank for theyear ended on that date;

iii) we have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of theCompanies Act, 1956 for safeguarding the assets of the Bank and forpreventing and detecting frauds and other irregularities;

iv) we have prepared the annual accounts on a going concern basis.

DIRECTORS

Mr. Vineet Jain resigned as a Director of the Bank with effect fromDecember 27, 2008. Your Directors wish to place on record their sincereappreciation of the contribution made by Mr. Jain during his tenure asa Director.

Mr. Arvind Pande and Mr. Ashim Samanta retire by rotation at theensuing Annual General Meeting and being eligible offer themselves forre-appointment.

The brief resume/details relating to the Directors who are to bere-appointed are furnished in the report on Corporate Governance.

AUDITORS

The Auditors M/s. Haribhakti & Co., Chartered Accountants will retireat the conclusion of the forthcoming Annual General Meeting and areeligible for re-appointment. Members are requested to consider theirre-appointment on remuneration to be decided by the Audit andCompliance Committee of the Board. The re-appointment of Auditors issubject to the approval of the Reserve Bank of India.

ACKNOWLEDGEMENT

Your Directors would like to place on record their gratitude for allthe guidance and co-operation received from the Reserve Bank of Indiaand other Government and Regulatory Agencies. Your Directors would alsolike to take this opportunity to express their appreciation for thehard work and dedicated efforts put in by the Banks employees and lookforward to their continued contribution in building a World ClassIndian Bank.

Page 237: company history of SBI, ICICI

On behalf of the Board of Directors

Jagdish CapoorMumbai, April 23, 2009 Chairman

Director ReportMar2007   Mar 2008 Mar2009

The Directors have great pleasure in presenting the of your Bank together with the audited accounts for the Fourteenth Annual Report on the business and operations year ended March 31, 2008.Financial Performance

(Rs. in crores) For the year ended

March 31, 2008 March 31, 2007

Deposits and Other Borrowings 105,247.5 71,113.3Advances 63,426.9 46,944.8Total Income 12,398.2 8,164.2*Profit before Depreciation and Tax 2,552.4 1,858.4Net Profit 1,590.2 1,141.5Profit brought forward 1,932.0 1,455.0Total Profit available for Appropriation 3,522.2 2,596.5

Appropriations

Transfer to Statutory Reserve 397.5 285.4Transfer to General Reserve 159.0 114.1Transfer to Investment Reserve Account (net) 38.5 3.0Proposed Dividend 301.3 223.6Tax including Surcharge and Education Cess on Dividend . 51.2 38.0Dividend paid for Prior Years 0.1 0.4Balance carried over to Balance Sheet 2,574.6 1,932.0

* Change pursuant to reclassification

The Bank posted total income and net profit of Rs. 12,398.2 crores andRs. 1,590.2 crores respectively for the financial year 2007-08 asagainst Rs. 8,164.2 crores and Rs. 1,141.5 crores respectively in theprevious year. Appropriations from the net profit have been effected asper the table given above.

Dividend

Page 238: company history of SBI, ICICI

Your Bank has had a consistent dividend policy of balancing the twinobjectives of appropriately rewarding shareholders and retainingcapital to maintain a healthy capital adequacy ratio to support futuregrowth. It has had a consistent track record of moderate but steadyincreases in dividend declarations over the last so many years with thedividend payout ratio ranging between 20% and 25%. In line with this,and in recognition of the robust performance during 2007-08, yourdirectors are pleased to recommend a dividend of 85% for the year endedMarch 31, 2008, as against 70% for the year ended March 31, 2007. Thisdividend shall be subject to tax on dividend to be paid by the Bank.

Awards

As in the past years, awards and recognition have been conferred onyour Bank by leading domestic and international organizations duringthe fiscal 2007-08. Some of them are:

- For the fifth consecutive year, your Bank has bagged the BusinessTodays Best Bank Award.

- Outlook Money and NDTV Profits Best Bank in the private sectorcategory.

- Bombay Stock Exchange and Nasscom Foundations Business for SocialResponsibility Award.

- Dun & Bradstreet - American Express Corporate Best Bank Award2007. There were 26 categories in all, including FMCG, Telecom andSoftware & IT.

- The Financial Express-Ernst & Young Best Bank award in the PrivateSector category - Your bank shared the top slot with another bank

- The Asia Pacific HRM Congress in Mumbai - Your Bank bagged as many asten awards including "Organisation with innovative HR Practices".

- Business Today Survey conducted by the Monitor Group Innovation Study- Your Bank is one of Indias most innovative 28 companies across tenmajor business sectors

The Asian Banker Excellence in Retail Financial Service Awards-TheBest Retail Bank in India

Ratings

The Bank has its deposit programs rated by two rating agencies - CreditAnalysis & Research Limited (CARE) and Fitch Ratings India PrivateLimited. The Banks Fixed Deposit programme has been rated CARE AAA(FD) [Triple A] by CARE, which represents instruments considered to be"of the best quality, carrying negligible investment risk". CARE hasalso rated the banks Certificate of Deposit (CD) programme "PR 1+"which represents "superior capacity for repayment of short termpromissory obligations". Fitch Ratings India Pvt. Ltd. (100% subsidiaryof Fitch Inc.) has assigned the "tAAA (ind)" rating to the Banks

Page 239: company history of SBI, ICICI

deposit programme, with the outlook on the rating as "stable". Thisrating indicates "highest credit quality" where "protection factors arevery high".

The Bank also has its long term unsecured, subordinated (Tier II) Bondsrated by CARE and Fitch Ratings India Private Limited and its Tier Iperpetual Bonds and Upper Tier II Bonds rated by CARE and CRISIL Ltd.CARE has assigned the rating of "CARE AAA" for the subordinated Tier IIBonds while Fitch Ratings India Pvt. Ltd. has assigned the rating"AAA(ind)" with the outlook on the rating as "stable". CARE has alsoassigned "CARE AAA [Triple A] for the Banks Perpetual bond and UpperTier II bond issues. CRISIL has assigned the rating "AAA/Stable" forthe Banks perpetual Debt programme and Upper Tier II Bond issue. Ineach of the cases referred to above, the ratings awarded were thehighest assigned by the rating agency for those instruments.

Additional Capital

In June 2007, the Bank allotted 1,35,82,000 equity shares of Rs. 10/-each at a premium of Rs. 1,013.49 per share on a preferential basis toHousing Development Finance Corporation Ltd. (HDFC) aggregating to Rs.1,390 crores. In July 2007, the Bank made a public offering of6,594,504 American Depositary Shares (ADS), each ADS representing threeequity shares, at a price of $ 92.10 per ADS aggregating to of Rs.2,394 crores (net of underwriting discounts and commissions).

During the year under review, 16.78 lacs shares were allotted to theemployees of your Bank pursuant to the exercise of options under theEmployee Stock Option Scheme of the Bank.

Employee Stock Options

The information pertaining to Employee Stock Options is given in anannexure to this report.

Capital Adequacy Ratio

Your Banks total Capital Adequacy Ratio (CAR) stood at a healthy13.6%, well above the regulatory minimum of 9.0%. Of this, Tier I CARwas 10.3%.

Amalgamation of Centurion Bank of Punjab Limited with the Bank On March27, 2008, the shareholders of the Bank accorded their consent to ascheme of amalgamation of Centurion Bank of Punjab Limited with HDFCBank Limited. The shareholders of the Bank approved the issuance of oneequity share of Rs. 10/- each of HDFC Bank Limited for every twentynine equity shares of Re. 1/- each held in Centurion Bank of PunjabLimited. This is subject to receipt of approvals from the Reserve Bankof India, stock exchanges and other requisite statutory and regulatoryauthorities. The shareholders also accorded their consent to issueequity shares and/ or warrants convertible into equity shares at therate of Rs. 1,530.13 each to HDFC and/or other promoter group companieson preferential basis, subject to final regulatory approvals in thisregard. The Shareholders of the Bank have also approved an increase inthe authorized capital from Rs. 450 crores to Rs. 550 crores.

Page 240: company history of SBI, ICICI

SUBSIDIARY COMPANIES

In terms of the approval granted by the Government of India, theprovisions contained under Section 212(1) of the Companies Act, 1956shall not apply in respect of the Banks subsidiaries namely, HDFCSecurities Limited (HSL) and HDB Financial Services Limited (HDBFSL).Accordingly, a copy of the balance sheet, profit and loss account,report of the Board of Directors and Report of the Auditors of HSL andHDBFSL have not been attached to the accounts of the Bank for the yearended March 31, 2008.

Investors who wish to have a copy of the annual accounts and detailedinformation on HSL and HDBFSL may write to the Bank for the same.Further, the said documents shall also be available for inspection bythe investors at the registered offices of the Bank, HSL and HDBFSL.

MANAGEMENTS DISCUSSIONS AND ANALYSIS

Macro-economic and Industry Developments

In the 25 years till 2007, the countrys real GDP grew on an average at6.2% per annum. In the last four years, however, GDP growth has beenfaster at 8.8% per annum. The real GDP growth for 2007-08 is expectedto have been between 8.7-8.9%. Investment expenditure, so crucial toeconomic growth, increased from 22.8% of GDP in FY02 to 35.9% in FY07.The domestic savings rate increased from 23.5% in FY02 to 34.8% inFY07.

The services sector with a share of nearly 60% in Indias GDP andaccounting for almost three-fourth in its overall growth, continues tobe the key driver. The manufacturing sector has shown good growth tooon the back of domestic and exportled demand. The countrysmerchandise exports have grown by a healthy 21.6% in the April07-January 08 period as compared to 23.7% in the corresponding periodof previous year.

For most part of the year, liquidity in the banking system was volatilebut largely in surplus due to strong capital flows and softening creditdemand. The Reserve Bank of India (RBI) followed a tight monetarypolicy to check inflationary pressures arising to a large extent, outof hardening global energy and commodity prices. The RBI increasedreserve requirements to suck out excess liquidity from the bankingsystem directly and raised the Cash Reserve Ratio (CRR) by 150 basispoints during the financial year ended March 31 2008.

Deposit rates remained flat (7.50% to 9.00% p.a.) for most of the firsthalf of the year, but rose by about 0.5% p.a. across tenors inSeptember 2007, primarily due to the onset of the busy credit seasonand tightening of monetary policy. Longer tenor yields, however fell byroughly 0.5% on the back of falling credit demand. The short tenordeposit rates, however, moved up by 0.25% in December 2007 but did notsee the sharp spike that had been experienced in the March 2007quarter.

Page 241: company history of SBI, ICICI

The yield on the one-year government security (G-sec), which largelyreflects the liquidity in the economy, fell by 15 basis points to 7.52%in first half of the financial year. The 10-year G-sec yield droppedby about 40 basis points to 7.6% during the same period. However, highinflation numbers in March 2008, and market apprehensions of large debtissuance by the government pushed the yields up in the second fortnightof March 2008.

Some signs of moderation in growth became apparent in 2007-08. Retailconsumer borrowing and spending slowed down in the second half of2006-07 in the wake of the monetary tightening. This has impactedsectors like automobiles and consumer durables where consumer credithas played a key role in driving demand. Rise in interest rates hasalso taken its toll on demand for housing and the growth of the realestate sector. Non-food credit clocked a 22% growth in the lastfortnight of February 2008 as against 28.9% in the last week of March2007. However, downward revisions (of 50 basis points on an average) inlending rates in the March 2008 by a number of banks could reverse thistrend at least partially.

On the foreign trade side, though overall exports showed an acceleratedgrowth during the last year, a number of sectors such as textiles,handicrafts, and leather products saw growth moderating. The rupeeappreciated sharply over the last year (by as much as 11%), which waslargely responsible for the deceleration in exports. The prospect of aslowdown in the global economy has increased the risk of a prolongedslowdown in exports.

Imports however remained robust in 2007-08, growing almost 30% in thefirst three quarters of the year (as against 22% for the correspondingperiod last year) on the back of higher global prices of oil andfood.This widened the trade deficit to USD 67 billion in April-JanuaryFY08 from USD 45 billion in the corresponding period of previous year.Despite the increase in the trade deficit, overall, balance of paymentswas comfortable due to large capital inflows (comprising mainly foreigndirect investment, portfolio inflows and external borrowings). Foreignexchange reserves grew by $107 billion during the year.

Indian equity markets gained sharply in the first nine-months of2007-08. However, as the global financial crisis deepened, benchmarkindices fell sharply in the last quarter. Markets are likely to trackthe global financial markets and remain volatile in 2008-09 althoughthe Indian economic fundamentals still remain strong and attractive inabsolute terms. Diminished risk appetite among investors couldadversely impact capital inflows into emerging markets like India.

(Sources: Ministry of Finance, RBI, CSO)

Industry structure and development

Indian banks faced a new set of challenges brought about by changes inboth the international and domestic environment. International creditmarkets tightened considerably on the back of rising defaults andforeclosures in the US mortgage market and the resultant risk aversion.

Page 242: company history of SBI, ICICI

Its impact was first felt in the mortgage-linked securities and theinter-bank money markets. A number of large US and European banksreported large loan losses and write- downs. The contagion effectssubsequently spread to other asset classes including emerging marketsbonds and equities. The expectation is that the turmoil in thefinancial sector will spill over to the real estate sector. Growth inthe G-7 economies, particularly the US is expected to be lower in 2008and this is likely to impinge on growth in other economies, includingIndia.

The Indian economy appeared to have entered a phase of moderation in2007-08.The Central Statistical Organisation (CSO) has estimated adecline in the growth rate of Indias Gross Domestic Product (GDP) to8.7% in 2007-08 from 9.6% in 2006-07. The growth in credit off-takefrom scheduled commercial banks (measured year on year) has fallen to21.9% in the last fortnight of February 2008 from 28.2% in the firsthalf of April 2007.

Risks and concerns

While Indian banks have limited direct exposure to the internationalmarkets for mortgage linked securities, they are unlikely to becompletely insulated from the turmoil in the global financial markets.Reduced availability of global finance through external commercialborrowings on the back of rising risk aversion in the global marketscould affect domestic growth, particularly investments in capacityexpansion.This in turn could have some impact on demand for domesticcredit.

Lower capital inflows could also impact domestic liquidity, which haslargely been a function of external capital inflows for most of 2007-08with the ratio of net foreign exchange assets to reserve moneyconsistently exceeding 100%.

The initial moderation in bank credit growth rates in 2007- 08 seems tohave been largely confined to the retail segment (housing, consumerdurables and auto loans). It is possible that the moderation in growthin 2008-09 could be more broad-based, affecting both retail and certainwholesale segments, due to trends in consumption and capital formation.This has obvious implications for the credit portfolio of the bankingsystem. A low 2.1 % growth in the capital goods component of theindex of industrial production (IIP) for January 2008 seems to indicatea further decline in investment demand going forward which could affectoverall credit growth for the banking system, particularly in termloans and project finance.

Rising global commodity prices created inflationary pressures for mostof 2007-08. A benign base-effect and the suppression in the petroleumproduct prices kept headline wholesale price inflation in a comfortzone for the first three quarters of the year. However, given the focuson managing underlying price pressures rather than headline inflation,monetary policy showed no signs of easing in 2007-08.Thus banksoperated in an environment where the central bank did not allow anysurplus liquidity in the system, resulting in interest rates remainingfirm.

Page 243: company history of SBI, ICICI

Despite the prospect of a slowdown in the global economy, commodityprice pressures, particularly those in food and mineral oils, showlittle sign of abating. As the base-effect wears off, headlineinflation is likely to ramp up to well over 7%. So, inflation concernsare likely to influence monetary policy stance going forward and theprospect of an economic slowdown need not entail immediate monetaryeasing. Thus, the operating environment of banks in 2008- 09 could be acombination of slower credit growth and some upward bias in interestrates.

Opportunities

The-financial system in India has witnessed considerably less turmoiland volatility than that in advanced economies.

Given this scenario, domestic corporates are more likely to turn tolocal sources of funding. Cyclical slowdown is unlikely to impactsegments of the economy such as agriculture where a structural shift isunder way. The rural economy has been the greater focus of governmentpolicy in recent years, and significant opportunities lie for bankshere where the penetration of credit and financial products is stillrelatively low.

The central and state governments appear to be driving an ambitiousprogramme in the infrastructure sectors.The eleventh five year plan(2007-2012) envisages an investment of USD 500 billion, withapproximately USD 80 billion envisaged for 2008-09 alone. This presentsa major opportunity for banks and financial institutions to financethese investments.

Although growth in retail credit has moderated in the last year, thelow penetration levels of retail credit (estimated at less than 12% ofGDP), the shift in demographics towards a higher proportion of youngerworking population, the changing attitudes towards borrowings, higherincome levels amongst the growing middle class, and the large pent-updemand for housing, cars etc., all augur well for the long-term,sustainable growth of retail lending in the Indian market.

Outlook

The Indian economy seems likely to see some moderation in growth ratesin 2008-09 relative to 2007-08. It is still likely to experiencehealthy growth in absolute terms and will probably remain one of thefastest growing economies in the world. Nonetheless, with a lower GDPgrowth coupled with tighter liquidity conditions (as RBI tacklesconcerns on inflation) and stable or slightly higher interest rates,system credit growth is likely to be lower than in 2007-08. Downwardpressures on economic growth may not immediately translate into anexpansionary monetary policy, given the continued risks of inflationfrom global energy and commodity prices. Thus, slightly slower creditgrowth could coexist with firm, if not rising, interest rates. GivenIndias strong macro-economic fundamentals, however, structural driverswill continue to support growth which is a positive for banks as well.

Page 244: company history of SBI, ICICI

Mission and Business Strategy

Our mission is to be "a World Class Indian Bank", benchmarkingourselves against international standards and best practices in termsof product offerings, technology, service levels, risk management andaudit & compliance. The objective is to build sound customerfranchises across distinct businesses so as to be a preferred providerof banking services for target retail and wholesale customer segments,and to achieve a healthy growth in profitability, consistent with theBanks risk appetite. We are committed to do this while ensuring thehighest levels of ethical standards, professional integrity, corporategovernance and regulatory compliance.

Our business strategy emphasizes the following:

- Increase our market share in Indias expanding banking and financialservices industry by following a disciplined growth strategy focusingon balancing quality and volume growth while delivering high qualitycustomer service;

- Leverage our technology platform and open scaleable systems todeliver more products to more customers and to control operating costs;

- Maintain high standards for asset quality through disciplined creditrisk management;

- Develop innovative products and services that attract our targetedcustomers and address inefficiencies in the Indian financial sector;

- Continue to develop products and services that reduce our cost offunds; and

- Focus on healthy earnings growth with low volatility. FinancialPerformance

The financial performance during the fiscal year 2007- 08 remainedhealthy with total net revenues (net interest income plus other income)increasing by 50.7% to Rs. 7,511.0 crores from Rs.4,984.7 crores in2006-07. The revenue growth was driven principally by an increase innet interest income. Net interest income grew by 50.7% primarily due toincrease in the average balance sheet size by 39.8% and an increase innet interest margin from 4.0% to around 4.4%. The key driver in volumeswas growth in advances. Margin expansion was contributed by increase inyields across all products partially offset by increase in time depositcosts.

The other income (non-interest revenue) increased by 50.6% to Rs.2,283.2 crores primarily due to fees and commissions, profit/(loss) onrevaluation / sale of investment and income from foreign exchange andderivatives income. In 2007-08, commission income increased by 32.7% toRs. 1,714.5 crores with the main drivers being commission fromdistribution of third party mutual funds and insurance, fees ondebit/credit cards, transactional charges/fees on deposit accounts,processing fees of retail assets and cards, and fees from trade

Page 245: company history of SBI, ICICI

products. The Bank earned a profit on sale / revaluation of investmentsof Rs. 241.8 crores during the year. Foreign exchange and derivativesrevenues grew from Rs. 280.3 crores to Rs. 319.8 crores which largelyrelated to customer transactions. Of this, 80% of the revenues camefrom plain vanilla foreign exchange transactions.

Operating (non-interest) expenses increased from Rs. 2,420.8 crores in2006-07 to Rs. 3,745.6 crores in 2007- 08, due to higher infrastructureand staffing expenses in relation to the expansion in the branchnetwork, (including branches which were in the process of being set upand would be commissioned in the June 2008 quarter) and growth in theretail loan and credit card businesses. Operating cost to net revenuesincreased to 49.9%, from 48.6% in the corresponding year. Staffexpenses accounted for 34.7% of non-interest expenses in 2007-08 asagainst 32.1% in 2006-07, due to an increase in staff strength andincrease in average salary levels. A large portion of the increase hasbeen in the direct sales infrastructure which stepped the pace ofliability and card account acquisitions substantially during the year.Loan loss provisions and provision for standard assets increased fromRs. 861.0 crores to Rs. 1,216.0 crores in 2007-08 which was broadly inline with the increase in retail loans and the product mix acrossvarious loan products. The Bank also provided Rs. 264.4 -crores ascontingent provisions for tax, legal and other contingencies.

Net profit increased by 39.3% from Rs. 1,141.5 crores in 2006-07 toRs.1,590.2 crores in 2007-08. Return on average net worth was lower at16.1% as against the previous year of 19.4% due to expansion ofnetworth as a result of infusion of over Rs. 3,800 crores of capitalduring the year. The Banks basic earning per share increased fromRs.36.3 to Rs.46.2 per equity share.

During 2007-08, the Banks total balance sheet size increased by 46.0%to Rs. 133,177 crores. Total Deposits increased from Rs. 68,298 crores(as of March 31, 2007) to Rs. 100,769 crores (as of March 31, 2008).With Savings account deposits at Rs. 26,154 crores and current accountdeposits at Rs. 28,760 crores, demand (CASA) deposits were around 54.5%of total deposits as of March 31, 2008. During 2007-08, gross advancesgrew by 35.8 % to Rs. 67,582 crores. This was driven by a growth of38.8% in retail advances to Rs. 39,316 crores, and an increase of 31.8%in wholesale advances to Rs.28,266 crores.

Business Segment Update:

As in the past, this year too the bank has been able to achieve healthygrowth across various operating and financial parameters. Thisperformance reflects the strength and diversity of the banks threeprimary business franchises - retail banking, wholesale banking andtreasury, and of its disciplined approach to risk - reward management.

The retail banking business continued its growth in 2007- 08. In thisbusiness, your Bank has positioned itself as a one-stop shop financialservices provider, catering primarily to the middle class, massaffluent and high networth customers. Your Banks range of retailfinancial products and services is fairly exhaustive and includesdeposit products of virtually all types, loans, credit cards, debit

Page 246: company history of SBI, ICICI

cards, depository (custody services), investment advisory, billpayments and several transactional services. Apart from its ownproducts, your Bank sells third party financial products like mutualfunds and insurance too. To provide its customers greater flexibilityand convenience as well as to reduce servicing costs, the bank hasinvested in multiple channels - branches, ATMs, phone banking, internetbanking and mobile banking. The success of the

Banks multi-channel strategy is evidenced in the fact that almost 83%of customer initiated transactions are serviced through the non-branchchannels. Your Banks data warehouse and Customer RelationshipManagement (CRM) solutions have helped it target existing and potentialcustomers more effectively and cost effectively and offer them productsappropriate to their profile and needs. Reduced costs of acquisitionapart, this has also led to deepening of customer relationships andlower credit losses.

Your Banks total customer base increased to over 11.6 million. On thedistribution side, your Bank added 77 new branches during the year totake the total to 761 branches (across 327 cities) as of March 2008from 684 branches (in 316 cities) in March 2007. 372 new ATMs were alsoadded during 2007-08 taking the size of the ATM network from 1605 to1977. Your Banks focus on semi-urban and under-banked marketscontinued, with 58% of the Banks branches now outside the top nineIndian cities. Savings account deposits, which reflect the strength ofthe retail liability franchise, grew by 33.5% to Rs 26,154 crores in2007-08. The retail gross loan portfolio grew 38.8% to Rs 39,316 croresduring the year.

In credit cards, your Bank continued with its strategy of focusing onquality customer acquisitions and improving processes to reduce cycletimes and bringing in cost efficiencies. Your Bank had 3.8 millioncards in force as at March 2008. It has a significant presence in the"merchant acquiring" business also with the total number of point-of-sale (POS) terminals installed at over 61,000. On housing loans, yourBank continued originating home loans under its arrangement withHousing Development Finance Corporation with monthly home loanorigination crossing Rs.550 crores (sanctions) by March 2008. Duringthe year, the Bank did not exercise its option to take any part of the70% of its HDFC home loan origination that it has the right to takeback on its books as "AAA" mortgage backed securities.

The wholesale banking business too registered a robust growth in2007-08. In this business, the Bank provides its corporate andinstitutional clients a wide range of commercial and transactionalbanking products, backed by high quality service and relationshipmanagement.

Banks commercial banking business covers not only the top end of thecorporate sector but also the emerging corporate segments and othersmall and medium enterprises (SMEs). The Bank now has four businessgroups catering to various SME customers with a wide range of bankingservices covering their working capital and term finance, tradeservices, cash management, foreign exchange and electronic bankingrequirements.

Page 247: company history of SBI, ICICI

During financial year 2007-08, growth in the wholesale banking businesscontinued to be driven by new customer acquisition and highercross-sell with a focus on optimizing yields and increasing productpenetration. Your Banks cash management and vendor & distributorfinance products continued to be an important contributor to growth inthe corporate banking business. Your Bank further consolidated itsposition as a leading player in the cash management business (coveringall outstation collection, disbursement and electronic fund transferproducts across the Banks various customer segments) with volumesgrowing to over Rs. 24 trillion an increase of more than 80% over thevolumes in FY 2006-07. Your Bank also strengthened its marketleadership in cash settlement services for major stock exchanges andcommodity exchanges in the country. Yet again, your Bank met theoverall priority sector lending requirement of 40% of net bank creditand improved its performance in certain sub- limits where it fell shortof the requirements.

Your Bank also achieved healthy growth in its agriculture andmicro-finance portfolios. With products including the Kisan Gold Card,rural supply chain initiatives and commodity finance the Bank is wellpositioned to meet its customers requirements across the entireagriculture financing cycle.

Your Banks experience with its hub and spoke model for rural marketshas been positive so far. Through this route, your Bank has targetedpotential outreach locations within a certain radius of its semi-urbanand rural branches, distributing a set of products that includessavings accounts, fixed deposits, two-wheeler and auto loans, kisancard crop loans, tractor loans and warehouse receipt loans. The Bankhas also rolled out special rural fixed deposit and savings accountproducts.The specially designed rural savings account includes featuressuch as mobile banking, net banking, instant alerts and payable-at-parcheque books. The Bank also has specialised Agri Desks at certainbranches across the country which works as a single point contact forfarmers.

The Bank has relationships with 110 micro finance institutions and hasextended credit facilities, whereby 1.61 million households have beenbeneficiaries of financial inclusion. In addition, the Bank under thedirect SHG linkage programme, has credit-linked and financed over32,000 Self-Help Groups with roughly half a million householdsbenefiting from this.

The treasury group manages the Banks balance sheet and is responsiblefor compliance with reserve requirements and management of liquidityand interest rate risk. On the foreign exchange and derivatives front,revenues are driven primarily by spreads on customer transactions basedon trade flows and customers hedging needs. During 2007- 08, revenuesfrom foreign exchange and derivative transactions grew by 14.1% to Rs.319.8 crores where the revenues were distributed across largecorporate, emerging corporate, business banking and retail customersegments for plain vanilla forex products and across primarily largecorporate and emerging corporate segments for derivatives. The Bankoffers Indian rupee and foreign exchange derivative products to itscustomers, who use them to hedge their market risks. The Bank enters

Page 248: company history of SBI, ICICI

into forex and derivative deals with counterparties after it has set upappropriate counterparty credit limits based on its evaluation of theability of the counterparty to meet its obligations in the event ofcrystallization of the exposure. Appropriate credit covenants may bestipulated where required as trigger events to call for collaterals orterminate a transaction and contain the risk. In the event of anycustomer default, the Bank, at the minimum, conforms to the ReserveBank of India guidelines with regard to provisioning requirements fornon-performing assets. On a conservative basis, the Bank may makeincremental provisions based on its assessment of impairment of thecredit. Where the Bank enters into foreign currency derivativecontracts with its customers it lays them off in the inter-bank marketon a matched basis. For such foreign currency derivatives, the Bankdoes not have any open positions or assume any market risks but carriesonly the counterparty credit risk (where the customer has crystallizedor mark-to-market losses). The Bank also deals in Indian rupeederivatives on its own account including for the purpose of its ownbalance sheet risk management. The Bank recognizes changes in themarket value of all rupee derivative instruments (other than thosedesignated as hedges) in the profit and loss account in the period ofchange. Rupee derivative contracts classified as hedge are recorded onan accrual basis.

Given the regulatory requirement of holding government securities tomeet the statutory liquidity ratio (SLR) requirement, your Bank has tonecessarily maintain a large portfolio of government securities. Whilea significant portion of these SLR securities are held in the"Held-to-Maturity (HTM) category, to the extent some of these are heldin the "Available for Sale" (AFS) category, this enables the Bank torealise gains in a declining interest rate environment and exposes theBank to losses or depreciation in value of investments when yieldsrise.

Service Quality Initiatives

Your Bank continued to seek and drive process improvement in allspheres of business through structured Quality Projects using LeanSigma Project Management Methodology. Over 1,000 projects were executedduring the year that resulted in substantial Cost and Turn Around Timesreduction, and productivity and process efficiency improvement.

Service Quality initiatives were refined to capture and improve uponreal customer experiences at various touch- points. New elements wereadded and renewed improvement schemes installed to provide customerdelight. Your Bank launched a Service Quality improvement drive forsome of the key support departments as well. Customer feedback wastaken into account to introduce new services using technology to ensurecustomer convenience, secured transactions and, reduced cost oftransactions.

Your Bank plans to use this platform to drive systemic changes andprocess re-engineering using technology, Lean Six Sigma tool-kit, 5 Sand other business excellence initiatives to further enhance customerexperience and value to business.

Page 249: company history of SBI, ICICI

Risk Management & Portfolio Quality

Taking on various types of risk is integral to the banking business.Sound risk management and balancing risk- reward trade-offs aretherefore critical to a banks success. Business and revenue growthhave therefore to be weighed in the context of the risks implicit inthe Banks business strategy. Of the various types of risks the Bank isexposed to, the most important are credit risk, market risk (whichincludes liquidity risk and price risk) and operational risk. Theidentification, measurement, monitoring and management of risks remaina key focus area for the Bank. For credit risk, distinct policies andprocesses are in place for the retail and wholesale businesses. Inretail loan businesses, the credit cycle is managed through appropriatefront-end credit, operational and collection processes. For eachproduct, programs defining customer segments, underwriting standards,security structure etc., are specified to ensure consistency of creditbuying patterns. Given the granularity of individual exposures, retailcredit risk is managed largely on a portfolio basis, across variousproducts and customer segments. For wholesale credit exposures,management of credit risk is done through target market definition,appropriate credit approval processes, ongoing post-disbursementmonitoring and remedial management procedures. Overall portfoliodiversification and reviews also facilitate mitigation and management.

The Risk Monitoring Committee of the Board monitors the Banks riskmanagement policies and procedures, vets treasury risk limits beforethey are considered by the Board, and reviews portfolio composition andimpaired credits. From an industry concentration perspective, as ofMarch 31, 2008, the following table gives industry wise classificationof the loans and investments outstanding (excluding SLR investments,equity shares, Bank certificate of deposits and mutual fund units).

(Rs.Crores)

Funded % to total exposure exposure

Automobiles and Auto Ancillaries 5,203 7.0% Transportation 5,144 6.9%Trade 4,111 5.5%Banks and Financial Institutions 3,152 4.2%Other Financial Intermediaries 2,644 3.6%Food Processing 1,695 2.3%Metals and Metal Products 1,560 2.1%Engineering 1,487 2.0%Other industries 2 % each of loans and investments outstanding (43 industries) 16,235 21.8%Retail-Except where otherwise classified 33,130 44.6%Total 74,361 100.0%

Note: Classification of exposure to real estate sector under Exposuresin Sensitive Sectors (as disclosed in Notes to the FinancialStatements) is as per the RBI guidelines. This includes not onlyexposure to borrowers in the real estate industry but also exposures toborrowers in other industries, where the exposures are primarily

Page 250: company history of SBI, ICICI

secured by real estate and investment in home finance institutions andsecuritisation.

As of March 31, 2008, the Banks ratio of gross nonperforming assets(NPAs) to total customer assets was 1.29%. Net non-performing assets(gross non-performing assets less specific loan loss provisions,interest in suspense and ECGC claims received) were 0.42% of customerassets as of March 31, 2008. The specific loan loss provisions that theBank has made for its non- performing assets continue to be moreconservative than the regulatory requirement. The Basel Committee onBanking Supervision (BCBS) released the International Convergence ofCapital Measurement & Capital Standards in June 2004, providing the NewFramework for Capital Adequacy (Basel II). Pursuant to this Accord,Reserve Bank of India came out with its final guidelines in April 2007.In terms of these guidelines, Indian banks having operational presenceoutside India are required to migrate to the selected approaches(Standardised Approach for credit risk and Basic Indicator Approach foroperational risk) with effect from March 31, 2008. All other scheduledcommercial banks are required to migrate to these approaches no laterthan March 31, 2009. The Bank is in preparedness to adopt the aboveapproaches as per the final guidelines issued in April 2007. Meanwhile,Reserve Bank of India has published its amendments to the finalguidelines in March 2008. The Bank has examined these amendments and isin the process of reconfiguring its systems and processes to accountfor these changes. While the Bank, to begin with, will migrate to theabove approaches defined in the Reserve Bank of India guidelines, theinitiatives undertaken are geared towards enabling the Bank comply withthe standards set out for the more advanced capital approaches underBasel II. These initiatives include augmentation of the risk managementsystems in terms of architecture, capabilities, technology, etc., inareas such as ratings systems, borrower segmentation, exposureconsolidation, risk mapping, risk estimation, capital computation, etc.The Bank has been investing appropriately in augmenting its riskmanagement systems and capabilities. The implementation of the Basel IIframework is in harmony with the Banks objective of adoptinginternational best practices in risk management.

INTERNAL AUDIT & COMPLIANCE

The Bank has Internal Audit & Compliance functions which areresponsible for independently evaluating the adequacy of all internalcontrols and ensuring operating and business units adhere to internalprocesses and procedures as well as to regulatory and legalrequirements. The audit function also pro-actively recommendsimprovements in operational processes and service quality. To ensureindependence, the Audit department has a reporting line to the Chairmanof the Board of Directors and the Audit & Compliance Committee of theBoard and only indirectly to the Managing Director. To mitigateoperational risks, the Bank has put in place extensive internalcontrols including restricted access to the Banks computer systems,appropriate segregation of front and back office operations and strongaudit trails. The Audit & Compliance Committee of the Board alsoreviews the performance of the Audit & Compliance functions and reviewsthe effectiveness of controls and compliance with regulatoryguidelines.

Page 251: company history of SBI, ICICI

SOCIAL INITIATIVES

In keeping with the HDFC Group philosophy, your Bank has alwaysbelieved in making a difference to society at large. As a responsiblecorporate citizen, it has been your Banks vision to empower thecommunity through socio- economic development of underprivileged andweaker sections of society. During 2007-08 your Bank furtherintensified its efforts in this direction. Most of the Banks socialactivities revolve around educational initiatives (including schooladoption projects, educational sponsorships of girl children, primaryeducation to first generation learners etc.) and initiatives in thefield of livelihood training and support. In the latter area, the Bankhas been working with NGOs in providing non-formal vocational andtechnical education programs as well as skill up gradation courses toenable sustainable employment and income generation for economicallyweaker sections. To further integrate some of its Corporate SocialResponsibility (CSR) initiatives with its banking operations, the Bankhas started outsourcing some non-core back office operations to certainsmall semi-urban locations. This creates jobs for the local educatedyouth in those towns with obvious gains for the families (as the youthis gainfully employed without having to relocate to distant cities) andalso gives a boost to the local economy in those locations.

Where relevant, the Bank coordinates its CSR activities with itsmicrofinance and self - help group (SHG) financing. The Bank hasrelationships with 110 micro finance institutions and has extendedcredit facilities, whereby 1.61 million households have beenbeneficiaries of financial inclusion. In this regard, your Bank hasalso appointed around 150 NGOs across the country as businesscorrespondents (BCs) to provide SHG - Bank linkage to help tribals,physically challenged, beggars, etc. to earn a livelihood and join themainstream. The Bank under the direct SHG linkage programme, has creditlinked over 32,000 SHGs and thereby roughly another half a millionhouseholds have been brought under Financial Inclusion.

Employees are a key part of your Banks social initiatives and areencouraged to participate in these activities, contributing their timeand skills. The Bank also administers a payroll-giving programmewhereby employees offer deductions from their salary to donate forspecified charities or social causes of their choice and the Bankcontributes an equivalent amount.

HUMAN RESOURCES

The Banks staffing-needs continued to increase during the yearparticularly in the retail banking and SME businesses in line with thebusiness growth. Total number of employees increased from 21,477 as ofMarch 31,2007 to 37,836 as of March 31, 2008. The Bank continues tofocus on training its employees on a continuing basis, both on the joband through training programs conducted by internal and externalfaculty. The Bank has consistently believed that broader employeeownership of its shares has a positive impact on its performance andemployee motivation. The Banks employee stock option scheme so farcovers around 6,535 employees.

Page 252: company history of SBI, ICICI

STATUTORY DISCLOSURES

The information required under Section 217(2A) of the Companies Act,1956 and the rules made there under, are given in the annexure appendedhereto and forms part of this report. In terms of section 219(1 )(iv)of the Act, the Report and Accounts are being sent to the shareholdersexcluding the aforesaid annexure. Any shareholder interested inobtaining a copy of the said annexure may write to the CompanySecretary at the Registered Office of the Bank. The Bank had 37,836employees as on March 31, 2008. Three hundred twenty six employeesemployed throughout the year were in receipt of remuneration of morethan Rs. 24.0 lacs per annum and fifty employees employed for part ofthe year were in receipt of remuneration of more than Rs. 2.0 lacs permonth.

The provisions of Section 217(1)(e) of the Act relating to conservationof energy and technology absorption do not apply to your Bank. The Bankhas, however, used information technology extensively in itsoperations.

The report on the Corporate Governance is annexed herewith and formspart of this report.

RESPONSIBILITY STATEMENT

The Board of Directors hereby state that

i) in the preparation of the annual accounts, the applicable accountingstandards have been followed along with proper explanation relating tomaterial departures;

ii) we have selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable andprudent so as to give a true and fair view of the state of affairs ofthe Bank as on March 31, 2008 and of the profit of the Bank for theyear ended on that date;

iii) we have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of theCompanies Act, 1956 for safeguarding the assets of the Bank and forpreventing and detecting frauds and other irregularities;

iv) we have prepared the annual accounts on a going concern basis.

DIRECTORS

Mr. Keki Mistry, Mrs. Renu Karnad and Mr. Vineet Jain will retire byrotation at the ensuing Annual General Meeting and are eligible forre-appointment.

The Board at its meeting held on October 12, 2007, appointed Mr. HarishEngineer and Mr. Paresh Sukthankar as Additional Directors as well asExecutive Directors of the Bank subject to the approval of theshareholders and the Reserve Bank of India. The Bank sought the

Page 253: company history of SBI, ICICI

approval of shareholders by way of postal ballot for the appointment ofMr. Engineer and Mr. Sukthankar as Executive Directors of the Bank. Asper the scrutinizers report, both the ordinary resolutions wereapproved by the shareholders with the requisite majority effectiveDecember 10, 2007.

The brief resume/details relating to Directors who are to beappointed/re-appointed are furnished in the report on CorporateGovernance.

AUDITORS

The Auditors M/s. Haribhakti & Co., Chartered Accountants will retireat the conclusion of the forthcoming Annual General Meeting and areeligible for re-appointment. Members are requested to consider theirre-appointment on remuneration to be decided by the Audit andCompliance Committee of the Board.

ACKNOWLEDGEMENT

Your Directors would like to place on record their gratitude for allthe guidance and co-operation received from the Reserve Bank of Indiaand other government and regulatory agencies. Your Directors would alsolike to take this opportunity to express their appreciation for thehard work and dedicated efforts put in by the Banks employees and lookforward to their continued contribution in building a World ClassIndian Bank.

On behalf of the Board of Directors

Jagdish Capoor Chairman

Mumbai, April 24,2008

Sbi

Director ReportMar2009   Mar 2010 Mar2011

V. CREDIT POLICY AND PROCEDURES DEPARTMENT (CPPD)PERFORMANCE HIGHLIGHTS :

- Loan Policy of the Bank, has been reviewed and current RBI guidelineshave been incorporated.

- Increase in the Term Loan exposure limit to Infrastructure sector to15% from 10%. .

Page 254: company history of SBI, ICICI

- Appointment of Nominee Directors Review and Authority Structure.

- Prudential Norms on Unsecured Advances.

- Guidelines on Restructuring of Advances by Banks.

- Review of Grievances redressal mechanism under Guidelines on FairPractice Codes for Lending.

- Accounting procedures for sale of NPAs / Securitisatibn Companies /Asset Reconstruction Companies.

- Operational guidelines on Forward Exchange Contracts and Derivatives.

- Competitive Pricing - Review.

- CP linked rates for discounting of Bills under LCs.

- Policy for financing Corporates on Unsecured basis to attract newbusiness.

- As part of the Banks Green Banking Policy, initiatives likeplantation of fruit bearing trees across the Banks premises,implementation of energy saving measures, encouraging customers onreduction of Green House gases by way of extending project loans onconcessionary interest rates, assisting in CDM Registration andsecuritization of CER receivables etc. were undertaken.

- Under the captive windmill project, the Bank has gone in for 10windmills (1.5 MW each) which have been set up in three States viz.Maharashtra, Gujarat and Tamilnadu. Power generated from the windmillsshall be set-off against the power consumption of identified offices /branches of those States. State Bank of India is the first Bank inIndia to have conceived the idea of Green Power generation forcaptive use in the Banking Industry.

NEW PRODUCT :

- Financing to Shipbreaking Units.

Responsibility Statement

The Board of Directors hereby states :

i, that in the preparation of the annual accounts, the applicableaccounting standards have been followed along with proper explanationrelating to material departures;

ii>. that they have selected such accounting policies and applied themconsistently and made judgements and estimates as are reasonable andprudent, so as to give a true and fair view of the state of affairs ofthe Bank as on the 31st March 2010, and of the profit and loss of theBank for the year ended on that date;

Page 255: company history of SBI, ICICI

iii. that they have taken proper and sufficient care for themaintenance of adequate accounting records in accordance with theprovisions of the Banking Regulation Act, 1949 and State Bank of IndiaAct, 1955 for safeguarding the assets of the Bank and preventing anddetecting frauds and other irregularities; and

iv. that they have prepared the annual accounts on a going concernbasis.

Acknowledgement

During the year, Shri Ashok Chawla, Finance Secretary, Govt, of Indiawas nominated to the Board under Section 19 (e) with effect from 13thMay 2009, in place of Shri Arun Ramanathan, who retired on 30th April2009.

The Directors express their gratitude for the guidance and cooperationreceived from the Government of India, RBI, SEBI, IRDA and othergovernment and regulatory agencies.

The Directors also thank all the valued clients, shareholders, banksand financial institutions, stock exchanges, rating agencies and otherstakeholders for their patronage and support, and take this opportunityto express their appreciation of the dedicated and committed team ofemployees of the Bank.

For and on behalf of the Central Board of Directors

O.P. Bhatt

Date : 14th May, 2010 Chairman

Director ReportMar2008   Mar 2009 Mar2010

Economic Backdrop and Banking EnvironmentThe Indian economy, which is one of the fastest growing economies inthe world, is poised to maintain its leading position, despite theglobal financial crisis and economic slowdown. India has managed tobeat the global financial turmoil due to sound regulation, prudentfinancial supervision and proactive policies.

Indias growth is driven predominantly by domestic consumption andinvestment and the Indian banking system has no direct exposure to theUS sub-prime mortgage assets or to the failed institutions. Thus, as

Page 256: company history of SBI, ICICI

also projected by the IMF, India will remain among the fastest growingeconomies in the world. In the first half of the year, high inflationand spiralling crude oil prices were the major concerns, but the focusin the second half shifted to sustaining growth and maintainingstability.

Real GDP growth is expected to moderate from 9.0% in 2007-08 to 6.5% -6.7% in 2008-09. Agriculture and allied sectors are likely to grow byaround 2.6% in 2008-09, which is only marginally lower than the averagegrowth of 2.9% during 2000-01 to 2007-08, mainly due to stagnantfoodgrains production.

Industrial production was marked by a slowdown in the manufacturingsector. During 2008-09 the Index of Industrial Production deceleratedto 2.4% against 8.5% in 2007-08. The deceleration in capital goodsreflects the slowdown in industry. The rebound in consumer durablesduring 2008- 09 at 4.4% against decline of 1.0% in 2007-08, however,reflects a measured pick up in consumption and investment.

The slowdown in industry and agriculture was partially offset by areasonable 9.7% growth in services sector in 2008-09 (April-Dec) withcommunity, social and personal services showing a higher growth of11.2% in 2008-09 (April-Dec) than the 5.7% growth posted in 2007-08(April- Dec). To mitigate the impact of the current slowdown,Government launched three fiscal stimulus packages in the form of cutin indirect taxes, higher Government spending and support for exports,along with easing of monetary policy by RBI.

Inflation based on WPI rose from 7.7% at end- March 2008 to a high of12.9% on 2nd August 2008, reflecting high international crude oil andcommodity prices coupled with increase in price of manufacturedproducts and primary articles. After remaining in the range of 10-12%between June and October 2008, inflation began to ease from November2008 onwards to touch 0.26% by 28th March 2009, mainly reflecting thedecline in prices of crude oil, metals, minerals and manufacturedgoods.

The deceleration in economic growth globally was reflected in weaknessin external demand for goods and services, besides decline in forexreserves and depreciation of the rupee against major currencies. Thefall in exports began in October 2008 and every month since then,export growth has been negative with the biggest decline of 33.3% inMarch 2009. Consequently, growth in exports during 2008-09 was lowerat 3.4% than 28.9% in 2007-08. Imports also registered a lower growthof 14.3% in 2008- 09 as against 35.4% in 2007-08, mainly due to fall ininternational crude oil prices. The risk aversion in the globalfinancial markets resulted in a sharp reversal in capital inflows intoIndia, with net outflow by foreign institutional investors (FIIs) ofaround US$15.0bn in 2008-09 compared with an inflow of US$20.3bn in2007-08. As a result of decline in exports and capital outflows fromthe domestic stock market, forex reserves fell by US$57.70 bn YoY toUS$252.00 bn as at end-

March 2009. The Rupee depreciated to Rs.50.95 per dollar at end-March2009 from Rs.39.99 per dollar at end-March 2008.

Page 257: company history of SBI, ICICI

The focus of RBIs monetary and credit policy during the year was tocontrol inflation, support growth, maintain financial market stability,ensure comfortable liquidity in the system to meet the required creditdemand and limit the contagion from the ongoing global turmoil. During2008-09, while the Bank Rate was kept unchanged at 6%, Reverse Repo andmore particularly the Repo rate and CRR were changed on a number ofoccasions. When inflation started rising due to increase ininternational commodity and oil prices, the Repo rate was hiked from7.75% in April 2008 to a high of 9% in July 2008 and CRR was hiked from7.50% in March 2008 to 9% in August 2008. Subsequently, when growthstalled and inflation started coming down due to drop in crude oil andcommodity prices, the Repo rate was cut five times to 5%, the ReverseRepo rate was reduced three times to 3.50% and CRR was cut four timesto 5.0%, between October 2008 and March 2009.

Deposit and lending rates of banks also moved more or less in tandemwith key policy rates as interest rates initially firmed up during2008-09 up to October 2008, and subsequently started declining afterNovember 2008. The capital outflows and slowdown in economic activity,particularly in the second half of the year, impacted money supplygrowth in the system (M3) and saw moderation in the business of allscheduled commercial banks (ASCB). While growth in money supply (M3)moderated to 18.6% in 2008-09 from 21.1% a year ago, deposit and creditgrowth of ASCB moderated to 19.8% and 17.3% respectively in 2008-09from 22.4% and 22.3% in 2007-08.

The coming year will continue to be marked with uncertainty as theimpact of the global crisis has been deeper and wider than earlieranticipated. However, a stable banking and financial sector, fallinginflation and prompt co-ordinated policy action have helped Indiaweather the crisis. On the upside, domestic demand especially fromrural areas, and Government investment activity in the economy willhelp keep up the growth momentum, making India the second fastestgrowing economy in the world.

Financial Performance

Profit

The Operating Profit of the Bank for 2008-09 stood at Rs. 17,915.23crores as compared to Rs. 13,107.55 crores in 2007-08 registering agrowth of 36.68%. The Bank has posted a Net Profit of Rs. 9,121.23crores for 2008-09 as compared to Rs. 6,729.12 crores in 2007-08registering a growth of 35.55%.

While Net Interest Income recorded a growth of 22.63% and Other Incomeincreased by 45.96%, Operating Expenses increased by 24.11%attributable to higher staff cost and other overhead expenses.

Dividend

The Bank has increased dividend to Rs. 29.00 per share (290%) from Rs.21.50 per share (215%) in the last year.

Page 258: company history of SBI, ICICI

Net Interest Income

The Net Interest Income of the Bank registered a growth of 22.63% fromRs. 17,021.23 crores in 2007-08 to Rs. 20,873.14 crores in 2008-09.This was due to growth in interest income on advances.

The gross interest income from global operations rose from Rs.48,950.31 crores to Rs. 63,788.43 crores during the year. This wasmainly due to higher interest income on advances.

Interest income on advances in India registered an increase from Rs.32,162.68 crores in 2007-08 to Rs. 42,989.36 crores in 2008-09 due tohigher volumes. Also average yield on advances in India increased from9.90% in 2007-08 to 10.15% in 2008-09. Interest income on advances atforeign offices also increased due to higher volumes.

Income from resources deployed in Treasury operations in Indiaincreased by 28.60% mainly due to higher average resources deployed.The average yield, which was 6.92 % in 2007-08, has increased to 7.10%in 2008-09.

Total interest expenses of global operations increased from Rs.31,929.08 crores in 2007-08 to Rs. 42,915.29 crores in 2008-09.Interest expenses on deposits during 2008-09 recorded an increase of40.74% compared to the previous year, whereas the average level ofdeposits grew by 24.85%. This resulted in an increase in the averagecost of deposits from 5.59% in 2007-08 to 6.30% in 2008-09. However, assubstantial high cost deposits are maturing and present level ofdeposit rate being lower, it is expected that there will be a fall inthe average cost of deposits.

Non-Interest Income

Non-interest income stood at Rs. 12,690.79 crores in 2008-09 as againstRs. 8,694.93 crores in 2007-08.

During the year, the Bank received an income of Rs. 409.60 crores (Rs.197.41 crores in the previous year) by way of dividends from AssociateBanks/subsidiaries and joint ventures in India and abroad.

Operating Expenses

There was an increase of 25.19% in the Staff Cost from Rs. 7,785.87crores in 2007-08 to Rs. 9,747.31 crores in 2008-09 attributable tohigher pension provisioning and increased staff strength. Staff Costincluded an amount of Rs.1,414 crores towards wage revision provisionas compared to Rs. 575 crores in the previous year.

Other Overhead Expenses have also registered an increase of 22.36%mainly due to increase in expenses on rent, taxes and lighting as aresult of opening of new branches, advertising & publicity, printing &stationary, postage and telephones and miscellaneous expenditure.

Page 259: company history of SBI, ICICI

Operating Expenses, comprising both staff cost and other overheadexpenses, have registered an increase of 24.11% over the previous year.

Provisions and Contingencies

Major amounts of provisions made in 2008-09 were as under:

- Rs. 707.16 crores towards provision for depreciation on investments,excluding amortization of premium on ‘Held to Maturity’ category (asagainst write back Rs. 88.68 crores in 2007-08).

- Rs. 5,971.52 crores towards Provision for Tax (as against Rs.3,823.50 crores in 2007-08).

Table: 1 Key Performance Indicators

Indicators SBI

2007-08 2008-09

Return on Average Assets (%) 1.01 1.04

Return on Equity (%) 17.82 15.73

Expenses to Income (%)(Operating

Expenses to Total Net Income) 49.03 46.62

Basic Earnings Per Share (Rs.) 126.62 143.77

Diluted Earnings Per Share (Rs.) 126.50 143.77

Capital Adequacy Ratio (%) (Basel-I) 13.54 12.97

Tier I 9.14 8.53

Tier II 4.40 4.44

Capital Adequacy Ratio (%) (Basel-II) - 14.25

Tier I - 9.38

Tier II - 4.87

Net NPAs to Net Advances 1.78 1.76

SBI Group 2007-08 2008-09

0.99 0.94

17.93 16.30

Page 260: company history of SBI, ICICI

56.64 52.65

168.61 172.68

168.45 172.68

13.49 12.90

8.95 8.21

4.54 4.69

- 14.17

- 9.03

- 5.14

1.43 1.49

- Rs. 142.00 crores towards Fringe Benefit Tax (as against Rs. 105.00crores in 2007-08).

- Rs. 2,474.96 crores (net of write-back) for non- performing assets(as against Rs. 2,000.94 crores in 2007-08).

Reserves and Surplus

- An amount of Rs. 5,291.79 crores (as against Rs. 4,839.07 crores in2007-08) was transferred to Statutory Reserves.

- An amount of Rs. 826.56 crores (as against Rs. 4.44 crores in2007-08) was transferred to Capital Reserve Fund.

- An amount of Rs. 306.89 crores (as against Rs. 362.09 crores in2007-08) was transferred to Other Reserve Funds.

Assets

The total assets of the Bank increased by 33.66% from Rs. 7,21,526.31crores at the end of March 2008 to Rs. 9,64,432.08 crores as at endMarch 2009. During the period, the loan portfolio increased by 30.17%from Rs. 4,16,768.20 crores to Rs. 5,42,503.20 crores. Investmentsincreased by 45.62% from Rs. 1,89,501.27 crores to Rs. 2,75,953.96crores as at the end of March 2009. A major portion of the investmentwas in the domestic market in government and other approved securities.The Banks market share in domestic advances was 16.03% as of March2009.

Liabilities

Page 261: company history of SBI, ICICI

The Bank’s aggregate liabilities (excluding capital and reserves) roseby 34.79% from Rs. 6,72,493.65 crores on 31st March 2008 to Rs.9,06,484.38 crores on 31st March 2009. The increase in liabilities wasmainly contributed by increase in deposits and Other Liabilities &Provisions. The Global deposits stood at Rs. 7,42,073.13 crores as on31st March 2009, representing an increase of 38.08 % over the level on31st March 2008. The Banks market share in domestic deposits was17.72% as of March 2009.

Performance Highlights

Consequent upon acquisition of State Bank of Saurashtra by State Bankof India in 2008-09, as also migration of branches to and from withinthe various business groups, the base business figures of previous year(2007-08) in respect of the various business groups have been amendedwith regrouping, wherever necessary and determinable, to make themcomparable with the current years figures and arrive at growth figuresduring the year 2008-09.

Core Operations

A Global Markets Department

B Corporate Banking Group

C Mid Corporate Group

D National Banking Group

E Rural Business Group

F Marketing & Cross Selling Department

G Corporate Strategy & New Business

H International Banking Group

I Associates & Subsidiaries

J Asset Quality

K Information Technology

A. GLOBAL MARKETS DEPARTMENT

Global Markets Department at the Corporate Centre handles the BanksTreasury Operations across all time zones and covers activities invarious markets i.e., Forex, Interest Rates, Bullion, Equity andAlternative Assets.

- The year witnessed heightened volatility in the bond market. Adversemarket conditions, mainly on account of higher inflation and commodityprices, resulted in higher yields which led to mark-to- market

Page 262: company history of SBI, ICICI

provisions on our portfolio in the first two quarters. During thesecond half of the financial year, interest rates stabilized and headeddownwards on account of reduction in CRR, SLR and buy back ofsecurities by RBI prompted by the sudden slow down in our economy. Thebenchmark 10 year yields saw a sharp fall to 4.85% in January 09, thelowest on record, from a high of 9.53% in July 08 and finally closed at7.01% on 31st March 2009. Increased requirement of CRR and SLR, aconsequence of the unprecedented deposit growth, resulted in anincrease in the overall domestic investment portfolio by Rs.64,724crores over 31st March 2008. Liquidity position eased in the secondhalf of the financial year and remained comfortable thereafter. Theseries of proactive measures taken by RBI and the resulting fall inbond yields provided us with an opportunity to book profit on sale ofinvestments from our bond portfolio.

- Performance of Global Markets department during the year issummarised in the table below.

(Amount in Rs. Crores)

2007-08 2008-09 % GrowthInterest Incomeon Investments 11,887 15,750 32.50

Other Income -Profit on Saleof Investmentsand Forex Income 1,987 3,125 57.27

Trading VolumeForex Operations 11,74,029 18,11,194 54.27

Average Yield onDomestic TreasuryOperations 7.49 8.02 0.53

B.CORPORATE BANKING GROUP

B.1 The Banks Corporate Banking Group consists of three StrategicBusiness Units viz., Corporate Accounts Group, Project Finance &Leasing SBU and Stressed Assets Management Group.

B.2 Corporate Accounts Group (CAG)

Corporate Accounts Group, with addition of CAG, Ahmedabad Branch duringthe year, has five branches which cater to 489 Corporate clients.

During the year, 42 new corporate clients were brought into the CAGfold.

- CAGs advances portfolio of Rs. 68,866 crores is 29 % of the C&I(Non-Food) credit of the Bank and constitutes 15 % of the totaldomestic credit portfolio of the Bank.

Page 263: company history of SBI, ICICI

Table : 2 CAG - Highlights

(Amount in Rs. crores)

Particulars As on As on Growth 31.03.2008 31.03.2009 %

Deposits 9,843 19,702 100

Advances 46,708 68,866 47

- CAG continues to be on the high growth trajectory in forex businessregistering a YoY growth of 68%. CAGs forex business constituted 53 %of the total domestic forex turnover of the Bank.

- Yield on advances has improved from 8.57% in 2007-08 to 9.98% in2008-09.

- Account Planning initiative was launched during the year to alignbetter, the Groups marketing to the Business Plans of the corporateclients and to provide customised solutions.

- Focus on fee-based services saw the fee income of CAG registering animpressive 66% growth during the year.

- By leveraging Banks balance sheet strength, substantial underwritingbusiness was booked from large corporates.

