CONTENTS 1. Notice 2. Directors' Report 3. Report on Corporate ...

CONTENTS

1. Notice

2. Directors’ Report

3. Report on Corporate Governance

4. BASEL Disclosures

5. Auditor’s Report

6. Balance Sheet

7. Profit & Loss Account

8. Schedules

9. Principal Accounting Policies

10. Notes on Accounts

NOTICE OF AGM AND BOOK CLOSURE

NOTICE is hereby given that the Fifty-third

Annual General Meeting of the Shareholders of

State Bank of Bikaner and Jaipur will be held

in the Maharana Pratap Auditorium, Bharatiya

Vidya Bhavan, K. M. Munshi Marg, Opp.

O.T.S., Jaipur - 302015 on Monday, the 2nd

June, 2014 at 11.30 a.m. (Indian Standard

Time) instead of Wednesday, the 28th May,

2014 at 12.00 noon, as notified earlier, to

discuss and adopt the Balance Sheet and Profit

& Loss Account of the Bank, the report of the

Board of Directors on the working and

activities of the Bank and the Auditors' Report

on the Balance Sheet and Accounts for the

period 1st April, 2013 to 31st March, 2014.

The register of shareholders of the Bank shall

remain closed from Monday, the 26th May,

2014 to Sunday, the 1st June, 2014 (both

days inclusive) instead of from Wednesday,

the 21st May, 2014 to Tuesday, the 27th May,

2014, for the purpose of Annual General

Meeting for the year ended 31st March, 2014.

एतद्दद्दवाया सचूना दी जाती है कि स्टेट फैंि ऑप फीिानेय एण्ड जमऩयु िे अशंधायिों िी 5 3वीं वार्षिि साधायण सबा, भहायाणा प्रताऩ ऑडडटोरयमभ, बायतीम र्वद्दमा बवन, िे.एभ.भुशंी भार्ि, ओ.टी.एस. िे साभने, जमऩयु भें, ऩवूि ननधािरयत नतथथ फधुवाय ददनांि 28 भई, 2014 िो दोऩहय 12 फजे िे स्थान ऩय, सोमवार दिनाांक 2 जून, 2014 को प्रात:11.30 बजे (बायतीम भानि सभम) आमोजजत िी जामेर्ी, जजसभें 1 अप्रेर 2013 से 31 भाचि, 2014 ति िी अवथध िे तरुन-ऩत्र एव ंराब औय हानन खाता, इसी अवथध भें फैंि िे िामिियण एव ंकिमािराऩों ऩय ननदेशि भण्डर िे प्रनतवेदन तथा तरुन-ऩत्र व रेखों िे सम्फन्ध भें सऩंयीऺिों िे प्रनतवेदन ऩय र्वचाय िय ऩारयत किमा जामेर्ा।

फैंि िे अशंधायिों िा यजजस्टय फधुवाय, ददनांि 21 भई, 2014 से भरं्रवाय, ददनांि 27 भई, 2014 ति, िे स्थान ऩय सोमवार, दिनाांक 26 मई, 2014 से रवववार, दिनाांक 1 जून, 2014 तक (दोनो ददन मभरािय), 31 भाचि, 2014 िो सभाप्त वषि िी वार्षिि साधायण सबा हेत ुफन्द यहेर्ा।

1

REPORT OF THE BOARD OF DIRECTORS TO THE STATE BANK OF INDIA,

THE RESERVE BANK OF INDIA AND THE GOVERNMENT OF INDIA IN

TERMS OF SECTION 43(1) OF THE STATE BANK OF INDIA (SUBSIDIARY

BANKS) ACT 1959.

PERIOD COVERED BY REPORT: 1ST

APRIL 2013 TO 31ST

MARCH 2014.

The Board of Directors of State Bank of Bikaner and Jaipur have pleasure in presenting

this Annual Report together with the audited Balance Sheet and Profit and Loss Account

of the Bank for the year ended 31st March 2014.

MANAGEMENT DISCUSSION AND ANALYSIS

ECONOMIC SCENARIO

Global Economy:

The financial year 2013-14 has been a challenging year for the global economy put

together. Although the global economic turmoil, which shook US in 2008-09 and slowly

spread into Europe has not yet subsided completely, the recovery signals are very much

visible. While the sub-prime impact has gone off-screen in US, the European slowdown

is also slowly pulling through. Global growth is projected to be slightly higher, at around

3.7 percent in 2014 and rising to 3.9 percent in 2015. However, downward revisions to

growth forecasts in some economies highlight continued fragilities, and downside risks

do still remain.

Growth in United States is expected to be 2.8% in 2014, up from 1.9% in 2013. The Euro

area is turning the corner from recession to recovery and is projected to improve to 1

percent in 2014 and further strengthen to 1.4% in 2015.

The overall growth in emerging market and developing economies is expected to increase

to 5.1% in 2014 and to 5.4% in 2015. Growth in China which rebounded strongly in the

second half of 2013, largely due to acceleration in investment, is expected to be

temporary and may moderate slightly to around 7.5% in 2014-15.

In most of the emerging markets and developing economies, while domestic weaknesses

do remain a concern, stronger external demand from advanced economies has, to some

extent, lifted growth. While some economies may have room for monetary policy

support, output is close to potential in others, suggesting that growth declines partly

reflect structural factors or a cyclical cooling and that the main policy approach for

raising growth must be to push ahead with structural reform.

Indian Economy:

On the domestic front, the economy has continued to register below 5% growth mark

successively for five quarters in a row with 4.7% in GDP in the third quarter of 2013-14.

The growth in the second and third quarter of FY 2013-14 was also due to better

agriculture numbers. The negative growth under manufacturing continued to exert

2

pressure on the overall GDP numbers. The index of industrial production for most part of

the year remained under strain, thereby dampening the growth prospects. As such the

indicators do not point towards any sustained revival in the industry and services sector.

However, there were signs of relief on the inflation front. The WPI started easing towards

the end of the FY 2013-14 with easing observed in the CPI numbers as well which also

helped the interest rates to ease a little. As against the RBI‟s glide path of inflation (CPI)

touching 8% by Jan‟15, the CPI inflation eased to 8.1% in February. However, with the

hardening of prices, the inflation may again rise, albeit not as much as previous year.

Exports, which picked up to double digit growth from July to Oct 2013 on falling rupee

value, slowed to 3.67% in Feb‟14 due to slowdown in demand in partner countries and

softening of prices of exports of petroleum products and gems and jewellery.

RBI, in its first bi-monthly review of 2014-15, has estimated GDP growth in the range of

5 to 6%, with downward risks to the central estimate of 5.5%. The end of the financial

year saw Sensex touching new highs on the back of huge FII inflows in the country.

Banking Industry:

The Banking Industry growth points toward the growth pattern of the economy as well.

As against the projected aggregate deposit and non-food credit growth of 14% and 15%

respectively, the banking industry, as at 21st Mar‟14, registered a growth of 14.6% and

14.3% respectively. While the deposit growth surpassed the RBI‟s projections, the credit

growth projections could not be achieved which reflect the low credit off-take and

eventually the falling investments in the economy. The asset quality concerns continued

to build up, because of the overall trade and demand slowdown. The increase in the

benchmark interest rates towards the second half of the year alongwith other liquidity

tightening measures targeted to bring inflation under control had their own impact on the

corporate credit pick-up, which already was suffering from the demand slowdown. The

interest rates, however, seem to have peaked and may see some easing, owing to the fall

in the inflation levels. The performance of the banking industry may also improve in the

coming quarters due to an expected revival in country‟s economic and industrial growth,

which may also help in controlling the NPAs and a decline in fresh slippages.