Transaction Banking Unit

The Transaction Banking Unit has been created in CBG with the CashManagement Product and Trade Finance wings under its fold to boost feebased income through Group Synergy.

CASH MANAGEMENT PRODUCT

Cash Management Product with its brand name SBIFAST has migrated to acentralized solution covering 379 branches and handles paper ande-collections as well as paper and e-payments for Corporate clients.CMP also has a liquidity management module, which aims to enhanceprofitability to Corporates by facilitating better liquidity managementand reducing interest costs.

B.3 Project Finance & Leasing SBU

The Project finance-SBU focusses on funding projects in infrastructuresectors like power, telecom, roads, ports, airports, logistics andothers. It also handles non-infrastructure projects with certainceilings on minimum project cost. During the year, the focus was onsyndication and underwriting of project loans.

During 2008-09, Project Finance-SBU participated in funding of numerousprojects and took up syndication of debt with other banks /

Page 264: company history of SBI, ICICI

institutions as given in the chart:

(Amount in Rs. crores)

Particulars FY FY Growth 2008 2009 (%)

Aggregate ProjectCost of projectssanctioned 1,45,045 1,93,595 N. A.

Aggregate Debtrequirement 92,558 1,33,894 N. A.Of the above,Debt sanctionedby SBI 20,195 25,854 28.02

Debt syndication 54,951 64,069 16.59

Besides other major projects, SBI is also the Lead Bank for the twoUltra Mega Power Projects in the country which have achieved financialclosure and are presently under implementation. Analysts trackingproject finance deals have been consistently ranking the Bank inleading positions in the Asia Pacific Region/globally.

B.4 Stressed Assets Management Group (SAMG)

The performance of SAMG during the year 2008-09 is given in the tablebelow.

Table : 3 SAMG - Highlights

(Amount in Rs. crores)

1 Cash Recovery in NPA 354

2 Upgradation to Standard Assets 245

3 Write Offs 588

4 Gross reduction in NPAs (1+2+3) 1187

5 Recovery in written off accounts 418

- Stressed Assets Management Group (SAMG), originally set up to takeover all NPAs with outstandings of Rs.5 crores and above, has expandedits role to resolve all NPAs of Rs.1 crore and above across the countrywith a view to provide focussed efforts in resolution of NPAs.

- 106 Stressed Assets Resolution Centres (SARCs) have been openedacross the country for focussed resolution of NPAs with outstandingsupto Rs.1 crore in SME and Personal segments. Out of these, 45independent SARCs were brought under SAMG in a phased manner to give

Page 265: company history of SBI, ICICI

further fillip to the Banks recovery efforts. The performance of SARCsis encouraging and substantial progress in the Management of NPAs hasbeen achieved. Proactive steps have also been taken for prevention ofNPAs by making demands on customers BEFORE DEFAULT and on FIRSTDEFAULT.

C. MID-CORPORATE GROUP (MCG)

Table : 4 MCG - Highlights

(Amount in Rs. crores)Particulars As on As on growth 31.03.2008 31.03.2009 %

Deposits 15,428 19,169 24.25

Advances(Excludingoff-site) 85,887 1,06,466 23.96

Advances(Includingoff-site) 1,02,052 1,25,951 23.41

- The Group handles about 42% of the total C&I non-food advances of theBank. It operates through 8 Regional Offices and 53 branches.

- 540 new mid-corporate clients were added by the MCG during thecurrent year.

- To ensure focussed service to MCG customers in upcoming towns and"Tier II" cities, 23 new off-site branches and 4 erstwhile SBS brancheshave been added to MCG.

- The average yield on advances went up from 9.73% in March 2008 to11.62% in March, 2009.

Initiatives taken

- e-Trade sbi has been launched with marketing under the ownership ofMCG. The product enables customers to handle their transactions fromtheir office or any other place 24x7 and keep track of the transactionsthrough web based software.

- 5 Mid-Corporate Loan Administration Units, which provide centralizedprocessing, servicing & documentation facilities to MCG customers,mainly at Off-site Centres, were brought under MCGs control during theyear.

New Products

- Import factoring, a new product, was launched in association with SBIFactors & Commercial Services Ltd.

Page 266: company history of SBI, ICICI

C.1 Gold Banking

- The Bank has taken several initiatives to undertake bullion businessin a big way.

- The number of branches for retail sale of gold coins has increasedfrom 250 in 2008 to 518 in 2009. The Scheme will be extended to coverall important centres of the country in 2009-10 by increasing thenumber of branches selling gold coins to about 1100. The Bank alsoundertakes supply of customised gold coins to corporates.

- The Bank has re-launched Gold Deposit Scheme at 50 branches tomobilise gold from domestic market for deployment as metal loans tojewellers.

- The Bank is in the process of setting up a dedicated Bullion branchat Mumbai to undertake bullion business in a focussed manner.

D. NATIONAL BANKING GROUP (NBG)

- National Banking Group consists of three Business Groups viz.,Personal Banking, Small & Medium Enterprise (SME), and GovernmentBanking and handles 34.41% of the total domestic credit and 59.21% ofthe total domestic deposit business (excluding inter bank deposits) ofthe Bank as on 31.03.2009.

- During the year, the Bank achieved another milestone by opening its11,111th Branch at Sonapur (Kamrup District) in Assam, which wasinaugurated in Jan 09 by the Hon. Home Minister Shri P. Chidambaram.

- During the year, apart from an addition of 461 branches on account ofSBS merger, 807 new domestic branches were also opened (under NBG andRBG), and the Bank had a vast network of 11,448 domestic branches atthe end of March 2009.

Table : 5 NBG - Highlights

(Amount in Rs. crores)Particulars As on As on growth 31.03.2008 31.03.2009 %

Deposits(excludinginter bank) 2,99,644 4,12,329 37.61

Advances(excludingfood andinter bank) 1,32,545 1,53,814 16.05

D.1 Personal Banking Business Unit (PBBU)

Page 267: company history of SBI, ICICI

PBBU handles about 23.66 % of the total domestic segmental advances and51.44% of the total domestic deposits of the Bank as on 31.03.09through 11,448 branches spread throughout India. Performance of PBBUduring 2008-09 is given in the following table :

(Amount in Rs. crores)

Particulars As on As on growth 31.03.2008 31.03.2009 %

Deposits 2,43,814 3,39,326 39.17

Advances 90,473 1,06,954 18.22

- SBI once again emerged as a leader among Scheduled Commercial Banks(SCBs) and Housing Finance Companies (HFCs) this year in terms ofIndividual Home Loans disbursements as on 31.03.2009.

- During the year, SBI introduced three new products viz., SBI SpecialHome Loan, SBI Happy Home Loan and SBI Lifestyle in response to thestimulus package announced by the Government of India. Theseinitiatives have resulted in stimulating supply in low cost andaffordable housing segment, which in turn has rejuvenated customersinterest in new housing. SBI Green Home has been introduced toencourage developers to come out with environment friendly residentialprojects.

- SBI is the market leader in Education Loans and maintaining itsmarket share of 24% amongst PSU banks. The growth in Education Loansduring the year is Rs. 2,203.33 crores. SBI Scholar Loan limit isextended to students joining 59 elite institutions like IIMs / IITs/AIIMS / Management Institutions etc. at concessional interest rates andterms. The limit for the loans has been increased to Rs.15 lacs.

- SBI became the largest financier of Maruti and Hyundai cars withpenetration of more than 13% since October 2008.

- The Bank was voted, for the third year in a row, as the MostPreferred Housing Loan and Most Preferred Bank in the CNBC AWAAZConsumer Awards in a survey conducted by CNBC TV18 in association withAG Nielsen & Company.

- The Bank was also awarded the Best Home Loan Provider as well asThe Best Bank by Outlook Money Awards, 2008.

- During the year, the Bank also entered into an exclusive arrangementwith TATA Motors for handling the booking process of TATA Nano cars.

- SBI has launched on its web-site an on-line application form forregistering Auto Loan enquiries and expeditiously monitoring andconverting these leads into Auto Loans.

- A special deposit product namely SBI-1000 was introduced to mop updeposits for 1000 days which was a huge success and resulted in mopping

Page 268: company history of SBI, ICICI

up around Rs.40,000 crores.

- During the year, the Bank also launched e-invest for the ASBA(applications supported by blocked accounts) to aid investors for theirequity subscriptions, IPO and Rights applications.

- The Bank opened over 174 lacs of new Savings Bank accounts during theyear as against 78 lacs in the previous year.

D.2 SME Business Unit (SMEBU)

The Bank continues to retain its premier position as a lender to theSME sector. The Bank has been implementing multiple strategies toattract business from the SME segment offering them a slew of productsand services. Advances to SMEs constitute 20.66% of Banks totaldomestic advances. The business performance of the Bank under SME is asunder:

(Amount in Rs. crores)Particulars As on As on Growth 31.03.2008 31.03.2009 %

Deposits 1,67,426 2,20,468 33.48

Advances 79,717 95,893 20.29

Achievements/Initiatives during the year

- With the downturn in the economy, a slew of reliefs and concessionshave been offered to SMEs banking with SBI. Two new schemes viz. SMECARE and SME Help were launched to meet the urgent fund requirements ofSME units. Under these schemes, finance is being sanctioned onliberalised terms and at a concessional rate of interest of 8% p.a.

- A Centralised Unit for Supply Chain Finance was operationalisedduring the year to finance vendors of industry majors and theirdealers.

- Web based registration of loan applications through SBI website waslaunched for Traders Easy Loan, SME Smart Score and SME Credit CardSchemes.

- A Special Capital Market Branch was opened at Mumbai which hasstarted clearing and settlement operations for various exchanges likePower Exchanges, Currency Exchanges.

- Bank has adopted the Code of Banks commitment to Micro and SmallEnterprise customers under the Banking Codes & Standards Board of India(BCSBI).

- Bank has established Regional MSME Care Centres at all Local HeadOffices across the country to facilitate MSME customers for quickredressal of their grievances at the network level of a circle.

Page 269: company history of SBI, ICICI

- The Bank was conferred the following National awards by theGovernment of India (GOI), Ministry of Micro Small and MediumEnterprises for the FY 2007-08:

(i) First under "National Awards for excellence in lending to MicroEnterprises".

(ii) Second under "National Awards for Excellence in MSE Lending".

(iii)The Bank was also presented an award for outstanding performancein the area of finance to SMEs by Dun & Bradstreet.

- To empower the emerging SME entrepreneurs by discussing specificindustry problems, best practices etc., the Bank has sponsored 13episodes in Zee Business channel.

D.3 Government Business Unit (GBU)

- In order to provide timely and accurate credit of Pension as well asits arrears to Pensioners, 14 Centralised Pension Processing Centres(CPPCs) have been established and 27.38 lakh Pension Accounts have beenmigrated from 9116 branches to the 14 CPPCs.

- Facility for e-payment of Railway Freight has been provided to 143Corporates and more and more Corporates are adopting this newconvenient 24x7 automated payment system.

- Internet Banking facility has been popularized for payment of taxesas a result of which 59.96% of CBDT receipts and 60.44% of CBECreceipts of the Bank are now through e- mode.

- Refund Banker Scheme for electronic refund of Income Tax is nowoperational at 6 centres viz. Delhi, Mumbai, Kolkata, Chennai,Bangalore and Patna and will be extended to other centres in a phasedmanner.

- Cyber Treasury for online collection of State Govt. receipts has beenimplemented in 14 States and remaining States are in the process ofbeing covered.

- Bank is partnering State Government of Delhi for their e-governanceproject for collection of taxes and utility payments from citizensthrough Citizen Service Centres (CSCs).

E. RURAL BUSINESS GROUP

Rural Business Group, which deals with the business of the Bank at allrural and semi urban centres, now handles a deposit portfolio of Rs.2,15,931 crores and a credit portfolio of Rs. 1,20,617 crores, which is32% and 26% of the Banks total domestic deposit and credit portfoliorespectively as on 31.03.2009.

Page 270: company history of SBI, ICICI

(Amount in Rs. crores)Particulars As on As on Growth 31.03.2008 31.03.2009 %

Deposits 1,65,852 2,15,931 30.19

Advances 1,01,850 1,20,617 18.46

Highlights/Initiatives during the year

- The rate of growth, both in deposits and advances, has been betterthan the growth rate of ASCB rural and semi urban branches. As aresult, the Banks market share in rural and semi urban areas improvedby 1.35% in deposits and 1.27% in advances between March and December2008.

- High proportion (54% of total deposits) of Current Account & SavingsAccount (CASA) deposits in the group contributes to its lower cost ofdeposits at 5.23%, which is significantly lower than the Whole Bankaverage of 6.03%.

- The business strategy envisaged setting up of multi pronged sourcingagents coupled with improved back end processing capacity.

- Front end sourcing force comprises, besides branches, alternatechannels like Officers Marketing and Recovery (OMR) and BusinessFacilitators (BFs) and Business Correspondents (BCs).

- OMRs numbering around 4800 now source not only high value Agriculturesegment loans but all types of deposits, loans and cross-sellingproducts across all the segments.

- The Bank has appointed about 18,000 Customer Service Point(CSP)/outlets of Business Correspondents/Business Facilitators(BC/BFs). Some of the national level BC/BFs are India Post and ITC.During the year, the alliance with India Post has been scaled up nationwide and now covers more than 5,200 Post Offices across all States.

- To increase its outreach, the Bank has opened about 481 new branchesin rural and semi urban areas during FY-09.

- To improve the processing capacity, 158 Rural Central ProcessingCentres (RCPCs) have been opened during FY-09.

E.1 Agri Business:

Table : 6 Agriculture - Highlights

(Amount in Rs. crores)Particulars As on As on Growth 31.03.2008 31.03.2009 %

Deposits 8,777 12,407 41%

Page 271: company history of SBI, ICICI

Advances 45,797 54,678 19%

Achievements during the year

- The Bank has consecutively for the second time crossed the 18%Benchmark in Agri Priority Sector Advances with achievement of 18.46%in FY 09.

- The Bank has surpassed the GOI target for credit flow to Agricultureby achieving Agri. disbursements of Rs. 28,442 crores in 2008-09against the target of Rs. 28,000 crores and financed 10.68 lac newfarmers against the target of 7.40 lac during the year.

- The Bank achieved more than 50% absolute reduction in Agri NPAs (NPAsreduced to Rs. 1,454 crores from Rs 3,079 crores) in FY 09.

- To improve quality of lendings and diversification of portfolio, AreaDevelopment Schemes have been prepared under National Business Plan,covering thrust areas viz. Horticulture, Dairy, Fisheries, FoodProcessing, Biotechnology, etc.

- Thrust continues to be laid on Contract Farming and Value ChainFinancing.

- Bonding with Farmers: To enhance customer awareness and ensurecontinued relationship with the farming community, various initiativeshave been taken under Bonding with Farmers. Achievements during FY09 are given in the table.

Initiative Achievement

Villages adopted(SBI ka Apna Gaon) 209

Farmers Clubs formed 1968

Farmers Meets conducted 29653

Kisan Manch established 28

- The Bank has successfully implemented Agricultural Debt Waiver & DebtRelief Scheme, 2008 of GOI in more than 6,550 Agri lending branches,covering 42 lac farmers. The Bank has submitted Agri. Debt Waiver claimof Rs. 5,287 crores to RBI and received first instalment of Rs. 2,168crores (41% of the claim).

Micro Finance and Financial Inclusion:

- The Bank is the market leader in SHG-Bank credit linkage programmehaving credit linked so far 13.73 lakh SHGs and disbursed loans to theextent of Rs. 8,050 crores. Bank has rolled out several unique productslike SHG Credit card and SHG Gold Card.

Page 272: company history of SBI, ICICI

- A new scheme for financing NGOs/MFIs for on- lending to SHGs has beenintroduced.

- A Micro Insurance product - Grameen Shakti has been rolled out.

- SBI has been rated as the Best Public Sector Bank for Rural Reach byDun & Bradstreet.

- The Bank has won awards for topping SHG-Bank Credit linkage inOrissa, Jharkhand, Maharashtra, Uttarakhand, Tamil Nadu and UttarPradesh.

- Coverage of unbanked village increased from 12,515 in March 2008 toabout 53,000 upto March 2009.

- The Bank is the major player in Electronic Benefit Transfer (EBT)projects of Government benefit payments, with participation in 5States.

Multiple IT enabled channels for Financial Inclusion:

- The Bank has gone beyond the usual domains of technology in terms ofplatform, solution, operational details and service contents in a veryaggressive manner to serve the excluded common citizen with minimalcosts. Some of these channels are:

a) SBI Tiny - Smart Card based accounts: This is a secure accountworking on biometric validation of the customer and RFID technology.Around 19.11 lakh customers have been enrolled with one technologypartner. To broad base the outreach, cards of a different technologyhave been introduced and about 4.5 lakh customers enrolled.

b) Internet based kiosk channel: This PC based solution launched inAugust 2008 leverages existing kiosk infrastructure in villages.Transactions are equally secure as this channel also works on biometricvalidation of the customer.

c) Mobile based accounts: These accounts work with mobile phone basedlow cost technical solution. A pilot project is currently beingimplemented in Uttam Nagar, New Delhi.

d) Low cost biometric ATMs: Low cost biometric ATMs have been deployedstarting with Cuddalore district of Tamil Nadu. This platform will beexpanded significantly.

E.2 Regional Rural Banks (RRBs)

- Post amalgamation, the Bank has got 17 RRBs with a network of 2557branches spread over 122 districts and 17 states in the country. Theaggregate deposits and advances of the sponsored RRBs stood atRs.17,273 crores and Rs.10,242 crores respectively as on 31st March2009. The profits increased from Rs.115.68 crores as on March 2008 toRs.203.31 crores as on March 2009.

Page 273: company history of SBI, ICICI

- Recommendations of the Committee to formulate a comprehensive HumanResources Policy for RRBs (Dr. Thorat Committee) regardingcategorisation of RRBs and their branches, organisational structuringetc. and accepted by the Government have been implemented in all oursponsored RRBs.

E.3 Credit Assistance provided to Scheduled Castes and Scheduled Tribes

The credit assistance provided by the Bank to Scheduled Castes andScheduled Tribes stands at Rs.12,939 crores and forms 7.9 % of totalPriority Sector advances of the Bank as on the 31st March 2009.

Table : 7 Recovery position ofSC/ST borrowers (scheme-wise)

SCHEME Recovery %

Prime MinistersRozgar Yojana (PMRY) 34.62

Swarnajayanti GramSwarozgar Yojana (SGSY) 43.14

Swarna Jayanti ShahariRozgar Yojana (SJSRY) 36.73

Scheme for Liberation &Rehabilitation of Scavengers(SLRS) 28.08

Differential Rate ofInterest (DRI) 42.39

E.4 Prime Ministers New 15 Point Programme for the welfare ofMinorities And Implementation of Sachar Committee recommendations.

- Our Bank has implemented Prime Ministers New 15 Point Programme forthe welfare of Minorities, whose important objective is to ensure thatan appropriate percentage of the Priority Sector Lendings is targetedfor the minority communities and that the benefits of variousGovernment sponsored schemes reach the under-privileged, particularlythe disadvantaged section of minority communities (Christians, Muslims,Buddhists, Sikhs and Zoroastrians).

The year wise position in respect of our financial assistance tominority communities in the identified Minority Concentration Districts(MCDs) is given below:

Table : 8 Credit Assistance to Minorities

Period No. of districts No. of Amountas on identified by A/cs (Rs. in

Page 274: company history of SBI, ICICI

GOI (MCDs) crores)

March 2007 44 7.94 lacs 2106

March 2008 121 9.88 lacs 3516

March 2009 121 9.91 lacs 5091

- Minority cells for co-ordination have already been created at LocalHead Office level and Nodal Officers have been designated to monitorthe progress in lendings to minority communities as well as to redressthe grievances of minority communities.

- As per Sachar Committee recommendations, our bank has opened 177 newbranches in under- banked / unbanked areas in MCDs during the financialyear 2008-09.

- All the lead district managers have been advised to monitorapplications received from minority committees and their disposal.Also, quarterly information regarding Minority Lendings is loaded onthe Banks Website.

F. MARKETING & CROSS SELLING DEPARTMENT

- Consistent efforts by the Bank have resulted in emergence of CrossSelling as an important source of income. Initiatives taken by theMarketing- Cross Selling Dept. has earned the Bank an income ofRs.166.45 crores during the financial year ending March 2009 despitethe adverse economic scenario.

Highlights of Initiatives Taken Life Insurance:

a) Cross Selling of Life Insurance products was actively carried out bybranches in Rural

Banking Group and Corporate Banking Group and International BankingGroup also, resulting in YoY growth of :

i) Income : 34.17%

ii) Rated premium : 27%

iii) Renewal Business : 82%

iv) Number of lives : 48% (12.52 lacs -covered New Business)

b) A Micro Insurance Product "Grameen Shakti scheme for SHGs" wasintroduced in Andhra Pradesh, Maharashtra, Orissa, Tamil Nadu and WestBengal. Total lives covered: 8.25 lacs.

c) The Bank introduced an omnibus credit protection product "DhanrakshaPlus" covering all personal loans including Home Loans and Auto Loans.

Page 275: company history of SBI, ICICI

d) Health insurance product covering nine critical illnesses namedCriti 9 was introduced in Bangalore Circle on a pilot basis.

Mutual Funds:

An amount of Rs.23,628.31 crores was mobilised through our branches forinvestment in mutual funds, recording a YoY growth of 66%.

Mutual Funds - Miscellaneous

MF-Training Initiatives:

There has been a significant increase in the number of AMFI certifiedemployees and Certified Insurance Facilitators as a result of trainingand skill upgradation initiatives undertaken by the Bank.

G. CORPORATE STRATEGIES & NEW BUSINESS

The New Businesses Department was created to formulate strategies fornew businesses, incubate new business initiatives, pilot the same andon stabilization, handover to the concerned Business Group. Various newbusinesses like Pension Fund Management, General Insurance, PrivateEquity, Financial Planning & Advisory Services (FP&AS), CustodialServices, Payment Solutions, Depository Participant Services and Onlinetrading have been initiated by the department. The status ofinitiatives is as follows:

Financial Planning & Advisory Services (FP&AS)

- Financial Planning and Advisory Services initiative is focussed onstrengthening the relationship of the Bank with Vishesh and High

Net-worth Individual (HNI) customers (existing as well as new) byproviding a range of services for managing and growing their wealth.

- 1135 Relationship Managers (RMs/CREs-PB) have been provided basictraining in Financial Planning and second level of training has beenimparted for 181 RMs PB.

- The Financial Planning and Wealth Management software has gone liveon 02/03/2009 and the FP&AS have been rolled out in 502 branches as on31/03/2009. The RMs PB and the Customer Relation Executives (CREs-PB)in these branches will not only help the Vishesh and HNI Customers inmanaging their assets through a mix of products and strategies but willalso advise them for optimally meeting their needs of protection,investment in various classes of assets through investment planning,tax planning, retirement and real estate plans. This initiative willadd enormous value to our offerings and increase customer stickiness,especially in the retail segment.

- Demat Services and eZ-trade@sbi (Online Trading) services are nowavailable at more than 1500 branches across India. In FY 2008-09, theBank has introduced several customer friendly features in our demat

Page 276: company history of SBI, ICICI

accounts like digitally signed email statements and SMS alerts onselect demat account transactions. Features such as Online instructionsfor securities transfer and pledge/unpledge, search ISINs, viewTransaction Status, view Settlement Calendar and order deliveryinstruction booklet online are available through www.onlinesbi.com. Ourobjective for the next financial year is to extend our reach to as manycentres as possible while continuously honing our products by addingmore value added features.

Custodial Services

- Indias attractiveness as a destination for investments iscontinuously on the increase and handling securities and providing fullrange of custodial services to the Foreign Institutional Investors aswell as to the domestic investors offers great potential.

- The Bank has entered into a Joint Venture (JV) Agreement with SocieteGenerale Securities Services (SGSS) on June 05, 2008 for starting theCustodial Services business. SBI Custodial Services Pvt. Ltd. has beenincorporated initially as a 100% subsidiary of the Bank and RBIapproval for inducting SGSS as a JV partner has been obtained. Afterreceipt of approval from SEBI, the company would be converted into a JVCompany with SBI holding 65% of the equity and the balance held bySGSS.

- The Clients of our JV would mainly comprise FIIs, Domestic FIs,Mutual Funds, Pension Funds etc. The Business plan envisages a 8-10 %market share in domestic and global custody in 3 years.

The Company is expected to commence its operations early in thefinancial year 2009-10.

General Insurance

- While SBI Life is meeting a part of the requirements under ProtectionServices, the insurance offering bouquet will be complete with theinclusion of General Insurance products, greatly enhancing the customervalue proposition at our vast branch network and enhancing the brandvalue of the Bank.

- With this end in view, the Bank has decided to enter into the GeneralInsurance business through the joint venture route. The main reason forthe Banks foray into General Insurance business is to leverage theBancassurance channel. We aim to capture and leverage the value ofin-house business, and establish State Bank Group as a leading playerin the arena of General Insurance.

- The J.V. Agreement has been signed with Insurance Australia Group(IAG) on the 24th November 2008. We have incorporated a subsidiaryunder the name SBI General Insurance Co. Ltd. after receiving approvalfrom the RBI. The Company is currently in the process of obtainingnecessary regulatory approvals for commencement of Insurance business.We anticipate the start of the business for the new subsidiary in thethird quarter of 2009-10.

Page 277: company history of SBI, ICICI

Private Equity

- In view of the growing importance of private equity as an alternateasset class and the attractive returns it offers, the Bank has decidedto enter this area and made substantial progress in this regard.

- An infrastructure fund has been set up in collaboration withMacquarie of Australia and IFC Washington, primarily aimed at investingin the Indian Infrastructure space. All necessary regulatory approvalshave been received for operationalisation of the fund. Over US $ 1billion has been mobilized from large and well known InternationalInvestors including the sponsors.

- The Bank is at an advanced stage in setting up a general purposePrivate Equity Fund jointly with sovereign entities in Oman. Governmentof India has designated the Bank as the operationalising agency for asimilar sovereign fund with Qatar. Several other Funds are at variousstages of formation.

- As some of the funds initiated by the Bank are on the verge ofoperationalisation, the Bank is poised to play a leading role in thispromising sector in the coming years.

Payment Solutions Business Group Mobile Banking Services

Mobile Banking Services (MBS) offers scope for convenient, userfriendly, secured and cost effective alternate channel of banking. MBShas been launched after RBI approval. Application based service usingSMS and GPRS facilities has been made available to the customers. Theservice is also available over WAP for all mobiles having GPRSconnectivity. MBS has been rolled out to all our non-rural branches.The product is comparable to the best available in the market.

Real Time Gross Settlement (RTGS) & National Electronic Fund Transfer(NEFT)

The Bank has been promoting Inter-Bank payments through RTGS and NEFTchannels. Due to our sustained efforts, the Bank has witnessedsubstantial growth in both inward and outward RTGS/NEFT remittances.Both RTGS/NEFT remittance facilities are available through internetbanking and NEFT is also available over Mobile Banking. We are makingefforts for migration of more corporates / Govt. Departments to NEFTfor effecting their payments to employees/vendors.

Debit Cards

The Bank has been encouraging the usage of debit cards at Point of Sale(POS) terminals. The daily average number of transactions at POS hasincreased manifold. Various offerings such as tie ups, loyaltyprogrammes etc. are being developed to improve the Banks footprint inthis area.

Consolidation of Payment Solution Business

Page 278: company history of SBI, ICICI

The Bank has embarked on an ambitious plan to restructure theorganizational and, if necessary,

IT set up for its various payment related businesses. This is beingdone to achieve efficiency in operations, avoid duplication, optimalutilization of resources, cost effectiveness and bringing aboutreduction in development efforts. The Bank has appointed an outsideConsultant for undertaking the above study and to advise the Bank inthe matter. The exercise, when completed, is expected to yieldsubstantial benefits.

H. INTERNATIONAL BANKING GROUP

H.1 Operation of Foreign Offices

The Bank at the year end had a network of 92 overseas offices spreadover 32 countries covering all time zones. The 92 offices comprised 37Branches, 5 Sub Offices, 8 Representative Offices, 35 Branches ofSubsidiaries, 3 Managed Exchange Companies and 4 Joint Ventures. Theasset level of Foreign offices and subsidiaries was US$ 23.73 billionregistering a growth of 20% over last year. Foreign Offices earned anet profit of US $ 151 million during the year.

Overseas Expansion

Consequent upon receipt of Qualifying Full Bank licence, the Bankstarted retail operations in Singapore during the year. Three newBranches and seven ATMs were set up to boost retail operations. Onebranch and a sub office were added to the network in Male and aRepresentative Office in Tianjin in China was operationalised. SBICalifornia, the Banks wholly owned subsidiary in USA, opened itsseventh Branch at Bakersfield. PT Bank Indomonex, a partly ownedsubsidiary in Indonesia, opened 2 branches during the year. Nepal SBIBank Ltd., a Joint Venture, opened 16 new branches. The Banks twopartly owned subsidiaries in Mauritius viz. Indian Ocean InternationalBank Ltd. and SBI International (Mauritius) Ltd. were merged during theyear to create a new entity titled SBI (Mauritius) Ltd. Significantaddition to the overseas network is planned for the current year.

Resource Management

Despite turmoil in global financial market conditions, the Banksforeign offices maintained comfortable liquidity position. During theyear 2008-09, US$ 686 million (approximately Rs. 3,480 crores) wasraised by the foreign offices under Banks MTN Programme and bilateralloans of different maturities.

NRI Business

The Banks NRI deposits grew by Rs. 8,948 crores during the year toreach a level of Rs. 48,950 crores by the year end. Similarly, advancesto NRIs increased by Rs. 197 crores and now stand at Rs. 1,218 crores.Six new tie-ups with Exchange Companies were concluded taking the total

Page 279: company history of SBI, ICICI

such tie-ups to 20. Rapid Remittance, a faster version of remittanceproduct, was introduced for the USA customers. A number of campaignsacross various media were undertaken during the year to publicize theBanks products and services.

H.2 DOMESTIC OPERATIONS

Export Credit

The Banks outstanding export credit stood at Rs. 26,732 crores as on31.03.2009. State Bank of Indias active participation in financingproject export activities resulted in the Bank supporting 22 projectexport proposals with contract value aggregating Rs. 12,460 crores. TheBanks own exposure as at the year end to these projects was Rs. 1,492crores.

Merchant Banking

Despite the slowdown in the economy and tight liquidity conditions, theBank retained its leadership as Mandated Lead Arranger and Book Runnerfor syndicated loans in Asia Pacific (excluding Japan but includingAustralia) for the year 2008. 15 syndication deals aggregating US$8,297 million and 13 bilateral facilities aggregating US$ 285 millionwere concluded in 2008-09. 22 Mergers and Acquisitions (M&A) dealsaggregating US$ 7,300 million with Banks participation level of US$ 2,269 million fructified during the year.

Global Link Services (GLS)

GLS, the Banks specialized outfit, caters to speedier settlement ofremittances. In the year 2008-09, GLS, on behalf of domestic branches,handled 139,788 export bills and 193,286 foreign currency chequesaggregating US$ 17.45 billion. In addition, it handled 2,196,447inward remittance transactions amounting to US$ 2.39 billion fromvarious centres in the Middle East, UK and USA.

Correspondent Relations

The Bank has entered into correspondent banking arrangement with 527reputed international banks to extend seamless services to variedclients.

These correspondent Banks are located in 124 countries. The Bank alsohas 1626 Bilateral Key Exchange (BKE) arrangements for SWIFTfacilitating speedier flow of financial messages.

Country Risk & Bank Exposures

The Bank has a Country Risk Management Policy in tune with RBIguidelines. The policy outlines robust risk management models withprescriptions for Country, Bank, Product and Counterparty exposurelimits. Considering the global economic turmoil, both Country wise andBank wise exposure limits are monitored and reviewed on a regularbasis. The exposure ceilings and classifications are moderated in line

Page 280: company history of SBI, ICICI

with the dynamics of their risk profiles. Periodical corrective stepsare initiated to safeguard the Banks interests.

I. ASSOCIATES AND SUBSIDIARIES

1.1 The State Bank Group with a network of 16055 branches including4607 branches of its six Associate Banks dominates the banking industryin India. In addition to banking, the Group, through its varioussubsidiaries, provides a whole range of financial services, whichinclude Life Insurance, Merchant Banking, Mutual Funds, Credit Card,Factoring, Security trading, Pension Fund Management and PrimaryDealership in the Money Market.

1.2 Associate Banks

SBIs six Associate Banks had a market share of 6.74% in deposits and6.95% in advances as on last Friday of March 2009.

Table : 9 Performance Highlights of Associate Banks (ABs)

(Amounts in Rs. crores) As on As on Change 31.03.2008 31.03.2009

Agg. Assets 263221 313099 18.95%

Agg. Deposits 218199 264779 21.35%

Agg. Advances 166050 198583 19.59%

Operating Profit 4160 5495 32.11%

Net Profit 2225 2774 24.71%Credit Deposit

Ratio 76.10 75.00 -1.10Capital Adequacy

Ratio 12.52 13.01 +0.49

Gross NPA 2465.41 2763.56 12.09%

Net NPA 972.36 1191.26 22.51%

Return on Equity 18.50% 19.83% 1.33

1.3 SBI Commercial & International Bank Ltd. (SBICI)

As at the end of March 2009, the aggregate deposits and total advancesof SBICI stood at Rs.538.33 crores and Rs.315.34 crores respectively.The Bank recorded an operating and net profit of Rs.11.52 crores andRs.11.07 crores respectively. The net NPAs as at the end of March 2009was Rs.0.23 crores.

Page 281: company history of SBI, ICICI

Performance Highlights of Non-Banking Subsidiaries/ Joint Ventures

1.4 SBI Capital Markets Limited (SBICAP)

SBICAP is a full service investment banking outfit offering ProjectAdvisory Services, arrangement of Structured Finance, Capital MarketServices like Equity Issuances, Mergers & Acquisitions and arrangementof Private Equity, etc. The company, during the year, has furtherconsolidated its dominant position as arrangers of debt for thecorporate sector both in the infrastructure as well asnon-infrastructure sectors.

The following achievements are some of the many recognitions won by theCompany during the year:

- Ranked 3rd globally as Mandated Lead Arranger by Thompson Reuters PFIfor 2008 as against 9th globally in 2007. Ranked No.2 globally and No.1in Asia Pacific by Dealogic.

- Ranked 1st as India Syndicated Loan Mandated Arranger and as IndiaSyndicated Loans Book runner by Bloomberg.

- The Company has been awarded "Bank of the year" award in 2008 byThompson Reuters.

- The project relating to Coastal Gujarat Power Ltd. (Tata Ultra MegaPower Plant) has been recognised by Project Finance International asPower Deal of the Year and as Best Power Project Deal of the Yearby Euromoney.

- Awarded Silver Shield under the category ‘Finance sector’ of ICAIAwards for Excellence in Financial Reporting for the year ended March2008.

- The company has posted a PAT of Rs.150.07 crores registering YoYgrowth of 5.55% upto March 2009.

- Declared a dividend of 120% as against 100% for the FY2007-08.

1.5 SBICAP Securities Limited (SSL)

SSL, which commenced its operations in June 2006, is a broking companyoffering equity broking services to retail and institutional clientsboth in the Cash as well as in the Futures and Options segments. It isalso engaged in sales & distribution of other financial products like

Mutual Funds, etc. The Company has launched e-broking services to theclients of SBI and Associate Banks. SSL has 48 branches and 18franchisees and offers Demat, e-broking, e-IPO and e-MF services toboth retail and institutional clients.

1.6 SBICAPS Ventures Limited (SVL)

Page 282: company history of SBI, ICICI

SBICAPS Ventures Limited (SVL), a USD 100 million Venture Capital Fund,jointly with SBI Holdings Inc. (Softbank), Japan has invested USD 8 mioin two companies and a number of investment proposals are beingexamined. The scope of the fund covers all sectors except real estateand financial services.

1.7 SBICAP (UK) Ltd.

SBICAP (UK) Ltd., which is only in its second full year’s operation,has booked a revenue of Rs. 2.14 crores upto March 2009 as against Rs.1.51 crores as on March 2008. The company has posted a net profit ofRs.0.44 crores in March 2009, as against a loss of Rs.0.36 crores lastyear due to diversification of income streams.

1.8 SBICAP TRUSTEE Co Ltd. (STCL)

SBICAP TRUSTEE Co Ltd. (STCL) has commenced security trustee businesswith effect from1st August 2008. The company’s gross income upto31.03.2009 is Rs. 0.44 crores and net profit is Rs.0.14 crores.

1.9 SBI DFHI LTD.

- SBI group holds 67.01% share in the Company, which is a primarydealer.

- For the period ended 31st March 2009, the Company’s PBT was Rs.101.76crores as against Rs.95.89 crores during 2007-08.

- The market turnover for G-Sec and Treasury bills during 2008-09 wasRs.57,922 crores as against Rs.54,919 crores recorded during 2007-08.

- Declared a dividend of 12.50% as against 10.00% for the FY2007-08.

1.10 SBI Cards & Payments Services Pvt. Ltd. (SBICSPL)

- SBI Cards, the only stand-alone credit card issuing company in India,is a joint venture by State Bank of India and GE Capital Services,wherein SBI holds 60% stake.

- The Cards in Force (CIF) of the Company stands at 27.24 lacs andthe receivables are at Rs.1,804 crores at the end of March 2009.

- The Company has posted a loss before tax of Rs. 185.12 crores duringthe year as against a loss before tax of Rs. 230.02 crores as on31.03.08.

1.11 SBI Life Insurance Company Limited (SBILife)

- SBI Life has a unique multi-distribution model comprisingBancassurance, Retail Agency & Institutional Alliances and GroupCorporate Channels for distribution of insurance products.

Page 283: company history of SBI, ICICI

- SBI Life has bagged the coveted personal finance award-Outlook Moneyand NDTV profit Best Life Insurer 2008.

- Ranked among global top three in terms of number of Million DollarRound Table (MDRT) members.

Table : 10 Performance Highlights of the Associate Banks as at March2009

(Rs. in crores)

Name of the Bank SBIs share in Deposits the capital (%)

State Bank of

Bikaner & Jaipur 75 38762

Hyderabad 100 64686

Indore 98.05 27693

Mysore 92.33 32388

Patiala 100 59580

Travancore 75 41670

All 6 Banks - 264779

Advances Operating Net Profit Profit

30088 892.84 403.45

43952 1302.96 615.81

21739 624.01 278.92

25878 653.52 336.91

43954 965.45 531.54

32972 1056.27 607.84

198583 5495.05 2774.47

- ICRA has assigned iAAA rating to the company indicating highest claimpaying ability.

- The company continued to be ranked 2nd among private insurers, fornew business growth.

Page 284: company history of SBI, ICICI

- Gross Premium of the Company was Rs.7,212 crores with YoY growth of28%.

- The market share of SBI Life in the total industry improved to 6.0%as against 5.15% in March 2008 and to 16% amongst private insurers from14% as at March 08.

- Recorded a loss of Rs.26 crores as on 31.03.2009 as against a profitof Rs.34 crores as on 31.03.2008 due to dimunition in the value ofequity investments.

- The ‘Assets Under Management’ of SBI Life recorded a growth of 43%YoY to reach Rs.14964 crores.

- Portfolio lives has increased to 131.2 lacs from 70 lacs as on March2008.

- Opened 246 new sales offices during the current year taking the totalnumber of offices to 489 as on 31.03.2009.

I.12 SBI Funds Management (P) Ltd. (SBIFMPL)

- SBIFMPL, the Mutual Fund arm of SBI, is the 6th largest Fund House interms of Assets Under Management and a leading player in the marketwith 5.5 million investors.

- The schemes of the Fund House have performed consistently over theyears and have emerged as the preferred investment for investors.

- The company has posted a PAT of Rs.68.95 crores as on 31.03.2009registering a decline of 2.0% Y-o-Y

- As against net outflows experienced by many of the Mutual Fundsacross the industry, SBIFMPL registered a net inflow of Rs.2,315 croresduring the year upto March 2009. The average Assets Under Management(AUM) of the company as at March 2009 stood at Rs.27,846 crores.

- Declared a dividend of 40% as against 33.60% for 2007-08.

- The company’s average AUM market share at the end of March 2009 stoodat 5.52%.

- SBI Magnum Balance Fund’’ and SBI Magnum Sector Umbrella-ContraFund were adjudged the best funds in their respective categories inLipper India Fund award in 2008.

- SBI Magnum Taxgain Scheme-93 was rated a Five Star Fund in 3 yearperformance category in ICRA Mutual Fund Awards 2009.

1.13 SBI Factors and Commercial Services Pvt. Ltd. (SBIFACTORS)

- SBI Factors provides domestic factoring services to Small and Medium

Page 285: company history of SBI, ICICI

Enterprises (SMEs).

- The turnover recorded by SBI Factors at the end of March 2009 stoodat Rs.5,979 crores as against Rs.6,479 crores at the end of March 2008.

- While total income of the company increased by 13% YoY and stood atRs.164.25 crores as at March 2009, the company earned PAT of Rs.42.79crores as at March 2009 registering a YoY growth of 50.78%.

- Declared a dividend of 30% as against 16% for 2007-08.

1.14 Global Trade Finance Ltd. (GTFL)

- GTFL is one of the leading factoring companies in India which has thehighest market share (85%) in export & import factoring.

- During the year ended 31st March 2009, the turnover of the companyincreased by 10.60% YoY, reaching Rs.12,303 crores. The total income ofthe company as at March 2009 was Rs.505.48 crores as against Rs.353.76crores in March 2008. The company earned a PAT of Rs.74.10 crores as onMarch 2009 as against Rs.73.57 crores last year.

- Declared a dividend of 20% as against 12% for 2007-08.

1.15 SBI Pension Funds Pvt. Ltd. (SBIPF)

- SBIPF is one of the three Fund Managers appointed by the Pension FundRegulatory &

Development Authority (PFRDA) for management of Pension Funds under theNew Pension System for Central Government (except Armed Forces) andState Government Employees. SBIPF, wholly owned subsidiary of the StateBank Group, commenced its operations from April 2008. SBIPF has got themandate to manage 55% of the total corpus of pension funds receivedunder the New Pension System during 2008-09. The total Assets UnderManagement’’ of the company as on 31st March 2009 was Rs.1,173.23crores on which a management fee of Rs. 26.32 lacs was received. TheCompany recorded a net profit of Rs. 0.04 crores.

Important Developments during the year in Associates & Subsidiaries:

- State Bank of Saurashtra, a wholly-owned Associate Bank having majorpresence in the state of Gujarat, was acquired by SBI during the yearwith the approval of RBI and Govt. of India. The Associate Bank had461 branches with an asset base of more than Rs.21,000 crores at thetime of acquisition.

- The Bank has also decided to merge SBICI Bank Ltd., a wholly owneddomestic banking subsidiary, with itself to bring about further synergyand efficiency. Necessary approval is awaited from the Government ofIndia.

- SBI Cap Securities Ltd. (SSL)., which is a wholly owned subsidiary ofSBI Capital Markets Ltd., is proposed to be taken over by SBI as a

Page 286: company history of SBI, ICICI

direct subsidiary in order to impart greater synergy by undertakingbesides broking activities, marketing of other wealth managementproducts through State Bank Group channels. The proposal is awaitingnecessary regulatory approvals.

- With a view to improving the market share in domestic andinternational factoring business as also to have synergy in operationsand optimising efficiency, the Bank has proposed to merge SBI Factorsand GTFL, two of its own subsidiaries. The proposal is awaitingnecessary regulatory approvals.

J. ASSET QUALITY

NPA Management

The position of NPA reduction as on 31.03.2009 is given hereunder.

Table : 11 Asset Quality (Rs. in crores)

1 Gross NPAs 15589Gross NPA Percentage 2.84%

2 Net NPAs 9552Net NPA Percentage 1.76 %

3 Cash Recovery in NPA 2966

4 Upgradation to Standard 3402Assets

5 Write offs 1896

6 Gross reduction in 8264NPAs (3+4+5)

7 Fresh slippages of Standard 11015Assets to NPA category

8 Recovery in written 888off accounts

- Restructuring of impaired Standard Assets as well as viablenon-performing assets, both under CDR mechanism as well as under Bank’sown scheme, have been given top priority for arresting new additionsand reducing the existing level of NPAs.

- The machinery for identification and monitoring of Special MentionAccounts by making prompt review and taking quick corrective action hasalso been geared up for the purpose.

- The Bank referred 9 cases with aggregate exposure of Rs. 883 croresto CDR mechanism this year out of a total of 20 cases with aggregateexposure of Rs. 1,235 crores referred to CDR by the whole Banking

Page 287: company history of SBI, ICICI

system. Our share in the debt in the cases referred was 72% by value.In all cases, timely intervention enabled the accounts to retain theirStandard Asset status.

- Five financial assets involving principal outstandings of Rs. 289crores have been sold to other banks/ARCIL during the year.

K. INFORMATION TECHNOLOGY

The Bank has been proactive in responding to the opportunities thrownopen by evolving technology and increasing technology penetration.Technology has been used innovatively for achieving financial inclusionand technology driven banking solutions have been implemented toachieve enhanced customer satisfaction.

Networking: More than 2000 branches were added to our wide area networkduring the year. Presently all the branches and ATMs of the Bank arenetworked. The network plays a major role in supporting the Bank’sbusiness applications and is capable of carrying data voice and videoin a secure manner.

Core Banking: The Bank achieved full Core Banking status on 23.07.2008when all the branches of the Bank were made functional on CBS. This isone of the most important achievements of the Bank as our network alongwith Associate Banks is one of the largest banking network in the worldto have gone on centralised data base (Core Banking) system. CoreBanking has not only enhanced our transaction processing capabilitiesbut has also empowered our customers to transact their banking businessfrom any of the 11448 branches of the Bank. Our 506 branches have beenenabled for Core Integrated Trade Finance also.

Internet Banking: With enabling of over 2100 branches for internetbanking, all the branches of the Bank are now internet banking enabled.Apart from enabling Anywhere Anytime banking, our Internet Bankingoffers a host of value added services like funds transfer throughRTGS/NEFT, Payment of Taxes, SMS Alerts, Bills Payments, Fee Payments,Mutual Fund Investments, Subscription to IPOs, Temple/Trust Donationsetc. For Corporate customers, additional facilities like CBEC Payment,Customs Payment, Fee collections for DGFT, Freight collection forRailways etc. have been provided. A number of e-Governance initiativeshave also been enabled through Internet Banking.

ATMs: The Bank, along with its Associate banks have a common ATMnetwork which is the largest in the country. It crossed the milestoneof 10,000 ATMs in December 2008 and with an addition of 2911 ATMsduring the year, the Bank has now a network of more than 11300 ATMs.The Bank also has 33 Multi Currency Module enabled ATMs at 19 foreigncentres in 6 countries. Functionalities available at our ATMs includeCard to Card Transfer, Fee Payments, Utility Bill Payments, Donationsto Temples/Trusts etc. The Bank is also in the process of installingBiometric and low cost rural ATMs.

Payment Systems Group: All the branches of the Bank have been enabledfor RTGS and NEFT transactions. Further, the Bank has also enabledState Bank Group Payment Scheme (for instant funds transfer among State

Page 288: company history of SBI, ICICI

Bank Group Banks), Rupee Remittance Scheme from our foreign offices fordirect credit to accounts in our Bank as well as with other banksthrough NEFT.

Mobile Banking: The Bank has launched its mobile banking facility whichoffers various features like Funds Transfer using NEFT, EnquiryServices (balance enquiry / mini statement), Request Services (chequebook request), m-commerce (Mobile Top Up, merchant payments, SBI LifeInsurance premium) and bill payment (utility bills, credit cards).

Data Warehouse Project: Implementation of Enterprise Data Warehouse isunder progress. Its implementation will provide critical toolsnecessary to help the Bank strengthen itself as an intelligentorganisation, to improve processes, delivery of information forDecision Support System (DSS) consisting of analytics on productperformance, channel management, customer relationship management,concurrent audit, Inspection and Audit, budgeting and monitoring andself service for internal users.

Information Security: The Bank has a robust IT policy and InformationSystem (IS) Security policy which has been benchmarked against globalbest practices. To ensure business continuity and to guard against anydisaster, the Bank has put in place a disaster recovery and businesscontinuity plan. The Bank’s Information Systems Security is regularlyreviewed to ensure that the Bank’s information systems remain safe andbanking operations are conducted in a secure way.

Miscellaneous Operations

L Risk Management & Internal controls

M Business Intelligence Department

N Customer Service & Community Services Banking

L. RISK MANAGEMENT & INTERNAL CONTROLS RISK MANAGEMENT IN SBI

L.1 Risk Management Structure

- An independent Risk Governance structure is in place for IntegratedRisk Management covering Credit, Market, Operational and Group Risks.This framework visualises empowerment of Business Units at theoperating level, with technology being the key driver, enablingidentification and management of risk at the place of origination.

- Being alive to this imperative, efforts are on hand to enhance thedegree of awareness at the operating level in alignment with betterrisk management practices, Basel II requirements and the overarchingaim of the conservation and optimum use of capital.

- Keeping in view the changes which the Bank’s portfolios may undergoin stressed situations, the Bank has in place a policy which provides aframework for conducting Stress Tests at periodic intervals andinitiating remedial measures wherever warranted. The scope of the tests

Page 289: company history of SBI, ICICI

is constantly reviewed to include more stringent scenarios.

- Risk Management is perceived as an enabler for business growth and instrategic business planning, by aligning business strategy to theunderlying risks. This is achieved by constantly reassessing theinterdependencies / interfaces amongst each silo of Risk and businessfunctions.

L.2 Basel II Implementation

- The Bank, as per RBI Guidelines, has migrated to Basel II as on 31stMarch 2008. Simultaneously, processes have been set in train forfine-tuning systems & procedures, IT capabilities and Risk

Governance structure to meet the requirements of the AdvancedApproaches.

- Various initiatives such as migration to new Credit Risk AssessmentModels, independent validation of internal ratings and improvement inLoan Data Quality would not only enable conservation of capital butalso facilitate smooth migration to Advanced Approaches.

L.3 Credit Risk Management

- Credit Risk Management process encompasses identification,assessment, measurement, monitoring and control of credit exposures.Well defined basic risk measures such as CRA Models, Industry ExposureNorms, Counterparty Exposure Limits, Substantial Exposure Limits, etc.have been put in place.

L.4 Market Risk Management

- Market Risk Management is governed by the Board approved Policies forInvestment and Trading in Bonds, Equities and Foreign Exchange.

- Exposure, Stop Loss, Duration Limits and Derivative Limits have beenprescribed. These limits along with other Management Action Triggers,are tracked daily and necessary action initiated as required to controland manage Market Risk.

L.5 Operational Risk Management

- The Bank manages Operational risks by ensuring maintenance of acomprehensive system of Internal Controls and Policies .

- The objective of the Bank’s Operational Risk Management is tocontinuously review systems and control mechanisms, create awareness ofOperational Risk throughout the Bank, assign risk ownership, alignmentof risk management activities with business strategy and ensuringcompliance with regulatory requirements.

- The Policy applies to all business and functional areas within theBank, and is supplemented by operational systems, procedures andguidelines which are periodically updated.

Page 290: company history of SBI, ICICI

L.6 Group Risk Management

- The State Bank Group is recognised as a major Financial Conglomerateand as a systemically important financial intermediary with significantpresence in various financial markets.

- Accordingly, it has become imperative, both from the regulatory pointof view as well as from the Group’s own internal control and riskmanagement point of view, to oversee the functioning of individualentities in the Group and periodically assess the overall level of riskin the Group so as to facilitate optimal utilisation of capitalresources and adoption of a uniform set of risk practices across theGroup Entities.

- The Group Risk Management Policy applies to all Associate banks,Banking and Non-banking Subsidiaries and Joint Ventures of the StateBank Group under the jurisdiction of specified regulators and complyingwith the relevant Accounting Standards.

- With a view to enabling the Group Entities to assess their materialrisks and adequacy of the risk management processes and capital, allGroup members, including Non-banking Subsidiaries are encouraged toalign their policies & operations with the Group, vide Baselprescriptions and international best practices.

- Further, a Group Risk Management Committee has also been constitutedto oversee the matters relating to Group Risk by creating riskawareness across all Group entities, ensuring periodic review of thepolicy and its compliance etc.

L.7 Asset Liability Management

- The Asset Liability Management Committee (ALCO) of the Bank isentrusted with the evolvement of appropriate systems and procedures inorder to identify and analyse balance sheet risks and setting of benchmark parameters for efficient management of these risks.

- ALM Department, being the support group to ALCO, monitors the Bank’smarket risk such as the liquidity risk, interest rate risk etc. byanalyzing various ALM reports/ returns. The ALM department reviews theBank’s ALM policy and complies with the Bank’s/ RBI’s policy guidelineson an ongoing basis.

- The Bank has successfully implemented Market Related Funds TransferPricing (MRFTP) in all its business units for effective performancemanagement and Interest Rate Risk Management through execution ofstate-of-the-art ALM Tools.

L.8 Internal Controls

L.8.1 The Bank has in-built internal control systems with well-definedresponsibilities at each level. Inspection & Management Audit (I&MA)Department of the Bank carries out four streams of audits- Risk

Page 291: company history of SBI, ICICI

Focussed Internal Audit (RFIA), Credit Audit, Information Systems Auditand Management Audit covering different facets of the Bank’sactivities. I&MA Department also prescribes the processes, guidelines,manual of operations and formats for the conduct of Concurrent Auditwhich is administered by the Circles and carried out at branches withlarge deposits, advances and other risk exposures and credit orientedBPR entities. The department, headed by the Dy. Managing Director(I&MA), is functionally independent and reports to the Audit Committeeof the Bank’s Board (ACB).

L.8.2 Risk Focussed Internal Audit

The Inspection system plays an important and critical role inintroducing international best practices in the internal audit functionwhich is regarded as a critical component of Corporate Governance. RiskFocussed Internal Audit, an adjunct to risk based supervision as perRBI directives, has been introduced in the Bank’s audit system fromApril 2003. The audit of branches and BPR entities is conducted as perthe periodicity approved by ACB and RBI guidelines. During the year,audit of 6136 branches and 171 BPR entities was conducted.

L.8.3 Credit Audit

Credit Audit aims at achieving continuous improvement in the quality ofthe credit portfolio of the Bank by critically examining individuallarge advances with exposures of Rs.10 crores and above. The auditexamines the probability of default, identifies risks and suggests riskmitigation measures. The overall risk perception is also arrived at toinitiate early remedial action to improve the quality of creditportfolio. During the year, on-site Credit Audit was conducted in 289branches, covering 4624 accounts with aggregate exposures ofRs.2,64,854 crores.

L.8.4 Management Audit

The Management Audit focusses on the effectiveness of risk managementin the processes and the procedures followed in the Bank and uses RBIRisk Profile Templates as the basis. The Management Audit universecomprises Corporate Centres Establishments; Circles/Zonal Offices/OnLocale Regional Offices/Regional Business Offices; Associate Banks;Subsidiaries (Domestic/Foreign); Joint Ventures (Domestic/ Foreign),Regional Rural Banks (RRBs) sponsored by the Bank; RepresentativeOffices abroad and Exchange companies managed by Bank. During the year,Management Audit was conducted at 25 offices /establishments.

L.8.5 Foreign Offices Audit

I&MA Department supervises internal audit of all foreign offices of theBank, namely:

(a) Home Office Audit carried out by officials identified by I&MADepartment.

(b) Internal Audit conducted either by an official of the Bank or by an

Page 292: company history of SBI, ICICI

outsourced firm of that country, where foreign office is located.

(c) Management Audit of Representative Offices, Joint Ventures andSubsidiaries.

During the year, 23 Foreign Offices/Representative Offices /Subsidiaries were subjected to audit.

L.9 Vigilance

The Vigilance Department in the Bank is headed by the Chief VigilanceOfficer appointed with the concurrence of the Ministry of Finance andCentral Vigilance Commission. At each Local Head Office, the VigilanceDepartment is headed by a senior official of the rank of Deputy GeneralManager. The Department is manned by officers havingknowledge/background of investigation, disciplinary action matters andextensive experience in banking operations. The Department overseesthree primary aspects of vigilance viz. prevention, detection andpunishment. The Bank has a zero tolerance policy for fraud, corruptionand financial irregularities and encourages Whistle blowing as amatter of corporate culture.

M. BUSINESS INTELLIGENCE DEPARTMENT

- The Business Intelligence Department in the Bank constantly assesses,upgrades and fine tunes the growing information requirements of varioususer departments and business units. The information takes care ofboth decision support as well as statutory requirements. The DataWarehousing Project, designed to be a single source for all datarequirements, is also progressing satisfactorily.

N. CUSTOMER SERVICE & COMMUNITY SERVICES BANKING

N.1 CUSTOMER SERVICE

- On July 01 2008, the Bank unveiled its new Vision statement whichcontains the distilled essence of the views of over 1,40,000 staff whoparticipated in a unique exercise conceptualized and conducted by HumanResource Management Department to re- define the Bank’s Mission, Visionand Values. The staff, who displayed understanding of the challenges ofachieving excellent customer service which alone will enable the Bankto continue to maintain its leadership position in future, wereoverwhelmingly of the opinion that the Bank’s vision should focusprimarily on customer service. The Vision statement- My SBI,

My Customer first.

My SBI: First in customer satisfaction.’

appropriately reflects this view of our staff and shall be the guidingprinciple for the Bank’s plans, activities and strategies.

- The Bank has a well established grievances redressal mechanism.Toll-free helpline numbers are available at all LHO centres. For

Page 293: company history of SBI, ICICI

product enquiries and technology related issues, a dedicated 24x7helpline is available to customers. As a part of BPR initiatives, aContact Centre has been established with toll free number for providinginformation on products and account enquiries to customers on 24x7basis.

A comprehensive analysis of customer grievances is done every quarterto identify common systemic issues that need rectification.

- The Customer Service Committee of the Board reviewed the Bank’sGrievances Redressal Policy in March 2009 and approved revised policyincorporating the Bank’s new organizational structure and instructionson grievances redressal.

N.2 COMMUNITY SERVICES BANKING

- Apart from the normal banking operations, the Bank, as a responsibleand responsive corporate citizen, seeks to reinvest part of its profitin various community welfare projects to improve the quality of thelife of the poor, neglected, weaker and downtrodden sections ofsociety.

- In the financial year 2008-09, the Bank sanctioned donationsamounting to Rs.8.76 crores to various NGOs/Trusts/Societies for theirprojects with social orientation and also to Relief Funds including theBihar Flood tragedy.