RAJASTHAN ECONOMY

Rajasthan is one of the emerging states in the Indian eco-system. Rajasthan economy

though primarily agricultural and pastoral, is rising fast on the industrial map of the

country. As an investment destination, Rajasthan ranks 3rd among all states in terms of

investment proposals. Multinationals are looking at Rajasthan as a potential investment

destination. The NCR areas of Rajasthan are now buzzing with automobile and

manufacturing companies creating forward linkages to spur growth of small business

units in the region. Rajasthan is pre-eminent in quarrying and mining in India. The state

3

is the second largest source of cement. It is rich in salt deposits, copper and zinc.

Rajasthan is going to be benefitted by the proposed Delhi Mumbai freight corridor in a

big way. The proposed oil refinery at Barmer, which has been formally inaugurated on

22nd

Sep‟13, and discovery of huge copper resource in Alwar district will add to the

state‟s prospects of becoming new industrial investment hub. The Oil discovery in

Rajasthan by Cairn India has already brought Rajasthan on the world map of Oil and Gas

exploration.

Textile is another segment which, besides other industries, contributes a lot to Rajasthan

as well as Indian economy. The textile sector contributes about 4% to GDP of the

country.

Endowed with natural beauty and a great history, tourism is flourishing in Rajasthan with

places like Jaipur, Udaipur, Jodhpur & Jaisalmer always buzzing with tourists. The

healthy and growing tourism industry has been the source of growth of the local

handicrafts and jewellary industry. Tourism provides a big boost to the economy of

Rajasthan.

DEVELOPMENTS IN THE FINANCIAL SECTOR

The year 2013-14 has been a period of increased burden of stressed assets for PSBs with

total growth of 39% in Gross NPAs upto Dec‟13 and 51% growth in Net NPAs.

Growth slowdown, persistent inflation and the twin deficit risks, that were increasing

rapidly in 2012-13, gave some respite in the current fiscal with CAD expected to be less

than 2% of GDP, GDP expected to be growing at 5.5% in last quarter of the current fiscal

and a control on inflation. Export growth in FY 2013-14 surged high and imports saw a

negative growth, owing to a declining rupee and measures to curb unproductive imports.

This has given way to CAD to be contained within the budgetary level.

Monetary Policy:

With inflation at current levels still considered to be sticky if the food and fuel prices

were to be removed, the RBI Governor, in the First Bi-monthly Monetary Policy

statement for 2014-15, has as a cautious stance, maintained status quo in the rates.

Some of the important key monetary policy features are:

The GDP growth estimate is expected to be in the range of 5 to 6%, with downside

risks.

Banks have been asked not to levy penal charges for non-maintenance of minimum

balances in saving deposit, both operative as well as inoperative accounts.

The recommendations of the Expert Committee to Revise and Strengthen the

Monetary Policy Framework (Chairman: Dr. Urjit R. Patel) have been implemented,

including adoption of the new CPI (combined) as the key measure of inflation, explicit

recognition of the glide path for disinflation and transition to a bi-monthly monetary

policy cycle,

4

As the liquidity coverage ratio (LCR) stipulated by the Basel Committee becomes a

standard with effect from January 1, 2015, it is proposed to issue guidelines relating to

Basel III LCR and Liquidity Risk Monitoring tools by end-May 2014.

Following industry-wide concerns about asset quality and the consequential impact on

the performance/profitability of banks, the Reserve Bank has further extended the

transitional period for full implementation of Basel III Capital Regulations in India

from as on March 31, 2018 to as on March 31, 2019.

Interim Budget:

This being an election year, the Government had presented the interim budget for the FY

2014-15. The Budget has estimated a GDP growth of 4.9% for the FY 2013-14. The

fiscal deficit for 2013-14 is projected to be contained at 4.6% while fiscal Deficit in

2014-15 is estimated at 4.1%, which will be below the target set by new Fiscal

Consolidation Path and Revenue Deficit is estimated at 3.0%. Foreign exchange reserve

to grow by USD 15 billion in this Financial Year.