- Under a novel scheme of Adoption of Girl Children designed by the SBILadies Club, over 15,300 poor and destitute girl children were adoptedby various branches throughout the country to meet their educationexpenses. The Club members also personally mentor the children adopted.

- It was a matter of pride that during the current year, the Bank wasawarded Reader’s Digest Pegasus Corporate Social Responsibility Award2007 in recognition of its contribution towards Rural CommunityDevelopment.

- From the Research & Development Fund, the Bank extended 100000 PoundSterling towards the functioning of an India Observatory and I.G.PatelChair at the Asia Research Centre of London School of Economics, inparticipation with RBI.

- The Bank also approved setting up of a special cell named SBI Cellfor Public Leadership in the prestigious Indian School of Business,Hyderabad which is currently ranked 15th among Global B Schools. TheCell proposes to undertake research in the area of Leadership in PublicSector with special reference to PSUs functioning in India. Theproposed project will not only add to the prestige of the Bank but alsoset the standards for holistic leadership and effective change forpublic sector organizations.

Miscellaneous

O Corporate Communication & Change

Page 294: company history of SBI, ICICI

P Organisational Planning

Q Right to Information Act (RTI Act 2005)

R Human Resources

S Business Process Re-engineering

T Official Language Department

U Banking Operations Department

O. CORPORATE COMMUNICATION & CHANGE

- During the current year, the Mass Internal Communication Programmenamed Parivartan - which was rolled out to over 130,000 officers andclerks last year - was modified, specially re-designed, and rolled outacross the Bank as Parivartan II to cover 44,000 subordinate staffincluding drivers, guards, liftmen, messengers, etc. spreading themessage of change, inclusiveness and empowerment. Over 1000 workshopswere held in a record 50 days.

- Meanwhile, Parivartan-I was simultaneously rolled out in allAssociate Banks after modifying the design to make it Associate Bankspecific. In all, over 53000 employees from clerks to senior managementwere covered in all Associate Banks in about 1400 two day workshops.Special two day workshops were held for the Top Management as well asthe Top Union and Association leaders of all Associate Banks creatingan awareness of their respective banks vis-a-vis the market and alsosensitizing them on the need for change.

- A series of non business HR initiatives were introduced and monitoredin the Bank to bring about an open, inclusive work culture such asintroduction of rolling shields, recognition dinners, Best Employee ofthe Month, Best RM, monetary incentives, inclusive Town Hall meetingswith Union and Association leaders, Open House hours for all staff withCircle Management Committee (CMC), etc.

- As a part of the Transformation process, special five day intensebrain storming Conclaves were held for the newly promoted DeputyGeneral Managers of the Bank.

- Internal communication in the Bank was enhanced by sharing CorporateVideo Clips with all Circles and sharing of best practices among allCircles. With a view to change work culture, placard campaigns andvideo campaigns through strategically placed plasma TVs were run.

- An ambitious new ‘Parivartan’ programme titled Citizen SBI,envisaging deep rooted, multilevel attitudinal change andtransformation in the Organization, consisting of waves of HRinterventions to be rolled out over the next two years was alsoinitiated during the year.

Page 295: company history of SBI, ICICI

P. ORGANISATIONAL PLANNING

Organisational Changes: The under noted important organisationalchanges were made during the year:-

- Upgradation of the post of DMD & GE (A&S) to MD & GE (Associates andSubsidiaries).

- During the year, with a view to bringing about greater speed andefficiency and improving customer service, the organisational structurehas been delayered by dismantling of Modules. A few posts in keepingwith new structure have been created.

Q. RIGHT TO INFORMATION ACT 2005 (RTI ACT 2005)

Suitable structure has been put in place at Branches/AdministrativeOffices/Regional Business Offices/Local Head Offices for handlingrequests and appeals under RTI Act 2005. Further, an exclusive ‘RTIDepartment’ has been created in Corporate Centre to handle andco-ordinate various issues under the Act. For convenience of thepublic, the Bank has also created an RTI link in its website.

R. HUMAN RESOURCES

Learning & Development

- Several key initiatives have been taken by the Bank to enthuse andmotivate the employees to perform better so as to achieve the Bank’sgrowth plans.

- A ‘Leadership pipeline’ initiative has been taken on hand with theobjective of grooming the officials from the level of Scale-IV upto GMfor future leadership positions. Services of reputed institutions likeISB/Duke University/IIMs have been engaged for the purpose.

- As the accreditation process is mandatory for the recovery agents,the Bank has gone in for accreditation of one of the traininginstitutions for training of debt recovery agents to facilitate thefuture appointments of recovery agents.

Personnel Management

- The Performance Linked Incentive Scheme of the Bank has beenbroad-based with an aim to foster team spirit amongst the employees andto motivate them to excel in customer service. This also helped theBank in exploiting the new emerging business opportunities to achievethe Bank’s growth plans.

- The Bank has gone for contract employment, on cost to company basis,of specialists like Chartered Accountants, Law Officers, Statisticians,Economists, Customer Relation Executives, Credit Analysts etc. to takecare of Bank’s growing needs to face competition.

- The Bank revised the Family Pension Scheme for the family pensioners

Page 296: company history of SBI, ICICI

of the Bank retrospectively from the 1st May 2005.

- The pension fund has been separated from the Banks’ liability afterobtaining necessary approval from the Board of Trustees. The fund willbe managed by the Treasury Dept. of SBI for better returns.

HRMS Project

- For leveraging Technology in employee management area, the Bank hasimplemented automation of its HR process through SAP-ERP- HRMSsoftware. A centralized database of all employees across SBI is nowavailable.

- Salary processing for 2.05 lakh employees across SBI and pensionprocessing of approximately 1 lakh SBI/IBI pensioners have beencentralized.

- Besides the above, HRMS will make available a variety of serviceslike online request submission and viewing of data etc. to all theemployees of the Bank on an online ‘real time’ basis. This willincrease efficiency in HR operations and help the management in makingemployee related decisions faster.

Recruitment

- Massive recruitment exercises were undertaken during the year byrecruiting 30231 clerical staff and 3472 Officers, out of which 25735clerical staff and 3286 Officers had already joined.

- This recruitment drive, which is the largest recruitment exerciseundertaken in the banking sector, was made to augment the staffstrength in tandem with the Bank’s branch expansion drive. This willnot only help in reducing the age profile of staff but will alsoprovide an opportunity for greater mobility and marketing thrust acrossthe Bank to achieve its growth plans.

Industrial Relations

- Excellence in relationship with the members of both the Staff andOfficers Federations was achieved by sorting out various industrialrelations issues through their consistent support and healthydialogue/discussions during the year.

- Enhancement in limits under various staff loan schemes and otherinitiatives have been taken up during the year, which, besidesproviding better facilities / incentives to the employees, helped increating better industrial relations environment in the Bank.

Staff Strength

The Bank had a total strength of 205896 as on the 31st March 2009. Ofthis, 31.42% were officers; 47.10% were clerks and the remaining 21.48%were sub-ordinate staff.

Page 297: company history of SBI, ICICI

Implementation of Persons With Disabilities (PWD) Act, 1995

Our Bank provides reservation to Persons with Disabilities (PWDs) asper the guidelines of the Government of India and Section 33 of the PWDAct, 1995. The total number of Persons with Disabilities, employed ason 31.03.2009, were 1767 (details given as under).

Table : 12Category Total No. of Persons with Disabilities

Officers 64685 351

Clerical 96974 1168

Sub-staff 44237 248

TOTAL 205896 1767

Representation of Scheduled Castes and Scheduled Tribes

- As on 31st March 2009, 19.20% of the Banks total staff strengthbelonged to Scheduled Castes and 6.52% belonged to Scheduled Tribes.

- In order to discuss issues relating to Reservation Policy andeffectively redress the grievances of SC/ST employees, Liaison Officershave been designated at all the Local Head Offices of the Bank as alsoat the Corporate Centre in Mumbai.

- Senior officials of the Bank hold regular meetings at periodicintervals with the representatives of the National Federation of StateBank of India SC/ ST Employees at Corporate Centre level as also withthe representatives of Circle SC/ST Welfare Associations at the LocalHead Office and Administrative Office levels where issues pertaining toimplementation of Reservation Policy and other points are discussed.This has ensured redressal of grievances of these communities to alarge extent.

- The Bank has been conducting workshops for SCs/STs/OBCs to impartup-to-date knowledge/latest operatives about the Reservation Policy andrelated areas to the Liaison officers for SCs/STs, in-charge of SC/STcells at LHOs, and the representatives of SC/ST Welfare Associations.

- Pre-recruitment and pre-promotion training programmes are beingconducted to enable SC/ST candidates to achieve the prescribedstandards to effectively compete with other candidates.

S. BUSINESS PROCESS RE-ENGINEERING (BPR)

Bank has redesigned the business processes to leverage the Core Bankingplatform to improve performance in key business areas and quality ofcustomer service. The BPR Project undertaken by the Bank is working totransform it into a world class institution by proactively reaching outto acquire new customers, building deep and lasting relationships with

Page 298: company history of SBI, ICICI

existing customers and providing all customers with the best quality ofservice across multiple channels. Various BPR initiatives undertakenare detailed below:

- Centralised Processing Centres for Retail loans, Small & Mediumenterprise loans, and Trade Finance were set up, wherein the end to endprocesses have been taken over from branches.

- Relationship Managers have been positioned at strategic centres toextend personalized service to mass affluent and HNI clients, and alsofor Medium Enterprises clients.

- Dedicated Sales Teams like Home Loans Sales Team and Multi ProductSales Team have been set-up to target niche markets and to up-sell andcross-sell various products.

- Assured Standard Turn Around Times for various sanction processeshave been fixed for Asset CPCs.

- Quality of Assets and Documentation has improved.

- All branches in trade finance intensive centres have been madecapable to handle non-fund based business like LCs/BGs and Bills withspeed and ease.

- Capability has been provided to branches for speedy opening of newaccounts and issue of personalised cheque books.

- Clearing CPCs have been established to centralise clearing relatedactivities and free up branches to focus on customer service.

- Pensions are being paid to pensioners through Centralised PensionProcessing Centres accurately and in time.

- Document Archival Centres have been designed to free up valuablespace in branches.

- Inward Remittance Cell has been opened to handle all retailremittances received through SWIFT at a single point.

- For increasing speed and efficiency and to improve customer service,the organizational structure has been delayered.

- A 24x7 contact centre has been established with toll-free number forproviding information on products and services as well as account andbalance queries to the customers. This service is being extended toNRIs in 17 countries shortly.

During the year, top 113 business centres of the country have beenfully covered by the above BPR initiatives which have stabilised verywell and have enabled branches to serve customers better, with speedand accuracy.

Page 299: company history of SBI, ICICI

All these initiatives have helped the Bank in creating a new operatingarchitecture capable of meeting global competition.

T. OFFICIAL LANGUAGE DEPARTMENT

The Bank complied with the statutory requirements relating to theOfficial Language policy and made several efforts to deliver itsproducts and services to the masses in Hindi and other Indianlanguages. These include installation of bilingual software in its11448 Core Banking branches during the year which enabled customers toget their pass books, statements of account and other reports in Hindi.In addition to this, the number of hits on ATMs in Hindi reached 46lakhs and in other Indian languages, 39 lakhs per month as a result ofefforts made by the Bank to provide its services in Hindi and otherIndian languages to its customers.

U. BANKING OPERATIONS DEPARTMENT

- The Bank has put in place, a Board approved revised policy on KnowYour Customer (KYC)/ Anti Money Laundering (AML)/Combating theFinancing of Terrorism (CFT) measures in line with the guidelinesissued by Reserve Bank of India on the subject.

- Monitoring of Transactions is done with a view to submit the requiredreports to Financial Intelligence Unit-India mandated by rules ofPrevention of Money Laundering Act, 2002.

- With a view to implementing and supporting monitoring oftransactions, the Bank has acquired appropriate software which isprocessing all transactions handled by all domestic branches of theBank, on a day to day basis and monthly Cash Transaction Reports (CTRs)are being generated along with Suspicious Transaction Report (STR)alerts daily in offline mode, for analysis by the dedicated KYC/AMLCell.

- Training on KYC/AML is being imparted on an ongoing basis in theBank. In addition to exclusive KYC/AML programmes, all trainingprogrammes/ seminars/workshops have a KYC/AML session included in theprogramme.

Responsibility Statement

The Board of Directors hereby states :

i. that in the preparation of the Annual Accounts, the applicableaccounting standards have been followed along with proper explanationrelating to material departures;

ii. that they have selected such accounting policies and applied themconsistently and made judgements and estimates as are reasonable andprudent, so as to give a true and fair view of the state of affairs ofthe Bank as on the 31st March 2009, and of the profit and loss of theBank for the year ended on that date;

Page 300: company history of SBI, ICICI

iii. that they have taken proper and sufficient care for themaintenance of adequate accounting records in accordance with theprovisions of the Banking Regulation Act, 1949 and State Bank of IndiaAct, 1955 for safeguarding the assets of the Bank and preventing anddetecting frauds and other irregularities; and

iv. that they have prepared the annual accounts on a going concernbasis.

Acknowledgement

During the year, Shri R. Sridharan was appointed as Managing Directorwith effect from the 5th December 2008, in place of Shri T.S.Bhattacharya, who retired on the 31st January 2008. Shri Suman KumarBery and Shri Ashok Jhunjhunwala, Directors, resigned from the Boardand were re-elected under Section 19(c) of the SBI Act., by theShareholders along with Shri Dileep C. Choksi and Shri S. Venkatachalamfor a period of 3 years with effect from the 24th June 2008.

Dr. Rajiv Kumar was nominated to the Central Board with effect from 8thSeptember 2008 by the Government of India. Shri D. Sundaram was electedby the Shareholders under Section 19(c) with effect from the 13thJanuary 2009, in place of Shri Suman Kumar Bery, who resigned from theCentral Board on the 18th September 2008, for the residual period uptothe 23rd June 2011.

Consequent to his superannuation on 30th April 2009, Shri ArunRamanathan, GOI Nominee Director [under Section 19(e)], ceased to be aDirector on the Banks Board.

The Directors place on record their appreciation of the contributionmade by Shri Arun Ramanathan and Shri Suman Kumar Bery to thedeliberations of the Board.

For and on behalf of the Central Board of Directors

O.P. BhattDate : 9th May, 2009 Chairman

Director ReportMar2007   Mar 2008 Mar2009

Economic Backdrop and Banking EnvironmentAfter growing at 5.0% in 2006 and 4.9% in 2007, IMF estimates globalGDP growth to decelerate to 3.7% in 2008 in the wake of the currentfinancial crisis. The financial market turbulence in developedeconomies following the US sub-prime mortgage crisis has reduced

Page 301: company history of SBI, ICICI

financial leverage, lowered credit availability and negative wealtheffects have emerged as risks to consumption and growth in advancedeconomies, especially in the US. Continuing inflationary pressures fromfood and commodity prices as well as high and volatile crude oil pricesare other risks being faced by the global economy.

India continued to be one of the fastest growing economies of theworld. During 2007-08, the Indian economy grew at a robust pace for thefifth consecutive year. Real GDP growth, estimated at 8.7% in 2007-08,is in tune with the average annual GDP growth of 8.7% in the five yearperiod 2003-04 to 2007-08. Agriculture and allied activities areestimated to grow by 2.6% in 2007-08, which is in line with the averagegrowth of 2.6% per annum during 2000- 01 to 2007-08. Foodgrainsproduction touched a record high in FY08, with total foodgrainsproduction placed at 227.3 million tonnes, surpassing the target of221.5 million tonnes and recording an increase of 4.6% over theprevious year. Industrial growth at 8.6% during 2007-08 has moderatedsomewhat against 10.6% in the previous year. The services sectormaintained its double-digit growth at 10.6% during 2007-08, higher thanthe long term average of 8.9% (2000-01 to 2007-08). Within services,transport and communications and financial services recordeddouble-digit growth for the last two years and are expected to maintainthe growth momentum. Trade and hotels showed higher growth of 12.1% in2007-08 against 11.8% growth in 2006-07. Another positive featureunderpinning growth is the sharp rise in the rate of savings andinvestment in recent years, which rose to 34.8% and 35.9% respectivelyin 2006-07.

Towards the close of the fiscal year, higher inflation rate was noticeddue to rise in global prices of food, metals and crude oil. Inflationbased on WPI declined from 6.4% at the beginning of the fiscal year toa low of 3.1% by mid-October 2007, partly reflecting moderation in theprices of some primary food articles and manufactured products. Afterhovering around 3% during November 2007, inflation began to edge upfrom early December 2007 to touch 7.4% by 29 March 2008, mainlyreflecting hardening in prices of primary articles such as fruits andvegetables, oilseeds, raw cotton and iron ore, as well as fuel andmanufactured products such as edible oil/oil cakes and basic metals,partly due to international commodity price pressures. However, fiscaland monetary measures are being taken to contain inflation and maintainhigh growth.

Despite Rupee appreciation, exports continued to show a healthy growth,rising by 23% in dollar terms during 2007-08 against 22.6% in theprevious year. Overall exports growth was driven by petroleum and crudeproducts, gems and jewellery, iron ore, non-basmati rice, cotton,transport equipment, etc. While Indias exports to USA, its singlelargest trading partner, showed deceleration, exports to UAE and Chinaremained robust. In the same period, imports increased by 27.0% against24.5%, mainly due to higher oil imports; non-oil imports were led bycapital goods, chemicals and related products, edible oils, gold,silver and pearls, precious and semi- precious stones. Due to highergrowth in imports than exports, the trade deficit widened by 35.5% toUSS 80.4 bn during 2007-08 from US$ 59.3 bn in the previous year.

The overall stance of RBIs monetary and credit policy during the year

Page 302: company history of SBI, ICICI

was to ensure price stability and financial system stability along withcontinuation of the growth momentum, emphasis on credit quality andcredit delivery including financial inclusion. During 2007-08, the BankRate,

Repo and Reverse Repo rates were kept unchanged. To manage theliquidity in the economy, RBI raised the Cash Reserve Ratio four times:in April, August and November 2007 from 6% to 7.50%. In line withliquidity tightening, PLRs and deposit rates of rnajor banks were hikedduring the year. While lending rates rose to 12.25-12.75% from 12.25-12.50%, deposit rates (for more than one year maturity) rose to8.25-9.0% from 7.5-9.0% in the previous financial year. However, in themonth of February 2008, to keep up the growth momentum in the economy,some banks announced cuts in their PLR and interest rate on housingloans below Rs.20 lakh.

The tight monetary policy followed by RBI to control inflation andmoney supply had a moderating impact on credit growth, which increasedby 21.6% in 2007-08 against 28.1% in 2006-07. Deposit growth alsomoderated to 22.2% in 2007-08 from 23.8% in 2006-07.

For the current year, despite slowdown in the major economies of theworld, the Indian economy will continue to grow at 8-8.5% driven byinvestment. Due to a number of fiscal and monetary measures taken bythe Government and RBI to put a check on prices, inflation is expectedto come down to 5-5.5% by March 2009.

Profit

The Operating Profit of the Bank for 2007-08 stood at Rs. 13,107.55crore as compared to Rs.9,999.94 crore in 2006-07, registering a growthof 31.08%. The Bank has posted a Net Profit of Rs 6729.12 crore for2007-08 as compared to Rs.4,541.31 crore in 2006-07, registering agrowth of 48.18%.

While Net Interest Income recorded a growth of 13.04% and Other Incomeincreased by 28.52%. Operating Expenses increased by 6.64%.

Dividend

The Bank has increased dividend to 215%.

Net Interest Income

The Net Interest Income of the Bank registereda growth of 13.04% from Rs.15,058.20 crore in 2006-07 to Rs. 17,021.23crore in 2007-08. This was due to growth in interest income onadvances. The Net Interest Margin was at a healthy 3.07% in 2007-08.

The gross interest income from global operations rose from Rs.37,242.33 crore to Rs. 48,950.31 crore during the year. This was mainlydue to higher interest income on advances.

Interest income on advances in India registered an increase from

Page 303: company history of SBI, ICICI

Rs.22,872.66 crore in 2006-07 to Rs 32,162.68 crore in 2007-08 due tohigher volumes. Also average yield on domestic advances increased from8.67% in 2006-07 to 9.90% in 2007-08. Interest income on advances atforeign offices also increased due to higher volumes.

Income from resources deployed in Treasury operations in Indiaincreased by 11.03% despite decline in average yield mainly due tohigher average resources deployed. The average yield, which was 6.99%in 2006-07, declined to 6.92% in 2007-08.

Total interest expenses of global operations increased fromRs.22,184.14 crore in 2006-07 to Rs. 31,929.08 crore in 2007-08.Interest expenses on deposits in India during 2007-08 recorded anincrease of 45.56% compared to the previous year, whereas the averagelevel of deposits in India grew by 22.09%. This resulted in increase inthe average cost of deposits from 4.69% in 2006-07 to 5.59% in 2007-08.

Non-Interest Income

Non-interest income stood at Rs.8,694.93 crore as against Rs.6,725.26crore in 2006-07.

During the year, the Bank received an income of Rs. 197.41 crore(Rs.598.12 crore in the previous year) by way of dividends fromAssociate Banks/ subsidiaries and joint ventures in India and abroad.

Operating Expenses

There was marginal decline of 1.84% in the Staff Cost from Rs.7,932.58crore in 2006-07 to Rs 7,785.87 crore in 2007-08. Staff Cost includedan amount of Rs.575.00 crore towards Wage arrears.

Other Operating Expenses have also registered an increase of 23.94%mainly due to increase in expenses on rent, taxes and lighting,insurance, postage, telegrams and telephones, repair and maintenance,audit fees and miscellaneous expenditure.

Operating Expenses, comprising both staff cost and other operatingexpenses, have registered an increase of 6.64%.

Provisions and Contingencies

Major amounts of provisions made in 2007-08 were as under:

- Rs. 88.68 crore (writeback) towards provision for depreciation oninvestments, excluding amortization of premium on Held to Maturitycategory (as against Rs.379.23 crore in 2006-07).

- Rs.3,823.50 crore towards Provision for Tax, excluding deferred taxcredit of Rs. 219.43 crore (as against Rs. 3,014.61 crore in 2006-07excluding deferred tax credit of Rs. 19.83 crore).

- Rs. 105.00 crore towards Fringe Benefit Tax (as against 88.50 crorein 2006-07).

Page 304: company history of SBI, ICICI

- Rs. 2,000.94 crore (net of write-back) for non- performing assets (asagainst Rs. 1,429.50 crore in 2006-07).

- Rs. 566.97 crore towards Standard Assets (as against Rs. 589.19 crorein 2006-07). Including the current years provision, the totalprovision held on Standard Assets amounts to Rs. 2,069.38 crore.

Reserves and Surplus

- An amount of Rs.4,839.07 crore (as against Rs. 3,358.11 crore in2006-07) was transferred to Statutory Reserves.

- An amount of Rs. 304.35 crore (as against Rs.321.15 crore in 2006-07)was transferred to Other Reserves.

- An amount of Rs. 62.18 crore was transferred to Investment Reserves.(Nil in 2006-07)

- An amount of Rs. 4,075.64 crore was withdrawn from Other Reservestowards transitional liability for complying with Accounting Standard -15 (Revised) - "Employee Benefits"

Assets

The total assets of the Bank increased by 27.35% from Rs.5,66,565.24crore at the end of March 2007 to Rs. 7,21,526.31 crore as at end March2008. During the period, the loan portfolio increased by 23.55% fromRs.3,37,336.49 crore to Rs. 416,768.19 crore. Investments increased by27.06% from Rs.1,49,148.88 crore to Rs 1,89,501.27 crore. A majorportion of the investment was in the domestic market in government andother approved securities. The Banks market shares in domesticadvances was 15.28% as of March 2008.

Liabilities

The Banks aggregate liabilities (excluding capital and reserves) roseby 25.64% from Rs. 5,35,266.68

Table : 1 Key Performance Indicators

Indicators SBI SBI Group 2007-08 2006-07 2007-08 2006-07

Return on Average Assets (%) 1.01 0.84 0.99 0.87Return on Equity (%) 17.82 14.24 17.93 15.08

Expenses to Income (%)OperatingExpenses to Total Net Income) 49.16 54.18 56.64 58.15Basic Earnings Per Share (Rs.) 126.62 86.10 168.61 120.66Diluted Earnings Per Share (Rs.) 126.50 86.10 168.45 120.66

Page 305: company history of SBI, ICICI

Capital Adequacy Ratio (%) (Basel I) 13.47 12.34 13.49 12.36Tier I 9.14 8.01 8.95 8.05Tier II 4.33 4.33 4.54 4.31Net NPAs to Net Advances 1.78 1.56 1.43 1.31

crore on 31st March 2007 to Rs. 6,72,493.65 crore st on 31 March 2008.The increase in liabilities was mainly contributed by increase indeposits and borrowings. The Global deposits stood at Rs.5,37,403.94crore as on 31st March 2008, representing an increase of 23.39 % overthe level on 31st March 2007. The Banks market share in deposits was15.44% as of March 2008.

Performance Highlights Core Operations

A Global MarketsB Wholesale Banking GroupC Mid Corporate GroupD National Banking GroupE Rural Business GroupF Corporate Strategy & New BusinessG International Banking GroupH Associates & SubsidiariesI Asset QualityJ Information Technology

A. GLOBAL MARKETS

A.1 In keeping with its integrated approach to all treasury activitiesin various markets in different time zones i.e., Forex, Interest Rates,Bullion, Equity and Alternative Assets, the Bank redesignated itsTreasury Operations into "Global Markets"

A new state-of-the-art Dealing Room with online connectivity to allactive forex intensive Branches across the country was inaugurated atCorporate Centre in Mumbai with facilities matching the best in theindustry. This facility ensures continuous availability of marketdetermined forex rates to our customers.

The year witnessed volatility in 10-year base yields which movedupwards to 8.38% during the year and finally closed at 7.94% as on 31stMarch 2008. Marginal slow down in credit growth led to increase inoverall Domestic investment portfolio by Rs.36311.76 crore over 31stMarch 2007. Liquidity position remained comfortable during most part ofthe year which helped the Bank to bring down high cost bulk deposits.In the backdrop of higher interest rate regime, Bond Market conditionswere less conducive to trading opportunities. The Bank diversified itstrading activity to Equity and Mutual Fund portfolio to encash theopportunities available through the buoyant capital markets during theyear.

A.2 While trading profits from Fixed Income portfolio came underpressure because of higher interest rate regime, Global Marketsprofits were contributed primarily by trading in equity and mutual

Page 306: company history of SBI, ICICI

funds. Trading profits from equity and mutual funds portfolio hasincreased by 321%. Interest income from investment portfolio increasedin absolute terms due to the increase in the overall Fixed Incomeportfolio from Rs. 1,36,927.48 crore to Rs.1,73,239.24 crore. RBFsdecision to increase CRR rate from 6.00% to 7.50% in four stages duringthe year and withdrawal of interest payable on CRR balances impactedoverall income from Treasury operations. Average yield on treasuryoperations net of income on CRR balances increased from 6.45% to 7.35%.

A. 3 The Bank contained the interest rate risk of the Fixed IncomePortfolio through a combination of measures including reduction in theduration of the portfolio and shifting of securities with a book valueof Rs.9,662 crore from Available for Sale portfolio to Held to Maturityportfolio.

A.4 Trading volumes in forex operations increased substantially fromRs.7,67,889 crore to Rs.ll,74,029 crore thereby increasing the exchangeincome from these operations by 59 % Y-O-Y to Rs.321.64 crore fromRs.202.20 crore.

B.1 The Banks Wholesale Banking Group consists of three StrategicBusiness Units viz., Corporate Accounts Group, Project Finance &Leasing SBU and Stressed Assets Management Group.

The Bank has recently launched the "Wholesale Banking Initiative" toharness the SBI Group synergy for the benefit of the corporatecustomers by providing them with a One Stop Shop facility for alltheir banking needs. The initiatives aim at providing comprehensive,customised and specialized banking solutions to the corporates therebyenhancing Banks share of business with them.

Table : 2 WBG - Highlights

Amount in Rs. crore)Particulars As on As on Growth 31.03.2007 31.03.2008 %

Deposits 6669 9823 47Advances 37989 46042 21

B.2 Corporate Accounts Group (CAG)

The loan portfolio of CAG constituted about 23% of the BanksCommercial and Institutional non-food credit and 12% of the totaldomestic credit portfolio as on 31.03.2008.

Initiatives taken:-

- With focused initiatives on fee-based services, fee-based incomeregistered an impressive 62% growth during the year.

- CAG continued on the growth trajectory in forex business registeringa YOY growth of 79% and contributed 49% of the total domestic forexturnover of the Bank.

Page 307: company history of SBI, ICICI

- SBI FAST, the Cash Management Product (CMP), in addition to offeringcollections and payments services, also facilitates the corporatesliquidity management by offering various value added products. Theseinclude auto sweep facility, customized MIS and reconciliation support,automated bulk NEFT, ECS and RTGS payments with reconciliation supportetc. It has started processing of centralized payments in bulk (IncomeTax Refund Orders) and has put in place a call centre for this purpose.CMP is well poised to enter new areas like customized e-payments ande-collections with Straight Through Processing.

B.3. Project Finance & Leasing SBU

The Project finance SBU focuses on funding core projects like power,telecom, roads, ports, airports, SEZ and others. It also handlesnon-infrastructure projects with certain ceilings on minimum projectcosts. During the year, the focus was on syndication and underwritingof project loans. Project Finance- SBU took up projects involving totaldebt of Rs. 92,558 crore and achieved sanctions of Rs. 20,195 crore,while it syndicated Rs. 54,951 crore with other banks during the year07-08.

In view of the unfavourable climate and availability of alternativefunding options at cheaper cost, the Bank decided not to write leasesduring the current year also. As at the end of March 2008, thedisbursements and capitalization were "NIL" and profit amounted toRs.8.81 crore.

B.4. Stressed Assets Management Group (SAMG)

The performance of SAMG during the year 2007-08 is given in Table No. 3below.

Table : 3 SAMG - Highlights

(Amount in Rs. crore)

1 Cash Recovery in NPA 3372 Upgradation to Standard Assets 533 Write Off 3684 Gross reduction in NPAs (1+2+3) 7585 Recovery in written off accounts 336

Stressed Assets Management Group (SAMG) was initially set up to takeover all NPAs with outstanding of Rs. 5 crore and above for focusedefforts in resolution of NPAs. The coverage has now been extended toRs.1.00 crore and above across the country.

92 Stressed Assets Resolution Centres (SARCs) have been opened acrossthe country for more focused resolution of NPAs with outstandings uptoRs. 1 crore in SME and Personal segments. Out of these, 44 independentSARCs are being brought under SAMG in a phased manner to give furtherfillip to the Banks recovery efforts. In this direction, 9 SARCs havealready been brought under the control of SAMG during the year. The

Page 308: company history of SBI, ICICI

performance of SARCs is encouraging and we expect to make substantialprogress in the Management of NPAs.

C.1.The Mid-Corporate Group (MCG) has been immensely successful inattracting the business of Mid-Corporate units through relationshipmanagement and quicker credit processing. To give added focus to thissegment during the year, a Dy. Managing Director & Group Executive(Mid- Corporates) was posted to independently head the operations ofthe Mid-Corporate Group.

Table : 4 MCG - Highlights

(Amount in Rs. crore)Particulars As on As on growth 31.03.2007 31.03.2008 %

Advances(incl. food) 68,446 76,338 11.5Advances(excl. food) 60,138 73,874 23Offsiteadvances 27,445 35,128 28Total 87,583 1,09,002 24advances(excl. food)Deposits 10,011 11,648 16

- The Group handles about 30% of the total non- food advances of theBank and operates through 8 Regional Offices situated across thecountry. It is estimated that 38% of the Mid-Corporate universe in thecountry is covered by the Bank. The coverage is expected to beextended to more centres during the current year.

- 695 new mid corporate clients were added to the MCG during the year.

- The total credit portfolio (fund based) of the Group stood at Rs1,09,002 crore as on 31st March, 2008. This is more than the aggregatebusiness handled by many of the top banks in the country.

- The average yield on advances went up from 8.76% in March 2007 to9.73% in March 2008.

Initiatives Taken

- Syndication Desks have been created at two Regional Offices, Mumbaiand Chennai, to tap the opportunities available for syndicating workingcapital facilities.

- Project Finance Cells have been set up in Chennai and New DelhiRegions.

- Substantial business in the form of IPOs/ Private Equity/DebtSyndication/Foreign Currency Loans/Overseas Acquisitions/ExternalCommercial Borrowings has been arranged for MCG clients through

Page 309: company history of SBI, ICICI

SBICAPS/Foreign Offices.

New Products

- A new product, Construction Equipment Loan, to cater to ConstructionCompanies has been launched.

C.2 Gold Banking

A separate Department, Precious Metals Department, has been created atthe Banks Corporate Centre for the purpose of boosting the GoldBanking business.

The Bank launched retail sale of gold coins which is now available at250 branches across the country. The scheme would be extended to cover1000 branches in a phased manner during the current year.

While 52 branches are authorized for metal loans and bulk sale of goldto jewellery manufacturers the number is being increased to 70.

Gold Deposit Scheme has been revived for institutions like temples,trusts, etc.

The Banks National Banking Group (NBG) consists of three BusinessGroups viz., Personal Banking, Small & Medium Enterprise (SME), andGovernment Banking.

During the year Bank achieved a milestone by opening its 10,000thBranch at Puduvayal, Sivaganga District in Tamil Nadu, which wasinaugurated by Hon. Finance Minister Shri P. Chidambaram.

During the year, as many as 965 branches were opened, and at the end ofMarch 2008 the Bank has a vast network of 10,186 branches to reach outto customers, even in the remotest parts of the country.

Table : 5 NBG - Highlights

(Amount in Rs. crore)

Particulars As on As on % 31.03.2007 31.03.2008 growth

Deposits(excludinginter bank) 3,67,524 4,54,883 23.77Advances(including foodbut excludinginter bank) 1,98,701 2,44,617 23.11Advances(excluding food) 1,95,531 2,43,068 24.31

D.1 Personal Banking Business Unit

Page 310: company history of SBI, ICICI

During the year, Personal Banking domestic deposits have grown fromRs.1,90,870 crore to Rs.2,36,645 crore, showing a growth of Rs.45775crore (23.98 %) as against Rs.27,684 crore during the previous year.

During the year, Personal Banking Advances have grown from Rs. 73,590crore to Rs. 88,549 crore, showing a growth of Rs.14,959 crore (20.33%)as against Rs.12,530 crore during the previous year.

SBI emerged as a leader this year in terms of Individual Home Loandisbursements among SCBs & HFCs as on 31.12.2007. Bank was voted, forthe second year in a row, as The Most Preferred Housing Loan Providerin CNBC AWAAZ Consumer Awards for 2007 along with the Most PreferredBank Award in a survey conducted by CNBC TV 18 in association with AGNielsen & Company covering more than 10,000 respondents across 21cities and 13 small towns.

New Products introduced during the year were SBI Reverse Mortgage Loanand SBI Home Plus in the area of Home Loans. Repayment period for HomeLoans has now been increased upto 25 years to facilitate lowerrepayment obligations and applications are now accepted online throughBanks website.

The Bank had opened 78.65 lac new Savings Bank Accounts during the yearas against 62.40 lac previous year.

The Auto Loan portfolio has shown a healthy growth of Rs.1,645 crore inabsolute terms, which is 29.89 % higher than last years growth.

SBI is market leader in Education Loans and has a market share of 24%amongst PSU Banks. The growth in Education Loans during the year isRs.1,112 crore which is 33.67% higher over March 2007.

SBI Scholar Loan is extended to the students joining 52 eliteinstitutions like IIMs/ IITs/AIIMS/ Management Institutes etc. atconcessional interest rates and terms.

Web based registration of applications for Education Loans was launchedby Honble Finance Minister on 14th November 2007. In principlesanctions are given online for SBI Scholar Loans.

D.2 SME Business Unit (SMEBU)

SME Business Unit is implementing multiple strategies to maintainBanks premier position in SME financing.

Advances to SME sector increased to Rs. 76,329 crore as on 31.03.2008from Rs.58,674 crore of the previous year registering a Y-O-Y growth of30%.

Deposits under SME sector increased to Rs.1,65,168 crore as at the endof March 2008 from Rs.1,23,054 crore of previous year, recording agrowth of 34% during the year.

Page 311: company history of SBI, ICICI

Initiatives taken

- Customer Relationship Executives have been recruited from the Marketand placed in potential SME branches for serving effectively MediumEnterprises.

- Traders Bonanza campaign has been conducted and loans sanctioned tomore than 60,000 traders.

D.3 Government Business Unit (GBU)

The following initiatives were taken in Government Business.

a) Electronic Accounting System in Excise and Service Tax (EASIEST) forindirect taxes was extended to the entire country.

b) E-Payment of Central Excise, Service Tax, Customs Duty, Rail Freightintroduced.

c) Centralised Pension Processing Centres (CPPC) were established atall LHOs covering 5814 branches (18.80 lac accounts). Remainingbranches will be covered in a phased manner.

d) Cyber Treasury for online collection of State Government taxes hasbeen extended to the State of Madhya Pradesh, Chhatisgarh, Rajastan andGujarat for collection of VAT/CST and the solution is being offered toother State Governments shortly.

During the year 2007-08, Rural Business Group of the Bank comprisingrural and semi urban branches, accounting for about 70% of the branchnetwork of the Bank grew by Rs.29,807 crore in deposit representing agrowth of 22.8% and Rs.18,734 crore in advances representing a growthof 23.4%. This was against a growth of Rs.16,367 crore in deposit andRs.17,684 crore in the advances in the previous year. Market share ofRural and Semi Urban branches during the year upto December 2007 hasimproved by 0.92% in deposit and 0.98% in advances. Banks share incurrent year growth upto December 2007 was 32.04% in deposits and31.97% in advances.

Table : 6 Agriculture - Highlights

(Amount in Rs.crore)Particulars As on As on Growth 31.03.07 31.03.08 %

Deposits 6,460 8058 25Advances 33,857 42806 26

As against the benchmark of 18% set by RBI, the Bank for the first timecrossed the benchmark and recorded its Agricultural Advances at 18.37%of Adjusted Net Bank Credit (ANBC) as at March 2008.

Page 312: company history of SBI, ICICI

The following important themes have been adopted by the Bank to fosterits Agricultural business:

"Growth with Quality"

Thrust is laid on contract farming and value chain financing. Specialscoring model has been introduced for financing tractors which aims toimprove the quality of the advance.

The Bank, in order to diversify its Agricultural business portfolio,prepared three year National Business Plan covering Horticulture,Dairy, Fisheries, Food processing and Biotechnology.

"Bonding with farmers"

As a sustainable business strategy, the Bank is focussing on Bondingwith Farmers. Under the scheme of SBI Ka Apna Gaon, one of the broadbusiness themes is adoption of villages for overall development andeconomic upliftment and so far 237 villages have been adopted. 2400Farmers Clubs were promoted and as many as 30,000 Farmers meets(Credit and Recovery Camps) were organized by the Bank during the year.

Micro Finance and Financial Inclusion

A major initiative taken in the area of financial inclusion has beenthe introduction of SBI Tiny Smart Cards to the financially excluded.This, in simple terms can be defined as a Bank in a box. The Card ishighly secured as it works on the bio-metric validation of thecustomer. More than two lacs SBI Tiny Smart Cards have been issued asat the end of March 2008. The Smart Card project together with theBusiness Correspondent model has been successfully piloted and rolledout nation-wide. The Bank has been able to cover more than 10 thousandunbanked villages, including far flung areas of North-Eastern, Easternand Central parts of the country. SBI Tiny Cards are used for openingNo Frills Accounts and providing basic banking services. These cardsare also used to route government payments direct to beneficiaries in 6Districts of Andhra Pradesh for example, payment of wages underNational Rural Employment Guarantee Programme (NREGP) and SocialSecurity Pension scheme (SSP). The scheme is being extended to otherStates as various other State Governments have approached the Bank forthe purpose.

Self Help Groups (SHGs)

The Bank is the market leader in SHG-Bank Credit Linkage Programmesince its inception. In the year 2003, Bank had set a challengingtarget of credit linking 1 million SHGs by March 2008 which has beenachieved. Cumulatively, the Bank has credit linked 10,18,481 SHGs anddisbursed loan to the extent of Rs.5077.72 crore so far. Bank hasbrought out unique products for SHGs, viz., SHG Credit Card / SHG GoldCard, Sahayog Niwas - a housing product for SHGs. Bank has alsointroduced a Scheme for financing NGOs / MFIs for on-lending to SHGs.We are the first bank to recruit officers from market exclusively forpromoting micro finance. SBI has won awards for topping in SHG- BankCredit Linkage in Orissa, Jharkhand, Maharashtra, Uttarakhand, Tamil

Page 313: company history of SBI, ICICI

Nadu and Uttar Pradesh. SBI has sponsored and financially supported NGOSAMANWITA in collaboration with Government of Orissa.

The Rural Business Strategy

The Rural Business strategy drawn up by the Bank envisaged setting up amulti-pronged sourcing force, coupled with back-end processing capacityby way of Rural Central Processing Centres. The front end marketingforce comprised, besides the branches, alternate channels like OfficersMarketing & Recovery (OMR) and the Business Facilitators/ BusinessCorrespondents.

MRT Channel: The OMRs not only source high value Agriculture segmentloans, but also all types of deposits, loans and cross-selling productsacross all the segments. The Bank has more than 3000 OMRs and isplanning to recruit additional 3000 OMRs during 2008-09.

Business Facilitators (BF)/ Business Correspondents (BC) Channel:Utilizing the liberalization permitted by RBI, the Bank has enteredinto various national level alliances with entities such as India Post,ITC Limited, Drishtee Foundation and Zero Microfinance And SavingsSupport Foundation.

INDIA POST has been engaged as a Business Correspondent (BC). The BCalliance with India Post is currently functioning in 110 post officesin six states. The India Post alliance is being extended to otherstates also. Besides, BCs and BFs are also being engaged at theregional levels. The BC model has enabled the Bank to reach hithertounbanked and under banked areas.

Rural CPC

To meet the requirement of processing of the increased business flowingfrom the alternate channels, 10 Rural Central Processing Centres(RCPCs) have been set up across the country, which is proposed to bescaled upto 100 RCPCs in the year 2008-09.

E.2. Regional Rural Banks (RRBs)

Post amalgamation Bank has got 16 RRBs with a network of 2,351 branchesspread over 115 districts and 16 states in the Country. The aggregatedeposits and advances of the sponsored RRBs stood at Rs.13,573 croreand Rs.7,856 crore respectively as on 31st March 2008. The profit havejumped from Rs.32.77 crore as on March 2007 to Rs.115.68 as on March2008. During the year, a remittance product - Gramin Pay Order (GOP)was introduced for facilitating remittances from remote areas toincrease fee income in RRBs. Post amalgamation, RRBs have broad basedtheir product profile by introducing Debt Swap Scheme, Ware HouseReceipt Financing.

E.3. CreditAssistance provided to Scheduled Castes and ScheduledTribes

The credit assistance provided by the Bank to SCs and STs stands at

Page 314: company history of SBI, ICICI

Rs.6,883 crore out of total priority sector advance of Rs.1,32,300crore.

Table No : 7 Recovery position ofSC/ST borrowers (Scheme-wise) :

Scheme Recovery %

Prime Ministers Rozgar Yojana 31.85(PMRY)

Swarnajayanti Gram Swarozgar 35.57Yojana (SGSY)

Swarnajayanti Shahari Rozgar 36.25Yojana (SJSRY)

Scheme for Liberation & 29.53Rehabilitation of Scavengers (SLRS)

Differential Rate of Interest (DRI) 65.82

Prime Ministers New 15 Point Programme for theWelfare of Minorities.

All commercial banks have been advised to ensure smooth flow of bankcredit to minority communities (Sikhs, Muslims, Christians,Zoroastrians and Buddhists).The Government of India directed the banksto prepare a road map laying down specific State-wise annual targetsover the next 3 years to ensure that Priority Sector lending toMinority Communities is raised to 15% by the end of 2009- 10. Thenumber of Minority concentration districts (MCDs) which were 44 inMarch 2007, has been enhanced to 121 in the financial year 2007-08.(our present lendings to Minority Communities in identified districtsconstitute 13.50% of the priority sector advances of these identifieddistricts).

During the financial year 2007-08, our Ban); has opened 256 newbranches in the MCDs. Further, 140 centres have been identified foropening of new branches. Nodal officers have been designated farco-ordinating Minority cell related work at all our Local Head Offices.Our Lead District Managers have been advised to monitor the credit flowto Minorities at monthly intervals and take corrective steps whereverthe performance is low.

Our financial assistance to Minority Communities in the identifiedMinority concentration districts is furnished hereunder:

Table No : 8 Credit Assistance to Minorities

(Amount in Rs. crore)Period No of No.of Amount districts A/cs identified

Page 315: company history of SBI, ICICI

by GOI

Mar. 2006 44 5.93 lacs 1016Mar. 2007 44 7.94 lacs 2106Mar. 2008 121 9.88 lacs 3516

Our Local Head Offices have been advised to have special publicitycampaigns for creating awareness of our schemes to Minorities. Villagelevel meetings are being conducted to create awareness of financialassistance to Minorities in all the service area villages of the bankapart from Visual and Print media. 28 Training Camps and Melas werearranged by our branches in MCDs wherein 1,87,153 members of minoritycommunities participated.

Information on assistance to Minorities has been put up on our BanksWebsite. We are now targeting two schemes- SBI Talent Awards Schemeand Adoption of a Girl Child Scheme, at our branches in MCDs.

F. CORPORATK STRATEGY & NEW BUSINESSES

In order to maintain our premier position in the financial servicesarena the Bank has institutionalized innovation and change. Againstthis backdrop, and in order to quickly identify and respond to emergingopportunities the Bank created the position of Dy Managing Director(Corporate Strategy & New Businesses) in the year 2006. During the lastone and a half year, various new business initiatives have beenundertaken by the Bank, as under:

E.1. Pension Fund Business:

State Bank of India has been appointed as a sponsor of Pension FundManager (PFM) by PFRDA to manage the pension funds of Central and StateGovt. employees under New Pension System (NPS) of Govt. of India. SBIPension Funds Pvt. Ltd. has been incorporated as a wholly ownedsubsidiary of State Bank of India to manage the pension funds underNPS. The Company has been allocated the largest share (55%) in thepension fund corpus.

F.2. Financial Planning and Advisory Services (FP&AS):

Financial Planning and Advisory Services initiative is focused ondeepening the existing relationship of the Bank with mass affluent andhigh-end customers and help them in managing their assets through a mixof products/strategies. Our relationship managers will advise thecustomers to meet their needs of protection, invest in various classesof assets through investment planning, tax planning, retirement andreal estate plans. Going forward, we plan to commence wealth managementservices by March 2009 and further introduce private banking by March2012.

F.3. Mobile Banking:

The proliferation of mobiles has led to the emergence of a new channelfor the delivery of basic banking services and small value e-commerce

Page 316: company history of SBI, ICICI

services. Considering the immense potential and the cost effectivenessof delivery, the Bank has decided to introduce mobile telephone basedbanking services which we plan to commence before the end of the firstquarter of 2008-09.

F.4. Private Equity:

The Bank has identified private equity in different areas as a key newbusiness. The rapid expansion of Indian economy, especially in growthsectors like Technology, Pharma, Health Care, Realty andInfrastructure, has opened up large opportunities of equity fundingwhich have continuously shown superior returns. The Bank is at anadvanced stage of preparedness for setting up various equity funds.Regulatory approval processes and JV formation are under implementationand a few funds are expected to be floated by the end of first half ofthe financial year.

F.5. Custodial Services:

With increasing securities transactions originating from domestic andforeign investors, there is an excellent demand for providing fullrange of custodial services. Accordingly, the bank has decided toexpand its present capabilities in the domestic custody and offer theseservices as a new business in collaboration with a leading globalcustodian. The process of forming the Joint Venture is at an advancedstage. In addition to Custody (local and foreign institutional) &Depository services the JV would provide other value added serviceslike Fund administration and securities lending and borrowing serviceson a full- fledged Straight Through Processes (STP) and web enabledenvironment.

F.6. Non- Life Insurance:

While SBI Life is meeting a part of the requirements under ProtectionServices, the insurance offering bouquet will be complete with theinclusion of General Insurance products, greatly enhancing the customervalue proposition at our vast branch network and enhancing the brandvalue of the Bank. With this end in view the Bank has decided to enterGeneral Insurance Business through the joint venture route. The Bankaspires to be amongst the top 3 players in the General Insurance spacewithin a period of 10 years. It is expected that the JV partner will beidentified shortly and MOU/ Definitive Agreement(s) will be signedduring the quarter ending June 08. After this process, InsuranceRegulators (IRDA) and RBI will be approached for seeking regulatoryclearances. We anticipate the start of the business by the year end.

F.7. Merchant Acquisition Business:

The increase in usage of cards of various kinds provides hugeopportunities. We are in the process of entering merchant acquisitionservices through a Joint Venture subsidiary in order to bring in thebest practices and services at par with international benchmarks. Weexpect this business to grow substantially over the next few years andachieve market leadership position.

Page 317: company history of SBI, ICICI

Operations of Foreign Offices

As on 31.03.2008, the Bank had a network of 84 overseas offices spreadover 32 countries covering all,, time zones.

Net Profit from Banks overseas operations (including subsidiaries andjoint ventures with more than 50% shareholding) registered a growth of84% during the fiscal year mainly driven by significant growth of 48%in Net Customer Credit.

Resource Management

The bank was able to manage growth despite tight liquidity position inthe global markets due to issues arising out of the US sub-primemortgage crisis. This was because the core focus area remained onprimary deposit mobilisation which stood in good stead in this periodof extreme volatility.

Despite volatile and challenging global market conditions, the Banksuccessfully entered the Malaysian Ringgit denominated bond market.This represented first ever MYR bond issue by an Indian borrower in theMalaysian market.

NRI Business

NRI remittances business routed through Banks foreign offices duringthe year registered a growth of more than 160%. The online USD and GBPremittance products more than doubled in the year. SBI -Nepal ExpressRemit has been launched from select Indian branches for enabling speedremittances to Nepal.

Instant Transfer remittance facility, launched in Mar 07, was extendedto 51 foreign offices in 18 countries. Internet enabled InstantTransfer was launched from Nepal and Bahrain offices; this product willbe extended to other countries shortly.

Tie ups with two exchange companies in Oman and UAE in addition to theexisting ten were operationalised to expand the Banks outreach in theMiddle East and boost remittance business. A tie up with Arab NationalBank for remittances from Saudi Arabia was entered into in 2007-08.

Overseas Expansion

SBI became the first Indian bank to receive approval from MonetaryAuthority of Singapore for Qualifying Full Bank licence, which enablesa foreign bank to open up to 25 offices/ branches in Singapore. Duringthe year 2007- 08, SBI received approval from local regulators to openone more branch each in New York, USA and Male. Besides, process ofopening of a branch at Jeddah, Saudi Arabia was initiated in 2007-08.

Domestic Operations

Export Credit

Page 318: company history of SBI, ICICI

The Banks outstanding export credit stood at Rs.26,531 crore, therebyregistering a growth of more than 21% over previous year.

Project Export Finance

State Bank of India is an active participant in financing projectexport activities involving bidding and execution of turnkey / civilconstruction contracts and export of engineering goods on deferredpayment basis, as also service exports.

During the period April 2007 to March 2008, the Bank supported 31project export proposals with contract value aggregating Rs.13,489crore, in 13 countries. Banks aggregate exposure as at the end ofMarch 2008 was Rs.993 crore.

Merchant Banking

The Bank further intensified its thrust in the area of syndicatedforeign currency loans and participated in corporate syndicated loandeals amounting to USD 27,575 million during April 2007 to March 2008,besides extending several bilateral facilities aggregating US$ 933million.

Bank has participated to the extent of US $ 3,038 million in 31 Mergerand Acquisition deals aggregating US $ 22,561 million in 2007-08 asagainst participation to the extent of US $ 1,073 million in 13 dealsaggregating US $ 5,375 million during the previous year.

The Bank was ranked No. 1 in the Asia Pacific (excluding Japan andAustralia) in the mandated arranger/book runner league table forsyndicated loans by IFR Asia.

Global Link Services Activities (GLS) GLS of the Bank facilitatesexport payments, other overseas collections and inward remittances,thereby improving the profitability of the Banks foreign exchangeoperations. During the fiscal year 2007-08, GLS, on behalf of domesticbranches of the Bank, handled 153715 export bills and 232468 foreigncurrency checks aggregating USD 19.55 billion during the year againstUSD 13.30 billion in the previous year. In addition, GLS handled764,341 transactions amounting to USD 914.84 million under inwardremittance facility.

Correspondent Relations

To cater to the needs of a large customer base of the Bank and also tosupplement the efforts of our foreign offices in the area ofinternational banking, the Bank has developed a network ofcorrespondent banks numbering 523, consisting of reputed internationalbanks spread over 124 countries. The Bank also has about 1100 BilateralKey Exchange (BKE) arrangements for SWIFT, which facilitates a seamlessflow of financial messages covering trade, remittances, etc.

Country Risk & Bank Exposures

Page 319: company history of SBI, ICICI

Country risk management policy was formulated in line with the RBIguidelines. Detailed country- wise and bank-wise risk analysis isundertaken to arrive at respective exposure limits. Both country andbank exposure limits (product wise] are being monitored on a regularbasis.

H.1 The State Bank Group with a network of 15118 branches including4932 branches of its seven Associate Banks dominates the bankingindustry in India. In addition to banking, the Group, through itsvarious subsidiaries, provides a whole range of financial services,which include Life Insurance, Merchant Banking, Mutual Funds, CreditCard, Factoring, Security trading and primary dealership in the MoneyMarket.

H.2 Associate Banks

SBIs seven Associate Banks had a market share of 7.29% in deposits and7.44% in advances in March 2008.

Table : 9 Performance Highlights of Associate Banks (ABs)

As on Growth 31.03.2008 (%)

Agg. Assets 289642 21.07Agg. Deposit 234167 19.07Agg. Advances 178375 21.64Operating profit 4336 1.03Net profit 2277 12.11

Growth % Growth % As on As on 31.03.2007 31.03.2008

Credit Deposit Ratio 74.57 76.17Capital Adequcy 12.22 12.50RatioGross NPA 1.83 1.48Net NPA 0.76 0.61Return on 17.71 18.50Equity

H.3 SBI Commercial & International Bank Ltd.(SBICI)

As at the end of March 2008, the aggregate deposits and total advancesof SBICI stood at Rs. 446.07 crore and Rs. 363.75 crore respectively.The Bank recorded an operating and net profit of Rs.12.37 crore andRs.12.85 crore respectively. The net NPA as at the end of March 2008was Nil.

H.4 SBI Capital Markets Limited (SBICAP)

Page 320: company history of SBI, ICICI

SBICAP has successfully positioned itself as a full service investmentbanking outfit offering Project Advisory Services, arrangement ofStructured Finance, Capital Market Services like Equity issuances,Mergers and Acquisitions Advisory Services, arrangement of PrivateEquity, etc. The company consolidated further its dominant position asarrangers of debt for the corporate sector both in the infrastructureas well as non-infrastructure sectors. The following achievements aresome of the many recognitions won by the Company during the year:

- Ranked No.l Mandated Lead Arranger for the third consecutive year inthe Asia Pacific Region by Thomson Financials Project FinanceInternational (Global Ranking No.9).

- Ranked No.l Loans Mandated Arranger in Asia Pacific Region byBloomberg and IFR Asia.

- Syndication of credit facilities to Guru Gobind Singh RefineriesLtd., lead arranged by the Group, adjudged best Petrochemical deal inAsia Pacific by Thomson Financials Project Finance International.

- Companys league table ranking for IPOs improved from 9th positionlast year to 3rd position in 2007-08.

The company has posted a PAT of Rs.142.19 crore in March 2008 asagainst Rs.71.18 crore last year.

H.5 SBICAP Securities Limited (SSL)

SSL, which commenced its operations in June 2006, is a broking companyoffering equity broking services to retail and institutional clientsboth in the cash as well as in the Futures and Options segments. It isalso engaged in Sales & Distribution of other financial products likeMutual Funds, etc. It launched E-broking services to the clients of SBIand 5 of the Associate Banks during the year. The Companys net profitfor the year increased three folds to Rs.12.21 crore from Rs.4.04 crorelast year.

H.6 SBICAPS Ventures Limited (SVL)

SVL has set up a USD 100 million Knowledge Sector Fund, jointly withSBI Holding Inc. Softbank, Japan.

H.7 SBICAP (UK) Ltd.

SBICAP (UK) Ltd. has been aggressively marketing for potential clientsand arranging for them Foreign Currency Convertible Bonds (FCCBs),Private Equities (PEs) and Cross-border Mergers and Acquisitions (M&As)transactions.

H.8 SBI DFHI LTD

SBI group holds 67.01% of the Companys Paid Up Capital, while otherNationalized Banks hold 22.46%. All India Financial Institutions andPrivate Sector Banks hold 5.84% and the Asian Development Bank holds

Page 321: company history of SBI, ICICI

4.69% as on March 31, 2008.

For the period upto March 2008, the Company had earned a PAT ofRs.85.68 crore. The Company prudently diversified into profitableNon-SLR avenues resulting in better profits this year.

Total Secondary market turnover of the company was Rs.49491.26 crore.The market share under Proprietary trading was 3.10%.

H.9 SBI Cards & Payments Services Pvt. Ltd. (SBICSPL)

During the year 5.3 lac additional cards were issued increasing theCards in Force (GIF) to 32 lacs as at the end of March 2008. The totalreceivables stood at Rs.2666 crore as at the end of March 2008 and were5.25% higher than receivables of Rs.2533 crore as at the end of March2007.

Table : 10 The Performance Highlights of the Associate Banks as atMarch 2008 are as under:

(Amount in Rs. crore)

Name of the Bank SBIs share Deposits in the capital (%)

State Bank of

Bikaner &. Jaipur 75 32701Hyderabad 100 51796Indore 98.05 24076Mysore 92.33 26781Patiala 100 48186Saurashtra 100 15968Travancore 75 34658All 7 Banks - 234167

Advances Operating Net Profit Profit

25319 661.18 315.00 35915 991.19 556.99 18352 451.20 234.01 21315 567.52 318.86 36706 779.33 413.73 12325 176.85 51.99 28442 709.09 386.11178375 4,336.36 2,276.69

H.10. SBI LIFE INSURANCE COMPANY LIMITED (SBILIFE)

SBI Life has a unique multi-distribution model comprisingBancassurance, Retail Agency & Institutional Alliances and GroupCorporate Channels for distribution of Insurance products. Grosspremium income was over Rs.5,622 crore for the period ended March 2008.

Page 322: company history of SBI, ICICI

The Company has added 19 lac new lives during the year. SBI Life hasbeen rated as "The Most Trusted Private Sector Life Insurance Company"according to a survey conducted by Brand Equity in association with ACNielsen ORG-MARG and the Economic Times. It has also received thehighest financial rating AAA from CRISIL. SBI Life has achieved theprestigious CMMI Level 3 certification for Information Systems Group(ISG) and has recently been awarded ISO 9001:2000 certification forClaims department. It has been ranked 5* across the world in terms ofnumber of Million Dollar Round Table members for 2007.

H.11. SBI Funds Management (P) Ltd. (SBIFMPL)

SBIFMPL was conferred with CNBC AWAAZ Consumer Award 2007 for the mostpreferred Brand of Mutual fund and also received the Outlook Money andNDTV Profit Awards for the Best Equity Fund House and the Overall BestFund House for 2007. The Lipper Global Ranking study rated two schemesmanaged by SBIFMPL, namely SBI Magnum Tax Gain and SBI Magnum COMMAFund among the best performing 100 schemes across the world for theperiod ended 31st December, 2007. Magnum Balanced Fund, Magnum TaxgainScheme and Magnum Sector Funds Umbrella-Contra Fund were ranked SevenStar Funds by ICRA and won ICRA Mutual Fund "Gold Awards: for bestperformance in their respective categories for the period ended 31stDecember, 2007 ICRA Mutual Fund "Silver Awards" was also won by five ofthe schemes managed by SBIFMPL for performance among the top 10% forthe period ended 31st December, 2007 in various categories. Ranking interms of Assets Under Management improved by one notch from 7th to 6thposition as on 31.03.2008

The total net assets under management stood at Rs. 26490 crore as on31.03.2008 as against Rsl7,016 crore as on 31.03.2007. The value ofportfolio assets managed was Rs.5,003 crore as on 31.03.2008 as againstRs.1,372 crore as on 31.03.2007. SBIFMPL reported a net profit ofRs.70.37 crore after tax as on 31.03.2008 as against Rs.29.78 crore forthe previous year.

H.12 SBI Factors and Commercial Services Pvt. Ltd. (SBIFACTORS)

Asset level of the Company increased by 56% (from Rs.1,220 crore toRs.1,908 crore). It recorded a growth of 53% (year-on-year) in totalincome and ended the year with a PBT of Rs. 43.17 crore as againstRs.20.36 crore last year and PAT of Rs.28.38 crore, as against Rs.13.17 crore last year.

H.13 Global Trade Finance Ltd (GTFL)

State Bank of India acquired 91% stake in GTFL, by acquiringshareholdings held by EXIM Bank (40%), International FinanceCorporation, Washington (12.50%), and FIM Bank (38.50%) in GTFL. Due tofurther infusion of capital, present shareholding of SBI in GTFL is92.03%.

GTFL is one of the leading Factoring Companies in India and has thehighest market share (85%) in Export & Import Factoring. The NBFC,which is into trade financing in the business-to-business (B2B)segment, has reported a 155% jump in its net profit to Rs.73.60 crores

Page 323: company history of SBI, ICICI

for the financial year ended March 31, 2008, as against Rs.28.90 croresin the corresponding period last year.

NPA MANAGEMENT

The position of NPA reduction as on 31.03.2008 is given in the tablebelow:

Table No : 11 Asset Quality

(Amount in Rs. crore)

Particulars Amount

1 Gross NPA 12,837.342 Gross NPA Percentage 3.04%3 Net NPA 7,424.344 Net NPA Percentage 1.78%5 Cash Recovery in NPA 1,732.156 Upgradation to Standard Assets 1,516.847 Write Off 1,242.528 Gross Reduction (3+4+5) 4,491.519 Recovery in written off account 838.64

1.1.2. Restructuring of impaired Standard Assets as well as viable nonperforming assets, both under CDR mechanism as well as under Banks ownscheme, has been given top priority for arresting new additions andreducing the existing level of NPAs. The machinery for identificationand monitoring of Special Mention Accounts as per the guidelines of RBIby making prompt review and taking quick corrective action has alsobeen geared up for the purpose.

CDR system has done well as a resolution option for stressed assetswhich are seen to have the potential for revival. Out of 165 companiesbrought under CDR from the entire Banking System, SBI has an exposurein 61% cases (i.e. in 101 companies with exposure of Rs. 7,649 crore).

Outof these, 21% of CDR cases i.e. 22 companies carrying 29% exposure(Rs. 2196 crore) have been revived and have since exited CDR due toimproved performance - a few of these being now high growth companies.23 other cases have been withdrawn from CDR system. Live cases underCDR as on 31.03.2008 number 56, amounting to Rs. 4,409 crore, of which,34 cases with Rs.3,408 crore (77%) exposure are classified as"Standard".

1.1.3. Two Financial Assets involving principal outstanding ofRs.25.22 crore have been sold to other banks / ARCIL during the year.

1.1.4. One asset with an exposure of Rs.9.00 crore has been purchasedwith which a beginning has been made in purchase of NPAs by the Bank.

Our IT initiatives have played a major role in transforming the Bankinto a highly responsive organization to meet the challenges of aglobalised economy. The Bank is pursuing an aggressive IT policy as a

Page 324: company history of SBI, ICICI

strategic initiative to meet the growing competition for business,achieve efficiency in internal operations and meet customerexpectations. With this end in view, the reach of our IT initiativeswas expanded to cover more banking touch points and overall business.

J.1. Core Banking: Core Banking Solution (CBS) presently covers 9390domestic branches transacting more than 98% of the Banks domesticbusiness. CBS offers anytime anywhere banking through Multicity Chequesand other products. Our 407 branches have been enabled for Coreintegrated Trade Finance solution. We have provided to our customers afull featured internet frontend eTradeSBT for their trade relatedtransactions.

J.2. Internet Banking: Internet Banking has been implemented at 9112domestic branches, and is used by retail banking as well as Corporatecustomers for enquiry, downloading account statements, e-mail, e-ticketing for Indian Airlines, e-tax, fee payment, e- pay (onlineutility bill payment), Bulk payments by corporates, funds transfer tocustomers of our Bank as well as of other banks through Visa MoneyTransfer, RTGS and NEFT. Our Corporate Internet Banking (CINB) enablesour corporate customers to transact almost all of their bankingtransactions through internet. Through our fully featured CINB accountVistaar (Freedom), corporates can make transactions upto an amount ofRs 500 crore per transaction from their own offices. CINB customers canalso submit online requests for issue of drafts. They can also makepayments to EPFO, DGFT and OLTAS besides making payments to theirsuppliers and vendors.

J.3. Foreign Offices Project: Finacle software for Treasury and CoreBanking Solution has been implemented at 82 foreign offices in 32countries. Our 70 foreign offices have been enabled in 17 countries tooffer Internet Banking. INR remittance facility through InternetBanking has been provided to branches in 11 countries. This facilitywill be extended to all the foreign branches soon. ATM facilities havealso been provided in 7 of our foreign offices.

J.4. ATMs: We have the largest ATM network in the country with 8460ATMs of State Bank Group installed throughout the length and breadth ofthe country. Our ATMs are enabled for various value added services likepayment of utility bills, mobile top up, SBI card bill payment, SBILife premium payment, donation to Trusts / Temples and funds transfer.Further, bilateral sharing of ATMs with thirteen banks has broughtadditional 10500 ATMs within the reach of our customers. We have plansto scale up our ATM network to 15000 by March 2009 and to 25000 byMarch 2010.

J.5. Payment Systems Group: Through our Payment Systems Group (PSG), wehave enabled 8817 branches for RTGS and 9425 branches for NEFT. We alsointroduced Instant Inward Rupee remittances from Foreign Offices (FOs)for direct credit to CBS accounts in any of the State Bank Groupbranches. This facility has also been integrated with RTGS and NEFTenabling Foreign Offices to send Rupee remittances to any Bank in thecountry. On-line Rupee remittance facility to beneficiaries in Nepalfrom authorised CBS branches of SBI is another product introducedduring the year. Other banks in the country can also effect Rupeeremittances to Nepal through this facility by originating the

Page 325: company history of SBI, ICICI

transactions at their end and forwarding them through NEFT to thePayment Hub at PSG.

J.6. Information Security: IT Policy and IS Security Policy have beenimplemented after being benchmarked against best global practices. TheBanks Information Systems are regularly reviewed to ensure that theseare adequately secure.

J.7. Networking: State Bank Connect, the Wide Area Networking (WAN)project of the Bank, is capable of carrying data, voice and video in asecure way. All Applications requiring connectivity now ride on theState Bank Connect backbone. A total of 14625 branches / offices haveso far been brought under State Bank Connect.

Miscellaneous Operations

K Risk Management & Internal controls

L Business Intelligence

M Customer Service & Community Services Banking

RISK MANAGEMENT IN SBI

K.1. Risk Management Structure

- An independent Risk Governance structure in line with theinternational best practices has been put in place in the Bank. In viewof the growing volume and complexity in business, risk management hasassumed critical importance. Accordingly, the Bank has elevated therisk function to Board level by appointing the Managing Director asChief Risk Officer to ensure this crucial function gets the importanceit deserves.

- The Bank has Board approved policies and procedures in place tomeasure, manage, mitigate various risks such as Credit, Market,Operational, Liquidity, and Interest Rate Risks across all itsportfolios.

- The Risk Management Committee of the Board oversees the policy andstrategy for risk management. In addition, various Risk Committees,namely the Credit Risk Management, Asset Liability, Market RiskManagement and Operational Risk Management Committees are in place tomonitor risks in their respective areas on an ongoing basis.

K.2. Migration to Basel II

- The Bank, as per RBI Guidelines, has migrated to Basel II as on 31stMarch 2008 with the Standardized Approach for Credit Risk and BasicIndicator Approach for Operational Risk, having already implementedStandardized Duration Method for Market Risk with effect from31.03.2006. Simultaneously, processes have been set in train forfine-tuning Systems & Procedures, Information Technology capabilities

Page 326: company history of SBI, ICICI

and Risk Governance Structure to meet the requirements of the AdvancedApproaches.

K.3. Credit Risk Management

- Credit Risk Management processes encompass identification,assessment, measurement, monitoring and control of the creditexposures.

- The Bank has multiple Credit Risk Assessment models in place coveringManufacturing, Trade, Non-Banking Financial Corporations, Banks andPrimary Dealers. The Credit Risk Models developed for Manufacturing andTrading sectors have been refined to conform to the requirements underAdvanced Internal Based Approach of Basel II. The other models are alsobeing reviewed.

- The Bank conducts Industry studies to assess the Risk prevalent ineach industry and also gives guidelines to operating functionaries inlending to these industries. Industry wise exposure limits are fixedand monitored regularly.

- The Bank manages its portfolio of loan assets with a view to limitingconcentrations in terms of risk quality, geography, industry, maturityand large exposure.

K.4. Market Risk Management

- Market risk is the risk that the value of the "on" & "off" balancesheet positions of the Bank will be adversely affected by movements inmarket variables viz: interest rates, exchange rates, equity andcommodity prices.

- Market Risk Management is governed by Board approved Policies forInvestment and Trading in Bonds, Equities and Foreign Exchange. Theidentification, measurement, monitoring and reporting of Market Risk isdone by the Market Risk Management Department which is a part of theindependent Risk Governance Structure of the Bank.

- Exposure, Stop loss and Duration limits have been prescribed. Theselimits along with other management action triggers, are tracked dailyand necessary action initiated as required to control and manage MarketRisk.

- In addition, Value at Risk (VaR) is generated on a daily basis forthe purpose of close monitoring. Back testing of VaR numbers is alsocarried out to validate these measurements. The portfolio is alsosubjected to Stress testing under various scenarios so that a properunderstanding of the potential losses under extreme price movements isalways kept in view.

K.5. Operational Risk Management

- Operational risk is the risk of losses resulting from inadequate orfailed internal processes, people and systems or from external events.

Page 327: company history of SBI, ICICI

Operational risk includes legal and regulatory risk but excludesstrategic and reputational risks.

- The Bank manages Operational risks by putting in place andmaintaining a comprehensive system of internal controls and policies.The Operational Risk Management Policy of the Bank establishes aconsistent framework for systematic and proactive identification,assessment, measurement, monitoring, and mitigation of operationalrisk. The policy applies to all business and functional areas withinthe Bank, and is supplemented by operational systems, procedures andguidelines which are periodically updated.

- All key processes, risks and controls are documented and periodicassessments of risks and controls are carried out. The Bank hasinitiated steps for creation of a loss database with a view to graduateto Advanced Measurement Approaches under the Basel II Guidelines.

- The objective of the Banks Operational Risk Management is tocontinuously review systems and control mechanisms, create awareness ofoperational risk throughout the Bank, assign risk ownership, alignmentof risk management activities with business strategy, and ensuringcompliance with regulatory requirements.

K.6. Asset Liability Management

The Asset Liability Management (ALCO) of the Bank is engaged inevolving appropriate systems and procedures for ongoing identificationand analysis of Market Risk which comprises mainly the Liquidity RiskManagement and Interest Rate Risk Management. It also conducts adetailed Behavioural Analysis of the components of Assets & Liabilitiesbesides Balance Sheet simulation, on an on-going basis.

The Market Related Funds Transfer Pricing (MRFTP), a scientificinternal funds transfer pricing, evolved a a supplement to AssetsLiability Management (ALM) has been rolled out to all branches underNational Banking Group (NBG) from 1st April 2007, thus covering allbranches of the Bank under the revised transfer pricing from 1st April2007. The revised transfer pricing helps in ascertaining the trueprofitability of branches by comparing the product prices with themarket rates.

K.7. Country Risk & Bank Exposure

Prudent exposure risk management is being ensured by setting upappropriate bank exposure limits - product-wise, on a large number ofForeign Banks. Substantial counterparty bank limits for handlingletters of credit, bank guarantees, forex and money market activitiesare in place. Limits are also set up for Investment/ Lines of Creditrelated exposures on acceptable banks, in order to clear bankablepropositions.

The Country Risk Management Policy, in line with RBI guidelines forsetting up country exposure limits, is in place, and the overallcountry risk for the Bank as a whole is monitored on a regular basis.

Page 328: company history of SBI, ICICI

K.8. Internal Controls

K.8.1 The Bank has an in-built internal control system withwell-defined responsibilities at each level. The Inspection &Management Audit Department of the Bank carries out 3 streams of audit,viz. Inspection and Audit, Credit Audit and Management Audit, coveringdifferent facets of the Banks activities.

K.8.1.1 Inspection and Audit

Risk Focused Internal Audit (RFIA), an adjunct to risk basedsupervision, as per RBI directives, was introduced in the Banks auditsystem on 01.04.2003. All domestic Branches have been segregated into3 groups on the basis of business profile and risk exposures, and arebeing subjected to RFIA.

K.8.1.2 Credit Audit

Credit Audit aims at achieving continuous improvement in the quality ofthe Commercial Credit portfolio with exposures of Rs.5 crore and above.Duly aligned with Risk Focused Internal Audit, it examines theprobability of default, identifies risks and suggests risk mitigationmeasures.

K.8.1.3 Management Audit

Management audit has been reoriented to focus on the effectiveness ofrisk management in processes and procedures. Management Audit of sixCircles was taken up and completed during the current year.

K.9. Vigilance

Vigilance Department of the Bank oversees 3 primary aspects ofvigilance: Preventive, Detective and Punitive. This is achieved throughvarious means, i.e through linkages with the training system, customereducation, Inspection & Audit Department, as well as suitable incentiveschemes.

L. BUSINESS INTELLIGENCE

MIS in the Bank is being constantly assessed, upgraded and fine tunedto cater to the growing information requirements of various userdepartments and operational units. A Data Warehousing Project conceivedas a single source for all data required for support in decisionmaking, analysis, forecast and reporting is under progress.

M.1 Customer Service:

The Bank strongly believes that customer service will be the mostimportant factor in maintaining and improving its leadership in IndiasBanking Industry. The Bank took several initiatives during the year toenhance awareness among staff on the importance of good customerservice in enhancing market share and business growth. The training

Page 329: company history of SBI, ICICI

programmes for staff were revamped to focus on marketing, attitudinalchanges, business strategies and goals. All the staff of the Bank wereexposed to a training programme called "Parivartan" (Transformation).The Parivartan programme has been successful in bringing aboutattitudinal changes in employees at most of the branches.

Open customer meets were conducted regularly at all important centres.The Banks customers, staff and senior Officials freely interacted atthese meets on issues relating to customer grievances and service.

The Banks toll free Helpline number (1800 112 211) offerscomprehensive product information to retail customers apart from beingavailable 24x7 for enqiries and grievances relating to alternatechannels. Besides, the Bank has dedicated helpline numbers available atall its 14 Local Head Offices for grievance redressal. A comprehensiveanalysis Of customer grievances is done every quarter to identifycommon systemic issues that need rectification.

M.2 Community Services Banking

Apart from the normal banking operations, the Bank, as a responsibleand responsive corporate citizen, seeks to reinvest part of its profitin various community welfare projects to improve the quality of life ofthe poor, neglected, weaker and downtrodden sections of society.

In the financial year 2007-08, the Bank made donations aggregating Rs.8.11 crore to various Relief Funds and also to NGOs / Trusts /Societies for their projects with social orientation. In recognition ofits contribution to Rural Community Development, the Bank was awardedthe prestigious Readers Digest Pegasus Corporate SocialResponsibilities Award 2007. Infact, it was the only Bank to havereceived this recognition.

Under a new scheme named Adoption of the Girl Child over 8,300 poorgirl children have been adopted by various branches throughout thecountry to meet their personal and educational expenses. This is notmerely a financial assistance scheme but offers emotional andpsychological support to the adopted girls due to the activeinvolvement and care of the SBI Ladies Clubs.

From the Research and Development Fund, the Bank has so far extendedRs.6.61 crore as research grants to 71 chairs / research projects atvarious Universities and Academic institutions. For the current yearSBI has extended 100000 Sterling Pounds to London School of Economicsfor establishing an India Observatory and I.G.Patel Chair at their AsiaResearch Centre in participation with RBI.

Miscellaneous

N Corporate Communication & Change

O Organisational PlanningP Right to Information Act (RTI Act 2005)Q Human Resources Management

Page 330: company history of SBI, ICICI

R Business Process re-engineering

S Official Language

N. CORPORATE .COMMUNICATION & CHANGE

During the year, the first Mass Internal Communication Programme named"Parivartan" was rolled out across the Bank. Over 3300 inclusive TwoDay workshops were conducted by over 360 specially trained Trainers ina span of 100 days covering 1,30,000 employees. Never in the history ofthe bank had so many been trained in so short a time. The workshopscaught the imagination of all employees and unleashed a new positiveenergy.

A professional Study conducted by Xavier Institute of Management,Bhubaneswar, found that Parivartan had brought about a perceptiblepositive change in each of the 25 identified Customer Serviceparameters.

As a part of the Transformation process, special brain stormingConclaves were held for the Top Management of the Bank where variousTransformational Initiatives were identified and discussed with fixedtime lines, for each Business and Group Head in the Bank. Many of theseinitiatives were completed during the year and many are being closelyfollowed up for implementation at gras6 root level.

O ORGANISATIONAL PLANNING - CHANGES IN SENIOR POSITIONS IN THE HANK

New Senior positions were created during the year as part of newinitiatives for complying with RBI guidelines relating to RiskManagement, implementation of Basel-II accord, catering to the needs oflarge corporate customers, to drive business growth in non-farm sectorin Rural & Semi Urban Centres and for targeting Private Equity, Realtyand Venture Capital Fund Business.

The following new positions were created during the year:

1. Managing Director & Chief Credit and Risk Officer,

2. Deputy Managing Director & GE (Wholesale Banking Group),

3. Deputy Managing Director & GE (Mid Corporate Group),

4. Deputy Managing Director & GE (Subsidiaries Business Group),

5. Deputy Managing Director & GE (Global Markets),

6. Chief General Manager (Chief Information Officer - Global IT),

7. .Chief General Manager (New Business Private Equity, Realty & Venture Funds),

Page 331: company history of SBI, ICICI

8. Chief General Manager (Rural Business - Non-farm),

9 Chief General Manager (CPPD),

10. General Manager (New Business - Pension Funds & GeneralInsurance),

11. General Manager (New business -Wealth Management & PrivateBanking),

12. Deputy General Manager (Alternate Channels),

13. Deputy General Manager (Group Risk Management Department)

P. RIGHT TO INFORMATION ACT 2005 (RTI ACT 2005)

Structure has been put in place for handling all matters relating toRTI Act 2005. All Branch Heads (except CAG), Assistant General Manager(COO) at CAG branches, all Heads of OAD at OLROs/RBOs/ ZOs/LHOs andAssistant General Manager (RTI) at Corporate Centre have beendesignated as Assistant Public Information Officers (ACPIOs). GeneralManagers of Networks at Local Head Offices, Deputy General Managers &Branch Heads of Corporate Account Group, General Manager of MidCorporate- Region, General Manager of Stressed Assets Management Group(SAMG) and General Manager (OL & CS) at Corporate Centres have beendesignated as Central Public Information Officers (CPIOs). The ChiefGeneral Managers of LHOs, Corporate Account Group, Mid Corporate Group,Stressed Assets Management Group have been designated as AppellateAuthority under the Act in their respective area of control and ChiefGeneral Manager (Banking Operations) for Corporate Centres and itsestablishments. An exclusive RTI Department, has been created atCorporate Centre to handle and co- ordinate various issues under theAct. For the convenience of the public, the Bank has created an RTIlink in its website http://sbi.co.in and assigned an e-mail [email protected].

Q.1 Learning & Development

Bank has taken up several key initiatives to motivate and retain itsmanpower.

In order to channelize the energy created by the Parivartan campaign,the Bank has launched a landmark exercise for creation of the newVision Mission & Values statement which will be in place shortly.

Young officers are being encouraged to takeup management education byway of sponsorship tie- up with the S. P. Jain Institute of Management.50 officers have been enrolled in the programme on a trial basis.

Bank is strong in the areas of training & development through 4 apexlevel training colleges and 45 learning centres across the country,e-learning project has been launched to enable any where, anytimelearning.

Page 332: company history of SBI, ICICI

Q.2. HRMS

For leveraging technology in employee management area, the Bank hasstarted automation of its HR processes through SAP-ERP-HRMS software.Once fully implemented, it will not only create a central repository ofall employees data but also will make available a variety of services,like online request submission and viewing of individual data etc. toall the employees across the State Bank group on an online real timebasis. HRMS will bring efficiency in HR operations and help theManagement in making employee related decisions faster. Pensioners ofSBI, IBI and Associate Banks will also form a part of this initiativeand their pension will be processed through HRMS.

Q.3. Personnel Management

The Bank has launched Performance Linked Incentive Scheme for theBranch Managers/AGMs(Region)/ DGMs(Module) and Team Incentive Schemefor the staff members of the Branch. The incentive scheme was launchedwith the aim of enthusing and motivating the staff members of theBranch so that the bank is placed in a position to face the competitionunleashed due to liberalization of economy and maintain its lead overothers. The scheme has been successful in enthusing the staff andgarnering business for the Bank.

Q.4. Employees Share Purchase Scheme (SBI ESPS-2008)

The Bank also launched Employees Share Purchase Scheme alongwith theRights issue with the objective of providing incentive to EligibleEmployees, to stimulate their efforts towards the continued success ofthe Bank and to provide a means to attract, reward and retain talent inthe Bank, to reward eligible employees as also to encourage equityownership by them.

The price was fixed at Rs.1590/- (the face value of 1 share is Rs.10/-)per equity share. The Scheme opened on 28.03.2008 and closed on30.04.2008.

Q.5. Industrial Relations

1. A number of HR initiatives such a payment of performance linkedincentives to staff, rationalisation of promotion policies andimprovement in various staff loan schemes were taken up during theyear. Such initiatives have helped in increasing the motivation levelof staff significantly.

2. To meet requirement of staff for an ongoing branch expansionprogramme, separate recruitment exercises were undertaken to recruitclerical staff for metro/urban centres, rural/semi- urban centres andalso for marketing. This also helped in reducing the age profile ofstaff and posting of younger staff at the front line.

3. The process of consultation and discussion with both the staff andofficers federations continued during the year.

Page 333: company history of SBI, ICICI

4. The industrial relations climate of the Bank remained cordialduring the year.

Q.6. Staff Strength

The Bank had a total strength of 1,79,205 on the 31st March, 2008. Ofthis, 32.23% are officers, 42.87% clerical staff and the remaining24.90% were sub-staff.

Q.7. Implementation of Persons with disabilities (PWD) Act 1995

Our Bank provides reservation to persons with disabilities (PWDs) asper the guidelines of the Government of India and section 33 of the PWDAct 1995. The total number of persons with disabilities who wereemployed as on 31.03.2008 was as follows:

Table : 12 Number of Persons with disabilities

Category Total No.of persons strength with Disabilities

Officers 57765 279Clerical 76818 584Sub-staff 44622 204Total 179205 1067

Q.8. Representation of Scheduled Castes and Scheduled Tribes

As on the 31st March, 2008, 34802 (19.42%) of theBanks total staff strength, belonged to Scheduled Casteand 11460 (6.30%) belonged to Scheduled Tribes.

In order to effectively redress the grievances of the SC/ST employees,Liaison Officers have been designated at all administrative offices ofthe Bank. Senior officials of the Bank hold regular meetings atperiodic intervals with the representatives of SC/ ST WelfareFederation and SC/ST Welfare Association at Corporate Centre, LHOs andZonal Offices. The Bank conducts workshops on reservation policy forSCs/STs/OBCs. So also, pre- recruitment and pre-promotion trainingprogrammes are conducted by the Bank to enable SC/ST candidates toachieve the prescribed standards to effectively compete with othercandidates.

The BPR Project aspires to transform the Bank into a world classfinancial institution by proactively reaching out to new customers,building strong and lasting relationships with existing customers andproviding best quality service to all customers across multiplechannels. Accordingly, a number of new initiatives have been designed,piloted and rolled out across the Bank, which resulted in the followingbenefits:

- "Centralised Processing Centres for Retail loans, Small & Mediumenterprise loans, and Trade

Page 334: company history of SBI, ICICI

- Finance were set up and later most of them were converted into endstate models, wherein the end to end processes have been taken over.

• Positioning Relationship Managers at strategic centres to extendpersonalized service to mass affluent and HNI (high networthindividuals).

- Cross-selling of various products

- Dedicated Sales Teams like Home Loans Sales Team and Multi ProductSales Team to target niche markets.

- Assured Standard Turn Around Time for various sanction processes

- Improvement in quality of Assets and Documentation.

- Establishment of Clearing CPCs to Centralise clearing relatedactivities and free up branches to focus on customer services

Accurate and timely payment of pensions to pensioners throughCentralised Pension Processing Centres

- Creation of Document Archival Centre to free up valuable space inbranches

- Contact Centre with toll-free number for providing information onproducts to the customers on 24X7 basis

- Delayering the organizational structure for increasing speed andefficiency and to improve customer sevice

During the year the coverage of the above BPR initiatives has beenconsiderably enlarged by opening

- 113 Retail Assets Central Processing Centres and 113 Small & MediumEnterprises City Credit Centres both covering around 2400 brancheseach.

- 100 Stressed Assets Resolution Centres covering 2240 branches.

- 18 Trade Finance Central Processing Centres covering 966 branches.

- 14 Centralised Pension Processing Centres (CPPC) covering 5814branches.

- 3 7 Centralised Clearing Processing Centres (CCPC) covering 938branches.

- 4 Liability Central Processing Centres (LCPC) covering 3120 branches.

- 97 Currency Administration Cells (CAC) covering 1877 branches and1221 off-site-ATMs.

Page 335: company history of SBI, ICICI

- 2112 Branches have also been redesigned across the country to providemore convenience to customers.

- Mid Corporate Loan Administration Units have been set up in 8 centrescovering 68 branches to take care of post sanction activities.

All these initiatives have helped the Bank in creating a new operatingarchitecture capable of meeting global competition.

S. OFFICIAL LANGUAGES

During the year statutory requirements relating to the officiallanguage policy were complied with by the Bank. Several initiativeswere taken to increase use of Hindi. Some of them are :

SBI Gold International Debit Card (VISA) which was launched during theyear is now being issued bilingual. This is first International debitcard issued bilingual.

Publicity/ Educational material are now being made in Hindi andregional languages.

Responsibility Statement

The Board of Directors hereby states :

i. that in the preparation of the annual accounts, the applicableaccounting standards have been followed along with proper explanationrelating to material departures;

ii. that they have selected such accounting policies and applied themconsistently and made judgements and estimates as are reasonable andprudent, so as to give a true and fair view of the state of affairs ofthe Bank as on the 31st March 2008, and of the profit and loss of theBank for the year ended on that date;

iii. that they have taken proper and sufficient care for themaintenance of adequate accounting records in accordance with theprovisions of the Banking Regulation Act, 1949 and State Bank of IndiaAct, 1955 for safeguarding the assets of the Bank and preventing anddetecting frauds and other irregularities; and

iv. that they have prepared the annual accounts on a going concernbasis.

During the year, Shri T.S. Bhattacharya, Managing Director, on hisattaining the age of superannuation, laid down office on 31.01.2008.Further, Shri S.K. Bhatttacharyya was appointed as Managing Directorwith effect from 08.10.2007, in place of Shri. Yogesh Agarwal whoresigned from the Board on 30.06.2007 on his appointment as Chairmanand Managing Director of IDBI Bank Ltd. Prof. M.S. Swaminathan resignedfrom the Board on 11.04.2007, on his nomination to the Rajya Sabha.Shri Ajay G Piramal retired from the Board on 31.08.2007 on completion

Page 336: company history of SBI, ICICI

of his term. Shri Amar Pal, non-workmen Director on the Board, retiredon attaining superannuation, as at the close of business on 31.03.2008.Further, Dr. Deva Nand Balodhi and Prof. Md. Salahuddin Ansari (bothwith effect from 09.07.2007) and Dr. (Mrs.) Vasantha Bharucha (witheffect from 25.02.2008) were nominated to the Central Board undersection 19(d) by the Government of India. Shri Arun Singh, Shri RajivPandey and Shri Piyush Goyal ceased to be members of the Board oncompletion of their term. Shri Arun Ramanathan, Secretary (FinancialServices), was nominated to the Board with effect froml8.01.2008, inplace of Shri Vinod Rai, who resigned on 06.01.2008, on his appointmentas Comptroller and Auditor General of India.

The Directors place on record their appreciation of the contributionsmade by Shri Vinod Rai, Shri. T.S. Bhattacharya, Shri Yogesh Agarwal,Prof. M.S. Swaminathan, Shri Ajay G Piramal, Shri Amar Pal, Shri ArunSingh, Shri Rajiv Pandey and Shri Piyush Goyal to the deliberations ofthe Board.

The Directors express their gratitude for the guidance and co-operationreceived from the Government of India, RBI, SEBI, IRDA, and othergovernment and regulatory agencies.

The Directors also thank all the valued clients, shareholders, banksand financial institutions, stock exchanges, rating agencies and otherstakeholders for their patronage and support, and take this opportunityto express their appreciation of the dedicated and committed team ofemployees of the Bank.

For and on behalf of the Central Board of Directors

O.P. BhattDate : 2nd May, 2008 Chairman

Director ReportMar 2007 Mar2008

Economic Backdrop and Banking Environment:The global economy grew at a higher pace of 5.4% in 2006, as comparedto 4.9% in 2005, as growth picked up in Asia and other emerging marketeconomies. According to the IMF, global growth is likely to moderate to4.9% in 2007, due to expected slowdown in the US economy, though growthin the Euro zone is expected to pick up, led by strong domestic demand.

The Indian economy witnessed robust growth for the fourth successiveyear. In 2006-07, the economy is estimated to have grown by 9.2%,building on 9.0% growth in the previous year. There are many positivefeatures to this growth, which reinforce its solid foundations: the

Page 337: company history of SBI, ICICI

broad based nature of the growth relying on domestic demand (bothinvestment and consumer) and exports, as well as the sectoralcontribution, with manufacturing contributing to the strong growthmomentum, not just services. The only exception is the challenge ofagriculture. During 2006-07, the manufacturing sector grew by 12.3%against growth of 9.1% a year ago. The services sector, which has beengrowing at 9% since mid-1990s, is expected to continue to power theIndian economy, as it now accounts for around three- fifth of GDP.Within services, trade, hotels, transport and communications andfinancial services recorded double-digit growth for the last two years.Another positive feature underpinning the current growth phase is thesharp rise in the rate of savings and investment in recent years, withthe rate of gross domestic investment having risen sharply to 33.8% andthe savings rate to 32.4% in 2005-06. Investment in general being aforward looking variable, reflects a high degree of business optimismand reinforces the outlook for growth.

Inflation remained a major concern during the year, with WPI inflationhovering around 6.0% though it declined to 5.74% by 31st March 2007.CPI inflation however, remained higher. With its roots in supply-sidefactors particularly primary articles and manufactured goods, inflationwas fuelled by buoyant growth in broad money supply and bank credit.

Exports continued to show a healthy growth, rising by 20.9% during2006-07, building on 23.4% in 2005-06. Buoyancy of exports was drivenby resurgence in the manufacturing sector and sustained demand frommajor trading partners, pushing India's share in world merchandiseexports to 1%. In the same period, imports grew faster at 26.4% (33.8%in 2005-06), due to increase in oil prices. There was a drop in silverand pearl imports while import of capital goods was robust, due tostrong investment activity in the country. Reflecting growing interestin India's growth prospects, capital flows remained sizeable andIndia's foreign exchange reserves rose by US $47.6 bn to US $199.2 bnas on 30th March 2007.

The overall stance of RBI's monetary policy was to check inflationwhile ensuring adequate credit to support growing investment demand,curb credit growth to sensitive sectors and maintain stability infinancial markets overall. During 2006-07, while the Bank Rate was keptunchanged, Cash Reserve Ratio was raised by 100 bps. The Reverse Reporate was raised by 25 bps to 6% while the Repo Rate was raised on fiveoccasions by 25 bps each to 7.75% from 6.50%. With rising inflation,interest rates across the board rose during the fiscal year. The PrimeLending Rate (PLR) of major banks rose from 10.25-10.75% on 31st March2006 to 12.25-12.50% on 30th March 2007. In the same period, depositrate of major banks rose from 6.0-7.0% to 7.50-9.0%

The rising lending rates had a moderating impact on credit growth,which increased by 27.6% in 2006-07 against 30.8% in 2005-06. At thesame time, the increase in deposit rates had a favourable impact ondeposit growth, which rose by 23.0% in 2006-07 against 18.1% in2005-06. Consequently, the incremental CD ratio fell to 86% from 110%.

The outlook for the current financial year is encouraging. Overall, thegrowth momentum is expected to be sustained, with continuing credit andinvestment demand from industry and services as well as agriculture,

Page 338: company history of SBI, ICICI

infrastructure and retail sectors.

Financial Performance

Profit

The Operating Profit of the Bank for 2006-07 stood at Rs.9,999.94 crore(which is arrived at after reckoning amortization loss of Rs. 1,677.51crore as compared to Rs.11,299.23 crore) in 2005-06. It would appearthat the Operating Profit has declined sharply. However, if thePrevious Year's figures are regrouped on the lines of the Current Year,the Operating Profit for FY 2005-06 would stand revised to Rs. 8,248.99crore (after regrouping the figures on the lines of the recent RBICircular on treatment of amortization of Rs.3,050.24 crore) which wouldmean a growth of 21.23% in Operating Profit. The Bank has posted a NetProfit of Rs. 4,541.31 crore for 2006-07 as compared to Rs. 4,406.67crore in 2005-06, registering a growth of 3.06%.

While Net Interest Income recorded a growth of 2.98% and Other Incomeincreased (on regrouped figures) by 31.57%, the gains made on theIncome side were largely offset by an increase of 14.94% in InterestExpended. However, Operating Expenses remained controlled, with amarginal increase of 0.84%.

Dividend

The Bank has retained dividend at the rate of 140% for the current yearalso.

Net Interest Income

The Net Interest Income of the Bank registered a growth of 2.98% fromRs.15,589.13 crore in 2005-06 to Rs. 16,054.21 crore in 2006-07. Thiswas due to growth in interest income on advances. The Net InterestMargin was at a healthy 3.31% in 2006-07.

The gross interest income from global operations rose from Rs.35,979.57crore to Rs. 39,491.03 crore during the year. This was mainly due tohigher interest income on advances.

Interest income on advances in India registered an increase fromRs.16,405.70 crore in 2005-06 to Rs.22,872.66 crore in 2006-07 due tohigher volumes. Also average yield on advances in India increased from7.78% in 2005-06 to 8.67% in 2006-07. Interest income on advances atforeign offices also increased due to higher volumes.

Income from resources deployed in treasury operations in India declinedby 21.18% due to a decline both in the average yield and the averageresources deployed. The average yield, which was 7.10% in 2005-06,declined to 6.88% in 2006-07, due to the declining trend in theinterest rates.

Total interest expenses of global operations increased fromRs.20,390.44 crore in 2005-06 to Rs. 23,436.82 crore in 2006-07.

Page 339: company history of SBI, ICICI

Interest expenses on deposits in India during 2006-07 recorded anincrease of 4.58% compared to the previous year, whereas the averagelevel of deposits in India grew by 9.70 %. This resulted in an increasein the average cost of deposits from 4.57% in 2005-06 to 4.79% in2006-07.

Non-Interest Income

Non-interest income stood at Rs.5,769.25 crore as against Rs.7,435.20crore in 2005-06. However, in view of the RBI Circular on treatment ofamortization, the Non-Interest income in previous year stands revisedto Rs.4,384.96 crore, resulting in a growth of 31.57%. Loss onrevaluation of Investment declined from Rs. 3,050.24 crore in 2005-06to Rs.1,677.51 crore in 2006-07.

During the year, the Bank received an income of Rs. 596.97 crore(Rs.317.18 crore in the previous year), by way of dividends fromAssociate Banks/subsidiaries and joint ventures in India and abroad.

Operating Expenses

There was a marginal decline of 2.34% in the Staff Cost fromRs.8,123.04 crore in 2005-06 to Rs.7,932.58 crore in 2006-07. StaffCost included an amount of Rs.478.30 crore (previous year Rs.72.24crore) paid towards Ex-gratia payment under Exit Option Scheme.

Other Operating Expenses have also registered an increase of 8.01%mainly due to increase in expenses on rent, taxes and lighting,insurance, postage, telegrams and telephones, repair and maintenanceand miscellaneous expenditure.

Operating Expenses, comprising both staff cost and other operatingexpenses, have registered an increase of 0.84%.

Provisions and Contingencies

Major amounts of provisions made in 2006-07 were as under:

* Rs. 379.23 crore towards provision for depreciation on investments,excluding amortization of premium on `Held to Maturity' category (asagainst Rs.3,898.50 crore including amortization of premium on "Held toMaturity" category in 2005-06).

* Rs. 3014.61 crore towards Provision for Income Tax, includingdeferred tax credit of Rs.19.83 crore (as against Rs.2,040.60 crore in2005 -06 adjusted for deferred tax debit of Rs. 357.89 crore).

* Rs. 88.50 crore towards Fringe Benefit Tax (as against 458.00 crorein 2005-06).

* Rs. 1,429.50 crore (net of write-back) for non-performing assets (asagainst Rs. 147.81 crore in 2005-06).

* Rs. 589.19 crore towards Standard Assets (as against Rs. 405.17 crore

Page 340: company history of SBI, ICICI

in 2005-06). Including the current year's provision, the totalprovision held on Standard Assets amounts to Rs. 1,502.32 crore.

Reserves and Surplus

* An amount of Rs. 3,358.11 crore (as against Rs. 2,933.77 crore in2005-06) was transferred to Statutory Reserves.

* An amount of Rs. 321.15 crore (as against Rs. 632.74 crore in2005-06) was transferred to Other Reserves

Assets

The total assets of the Bank increased by 14.68% from Rs.4,94,028.95crore at the end of March 2006 to Rs. 5,66,565.24 crore as at the endof March 2007. During the period, the loan portfolio increased by28.85% from Rs.2,61,801.00 crore to Rs. 3,37,336.49 crore. Investmentsdeclined by 8.23% from Rs.1,62,534.24 crore to Rs.1,49,148.88 crore. Amajor portion of the investments was in the domestic market ingovernment and other approved securities. The Bank's market shares indomestic advances was 15.55% as of March 2007.

Table - 1 Key Performance Indicators

SBI SBI GroupIndicators 2006-07 2005-06 2006-07 2005-06

Return on Average Assets (%) 0.84 0.89 0.87 0.85Return on Equity (%) 14.24 15.47 15.08 14.86Expenses to Income (%) 54.18 58.70 58.15 53.40(Operating Expenses toTotal Net Income)Earnings Per Share (Rs.) 86.29 83.73 120.93 105.07Capital Adequacy Ratio (%) 12.34 11.88 12.36 12.55Tier I 8.01 9.36 8.05 9.55Tier II 4.33 2.52 4.31 3.00Net NPAs to Net Advances (%) 1.56 1.88 1.31 1.62

Liabilities

The Bank's aggregate liabilities (excluding capital and reserves) roseby 14.76 % from Rs. 4,66,384.87 crore on 31st March 2006 to Rs.5,35,266.68 crore on 31st March 2007. The increase in liabilities wasmainly contributed by increase in deposits and borrowings. The Globaldeposits stood at Rs.4,35,521.09 crore as on 31st March 2007,representing an increase of 14.60 % over the level on 31st March 2006.The Bank's market share in deposits was 14.91% as of March 2007.

Performance Highlights

Core Operations

A Treasury OperationsB Corporate Banking Group

Page 341: company history of SBI, ICICI

C National Banking GroupD Rural & Agri Business GroupE International Banking GroupF Associates & SubsidiariesG Asset QualityH Information Technology

A. TREASURY OPERATIONS

A.1 The year witnessed continuous hardening of interest rates andhealthy credit growth which had an impact on the domestic investmentportfolio. Liquidity position remained comfortable during the year. Inthe backdrop of tight Bond Market conditions, the Bank increased itsactivity in Equity portfolio with a view to diversify the portfolio andmaintain higher profit levels. The overall domestic investmentsdeclined during the year from Rs.1,59,289 crore to Rs.1,36,927 crore.The 10 year G-Sec benchmark yield increased from 7.52% as on 31-03-2006to 7.97% as on 31-03-2007.

A.2 Trading profits registered a healthy growth during the year. Whiletrading profits from Fixed Income Portfolio continued to be underpressure in view of upward moving Yield Curve, profits from EquityPortfolio increased by 68.55% (from Rs.193 crore to Rs.325 crore).Interest income from the Investment Portfolio declined in absoluteterms because of shrinkage of the overall Fixed Income Portfolio.Reduction of Interest payable CRR balances with RBI during the yearimpacted overall income from Treasury operations. Average yield ontreasury operations net of income on CRR Balances held increased from7.64% to 7.67%.

A.3. During the year the Bank contained the interest rate risk of theFixed Income Portfolio through a combination of measures which includedshifting of securities amounting to Rs.10,976 crore (book value) fromAFS to HTM.

A.4 Trading volumes in forex operations increased substantially therebyincreasing the income from such operations to Rs.202.20 crore fromRs.81.54 crore (growth of 147.98% y-o-y basis).

A.5 The Bank continued to be active in INR Interest Rate DerivativesMarket as well as Forex Derivatives Market. The Bank focused ondelivery of Structured Products to High Value customers.

B. CORPORATE BANKING GROUP

B.I The Bank's Corporate Banking Group consists of five StrategicBusiness Units (SBU), viz., Corporate Accounts Group, Leasing SBU,Project Finance SBU, Mid Corporate Group and Stressed Assets ManagementGroup (SAMG).

Table - 2 CBG - highlights

(Amount in Rs. Crore)

Page 342: company history of SBI, ICICI

Particulars As on As on Growth 31.03.2006 30.03.2007 %

Deposits 15,406 16,882 9.58

Advances(includingfood) 84,823 1,06,581 25.65

Advances(excludingfood) 78,721 98,273 24.84

B.2 Corporate Accounts Group (GAG)

CAG's loan portfolio constituted about 24% of the Bank's Commercial andInstitutional non-food credit and 11.75% of the total domestic creditportfolio as on 31.03.2007.

Initiatives taken :-

* During the year 2006-07, Corporate Accounts Group (GAG) has focusedon increasing its fee-based income, which registered an impressivegrowth of approx. 44% Y-O-Y. To this end, it has put in place differenttechnology based products offering wholesale banking services to ourcorporate customers to enable them to fully outsource their AccountsPayable and Accounts Receivable function.

* A new Group - Institutional Accounts Group has been formed forfocussing on Banks and Financial Institutions, providing them withvarious Banking Products/Services, and for forming strategic alliancesin the areas of mutual interest.

* SBI FAST, the CMP Product offered by CAG, had a turnover ofRs.5,06,752 crore as on 31.03.2007. CMP is now a comprehensive cashmanagement solution, offering payments in addition to collections. CMPalso empowers the corporates in their liquidity management by offeringauto sweep facility, customized MIS and reconciliation support.Introduction of Direct Debit facility, handling Bulk RTGS transactions,Bulk Drafts printing, Dispersed Direct Credits are some of the newinitiatives. CAG is now well poised to recapature the interest anddividend warrants business of the large corporates.

* All the CAG branches have migrated to Core Banking Platform.

* Vendor financing package, which provides easy finance against thereceivables of various vendors of our corporates across the country hasbeen successfully implemented in 6 branches in 3 Circles, and is nowready for a full scale rollout.

* Six Sigma has enabled CAG to continue on the growth trajectory in theforex business registering Y-O-Y growth of nearly 44%. The forexturnover reached Rs. 2,04,273 crore, as on 31.03.2007. CAG is a majorcontributor to the forex kitty with around 40% share in the total

Page 343: company history of SBI, ICICI

domestic forex turnover of SBI.

* With the active co-operation of Treasury Marketing Units, CAG hasmarketed for derivative business to the tune of Rs. 8,651 crore.

B.3 Leasing SBU

In view of unfavourable climate and availability of alternative fundingoptions at cheaper cost, the Bank decided not to write leases duringthe current year also. As at the end of March 2007, the disbursementsand capitalization were "NIL" and profit amounted to Rs.16.42 crore.

B.4. Project Finance SBU (PFSBU)

The Project finance-SBU focuses on funding core projects like power,telecom, roads, ports, airports, SEZ and others. It also handlesnon-infrastructure projects with certain ceilings on minimum projectcosts. During the year, the focus was on syndication and underwritingof project loans. As a whole, Project Finance-SBU took up projectsinvolving total debt of Rs. 42,687 crore for sanction and achievedfund-based sanctions of Rs. 10,272 crore, while it syndicated thebalance Rs. 32,415 crore with other banks during the year ending March2007.

B.5. Mid-Corporate Group

The Mid-Corporate Group was created on 1st July 2004 with 7 MCGRegional Offices controlling 28 branches with high concentration ofMid-Corporate (MC) business. The MC business at all other branches atcertain identified centres was also brought under the control of MCGunder the off-site model.

The focus of the MCG was to increase market share of the Bank in theemerging Mid-Corporate segment through relationship management andquicker credit processing. The initiative has been successfulinasmuchas it has resulted in increasing the credit portfolio underMid- Corporate segment substantially with attendant increase inearnings.

In 2006-2007, the following were the major achievements of the Group:

* All 28 Mid-Corporate owned branches have migrated to Core BankingSolution Network.

* 689 new customers were sanctioned credit facilities.

* Total advances controlled by the Group, both at MC branches and underoff-site model, stood at Rs.95,994 crore as on 31st March 2007.

* Advances have grown by Rs.24,358 crore (34%)

* Interest income has grown by 49% over the corresponding period of thelast year.

Page 344: company history of SBI, ICICI

* Average Yield on Advances went up by more than 17% registering anincrease of 128 bps to 8.76%.

* Regional Treasury Marketing Units have been set up at 7 centres whereMCG Regional Offices are located to push treasury related productsaggressively.

B.6. Stressed Assets Management Group (SAMG)

Stressed Assets Management Group (SAMG) was initially set up to takeover all NPAs with outstanding of Rs. 5 crore and above, for ensuringfocussed efforts in resolution of NPAs. Now the policy has beenmodified to bring all NPAs of Rs. 1 crore and above under the purviewof SAMG. During the year ended March 2007, the gross reduction in NPAsof the Group was to the tune of Rs. 959 crore.

C. NATIONAL BANKING GROUP

The Bank's National Banking Group consists of three business groupsviz., Personal Banking, SME, and Government Banking.

As at the end of March 2007, the NBG had 14 administrative circlesencompassing a vast network of 9517 branches to reach out to customers,even in the remotest corners of the country.

Table-3 NBG - highlights

(Amount in Rs. Crore)

Particulars As on As on % 31.03.2006 31.03.2007 Growth

Deposits (excluding inter-bank) 3,15,540 3,67,511 16.47

Out of which, contributed by* Retail Sector 1,98,362 2,40,816 21.40

Advances (includingfood but excluding interbank) 155,401 198,705 27.87

Advances (excluding food) 153,040 195,534 27.77

- out of which advances to* Retail Sector 85,320 103,047 20.78

* Retail Sector includes, small industries business and personalsegment.

C.1 Personal Banking Business Unit

C.1.1 During the year ended March 2007, Personal Banking Deposits havegrown from Rs. 1,63,001 crore to Rs. 1,90,388 crore, showing a growth

Page 345: company history of SBI, ICICI

of Rs.27,387 crore (17%).

During the year ended March 2007, Personal Banking Advances increasedfrom Rs. 60,935 crore to Rs. 73,468 crore, showing a growth ofRs.12,533 crore at the rate of 20.57%.

C.1.2 Our Bank was voted as THE MOST PREFERRED HOUSING LOAN PROVIDER inAWAAZ consumer Awards for 2006 along with the MOST PREFERRED Bank awardin a survey conducted by TV 18 in association with AC Nielsen-ORG Margcovering more than 1000 respondents across 21 cities.

New products introduced during the year were, SBI Optima, SBI Homelineand SBI Upfront (Advance Disbursement Facility) in the area of HomeLoans, Car Loan Overdraft, and NRI Car Loan. New products underdeposits were Super Saver Term deposit scheme, SBI Tax Savings scheme2006, and SBI Platinum account, which has an innovative feature of 'putoption'. Bank launched SBI Vishwa Yatra Foreign Travel Card (FTC) andSBI Pay Roll & Gift Cards this year. For inward remittances into India,a tie-up with Western Union Financial Services INC (WU) was finalizedthis year. Multi City cheque facility was introduced. For extendingDemat Services, the Bank launched 'eZ-trade@sbi', an on-line tradingfacility scheme at select branches.

C.1.3 The auto loan portfolio has shown a growth of Rs.1,082 crore inabsolute terms, which is 24% higher than last year's growth, mainly dueto implementation of well planned strategies.

C.2 SME Business Unit (SMEBU)

SME Business Unit is implementing various strategies to maintain theBank's leadership in SME financing. The Bank is continuously engaged inbringing out new products to meet SME customer expectations, developingsector specific value propositions, and doing intensive clusterfinancing.

Advances to SME sector increased to Rs.58,667 crore, from Rs.45,106crore for the previous year recording a growth of 30% during the yearas against the minimum growth of 20% stipulated under the SME policypackage of Govt. of India.

Liability and transactions products for SMEs are revamped andrepackaged. SBI Power Gain and SBI Power pack, two bundled currentaccounts that provide value to the customers, in the form of gradedconcessions in charges for services, have been introduced. A no frillscurrent account `SBI SME Sahaj', has been introduced for SMEs that arenot in a position to maintain the stipulated minimum balance.

Deposits of SME BU increased to Rs.1,23,05 7 crore as at the end ofMarch 2007 from Rs. 1,04,3 3 8 crore of previous year, recording agrowth of 17.94% during the year.

C.3 Project Uptech

Project Uptech is a unique format, and is designed to catalyze

Page 346: company history of SBI, ICICI

entrepreneurial thoughts and action for technologyupgradation/modernization which is vital for the survival of SMEs.Focused on the Small and Medium Enterprises (SME] sector, projectsunder Uptech are taken up in location specific and activity specificindustry clusters. So far the Bank has undertaken 30 projects formodernization under Project Uptech.

C.4 Government Business Unit (GBU)

Govt. business turnover recorded a growth of 19.63% this year, comparedto 10.82% in the previous year. Growth in Govt. commission has been8.17% this year, (compared to a decline of 11.97% in the previous year)due to introduction of various e-payment initiatives, and CentralisedPension Processing Centres at-all Circles.

D 1. RURAL & AGRI BUSINESS-GROUP

During the year under review, a new business group, viz., Rural andAgri Business Group, has been created as a strategic initiative formaximum exploitation of the emerging rural banking opportunity.

The percentage of agricultural advances to Net Bank Credit has improvedto 14.80% as at the end of March 2007 as compared to 13.64% as at theend of March 2006. Disbursements upto March 2007 was Rs. 21,625 crore.The Bank's target of doubling the credit flow to agriculture (as perGOI directives) within 3 years, w.e.f. June 2004, was achieved during2005-06, i.e., within 18 months, as a result of sustained loandisbursement campaigns, introduction of new products for farmers,entering into Corporate tie-ups for contract farming, in addition toutilization of ATMs for ensuring easier credit availability.

Table - 4 Agriculture - highlights

(Amount in Rs. Crore)

Particulars As on As on Growth 31.03.06 31.03.07 %

Deposits 5,177 6,460 25Advances 26,305 34,993 33

Major initiatives taken

`Spotlight Kharif' and `Spotlight Rabi' campaigns were launched in allCircles that resulted in higher disbursements.

New products were introduced for financing sugarcane, cotton, and othercrops and a scheme developed for financing organic manuremanufacturers.

With a view to up scaling the number of credit-linked SHGs, the Bankentered into a tie-up with reputed NGO - `CARE India'.

The Bank introduced ATM linked KCCs in all Circles during the year.

Page 347: company history of SBI, ICICI

Rural publicity campaign intensified.

National Plan for financing emerging areas in agri. Business, such as,bio-technology, food technology, etc., in the coming 3 year plan(2007-2010) was initiated.

Kisan Credit Card scheme (KCC): Bank has issued 14.24 lac cards for anaggregate limit of Rs.6,363.47 crore.

New thrust areas: The Bank's performance under the new thrust areasviz. contract farming, farmers financed through AEZ and value chainfinancing was as under:

Contract farming : Rs. 1,900 croreValue chain financing : Rs. 1,163 crore

Self-Help Groups (SHGs) :

Cumulatively, the Bank has credit linked 7.68 lac SHGs and disbursedloans to the extent of Rs.3,468 crore, so far.

Alternative Delivery Channels

The Bank entered into an MOU with Infrastructure Leasing and FinancialServices Limited (IL&FS), the National Level Agency identified by theGovernment of India for implementation of its National eGovernancePlan. Under this scheme, it is proposed to set up 1,00,000+ commonservice centres, designed as ICT enabled kiosks. The tie up will enablethe Bank to reach out to rural masses in far flung villages not coveredby our branch network for providing basic banking services, as well asto market our various schemes.

Financial Inclusion

A major initiative introduced during the year in the area of financialinclusion has been the introduction of SBI Tiny smart cards to thefinancially excluded. The smart card project together with the businesscorrespondent model has been piloted in Aizawl, Pithoragarh and Medakfor opening 'No Frill' accounts. The experiment has been successful andit is proposed to have a nationwide roll out during the current year.

An MOU has also been signed with the Govt. of Andhra Pradesh forproviding basic banking services in the district of Warangal by issuingsmart cards to all beneficiaries under Rural Employment GuaranteeProgramme.

The Bank has also launched a special programme in the district ofWardha in Maharashtra to promote financial inclusion, which has beenwell received.

D.2. Regional Rural Banks (RRBs)

Page 348: company history of SBI, ICICI

2006-07 was a year of consolidation of RRBs. There was Bank specificamalgamation at each State level. Resultantly, Bank has got 16 RRBspost amalgamation with a network of 2334 branches spread over 104districts in the Country. The aggregate deposits and advances of thesponsored RRBs stood at Rs.12,990 crore and Rs.7,902 crore respectivelyas on 31st March 2007. During the financial year, the Bank's sponsoredRRBs made a profit of Rs.27.58 crore.

D.3. Credit Assistance provided to Scheduled Castes and ScheduledTribes

The credit assistance provided by the Bank to SCs and STs stands atRs.6,381 crore out of total priority sector advance of Rs.1,10,373crore as on 31.03.2007.

Recovery position of SC/ST borrowers (scheme-wise) :

Scheme Recovery

Prime Minister's Rozgar Yojana (PMRY) 27%Swarnajayanti Gram Swarozgar Yojana (SGSY) 51%Swarnajayanti Shahari Rozgar Yojana (SJSRY) 29%Scheme for Liberation & Rehabilitation of Scavengers (SLRS) 24%Differential Rate of Interest (DRI) 27%

E. INTERNATIONAL BANKING GROUP (IBG)

E.1.1 Operations of Foreign Offices

As on 31.03.2007, the Bank had a network of 83 overseas offices spreadover 32 countries covering all time zones. The Bank also hascorrespondent arrangements with 525 Banks in 126 countries.

Net Profit from Bank's foreign branches increased to USD 90.22 mioduring the year from USD 69.55 mio for the previous year. Assets of theforeign branches increased from USD 11.960 bio as on 31.03.06 to USD17.188 bio as on 31.03.07.

E.1.2 NRI Business

The online technology based remittance products registered a growth ofmore than 200%. A new car loan scheme for close relatives of NRIs inIndia was introduced. In addition, an 'In Principle' sanction schemefor NRI Home Loans was also launched at select foreign countries.

E.1.3 Treasury Management

As part of the centralisation of treasury activities at foreignoffices, London Central Treasury Hub became operational during theyear. Foreign offices of the Bank diversified their investmentportfolio through first time investment in Collateralised DebtObligations. Credit Default swaps were also undertaken for the firsttime at select foreign branches.

Page 349: company history of SBI, ICICI

E.1.4 Overseas Expansion

With opening up 5 new offices and takeover of a Bank in Indonesiaduring the year, the Bank now has 83 offices in 32 countries.