The savings rate and investment rate of the economy is estimated at 30.1% and 34.8%

respectively in 2012-13. To boost investment, the Government has set up a Cabinet

Committee on investment and Project Monitoring Group. By end of January 2014,

Projects numbering 296 with an estimated project cost of `660,000 crore had been

cleared.

Gross market borrowing for 2014-15 is kept at `5.97 trillion with net borrowings at `4.57

trillion. The plan is to buy back/switch bonds of `500 billion in 2014-15, Debt repayment

in 2014-15 is seen at `1.397 trillion and Interest payments are seen rising to `4.27 trillion

in 2014-15 from a revised estimate of `3.8 trillion for the current fiscal year. The plan

expenditure for 2014-15 is kept at `5.55 trillion, the same level as the previous fiscal

year, while non plan spending is estimated at about `12.08 trillion. The Government

would be providing `112 billion of capital infusion in state runs banks in 2014-15.

CORPORATE OPERATIONS

BUSINESS PERFORMANCE

The overall business of the Bank (deposits plus gross advances) reached a level of

`139207 crore as at end-March 2014 as against `130590 crore as at end-March 2013,

recording a growth of `8617 crore (6.60%). The total deposit increased by `1759 crore

(2.44%) to reach a level of `73875 crore while advances increased by `6858 crore

(11.73%) to reach a level of `65332 crore by end-March 2014. The cost of deposits of the

Bank decreased from 7.13% in 2012-13 to 7.04% in 2013-14, while yield on advances

decrease from 11.64% to 11.27%.

5

TREASURY AND INVESTMENTS

The year opened with softening of yields in bonds with 10 year benchmark sovereign

bond yield easing between 7.25% to 7.90% during the period April 2013 to mid July

2013, giving opportunity to dealers to book good profit. However, the second half of July

2013 and the rest of the year saw yields spiralling upwards, on a series of monetary

tightening steps initiated by the RBI to contain the fall of ` against the U.S. $. The 10

year benchmark yield touched a high of 9.48% during the year, before closing at 8.80%

on March 28, 2014. The Bank booked arbitrage profit whenever there arose an

opportunity due to difference in domestic and forex interest rates.

The stock market remained largely in the green territory during the first quarter, as a

result of various reform measures taken by the government and continued FII inflows.

During the second quarter, the market plunged due to several liquidity tightening

measures taken by RBI to strengthen the weakening ` against the U.S. $. The negative

sentiment accentuated further due to lower GDP growth, falling IIP and high inflation. In

the latter half of the year, the market showed strength and towards the end of the year

rallied to its level of an all time high on account of strengthening `, falling inflation and

pre election sentiments. During the year, Bank participated in Initial Public Offers/Offer

for Sale of companies with proven record/sound fundamentals and also undertook trading

in the secondary market to maximize returns.

The Bank‟s gross investments were `21287 crore as on 31st March 2014 as against

`20163 crore in the previous year while net investments (after netting repo and provision

for depreciation amounts) stood at ` 17750 crore as aginast `20146 crore in the previous

year. Profit for the year 2013-14 was `138.63 crore as against a profit of `75.55 crore for

the year 2012-13 thereby registering an increase of 83.49%. The yield on investments,

excluding profits, improved from 7.64% in 2012-13 to 7.83% in 2013-14. The yield on

investment including profit improved from 8.04% to 8.53% during the same period.

FINANCIAL HIGHLIGHTS

NET INTEREST INCOME

The Bank's total interest income increased from `7498.19 crore during 2012-13 to

`8168.56 crore during 2013-14, recording a growth of 8.94%. Interest expenditure

6

increased by 8.36% to `5344.78 crore, as against `4932.38 crore in the previous year.

The net interest income recorded a growth of 10.05% to `2823.78 crore, as against

`2565.81 crore in 2012-13. The net interest margin remained same at the last years level

of 3.62%.