Table 5 (a): Assets/Liabilities ofForeign Offices as at 31.03.007(excluding Subsidiaries and Joint Ventures)

Items Rs. in Crore USD Million

ResourcesDeposits 15,584.32 3,585.08Borrowings 33,883.56 7,794.70Other Liabilities 25,246.81 5,807.87Total 74,714.69 17,187.65Deployment Investments andPlacements 15,328.99 3,526.35Advances (Net) 38,114.07 8,767.90Other Assets 21,271.63 4,893.40Total 74,714.69 17,187.65

Table 5 (b): Aggregate Working Results of

Foreign Subsidiaries/Joint Ventures Associates Abroad

As on 31.03.2007. (Rs. in Crore)

Deposits Loans

Subsidiaries* 3,604.22 3,375.48Joint Ventures/Associates ** 2,209.35 996.66

* SBI (California), SBI(Canada), SBI International (Mauritius) Ltd.,Indian Ocean International Bank Ltd., Mauritius and PT Bank Indo Monex,Indonesia.

** Commercial Bank of India Ltd. as on 31.03.2007, Bank of Bhutan Ltd.as on 31.12.2006, and Nepal SBI Bank Ltd. as on 16.07.2006.

Conversion rate USDl = INK 43.4700

E.2 Domestic Operations

E.2.1 Export Credit

The Bank's outstanding export credit stood at Rs. 21,868 crore, havingincreased by 20.36% during April 2006 to March 2007 as compared to thecorresponding period of the previous year.

E.2.2 Project Export Finance

Page 350: company history of SBI, ICICI

State Bank of India is an active participant in financing projectexport activities involving bidding and execution of turnkey/civilconstruction contracts and export of engineering goods on deferredpayment basis, as also service exports.

During the period April 2006 to March 2007, the Bank supported 38project export proposals aggregating Rs.6,635 crore, in 13 countries.

E.3 Merchant Banking

The Bank further intensified its thrust in the area of syndicatedforeign currency loans and participated in corporate syndicated loandeals amounting to USD 9,121 mio during April 2006 to March 2007,besides extending several bilateral facilities aggregating US$ 376 mio.Bank has participated in 13 Merger and Acquisition deals aggregating US$ 5,375 mio to the extent of US$ 1,073.07 mio as against participationin four deals aggregating US $ 554.50 mio to the extent of US $ 204.50mio during the previous year.

E.4 Forex Turnover

During April 2006 to March 2007, the Bank recorded a total turnover ofRs. 5,11,712 crore in its forex business (Rs. 2,81,209 crore in Salesand Rs. 2,30,503 crore in Purchases) reflecting an increase of 18.18%over the previous year.

E.5 Global Link Services (Export Payments & Clean Collections)

Global Link Services (GLS) of the Bank facilitates export payments andother overseas collections, thereby improving the profitability of theBank's foreign exchange operations. During the fiscal year 2006-07, GLScollected on behalf of domestic branches of the Bank proceeds of148,000 export bills in US dollars and Euros, and the proceeds of277,463 cheques in Sterling. Euro and US Dollars aggregating USD 13000mio and USD 321.16 mio respectively, in value terms.

Remittance by NRIs: GLS has also introduced Inward Remitttance productson Electronic Platform. During the year, 215,176 Inward Remittances, inUS dollars/GBP/INR were handled from USA, UK and Middle East throughvarious exchange companies, our foreign branches and online directcustomers in the USA.

E.6 Correspondent Relations

To cater to the needs of a large customer base of the Bank, and to alsosupplement the efforts of our foreign offices in the area ofInternational Banking, the Bank has developed a network ofCorrespondent Banks numbering 525 consisting of reputed InternationalBanks spread over 126 countries. The Bank also has about 1100 BilateralKey Exchange (BKE) arrangements for SWIFT, which facilitates a seamlessflow of financial messages covering trade, remittances etc.

F. ASSOCIATES AND SUBSIDIARIES

Page 351: company history of SBI, ICICI

F.1 The State Bank Group with a network of 14,337 branches including4820 branches of its seven Associate Banks dominates the bankingindustry in India. In addition to banking, the Group, through itsvarious subsidiaries, provides a whole range of financial serviceswhich includes Life Insurance, Merchant Banking, Mutual Funds, CreditCard, Factoring, Security trading and primary dealership in the MoneyMarket.

F.2 Associate Banks

SBI's seven Associate Banks had a market share of 7.52% in deposits and7.56% in advances as on the last day of March 2007.

Performance Highlights of Associate Banks (ABs)

Gross NPA ratio improved from 2.62% in March 2006 to 1.83% as on March2007. Net NPA ratio was at 0.76%.

The combined operating profit of Associate Banks registered a growth of10% and stood at Rs.4,433.61 crore and net profit at 31.03% andRs.2,030.74 crore.

F.3 SBI Commercial & International Bank Ltd. (SBICI)

As at the end of March '07, the aggregate deposits and total advancesof SBICI stood at Rs. 446.86 crore and Rs.340.06 crore respectively.The Bank recorded an operating and net profit of Rs.6.18 crore andRs.7.55 crore respectively. During the year, net NPA ratio is just0.19% as on March 2007.

Performance Highlights of Non-Banking Subsidiaries/Joint Ventures

F.4 SBI Capital Markets Limited (SBICAP)

To fully exploit the opportunities arising out of the increasingfunding requirements of corporate India, SBICAP substantially enhancedits scale of operations in the Project Advisory & Structured Finance(PA&SF) and Mergers & Acquisitions (M&A) areas. SBCAP is ranked as no.llead Arranger in the Asia Pacific Region (including Japan) for thesecond consecutive year, by both Project Finance International (PFI)and Bloomberg. It was also ranked 9th and 3rd globally by PFI in the`Project Finance Arranger' and `Project Finance Advisory' categoriesrespectively, in 2006. SBI Cap is ranked as the number one "ProjectFinance Advisor" in the PFI league table and moved to the numero unoposition from seventeenth position the previous year, in the"Syndicated Loans Bookrunner" category by Bloomberg.

Table - 6 The performance highlights of the Associate Banks as at March2007 are as under:

(Rupees in Crore)

Name of the Bank SBI's share Deposits Advances Operating Net in the Profit Profit

Page 352: company history of SBI, ICICI

capital (%)

State Bank ofBikaner & Jaipur 75 28480 20766 679.20 305.80Hyderabad 100 42881 28346 1003.80 505.50Indore 98.05 19976 15482 388.96 189.96Mysore 92.33 22022 16762 471.58 249.23Patiala 100 39184 29049 789.13 366.53Saurashtra 100 15871 11162 248.81 87.44Travancore 75 30984 25074 852.13 326.28All 7 Banks - 199398 146641 4433.61 2030.74

SBICAP has converted its broking arm SBICAP Securities Ltd., into asubsidiary and SSL has 134 branches.

SBICAP Ventures Ltd., Softbank, Japan (SBI Holdings Ltd.,) have signedan MOU for setting up a USD 100 million Knowledge Sector Fund.

In 2006, SBICAP (UK) Ltd., got the authorization to undertake CorporateFinance and Investment Advisory activities in the UK, and part of theEuropean Economic Area (EEA). It arranges for its clients ForeignCurrency Convertible Bonds (FCCBs), Global Depository Receipts (GDRs),Private Equities (PEs) and Cross-border Mergers and Acquisitions(M&As).

F.5 SBI DFHI LTD

SBI group holds 67.01% of the Company's paid up capital, while otherNationalized Banks hold 22.46%. All India Financial Institutions andPrivate Sector Banks hold 5.84% and the Asian Development Bank holds4.69% as on March 31,2007.

For the period upto March 2007, the Company had earned a PAT ofRs.53.25 crore. Company prudently diversified into profitable Non-SLRavenues resulting in better profits this year.

Total Secondary market turnover of the company was Rs.22,791.84 crore.The market share (Proprietary) was 2.47%.

F.6 SBI Cards & Payments Services Pvt. Ltd. (SBICSPL)

During the year 14.81 lac additional cards were issued increasing theCards in Force (CIF) to 33.57 lacs up from 24.27 lacs in 2005-06.Revenue generated was Rs.896.50 crore. The Company maintainedprofitability of its operations, and achieved a pretax profit ofRs.91.22 crore this year. SBI Cards is in 2nd position in the countryunder market share.

New products launched during the year were, `Truly Gold' SBI GoldMaster Card, GO Air SBI Credit card. New promotional initiatives of theyear were, `Low interest offer', The Smart Traveller offer', etc., toincrease SBI Card usage and particularly for using the card for cashdrawals, such as `Payment Holiday offer', Targeted Cash Offer', etc.,

Page 353: company history of SBI, ICICI

F.7 SBI Life Insurance Company Limited (SBILife)

SBI Life, which has been making rapid strides in the liberalized lifeinsurance industry in India has covered 6.49 million lives upto March07 by selling its products through over 7000 branches of the State BankGroup, thereby earning the distinction of being the company with thehighest number of lives covered, among private players. Gross premiumincome was over Rs. 2,929 crore for the period ended March 2007. SBILife enjoys the unique distinction of being the private sector lifeinsurance company in India to make profits for two consecutive years.SBI Life has made a net profit of Rs.3.83 crore during the financialyear 2006-07 and total Assets Under Management of the Company stood atRs.4,741 crore as on March 31, 2007.

F.8 SBI Funds Management (P) Ltd. (SBIFMPL)

SBIFMPL was judged "Mutual fund of the year" by CNBC/TV-18/CRISIL. SBIFMPL Equity Schemes won 11 awards during the year. The ranking of theAMC in terms of Assets Under Management remained at 7th position as on31st March 2007.

SBIFMPL reported a total cashflow of Rs. 52,512 crore in the variousschemes during the year. The total net assets of domestic funds undermanagement are Rs. 16,873 crore. The company reported a net profit ofRs.29.78 crore after tax for the period ending March 2007 as againstRs. 18.64 crore for the previous year.

F.9 SBI Factors and Commercial Services Pvt. Ltd. (SBIFACTORS)

Asset level of the Company increased by 33% (from Rs.919.36 crore toRs. 1,225.18 crore) and the number of clients increased by 48% (from750 to 1106) during the year.

It recorded a growth of 56% (year-on-year) in total income and endedthe year with a PBT of Rs. 20.36 crore as against Rs.15.80 crore lastyear and PAT of Rs. 13.10 crore, as against Rs. 10.67 crore last year.

G. ASSET QUALITY

NPA MANAGEMENT

G.1. The gross NPAs and net NPAs of the Bank have been brought down to2.92 % and 1.56% as at end of March, 2007, from the previous year-endlevel of 3.61% and 1.88% respectively.

G.2. Cash recoveries of Rs. 1,940 crore and upgradation to standardassets to the tune of Rs. 1,257 crore were achieved during the year.The Gross reduction till the end of March 2007 was to the tune ofRs. 4,594 crore.

G.3. Apart from the reduction in NPAs, a cash recovery of Rs. 972 crorehas been effected in written off accounts during the year.

G.4. Slippages of standard assets to NPA category to the tune of Rs.

Page 354: company history of SBI, ICICI

4,964 crore resulted in marginal increase of Rs. 370 crore in the GrossNPA level. However, slippages were arrested by identification andmonitoring of Special Mention Accounts as per the guidelines of RBI byprompt reviews and taking quick corrective action. Restructuring ofimpaired standard assets as well as viable non performing assets, bothunder CDR mechanism as well as under Bank's own scheme, were given toppriority for arresting new additions and reducing the existing level ofNPAs.

G.5. 116 cases were referred to CDR for restructuring till 31.03.2007in which the Bank had an aggregate exposure of Rs. 7,678 crore. Out ofthese cases, 94 cases with an exposure of Rs. 6,726 crore were approvedand two, with an exposure of Rs. 43 crore, were under process.

G.6. 110 Financial Assets including NPAs and AUCAs, involving principaloutstanding of Rs. 123.45 crore had been sold to other banks/ARGILduring the year.

H. INFORMATION TECHNOLOGY:

H.1. The Bank is pursuing an aggressive IT policy as a strategicinitiative to meet the growing competition for business and marketshare, achieve efficiency in internal operations, and meet customerexpectations. With this end in view, several initiatives wereundertaken, viz. ATM Project, where ATMs are now also enabled to payutility bills, and college fees, book air-line tickets, acceptdonations etc. Further, bilateral sharing of ATMs was extended tothirteen banks, covering 15,700 ATMs, and an MOU has been signed withthe Indian Railways for installing ATMs at 682 Railway Stations.

H.2. Core Banking Solution (CBS) presently covers 72 million accounts,and more than 85% of the bank's business. Finacle Project for Treasuryand Core Banking Solution has been implemented at 73 foreign offices in22 countries, alongwith Internet Banking at all foreign offices.Further, Internet Banking has been implemented at 4841 domesticbranches, and used by retail banking customers for utility bill paymentand booking of Rail and Air tickets.

H.3. Payment Systems Group is responsible for implementation of RTGS,(4748 branches) NEFT (4690 branches), setting up MICR Cheque ProcessingCentres (5 new) and adding ECS facility at Clearing Houses managed bySBI (22).

H.4. IT Policy and IS Security Policy have been implemented after beingbenchmarked against best global practices. The Bank's Central DataCentre and Disaster Recovery Centres were certified as ISO/IEC27001:2005 Compliant, which is the new International Standard forInformation Security Management Systems.

H.5. SBI Connect, the Wide Area Networking (WAN) project of the Bank,is capable of carrying data, voice and video. All Applicationsrequiring connectivity now ride on the SBI CONNECT backbone, inaddition to 5794 branches/offices of SBI and 4995 branches/offices ofAssociate Banks being networked under the SBI Connect Project.

Page 355: company history of SBI, ICICI

Miscellaneous Operations

1 Risk Management & Internal controls2 Management Information System3 Allied Activities

I. RISK MANAGEMENT & INTERNAL CONTROLS

Risk Governance Structure:

An independent Risk Governance structure, in line with internationalbest practices, has been put in place in the Bank. This is in thecontext of separation of duties/independence of risk measurement,monitoring and control functions of the Bank. An independent positionof 'Chief Risk Officer' has been created to ensure integrated riskmanagement for credit, market and operational risks.

1.1 Credit Risk Management

The existing Credit Risk Assessment (CRA) system for the CorporateBorrowers has been enlarged to meet the requirements of the Basel IIaccord. New CRA Models for both Non-Trading and Trading sectors havebeen designed. These Models have been designed with a view to conformto the requirements of risk measurement as stipulated under theAdvanced Internal Ratings Based (AIRB) approach of Basel n.

1.2.1 Market Risk Management

Bank has developed sensitive tools to hedge and minimize the risksarising out of movements in interest rates, currency exchange rates andcommodity prices.

1.2.2 Asset Liability Management

The Asset Liability Management (ALCO) of the bank is engaged inevolving appropriate systems and procedures for ongoing identificationand analysis of Balance Sheet risks and laying down parameters forefficient management of the same. Market Risk Management includesimportant tasks such as Liquidity Risk Management, Interest Rate RiskManagement, Interest Rate Views, Economic, Market and BehavioralAnalysis, Policy Formulation and Balance Sheet simulation, on anon-going basis.

1.2.3 BASEL II Implementation

While the Bank is updating/fine-tuning Systems & Procedures, Technologycapabilities, Risk Assessment, Risk Governance Structure etc., to meetthe requirement of the Advanced Approaches, for the present, the Bankproposes to migrate to Basle II with the Basic Approaches, in line withRBI Guidelines.

1.3 Operational Risk Management

The Operational Risk Management Committee in the Bank oversees the

Page 356: company history of SBI, ICICI

Operational Risks and ensures that the requisite control measures arein place, in line with the operational risk management policy of theBank.

1.4 Country Risk & Bank Exposure

Prudent exposure risk management is being ensured by setting lipappropriate bank exposure limits - product-wise, on a large number ofForeign Commercial Banks. Substantial counterparty bank limits forhandling letters of credit, bank guarantees, forex and money marketactivities are in place. Limits are also set up for Investment/Lines ofCredit related exposures on acceptable banks, in order to clearbankable propositions.

The Country Risk Management Policy, in line with RBI guidelines forsetting up country exposure limits, is in place, and the overallcountry risk for the Bank as a whole is monitored on a regular basis.

1.5 Internal Controls

1.5.1 The Bank has an in-built internal control system withwell-defined responsibilities at each level. The Inspection &Management Audit Department of the Bank carries out 3 streams of audit,viz. Inspection and Audit, Credit Audit and Management Audit, coveringdifferent facets of the Bank's activities.

1.5.1.1 Inspection and Audit

Risk Focused Internal Audit (RFIA), an adjunct to risk basedsupervision, as per RBI directives, was introduced in the Bank's auditsystem on 01.04.2003. All domestic Branches have been segregated into3 groups on the basis of business profile and risk exposures, and arebeing subjected to RFIA.

1.5.1.2 Credit Audit

Credit Audit aims at achieving continuous improvement in the quality ofthe Commercial Credit portfolio with exposures of Rs.5 crore and above.Duly aligned with Risk Focussed Internal Audit, it examines theprobability of default, identifies risks and suggests risk mitigationmeasures.

1.5.1.3 Management Audit

Management audit has been reoriented to focus on the effectiveness ofrisk management in processes and procedures. Management Audit of sixCircles was taken up and completed during the current year.

1.5.1.4 Vigilance

Vigilance Department of the Bank oversees 3 primary aspects ofvigilance: Preventive, Detective and Punitive. This is achieved throughvarious means, i.e through linkages with the training system, customereducation, Inspection & Audit Department, as well as suitable incentive

Page 357: company history of SBI, ICICI

schemes.

J. MANAGEMENT INFORMATION SYSTEM (MIS)

MIS in the Bank is being constantly assessed, upgraded and fine tunedto cater to the growing information requirements, of which the DataWarehousing Project is a major initiative.

K. ALLIED ACTIVITIES

K.1 Customer Service:

A number of initiatives were launched to intensify focus on customerservice. These include conducting of Open House or Town Hall CustomerMeets with participation by Circle Management; `Operation Samay' atbranches to ensure that counters open for business before time anddrawing up of ground rules for customer service for operating staff.Customers were encouraged to provide frank and honest feedback onservices at Open House,Meets.

The Bank became a member of the Banking Codes and Standards Board ofIndia (BCSBI) in September 2006. The Bank has thereby adopted theBCSBFs Code of Bank's Commitments to Customers as the Fair PracticeCode for implementation at all its branches. The Bank has alsoappointed Code Compliance Officers at all its Local Head Offices. TheBank places importance not only to redress customer grievances but alsoin identifying systemic/attitudinal issues, if any, that lead to a highfrequency of complaints in particular areas and in rectifying them.

K.2 Community Services Banking

Apart from the normal Banking operations, the Bank, as a responsibleand responsive corporate citizen, seeks to reinvest part of its profitin various community welfare projects to improve the quality of thelife of the poor, neglected, weaker and downtrodden sections ofsociety.

Miscellaneous

L Corporate Communication & ChangeM Organisational Planning'N Right to Information Act (RTI Act 2005)O Human Resources ManagementP Official Language

L. CORPORATE COMMUNICATION & CHANGE

The Bank has launched a massive Transformation Exercise in order to becompetitive in the fast changing environment. An inclusive Culture,focussing on People - Customer and Staff- is being ushered in, with theaim of becoming the Best in Customer Service. A new department -Corporate Communication & Change, has been created at Corporate Centreto monitor and drive the various change initiatives.

Page 358: company history of SBI, ICICI

M. ORGANISATIONAL PLANNING - CHANGES IN SENIOR POSITIONS IN THE BANK

New senior positions were created during the year, i.e., DeputyManaging Director & Group Executive (Rural & Agri. Business), DeputyManaging Director & Group Executive (Treasury & Markets), DeputyManaging Director (Corporate Strategy & New Businesses), GeneralManager (Corporate Communication & Change) and General Manager (SuperCircle of Excellence), as part of new initiatives for focusing onmarket segments, that need ongoing monitoring of the growth inbusiness.

A new Risk Management structure with new positions, has been put inplace at Corporate Centre, to enable the Bank to comply with the firstphase of implementation of Basel II.

N. RIGHT TO INFORMATION ACT 2005 (RTI ACT 2005)

Structure has been put in place for handling requests and appeals underthe RTI Act 2005. All Branch Heads (excepts GAG), all Heads of OAD atZOs/LHOs and AGM (RTI) at corporate centres have been designated asACPIOs. General Managers of Networks at Local Head Offices; BranchHeads of GAG; General Managers of Mid Corporate-Region; General Manager(SAMG) at Corporate Centre and General Manager (OL & CS) have beendesignated as CPIOs. The Chief General Manager (BO) has been designatedas Appellate Authority under the Act. An exclusive `RTI Cell', has beencreated in Corporate Centre, to handle and co-ordinate various issuesunder the Act.

O. HUMAN RESOURCES MANAGEMENT (HRM)

O.1 HRMS Project

To derive the benefits of the technology up-gradation drive, the Bankhas put in place its HR processes with the overall objective of gainingefficiency in its operations, and aligning the HR processes withbusiness objectives. Thus HRM solution which is in the process ofimplementation would handle all aspects of HRM, including payment ofwages and salaries, performance management, training management, leaveadministration etc. For this purpose, Bank has selected SAP-ERP-HRMSsolution for implementation across the State Bank Group.

O.2 Personnel Management

A few of the important developments/initiatives taken were as under:-

a) The Exit Option scheme for the officers has been withdrawn and keptin abeyance w.e.f. 01.11.2006.

b) Introduced a scheme for extending legal and financial support to theExecutives of the Bank against whom motivated false complaints havebeen made by people/agencies outside the Bank.

c) Pension for the employees retiring on or after 1.11.2002 was revisedin the current year.

Page 359: company history of SBI, ICICI

O.3 Business Process Re-engineering (BPR)

BPR Project is redesigning business processes to leverage the CoreBanking Platform to improve the Bank's performance in key businessareas and also quality of service.

O.4 Industrial Relations

In order to avoid delays on account of handing over/taking over of cashevery day in the morning and evening, In-Branch Cash Handling systemhas been introduced.

O.5 Recruitment

The Bank has recruited Marketing & Recovery Officers (Farm Sector) forspecial thrust on marketing of Agriculture and Allied Activities.

O.6.1 Staff Strength

The Bank had a total staff strength of 1,85,388 on the 31st March,2007. Of this, 29.99% are officers, 43.73% clerical staff and theremaining 26.28% were sub-staff.

O.6.2 Implementation of Persons with disabilities (PWD) Act 1995

Our Bank provides reservation to persons with disabilities (PWDs) asper the guidelines of the Government of India and section 33 of the PWDAct 1995. The total number of persons with disabilities who wereemployed as on 31.03.2007 was 1179.

Category Total No. of persons strength with Disabilities

Officers 55599 290Clerical 81080 635Sub-staff 48709 254Total 185388 1179

O.7 Representation of Scheduled Castes and Scheduled Tribes

As on the 31st March, 2007, 34,909 (18.83%) of the Bank's total staffstrength, belonged to Scheduled Caste and 11,527 (6.22%) belonged toScheduled Tribes.

In order to effectively redress the grievances of the SC/ST employees,Liaison Officers have been designated at all administrative offices ofthe Bank. Senior officials of the Bank hold regular meetings atperiodic intervals with the representatives of SC/ST Welfare Federationand SC/ST Welfare Association at Corporate Centre, LHOs and ZonalOffices.

P. OFFICIAL LANGUAGE

Page 360: company history of SBI, ICICI

Bank's In-House Hindi magazine "Prayas" has once again bagged 1st Prizefor the year 2005-06 among the In-House Hindi magazine competition forPublic sector Banks/Financial Institutions conducted by RBI, for thethird consecutive year.

Facility for transacting on Bank's ATMs in respective regionallanguages, Hindi and English is available. Bank's ATM Card is alsoissued in bilingual format. News related to banking and finance andtemplates of letters and forms of repetitive nature in Hindi, generalnoting in Hindi, Hindi equivalents of new terms of banking and finance,Hindi teaching and training material are now available on Bank'sintranet "SBI Time's", which is helping in increased usage of Hindi inthe Bank. A software enabling printing of reports in Hindi in BankMaster branches is now available.

Responsibility Statement

The Board of Directors hereby states :

i. that in the preparation of the annual accounts, the applicableaccounting standards have been followed along with proper explanationrelating to material departures;

ii. that they have selected such accounting policies and applied themconsistently and made judgments and estimates as are reasonable andprudent, so as to give a true and fair view of the state of affairs ofthe Bank as on the 31st March 2007, and of the profit or loss of theBank for the year ended on that date;

iii. that they have taken proper and sufficient care for themaintenance of adequate accounting records in accordance with theprovisions of the Banking Regulation Act, 1949 and State Bank of IndiaAct, 1955 for safeguarding the assets of the Bank and preventing anddetecting frauds and other irregularities; and

iv. that they have prepared the annual accounts on a going concernbasis.

Acknowledgement

During the year, Shri A.K. Purwar, Chairman, laid down office on 31stMay 2006, consequent upon his attaining the age of superannuation.Further, consequent upon the elevation of Shri Ashok Jha, GOI

Nominee Director on the Bank's Board, as Finance Secretary, Shri VinodRai, Secretary (Financial Sector) was nominated to the Board vice ShriJha.

The Directors place on record their appreciation of the contributionsmade by Shri Purwar and Shri Jha to the deliberations of the Board.

The Directors express their gratitude for the guidance and co-operationreceived from the Government of India, RBI, SEBI, IRDA, and other

Page 361: company history of SBI, ICICI

government and regulatory agencies. ;

The Directors also thank all the valued clients, shareholders, banks,and financial institutions, stock exchanges, rating agencies and otherstakeholders for their patronage and support, and take this opportunityto express their appreciation of the dedicated and committed team ofemployees of the Bank.

For and on behalf of the Central Board of Directors

O.P. BhattChairman

Date: 12th May, 2007

Company History - Bank of India

1969

- The Bank was brought into existence by an Ordinance issued on 19th July by the Central Government. In terms of the Ordinance, the Undertaking of `The Bank of India Ltd.' was transferred to and vested in the new bank. The Ordinance was replaced by the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1969.

1970

- The Acquisition and Transfer of Undertakings Act was declared null and valid by the Supreme Court on 10th February. An ordinance was thereupon promulgated which was later replaced by the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 which was made effective restrospectively from 19th July, 1969.

- Under the `Lead Bank Scheme' the Bank was allotted 30 districts in 5 states - 9 in Maharashtra, 9 in Madhya Pradesh, 2 in Orissa, 4 in Bihar and 6 in U.P.

1985

- Rs 43 crores capital contributed by Government.

1986

- Rs 27 crores capital contributed by Government.

Page 362: company history of SBI, ICICI

1988

- Rs 35 crores capital contributed by Government.

1989

- The Bank of India Finance Ltd. was incorporated in June as a subsidiary of Bank of India to extend a complete package of professional financial services to the corporate sector, including merchant banking, leasing and investment banking.

- Rs 140 crores capital contributed by Government.

1990

- BOI Mutual Fund was estabished, to provide direct services to investors by pooling their resources and investing in capital market securities.

- Rs 100 crores capital contributed by Government.

1991

- Rs 110 crores capital contributed by Government.

1993

- Rs 6357 crore capital contributed by Government.

1994

- A new subsidiary of the bank was formed to manage the investment operations of BOI Mutual Fund. It received Certificate of Commencement of Business on 21st February.

- Rs 848.38 crores capital contributed by Government.

1995

- In terms of Ministry of Finance the accumulated loss of Rs 1369.91 crores adjusted against paid-up capital.

1996

Page 363: company history of SBI, ICICI

- Rs 93.47 crores returned to Government as a part of capital restructuring. 1500,00,000 equity shares (prem. of Rs 35 per share) issued to public through prospectus.

1997

- The BOIFIN was associated with 12 issues as Lead Managers/Co-Manager/Arranger.

- The Company became Depository Participate of National Securities Depository Ltd., for the purpose of clearing and settlement of trades in the dematerialised segment of BSE.

1998

- As on 31st March, the Bank had sponsered 16 Regional Rural Banks with capital of 5.60 crores and a total branch network of 992 in five states.

- Bank of India has been awarded the Gem & Jewellery Export Promotion Council Award.

- Bank of India (BOI) has set up a full fledged risk management department at its corporate office. The bank has already integrated its money market and forex operations to set up global treasury which will be better equipped to manage the types of risks arising from capital recent convertibility.

- Four Banks - State Bank of India (SBI), Bank of India (BoI), Oriental Bank of Commerce (OBC) and Hongkong Bank - have introduced term deposits with a minimum maturity of 15 days.

- Bank of India (BoI) has tied up with Equifax Venture Infotek Ltd (EVI) to automate its credit card operations to provide electronic solutions to its customers. EVI is a 50:50 joint venture between the US-based Equifax Inc and Venture Infotek. According to the agreement, BoI would provide point-of-sale (POS) terminals at its leading card acceptance establishments all over the country.

- Mr. A.M. Ahmadi, former Chief Justice of India, on Monday presented the Bank of India Excellence Awards to five personalities in the fields of finance, literature, management, music and arts and media.

- The public sector Bank of India has launched the BOI Navy Card with MasterCard International on the occasion of Navy Day.

1999

- The Mumbai Stock Exchange (BSE) and the Bank of India (BoI) have set up an internal working committee to review the working of the BoI Shareholding and also make it a `self sustaining unit'.

Page 364: company history of SBI, ICICI

- The public sector, Bank of India (BoI), is currently on an exercise of restructuring its subsidiaries. As a part of the restructuring, the bank will be taking stock of the viability of the subsidiaries and try to turn them around.

- BoI will enter the insurance partnership with a foreign insurance company.

2000

- Bank of India has introduced floating interest rate on deposits for select customers, besides advancing on Mumbai Inter Bank Offer Rate (MIBOR).

- Bank of India (BoI) has unveiled major business initiatives like the introduction of a centralised banking system, floating deposit schemes and cash management services.

- Bank of India (BoI) plans to introduce a centralised banking programme which will facilitate anytime and anywhere banking for its customers.

- Bank of India and Andhra Bank have become the first public sector banks to receive an in-principle approval to dilute government shareholding in them to 33 per cent through mobilisation of fresh capital via a public issue.

- The Bank has offered a special deposit scheme for investors in BoI Mutual Fund's Double Square Plus (1990) Scheme, which would be redeemed on September 1.

- Bank of India has revised its FCNR, NRE and NRNR deposit rate effective from 11th September.

- Bank of India has hiked the rates on foreign currency non-resident Indian (FCNR) account effective 2nd October.

- Venugopalan, general manager, Bank of India (BoI) has been appointed as the new executive director of Union Bank of India (UBI).

- Mr. Onkar Nath Singh has been named executive director of Bank of India for a period of five years.

- The Bank has joined Central Depository Services as depository participant.

- Bank of India will close down its merchant banking arm, BoI Finance.

2001

- State-Run Bank of India has suspended bullion trading in Ahmedabad after being hit by a payment

Page 365: company history of SBI, ICICI

crisis involving a troubled cooperative bank.

-Bank of India has passed a resolution to return Rs 300 crore capital to the government. Chairman K V Krishnamurthy said the depressed share value has been a matter of concern to the management.

- Bank of India (BoI) has finalised a comprehensive human resource development (HRD) package for its employees. The scheme is believed to provide impetus to banks’ business growth and will cost the bank around Rs 30 lakh per annum.

- Bank of India (BoI) has reported a 63 per cent rise in net profit at Rs 135.16 crore in the second-quarter ended September 30, 2001.

- Bank of India proposes to convert its fully-owned subsidiary in Kenya into a full-fledged bank. The two existing BoI branches in Kenya will also be merged into the entity. According to Mr S.A. Bhat, General Manager, International, BoI.

- Bank of India has informed that Shri S.R. Sengupta and Shri A.B. Telang have relinquished their office from Directorship of the Bank with effect from January 01, 2002. This is pursuant to their attaining age of superannuation.

2002

- Bank of India on March 30th returned Rs 150 crore capital to the government, bringing down its capital base from Rs 639 crore to Rs 489 crore.

-Bank of India has informed that it has decided to exit from the Mutual Fund Business and therefore the remaining two current Mutual Fund Schemes have been sold to Taurus Mutual Fund.

-Deveshwar Kumar nominated by GOI as non official Director of BOI.

-Bank of India has informed BSE that the Government of India has nominated Mr Deepak Prabhakar Patil as a Workmen Employee Director on the Board of Directors of Bank of India for a period of three years with effect from August 29, 2002 and thereafter until his successor is appointed or till he ceases to be an Workman Employee of the Bank of India.

-Bank of India has informed that the following four persons who have polled the majority votes have been elected as Directors in the EGM held on October 10, 2002.Mr Sadagopan Sowmyanarayanan,Mr Sheth Tarun,Mr Shastri Girish Ramanugrah,Mr Chandra Bhagwantrao Govindrao

-Extends its Multi-Branch Banking (MBB) facility to all its branches in Mumbai

Page 366: company history of SBI, ICICI

-Enters film financing sector, becomes the first commercial bank to enter the sector

-High Court at Mumbai sanctions amalgamation of BOI Finance Pvt. Ltd. (100% subsidiary) with Bank of India (BOI)

-Slashes interest rates on FCNR deposits by 20-35 basis points (bp)

-Ties up with ICICI Bank to utilise wide branch network covering 1,000 branches for ICICI Bank's cash management services

-Prunes the number of training centres from 14 to 5

-Becomes the bank with third highest Non Performing Assets (NPA)

-Reduces deposit rates by 40 to 75 basis points

-Decides to merge BOI Asset Management Co. Ltd. (BOIAMC), a wholly owned subsidiary, with the Bank

-IBA gives its nod for second phase of BoI VRS

-Reduces Prime Lending Rate (PLR), deposit rates by 50 basis points

-Changes the maturity buckets for interest rates on domestic as well as non-resident external rupee (NRE) term deposits

-Slashes deposit rates across all maturities

-Appoints Deloitte Touche Tohmatsu India Pvt Ltd. as a special recovery agent for recovery of NPAs

-Slashes interest rate on Euro-denominated FCNR deposits

2003

-Introduces mobile ATM in Mumbai

-Slashes the rate of interest on FCNR US dollar and euro deposits by 10-25 basis points across maturitie effective January 4

-Approves insurance referral business at Hong Kong Centre

Page 367: company history of SBI, ICICI

-Enters into a tie-up with leading information technology players CMC Ltd. and Infrasoft Technologies to extend its multi-branch banking (MBB) facility to another 450 branches in 21 cities

-High Court approves Scheme of Amalgamation of BOI AMC with Bank of India

-Four state-owned banks (Bank of India (BoI), Indian Bank, Syndicate Bank and United Bank of India) enter into an agreement to share their respectime ATM (automated teller machine) networks

-Government clears Bank of India's (BoI) proposal to settle Rs 137 crore outstanding with Ketan Parekh

-Introduces 'Starlinks' global debit card in partnership with Visa International and India Switch Company

-Finance Ministry, RBI approve compromise formula for bank's due recovery from stock broker Ketan Parekh

-Networks 275 out of 2541 branches at a cost of Rs 14 crore

-Launches its first off-site ATM in Sathy Main Road in Coimbatore on September 11

-The bank has taken possession of a tea factory in Coonoor under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, 2002.

-Bank of India divested Silverline's 45 lakh shares at Rs 8

-Revises interest rates on domestic term deposits with effect from Dec 1

-The Company has tied up with insurers for Bankassurance products - both life insurance and general insurance. The bank launched some of the products on December 09, said it had tied up with ICICI Prudential Life Insurance Company and National Insurance Company.

-Bank of India ties up with ICICI prudential

2004

-Board approves increase in Tier II Capital by issue of subordinated bonds

-Bank of India & Canara Bank acquire 4% in Mercator Lines Ltd.

-Bank Of India has informed that the Govt of India vide its notification dated January 09, 2004 has

Page 368: company history of SBI, ICICI

nominated Mr. V S Das, Chief General Manager-in-charge, Department of Government and Bank Accounts, RBI as Director on the Board of the Bank w.e.f. January 09, 2004 in place of Mr. M P Kothari, Regional Director, RBI.

-BoI signs tractor finance agreement with L&T-John Deere

-Launches IPO financing, becomes the first public sector bank to do so

-Revises interest rates on its FCNR deposits in dollar and euro currencies

-Launches Star IPO, a demand loan for investors interested in subscribing to initial public offerings (IPO) approved by the bank

-Bank of India (BoI) has raised Rs 200 crore by way of issuing Tier II subordinated bonds.

-BoI inks pact with Escort Tractors

-BoI inks pact with Punjab Tractors

-Bank of India opens first off-site ATM in Tiruchi

-Bank of India introduces new Kisan Samadhan card

-BoI ties up with Greaves Cotton

2005

- Bank of India (BoI) enters collaboration with ACIL-Navasarjan Rural Development Foundation (ANARDE), a non-government organisation (NGO) to increase rural penetration and boost lending to the agriculture sector.

- Launches an international gold credit card in association with Visa International on January 5, 2005

-BoI unveils new 'Star Diamond Saving Account'

-Bank of India appoints Shri M Balachandran as Chairman & Managing Director (CMD) up to April 30, 2007

-BOI signs MoU with LG to finance consumer durables

-Bank of India teams up with Nabard arm for agri projects

Page 369: company history of SBI, ICICI

-Bank of India ties up with ICICI Prudential Life Insurance to provide cover to housing loan borrowers against risk of death during the loan tenure.

-Bank of India and Banco Popolare Di Verona E Novara signed a Memorandum of Understanding (MoU) for supporting their respective customers doing business in each other's countries.

2006

-BoI inks MoU with Exim Bank

-BoI join hands with Andhra Bank to set up Dai-ichi Mutual

-Change of address: the Company Secretary Bank of India Share Department, 8th Floor, Star House, C - 5, G. Block, Bandra Kurla Complex, Bandra (East), Mumbai - 400 051.

-BoI joins hand with SIDBI to train jewellers

2007

- Bank of India has appointed Shri. A D Parulkar as Executive Director of the Bank.

2008

-Bank of India has informed that the Government of India, Ministry of Finance, Department of Financial Services vide its Notification has nominated Shri. Amit Kumar Motayed as Officer Employee Director in place of Shri. V Eswaran for a period upto January 31, 2011 from the date of notification or until he ceases to be an officer of the Bank of India or until further orders, whichever is the earliest.

- Bank of India has appointed Shri. B A Prabhakar as Executive Director of the Bank. He has taken over charge on October 15, 2008.

-BoI launches debt waiver scheme

-Bank of India on July 23 opened the first branch of its Tanzanian subsidiary, BoI Tanzania at Dar-es-Salaam.

2009

- Alok K. Misra was appointed as Chairman and Managing Director succeeding T. S. Narayanasami of Bank of India by the centre. He was the CMD of Oriental Bank of Commerce till now.

Page 370: company history of SBI, ICICI

- Bank of India has informed that the Government of India, Ministry of Finance, Department of Financial Services vide their Notification dated August 05, 2009 has appointed Shri. Alok Kumar Mishra as Chairman and Managing Director of the Bank. He has taken over charge on August 05, 2009.

-BoI launches new home loan plan for new borrowers

-Bank of India has signed a memorandum of understanding with Tata Motors to provide financing for Tata's entire range of commercial vehicles.

Director ReportMar2010   Mar 2011

The Board of Directors have pleasure in presenting the Banks Annual Report along with the audited statement of accounts and the cash flow statement for the year ended 31st March 2011.PERFORMANCE HIGHLIGHTS

FINANCIAL PARAMETERS

- Operating profit Rs. 5,384 crore.

- Net Profit Rs. 2,489 crore, recording 42.94% growth over previousyear.

- Capital Adequacy Ratio at 12.17% as against 12.94% in previous year(under Basel-II).

- Net Worth at Rs. 15,500 crore grew by 24.43% over March 2010.

- Book Value per share Rs. 283.24 (Rs. 236.84 previous year).

- Gross NPA ratio at 2.23% as on 31.03.2011.

- Net NPA ratio at 0.91% as on 31.03.2011.

- Total business (Deposits + Advances) reached at Rs. 5,15,040 crorerecording a growth of Rs. 1,13,961 crore (28.41%). Domestic businessgrew by 26.02% to reach the level of Rs. 4,18,110 crore.

- Total deposits increased by Rs. 69,124 crore reached the level of Rs.2,98,886 crore, a growth of 30.08%. Domestic deposits increased by28.68% to reach the level of Rs. 2,52,963 crore. Share of low costdeposits in the domestic deposits is 29.18% as on 31.03.2011.

- Gross credit touched Rs. 2,16,154 crore, recording a growth of 26.17%with domestic credit recording a growth of 22.16% to reach level of Rs.1,65,147 crore.

Page 371: company history of SBI, ICICI

- Priority Sector lending constituted 46.27% of Net Adjusted BankCredit and the share of Agricultural Credit to Net Adjusted Bank Creditwas 16.76%.

- Credit to SME sector grew from Rs. 29,568 crore to Rs. 35,586 crorerecording a growth of 20.35%.

- Retail Credit grew by 5.70% from Rs. 15,750 crore to Rs. 16,649crore.

- Export Credit registered a growth of Rs. 898 crore, i.e., 13.53%growth over previous year.

NEW PRODUCTS & SERVICES

- Welcome Kits introduced for NRI Customers opening NRE/ NRO accountsat foreign centers.

- Calculation of interest on Savings Bank account, from 1st April 2010,has been changed from monthly product basis to daily product basis.

- Launched Marathi version of the Banks website.

- As per Finance Ministry guidelines and recommendations, the Bankscorporate web-site (English) has been enabled for persons withDisabilities.

- The Bank has introduced a new format of Savings Bank Passbook(Horizontal Format) which will print all details of the transaction onthe same page as against the existing format (Vertical Format) wherethe details are printed on two pages.

- As per Banking Codes and Standards Board of India (BCSBI)requirements, the Bank is printing helpline number on the passbook &statement of accounts.

- The Bank introduced issuance of insta-pin for Debit-cum- ATM Card.This will address the customer grievance for non-receipt of Re-pin andalso save the effort and expense in generating and mailing Re-pins.

- Quarterly consolidated Statement of a/c is sent to the Diamondcustomers in PDF format via email.

- As a fraud prevention measure, SMS alerts - Star Sandesh aregenerated and provided to all customers

who have registered their mobile number with the Bank for all Debittransactions from delivery channels (Internet banking/ATM/POS); allDebit clearing transactions of Rs. 25,000/- and above; all Customerinduced debit transfer & cash payments of Rs. 10,000/- and above; allDebit ECS transactions of Rs. 10,000/- and above; all Debit RTGStransactions and acknowledgment on accepting the cheque book issue

Page 372: company history of SBI, ICICI

request.

- Enabling internet banking customers to make online Fixed Deposit.

- Hot Listing/Reset/Unblock/Change of Debit Cum ATM card PIN usingInternet Banking password.

- Viewing of Annual Tax Statement (Form 26AS).

- Star eTrade - Online share trading - Integration with Gupta Equities.

- Extended the facility of online e-Payment to the customers holdingBanks Debit-cum-ATM card. This will enable the customers to use theirDebit-cum-ATM cards for e-payments in addition to credit card &Internet banking account.

- Mobile Banking facility is introduced as the latest alternatedelivery channel which allows customers to do banking activitiesvirtually from the convenience of the Mobile phone at any time and fromanywhere. This facility is extended to all Retail internet bankingcustomers and includes features like Balance enquiry, last fivetransactions, Cheque status, Funds Transfer & Mobile Payments.

- Online Interbank Fund Transfer across banks, through Star ConnectInternet Banking Services, using RTGS/ NEFT

- BOI Star e-Pay for Auto-pay or on-line payment of various utilityservices/ bills.

- e-Payment for Direct & Indirect, Central Excise & Service Tax.

- Star e-Share Trade to trade in shares.

- e-Freight Payment.

- Online Payment of Directorate General of Foreign Trade (DGFT) licensefees.

- Online Booking of Railway & Airlines Ticket.

- Online Application for Education loan.

- Facility to make online bid-cum-application for Application Supportedby Blocked Amount (ASBA) IPO issues by Retail Internet BankingCustomers having account with any DPO

BUSINESS INITIATIVES

- Keeping its growth aspirations in mind, the Bank has embarked upon anew bold vision Sankalp 10,000. Sankalp 10,000 rests on the threepillars of Customer First, Building Winning Teams & High performanceDriven Culture.

Page 373: company history of SBI, ICICI

- Under Project Sankalp, the organizational structure of the Bank hasbeen redesigned in September 2010 with its division in two distinctlyseparate groups of businesses i.e. (a) National Banking Group and (b)Wholesale and

International Banking Group in order to have a more focused attentionto each business segment. The two groups are headed by the twoExecutive Directors of the Bank.

- National Banking Group (Head Office) - The National Banking Group iscomprised of Rural Banking, Financial Inclusion, Retail Banking and SMEBanking business units.

- Wholesale and International Banking Group (Head Office) - TheWholesale and International Banking Group are comprised Large CorporateBanking, Mid- Corporate Banking, Project Finance, Transaction Banking,International Banking and Treasury.

- All accounts of Mid-Corporate and Large Corporate Branches have beenmapped to respective branch RSMs.

- Fifteen Rural Centralised Credit Processing Centres (CPC) have beenstarted at Belgaon, Ujjain, Barabanki, Mehasana, Ludhiana, Karad,Amalapuram, Tanjavur, Barasat, Hardoi, Nadiad, Ratnagiri, Nashik,Solapur & Barnagar.

- In all, 40 focused districts have been identified in 19 zones totarget large and medium farmers and large institutions with high creditquality.

- Five New Retail Business Centres were launched in 5 identified Zonesnamely Bangalore, Chandigarh, Mumbai South, New Delhi and Pune on Pilotbasis on 14.01.2011.

- Five SME City Centres at Ahmedabad, Coimbatore, Kolkata, Ludhiana,and Pune were launched on 14th December, 2010. Subsequently, sevenmore SME City Centres at Bangalore, Chandigarh, Hyderabad, NewDelhi,Nagpur, Mumbai North and Vadodara have started functioning.

- Mid-Corporate branches at Ernakulam, Andheri and Seepz opened.

- 10 Mid-Corporate CPCs started functioning.

- Large Corporate branches at Mumbai (Nariman Point) and Hyderabadopened.

- Lead Management System (Sales Force Automation), to generate, trackand monitor leads, revamped.

- The Bank is treating financial inclusion as social cause andimplementing it as a movement taking all banking products and servicesto those who are currently deprived from these services. So far, firststep towards achievement of financial inclusion was opening of No-FrillAccounts and accordingly the Bank has opened 50.07 lakh No-Frill

Page 374: company history of SBI, ICICI

Accounts.

- The Bank is also implementing IT solutions on end to end basis usinghand held devices and smart cards. The Bank has issued/ enrolled 6.01lakh smart cards.

- Project Finance And Syndications Group: It takes up assignments oftechnical appraisal, underwriting and syndication of loans. DuringFY11, financial closures were done with a project cost of Rs. 26,901crore and syndicated debt of Rs. 9,008 crore. Bank of India achievedsixth position in syndication space as per the Bloomberg Lead tablesfor the calendar year 2010.

- The Bank has created a new SME vertical headed by a General Managerto cater to the specific business needs of the segment. A moreinclusive definition has been given for SME business to include allbusiness activities with a turnover of up to Rs. 100 crore. Thevertical will look for growth not only on credit, but CASA, retailbusiness, fee based income and third party products in the SME segment.

- Mobile Banking facility is introduced as the latest alternatedelivery channel which allows customers to do banking activitiesvirtually from the convenience of the Mobile phone at any time and fromanywhere. This facility is extended to all Retail internet bankingcustomers and includes features like Balance enquiry, last fivetransactions, Cheque status, Funds Transfer & Mobile Payments.

- Established Global Remittance Centre for centralizing some of theactivities related to NRI Customers which would hasten turnaround timeand product delivery and also enable proactive marketing strategies &grievance redressal mechanism.

AWARDS & ACCOLADES

- The Bank has received the Winners Award in International BankingTechnology Award 2010 from IBA in the Best Business EnablementInitiative category in recognition of its achievement in BankingTechnology for the Year 2009.

- The Bank has been adjudged FE-EY Most Efficient Public Sector Bank2010 by Dalal Street.

- Mumbai North Zone of the Bank has received Third Prize for use ofOfficial Language Hindi in Bank from Government of India, Ministry ofHome Affairs, Official Language Department.

- The Bank has received the consolation prize from Maharashtra StateLevel Bankers Committee for commendable work done in implementation ofofficial language in Hindi.

- The Bank has received National Award for Best Bank in West Zone forPMEGP under lending to KVIC in August 2010.

- The Bank has been rated by The Economic Times/The Nielsen company

Page 375: company history of SBI, ICICI

survey “The Most Trusted Brands” (MTB) 2010 as follows”

- Under PSU Banking Category - 2nd next to SBI

- Under Top Service Brands-8th rank

FINANCIAL REVIEW

FINANCIAL PERFORMANCE

The Bank recorded an Operating Profit of Rs. 5,384.23 crore, (growth of14.44% over previous year). Net Profit stood at Rs. 2,488.71Crore,recording a growth of 42.94%.

Net interest income grew by 35.70% on the backdrop of rise in volume ofbusiness mix by 28.41% (from Rs. 4,01,078.83 crore to Rs. 5,15,040.06crore). Non-interest income increased by 0.96% and covered 52.12% ofOperating Expenses as against 71.34% in the previous year.

The Financial performance of the Bank for the year 2010-11 issummarised below:

(Amount in Rs. Crore)

Particulars 2009-10 2010-11 Growth (%) Net Interest Income 5,755.94 7,810.69 35.70

Non-Interest Income 2,616.64 2,641.77 0.96

Operating Expenses 3,667.81 5,068.24 38.18

Operating Profit 4,704.77 5,384.23 14.44

Provisions / Contingencies 2,963.70 2,895.52 -2.30

Net Profit 1,741.07 2,488.71 42.94

Earnings per share (Rs.) 33.15 47.35 42.84

Book value per share (Rs.) 236.84 283.24 19.59

Return on Average Networth (%) 14.76 8.90 –

Return on Average Assets (%) 0.70 0.82 –

Some of the Financial Ratios are presented below:

(Percentage) (%)

Parameters 2009-10 2010-11

Page 376: company history of SBI, ICICI

Yield on Advances 8.42 8.62

Yield on Investment 7.46 7.59

Yield on Funds 7.14 7.14

Cost of Deposits 5.16 5.03

Cost of Funds 4.84 4.57

Net Interest Margin 2.51 2.92

Non Interest Income to Operating 71.34 52.12 Expenses

Other Income to Average Working Fund 1.05 0.87

Operating Expenses to Average 1.47 1.66 Working Fund

Staff Expenses to Average Working Fund 0.92 1.14

Other operating Exp. to Average 0.55 0.52 Working Fund

Asset Utilisation Ratio 1.88 1.77

Non-Interest Income to Total Income 12.77 10.83

Non-Interest Income to Net Income 31.25 25.27

Cost to Net Income 43.81 48.49

SEGMENT- WISE PERFORMANCE

The Bank earned an Operating Profit of Rs. 5,384.23 crore during theyear 2010-11. The contribution made by Treasury was Rs. 371.38 croreand other banking operation earned a profit of Rs. 5,161.12 crore. Theunallocable expenditure net of unallocable income was Rs. 148.27 croreduring the year 2010-11.

DIVIDEND

A Dividend at the rate of Rs. 7 per share (70%) for the year, has beendeclared. The total dividend payment amounts to Rs. 444.29 crore(including dividend distribution tax).

CAPITAL

Net worth of the Bank in FY 2010-11 has increased to Rs. 15,499.5 crorefrom Rs. 12,456 crore. During the year the bank has issued 2,13,04,870Equity Shares of Rs. 10 each to Government of India at a price of Rs.

Page 377: company history of SBI, ICICI

474.07 per share, on preferential basis, as approved by theshareholders in an Extra ordinary General Meeting held in accordancewith the regulation 76(1) of SEBI (Issue of Capital and disclosurerequirements) Regulations, 2009. The amount received by the bank onthis account is Rs. 1,010 crore. Consequently, the Government of Indiashareholding has increased from 64.47% to 65.86%.

CAPITAL ADEQUACY

As per Basel II framework, the Banks Capital Adequacy Ratio was at12.17%, which was higher than the regulatory requirement of 10%.

Details of Capital Adequacy (BASEL II) are shown as under:

(Rs. in crore)

Particulars 31.03.2010 31.03.2011(Under BASEL – II)

Amount CRAR (%) Amount CRAR (%)

Tier I Capital 13,725 8.48 17,047 8.33

Tier II Capital 7,218 4.46 7,867 3.84

Total Capital 20,943 12.94 24,914 12.17

Risk Weighted Assets 1,61,857 – 2,04,762 –

BORROWINGS

The Bank has raised debts instrument through private placements likeperpetual bonds and Upper Tier II Bonds and Medium Term Notes (MTN)through overseas borrowings. The bank has raised Rs. 300 crore throughissue of IPDI and Rs. 1000 crore through Upper Tier-II instrumentduring the year 2010-11. The Bank has also redeemed Tier IISubordinated bonds for Rs. 450 crore.

DIRECTORS RESPONSIBILITY STATEMENT

The Directors confirm that in the preparation of the annual accountsfor the year ended March 31, 2011,

- The applicable accounting standards have been followed along withproper explanation relating to material departures, if any;

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

- Reasonable and prudent judgement and estimates were made so as togive a true and fair view of the state of affairs of the Bank at theend of the financial year and of the profit of the Bank for the yearended on March 31, 2011;

Page 378: company history of SBI, ICICI

- Proper and sufficient care was taken for the maintenance of adequateaccounting records in accordance with the provisions of applicable lawsgoverning banks in India, and

- The accounts have been prepared on a “going concern” basis.

CORPORATE GOVERNANCE

A detailed report on Corporate Governance, being a part of DirectorsReport is appearing from page no. 59 to 76.

ACKNOWLEDGEMENT

The Board express its gratitude to the Government of India, ReserveBank of India and Securities and Exchanges Board of India for thevaluable guidance and support received from them. The Board places onrecord its deep appreciation for the services and contributions made byShri M. Narendra (Ex Executive Director), Shri K.S. Sampath, Shri A.V.Sardesai, Shri Amit K. Motayed, Shri Indresh V. Singh, all Directors ofthe Bank, who have relinquished office during the year. The Board alsothanks financial Institutions and correspondent banks for theirco-operation and support. The Board acknowledges the unstinted supportof its customers and shareholders and also wishes to place on recordits appreciation of staff members for their dedicated services andcontribution for the overall performance of the Bank.

For and on behalf of the Board of Directors

(Alok K Misra) Chairman & Managing Director

Place : Mumbai Date : 02.05.2011

http://economictimes.indiatimes.com/et500list.cms

Director Report

Mar2009   Mar 2010 Mar2011

The Board of Directors have pleasure in presenting the Bank’s Annual Report along with the audited statement of accounts and the cash fl ow statement for the year ended 31st March 2010.PERFORMANCE HIGHLIGHTS

FINANCIAL PARAMETERS

- Operating profit Rs.4,705 crore and Net Profit Rs.1,741 crore.

Page 379: company history of SBI, ICICI

- Capital Adequacy Ratio at 12.94% as against 10% prescribed by RBI(under Basel-II).

- Net Worth at Rs.12,456 crore, grew by 11.78% over March 2009.

- Book Value per share Rs.236.84 (Rs.211.89 previous year)

- Gross NPA ratio at 2.85% as on 31.03.2010.

- Net NPA ratio at 1.31% as on 31.03.2010.

- Total business (Deposit + Advances) reached at Rs. 401,079 crorerecording a growth of Rs. 66,639 crore (19.93%). Domestic

business grew by 20.72% to reach the level of Rs.331,779 crore.

- Total deposits increased by Rs. 40,053 crore reached the level ofRs.229,762 crore, a growth of 21.11%. Domestic deposits increased by23.26% to reach the level of Rs.196,585 crore. Share of low costdeposits in the domestic deposits is 31.75% as on 31.03.2010.

- Gross credit touched Rs.171,317 crore, recording a growth of 18.37%with domestic credit recording a growth of 17.20% to reach level ofRs.135,194 crore.

- Priority Sector lending constituted 46.39% of Net Adjusted BankCredit and the share of Agricultural Credit to Net Adjusted Bank Creditwas 16.24%.

- Credit to SME sector grew from Rs.25,441 crore to Rs.29,568 crorerecording a growth of 16.22%.

- Schematic Retail Credit grew by 15.73% from Rs.8,714 crore toRs.10,088 crore.

- Export Credit registered a growth of Rs. 602 crore, i.e., 9.98%growth over previous year.

NEW PRODUCTS & SERVICES

- All domestic branches are covered under Core Banking Solution. Newdomestic branches opened are directly under the CBS platform. Alldomestic branches are RTGS/NEFT enabled.

- Call centre facility is made operational as an alternate deliverychannel to a branch set-up which would act as a “Contact” centre and isa cost effective touch point for customers.

- Bank has launched the Marathi version of its web-site.

- Bank has launched “Welcome Kit” for all new accounts opened at theselect branches of Mumbai, New Delhi, Chandigarh and Ghaziabad. The kitcontains cheque book, ATM card, Pin, TPIN and internet PIN, the unique

Page 380: company history of SBI, ICICI

feature of which is that the same are in activated status from the dayone.

- A web based Customer Complaint Management System has been made livefrom 1st January, 2010 to reduce the response time.

- Oracle Marketing Online product has been implemented at DataWarehouse for communicating with customers via email. With this systemin vogue, Bank is able to deliver emails overnight to its customers.

- SMS alert facility has been introduced and provided to all customersfor all debit transactions from delivery channels, all debit clearingtransactions of Rs.25,000 and above, all customer induced debittransfer and cash payments of Rs. 10,000 and above, all debit RTGStransactions and acknowledgement on accepting the cheque book issuerequest

- Bank of India is the fi rst PSU Bank in India to implement TWO-FactorAuthentication (2FA) – Star Token for both Retail and Corporateinternet banking customers as an additional security measure. Bank’scustomers enjoy the convenience of “secured” Anytime, Anywhere, Anyhowhassle free Banking from the comfort of their homes and offi ces with aclick of a mouse.

- Resetting or Unblocking of Internet Banking login password can bedone using Debit-cum-ATM card PIN.

- Transaction under taken through Credit Card can be viewed throughInternet Banking channel.

- Provision to make online bid-cum-application for ApplicationSupported by Blocked Amount (ASBA) IPO issues by Retail InternetBanking Customers.

- Mobile Banking Services extended to all retail internet bankingcustomers which includes features like Balance enquiry, last fi vetransactions, Cheque status, Funds Transfer and Mobile Payments.

- Bank has joined National Financial Switch (NFS) which enablescustomers to access more than 50,000 ATMs across the through owned aswell as shared ATMs network.

- Technology has been leveraged in some important projects likeFinancial inclusion project for Banking the unbanked sector, SolarPower Project which is Eco-friendly for Technology Power for RuralAreas, V-sat Connectivity Project – Networking / connecting the Rural /Remote locations.

- Bank launched “Star Abhilasha Biometric Smart Cards” in Nagpur,Maharashtra in February, 2010. Installation of Biometric ATMs and ATMswith easy accessibility for the physically handicapped is beingestablished.

BUSINESS INITIATIVES

Page 381: company history of SBI, ICICI

- To strengthen our internal control system, Project STAR BOOST hasbeen initiated by the bank to leverage technology for more effectiveand focussed audit. With the launch of this programme bank hasestablished a Back Offi ce for Offsite Audit and related work and iseffectively making use of CAAT (Computer Aided Audit Tools). The AuditException Reports (AER) are generated in advance and sent to branchesfor compliance before commencement of audit. This process is expectedto improve the audit rating of the branches.

- Bank has opened Global Remittance Centre (GRC) at Mumbai. The inwardremittances, SB NRE / NRO Account opening of NRI customers have beencentralized at GRC. Bank has initiated the process for establishing ahub for the purpose of handling the documentation part of Trade Financeportfolio.

- With a view to enhance the corporate image and identity, Bank hasinitiated media campaigns on the existing theme “Relationships beyondBanking”. Three TVCs were produced in line with our Relationship themeviz. Old Couple, Friends and Bus which were aired on both National aswell as Regional Channels.

- For building the brand image and increasing the visibility and bettermarketing of various products through publicity, Bank has also beenadvertising our products in newspapers, magazines, television,Hoardings, banners, bus panels, trains, glow signs at railway stations,events and sponsorships, leafl ets and brochures, etc.

- Introduction of Credit Application Processing Systems throughsoftware termed as CAPS which covers all major

credit segments - Retail, Corporate, MSME and Agriculture. This hasbeen launched from 15.02.2010 on pilot basis to cover Retail loans atall 24 Retail Hubs and select 263 branches across the Zones. It will bea fully Automated system to improve credit delivery.

- Two new products, “Star Suraksha SB account” and “Star Benefi t CDaccount” having unparallel features were launched on the Bank’sFoundation Day on 7th September, 2009 for improving the CASA business.

- To give a boost to SME business, Bank has SME branches and also SMEhubs and Nodal Offi cers at all Zonal Centres.

- Bank has devised a Composite Loan Scheme for MSE sector borrowers inRural / Semi Urban and Urban areas for maximum exposure of up to Rs. 5lacs per borrower. The scheme has unique features like simplifi edapplication cum proposal format, hassle free minimum documentations,relaxed margin and interest rates, etc.

- MOUs have been signed with Tata Motors, M/s. Piaggio Vehicles Pvt.Ltd., M/s. Asia Motor Works, M/s. JCB India Ltd., M/s. MahindraNavistar, M/s. Ashok Leyland Ltd., Sonalika Group of companies etc. forfi nancing vehicles / earth moving equipments.

Page 382: company history of SBI, ICICI

- Credit business is receiving focus through specialised branches - 29SME branches, 28 Mid Corporate Branches 2 Large Corporate and 13Corporate Banking branches, 36 Commercial & Personal banking branchesand ‘Retail Hubs’ at 27 centres across the country working on theconcept of single window for Housing & Personal fi nance banking.

- To achieve objective of Financial Inclusion, information technologyinitiatives implemented and the concept of business correspondents andfacilitators has been introduced throughout the country.

AWARDS & ACCOLADES

- Best Performance in Western Zone under the Rural EmploymentGeneration Program (REGP) of KVIC.

- Bank has been rated by the Economic Times / The Nielsen Companysurvey as “The Most Trusted Brands” (MTB) 2009 as follows :

? Under PSU Banking Category - 2nd next to SBI.

? Under Top Service Brands - 8th.

- The Debutant - 1st time in top 100.

- NDTV Profi t Business Leadership Awards 2009- Best PSU Bank.

- Outlook money NDTV Profi t Awards 2009 - Best Education Loan Provider- Runner up.

- CIO Green Information Technology Award.

- Dun & Bradstreet – Rolta Corporate Awards 2009, Best Bank underBanking Category.

- FE-EY Most Effi cient Public Sector Bank Awards 2010 by Dalal Street.

- Second Rank for excellent performance in lending to Micro & SmallEnterprises Sector by the Ministry of Micro, Small & MediumEnterprises. Also, ‘Best Performing bank’ for covering maximum numberof Micro & Small accounts under collateral free lending scheme ofCGTMSE

FINANCIAL REVIEW

FINANCIAL PERFORMANCE

The Bank recorded an Operating Profi t of Rs. 4,704.77 crore, (previousyear Rs. 5,456.80 crore). Net Profi t stood at Rs.1,741.07 crore(previous year Rs. 3,007.35 crore).

Net interest income grew by 4.67% due to rise in volume of business mixby 19.93% (from Rs.334,440 crore to Rs.401,079 crore). Non-interestincome declined by 14.26% and covered 71.34% of Operating Expenses as

Page 383: company history of SBI, ICICI

against 98.64% in the previous year.

The Financial performance of the Bank for the year 2009-10 issummarised below:

(Amount in Rs. Crore)

Particulars 2008-09 2009-10 Growth (%)

Net Interest Income 5498.90 5755.94 4.67

Non-Interest Income 3051.86 2616.64 -14.26

Operating Expenses 3093.96 3667.81 18.55

Operating Profit 5456.80 4704.77 -13.78

Provisions / Contingencies 2449.45 2963.70 20.99

Net Profit 3007.35 1741.07 -42.11

Earnings per share (Rs.) 57.26 33.15 -42.11

Book value per share (Rs.) 211.89 236.84 11.77

Return on Average Networth (%) 30.42 14.76 --

Return on Average Assets (%) 1.49 0.70 --

Some of the Financial Ratios are presented below :

(Percentage) (%)

Parameters 2008-09 2009-10

Yield on Advances 9.78 8.42

Yield on Investment 7.14 7.46

Yield on Funds 8.09 7.14

Cost of Deposits 5.76 5.16

Cost of Funds 5.37 4.84

Net Interest Margin 2.97 2.51

Non Interest Income to Operating 98.64 71.34

Page 384: company history of SBI, ICICI

Expenses

Other Income to Average Working Fund 1.51 1.05

Operating Expenses to Average 1.53 1.47Working Fund

Staff Expenses to Average Working 0.96 0.92

Fund

Other operating Exp. to Average 0.57 0.55

Working Fund

Asset Utilisation Ratio 2.70 1.88

Non-Interest Income to Total Income 15.73 12.77

Non-Interest Income to Net Income 35.69 31.25

Cost to Net Income 36.18 43.81

SEGMENT- WISE PERFORMANCE

The Bank earned an Operating Profi t of Rs.4,704.77 crore during theyear 2009-10. The contribution made by Treasury was Rs.603.42 crore andother banking operation earned a profi t of Rs.4,751.72 crore. Theunallocable expenditure net of unallocable income was Rs. 673.98 croreduring the year 2009-10.

DIVIDEND

A Dividend at the rate of Rs. 7/- per share (70%) for the year, hasbeen declared. The total dividend payment amounts to Rs.428.65 crore(including dividend distribution tax).

CAPITAL

Net worth of the Bank in FY 2009-10 has increased to Rs.12,456 crorefrom Rs.11,144 crore. During the year, the Bank has not increased itsequity capital either by way of Public or Right or Preferential Issueof Equity Shares.

CAPITAL ADEQUACY

As per Basel II framework, the Bank’s Capital Adequacy Ratio of 12.94%which was higher than the regulatory requirement of 10%.

Details of Capital Adequacy (BASEL II) are shown as under :

(Rs. In crore)

Page 385: company history of SBI, ICICI

31.03.2009 31.03.2010

Particulars(Under BASEL - II) Amount CRAR (%) Amount CRAR (%)

Tier I Capital 12466 8.91 13725 8.48

Tier II Capital 5745 4.10 7218 4.46

Total Capital 18211 13.01 20943 12.94

Risk Weighted Assets 139931 - 161857 -

BORROWINGS

The Bank has raised Subordinated debts through private placements andMedium Term Note (MTN) for perpetual bonds and Upper Tier II Bondsthrough overseas borrowings. The bank has raised Rs.325 crore throughissue of IPDI and Rs.2,000 crore through Upper Tier-II instrumentduring the year 2009-10.

ACKNOWLEDGEMENT

The Board express its gratitude to the Government of India, ReserveBank of India and Securities and Exchanges Board of India for thevaluable guidance and support received from them. The Board places onrecord its deep appreciation for the services and contributions made byShri T.S. Narayanasami (Ex-Chairman & Managing Director), Shri KamalKishore Gupta, Shri Rameshwar Prasad, all Directors of the Bank, whohave relinquished offi ce during the year. The Board also thanks financial Institutions and correspondent banks for their co- operationand support. The Board acknowledges the unstinted support of itscustomers and shareholders and also wishes to place on record itsappreciation of staff members for their dedicated services andcontribution for the overall performance of the Bank.

For and on behalf of the Board of Directors (Alok K. Misra)

Chairman & Managing Director

Place: MumbaiDate: 07.05.2010

Director ReportMar2007   Mar 2009 Mar2010

The Board of Directors have pleasure in presenting the Bank’s Annual Report along with the audited statement of accounts and the cash flow statement for the year ended 31st March 2009.PERFORMANCE HIGHLIGHTS FINANCIAL PARAMETERS

- Operating profit Rs. 5,457 crore.

Page 386: company history of SBI, ICICI

- All time high Net Profit of Rs. 3,007 crore, recording 49.68% growthover previous year.

- Capital Adequacy Ratio at 13.01 % as against 12.04% in previous year(under Basel-II).

- Net Worth is Rs.11,144 crore, growth of 29.16% over March 2008.

- Book Value per share Rs.211.89 (Rs.164.05 previous year)

- Gross NPA ratio at 1.71 %. .

- Net NPA ratio declined to 0.44 % from 0.52% as on 31.03.08.

- Total business reached at Rs. 334,440 crore recording a growth of Rs.69,636 crore (26.30%). Domestic business grew by 26.77% to reach thelevel of Rs. 274,841 crore.

- Total deposits increased by Rs. 39,696 crore to reach the level ofRs.189,708 crore, a growth of 26.46%. Domestic deposits increased by27.17% to reach Rs.159,487 crore. Share of low cost deposits in thedomestic deposits is 31% as on 31.03.09.

Gross credit touched Rs.144,732 crore, increasing by 26.08% withdomestic credit recording a growth of 26.22% to reach the level ofRs.115,354 crore.

- Priority Sector lending constituted 46.97% of Net Adjusted BankCredit and the share of Agricultural Credit to Net Adjusted Bank Creditstood at 18.40%.

- Credit to SME sector grew from Rs.20,400 crore to Rs.25,443 crore(24.72 % growth in the year).

- Home Loan, Education Loan and Auto finance under Retail Credit grewby 22.6% from Rs.7,107 crore to Rs.8714 crore.

- Export Credit on outstanding basis was Rs.6176 crore, as againstRs.6666 crore in the previous year.

PRODUCT IMPROVEMENT & SERVICE ENHANCEMENT INITIATIVES

- Bank’s bouquet of products was made more attractive by providingvalue added services like free air accidental insurance to SB Diamondcustomers, single premium insurance cover for educational loans, BOISwastha Bima (Medi-Claim) and comprehensive domestic travel insurancein tie up with NICL specially for bank’s account holders.

- Financing against warehouse receipt and produce marketing alongwithtie-up for collateral management, financing against gold coins (apartfrom gold jewellery) and Rural Sanitation Scheme were launched.

- The project on integrated development of villages covered 128

Page 387: company history of SBI, ICICI

villages spread over 17 states and 78 districts.

- Core Banking Solution implemented in 2593 branches covering 95.6% ofdomestic business mix.

- Bank’s revamped web-site using latest Next Generation Web 2.0technology was launched.

- Around 35000 ATMs made available to our card holders through owned aswell as shared ATMs network.

- SMS alerts for cheque book request and any debits in accounts throughany of the delivery channel like ATM, Internet Banking provided to allcustomers.

- Solar Power System implemented at 143 locations to overcome acutepower shortages and erratic power supply as well as Bank’s commitmenttowards ‘Go Green’.

BUSINESS INITIATIVES

- Administrative set up on the line of Strategic Business Units (SBUs)and segmentation of branches according to their business focus, i.e.,Resource Centre, Profit Centre, Priority Sector Centre and GeneralBanking Centre continued to serve as business development model.

- Credit business is receiving focus through specialised branches - 30SME branches, 2 Large Corporate and 12 Corporate Banking branches, 36Commercial & Personal banking branches and ‘Retail Hubs’ at 23 centres.

- To achieve objective of Financial Inclusion, information technologyinitiatives implemented and the concept of business correspondents andfacilitators were introduced throughout the country.

- Corporate Agency Tie-up entered with Star Union Dai Ichi LifeInsurance Co. Ltd for sale of their life insurance products. Tie-uparrangement was also made to boost schematic retail loans - with TataMotors and Hyundai Motors Ltd for Auto loans, ICICI Prudential LifeInsurance Co Ltd for 1 year PGPMI course for Educational loans and DLFfor Housing loans.

- Prestigious assignment as trustee effective from 01.04.2008 for aperiod of 5 years from Pension Fund Regulators & Development Authority.

- Project ‘Star Gaurav’ extended to 36 major centres across the countryto increase productivity of marketing staff through various structuredsales initiatives.

- At 43 major centres across India, back office operations werecentralized to achieve process efficiency and customer service.

- Quality Cells have been formed at Head Office, Zonal Offices andbranches to raise the standard and quality of customer services.

Page 388: company history of SBI, ICICI

- For management of Pre-sale and Post-sale activities, softwaresolution namely Sales Force Automation and Customer ComplaintManagement System have been installed.

AWARDS & ACCOLADES

- The NDTV Business Leadership Awards 2008 - India’s Best PSU BankAward.

- Business World - PWC Survey - No. 1 Public Sector Bank.

- Business Today - KPMG Survey - Ranked No. 1 - The Best Banks 2008.

- Dun & Bradstreet Study 2008 - Best Public Sector Bank and OverallBest Bank in the country.

- Dun & Bradstreet - Rolta Corporate Awards 2008 - Top Indian Companyunder ‘Banks’.

- Prestigious CIO 100 Award 2008 for the Bank’s Green IT initiativewherein solar energy is put to use to power technology in ruralbranches. - Best Performance in Western Zone under the RuralEmployment Generation Program (REGP) of KVIC.

FINANCIAL REVIEW

FINANCIAL PERFORMANCE

The Bank recorded an Operating Profit of Rs.5,456.80 crore (growth of47.43% over previous year) and Net Profit increased to Rs.3,007.35crore, recording growth of 49.66%.

Net interest income grew by 30.02% on the backdrop of rise in volume ofbusiness mix by 26.30% (from Rs.264,804 crore to Rs. 334,440 crore).Non-interest income made quantum leap by 44.16% as against previousyears growth of 35.44%. Non-interest income covered 98.6% of OperatingExpenses as against 80.0% in the previous year.

The Financial performance of the Bank for the year 2008-09 issummarised below:

(Amount in Rs. crore)Particulars 2007-08 2008-09 Growth(%)

Net Interest Income 4229.27 5498.90 30.02

Non-Interest Income 2116.93 3051.86 44.16

Operating Expenses 2644.99 3093.96 16.97

Operating Profit 3701.21 5456.80 47.43

Page 389: company history of SBI, ICICI

Provisions / Contingencies 1691.81 2449.45 44.78

Net Profit 2009.40 3007.35 49.66

Earnings per share (Rs.) 40.83 57.26 40.24

Book value per share (Rs.) 164.05 211.89 29.16

Return on Average Networth (%) 28.44 30.42

Return on Average Assets (%) 1.25 1.49

Some of the Financial Ratios are presented below:

(Percentage)Parameters 2007-08 2008-09

Yield on Advances 9.34 9.78

Yield on Investment 6.83 7.14

Yield on Funds 7.71 8.09

Cost of Deposits 5.23 5.76

Cost of Funds 5.07 5.37

Net Interest Margin 2.95 2.97

Non Interest Income to Operating Expenses 80.04 98.64

Other Income to Average Working Fund 1.32 1.51

Operating Expenses to Average Working Fund 1.65 1.53

Staff Expenses to Average Working Fund 1.03 0.96

Other Operating Exp. to Average Working Fund 0.62 0.57

Asset Utilisation Ratio 2.31 2.70

Non-Interest Income to Total Income 14.63 15.73

Non-Interest Income to Net Income 33.36 35.69

Page 390: company history of SBI, ICICI

Cost to Net Income 41.68 36.18

SEGMENT-WISE PERFORMANCE

The Bank earned a profit before tax of Rs.4,164.43 crore during theyear 2008-09. The contribution made by different segments of operationswere - Treasury Rs. 551.10 crore, Wholesale Banking Rs. 3120.36 croreand Retail Banking Rs. 1045.42 crore. The unallocable expenditure netof unallocable income was Rs. 552.45 crore during the year 2008-09.

DIVIDEND

A Dividend at the rate of 80% has been declared for the year,comprising 30% interim dividend already distributed and 50% finaldividend as against a total of 40% of previous year. The total dividendpayment amounts to Rs. 420.14 crore (excluding dividend distributiontax).

CAPITAL

Net worth of the Bank in FY 2008-09 has increased to Rs. 11,143.58crore from Rs.8,627.77 crore. During the year, the Bank has notincreased its equity capital by way of Public or Right or PreferentialIssue of Equity Shares. However, the Bank raised Rs.400 crore by way ofInnovative Perpetual Debt Instruments (IPDI) as Tier I capital andRs.500 crore by way of Upper Tier II Bonds during the year.

CAPITAL ADEQUACY

As per Basel II framework, the Banks Capital Adequacy Ratio of 13.01 %during the year as against 12.04 % during the previous year and washigher than the regulatory requirement of 9%.

Details of Capital Adequacy are shown as under :

(Rs. in crore)Particulars BASEL -1 31.03.2008 31.03.2009

Amount CRAR (%) Amount CRAR (%)

Tier I Capital 9439 8.19 12496 8.73

Tier II Capital 5487 4.76 6416 4.48

Total Capital 14926 12.95 18912 13.21

Risk Weighted Assets 115280 - 143136 -

BASEL - II 31.03.2008 31.03.2009

Amount CRAR (%) Amount CRAR (%)

Page 391: company history of SBI, ICICI

9409 7.70 12466 8.91

5303 4.34 5745 4.10

14712 12.04 18211 13.01

122221 - 139931 -

ACKNOWLEDGEMENT

The Board express its gratitude to the Government of India, ReserveBank of India and Securities and Exchanges Board of India for thevaluable guidance and support received from them. The Board places onrecord its deep appreciation for the services and contributions made byShri K.R.Kamath (Ex-Executive Director), Shri V.Eswaran ,Dr.PrabhaTaviad,Shri V.B.Kaujalgi, all Directors of the Bank, who haverelinquished office during the year. The Board also thanks financialInstitutions and correspondent banks for their co-operation andsupport. The Board acknowledges the unstinted support of its customersand shareholders and also wishes to place on record its appreciation ofstaff members for their dedicated services and contribution for theoverall performance of the Bank.

For and on behalf of the Board of Directors

Place: MumbaiDate : 30.04.2009 (T.S. Narayanasami) Chairman & Managing Director

Axix bank

Director ReportMar2011   Mar 2012

The Board of Directors is pleased to present the Eighteenth Annual Report of the Bank together with the Audited Statement of Accounts, Auditors'' Report and the report on business and operations of the Bank for the financial year ended 31st March 2012.FINANCIAL PERFORMANCE

The financial highlights for the year under review are presented below:

(Rs in crores)

PARTICULARS 2011-12 2010-11 GROWTH

Page 392: company history of SBI, ICICI

Deposits 220,104.30 189,237.80 16.31%

Out of which

- Savings Bank Deposits 51,667.96 40,850.31 26.48%

- Current Account Deposits 39,754.07 36,917.09 7.68%

Advances 169,759.54 142,407.83 19.21% Out of which

- Retail Advances 37,570.33 27,759.23 35.34%

- Non-retail Advances 132,189.21 114,648.60 15.30%

Total Assets/Liabilities 285,627.79 242,713.37 17.68%

Net Interest Income 8,017.75 6,562.99 22.17%

Other Income 5,420.22 4,632.13 17.01% Out of which

- Trading Profit (1) 361.56 496.97 (27.25%)

- Fee and other income 5,058.66 4,135.16 22.33%

Operating Expenses(excluding depreciation) 5,664.86 4,489.84 26.17%

Profit before depreciation,provisions and tax 7,773.11 6,705.28 15.93%

Depreciation 342.24 289.59 18.18%

Provision for Tax 2,045.63 1,747.17 17.08%

Other Provisions and Write offs 1,143.03 1,280.03 (10.70%)

Net Profit 4,242.21 3,388.49 25.19%

Appropriations:

Transfer to Statutory Reserve 1,060.55 847.12 25.19%

Transfer to/(from) Investment Reserve - (14.94) -

Transfer to Capital Reserve 51.90 4.76 -

Transfer to/(from) General Reserve - 338.85 -

Page 393: company history of SBI, ICICI

Proposed Dividend 770.08 670.36 14.88%

Surplus carried over to Balance Sheet 2,359.68 1,542.34 52.99%

(1) Excluding Merchant Exchange Profit

KEY PERFORMANCE INDICATORS 2011-12 2010-11

Interest Income as a percentage of working funds* 8.71% 7.49%

Non-Interest Income as a percentage of working funds* 2.15% 2.29%

Net Interest Margin 3.59% 3.65%

Return on Average Net Worth 21.22% 20.13%

Operating Profit as a percentage of working funds* 2.94% 3.17%

Return on Average Assets 1.68% 1.68%

Profit per employee** Rs 14.34 lacs Rs 14.35 lacs

Business (Deposits less inter-bank deposits Advances)per employee** Rs 12.76 crores Rs 13.66 crores

Net non-performing assets as a percentage of net customer assets*** 0.25% 0.26%

- Working funds represent average total assets.

** Productivity ratios are based on average number of employees for theyear.

*** Customer assets include advances and credit substitutes.

Previous year figures have been regrouped wherever necessary.

The Bank continued to show a steady growth both in business andearnings with a net profit of Rs4,242.21 crores for the year ended 31stMarch 2012, registering a growth of 25.19% over the net profit ofRs3,388.49 crores last year. The strong growth in earnings was a resultof robust business growth across all banking segments indicative of aclear strategic focus. During the year, the Basic Earnings Per Share(EPS) was at Rs102.94 and a Return on Equity (ROE) at 21.22%.

Page 394: company history of SBI, ICICI

During the year, the total income of the Bank increased by 38.55% toreach Rs27,414.87 crores as compared to Rs19,786.94 crores last year.Operating revenue increased by 20.03% to Rs13,437.97 crores whileoperating profit increased by 15.82% to Rs7,430.87 crores. The growth inearnings was mainly due to a rise in core income streams such as netinterest income (NII) and fee income. NII increased by 22.17% toRs8,017.75 crores as compared to Rs6,562.99 crores last year. Fee,trading and other income increased by 17.01 % to Rs5,420.22 crores fromRs4,632.13 crores last year. The strong growth in income was partlyoffset by an increase in operating expenses including depreciation by25.69% to Rs6,007.10 crores.

During the year, the growth in NII may be attributed to an expansion inthe balance sheet size and healthy low-cost Current Account and SavingsBank (CASA) deposits. The total earning assets on a daily average basisincreased by 24.30% to Rs223,206 crores, as compared to Rs179,573 croreslast year. This was partly offset by a rise in funding costs due tohardening of general interest rates, particularly on term depositsduring the year. The steady growth of low-cost CASA deposits, which ona daily average basis increased by 18.96% to Rs70,845 crores fromRs59,551 crores last year, helped in containing the cost of funds.Overall, the daily average cost of funds in the year increased to 6.28%from 4.96% last year. During the year, the cost of deposits increasedto 6.47% from 4.96% last year primarily due to an increase in cost ofterm deposits by 211 basis points (from 6.81 % to 8.92%) as well as thecost of savings bank deposits. During the year, the yield on earningassets increased by 125 basis points to 9.66% from 8.41% last year.

Other income comprising fees, trading profit and miscellaneous incomeincreased by 17.01% to Rs5,420.22 crores in 2011-12 from Rs4,632.13crores last year and constituted 40.34% of operating revenue of theBank. Fee income is a significant part of the earnings and is generatedfrom a diverse set of businesses in the Bank. The main sources of feeincome are client- based merchant foreign exchange trade, servicecharges from account maintenance, transaction banking (including cashmanagement services), syndication and placement fees, processing feesfrom loans and commission on non- funded products (such as letters ofcredit and bank guarantees), inter-change fees on ATM-sharingarrangements and fee income from the distribution of third-partypersonal investment products. During the year, proprietary tradingprofits fell by 27.25% to Rs361.56 crores from Rs496.97 crores last year,owing to adverse market conditions in the debt and equity markets.Miscellaneous income dropped by 3.79%, mainly due to lower recoveriesof loans written-off in earlier years. During the year, such recoveriesaccounted to Rs291.84 crores.

During the year, the operating revenue of the Bank increased by 20.03%to Rs13,437.97 crores, as compared to Rs11,195.12 crores last year. Thecore income streams (NII, fee and miscellaneous income) constituted97.31% of the operating revenue, reflecting the stability andsustainability of the Bank''s earnings. Operating expenses increased by25.69% to Rs6,007.10 crores from Rs4,779.43 crores last year, as a resultof the growth of the Bank''s network and other infrastructure requiredfor supporting the existing and new businesses. The Cost to Incomeratio of the Bank was 44.70% compared to 42.69% last year.

Page 395: company history of SBI, ICICI

During the year, the operating profit of the Bank increased by 15.82%to Rs7,430.87 crores from Rs6,415.69 crores last year. During thisperiod, the Bank created total provisions (excluding provisions fortax) of Rs1,143.03 crores compared to Rs1,280.03 crores last year. Ofthis, the Bank provided Rs860.43 crores towards loan/investment lossescompared to Rs955.12 crores last year, while the provision for standardassets was Rs150.30 crores. The Bank also provided Rs88.86 crorescompared to Rs15.06 crores last year against restructured assets. Duringthe year, the Bank restructured loans of Rs1,300.29 crores. The Bankcontinued to maintain a healthy asset-quality with a ratio of GrossNPAs to gross customer assets of 0.94%, as compared to 1.01 % lastyear, and a Net NPA ratio (Net NPAs as percentage of net customerassets) of 0.25% compared to 0.26% last year. With higher levels ofprovisions built over and above regulatory norms during the year, theBank has maintained its provision coverage to 80.91% (after consideringprudential write-offs).

The Bank has also shown an all-round improvement in various financialparameters and ratios during the year. Basic Earnings Per Share (EPS)was Rs102.94 as compared to Rs82.95 last year, while the Diluted EarningsPer Share was Rs102.20 compared to Rs81.61 last year. Return on Equity(RoE) improved to 21.22% from 20.13% last year and Book Value Per Shareincreased from Rs462.77 to Rs551.99. Return on Assets (RoA) is maintainedat 1.68% as last year. The hardening of interest rates led to acontraction in the net interest margin (NIM) by 6 basis points for theyear to 3.59% from 3.65% last year. On quarter-on- quarter basis, theNIM was 3.28% in Q1, 3.78% in Q2, 3.75% in Q3 and 3.55% in Q4.

The Bank has shown robust growth in several key balance sheetparameters for the year ended 31st March 2012. The total assetsincreased by 17.68% to Rs285,628 crores on 31st March 2012 from Rs242,713crores on 31st March 2011. Total deposits increased by 16.31% and stoodat Rs220,104 crores. Savings Bank deposits increased by 26.48% toRs51,668 crores, while Current Account deposits increased by 7.68% toRs39,754 crores. Low-cost demand deposits: Current Accounts and SavingsBank (CASA) deposits were Rs91,422 crores as on 31st March 2012, ascompared to Rs77,767 crores last year. As on 31st March 2012, CASAdeposits constituted 41.54% of total deposits as compared to 41.10%last year. On a daily average basis, Savings Bank deposits increased by20.43% to Rs43,442 crores, while Current Account deposits increased by16.71 % to Rs27,403 crores. The percentage share of CASA in totaldeposits, on a daily average basis, was 37.65% compared to 39.40% lastyear. The total advances of the Bank increased by 19.21% to Rs169,760crores. Out of this, corporate advances (comprising large,infrastructure and mid-corporate accounts) increased by 19.93% toRs91,053 crores and SME loans increased by 11.16% to Rs23,795 crores.Agricultural lending (including micro finance) stood at Rs17,340 crores,increasing 0.11% over the last year. Retail loans increased by 35.34%to Rs37,570 crores. The percentage share of retail loans to totaladvances has increased to 22.13% from 19.49% last year. The totalinvestments of the Bank increased by 29.45% to Rs93,192 crores andinvestments in government and approved securities, held mainly for SLRrequirement, increased by 32.43% to Rs58,533 crores. Other investments,including corporate debt securities, increased by 24.70% to Rs34,659crores. As on 31st March 2012, the total assets of the Bank''s overseas

Page 396: company history of SBI, ICICI

branches stood at Rs32,302 crores, constituting 11.31% of the Bank''stotal assets.

During the year, the Bank continued to expand its distribution networkto enlarge its reach in geographical centres with potential for growth,especially in the areas with potential for low-cost CASA deposits,lending to retail, agriculture and SME segments and the distribution ofthird-party products. This year, the Bank has added 231 new branchesand 1 extension counter, taking the total number of branches andextension counters (ECs) to 1,622, of which 674 branches/ECs are insemi-urban and rural areas and 948 branches are in metropolitan andurban areas. The Bank is present in all the States and UnionTerritories (except Lakshadweep), covering a total of 1,050 centres.The Bank has also increased its ATM network to 9,924, as compared to6,270 ATMs last year. In addition to domestic branches, during the yearthe Bank opened an international branch office in Colombo, Sri Lanka tofinance cross-border trade and manufacturing activities. This is inaddition to the existing branches at Singapore, Hong Kong and DIFC(Dubai International Finance Centre) and representative offices atShanghai, Dubai and Abu Dhabi.

CAPITAL & RESERVES

During the year, the Bank has raised capital of Rs3,425 crores by way ofsub-ordinated bonds (unsecured redeemable non-convertible debentures)qualifying as Tier II capital. The raising of this non- equity capitalhas helped the Bank continue its growth strategy and has strengthenedits capital adequacy ratio. The Bank is well capitalised with anoverall capital adequacy ratio (CAR) of 13.66% at the end of the year,well above the benchmark requirement of 9% stipulated by Reserve Bankof India (RBI). Of this, Tier I CAR was 9.45%, as against 9.41 % lastyear, while the Tier II CAR was at 4.21%, as against 3.24% last year.

During the year, a total of 2,658,109 equity shares were allotted toemployees of the Bank pursuant to the exercise of options under itsEmployee Stock Option Scheme. The paid-up capital of the Bank rose toRs413.20 crores, as compared to Rs410.55 crores last year. Theshareholding pattern of the Bank as of 31st March 2012 was as under:

Sr. No. Name of Shareholders % of Paid-up Capital

i. Administrator of the Specified Undertaking of the Unit Trust of India (SUUTI) 23.53

ii. Life Insurance Corporation of India (LIC) 9.69(1)

iii. General Insurance Corporation and four PSU insurance companies 4.16

iv. Overseas investors (including FIIs/OCBs/NRIs) 33.19

v. Foreign Direct Investment (GDR issue) 8.54

Page 397: company history of SBI, ICICI

vi. Other Indian financial institutions/mutual funds/banks 6.45

vii. Others 14.44

Total 100.00

(1) Save and except 4,00,40,156 shares equivalent to 9.69% of the totalpaid up capital of the Bank held by LIC, all other holdings are notconsidered for arriving at the Promoter''s shareholding.

The Bank''s shares are listed on the NSE and the BSE. The GDRs issued bythe Bank are listed on the London Stock Exchange (LSE). The Bondsissued by the Bank under the MTN programme are listed on the SingaporeStock Exchange. The listing fees relating to all stock exchanges forthe current year have been paid.

DIVIDEND

The Diluted Earnings Per Share (EPS) for 2011-12 has risen to Rs102.20from Rs81.61 last year. In view of the overall performance of the Bankand the objective of rewarding shareholders with cash dividends whileretaining capital to maintain a healthy capital adequacy ratio tosupport future growth, the Board of Directors has recommended a higherdividend of Rs16.00 per equity share, compared to Rs14.00 per equityshare declared last year. This dividend shall be subject to tax ondividend to be paid by the Bank. This increase reflects our confidencein the Bank''s ability to consistently grow earnings over time.

BOARD OF DIRECTORS

During the year, some changes in the composition of the Board ofDirectors have taken place. Shri J. R. Varma ceased to be a Director ofthe Bank at the conclusion of the last Annual General Meeting witheffect from 17th June 2011. Shri S. K. Roongta, resigned as a Directorof the Bank with effect from 20th June 2011. Shri R. B. L. Vaishtendered his resignation as a Director on completion of his tenure asLIC Nominee with effect from 5th September 2011. Shri S. K.Chakrabarti, Deputy Managing Director, retired from the services of theBank on 30th September 2011 and accordingly ceased to be a Director ofthe Bank with effect from 1st October 2011. Shri M. V. Subbiah resignedas a director with effect from 26th April, 2012. Prof. Samir K. Barua,Director, Indian Institute of Management, Ahmedabad was appointed as anAdditional Independent Director of the Bank with effect from 22nd July2011. Shri A. K. Dasgupta was nominated by LIC as its Nominee Directorin place of Shri R. B. L. Vaish and was accordingly appointed as anAdditional Director of the Bank with effect from 5th September 2011.Shri Som Mittal, President of NASSCOM was appointed as an AdditionalIndependent Director of the Bank with effect from 22nd October 2011. Wereport with sadness the demise of Dr. R. H. Patil who passed away on12th April 2012. The Board of Directors places on record its deepappreciation and gratitude to Dr. R. H. Patil, Shri M. V. Subbiah, ShriJ. R. Varma, Shri S. K. Roongta, Shri R. B. L. Vaish and Shri S. K.Chakrabarti for the valuable services rendered by them during theirtenure as Directors of the Bank.

Page 398: company history of SBI, ICICI

In accordance with the provisions of the Companies Act, 1956 and theArticles of Association of the Bank, Smt. Rama Bijapurkar and Shri V.R. Kaundinya retire by rotation at the Eighteenth Annual GeneralMeeting and, being eligible, offer themselves for re-appointment asDirectors of the Bank.

The Board of Directors of the Bank at its meeting held on 13th February2012, has re-appointed Smt. Shikha Sharma as Managing Director & CEOfor a further period of three years i.e. from 1st June 2012 till 31stMay 2015. The re-appointment is subject to approval of Reserve Bank ofIndia and the shareholders. Further, the Board of Directors of the Bankat its meeting held on 27th April, 2012, has decided to appoint Shri V.Srinivasan and Shri Somnath Sengupta, Executive Directors of the Bankas the Whole-time Directors of the Bank with effect from the date asmay be approved by RBI.

SUBSIDIARIES

The Bank has set up six wholly-owned subsidiaries: Axis Securities andSales Ltd., Axis Private Equity Ltd., Axis Trustee Services Ltd., AxisAsset Management Company Ltd., Axis Mutual Fund Trustee Ltd., and AxisU.K. Ltd.

Axis Securities and Sales Ltd. is primarily in the business ofmarketing of credit cards and retail asset products and also providesretail broking services. The primary objective of Axis Securities andSales Ltd. is to build a specialised force of sales personnel andoptimise operational efficiency by providing greater control over thesales functions, as compared to a Direct Sales Agent (DSA) model aswell as undertake retail broking business. Axis Private Equity Ltd.primarily carries on the activities of managing equity investments andprovides venture capital support to businesses. Axis Trustee ServicesLtd. is engaged in trusteeship activities (e.g. acting as debenturetrustee and as trustee to various securitisation trusts). Axis AssetManagement Company Ltd. undertakes the activities of managing themutual fund business. Axis Mutual Fund Trustee Ltd. was formed to actas the trustee for the mutual fund business. Axis U.K. Ltd. is aprivate limited company registered in the UK. It was formed with themain purpose of filing an application with Financial Services Authority(FSA), UK for a banking license in the UK and for the creation ofnecessary infrastructure for the subsidiary to commence bankingbusiness in the UK. As of 31st March 2012, Axis U.K. Ltd. has notcommenced operations.

In terms of the General Circular No. 2/2011 dated 8th February 2011issued by the Ministry of Corporate Affairs, Government of India, thecopies of Directors'' Reports, Auditors'' Reports and the financialstatements of the six subsidiaries have not been attached to theaccounts of the Bank for the financial year ended 31st March 2012. Anyshareholder who may be interested in obtaining a copy of the aforesaiddocuments may write to the Company Secretary at the Registered Officeof the Bank. These documents will also be available for examination byshareholders of the Bank at its Registered Office. The documentsrelated to individual subsidiaries will similarly be available for

Page 399: company history of SBI, ICICI

examination at the respective registered offices of the companies. Inline with the Accounting Standard 21 (AS-21) issued by the Institute ofChartered Accountants of India, the consolidated financial results ofthe Bank along with its subsidiaries for the year ended 31st March 2012are enclosed as an Annexure to this report.

PROPOSED ACQUISITION OF ENAM SECURITIES PVT. LTD.

On 17th November, 2010, the Board of Directors of the Bank had approvedthe acquisition of certain financial services business undertaken byEnam Securities Private Limited (ESPL) directly and through its whollyowned subsidiaries, by Axis Securities and Sales Limited (ASSL), awholly owned subsidiary of the Bank by way of a demerger. However,pursuant to conditions prescribed by the Reserve Bank of India, certainmodifications have been carried out to the demerger structure in termsof a revised Scheme of Arrangement under Sections 391-394 and otherrelevant provisions of the Companies Act, 1956. Accordingly, theacquisition will now comprise (a) a demerger of the financial servicesbusinesses from ESPL to the Bank, in consideration of which the Bankwill issue shares to the shareholders of ESPL, and (b) immediately uponcompletion of the demerger under the Scheme, a simultaneous sale of thefinancial services businesses will be undertaken from the Bank to ASSLfor a cash consideration, with both the aforesaid steps occurringsimultaneously. The Reserve Bank of India has on 30th March, 2012,conveyed its no objection to the Scheme. Further, on 27th April, 2012,the Board of Directors of the Bank have approved the reassessment ofthe valuation of the ESPL business at Rs1,396 crores and consequently,in consideration for the demerger of the financial services business ofESPL, the Bank will issue shares in the ratio of 5 equity shares of theBank (aggregating 12,090,000 equity shares) of the face value of Rs10each for every 1 equity share (aggregating 2,418,000 equity shares) ofRs10 each held by the shareholders of ESPL. The sale of the financialservices business will be simultaneously undertaken from the Bank toASSL for a cash consideration of Rs274 crores only. The appointed dateunder the Scheme is 1st April, 2010, and the parties shall proceed withfiling the Revised Scheme and other necessary documents with therelevant High Courts and other regulatory authorities for theirapproval.

EMPLOYEE STOCK OPTION PLAN (ESOP)

The Bank has instituted an Employee Stock Option Scheme to enable itsemployees and the employees of its subsidiaries including Whole-timeDirectors, to participate in the future growth and financial success ofthe Bank. Under the Scheme 40,517,400 options can be granted toemployees. The employee stock option scheme is in accordance with theSecurities and Exchange Board of India (Employee Stock Option andEmployee Stock Purchase Scheme) Guidelines, 1999. The eligibility andnumber of options to be granted to an employee is determined on thebasis of the employee''s work performance and is approved by the Boardof Directors.

The Bank''s shareholders approved plans for the issuance of stockoptions to employees in February 2001, June 2004, June 2006, June 2008and June 2010. Under the first two plans and upto the grant made on29th April 2004, the option conversion price was set at the average

Page 400: company history of SBI, ICICI

daily high-low price of the Bank''s equity shares traded during the 52weeks preceding the date of grant at the Stock Exchange which has hadthe maximum trading volume of the Bank''s equity share during thatperiod. Under the third plan and with effect from the grant made by theBank on 10th June 2005, the pricing formula has been changed to theclosing price on the day previous to the grant date. The Remunerationand Nomination Committee granted options under these plans on elevenoccasions: 1,118,925 during 2000-01, 1,779,700 during 2001-02,2,774,450 during 2003-04, 3,809,830 during 2004-05, 5,708,240 during2005-06, 4,695,860 during 2006-07, 6,729,340 during 2007-08, 2,677,355during 2008-09, 4,413,990 during 2009-10, 2,915,200 during 2010-11 and3,268,700 during 2011-12. The options granted, which arenon-transferable, vest at rates of 30%, 30% and 40% on each of threesuccessive anniversaries following the grant, subject to standardvesting conditions, and must be exercised within three years of thedate of vesting. As of 31st March 2012, 24,368,087 options had beenexercised and 11,428,248 options were in force.

Other statutory disclosures as required by the revised SEBI guidelineson ESOPs are given in the Annexure to this report.

CORPORATE GOVERNANCE

The Bank is committed to achieve the highest standards of corporategovernance, and it aspires to benchmark itself with international bestpractices in this regard. The corporate governance practices followedby the Bank are enclosed as an Annexure to this report.

The Bank has adopted a major part of the recommendations contained inthe Corporate Governance Voluntary Guidelines 2009 issued by theMinistry of Corporate Affairs and is examining the possibility ofimplementing the remaining recommendations.

DIRECTORS'' RESPONSIBILITY STATEMENT

The Board of Directors hereby declares and confirms that:

- The applicable accounting standards have been followed in thepreparation of the annual accounts and proper explanations have beenfurnished, relating to material departures.

- Accounting policies have been selected and applied consistently andreasonably, and prudent judgements and estimates have been made so asto give a true and fair view of the state of affairs of the Bank and ofthe Profit and Loss of the Bank for the financial year ended 31st March2012.

- Proper and sufficient care has been taken for the maintenance ofadequate accounting records, in accordance with the provisions of theCompanies (Amendment) Act, 2000, for safeguarding the assets of theBank, and for preventing and detecting fraud and other irregularities.

- The annual accounts have been prepared on a going concern basis.

Page 401: company history of SBI, ICICI

- The Bank has in place a system to ensure compliance of all lawsapplicable to the Bank.

STATUTORY DISCLOSURE

Considering the nature of activities of the Bank, the provisions ofSection 217(1 )(e) of the Companies Act, 1956 relating to conservationof energy and technology absorption do not apply to the Bank. The Bankis, however, constantly pursuing its goal of technological upgradationin a cost-effective manner for delivering quality customer service.

The statement containing particulars of employees as required underSection 217(2A) of the Companies Act, 1956 and the rules hereunder isgiven in an Annexure appended hereto and forms part of this report. Interms of Section 219(1 )(iv) of the Act, the Report and Accounts arebeing sent to the shareholders excluding the aforesaid Annexure. Anyshareholder interested in obtaining a copy of the Annexure may write tothe Company Secretary at the Registered Office of the Bank.

AUDITORS

M/s Deloitte Haskins & Sells, Chartered Accountants, Statutory Auditorsof the Bank will retire on the conclusion of the Eighteenth AnnualGeneral Meeting and are eligible for re-appointment, subject to theapproval of Reserve Bank of India and the shareholders. As recommendedby the Audit Committee of the Board, the Board of Directors hasproposed the appointment of M/s Deloitte Haskins & Sells, CharteredAccountants as Statutory Auditors for the financial year 2012-13. Theshareholders are requested to consider their appointment on theremuneration to be decided by the Audit Committee of the Board.

ACKNOWLEDGEMENTS

The Board of Directors places on record its gratitude to the ReserveBank of India, other government and regulatory authorities, financialinstitutions and correspondent banks for their strong support andguidance. The Board acknowledges the support of the shareholders andalso places on record its sincere thanks to its valued clients andcustomers for their continued patronage. The Board also expresses itsappreciation to all employees of the Bank for their strong work ethic,excellent performance, professionalism, teamwork, commitment andinitiative, which has led to the Bank making commendable progress intoday''s challenging environment.

For and on behalf of the Board of Directors

Place : Mumbai Adarsh Kishore

Date : 27th April, 2012 Chairman

Director ReportMar2010   Mar 2011 Mar2012

The Board of Directors is pleased to present the Seventeenth Annual Report of the Bank together with the Audited Statement of Accounts, Auditors Report and the report on business and operations of the Bank for the financial year ended 31 March, 2011.

Page 402: company history of SBI, ICICI

FINANCIAL PERFORMANCE

The financial highlights for the year under review are presented below:

(Rs. in crores)

PARTICULARS 2010-11 2009-10 Growth

Deposits 189,237.80 141,300.22 33.93%

Out of which

- Savings Bank Deposits 40,850.31 33,861.80 20.64%

- Current AccountDeposits 36,917.09 32,167.74 14.76%

Advances 142,407.83 104,340.95 36.48%

Out of which

Retail Advances 27,759.23 20,820.73 33.32%

Non-retailAdvances 114,648.60 83,520.22 37.27%

TotalAssets/Liabilities 242,713.37 180,647.85 34.36%

Net InterestIncome 6,562.995,00 4.49 31.14%

Other Income 4,632.13 3,945.78 17.39%

Out of which

- Trading Profit 496.97 822.38 (39.57%)

. Fee & other income 4,135.16 3,123.40 32.39%

Operating Expenses excl.depreciation 4,489.8 43,475.40 29.19%

Profit before depreciation, provisions and tax 6,705.28 5,474.87 22.47%

Depreciation 289.59 234.32 23.59%

Provision for Tax 1,747.17 1,336.83 30.70%

Other Provisions & Writeoffs 1,280.03 1,389.19 (7.86%)

Page 403: company history of SBI, ICICI

Net Profit 3,388.49 2,514.53 34.76%

Appropriations:

Transfer to StatutoryReserve 847.126 28.63 34.76%

Transfer to/(from) InvestmentReserve (14.94) 14.88 -

Transfer to Capital Reserve 4.76 223.92 (97.87%)

Transfer to General Reserve 338.85 0.31 -

Proposed Dividend 670.36 567.45 18.14%

Surplus carried over to Balance Sheet 1,542.34 1,079.34 42.90%

(1) Excluding Merchant Exchange Profit

KEY PERFORMANCE INDICATORS 2010-11 2009-10

Interest Income as a percentage of working funds* 7.49% 7.73%

Non-Interest Income as a percentage of working funds* 2.29% 2.62%

Net Interest Margin 3.65% 3.75%

Return on Average Net Worth 20.13% 19.89%

Operating Profit as a percentage of working funds* 3.17% 3.48%

Return on Average Assets 1.68% 1.67%

Profit per employee** 14.35 lacs 11.63 lacs

Business (Deposits less inter-bank deposits + Advances) per employee** 13.66 crores 1.11 crores

Net non performing assets as a percentage of net customer assets *** 0.26% 0.36%

- Working funds represent average total assets.

** Productivity ratios are based on average number of employees for theyear. *** Customer Assets include advances and credit substitutes.

Page 404: company history of SBI, ICICI

Previous year figures have been regrouped wherever necessary.

In 2010-11 both business and earnings grew strongly with the Bankreporting a net profit of Rs.3,388.49 crores for the year ended 31 March,2011, rising 34.76% over the net profit of Rs.2,514.53 crores in theprevious year. The solid growth of business across segments has beenreflected in a set of robust financial indicators.

The Banks total income increased 26.97% to reach Rs.19,786.94 croresduring 2010- 11, compared to Rs.15,583.80 crores last year. Operatingrevenue during this period increased 25.08% to Rs.11,195.12 crores whileoperating profit increased by 22.42% to Rs. 6,415.69 crores. The growthin revenues may be attributed to the performance of the Banks coreincome streams: net interest income (Nil), fee and other income. Nilincreased by 31.14% to Rs.6,562.99 crores from ^5,004.49 crores lastyear, while fee and other income increased by 17.39% to Rs.4,632.13crores from ^3,945.78 crores last year. Nil increased by 31.14% as aresult of healthy growth of both assets and low-cost Current Accountand Savings Bank (CASA) deposits, on a daily average basis. During theyear, total earning assets, on a daily average basis, rose 34.70% toRs.179,573 crores from Rs.133,309 crores last year. A 32.81 % growth oflow-cost CASA deposits, on a daily average basis, from ^44,839 croreslast year to Rs.59,551 crores, helped the Bank contain funding costs,which had risen in the last quarter of the year due to the hardening ofinterest rates on term deposits.

Other income comprising fees, trading profit and miscellaneous incomealso rose 17.39% to ^4,632.13 crores in 2010-11 from Rs.3,945.78 croreslast year. Fee income constituted 33.86% of the operating revenue ofthe Bank and rose 29.59% to Rs.3,790.37 crores from Rs.2,924.96 crores lastyear. The Bank earns fee income from a diverse set of products andbusinesses such as client- based merchant foreign exchange trade,service charges from account maintenance, transaction banking includingcash management services, syndication and placement fees, processingfees from loans and commission on non-funded products such as lettersof credit and bank guarantees, inter-change fees on ATM-sharingarrangements and fee income from the distribution of third-partypersonal investment products. During the year, proprietary tradingprofits fell 39.57% to Rs.496.97 crores from Rs.822.38 crores last year,primarily due to adverse market conditions in the debt and equitymarkets. Miscellaneous income was buoyant, rising 73.75% mainly due tostrong recoveries of loans and derivative receivables written-off inprevious years. During the year, such recoveries amounted to Rs.325.22crores compared to Rs.174.43 crores last year.

During the year, the operating revenue of the Bank increased 25.08% toRs.11,195.12 crores from Rs.8,950.27 crores last year. The core incomestreams (Nil, fee and miscellaneous income) constituted 95.56% of theoperating revenue, reflecting the stability and sustainability of theBanks earnings. Operating expenses increased by 28.84% to ^4,779.43crores from Rs.3,709.72 crores last year, on the back of the continuinggrowth of the Banks network and infrastructure required for supportingexisting and new businesses. During the year, the Cost: Income ratiowas 42.69% compared to 41.45% last year.

During the year, the operating profit of the Bank increased 22.42% to

Page 405: company history of SBI, ICICI

Rs.6,41 5.69 crores from Rs.5,240.55 crores last year. During this period,provisions (excluding provisions for tax) charged to the Profit & Lossaccount were Rs.1,280.03 crores compared to Rs.1,389.19 crores last year.Of this, provisions for loan losses were ^955.12 crores compared toRs.1,357.04 crores last year, while the provision for standard assets wasRs.166.16 crores. The Bank accelerated its provisioning requirements insome portfolios as a measure of prudence, increasing the overallprovision coverage. The Bank also provided Rs.15.06 crores compared toRs.56.47 crores last year against restructured assets. During 2010-11,the Bank restructured loans of Rs.404 crores, significantly lower thanRs.1,633 crores last year. The Bank continued to maintain a generallyhealthy asset-quality with a ratio of Gross NPAs to gross customerassets of 1.01% compared to 1.13% last year and a Net NPA ratio(percentage of Net NPAs as percentage of net customer assets) of 0.26%compared to 0.36% last year. With higher levels of provisions, builtover and above regulatory norms during the year, the Bank has furtherimproved its provision-coverage to 80.90% (after considering prudentialwrite-offs) from 72.38% last year.

Due to a consistent trajectory of core earnings, there has been anall-round improvement in various financial metrics. The Return onEquity (RoE) improved to 20.13% from 19.89% last year. Basic EarningsPer Share (EPS) rose to Rs.82.95 from Rs.65.78 last year, while the DilutedEarnings Per Share was Rs.81.61 compared to Rs.64.31 last year. The BookValue Per Share increased from Rs.395.99 on 31 March, 2010 to Rs.462.77 on31 March, 2011, while Return on Assets (RoA) improved to 1.68% from1.67% last year. Employee productivity has also improved with Profitper Employee increasing to Rs.14.35 lacs from ^11.63 lacs last year andBusiness per Employee increasing to Rs.13.66 crores from Rs.11.11 croreslast year. Hardening of interest rates on Term Deposits in the finalquarter of the year pushed up the cost of funds, compressing the Netinterest Margin by 10 basis points of the year to 3.65% from 3.75% lastyear. The quarterly NIMs during the year were as follows: 3.71% in Q1,3.68% in Q2, 3.81% in Q3 and 3.44% in Q4.

The total assets of the Bank were Rs.242,713 crores, rising 34.36% from<="" pre="">As a conscious strategy of building a network of branches and ATMs witheffective penetration, the Bank continued to enlarge its geographicalcoverage of centres with potential for growth, especially in the areaswith potential for low- cost CASA deposits, lending to retail,agriculture and SME segments and the distribution of third partyproducts. During the year, 407 new branches were added to the Banksnetwork taking the total number of branches and extension counters

(ECs) to 1,390. Of these, 564 branches/ECs are in semi-urban and ruralareas and 826 branches/ECs are in metropolitan and urban areas. TheBank is present in all states and Union Territories (exceptLakshadweep) covering 921 centres. The ATM network of the Bankincreased from 4,293 last year to 6,270 as on 31 March, 2011. Duringthe year, the Bank also opened a Representative Office in Abu Dhabi.This was in addition to the existing branches at Singapore, Hong Kongand DIFC (Dubai International Financial Centre) and representativeoffices at Shanghai and Dubai.

CAPITAL & RESERVES

Page 406: company history of SBI, ICICI

The Bank is well capitalised at present with an overall CapitalAdequacy Ratio (CAR) of 12.65% at the end of the year, well above thebenchmark requirement of 9% stipulated by Reserve Bank of India. Ofthis, Tier I CAR was 9.41 % against 11.18% a year earlier, while theTier II CAR was at 3.24% against 4.62% a year earlier.

During the year under review, 5,371,724 equity shares were allotted toemployees of the Bank pursuant to the exercise of options under itsEmployee Stock Option Scheme. The paid-up capital of the Bank as on 31March, 2011 rose toRs.410.55 crores from ^405.17 crores as on 31 March,2010. The shareholding pattern of the Bank as of 31 March, 2011 isstated below.

Sr.No. Name of Shareholders % of Paid Up Capital

i. Administrator of the Specified Undertaking of the Unit Trust of India (SUUTI) 23.68

ii. Life Insurance Corporation of India 9.56

iii. General Insurance Corporation and four PSU Insurance Companies 3.97

iv. Overseas Investors including Flls/OCBs/NRIs 37.89

v. Foreign Direct Investment (GDR issue) 9.19

vi. Other Indian Financial Institutions/ Mutual Funds/Banks 5.12

vi Others 10.59

Total 100.00

The Banks shares are listed on the NSE and the BSE. The GDRs issued bythe Bank are listed on the London Stock Exchange (LSE). The Bondsissued by the Bank under the MTN programme are listed on the SingaporeStock Exchange. The listing fees relating to all stock exchanges forthe current year have been paid. With effect from 26 March, 2001, theshares of the Bank have been included and traded in the BSEs Group Astocks. With effect from 27 March, 2009, the Banks shares have beenincluded and traded as part of the main NIFTY Index of the NSE.Earlier, the shares of the Bank were part of the NIFTY Junior Index ofthe NSE.

DIVIDEND

In view of the overall performance of the Bank and the objective ofrewarding shareholders with cash dividends while retaining capital tomaintain a healthy capital adequacy ratio to support future growth, theBoard of Directors has recommended a higher dividend of Rs.14.00 perequity share, compared to Rs.12.00 per equity share declared for 2009-10.This dividend shall be subject to tax on dividend to be paid by theBank. This increase reflects our confidence in the Banks ability to

Page 407: company history of SBI, ICICI

consistently grow earnings over time.

BOARD OF DIRECTORS

During the year, some changes have taken place in the composition ofthe Board of Directors. Shri M. S. Sundara Rajan, former Chairman andManaging Director of Indian Bank, was appointed as an AdditionalIndependent Director with effect from 8 June, 2010. He resigned witheffect from 22 February, 2011. Shri S. K. Roongta, former Chairman ofSAIL, was appointed as an Additional Independent Director with effectfrom 15 July, 2010. Shri S. K. Chakrabarti, former Executive Director(Retail Banking, SME and Agri.) of the Bank was appointed as the DeputyManaging Director of the Bank with effect from 27 September, 2010. ShriPrasad R. Menon, former Managing Director, Tata Power Limited, wasappointed as an Additional Independent Director with effect from 9October, 2010. Shri R. N. Bhattacharyya, former IPS officer and nomineeof the Specified Undertaking of the Unit Trust of India (SUUTI) wasappointed as an Additional Director with effect from 17January, 2011.

In accordance with the provisions of the Companies Act, 1956 and theArticles of Association of the Bank, Shri R. B. L. Vaish and Shri K. N.Prithviraj retire by rotation at the Seventeenth Annual General Meetingand, being eligible, offer themselves for re-appointment as Directorsof the Bank. Shri J. R. Varma also retires by rotation but he hasexpressed his desire not to be re-appointed as his term of continuousperiod of eight years as Director under the provisions of Section10-A(2-A)(i) of the Banking Regulation Act, 1949, comes to an end witheffect from 25 June, 2011.

SUBSIDIARIES

The Bank has set up six wholly-owned subsidiaries: Axis Securities andSales Ltd., Axis Private Equity Ltd., Axis Trustee Services Ltd., AxisAsset Management Company Ltd., Axis Mutual Fund Trustee Ltd. and AxisU.K. Ltd.

Axis Securities and Sales Ltd. is primarily in the business ofmarketing of credit cards and retail asset products as well as retailbroking. The objective of this subsidiary is to build a specialisedforce of sales personnel and optimise operational efficiency byproviding greater control over the sales functions, as compared to aDirect Sales Agent (DSA) model, as well as undertake retail brokingbusiness. Axis Private Equity Ltd., primarily carries on theactivities of managing equity investments and provides venture capitalsupport to businesses. Axis Trustee Services Ltd. is engaged intrusteeship activities (e.g. acting as debenture trustee and astrustee to various securitisation trusts). Axis Asset ManagementCompany Ltd. primarily undertakes the activities of managing a mutualfund business and the Axis Mutual Fund Trustee Ltd. was set up to actas the trustee for the mutual fund business. On 7 March, 2011, the Bankhas incorporated a new subsidiary namely Axis U.K. Ltd. as a privatelimited company registered in the United Kingdom (UK) with the mainpurpose of filing an application with Financial Services Authority(FSA), UK for a banking license in the UK and for the creation ofnecessary infrastructure for the subsidiary to commence bankingbusiness in the UK. As on 31 March, 2011, Axis U.K. Ltd. had notcommenced operations.

Page 408: company history of SBI, ICICI

In terms of an exemption received from the Ministry of CorporateAffairs, Government of India through its letter no. 47/19/2011-CL-llldated 21 January, 2011, under Section 212(8) of the Companies Act,1956, copies of Directors Reports, Auditors Reports and the financialstatements of the five subsidiaries (Axis Securities and Sales Ltd.,Axis Private Equity Ltd., Axis Trustee Services Ltd., Axis AssetManagement Company Ltd. and Axis Mutual Fund Trustee Ltd.) have notbeen attached to the accounts of the Bank for the financial year ended31 March, 2011. Any shareholder who may be interested in obtaining acopy of the aforesaid documents may write to the Company Secretary atthe Registered Office of the Bank. These documents will also beavailable for examination by shareholders of the Bank at its RegisteredOffice. Documents related to individual subsidiaries will similarly beavailable for examination at the respective registered offices of thefive companies. In line with the Accounting Standard 21 (AS 21) issuedby the Institute of Chartered Accountants of India, the consolidatedfinancial results of the Bank along with its subsidiaries for the yearended 31 March, 2011 are enclosed as an Annexure to this report.

PROPOSED ACQUISITION OF ENAM SECURITIES PVT. LTD. BY AXIS SECURITIESAND SALES LTD.

At their meetings held on 17 November, 2010, the Board of Directors ofthe Bank, Enam Securities Private Limited (ESPL) and Axis Securitiesand Sales Limited (ASSL), a wholly-owned subsidiary of the Bank,approved the acquisition of certain businesses undertaken by ESPLdirectly and through its wholly owned subsidiaries, by ASSL by way of ademerger. It is envisaged that these businesses will be transferred toASSL, pursuant to a Scheme of Arrangement, as may be approved by therelevant High Courts under Sections 391 to 394 and other relevantprovisions of the Companies Act, 1956 and subject to receipt ofnecessary requisite approvals. The appointed date for the purpose ofthe Demerger under the Scheme shall be 1 April, 2010. The valuation ofESPL business was assessed at ^2,067 cores in consideration for thedemerger, the Bank will issue shares in the ratio of 5.7 equity sharesof the Bank (aggregating 13,782,600 equity shares) of the face value ofRs.10 for every 1 equity share (aggregating 2,418,000 equity shares) ofRs.10 each held by shareholders of ESPL.

EMPLOYEE STOCK OPTION PLAN (ESOP)

The Bank has instituted an Employee Stock Option Scheme to enable itsemployees and the employees of its subsidiaries including whole-timeDirectors, to participate in the future growth and financial success ofthe Bank. Under the Scheme 40,517,400 options can be granted toemployees. The employee stock option scheme is in accordance with theSecurities and Exchange Board of India (Employee Stock Option andEmployee Stock Purchase Scheme) Guidelines, 1999. The eligibility andnumber of options to be granted to an employee is determined on thebasis of the employees work performance and is approved by the Boardof Directors.

The Banks shareholders approved plans for the issuance of stockoptions to employees in February 2001, June 2004, June 2006, June 2008and June 2010. Under the first two plans and upto the grant made on 29April, 2004, the option conversion price was set at the average daily

Page 409: company history of SBI, ICICI

high-low price of the Banks equity shares traded during the 52 weekspreceding the date of grant at the Stock Exchange which has had themaximum trading volume of the Banks equity share during that period.Under the third plan and with effect from the grant made by the Bank on10 June, 2005, the pricing formula has been changed to the closingprice on the day previous to the grant date. The Remuneration andNomination Committee granted options under these plans on tenoccasions: 1,118,925 during 2000-01, 1,779,700 during 2001 -02,2,774,450 during 2003-04, 3,809,830 during 2004-05, 5,708,240 during2005-06, 4,695,860 during 2006-07, 6,729,340 during 2007-08, 2,677,355during 2008-09, 4,413,990 during 2009-10 and 2,915,200 during 2010-11.

The options granted, which are non-transferable, vest at rates of 30%,30% and 40% on each of three successive anniversaries following thegrant, subject to standard vesting conditions, and must be exercisedwithin three years of the date of vesting. As of 31 March, 2011,21,709,978 options had been exercised and 11,122,518 options were inforce.

Other statutory disclosures as required by the revised SEBI guidelineson ESOPs are given in the Annexure to this report.

CORPORATE GOVERNANCE

The Bank is committed to achieving the highest standards of corporategovernance and it aspires to benchmark itself with international bestpractices in this regard. The corporate governance practices followedby the Bank are enclosed as an Annexure to this report.

The Bank has adopted a major part of the recommendations contained inthe Corporate Governance Voluntary Guidelines 2009 issued by theMinistry of Corporate Affairs and is examining the possibility ofimplementing the remaining recommendations.

DIRECTORS RESPONSIBILITY STATEMENT

The Board of Directors hereby declares and confirms that:

i. The applicable accounting standards have been followed in thepreparation of the annual accounts and proper explanations have beenfurnished, relating to material departures.

ii. Accounting policies have been selected, and applied consistentlyand reasonably, and prudent judgements and estimates have been made soas to give a true and fair view of the state of affairs of the Bank andof the Profit & Loss of the Bank for the financial year ended 31 March,2011.

iii. Proper and sufficient care has been taken for the maintenance ofadequate accounting records, in accordance with the provisions of theCompanies (Amendment) Act, 2000, for safeguarding the assets of theBank and for preventing and detecting fraud and other irregularities.

iv. The annual accounts have been prepared on a going concern basis.

v. The Bank has in place a system to ensure compliance of all lawsapplicable to the Bank.

Page 410: company history of SBI, ICICI

STATUTORY DISCLOSURE

Considering the nature of activities of the Bank, the provisions ofSection 217(1 )(e) of the Companies Act, 1956 relating to conservationof energy and technology absorption do not apply to the Bank. The Bankis, however, constantly pursuing its goal of technological upgradationin a cost-effective manner for delivering quality customer service.

The statement containing particulars of employees as required underSection 217(2A) of the Companies Act, 1956 and the rules thereunder, isgiven in an Annexure appended hereto and forms part of this report. Interms of Section 219(1) (iv) of the Act, the Report and Accounts arebeing sent to the shareholders excluding the aforesaid Annexure. Anyshareholder interested in obtaining a copy of the Annexure may write tothe Company Secretary at the Registered Office of the Bank.

AUDITORS

M/s Deloitte Haskins & Sells, Chartered Accountants, Statutory Auditorsof the Bank will retire on the conclusion of the Seventeenth AnnualGeneral Meeting and are eligible for re-appointment, subject to theapproval of Reserve Bank of India and of the shareholders. Asrecommended by the Audit Committee of the Board, the Board of Directorshas proposed the appointment of M/s Deloitte Haskins & Sells, CharteredAccountants as Statutory Auditors for the financial year 2011-12. Theshareholders are requested to consider their appointment on theremuneration to be decided by the Audit Committee of the Board.

ACKNOWLEDGEMENTS

The Board of Directors places on record its gratitude to the ReserveBank of India, other government and regulatory authorities, financialinstitutions and correspondent banks for their strong support andguidance. The Board acknowledges the support of the shareholders andalso places on record its sincere thanks to its valued clients andcustomers for their continued patronage. The Board also expresses itsdeep sense of appreciation to all employees of the Bank for theirstrong work ethic, excellent performance, professionalism, team work,commitment, and initiative which has led to the Bank making commendableprogress in todays challenging environment.

For and on behalf of the Board of Directors

Place : Mumbai Adarsh Kishore Date : 22nd April, 2011 Chairman

Director ReportMar2009   Mar 2010 Mar2011

The Board of Directors is pleased to present the Sixteenth Annual Report of your Bank together with the Audited Statement of Accounts, Auditors Report and the report on business and operations of the Bank for the financial year ended 31st March 2010.

Page 411: company history of SBI, ICICI

FINANCIAL PERFORMANCE

The financial highlights for the year under review are presented below:

(Rs. in crores)

PARTICULARS 2009-10 2008-09 Growth

Deposits 141,300.22 117,374.11 20.38%Out of which

- Savings Bank Deposits 33,861.80 25,822.12 31.13%

» Current Account Deposits 32,167.74 24,821.61 29.60%

Advances 104,343.12 81,556.77 27.94%

Out of which- Retail Advances 20,822.90 16,051.78 29.72%

- Non-retail Advances 83,520.22 65,504.99 27.50%

Total Assets/Liabilities 180,647.85 147,722.05 22.29%

Net Interest Income 5,004.49 3,686.21 35.76%

Other Income 3,945.78 2,896.88 36.21%

Out of which

- Trading Profit (1) 822.38 373.86 119.97%

- Fee & other income 3,123.40 2,523.02 23.80%

Operating Expensesexcl.depreciation 3,475.40 2,669.55 30.19%

Profit before depreciation,provisions and tax 5,474.87 3,913.54 39.90%

Depreciation 234.32 188.66 24.20%

Provision for Tax 1.336.83 969.84 37.84%

Other Provisions &Writeoffs 1,389.19 939.68 47.84%

Net Profit 2,514.53 1,815.36 38.51%

Appropriations:

Transfer to Statutory Reserve 628.63 453.84 38.51%

Page 412: company history of SBI, ICICI

Transferto Investment Reserve 14.88 0.06 -

Transferto Capital Reserve 223.92 146.72 52.62%

Transferto General Reserve 0.31 - -

Proposed Dividend 567.45 420.52 34.94%

Surplus carried overto Balance Sheet 1,079.34 794.22 35.90%

(1) Excluding Merchant Exchange Profit

KEY PERFORMANCE INDICATORS 2009-10 2008-09

Interest Income as a percentage of working funds* 7.73% 8.59%

Non-Interest Income as a percentage of working funds 2.62% 2.30%

Net Interest Margin 3.75% 3.33%

Return on Average Net Worth 19.89% 19.93%

Operating Profit as a percentage of working funds 3.48% 2.95%

Return on Average Assets 1.67% 1.44%

Profit per employee** Rs. 11.63 lacs Rs. 10.02 lacs

Business (Deposits less inter bank deposits + Advances) per employee** Rs. 11.11 crores Rs. 10.60 crores

NetNon performing assets as a percentage of net customer assets*** 0.36% 0.35%

- Working funds represent average total assets.

** Productivity ratios are based on average number of employees for theyear.

*** Customer Assets include advances and credit substitutes.

Previous year figures have been regrouped wherever necessary.

In a difficult year for the financial sector, the Bank has delivered a

Page 413: company history of SBI, ICICI

very strong performance with a net profit of Rs. 2,514.53 crores (38.51% higher than the net profit of Rs. 1,81 S.36 crores last year), BasicEarnings per Share (EPS) of Rs. 65.78 (29.97% higher than the EPS ofRs. 50.61 in 2008-09) and a Return on Equity (ROE) of 19.89% comparedto 19.93% last year.

In 2009-10, the total income was Rs. 15,583.80 crores, increasing byRs. 1,851.44 crores or 13.48% over last year. During the period theoperating revenue rose 35.96% to Rs. 8,950.27 crores, while operatingprofit increased by 40.69% to Rs. 5,240.55 crores, due to a robustgrowth of core income streams. The Net Interest Income (Nil) grew byRs. 1,318.28 crores to Rs. 5,004.49 crores, rising 35.76%, due in largemeasure, to lower cost of deposits supported by the solid and sustainedgrowth of the low-cost current account and savings bank (CASA) depositsas well as a sharp fall in the cost of term deposits. Nil also grew onthe back of strong asset growth across business segments and on a dailyaverage basis, the total earning assets of the Bank increased by 20.46%to Rs. 133,308.75 crores from Rs. 110,663.96 crores last year.

During the year the yield on earning assets declined by 101 basispoints from 9.73% last year to 8.72% in line with the general declinein lending rates facilitated by an accommodating monetary policy. Thedecline in the cost of funds, on the other hand, was steeper, falling130 basis points from 6.50% last year to 5.20%, mainly on account ofthe reasons stated above. The share of CASA deposits in the totaldeposits of the Bank on a daily average basis rose sharply by 429 basispoints from 36.10% last year to 40.39% while the cost of term depositsfell 189 basis points from 9.41% last year to 7.52%. As a result, theNet Interest Margin (NIM) climbed 42 basis points over the year. In thelast four quarters, the NIM has consistently improved: from 3.34% inQ1, to 3.52% in Q2,4.00% in Q3 and 4.09% in Q4.

Other income comprising fees, trading profit and miscellaneous incomewas Rs. 3,945.78 crores, at the end of the year, rising 36.21% or byRs. 1,048.90 crores over the year. Fee income comprised 32.68% of theoperating revenue of the Bank, generated by products and services ofdiverse businesses such as client-based merchant foreign exchangetrade, service charges from account maintenance, transaction bankingincluding cash management services, syndication and placement fees,processing fees from loans and commission on non-funded products suchas letters of credit and bank guarantees, inter-change fees onATM-sharing arrangements and fee income from the distribution ofthird-party personal investment products. There was also a healthyincrease in treasury income by way of proprietary trading profit whichgrew 119.97% over the year to Rs. 822.38 crores, from Rs. 373.86 croreslast year. Miscellaneous income rose 162.24% mainly on account ofhigher recoveries of loans written-off in earlier years. During theyear, such recoveries amounted to Rs. 174.43 crores against Rs. 62.95crores last year.

The Bank continued to add to its network of branches, ATMs and otherchannels, contributing in part to the growth of operating expenses ofthe Bank which rose 29.79% to Rs. 3,709.72 crores over last year.However, the Cost: Income ratio which reflects operational efficiency,improved to 41.45% in 2009-10 from 43.42% last year.

Page 414: company history of SBI, ICICI

During the year, the Bank created total provisions (excludingprovisions for tax) of Rs. 1,389.19 crores against Rs. 939.68 croreslast year. Of this, provisions for loan losses were Rs. 1,357.04crores (against Rs. 732.21 crores last year) as some loan segments cameunder stress in the wake of the economic slowdown. The Bank acceleratedits provisioning requirements in several portfolios as a measure ofprudence, increasing the overall provision coverage. The Bank alsoprovided Rs. 56.47 crores against restructured assets. Globalrecessionary conditions and the consequential impact upon the Indianeconomy led to a sharp rise of restructured assets in the bankingsector during the year. Although the Bank restructured assets of Rs.1,632.97 crores during the year, it has been able to maintain thequality of its loans, ending the year with a ratio of Gross NPAs togross customer assets of 1.13% (against 96 basis points last year) anda net NPA ratio (net NPAs as percentage of net customer assets) of0.36% (against 35 basis points last year). With higher levels ofprovisions, built over and above the regulatory norms during the year,the Bank achieved a provision-coverage of 72.38% after consideringprudential write-offs.

Given the strong revenue growth, key financial parameters and ratiosfor the year have improved. The ROE declined marginally from 19.93% in2008-09 to 19.89%. Basic EPS rose to Rs. 65.78 from Rs. 50.61 lastyear, while diluted EPS was Rs. 64.31 compared to Rs. 50.27 last year.The Book Value per share rose from Rs. 284.50 on 31st March 2009 to Rs.395.99 on 31" March 2010 while Return on Assets (ROA) improved to 1.67%from 1.44% last year. Employee productivity also improved, profit peremployee increasing to Rs. 11.63 lacs from Rs. 10.02 lacs last year andbusiness per employee increasing to Rs. 11.11 crores from Rs. 10.60crores last year.

Despite relatively subdued growth during the first three quarters ofthe year, the Bank finished the year with a healthy growth of thebalance sheet at Rs. 180,647.85 crores, increasing by Rs. 32,925.80crores, or 22.29% over last year. Total deposits were Rs. 141,300.22crores, increasing by Rs. 23,926.11 crores, or 20.38% over last year.Low-cost demand deposits (savings bank and current accounts) (CASA)were Rs. 66,029.54 crores, rising by Rs. 15,385.81 crores, or 30.38%over the year. As on 31st March 2010, the percentage share of low-costdemand deposits (CASA) in total deposits rose to 46.73% from 43.15%last year. Savings bank account deposits grew 31.13% to Rs. 33,861.80crores, while current account deposits grew 29.60% to Rs. 32,167.74crores. Total advances were Rs. 104,343.12 crores, growing 27.94% byRs. 22,786.35 crores from last year. Of this, corporate advances(comprising large and mid-corporate accounts) were Rs. 52,503.53crores, growing by Rs. 11,292.63 crores or 27.40% over last year.During the same period, advances to the SME segment (including microfinance) were Rs. 19,482.65 crores, increasing by Rs. 3,405.95 crores,or 21.19% over last year, while agricultural lending stood at Rs.11,534.04 crores, increasing by Rs. 3,316.65 crores or 40.36% over theyear. Retail loans wereRs. 20,822.90 crores, increasing by Rs. 4,771.12crores or 29.72% from last year. The Banks total investments were Rs.55,974.82 crores, increasing by Rs. 9,644.47 crores or 20.82% over lastyear. Investments in government and approved securities, mainly held tomeet the Banks SLR requirement, were Rs. 34,195.88 crores increasingby Rs. 6,473.01 crores or 23.35% over last year. Other investments,

Page 415: company history of SBI, ICICI

including corporate debt securities, were Rs. 21,778.94 croresincreasing by Rs. 3,171.46 crores or 17.04% over last year. The totalassets of the Banks overseas branches as on 31" March 2010 were Rs.13,921.42 crores, increasing by Rs. 2,245.93 crores or 19.24% over lastyear, constituting 7.71% of the Banks total assets.

As one of the key planks for business growth and customer-acquisition,the Bank continued to enlarge its distribution network. Wideninggeographical reach is critical for extending service delivery and fortapping growth opportunities in newer markets, especially in the areasof low-cost CASA deposits, lending to retail, agriculture and SMEsegments and the sale of third party products. The distribution networknow covers 643 centres in India and 4 centres in overseas as on 31"March 2010. The Bank crossed a landmark on 29* March opening its1000th branch at Bandra West, Mumbai. The Bank is now present in allstates and Union Territories (except Lakshadweep) and is present in 401of the 626 district headquarters in the country. During 2009-10, 200branches (including service branches/CPC) were added to the Banksnetwork, taking the total number of branches and Extension Counters(ECs) to 1,035 as on 31" March 2010 from 835 last year. Of these, 320branches are in semi-urban and rural areas and 707 branches are inmetropolitan and urban areas. The ATM network of the Bank grew from3,595 last year to 4,293 at the end of FY 2010.

CAPITAL & RESERVES

During the year under review, the Bank raised capital in the form ofequity and debt to support future growth. It raised Tier I capital inthe form of equity capital through simultaneous offerings in the formof a follow-on Global Depositary Receipt (GDR) issue, a QualifiedInstitutional Placement (QIP) and a preferential allotment of equityshares to the promoters of the Bank. The Bank mobilised an aggregate ofRs. 3,816.14 crores through the three-way offering, of which the Bankraised US Dollars 95.56 million (equivalent to Rs. 459.43 crores)through allotment of 5,055,500 GDRs each representing one equity shareof the Bank at a price of US Dollars 18.90 per GDR. The Bank alsoraised Rs. 2,996.15 crores by issuing 33,044,500 equity shares througha QIP offering, which was priced along with the GDR at Rs. 906.70 pershare (equivalent to the price offered under the GDR offering). Inorder to maintain the percentage shareholding of the Banks promotersat the pre-GDR/QIP offering levels. Life Insurance Corporation of Indiaand New India Assurance Company Ltd. participated in a preferentialoffer by subscribing to 3,976,632 equity shares aggregating Rs. 360.56crores. The equity shares offered under the preferential allotment werealso priced at Rs. 906.70 per share (equivalent to price at which bothGDR and QIP was offered). Under its Employee Stock Option Plan, theBank allotted 4,092,369 equity shares to employees during the yearunder review. The Bank also raised Rs. 2,000 crores by way ofsubordinated bonds (unsecured redeemable non-convertible debentures)qualifying asTier II capital.

The Bank is thus well capitalized, with a capital adequacy ratio of15.80% at the end of the year, of which the Tier I capital adequacyratio was 11.18% against 9.26% a year earlier, while the Tier IICapital Adequacy Ratio was 4.62% against 4.43% in FY 2009. Thesemeasures have significantly strengthened the capital position of the

Page 416: company history of SBI, ICICI

Bank, particularly core Tier I capital, providing adequate support forits growth plans in future.

The paid up capital of the Bank as on 31st March 2010 rose to Rs.405.17 crores from Rs. 359.01 crores as on 31" March 2009. Theshareholding pattern of the Bank as of 31st March 2010 is stated below:

Sr. No. Name of Shareholders % of Paid Up Capital

i. Administrator of the Specified Undertaking of the Unit Trust of India (UTI-I) 24.00

ii. Life Insurance Corporation of India 10.27

iii. General Insurance Corporation and four PSU Insurance Companies 4.27

iv. Overseas Investors including Flls/OCBs/NRIs 33.68

v. Foreign Direct Investment (GDR issue) 8.37

vi. Other Indian Financial Institutions/ Mutual Funds/ Banks 7.07

vii. Others 12.34

Total 100.00

The Banks shares are listed on the NSE and the BSE. The GDRs issued bythe Bank are listed on the London Stock Exchange (LSE).

The Bonds issued by the Bank under the MTN programme are listed on theSingapore Stock Exchange. The listing fees relating to all stockexchanges for the current year have been paid. With effect from 26"March 2001, the shares of the Bank have been included and traded in theBSE Group A. Further, with effect from 27th March 2009, the Banksshares have been included and traded as part of the main NIFTY Index ofthe NSE. Earlier, the shares of the Bank were part of the NIFTYJuniorlndexof the NSE.

The Banks shares were voluntarily delisted from the Ahmedabad StockExchange with effect from 17th August 2009 as there was no trading ofthe Banks shares at this Stock Exchange and the only trading whichtook place for the last few years was that of a few shares in February2000.

DIVIDEND

The Banks diluted EPS for 2009-10 has risen to Rs. 64.31 from Rs.50.27 during 2008-09. In view of the overall performance of the Bank,future outlook and the objective of rewarding shareholders with cashdividends while retaining capital to maintain a healthy capitaladequacy ratio to support future growth, the Board of Directors has

Page 417: company history of SBI, ICICI

recommended a higher dividend of Rs. 12.00 per share on equity shares,compared to Rs. 10.00 per share declared for the last year. Thisincrease reflects our confidence in the Banks ability to consistentlygrow earnings over time.

BOARD OF DIRECTORS

During the year, some changes in the Board of Directors have takenplace. Dr. P.J. Nayak, former Chairman and CEO of the Bank retired witheffect from 20th April 2009. Shri A. T. Pannir Selvam, nominee Directorof the Specified Undertaking of the Unit Trust of India (SUUTI) passedaway on 21" April 2009. Shri Ramesh Ramanathan, Independent Directorresigned with effect from 14th July 2009. Five new Directors have beeninducted in the Board during the year. Smt. Shikha Sharma was appointedas Managing Director and CEO of the Bank with effect from 1" June 2009.RBI gave its approval for the appointment of Shri M. M. Agrawal, formerExecutive Director (Corporate Banking) of the Bank as Deputy ManagingDirector with effect from 10th February 2010. Shri V. R. Kaundinya,Managing Director, Advanta India Ltd. was appointed as an AdditionalIndependent Director with effect from 12th October 2009. Dr. AdarshKishore, former Finance Secretary, Government of India and formerExecutive Director, International Monetary Fund and nominee of theSpecified Undertaking of the Unit Trust of India (SUUTI) was appointedas an Additional Director with effect from 15th January 2010. RBI gaveits approval for the appointment of Dr. Adarsh Kishore as anon-executive Chairman of the Bank with effect from 8th March 2010.Shri S. B. Mathur, former Chairman of LIC and the National StockExchange of India was appointed as an Additional Independent Directorwith effect from 15th January 2010.

The Board of Directors places on record its appreciation and gratitudeto Dr. P.J. Nayak for the pivotal role played by him in shaping thestrategies of and building the Bank to its present pre-eminent positionin the banking sector. The Board of Directors also places on record itsappreciation and gratitude to Shri A. T. Pannir Selvam and Shri RameshRamanathan for the valuable services rendered by them during theirtenure as Directors of the Bank.

In accordance with the provisions of the Companies Act, 1956 and theArticles of Association of the Bank, Dr. R. H. Patil and Smt. RamaBijapurkar retire by rotation at the Sixteenth Annual General Meetingand, being eligible, offer themselves for re-appointment as Directorsof the Bank.

SUBSIDIARIES

The Bank has set up five wholly-owned subsidiaries: Axis Securities andSales Ltd., Axis Private Equity Ltd., Axis Trustee Services Ltd., AxisAsset Management Company Ltd. and Axis Mutual Fund Trustee Ltd.

Axis Securities and Sales Ltd. was set up in December 2005 (originallyincorporated as UBL Sales Ltd., renamed as Axis Sales Ltd. in 2007 andnow rechristened as Axis Securities and Sales Ltd. on 5th April 2010)to market credit cards and retail asset products. The objective ofsetting up the subsidiary was to build a specialised force of sales

Page 418: company history of SBI, ICICI

personnel and optimize operational efficiency by providing greatercontrol over the sales effort in comparison with a Direct Sales Agent(DSA) model. The scope of activities of the subsidiary has now beenenlarged to include retail broking. In October 2006, the Bank set upAxis Private Equity Ltd., primarily to carry on the activities ofmanaging equity investments and provide venture capital support tobusinesses. Axis Trustee Services Company Ltd. was established in May2008 to engage in trusteeship activities (e.g. acting as a debenturetrustee, the trustee to various securitisation trusts as well as othertrusteeship businesses). Axis Asset Management Company Ltd. was set upprimarily to carry on the activities of managing a mutual fund businessin January 2009 and in the same year, Axis Mutual Fund Trustee Ltd. wasset up, to act as the trustee for the mutual fund business.

In terms of an exemption received from the Ministry of CorporateAffairs, Government of India through its letter no. 47/39/2010-CL-llldated 25,h January 2010 under Section 212(8) of the Companies Act 1956,copies of the Directors Report, report of the auditors of the fivesubsidiaries [Axis Sales Ltd. (now renamed as Axis Securities and SalesLtd.), Axis Private Equity Ltd., Axis Trustee Services Ltd., Axis AssetManagement Company Ltd. and Axis Mutual Fund Trustee Ltd.] along withfinancial statements have not been attached to the accounts of the Bankfor the financial year ended 31st March 2010.

Any shareholder who is interested in obtaining a copy of these detailsmay write to the Company Secretary at the Registered Office of theBank. These documents will also be available for examination byshareholders of the Bank at its Registered Office and also at theregistered offices of the five subsidiary companies. In line with theAccounting Standard 21 (AS 21) issued by the Institute of CharteredAccountants of India, the consolidated financial results of the Bankalong with its subsidiaries for the year ended 31st March 2010 areenclosed as an Annexureto this report.

EMPLOYEE STOCK OPTION PLAN (ESOP)

To enable employees including whole-time Directors of the Bank toparticipate in the future growth and financial success of the Bank, theBank instituted in 2001 an Employee Stock Option Scheme under which35,770,000 options can be granted to employees. The employee stockoption scheme is in accordance with the Securities and Exchange Boardof India (Employee Stock Option and Employee

Stock Purchase Scheme) Guidelines, 1999. The eligibility and number ofoptions to be granted to an employee is determined on the basis of theemployees work performance and is approved by the Board of Directors.

The Banks shareholders approved plans in February 2001, June 2004,June 2006 and June 2008 for the issuance of stock options to employees.Under the first two plans and upto the grant made on 29th April 2004,the option conversion price was set at the average daily high-low priceof the Banks equity shares traded during the 52 weeks preceding thedate of grant at the Stock Exchange which has had the maximum tradingvolume of the Banks equity share during that period. Under the thirdplan and with effect from the grant made by the Bank on 10"June 2005,

Page 419: company history of SBI, ICICI

the pricing formula has been changed to the closing price on the dayprevious to the grant date. The Remuneration and Nomination Committeegranted options under these plans on nine occasions: 1,118,925 during2000-01, 1,779,700 during 2001-02, 2,774,450 during 2003-04, 3,809,830during 2004-05, 5,708,240 during 2005-06, 4,695,860 during 2006-07,6,729,340 during 2007-08, 2,677,355 during 2008-09 and 4,413,990 during2009-10. The options granted, which are non-transferable, vest at ratesof 30%, 30% and 40% on each of three successive anniversaries followingthe grant, subject to standard vesting conditions, and must beexercised within three years of the date of vesting. As of 31st March2010, 16,338,254 options had been exercised and 13,897,518 options werein force.

Other statutory disclosures as required by the revised SEBI guidelineson ESOPs are given in the Annexure to this report.

CORPORATE GOVERNANCE

The Bank is committed to achieving the highest standards of corporategovernance and it aspires to benchmark itself with international bestpractices in this regard. The corporate governance practices followedby the Bank are enclosed as an Annexure to this report.

The Bank has adopted a major part of the recommendations contained inthe Corporate Governance Voluntary Guidelines 2009 issued by theMinistry of Corporate Affairs and is examining the possibility ofimplementing the remaining recommendations.

DIRECTORS RESPONSIBILITY STATEMENT

The Board of Directors hereby declares and confirms that:

i. The applicable accounting standards have been followed in thepreparation of the annual accounts and proper explanations have beenfurnished, relating to material departures.

ii. Accounting policies have been selected, and applied consistentlyand reasonably, and prudent judgements and estimates have been made soas to give a true and fair view of the state of affairs of the Bank andof the Profits Loss of the Bank for the financial year ended 31s March2010.

iii. Proper and sufficient care has been taken for the maintenance ofadequate accounting records, in accordance with the provisions of theCompanies (Amendment) Act, 2000, for safeguarding the assets of theBank and for preventing and detecting fraud and other irregularities.

iv. The annual accounts have been prepared on a going concern basis.

v. The Bank has in place a system to ensure compliance of all lawsapplicable to the Bank.

STATUTORY DISCLOSURE

Page 420: company history of SBI, ICICI

Considering the nature of activities of the Bank, the provisions ofSection 217(1 )(e) of the Companies Act, 1956 relating to conservationof energy and technology absorption do not apply to the Bank. The Bankis, however, constantly pursuing its goal of technological upgradationin a cost-effective mannerfordelivering quality customer service.

The statement containing particulars of employees as required underSection 217(2A) of the Companies Act, 1956 and the rules thereunder, isgiven in an Annexure appended hereto and forms part of this report. Interms of Section 219(1) (iv) of the Act, the Report and Accounts arebeing sent to the shareholders excluding the aforesaid Annexure. Anyshareholder interested in obtaining a copy of the Annexure may write tothe Company Secretary at the Registered Office of the Bank.

AUDITORS

M/s S. R. Batliboi & Co., Chartered Accountants, had been appointed bythe shareholders at the fifteenth Annual General Meeting as StatutoryAuditors of the Bank for the year 2009-10 and will be retiring at theconclusion of the forthcoming Annual General Meeting. M/s S. R.Batliboi & Co. have been the Statutory Auditors of the Bank since 2006.As per the regulations of Reserve Bank of India, the same auditorscannot be re-appointed for a period beyond 4 years. It is, accordingly,proposed to appoint M/s Deloitte Haskins & Sells, CharteredAccountants, as the Banks new Statutory Auditors subject to theapproval by the shareholders. The Board of Directors place on recordtheir appreciation of the professional services rendered by IWs S. R.Batliboi & Co., as the Statutory Auditors of the Bank.

ACKNOWLEDGEMENTS

The Board of Directors places on record its gratitude to the ReserveBank of India, other government and regulatory authorities, financialinstitutions and correspondent banks for their strong support andguidance. The Board acknowledges the support of the shareholders andalso places on record its sincere thanks to its valued clients andcustomers for their continued patronage. The Board also expresses itsdeep sense of appreciation to all employees of the Bank for theirstrong work ethic, excellent performance, professionalism, team work,commitment, and initiative which has led to the Bank making commendableprogress in todays challenging environment.

For and on behalf of the Board of Directors

Place: Mumbai Adarsh Kishore

Date : April 20,2010 Chairman

Director ReportMar2008   Mar 2009 Mar2010

The Board of Directors has pleasure in presenting the Fifteenth Annual Report of your Bank together with the Audited Statement of Accounts, Auditors Report and the report on business and operations of the Bank for the financial year ended 31st March 2009.

Page 421: company history of SBI, ICICI

FINANCIAL PERFORMANCE

The Bank has delivered a strong performance in 2008-09 in the backdropof widespread turbulence in the global financial markets as well as aslowdown of economic growth in India. The Banks strategy of buildingcustomer franchises and tapping into the opportunities within thosefranchises for growing its business continues to deliver strongresults. Financial highlights for the year under review are presentedbelow:

(Rs. in crores)

PARTICULARS 2008-09 2007-08 Growth

Deposits 1,17,374.11 87,626.22 33.95%Out of which

- Savings Bank Deposits 25,822.12 19,982.41 29.22%-Current Account Deposits 24,821.61 20,044.58 23.83%Advances 81,556.77 59,661.14 36.70%Out of which- Retail Assets 16,051.78 13,591.68 18.10%- Non-retail Advances 65,504.99 46,069.46 42.19%Total Assets/Liabilities 1,47,722.05 1,09,577.85 34.81%Net Interest Income 3,686.21 2,585.35 42.58%Other Income 2,896.88 1,795.49 61.34%Out of which- Trading Profit (1) 373.86 253.59 47.43%- Fee & other income 2,523.02 1,541.90 63.63%Operating Expenses excl. depreciation 2,669.55 1,996.81 33.69%Profit before depreciation, provisions and tax 3,913.54 2,384.03 64.16%Depreciation 188.66 158.11 19.32%Provision for Tax 969.84 575.25 68.59%Other Provisions & Write offs 939.68 579.64 62.11%Net Profit1, 815.36 1,071.03 69.50%Appropriations:Transfer to Statutory Reserve 453.84 267.76 69.50%Transfer to Investment Reserve 0.06 - -Transfer to Capital Reserve 146.72 26.84 446.65%Proposed Dividend 420.52 251.64 67.11%Surplus carried over to Balance Sheet 794.22 524.79 51.34%(1) Excluding Merchant Exchange Profit

KEY PERFORMANCE INDICATORS 2008-09 2007-08

Interest Income as a percentage of working funds 8.59% 8.08%Non-Interest Income as a percentage of working funds 2.30% 2.07%Net Interest Margin 3.33% 3.47%Return on Average Net Worth 19.93% 16.09%Operating Profit as a percentage of

Page 422: company history of SBI, ICICI

working funds 2.95% 2.57%Return on Average Assets 1.44% 1.24%Profit per employee Rs.10.02 lacs Rs.8.39 lacsBusiness (Deposits less inter bank deposits + Advances) per employee Rs.10.60 crores Rs.11.17 croresNet Non performing assets as a percentage of net customer assets 0.35% 0.36%

- Working funds represent average total assets.

- Productivity ratios are based on average number of employees for theyear.

- Customer Assets include advances, credit substitutes and unamortizedcost of assets leased out.

Previous year figures have been regrouped wherever necessary.

The Bank continues to record an impressive year-on-year performance,earning a net profit of Rs. 1,815.36 crores for the financial year2008-09 against Rs. 1,071.03 crores in the previous year. The YoYgrowth of 69.50% in net profit was mainly due to an increase in netinterest income by 42.58% and non-interest income by 61.34%, partlyoffset by a lower increase in operating expenses of 33.69%.

The overall performance in 2008-09 was supported well by a healthy risein core income streams such as net interest income and fee income.During the year, the total income of the Bank increased by 56.04% toRs. 13,732.36 crores from Rs. 8,800.80 crores in the previous year,largely driven by substantial increase in both net interest income(NIl) and in fee and other income. NIl

grew by 42.58% to Rs. 3,686.21 crores from Rs. 2,585.35 crores in theprevious year, while fee and other income increased by 61.34% to Rs.2,896.88 crores from Rs. 1,795.49 crores in the previous year. Thegrowth of NIl may be attributed to an expansion in the balance sheetsize, with average earning assets in the year increasing by 48.37% (Rs.74,589 crores in 2007-08 to Rs. 1,10,664 crores in 2008-09). Althoughthis gain in NIl was partly offset by the hardening of interest rates,particularly in the second half of the financial year, the growth ofdemand deposits (which on a daily average basis increased by 33.81 % toRs. 34,141 crores from Rs. 25,515 crores in the previous year) helpedthe Bank contain the cost of funds. Overall, the daily average cost offunds in the year rose to 6.50% from 6.02% in the previous year,primarily due to a steep rise of interest rates on term deposits in thethird quarter when liquidity concerns were at a peak.

During 2008-09, the yield on earning assets increased by 37 basispoints to 9.73% from 9.36% which, however, was offset by an increase incost of funds by 48 basis points. During 2008-09, the net interestmargin (NIM) declined by 14 basis points to 3.33% from 3.47% in theprevious year. On a quarter-on-quarter basis, the NIM was 3.35%, 3.51%,3.12% and 3.37% in Q1, Q2, Q3 and Q4 respectively.

Other income, comprising fees, trading profits and miscellaneous income

Page 423: company history of SBI, ICICI

also showed impressive growth, increasing by 61.34% to Rs. 2,896.88crores in 2008-09 from Rs. 1,795.49 crores in the previous year. Feeincome is a significant part of the earnings of the Bank and isgenerated through a diverse set of businesses in the Bank. The mainconstituents of fee income are service charges for account maintenance,inter-change fees on ATM-sharing arrangements, fees on distribution ofthird-party personal investment products, fee income from cashmanagement services, syndication and placement fees and fees earned onthe processing of loans and on non-fund based business. Fee andmiscellaneous income (including exchange profit earned on client-basedmerchant foreign exchange business) rose by 63.63% to Rs. 2,523.02crores from Rs. 1,541.90 crores in the previous year. Of this, exchangeprofit earned on merchant foreign exchange business has increased by57.38% to Rs. 274.08 crores from Rs. 174.15 crores in the previousyear. During the same period, proprietary trading profits increased by47.43% to Rs. 373.86 crores from Rs. 253.59 crores in the previousyear.

During the year, the operating revenue of the Bank increased by 50.27%to Rs. 6,583.09 crores from Rs. 4,380.84 crores in the previous year.The core income streams (Nil, fee and miscellaneous income) constituted94.32% of the operating revenue of the Bank, reflecting the stabilityas also the sustainability of the Banks earnings. The operatingexpenses (including depreciation) increased by 32.64% to Rs. 2,858.21crores from Rs. 2,154.92 crores in the previous year, which reflectedthe growth of the Banks network and other infrastructure required forsupporting existing and new businesses. During the year, there was animprovement in operational efficiency, evident from a decline in thecost: income ratio to 43.42% from 49.19% in the previous year.

In 2008-09, the operating profit of the Bank increased by 67.34% to Rs.3,724.88 crores from Rs. 2,225.92 crores in the previous year. Duringthe period, the Bank has created total provisions (excluding provisionsfor tax) of Rs. 939.68 crores against Rs. 579.64 crores in the previousyear. The Bank has provided Rs. 732.21 crores towards non-performingassets against Rs. 322.69 crores in the previous year, while theprovision for standard assets was Rs. 105.50 crores against Rs. 153.46crores in the previous year. The Bank has also provided Rs. 65.46crores towards restructuring of assets. The Bank continued to maintainthe generally high quality of its assets and net NPAs, as thepercentage of net customer assets declined from the previous year levelof 0.36% to 0.35% in 2008-09.

There has been an all-round improvement on various financial parametersand ratios during the year. Basic earning per share has increased by57.42% to Rs. 50.61 per share from Rs. 32.15 per share in the previousyear, Diluted earnings per share (EPS) was Rs. 50.27 per share, up60.56% from Rs. 31.31 per share in the previous year. Return on Equity(ROE) has improved to 19.93% from 16.09% in the previous year. BookValue per share has improved by 16.06% to Rs. 284.50 from Rs. 245.14 inthe previous year. Return on Average Assets improved to 1.44% from1.24% in the previous year.

The Bank has also reported a robust growth of key balance sheetparameters for the year ended 31st March 2009. The Banks total balancesheet size increased by 34.81 % to Rs. 1,47,722.05 crores from Rs.

Page 424: company history of SBI, ICICI

1,09,577.85 crores in the previous year. As on 31st March 2009, totaldeposits overtook the Rs. 1 lac-crore mark and stood at Rs. 1,17,374.11crores against Rs. 87,626.22 crores, a growth of 33.95%. Demanddeposits (savings bank and current accounts) increased by 26.52% to Rs.50,643.73 crores from Rs. 40,026.99 crores in the previous year,constituting 43.15% of total deposits as on 31st March 2009. Savingsbank account deposits grew by 29.22% to Rs. 25,822.12 crores, whilecurrent account deposits grew by 23.83% to Rs. 24,821.61 crores.During the year, total advances of the Bank grew by 36.70% to Rs.81,556.77 crores from Rs. 59,661.14 crores in the previous year. Ofthis, corporate advances (comprising large and mid-corporates)increased by 41.98% to Rs. 41,210.90 crores. During the same period,advances to SMEs (including microfinance) increased by 39.35% to Rs.16,076.70 crores, while agricultural lending increased by 49.23% to Rs.8,217.39 crores. Retail loans grew 18.10% to Rs. 16,051.78 crores. TheBanks total investments increased by 37.46% to Rs. 46,330.35 croreswith investments in government and approved securities, held to meetthe Banks SLR requirement, increasing by 37.41 % to Rs. 27,727.24crores as a result of the increase in total deposits. Otherinvestments, including corporate debt securities, increased by 37.53%to Rs. 18,603.11 crores. As on 31st March 2009, the total assets ofthe Banks overseas branches stood at Rs. 11,675 crores, constituting7.90% of the Banks total assets.

As part of its strategy of building the organic growth engine, the Bankcontinued to enlarge its geographical coverage of centres withpotential for growth, including district headquarters and other Tier IIcities and towns across the country. This has helped the Bankparticularly in the acquisition of low cost retail deposits, retailassets, lending to agriculture, SME and mid-corporates as also the saleof third-party products. During the year, 176 new branches were addedto the Banks network (including 12 extension counters that have beenupgraded to branches), taking the total number of branches and ECs to835 as on 31.3.2009 (against 671 branches and ECs in the previousyear). Of the 827 branches, 230 branches are in semi-urban and ruralareas. With the opening of these offices, the geographical reach of theBank now extends to 30 States and 4 Union Territories covering 515centres. During 2008- 09, the Bank opened 831 ATMs, thereby taking theATM network of the Bank from 2,764 to 3,595. The Bank has also openeda Representative Office in Dubai during the year. This was in additionto the existing branches at Singapore, Hong Kong and DIFC (DubaiInternational Finance Centre). The opening of overseas offices providesopportunities to the Bank to finance cross-border trade andmanufacturing activities in addition to the ability to sourceremittances and other businesses from the NRI community.

CAPITAL & RESERVES

The business expansion plans of the Bank need to be backed by adequatecapital. During the year under review, the Bank has raised capital ofRs. 1,700 crores by way of subordinated bonds (unsecured redeemablenon-convertible debentures) qualifying as Tier II capital. The raisingof this non-equity capital has helped the Bank continue its growthstrategy and has strengthened its capital adequacy ratio. The Bank iswell capitalized with the capital adequacy ratio as at the end of theyear at 13.69%, substantially above the benchmark requirement of 9%

Page 425: company history of SBI, ICICI

stipulated by Reserve Bank of India. Of this Tier I Capital amounted to9.26%, as against 10.17% last year, while Tier II Capital was at 4.43%.

During the year under review, 12,95,449 equity shares were allotted toemployees of the Bank pursuant to the exercise of options under itsEmployee Stock Option Plan. The paid up capital of the Bank as on 31stMarch 2009 thereby rose to Rs. 359.01 crores from Rs. 357.71 crores ason 31st March 2008. The shareholding pattern of the Bank as of 31stMarch 2009 was as under:

Sr. No. Name of Shareholders % of Paid Up Capital

i. Administrator of the Specified Undertaking of the Unit Trust of India (UTI-I) 27.08

ii. Life Insurance Corporation of India 10.36

iii.General Insurance Corporation and four PSU Insurance Companies 4.96

iv. Overseas Investors including Flls/OCBs/NRIs 25.12

v. Foreign Direct Investment (GDR issue) 7.76

vi. Other Indian Financial Institutions/ Mutual Funds/ Banks 11.26

vii.Others 13.46

Total 100.00

The Banks shares are listed on the NSE, the BSE and the AhmedabadStock Exchange. The GDRs issued by the Bank are listed on the LondonStock Exchange (LSE). The Bonds issued by the Bank under the MTNprogramme are listed on the Singapore Stock Exchange. The listing feesrelating to all stock exchanges for the current year have been paid.With effect from 26th March 2001, the shares of the Bank have beenincluded and traded in the BSE Group A. Further, with effect from27th March 2009, the Banks shares have been included and traded aspart of the main NIFTY Index of the NSE. Earlier, the shares of theBank were part of the NIFTY Junior Index of the NSE.

DIVIDEND

The diluted Earning per Share (EPS) for 2008-09 has risen to Rs. 50.27from Rs. 31.31 last year. In view of the overall performance of theBank and the objective of rewarding shareholders with cash dividendswhile retaining capital to maintain a healthy capital adequacy ratio tosupport future growth, the Board of Directors has recommended a higherdividend of Rs. 10.00 per share on equity shares, compared to Rs. 6.00per share declared for 2007-08. This increase reflects our confidencein the Banks ability to consistently grow earnings overtime.

BOARD OF DIRECTORS

Page 426: company history of SBI, ICICI

During the year, some changes in the Board of Directors have takenplace. The term of office of Shri Surendra Singh, Independent Director,who served on the Board for eight years, the maximum period allowedunder the Banking Regulation Act, ended on 27th April 2008. The Boardof Directors places on record its appreciation and gratitude to ShriSurendra Singh for the valuable services rendered by him during histenure as Director of the Bank.

In accordance with the provisions of the Companies Act, 1956 and theArticles of Association of the Bank, Shri M. V. Subbiah and Shri RameshRamanathan retire by rotation at the Fifteenth Annual General Meetingand, being eligible, offer themselves for re- appointment as Directorsof the Bank.

SUBSIDIARIES

The Bank has set up five wholly-owned subsidiaries. Axis Sales Limited,Axis Private Equity Limited, Axis Trustee Services Limited, Axis AssetManagement Company Limited and Axis Mutual Fund Trustee Limited.

Axis Sales Limited has been set up for marketing credit cards andretail asset products. The objective of this subsidiary is to build aspecialised force of sales personnel, optimize operational efficiencyand productivity and thereby reduce costs. The sales subsidiary alsoseeks to provide greater control and monitoring of the sales effortvis-a-vis the Direct Sales Agent model. The second subsidiary of theBank, Axis Private Equity Limited, has been formed primarily to carryon the activities of managing equity investments and providing venturecapital support to businesses.

During the year, the Bank has set-up three more subsidiaries viz. AxisTrustee Services Limited, Axis Asset Management Company Limited andAxis Mutual Fund Trustee Limited. The objective of Axis TrusteeServices Limited is to carry on trusteeship activities such asdebenture trustee, trustee to various securitization trusts and othertrusteeship business. Another subsidiary, Axis Asset Management CompanyLimited has been formed primarily to carry on the activities ofmanaging a mutual fund business. Axis Mutual Fund Trustee Limited hasbeen formed to act as the trustee for the mutual fund business.

In terms of an exemption received from the Ministry of CorporateAffairs, Government of India through its letter no. 47/126/2009-CL- IIIdated 27th March 2009 under Section 212(8) of the Companies Act 1956,copies of the Directors Report, report of the auditors of the threesubsidiaries (Axis Sales Limited, Axis Private Equity Limited and AxisTrustee Services Limited) along with financial statements have not beenattached to the accounts of the Bank for the financial year ended 31stMarch 2009. In the case of two subsidiaries viz. Axis Asset ManagementCompany Limited and Axis Mutual Fund Trustee Limited, the first auditedfinancial results will be prepared as on 31st March 2010.

Any shareholder who may be interested in obtaining a copy of thesedetails may write to the Company Secretary at the Registered Office ofthe Bank. These documents will also be available for examination by

Page 427: company history of SBI, ICICI

shareholders of the Bank at its Registered Office and also at theregistered offices of the three subsidiaries. In line with theAccounting Standard 21 (AS 21) issued by the Institute of CharteredAccountants of India, the consolidated financial results of the Bankalong with its subsidiaries for the year ended 31st March 2009 areenclosed as an Annexure to this report.

EMPLOYEE STOCK OPTION PLAN (ESOP)

The Bank has instituted an Employee Stock Option Scheme to enable itsemployees, including whole-time Directors, to participate in the futuregrowth and financial success of the Bank. Under the Scheme 3,57,70,000options can be granted to employees. The employee stock option schemeis in accordance with the Securities and Exchange Board of India(Employee Stock Option and Employee Stock Purchase Scheme) Guidelines,1999. The eligibility and number of options to be granted to anemployee is determined on the basis of the employees work performanceand is approved by the Board of Directors.

The Banks shareholders approved plans in February 2001, June 2004,June 2006 and June 2008 for the issuance of stock options to employees.Under the first two plans and upto the grant made on 29th April 2004,the option conversion price was set at the average daily high-low priceof the Banks equity shares traded during the 52 weeks preceding thedate of grant at the Stock Exchange which has had the maximum tradingvolume of the Banks equity shares during that period (presently theNSE). Under the third plan and with effect from the grant made by theCompany on 10th June 2005, the pricing formula has been changed to theclosing price on the day previous to the grant date. The Remunerationand Nomination Committee granted options under these plans on eightoccasions, 11,18,925 during 2000-01, 17,79,700 during 2001-02,27,74,450 during 2003-04, 38,09,830 during 2004-05, 57,08,240 during2005-06, 46,95,860 during 2006-07, 67,29,340 during 2007-08 and26,77,355 during 2008-09. The options granted, which arenon-transferable, vest at the rate of 30%, 30% and 40% on each of threesuccessive anniversaries following the granting, subject to standardvesting conditions, and must be exercised within three years of thedate of vesting. As of 31st March 2009, 1,22,45,885 options had beenexercised and 1,38,52,974 options were in force.

Other statutory disclosures as required by the revised SEBI guidelineson ESOPs are given in the Annexure to this report.

CORPORATE GOVERNANCE

The Bank is committed to achieving a high standard of corporategovernance and it aspires to benchmark itself with international bestpractices. The corporate governance practices followed by the Bank areenclosed as an Annexure to this report.

DIRECTORS RESPONSIBILITY STATEMENT

The Board of Directors hereby declares and confirms that:

i. The applicable accounting standards have been followed in the

Page 428: company history of SBI, ICICI

preparation of the annual accounts and proper explanations have beenfurnished, relating to material departures.

ii. Accounting policies have been selected, and applied consistentlyand reasonably, and prudent judgements and estimates have been made soas to give a true and fair view of the state of affairs of the Bank andof the Profits Loss of the Bank for the financial year ended 31st March2009.

iii. Proper and sufficient care has been taken for the maintenance ofadequate accounting records, in accordance with the provisions of theCompanies (Amendment) Act, 2000, for safeguarding the assets of theBank and for preventing and detecting fraud and other irregularities.

iv. The annual accounts have been prepared on a going concern basis.

STATUTORY DISCLOSURE

Considering the nature of activities of the Bank, the provisions ofSection 217(1)(e) of the Companies Act, 1956 relating to conservationof energy and technology absorption do not apply to the Bank. The Bankhas, however, used information technology extensively in itsoperations.

The statement containing particulars of employees as required underSection 217(2A) of the Companies Act, 1956 and the rules madethereunder, is given in an Annexure appended hereto and forms part ofthis report. In terms of Section 219(1) (iv) of the Act, the Report andAccounts are being sent to the shareholders excluding the aforesaidAnnexure. Any shareholder interested in obtaining a copy of theAnnexure may write to the Company Secretary at the Registered Office ofthe Bank.

AUDITORS

M/s S. R. Batliboi & Co., Chartered Accountants, Statutory Auditors ofthe Bank since 2006, retire on the conclusion of the Fifteenth AnnualGeneral Meeting and are eligible for re-appointment, subject to theapproval of Reserve Bank of India, and of the shareholders. Asrecommended by the Audit Committee, the Board has proposed theappointment of M/s S.R. Batliboi & Co., Chartered Accountants asStatutory Auditors for the financial year 2009-10. The shareholders arerequested to consider their appointment.

ACKNOWLEDGEMENTS

The Board of Directors places on record its gratitude to the ReserveBank of India, other government and regulatory authorities, financialinstitutions and correspondent banks for their strong support andguidance. The Board acknowledges the support of the shareholders andalso places on record its sincere thanks to its valued clients andcustomers for their continued patronage. The Board also expresses itsdeep sense of appreciation to all employees of the Bank for theirstrong work ethic, excellent performance, professionalism, team work,

Page 429: company history of SBI, ICICI

commitment and initiative which has led to the Bank making commendableprogress in todays challenging environment.

For and on behalf of the Board of Directors

Place: Mumbai P. J. NayakDate : April 20, 2009 Chairman & Chief Executive Officer

Director ReportMar2007   Mar 2008 Mar2009

The Board of Directors has pleasure in presenting the Fourteenth Annual Report of your Bank together with the Audited Statement of Accounts, Auditors Report and the report on business and operations of the Bank for the financial year ended 31st March 2008.The financial year 2007-08 will be remembered as a year oftransformation in the history of the Bank, when the name of the Bankchanged to Axis Bank from UTI Bank. The conviction that it wasworthwhile to invest in building a brand that would solely be our own,helped to create a distinct identity. The name Axis Bank connotessolidity and transcends geographical boundaries as we seek to become amultinational bank. The Bank was successful in establishing a newidentity in the market in a short span of time.

FINANCIAL PERFORMANCE

The Bank once again met with considerable success over the past yearand achieved all its key objectives. This encouraging performance notonly underscored the sustainability of the Banks high tempo of growth,but also helped to move closer to its objective of being one of themore customer-focused banks in the country. This is reflected in therobust growth in both business and revenue during 2007-08 and invarious financial parameters. The financial highlights for the yearunder review are presented below:

(Rs. in crores)PARTICULARS 2007-08 2006-07 Growth

Deposits 87,626.22 58,785.60 49.06%Out of whichSavings Bank Deposits 19,982.41 12,125.88 64.79%Current Account Deposits 20,044.58 11,304.31 77.32%Advances 59,661.14 36,876.48 61.79%Out of whichRetail Assets 13,591.68 8,927.54 52.24%Non-retail Advances 46,069.46 27,948.94 64.83%Total Assets/Liabilities 1,09,577.85 73,257.22 49.58%Net Interest Income 2,585.35 1,468.33 76.07%Other Income 1,795.49 1,010.11 77.75%Out of whichTrading Profit 427.74 185.72 130.31%

Page 430: company history of SBI, ICICI

Fee & other income 1,367.75 824.39 65.91%Operating Expenses excl.depreciation 1,996.81 1,102.73 81.08%Profit before depreciation, provisions and tax 2,384.03 1,375.71 73.29%Depreciation 158.11 111.86 41.35%Provision for Tax 575.25 337.21 70.59%Other Provisions & Write offs 579.64 267.61 116.60%Net Profit 1,071.03 659.03 62.52%Appropriations:Transfer to Statutory Reserve 267.76 164.76 62.52%Transfer to Capital Reserve 26.84 15.64 71.61%Proposed Dividend 251.64 148.79 69.12%Surplus carried over toBalance Sheet 524.79 329.84 59.10%

KEY PERFORMANCE INDICATORS 2007-08 200607

Interest Income as a percentage of working funds* 8.08% 7.42%

Non-Interest Income as a percentage of working funds 2.07% 1.68%

Net Interest Margin 3.47% 2.74%

Return on Average Net Worth 16.09% 21.84%

Operating Profit as a percentage of working funds 2.57% 2.10%

Return on Average Assets 1.24% 1.10%

Profit per employee** Rs. 8.39 lacs 7.59 lacs

Business (Deposits less inter bank deposits + Advances) per employee** Rs.11.17crores 10.24 crores

Net Non performing assets as a percentage of net customer assets*** 0.36% 0.61%

- Working funds represent average total assets.

- Productivity ratios are based on average number of employees.

- Customer Assets include advances, credit substitutes and unamortisedcost of assets leased out.

Previous year figures have been regrouped wherever necessary.

During 2007-08, the Banks business and earnings continued to show highgrowth, indicative of a clear strategic focus, the communication ofcorporate priorities to branches across the country, and finally the

Page 431: company history of SBI, ICICI

execution of these goals through intensive efforts. The Bank reported anet profit of Rs. 1,071.03 crores during the year ended 31st March2008, up 62.52%, from Rs. 659.03 crores in the previous year. Dilutedearnings per share (EPS) were Rs. 31.31 per share, up 37.38% from Rs.22.79 per share a year earlier. Return on Equity (ROE) was 16.09%compared to 21.84% a year earlier. The decline in ROE was primarily onaccount of the raising of fresh equity capital during the financialyear. Return on Average Assets was 1.24%, compared to 1.10% in theprevious year.

In 2007-08, the Bank achieved a total income of Rs. 8,800.80 crores, up60.84% from 2006-07. During this period, operating revenue was Rs.4,380.84 crores, up 76.76% from the previous year, while operatingprofit was up by 76.12% to reach Rs. 2,225.92 crores. The strong growthin income was largely driven by a strong increase in both net interestincome by 76.07% to Rs. 2,585.35 crores, and fee and other income by77.75% to Rs. 1,795.49 crores. The strong income growth reflects thesolid business growth across all banking segments and the successfulexecution of growth initiatives. The strong growth in incomes waspartly offset by an increase in operating expenses, includingdepreciation, by 77.42% to Rs. 2,154.92 crores. The increase inoperating expenses primarily reflects the higher costs incurred as aresult of increased business levels that include additional sales andservice personnel and higher variable compensation. Additional expensesincurred to support the growth initiatives of the Bank (includingnetwork expansion as well as the re-branding exercise) also contributedto the increase in operating expenses.

In 2007-08, net interest income increased by 76.07% to Rs. 2,585.35crores from Rs. 1,468.33 crores in the previous year. This increase waslargely due to a strong asset side growth, as also the robust growth inlow-cost demand deposits (current and savings bank deposits). On adaily average basis, total earning assets in 2007-08 increased by39.18% to Rs. 74,589 crores from Rs. 53,591 crores a year ago. This waspartially offset by a rise in funding costs due to the hardening ofrates on term deposits during the year. However, the steady growth indemand deposits, which on a daily average basis increased by 57% to Rs.25,515 crores from Rs. 16,252 crores a year ago, helped contain thefunding costs. Nevertheless, the average cost of funds in 2007-08increased to 6.02% from 5.60% a year earlier. In 2007-08, the cost ofdeposits increased to 5.91% from 5.38% a year earlier, primarily theresult of an increase in the cost of term deposits by 146 basis points.

During the year, the yield on earning assets increased by 106 basispoints to 9.36% from 8.30% a year earlier, reflecting the impact ofchanges in the product-mix in advances, together with an improvement inthe yield on investments. The Bank was able to absorb the downwardpressure on the yield on advances in the last quarter of the financialyear, and the consequent compression of margins, through concertedefforts in shoring up low-cost demand deposits. In 2007-08, the netinterest margin increased to 3.47% from 2.74% a year earlier. On aquarter-to-quarter basis, net interest margin in the year rose from2.56% in Q1, to 3.28% in Q2, to 3.91 % in Q3 and 3.93% inQ4,highlighting the quality of earnings.

Other income, comprising trading profits, fee and miscellaneous income,

Page 432: company history of SBI, ICICI

also increased strongly by 77.75% to Rs. 1,795.49 crores in 2007-08from Rs. 1,010.11 crores in 2006-07. Fee and miscellaneous income roseby 65.91% to Rs. 1,367.75 crores from Rs. 824.39 crores a year earlier.Fee income has a significant share in the earnings of the Bank and itsmain contributors are service charges for account maintenance,inter-change fees, third-party distribution fees, transaction bankingincluding cash management services, syndication and placement fees andfees earned on the processing of loans. Trading profit increased by130.31 % to Rs. 427.74 crores from Rs. 185.72 crores a year earlier. Asignificant portion of growth in trading profit was client- driven,with particularly high growth in profit earned on merchant

foreign exchange business. In 2007-08, profit on foreign exchangetransactions increased by 66.18% to Rs. 207.48 crores from Rs. 124.85crores. Another contributor to the growth of trading profit was profitfrom investment in equity shares - a result primarily of the buoyancyin the capital markets.

In 2007-08, the operating revenue of the Bank increased by 76.76% toRs. 4,380.84 crores from Rs. 2,478.44 crores in 2006-07. Net interestincome together with fee and other income (excluding trading profit)constituted 90.24% of operating revenue, reflecting the robust coreearning streams of the Bank.

Operating expenses increased by 77.42% to Rs. 2,154.92 crores from Rs.1,214.59 crores in 2006-07. Expenses grew mainly due to the increase insales and service staff levels, higher performance related pay, anaggressive growth of the Banks retail network and the re-brandingexercise undertaken by the Bank. Employees costs increased by 75.76%to Rs. 670.25 crores from Rs. 381.35 crores last year, constituting31.10% of the operating expenses, largely prompted by the increase inthe number of employees from 9,980 on 31st March 2007 to 14,739 on 31stMarch 2008. During the year, the cost: income ratio was 49.19% against49.01% last year.

Operating profit of the Bank in 2007-08 increased by 76.12% to Rs.2,225.92 crores from Rs. 1,263.85 crores a year earlier. Further, thebook value per share increased from Rs. 120.50 as on 31" March 2007 toRs. 245.14 as on 31st March 2008. The business per employee improved toRs. 11.17 crores from Rs. 10.24 crores a year ago. Profit per employeehas also improved from Rs. 7.59 lacs in 2006-07 to Rs. 8.39 lacs in2007-08. In 2007-08, the Bank has created total provisions (excludingprovisions for tax) of Rs. 579.64 crores compared to Rs. 267.61 croresa year ago. The Bank has created provisions for loan assets of Rs.344.01 crores compared to Rs. 73.73 crores a year ago, while provisionfor standard assets was Rs. 153.46 crores compared to Rs.122.35 croresa year ago. The Bank continued to improve its asset quality, as aresult of which net NPAs, as a percentage of net customer assets,declined from 0.61 % as on 31" March 2007 to 0.36% as on 31" March2008. The Bank has also shown substantial growth in several key balancesheet parameters for the year ended 31st March 2008. The total balancesheet size increased by 49.58% to Rs. 1,09,577.85 crores as on 31stMarch 2008 from Rs. 73,257.22 crores as on 31st March 2007. Totaldeposits have increased by 49.06% from Rs. 58,785.60 crores as on 31stMarch 2007 to Rs. 87,626.22 crores as on 31st March 2008. Demanddeposits (savings bank and current accounts) increased by 70.84% to Rs.

Page 433: company history of SBI, ICICI

40,026.99 crores on 31st March 2008. Savings bank account deposits haveincreased by 64.79% to Rs. 19,982.41 crores, while current accountdeposits grew by 77.32% to Rs. 20,044.58 crores. Demand depositsconstituted 45.68% of total deposits on 31st March 2008 compared to39.86% last year. On a daily average basis, the total deposits in2007-08 increased by 37.35% to Rs. 63,341 crores, in which demanddeposits increased by 57.00% to Rs. 25,514 crores. As a result, thepercentage share of demand deposits on a daily average basis increasedto 40.28% in 2007-08. The total advances of the Bank as on 31" March2008 increased by 61.79% to Rs. 59,661.14 crores. Of this, corporateadvances (comprising large and mid- corporates) increased by 68.32% toRs. 29,025.84 crores. During the same period, advances to SMEsincreased by 73.98% to Rs. 11,536.92 crores, while agriculturallending increased by 35.17% to Rs. 5,506.70 crores. Retail loansincreased by 52.24% to Rs. 13,591.68 crores. The Banks totalinvestments increased by 25.31% to Rs. 33,705.10 crores. Theinvestments in government and approved securities held to meet theBanks SLR requirement increased by 22.81 % to Rs. 20,178.84 crores asa result of the increase in total deposits. Other investments,including corporate debt securities, increased by 29.24% to Rs.13,526.26 crores. The total assets of the Banks overseas branches ason 31" March 2008 increased by 110% to Rs. 6,672 crores, constituting6.09% of the Banks total assets.

As a conscious strategy of building an organic growth engine during theyear, the Bank continued to expand its distribution network, in bothdomestic and overseas geographies, to enlarge its reach and accelerateits business momentum. The Bank has developed a branch network which isbuilt on customer-convenience and service, helping it particularly inthe acquisition of low-cost retail deposits, retail assets, lending toagriculture, SME and mid-corporates and facilitating the cross-sellingof third-party products.

During 2007-08,143 new branches were added to the Banks network,taking the number of branches to 651. This includes 33 extensioncounters that have been upgraded to branches. As on 31st March 2008,the Bank had a network of 651 branches and 20 extension counters asagainst 508 branches and 53 extension counters a year earlier. Out ofthe 651 branches, 158 branches are in semi-urban and rural areas. Withthe opening of these offices, the geographical reach of the Bankextends to 29 States and 3 Union Territories covering 405 centres.During the year, the Bank set up 423 ATMs, thereby taking the ATMnetwork of the Bank from 2,341 to 2,764, enabling it to retain itsstatus of being the third largest ATM network provider among all banksin the country. During the year, the Bank also expanded overseas withthe opening of a branch at the Dubai International Finance Centre(DIFC). This was in addition to the existing branches at Singapore andHong Kong and the representative Office in Shanghai. The Bank has alsoreceived the authorization of the Central Bank of the UAE to establisha Representative Office in Dubai. The opening of these overseas officeswill provide significant opportunities to the Bank to financecross-border trade and manufacturing activities in addition to theability to source remittances and other businesses from the NRIcommunity.

CAPITAL & RESERVES

Page 434: company history of SBI, ICICI

During the year under review, the Bank has raised capital in the formof Tier I and Tier II Capital to support future growth. The Bank hasraised Tier I Capital in the form of equity capital throughsimultaneous offerings in the form of a follow-on Global DepositaryReceipt (GDR) issue, a Qualified Institutional Placement (QIP) and apreferential allotment of equity shares to the promoters of the Bank.As a result, the Bank mobilised an aggregate of Rs. 4,534.36 croresthrough the three-way offering as per the details below.

The Bank raised Rs. 878.83 crores (equivalent to US Dollars 218.06million) through the allotment of 1,41,32,466 GDRs, each representingone equity share of the Bank at a price of US Dollars 15.43 per GDR.The GDR was priced at a nominal discount to the closing price of theBanks listed GDR on the London Stock Exchange (LSE) but at par withthe preceding one-month average price of GDRs quoted on the LSE.Converted at the Noon-Day Buying Rate of US Dollars published by theFederal Reserve in New York, the price of the underlying share in theIndian market was Rs. 620 per share, which is a discount to the closingprice of the Banks share of Rs. 644.60 on the NSE as on that date. TheGDRs are listed and traded on the London Stock Exchange.

The Bank also raised Rs. 1,752.43 crores by issuing 2,82,64,934 equityshares under QIP. The equity shares under the QIP were priced alongwith the GDR at Rs. 620 per share (equivalent to the price offeredunder the GDR offering). To maintain the percentage shareholding of theBanks promoters at the pre-GDR/QIP offering level, the Administratorof the Specified Undertaking of the Unit Trust of India (UTI-1), LifeInsurance Corporation of India, General Insurance Corporation of Indiaand three government-owned general insurance companies participated ina preferential offer by subscribing to 3,06,95,129 equity shares. Theequity shares offered under the preferential allotment route were alsopriced at Rs. 620 per share (equivalent to price at which both GDR andQIP was priced). Through the process of preferential allotment ofequity shares to promoter entities, the Bank raised Rs.1,903.10 crores.Asa result, the Bank raised, as stated above, an aggregate equitycapital of Rs. 4,534.36 crores under GDR/QIP and the preferentialoffer. This will help the Bank in continuing its growth strategy and instrengthening its capital adequacy ratio. The Bank is now wellcapitalised, with the capital adequacy ratio at the end of the year at13.73%, substantially above the benchmark requirement of 9% stipulatedby Reserve Bank of India. Of this Tier I Capital amounted to 10.17%, upfrom 6.42% a year earlier, while Tier II Capital was at 3.56%.

During the year under review, the Bank also allotted equity shares toemployees under its Employee Stock Option Plan aggregating 29,86,353equity shares.

The paid up capital of the Bank as on 31st March 2008 thereby rose toRs. 357.71 crores from Rs. 281.63 crores as on 31st March 2007. Theshareholding pattern of the Bank as of 31st March 2008 was as under.

Sr. No. Name of Shareholders % of Paid Up Capital

i. Administrator of the Specified

Page 435: company history of SBI, ICICI

Undertaking of the Unit Trust of India (UTI-I) 27.18

ii. Life Insurance Corporation of India 10.40

iii. General Insurance Corporation and four PSU Insurance Companies 4.93

iv. Overseas Investors including Flls/OCBs/NRIs 35.46

v. Foreign Direct Investment (GDR issue) 3.64

vi. Other Indian Financial Institutions/ Mutual Funds/ Banks 8.33

vii. Others 10.06

Total 100.00

During the year, the Bank has also raised US Dollars 60 million(equivalent to Rs. 243.12 crores) as Upper Tier II Capital fromSingapore under its MTN Programme.

The Banks shares are listed on the NSE, the BSE, the Ahmedabad StockExchange and the OTCEI (under permitted securities). The GDRs issued bythe Bank are listed on the London Stock Exchange (LSE). The Bondsissued by the Bank under the MTN programme are listed on the SingaporeStock Exchange. The listing fees relating to all stock exchanges forthe current year have been paid. With effect from 26th March 2001, theshares of the Bank have been included and traded in the BSE GroupA.

DIVIDEND

The Banks diluted Earning per Share (EPS) for 2007-08 has risen to Rs.31.31 from Rs. 22.79 during 2006-07. In view of the excellent financialperformance of the Bank, the encouraging future outlook of the Bank aswell as the objective of rewarding shareholders with cash dividendswhile retaining capital to maintain a healthy capital adequacy ratio tosupport future growth, the Board of Directors has recommended a higherdividend rate of 60% on equity shares, compared to the 45% dividenddeclared for the last year. This increase reflects our confidence inthe Banks ability to consistently grow earnings over time.

BOARD OF DIRECTORS

During the year, some changes in the Board of Directors have takenplace. Shri K. N. Prithviraj was appointed as Additional Director on9th January 2008, joining the Board as a nominee of the Administratorof the Specified Undertaking of the Unit Trust of India (UTI - I).Further, Shri S. B. Mathur, a nominee of the Administrator of theSpecified Undertaking of the Unit Trust of India (UTI - I) has resignedon 6th December 2007.

The Board of Directors places on record its appreciation and gratitude

Page 436: company history of SBI, ICICI

to Shri S. B. Mathur for the valuable services rendered by him duringhis tenure as Director of the Bank.

In accordance with the provisions of the Companies Act, 1956 and theArticles of Association of the Bank, Shri N. C. Singhal, Shri J. R.Varma and Shri R. B.L. Vaish retire by rotation at the FourteenthAnnual General Meeting and, being eligible, offer themselves for re-appointment as Directors of the Bank.

SUBSIDIARIES

The Bank has set up two wholly-owned subsidiaries. Axis Sales Limited,and Axis Private Equity Limited. Axis Sales Limited has been set up formarketing credit cards and retail asset products. The objective of thissubsidiary is to build a specialised force of sales personnel, optimiseoperational efficiency and productivity and thereby reduce costs. Thesales subsidiary also seeks to provide greater control and monitoringof the sales effort vis-a-vis the DSA model. The second subsidiary ofthe Bank, Axis Private Equity Limited has been formed primarily tocarry on the activities of managing (directly or indirectly)investments, venture capital funds and off-shore funds. In terms of anexemption received from the Ministry of Corporate Affairs, Governmentof India through its letter no. 47/417/2007-CL-lll dated 22nd November2007 under Section 212(8) of the Companies Act 1956, copies of theDirectors Report, report of the auditors of the two subsidiaries alongwith financial statements have not been attached to the accounts of theBank for the financial year ended 31st March 2008. Any shareholder whomay be interested in obtaining a copy of these details may write to theCompany Secretary at the Registered Office of the Bank. These documentswill also be available for examination by any shareholder of the Bankat its Registered Office and also at the registered offices of the twosubsidiaries. Inline with the Accounting Standard 21 (AS 21) issued bythe Institute of Chartered Accountants of India, the consolidatedfinancial results of the Bank along with its subsidiaries for the yearended 31st March 2008 are enclosed as an Annexure to this report.

EMPLOYEE STOCK OPTION PLAN (ESOP)

The Bank has instituted an Employee Stock Option Scheme to enable itsemployees, including whole-time Directors, to participate in the futuregrowth and financial success of the Bank. Under the Scheme 2,78,00,000options can be granted to employees. The employee stock option schemeis in accordance with the Securities and Exchange Board of India(Employee Stock Option and Employee Stock Purchase Scheme) Guidelines,1999. The eligibility and number of options to be granted to anemployee is determined on the basis of the employees work performanceand is approved by the Board of Directors.

The Banks shareholders approved plans in February 2001, June 2004 andJune 2006 for the issuance of stock options to employees. Under thefirst two plans and upto the grant made on 29th April, 2004, the optionconversion price was set at the average daily high- low price of theBanks equity shares traded during the 52 weeks preceding the date ofgrant at the Stock Exchange which has had the maximum trading volume ofthe Banks equity share during that period (presently the NSE). Under

Page 437: company history of SBI, ICICI

the third plan and with effect from the grant made by the Company on10th June 2005, the pricing formula has been changed to the closingprice on the day previous to the grant date. The Remuneration andNomination Committee granted options under these plans on sevenoccasions, 11,18,925 during 2000-01,17,79,700 during 2001-02, 27,74,450during 2003-04, 38,09,830 during 2004-05, 57,08,240 during 2005-06,46,95,860 during 2006-07 and 67,29,340 during 2007-08. The optionsgranted, which are non-transferable, vest at the rate of 30%, 30% and40% on each of three successive anniversaries following the granting,subject to standard vesting conditions, and must be exercised withinthree years of the date of vesting. As of 31st March 2008, 1,09,50,436options had been exercised and 1,27,94,268 options were in force.

Other statutory disclosures as required by the revised SEBI guidelineson ESOPs are given in the Annexure to this report.

CORPORATE GOVERNANCE

The Bank is committed to achieving a high standard of corporategovernance and it aspires to benchmark itself with international bestpractices. The corporate governance practices followed by the Bank areenclosed as an Annexure to this report.

DIRECTORS RESPONSIBILITY STATEMENT

The Board of Directors hereby declares and confirms that:

i. The applicable accounting standards have been followed in thepreparation of the annual accounts and proper explanations have beenfurnished, relating to material departures.

ii. Accounting policies have been selected, and applied consistentlyand reasonably, and prudent judgements and estimates have been made soas to give a true and fair view of the state of affairs of the Bank andof the Profit & Loss of the Bank for the financial year ended 31st March2008. iii. Proper and sufficient care has been taken for themaintenance of adequate accounting records, in accordance with theprovisions of the Companies (Amendment) Act, 2000, for safeguarding theassets of the Bank and for preventing and detecting fraud and otherirregularities.

iv. The annual accounts have been prepared on a going concern basis.

STATUTORY DISCLOSURE

Considering the nature of activities of the Bank, the provisions ofSection 217(1)(e) of the Companies Act, 1956 relating to conservationof energy and technology absorption do not apply to the Bank. The Bankhas, however, used information technology extensively in itsoperations.

The statement containing particulars of employees as required underSection 217(2A) of the Companies Act, 1956 and the rules madethereunder, is given in an Annexure appended hereto and forms part of

Page 438: company history of SBI, ICICI

this report. In terms of Section 219(1) (iv) of the Act, the Report andAccounts are being sent to the shareholders excluding the aforesaidAnnexure. Any shareholder interested in obtaining a copy of theAnnexure may write to the Company Secretary at the Registered Off iceof the Bank.

AUDITORS

M/s S. R. Batliboi & Co., Chartered Accountants, Statutory Auditors ofthe Bank since 2006, retire on the conclusion of the Fourteenth AnnualGeneral Meeting and are eligible for re-appointment, subject to theapproval of Reserve Bank of India, and of the shareholders. Asrecommended by the Audit Committee, the Board has proposed theappointment of M/s S.R. Batliboi & Co., Chartered Accountants asStatutory Auditors for the financial year 2008-09. The shareholders arerequested to consider their appointment.

ACKNOWLEDGEMENTS

The Board of Directors places on record its gratitude to the ReserveBank of India, other government and regulatory authorities, financialinstitutions and correspondent banks for their strong support andguidance. The Board acknowledges the support of the shareholders andalso places on record its sincere thanks to its valued clients andcustomers for their continued patronage. The Board also expresses itsdeep sense of appreciation to all employees of the Bank for theirstrong work ethic, excellent performance, professionalism, team work,commitment, and initiative which has led to the Bank making commendableprogress in todays challenging environment.

For and on behalf of the Board of Directors

Place: Mumbai P. J. NayakDate : April 21, 2008 Chairman & Chief Executive Officer

Pnb

Director ReportMar2010   Mar 2011 Mar2012

Punjab National Bank with a rich legacy spanning 117 years has emerged as the second largest bank in the country. Today, PNB is a well established brand with a strong technological base touching the lives of millions of customers. The Bank has worked assiduously to build its front line position, constantly reinventing itself to keep pace with the changing banking landscape and customer preferences. While successfully managing change, the Bank has remained deeply rooted in the principles of good banking. Resultantly, the fundamentals of the Bank have strengthened which augur well for a bright future.A network of 5189 branches, 5050 ATMs and a customer base of over 60million add considerably to the franchise value the Bank enjoys.Technology has played an important role in expanding its franchisevalue through customer acquisition and retention, carrying out fasterand efficient financial transactions in a secure manner and in

Page 439: company history of SBI, ICICI

improving customer convenience.

The awards and recognitions received by the Bank bear testimony to theefforts and initiatives to remain highly customer-focused, adoption ofgood business practices and extending the reach to the unbanked. It isalso a reflection of how the Bank has been able to successfully pursuebusiness opportunities with acumen while continuing to fulfill itssocial responsibilities.

Organization Structure

Pursuit of strategy requires that organization structure is closelyaligned with business goals. During the year, Bank took variousmeasures aimed at improving organization structure to support effectiveexecution of strategy. The Retail Banking Division was bifurcated intoRetail Assets Division and Resource Mobilization Division. Further, theRetail Hubs were reorganized into Retail Asset Branches (RAB) to meetthe requirements of the retail borrowers and ensure faster delivery ofretail credit. Presently, 73 RABs are functioning successfully.Budgeting process was further strengthened by linking with systemsgrowth in a particular area as well as available potential. To face theHR challenges in a proactive manner, routine administrative functionsrelating to human resource management were hived-off into a separatePersonnel Administration Division.

Your Directors take pleasure in placing the Banks Annual Report for2010-11 along with its audited annual financial statements.

OUR PERFORMANCE

1. FINANCIAL HIGHLIGHTS

1.1 BALANCE SHEET

(Rs Crore) 2009-10 2010-11 Growth %

PARTICULARS

Capital & Reserves 17723 21509 21.36

Total Business 435931 555005 27.31

Deposits 249330 312899 25.50

Low cost Deposits (Savings and Current) 101850 120325 18.14

Advances 186601 242107 29.75

Retail Credit 19214 23621 22.94

Priority Sector Credit 63769 75652 18.63

Page 440: company history of SBI, ICICI

-% of Adjusted Net Bank Credit (ANBC) 40.55 40.67 -

Agreecultural Credit 30207 35462 17.40

-% of Adjusted Net Bank Credit (ANBC) 19.53 19.3 -

1.2 PROFIT

(Rs Crore)

PARTICULARS FY 2009-2010 FY 2010-2011 Growth%

Operating profit 7326 9056 23.61

Provisions 3421 4622 35.11

Net profit 3905 4433 13.53

1.3 INCOME & EXPENDITURE

(Rs Crore)

PARTICULARS FY 2009-2010 FY 2010-2011 Growth%

Interest income 21422 26986 25.97

- Interest/discount on advances/bills 16677 21105 26.55

- Income on investments 4556 5638 23.75

Non-interest income 3610 3613 0.08

Commission, Exchange & Brokerage 1682 2045 21.58

Net Interest Income 8478 11807 39.27

Total Income 25032 30599 22.24

Interest expended 12944 15179 17.27

- Interest paid on deposits 11966 13795 15.28

Total Operating expenses 4762 6364 33.64

- Establishment expenses 3121 4461 42.93

Total Expenses 17706 21543 21.67

Operating profit 7326 9056 23.61 Provisions and contingencies 3421 4622 35.11

Page 441: company history of SBI, ICICI

Net profit 3905 4433 13.53

Note: Difference in total is due to rounding off

1.4. KEY RATIOS (Percent)

PARTICULARS 2009-10 2010-11

Average cost of funds 4.76 4.57

Average yield on funds 7.88 8.12

Return on Equity 24.59 22.13

Net Interest Margin 3.57 3.96

Return on Assets 1.44 1.34

Cost to Income Ratio 39.39 41.27

Operating expenses to average Working Funds 1.70 1.91

Operating profit to average Working Funds 2.62 2.72

Earnings per share (Rs.) 123.86 140.60

Book value per share (Rs.) 514.77 661.20

Ratio of Net NPAs to Net advances 0.53 0.85

NPA coverage ratio 81.17 73.21

CRAR - Basel II 14.16 12.42

2. OPERATIONAL HIGHLIGHTS

- Bank leveraged on its 5180 plus branch network to build deep,enduring relationships with its 60 million plus customers across allthe segments.

- Bank’s network of 5050 ATMs along with alternate delivery channelsaccount for more than 28% of transactions.

- New set of products and services like PNB Uphaar, PNB Suvidha, WorldTravel Card, etc were introduced during the year.

- In addition to international presence in 9 countries, Bank acquiredequity stake in Dana Bank of Kazakhstan and is in the process of

Page 442: company history of SBI, ICICI

setting up presence in Australia and Canada.

- Under the performance management system, employee performance wasrecognized and incentivized.

- Strengthened pool of management talent as part of succession planningexercise with Team 2020 initiatives.

- Streamlined CSR activities to move forward and to make a positivecontribution towards community.

3. DIVIDEND

The Board of Directors has recommended a dividend of 220% for the year2010-11.

4. CORPORATE GOVERNANCE

The Bank is committed to best practices in corporate governance andrecognizes that transparency, ethical behavior, integrity andprotection of interests of all stakeholders form the keystones ofgovernance. Being in the business of financial intermediation, the Bankis fully aware of the risks involved. To address this, the Bank has putin place elaborate system of risk identification, measurement andmitigation. A Risk Management Committee at the Board level monitors therisk management process in the Bank. The Board of Directors hasoversight on the Bank and ensures that there is right balance betweenbusiness and risk. Further through the Audit Committee, the Boardensures strong system of internal control and corporate reportingincluding financial reporting. As a listed entity, the Bank iscomplying with various regulatory requirements. Disclosures are made inthe financial statements in compliance with Section 29 of BankingRegulation Act, 1949, RBI guidelines, Section 49 of the ListingAgreement and Accounting Standards and Guidelines issued by theInstitute of Chartered Accountants of India. These inter-alia, includesegment reporting, related party disclosures, lending to sensitivesectors, restructured loan assets, key business ratios, riskmanagement, performance of Bank’s share price, etc.

PNB follows practices that provide its financial stakeholders a highlevel of assurance on the quality of Corporate Governance. This isreflected in the ICRA Ltd’s CGR 2 rating which is the highest ratingassigned to a financial institution in India.

5. BOARD OF DIRECTORS

As on 31.03.2011 there were 11 Directors on the Board of the Bankincluding Chairman and Managing Director and two Executive Directors.

At the time of appointment/nomination of any Director, the guidelinesdefining the roles and responsibilities of Directors as circulated byGovernment of India/ Ministry of Finance from time to time are madeavailable to them. A declaration of “Model Code of Conduct” is beingobtained from all the Directors in April every year. Deeds of covenants

Page 443: company history of SBI, ICICI

as recommended by Ganguly Committee are being entered into with theelected directors on the Board of the Bank in terms of instructions ofReserve Bank of India/ Government of India every year.

As per recommendations of Ganguly Committee, Directors are impartedtraining to make them more responsive to the organization, the businessenvironment and emerging developments/challenges in the banking sector.As part of their

training, Directors are nominated to training programmes in reputedInstitutions like Centre for Corporate Research and Training (CCRT),Navi Mumbai, Institute of Company Secretaries of India, Institute ofDirectors, etc.

During the Financial Year 2010-11, four Directors were nominated forvarious training programmes viz. “Masterclass for Directors leading toCertified Corporate Directorship”, “Conference on Corporate Compliance”and “Role of Independent Directors - Issues & Solutions”.

6. CHANGES IN THE BOARD OF DIRECTORS

During the year 2010-11, the following changes took place in thecomposition of Board of Directors of the Bank:

- Shri L.M. Fonseca, RBI Nominee Director ceased to be Director on30.07.2010 on expiry of his term.

- Shri Jasbir Singh, RBI Nominee Director was appointed on the Board ofthe Bank on 30.07.2010.

- Shri Nagesh Pydah, Executive Director, demitted the office on31.12.2010 on his elevation as Chairman & Managing Director of OrientalBank of Commerce.

- Shri Rakesh Sethi was appointed as Executive Director of the Bank on01.01.2011.

- Shri M.A. Antulay, part time non-official Director ceased to beDirector w.e.f 27.02.2011 on completion of his tenure.

- Shri G.P. Khandelwal, part time non-official Director ceased to beDirector w.e.f 27.02.2011 on completion of his tenure.

The Board welcomes Shri Rakesh Sethi, new Executive Director and ShriJasbir Singh, new Director and wishes to place on record the valuableservices rendered by Sh. Nagesh Pydah, Sh. L.M. Fonseca, Sh. M.A.Antulay and Sh. G.P. Khandelwal.

BOARD COMMITTEES

(As on 31.03.2011)

No. NAME OF THE COMMITTEE

Page 444: company history of SBI, ICICI

1. Management Committee

2. Audit Committee of Board

3. Risk Management Committee

4. Share Transfer Committee

5. Shareholders’ /Investors’ Grievance Committee

6. Customer Service Committee

7. I.T. Committee

8. PA Committee

9. Director’s Promotion Committee

10. Appellate Authority and Reviewing Authority

11. Special Committee of Board to monitor and follow up fraud casesinvolving Rs.1.00 crore and above.

12. Committee of Directors to Review Vigilance and Non Vigilance cases

13. HRD Committee of Directors

14. Remuneration Committee

15. Nomination Committee

16. Steering Committee for Vision 2013

17. Insurance Joint Venture Committee

The details of various meetings held up to 31st March, 2011 are asfollows:

S. Meeting Number of No Meetings

1 Board Meeting 15

2 Management Committee 22

3 Committee of Directors 4 to review vigilance &non-vigilance cases

4 Audit Committee of Board 10

Page 445: company history of SBI, ICICI

5 Risk Management Committee 4

6 Special Committee 6 of Board to Monitorand Follow Fraud casesof Rs. 1.00 crore and above

7 IT Committee of the Board 5

8 P.A. Committee 5

9 Customer Service 4Committee

10 Share Transfer Committee 24

11 Shareholders/ Investors 6Grievances Committee

12 Directors Promotion 2Committee

13 Steering Committee 4Vision 2013

14 Insurance Joint Venture 4Committee

7. ACKNOWLEDGMENTS

The Board of Directors thank the Government of India, Reserve Bank ofIndia, Securities and Exchange Board of India, Stock Exchanges, Bank’scustomers, public and the shareholders for valuable support, continuedpatronage and confidence reposed in the bank.

The Board also wishes to place on record its appreciation for thevaluable contribution of the members of the Bank’s staff at all levelsand look forward to their continued enthusiasm in meeting the futuregoals.

For and on behalf of Board of Directors CHAIRMAN AND MANAGING DIRECTOR

Director ReportMar2009   Mar 2010 Mar2011

Page 446: company history of SBI, ICICI

The brand PNB commands respect and confidence in the eyes of public and shareholders today. PNB with its sound and strong fundamentals remained unscathed by the economic slowdown and global financial crisis of 2008-09. PNB, not only maintained its leading position among the Nationalized Banks in the above turbulent period, but is once again poised to excel in its business as the economy shows signs of improvement. The image and perception of PNB in the Government, industry and public is aptly reflected in the awards and accolades it has won for itself recently.PNB was declared the “Best Public Sector Bank” by a survey conducted byThe Financial Express and Ernst & Young. PNB was ranked 26th amongstIndia’s top 500 listed companies by “ET 500”. Globally, the “The BankerMagazine” (London) placed PNB at 239th position amongst the top 1000Global Banks while Forbes’ ranking of 2000 global giants placed it at695th position.

The Bank was conferred with the “Best Corporate Social ResponsibilityPractice” award by Bombay Stock Exchange. The Bank was also declaredthe winner of the Gold trophy of SCOPE Meritorious Award for Excellencein Corporate Governance 2009 by Standing Conference of PublicEnterprises amongst the Public Sector Enterprises, a coveted awardreceived by the Bank from the the hands of the Hon’ble President ofIndia. The Bank also received the Golden Peacock Award for Excellencein Corporate governance for 2009 from the Institute of Directors. The‘Dainik Bhaskar’ in association with ‘Daily News and Analysis’presented PNB with India Pride Awards for excellence in PSU category inthe year 2009, while Dun & Bradstreet Award for “Priority SectorLending including Financial Inclusion” was also bagged by the Bank.

BUILDING STABLE BUSINESS

PNB is committed to build business through long term sustainedrelationships with its customers. PNB has been recognized as the Bankoffering highest levels of customer satisfaction in Delhi and Chennai.Our customer base as of today stands at around 56 million which we aimto grow to 150 million by the year 2013. We are considered to be theBank that cares about needs & ambitions of customers. We believe inpartnering growth of our clients over generations which is properlyreflected in our tagline “Bharose ka Prateek”. This approach tobusiness is characteristic of PNB’s 116 year history of banking withgrowth.

RATIONALIZATION OF THE CIRCLE OFFICES

Bank’s 4 tier structure was reduced to 3 tiers to improve uponefficiency in decision making and to cut on administrative costs.

An opportunity was identified in rationalizing the administrativestructure of the Bank, in the backdrop of economic downturn, to bringin more efficiency and team spirit in the overall work culture of thebank. The objectives for this rationalization accordingly aimed atdecentralizing the decision making and reporting functions, bettertransient speeds and responses, higher transparency, effectivemonitoring, shared vision and reliance upon each other, easyaccessibility and greater control. Rationalization of circles was doneto remove the disparity in number of branches allocated among variouscircles. New circles were created in Delhi, Rajasthan, Kerala, Haryana,

Page 447: company history of SBI, ICICI

UP and Punjab. The number of Field General Managers (FGM) was alsoincreased from 5 to 10 ensuring pan-India presence and control of FGMs.This new structure has been implemented w.e.f. 1st April, 2010.

PNB has the largest domestic network of 4997 offices, including 46extension counters among Nationalized Banks. All our branches offerCore/Centralized Banking Solution (CBS) along with a variety offinancial products catering to different market segments. PNB offersits customers a warm and friendly banking experience by serving themwith a characteristic Indian emotional touch. This commitment showcasesthe intent of the bank to be closely involved in the lives of itscustomers. To facilitate our customers and to focus our deliverablesuniquely to specific market segments, branches have been classified asAgriculture, Retail, MSME and Commercial/Corporate.

Today, PNB has both the strength and the capability to expand in theinternational arena but will go full throttle for this expansion onlyafter it makes an excellent business case. Bank has internationalpresence in 9 countries. Bank constantly innovates and reorientsstrategies, and realigns business processes with advanced technology toserve its customers better to earn strong brand loyalty and recallvalue.

Your Directors take pleasure in placing the Bank’s Annual Report for2009-10 along with its audited annual financial statements.

OUR PERFORMANCE IN THE YEAR 2009-10

1. FINANCIAL HIGHLIGHTS

1(a) BALANCE SHEET

(Rs crore)

PARTICULARS 2009-10 yoy growth %

Capital & Reserves 17723 20.95

Total business 435931 19.61

Deposits 249330 18.86

Low cost Deposits (Savings and Current)101850 25.0

Advances 186601 20.6

Retail credit 19214 20.5

Priority Sector Credit 63769 25.5

-Percent of adjusted Net bank credit (ANBC) 40.55% (National goal

Page 448: company history of SBI, ICICI

- 40%)

Agricultural credit 30207 25.56

-Percent of adjusted Net bank credit (ANBC) 19.53% (National goal - 18%)

1(b) PROFIT

(Rs. crore)

PARTICULARS 2009-10 yoy growth %

Operating profit 7326 28.8

Provisions 3421 31.58

Net profit 3905 26.4

1(c) INCOME & EXPENDITURE

(Rs. crore)

PARTICULARS 2009-10 yoy growth %

Interest income 21467 12.2

- Interest/discount on advances/bills 16701 14.5

- Income on investments 4577 7.3Non-interest income 3565 16.3CEB 1682 22.2Net Interest Income 8523 24.8Total Income 25032 12.8Interest expended 12944 5.3

- Interest paid on deposits 11966 3.5Total Operating expenses 4762 13.2

- Establishment expenses 3121 6.7Total Expenses 17706 7.3Operating profit 7326 28.8Provisions and contingencies 3421 31.6Net profit 3905 26.4Note: Difference in total is due to rounding off

1(d) KEY RATIOS

(per cent)

Page 449: company history of SBI, ICICI

Particulars 2008-09 2009-10

Average cost of funds 5.51 4.75

Average yield on funds 8.43 7.89

Return on Equity 23.52 24.54

Net Interest Margin 3.52 3.57

Return on Assets 1.39 1.44

Cost to Income Ratio 42.50 39.39

Staff expenses to average Working Funds 1.29 1.15

Operating profit to average Working Funds 2.52 2.70

Earnings per share (Rs) 98.03 123.86

Book value per share (Rs) 416.74 514.77

Ratio of Net NPAs to Net advances * 0.17 0.53

NPA coverage ratio* 93.51 81.17

CRAR - Basel II 14.03 14.16

*Excluding Rs 338 Crore impact of slippage from Debt relief, Net NPAratio and NPA coverage ratio in 2009-10 will be 0.35% and 86.80 %,respectively.

2) NON FINANCIAL-HIGHLIGHTS

- Customer centric business through Robust Technology platform.

- Continued to expand, adding over 500 branches and 1400 ATMs whileimproving internet and mobile banking capabilities.

- Expanding International forays to newer destinations like Australiaand Canada in addition of international presence in 9 countries.

- Strong revenue growth across all client segments, geographies andproducts despite the challenging conditions during the stressedeconomic conditions.

- Created a competitive advantage through the efficient management ofour capital and liquidity.

Page 450: company history of SBI, ICICI

- Significantly strengthened our pool of management talent as part ofsuccession planning exercise.

- Streamlined CSR activities in the Bank to move forward in a plannedway in this direction.

3) DIVIDEND

The Board of Directors has recommended a dividend of 220 percent forthe year 2009-10.

4) CORPORATE GOVERNANCE

The Bank stresses on implementing best practices in Corporategovernance as we believe in following

- Full transparency in all our operations and policies which has earnedus the customers’ trust over the years and our customers have stayedwith us for generations which may seem unrealistic to many in thesetimes of declining brand loyalty.

- Zero tolerance for any malpractices which has made the institutionfundamentally stronger and has withstood many testing times.

- All our decisions are consensus decisions involving voice of ourstakeholders. We take the opinions of our customers while deciding theroadmap and future directions of the Bank.

- The Bank being a financial intermediary has to undertake risks whilemanaging assets and liabilities, making risk mitigation the mostcrucial aspect of our functioning. Towards understanding, measuring andmanaging various risks and ensuring a sustained growth of healthy assetportfolio, the bank has put in place a robust risk management system.

- The Bank is guided (to the extent possible/applicable) by theacclaimed OECD (Organization for Economic co-operation and Development)principles of corporate governance as far as responsibilities of theBoard of Directors, governance infrastructure, rights of shareholders,equitable treatment of shareholders, role of shareholders in governanceand disclosures and transparency are concerned.

- The Bank has a strong and committed Board of Directors withspecialists from various fields; a robust risk management framework;audit committee including Management audit committee, etc. The Bank isa listed entity and ensures that the Shareholders are satisfied withBank’s performance and are kept well informed about the performance ofthe Bank. The Bank has a consistent track record of paying dividends.

- The Bank ensures ‘disclosure & transparency’ in financial statementsas per section 29 of Banking Regulation Act, 1949; RBI guidelines;section 49 of the Listing Agreement; Accounting Standards andGuidelines issued by the Institute of Chartered Accountants of India,etc. Disclosures as per RBI guidelines & ICAI Accounting Standards (AS)include Segment reporting, Related Party Disclosures, Lending to

Page 451: company history of SBI, ICICI

sensitive sectors, Loan assets restructured, ALM, Key Business Ratiosand Performance of bank’s share price vis-à-vis NIFTY/ Bank index. Inaddition to the statutory disclosures, the Bank discloses voluntarilyadditional information by way of Directors’ Report about the bank’soverall performance, business strategies, products & services, RiskManagement etc.

The Bank gives high priority to good Corporate Governance. ICRA Ltd,the rating Agency has reaffirmed the CGR 2 rating (on a rating scale ofCGR1 to CGR 6, where CGR 1 denotes the highest rating) to the Bank inFebruary 2010, which reflects that PNB has adopted and follows suchpractices, conventions and codes as would provide its financial stakeholders a high level of assurance on the quality of CorporateGovernance. This is the highest rating assigned to a financialinstitution in India.

The Bank has complied with the guidelines of Reserve Bank of India andSEBI on the matters relating to Corporate Governance, which has beenexamined by the Statutory Central Auditors.

5) CHANGES IN BOARD OF DIRECTORS

During the year 2009-10, the following changes took place in thecomposition of Board of Directors.

- Dr. K.C. Chakrabarty, CMD demitted the office on 15.06.2009 on hiselevation as Dy. Governor of RBI.

- Shri M.L. Bagga, Director representing Workmen Employee ceased to beDirector on 25.09.2009.

- Shri K.R. Kamath took over as Chairman & Managing Director of theBank on 28.10.2009.

- Shri S.R. Khurana, Director representing CA Category ceased to beDirector on 2.01.2010.

- Shri M.P. Singh, Director representing Workmen Employee was appointedon the Board of the Bank by Govt. of India under clause 9(3)(e) ofBanking Companies Acquisition and Transfer of Undertakings Act w.e.f.28.01.2010.

- Shri Pardeep Kumar, Director representing Officer Employee wasappointed on the Board of the Bank by Govt. of India under clause9(3)(f) of Banking Companies Acquisition and Transfer of UndertakingsAct w.e.f. 15.02.2010.

BOARD COMMITTEES:

(As on 31.03.2010)

S. No. NAME OF THE COMMITTEE

1. Management Committee

Page 452: company history of SBI, ICICI

2. Audit Committee of Board

3. Risk Management Committee

4. Share Transfer Committee

5. Shareholders’ /Investors’ Grievance Committee

6. Customer Service Committee

7. I.T. Committee

8. PA Committee

9. Director’s Promotion Committee

10. Appellate Authority and Reviewing Authority

11. Special Committee of Board to monitor and follow up fraud casesinvolving Rs.1.00 Cr. and above.

12. Committee of Directors to Review Vigilance and Non Vigilance cases

13. HRD Committee of Directors

14. Remuneration Committee

15. Nomination Committee

16. Steering Committee for Vision 2013

The details of various meetings held up to March, 2010:

S. Meeting Number of S. Meeting Number ofNo. Meetings No. Meetings Held Upto Held Upto March, 2010 March, 2010

1 Board Meeting 14 9 HRD Committee 1

2 Management 23 10 Remuneration 1 Committee Committee

3 Committee of 4 11 Customer Service 4Directors to review Committeevigilance & non-vigilance cases

4 Audit Committee 14 12 Share Transfer 24of Board Committee

Page 453: company history of SBI, ICICI

5 Risk Management 5 13 Shareholders’/ Investors’ 6Committee Grievances Committee

6 Special Committee of 5 14 Directors PromotionBoard to Monitor and Committee 1Follow Fraud cases ofRs. 1.00 crore and above

7 IT Committee of the 4 15 Steering Committee 3 Board Vision 2013

8 P.A. Committee 4

The Board welcomes new CMD, Shri K R Kamath and other new Directors andplaces on record the valuable services rendered by former CMD, Dr. K.C.Chakrabarty and Directors, Shri M.L. Bagga and Shri S.R. Khurana.

6) ACKNOWLEDGMENTS

The Board of Directors thank the Government of India, Reserve Bank ofIndia, Securities and Exchange Board of India, Stock Exchanges, Bank’scustomers, public and the shareholders for valuable support, continuedpatronage and confidence reposed in the bank.

The Board also wishes to place on record its appreciation for thevaluable contribution of the members of the Bank’s staff at all levelsand look forward to their continued enthusiasm in meeting the futuregoals set in “VISION 2013”.

For and on behalf of Board of Directors CHAIRMAN AND MANAGING DIRECTOR

Director ReportMar2008   Mar 2009 Mar2010

The Directors take pleasure in placing the Bank s Annual Report for 2008-09 along with its audited annual financial statements.Key Financial Highlights

1. Positive Earning Momentum

- Net Profit of Rs.3,091 crore (y-o-y rise of 50.9 percent).

- Operating Profit amounted to Rs.5,744 crore (y-o-y rise of 43.4percent).

- 50.9 percent increase in Earning Per Share to Rs.98.03.

- Cost to income ratio of 42.27 percent (y-o-y improvement of 4.54 pps,i.e percentage points).

Page 454: company history of SBI, ICICI

- Net Interest margin protected at 3.62 percent.

- Return on Assets increased by 0.24 pps to 1.39 percent.

- CRAR under Basel II rose to 14.03 percent (as against 13.46 percentin 2007-08).

- Ratio of net NPAs to net advances 0.17 percent; (y-o-y improvement of0.47 pps).

- NPA coverage ratio stood at 90.47 percent as at the end of March2009.

- Return on Equity 23.52 percent; (y-o-y improvement of 4.52 pps).

2. Balance Sheet Strength increases significantly

- Capital & Reserves increased to Rs.14,654 crore (y-o-y increase ofaround 19 percent).

- Total business stood at Rs.3,64,463 crore (y-o-y increase of 27.5percent).

- Deposits amounted to Rs.2,09,760 crore (y-o-y increase of 26.0percent).

- Low cost deposits comprising savings and current deposits formed38.83 percent of total deposits.

- Advances grew by 29.5 percent to Rs.1,54,703 crore.

- Retail credit at Rs 25,012 crore constituted 16.2 percent of the Banks net advances. .

- Priority Sector Credit at Rs.50,793 crore was 41.53 percent of theAdjusted Net Bank Credit (ANBC) and continues to be above the NationalGoal of 40 percent.

- Agricultural credit at Rs.24,057 crore was 19.72 percent to ANBC, asagainst the National Goal of 18 percent.

3. Income & Expenditure Analysis

- Total income of the Bank increased by 36.8 percent to reach a levelof Rs.22,246 crore.

- Interest Income rose by 35.5 percent to Rs.19,326 crore.

- Net Interest Income improved by 27 percent to Rs.7,031 crore.

- Non-Interest income grew by 46.2 percent to Rs.2,920 crore,accounting for 13.12 percent of total income. Commission, Exchange and

Page 455: company history of SBI, ICICI

Brokerage (CEB) increased to Rs.1,377 crore, registering a growth of24.4 percent.

- Operating expenses stood at Rs.4,206 crore during 2008-09, showing anincrease of 19.3 percent.

- Interest Spread improved to 3.15 percent from 3.11 percent during2007-08.

Income Expenditure Details (Rs. crore)Particulars 2007-08 2008-09

Interest income 14265 19326 - Interest/discount on advances/bills 10439 14638 - Income on investments 3611 4410 Non-interest income 1998 2920Total Income 16263 22246

Interest expended 8731 12295 - Interest paid on deposits 8265 11564 - Other interest expenses 466 731 Total Operating expenses 3526 4206 - Establishment expenses 2462 2924Total Expenses 12257 16502

Operating profit 4006 5744Provisions and contingencies 1957 2653Net profit 2049 3091

4. Profit Analysis

- Operating profit of the Bank rose by 43.4 percent to Rs.5,744 crore.

- Provisions made at Rs.2,653 crore were higher as compared to Rs.1,957crore made during the last year.

- Net profit grew by 50.9 percent to Rs.3,091 crore.

5. Key Ratios (per cent)Particulars 2007-08 2008-09

Average cost of funds 4.90 5.51Average yield on funds 8.01 8.67Return on Equity 19.00 23.52Net Interest Margin 3.58 3.62Return on Assets 1.15 1.39Staff expenses to AWF 1.38 1.31Operating profit to AWF 2.25 2.58Earning per share (Rs) 64.98 98.03Book value per share (Rs) 341.98 416.74

6. Dividend

Page 456: company history of SBI, ICICI

- The Board of Directors has recommended a Dividend of 200 percent forthe year 2008-09.

7. Changes in Board of Directors

During the year 2008-09, the following changes took place in thecomposition of Board of Directors :-

- Shri M.V. Tanksale took over as Executive Director on 26.3.09.

- Shri Nagesh Pydah took over as Executive Director on 26.3.09

- Mrs Ravneet Kaur was appointed as Director representing Govt. ofIndia on 10.6.08 (in place of Shri Rakesh Singh).

- Shri Vinod Kumar Mishra was appointed as Director on 05.12.08 undersection 9(3)(h) of the Banking Companies (Acquisition and Transfer ofUndertaking) Act, 1970.

- Shri D.K.Singla, Shri T.N. Chaturvedi and Shri G.R. Sundaravadivelhave been elected as Directors, w.e.f. 27.12.08, representingShareholders under clause 9(3)(i) of the Banking Companies (Acquisitionand Transfer of Undertaking) Act.

- Shri Prakash Agarwal and Dr. Harsh Mahajan ceased to be Directors on12.12.08.

- Shri K. Raghuraman ceased to be Executive Director on attaining theage of superannuation on 30.9.08.

- Shri J.AA.Garg ceased to be Executive Director on his elevation asChairman & Managing Director of Corporation Bank on 6.11.08.

- Shri P.K.Nayar, Director representing Non Workman ceased to beDirector on attaining the age of superannuation on 31.3.09.

The Board welcomes all the new Directors and wishes to place on recordthe valuable services rendered by Shri K. Raghuraman, Shri J.M. Garg,Shri Rakesh Singh, Shri Prakash Agarwal, Dr Harsh Mahajan and Shri P.K.Nayar.

8. Corporate Governance

The Bank accords high priority to good Corporate Governance. ICRA Ltd,the rating agency has reaffirmed the CGR 2 rating of the Bank, whichreflects PNBs transparent ownership structure, improved riskmanagement practices, well defined delegation of powers, accountabilityand an elaborate audit function carried out by both its Inspection &Audit Division and by independent Statutory Central Auditors. Thefavourable factors also include the satisfactory Board processes andthe oversight function played by the Board.

In compliance of RBI directive regarding "fit & proper criteria" to be

Page 457: company history of SBI, ICICI

fulfilled by the persons being elected as Directors on the Board of theNationalised Bank, the Board of the Bank has constituted a "NominationCommittee".

Bank has complied with the guidelines of RBI and SEBI on the mattersrelating to Corporate Governance which has been examined by theStatutory Central Auditors.

9. Acknowledgments

The Board of Directors thanks the Government of India, Reserve Bank ofIndia and Securities & Exchange Board of India (SEBI) for their longand sustained efforts to strengthen our safety and soundness through awhole slew of prudential measures. The Board of Directors also thanksthe Stock Exchanges, Banks customers, public in general and theshareholders for their valuable support and trust reposed in the Bank.

The Board pays tribute to all our people whose talent, commitment,teamwork and professionalism have contributed to the Banks success andongoing developments. The Board looks forward to their continueddedication and co-operation in 2009-10 and thereafter too.

For and on behalf of Board of Directors CHAIRMAN AND MANAGING DIRECTOR

Director ReportMar2007   Mar 2008 Mar2009

The Bank completed eventful 113 years and has crossed several milestones in its quest to satisfy the diverse requirements of its customers. In the process, the Bank has gained the goodwill of its around 3.7 crore customers, earned a strong brand image as one of India’s most trusted brands, received recognitions and won various awards. The Bank features at 11 66th position among Forbe’s Global 2000 list of world’s biggest companies. The Bank was bestowed ‘Corporate Excellence Award’ by Amity International Business School, Amity University, Noida.The year 2007-08 reflects the Bank’s efforts to re-furbish itsoverriding principle that the customer should benefit from hisrelationship with the Bank. The Bank sees ‘Financial Inclusion’ as adistinct opportunity and a business proposition, especially in the IndoGangetic area, where the Bank has inherent strength. For fullyexploiting the business potential with cost effectiveness, the Bank hasre-aligned its business processes with technology; pruned itsorganisational structure to 3 tier from 4 tier making it morehorizontal; re-invented its human capital and formulated variousschemes. The Bank has also fully complied with revised AS-15 (relatingto accounting for retirement benefits) of Institute of CharteredAccountants of India. In compliance with revised AS- 15, thetransitional liability has been adjusted out of Opening Reserves (netof taxes) and the current year liability charged to Profit & LossAccount.

Your Directors take pleasure in placing the Bank’s Annual Report for2007-08 along with its audited annual financial statements.

Key Financial Highlights

Page 458: company history of SBI, ICICI

Key highlights of the Bank’s performance in the year 2007-08

include the following :

1. Positive Earnings Momentum

Net Profit of Rs 2,048.76 crore; a rise of 33.0 per cent.

Operating Profit crossed the landmark level of Rs 4000 crore to reachRs 4,006.24 crore as compared to Rs 3617.40 crore in the previous year.

Cost to income ratio of 46.8 per cent; an improvement of 109 basispoints (bps).

Net Interest margin stood at 3.58 percent.

Return on Assets rose by 12 bps to 1.15 percent.

CRAR improved to 12.96 percent as at the end of March 2008, compared to12.29 percent last year. This CRAR was achieved even after providingfor additional capital towards (i) compliance with revised AS-15 (relating to accounting for retirement benefits) ; (ii) compliance withBasel II- the capital has also been provided for operational risk,besides credit & market risks and (iii) starting the Bank’s subsidiaryat London, called PNBIL.

The Bank has successfully migrated to Basel II accord as at March 31,2008. The CRAR, as per Basel II works out to 13.46 percent.

To shore up the capital base, the Bank raised Hybrid Perpetual Tier-Ibonds (Rs 1,100 crore) and Upper Tier II bonds (Rs 1,610 crore) duringthe year 2007-08.

Ratio of Gross NPAs to Gross advances was 2.74 per cent; showing animprovement of 71 bps over the previous year.

Ratio of net NPAs to net advances stood at 0.64 per cent; animprovement of 12 bps over the previous year.

NPA Coverage ratio stood at 77.3 percent as at the end of March 2008.

Return on Equity of 19 percent; an improvement of 381 bps over theprevious year.

2. Significant Balance Sheet Strength

Capital and Reserves increased to Rs 12,318 crore; an increase of 18.0per cent.

Total business stood at Rs 2,85,959 crore; registering an increase of20.9 per cent.

Page 459: company history of SBI, ICICI

Deposits amounted to Rs 1,66,457 crore; showing a growth of 19.0 percent.

Low cost deposits comprising savings and current deposits formed 42.99per cent of total deposits.

Advances grew by 23.7 per cent to Rs 1,19,502 crore.

Retail Advances (excluding traders) rose by 18.5 percent to Rs 18,834crore.

Priority Sector Credit at Rs 43,412 crore was 44.11 percentage ofAdjusted Net Bank Credit (ANBC) and continues to be above the nationalgoal of 40 per cent.

Agricultural credit at Rs 19,947 crore was 18.94 percent of ANBC andcontinues to be higher than the national goal of 18 percent.

3. Income & Expenditure Analysis

Total income of the Bank increased by 25.4 percent to reach a level ofRs 16,262 crore.

Interest Income rose by 27.0 percent to Rs 14,265 crore.

Net Interest Income increased by 6.2 per cent to Rs 5,534 crore.

Non-Interest income grew by 15.4 percent to Rs 1,997 crore, accountingfor 12.3 percent of total income of the Bank. Commission, Exchange andBrokerage (CEB) increased to Rs 1,106 crore, registering a growth of 14percent.

Operating expenses stood at Rs 3,525 crore during 2007- 08, showing anincrease of 6 percent.

Interest Spread stood at 3.11 percent during 2007-08.Income Expenditure Details

(Rs crore)Particulars 2006-07 2007-08

Interest income 11236 14265Interest/discount on advances/bills 7644 10439Income on investments 3288 3611Non-interest income 1730 1997 Total Income 12966 16262Interest expended 6023 8731Interest paid on deposits 5617 8265Other interest expenses 406 466 Total Operating expenses 3326 3525Establishment expenses 2352 2462Total Expenses 9349 12256

Page 460: company history of SBI, ICICI

Operating profit 3617 4006Provisions and contingencies 2077 1957Net profit 1540 2049

4. Profit Analysis

* Operating profit of the Bank crossed the landmark level of Rs 4000crore to reach Rs 4,006 crore.

* Provisions were made at Rs 1,957 crore, as compared to Rs 2,077 croremade during the last year.

* Net profit grew by 33 percent to Rs 2,049 crore.

5. Key Ratios (per cent)

Particulars 2006-07 2007-08

Average cost of funds 4.01 4.90Average yield on funds 7.48 8.01Return on net worth 15.19 19.00Net Interest Margin 3.85 3.58Return on assets 1.03 1.15Staff expenses to average Working Funds 1.57 1.38Operating profit to Working Funds 2.41 2.25Earning per share (Rs) 48.84 64.98

6. Dividend

The Board of Directors has recommended a dividend of 130 percent for2007-08.

7. Changes in Board of Directors

During the year 2007-08, the following changes took place in thecomposition of Board of Directors.

Dr. K.C. Chakrabarty took over as Chairman & Managing Director on4.6.2007.

Shri J.M. Garg was appointed Executive Director of the Bank on6.6.2007, thereby increasing the strength of Executive Directors totwo.

Shri Mushtaq A. Antulay and Shri Gautam P. Khandelwal were nominated asDirectors on the Board of the Bank on 27.2.2008 under Section 9(3)(h)of the Banking Companies (Acquisition and Transfer of Undertaking) Act,1970.

Shri S.C. Gupta ceased to be Chairman & Managing Director w.e.f.1.6.2007 on attaining the age of superannuation.

Shri Mohanjit Singh, Director representing shareholders expired on

Page 461: company history of SBI, ICICI

21.2.2008.

The Board welcomes all the new Directors and wishes to place on recordthe valuable services rendered by Shri S.C. Gupta and Shri MohanjitSingh.

8. Corporate Governance

The Bank gives high priority to good Corporate Governance. The Bankwas assigned the CGR-2 Rating by ICRA Ltd implying adoption of suchpractices, conventions and codes as would provide its financialstakeholders a high level of Corporate Governance.

In compliance of RBI directive regarding “fit & proper criteria” to befulfilled by the person being elected as Directors on the Boards of theNationalised Bank, the Board of the Bank constituted a “NominationCommittee”.

The Bank has complied with the guidelines of RBI and SEBI on thematters relating to Corporate Governance which has been examined by theStatutory Central Auditors.

In recognition of its efforts, the Bank was bestowed Golden PeacockAward for Excellence in Corporate Governance by the Institute ofDirectors, on September 20, 2007.

9. Organisational Restructuring

While the Bank gained in terms of improved business processes, assetliability management and risk management, the rapid changes in thecompetitive environment and higher use of technology warranted the needfor a more horizontal organizational structure for speedier decisionmaking. Keeping this in view, the Bank removed one tier and adopted 3tier structure in place of existing 4 tier one. The new 3 tierstructure will allow for a leaner, efficient and cost effective system.

10. Acknowledgments

The Board of Directors thank the Government of India, Reserve Bank ofIndia, Securities and Exchange Board of India (SEBI), Stock Exchanges,the Bank’s customers, public in general and the shareholders forvaluable support, continued patronage and confidence reposed in theBank. The Board also wishes to place on record its appreciation to allour people whose talent and commitment are central to the Bank’ssuccess and look forward to their continued co-operation in meeting thefuture challenges.

For and on behalf of the Board of Director

Chairman and Managing Director

New DelhiMay 29, 2008