NON-INTEREST INCOME

The non-interest income of the Bank has increased by 20.66% from `726.28 crore in

2012-13 to `876.34 crore during 2013-14. The increase during the year as compared to

the last year is mainly on account of increase in profit on sale of Investment by `63.08

and recovery in Written-off accounts by `38.57 crore.

OPERATING EXPENSES

The operating expenses recorded a growth of 26.99% from `1579.22 crore in 2012-13 to

`2005.46 crore during 2013-14. Of this, employee costs increased by 31.20% to

`1295.64 crore, while total other operating expenditure increased by 19.96% to `709.82

crore.

PROFIT

During 2013-14, the operating profit decreased to `1694.66 crore, (by -1.06%) as against

`1712.87 crore in the previous year. The net profit recorded a growth of 0.20% from

`730.24 crore in 2012-13 to `731.69 crore in 2013-14.

DIVIDEND

During the year 2013-14, the Bank declared an Interim Dividend of 143% i.e. `14.30 per

equity share (face value of share `10/- per share). Record date for ascertainment of

entitlement of shareholders for Interim Dividend was 31st March, 2014. Interim Dividend

may be treated as final dividend.

KEY FINANCIAL INDICATORS

The Return on Assets of the Bank stood at 0.87% during 2013-14 as against 0.96% in the

previous year. The return on equity decreased to 13.66% as against 15.33% in the

previous year. The earnings per share increased from `104.32 in 2012-13 to `104.53 in

2013-14, while the book value per share improved from `678.74 in 2012-13 to `765.13

in 2013-14. As at end-March 2014, the capital adequacy ratio of the Bank stood at

11.71% and 11.55% as per Basel II and III norms respectively, as against 12.16% as per

Basel II norms respectively, as at end-March 2013. This was well above the RBI

benchmark of 9%. Due to rise in NPAs on account of continued stress faced by the

industrial sector coupled with agriculture NPAs, the Bank's Gross NPA ratio and Net

NPA ratio increased from 3.62% and 2.27% respectively as at end-March 2013 to 4.18%

and 2.76% respectively, as at end-March 2014. The average business per employee

7

increased to `977 lakh in 2013-14, as against `900 lakh in the previous year. The net

profit per employee decreased to `5.62 lakh in 2013-14, compared to `5.91 lakh during

2012-13. The average business per branch increased to `116.52 crore during 2013-14, as

against `112.42 crore in the previous year.

CREDIT MANAGEMENT

The overall credit demand remained muted during the FY 2013-14, with GDP growth in

sub 5 % range due to overall slowdown in the economy leading to a lower level of

investment activity. However, the Bank continued to focus on qualitative credit growth

and faster credit delivery. Total advances of the Bank grew by 11.72% during 2013-14,

as against growth of 16.98% during 2012-13.

The Bank‟s Commercial & Institutional (C&I) segment advances (other than food credit)

during the FY 2013-14 grew by 9.40% with an increase of ` 3099.00 crore over FY

2012-13, whereas non C&I segment comprising personal, small & micro enterprises and

agricultural advances grew by ` 2907.42 crore (11.50%).

Against the backdrop of stress in the various segments of the industry, the impetus of

financing remained mainly towards top rated PSUs and other sectors such as Real Estate

(RH), textiles and NBFCs etc.

In view of the prevailing competitive and stretched market scenario, closer interaction

and regular meetings by the Top Management with high value customers were held at

major centers in the country which resulted in booking several good advances.

PERSONAL BANKING

Deposits under Personal Segment grew from `41,905 Cr as on 31st March 2013 to

`46,726 Cr as on 31st March 2014, thus recording a growth of 11.50%.

Acquisition of new customers

Acquisition of new customers was the prime focus of the Bank during the year to

augment its retail deposit base. We could open 24.97 lakh new savings Bank

accounts during the year which accounts 23.46% of the base level. The resources

mobilized in the savings bank portfolio was `3,617 Crores, which helped the Bank to

improve its CASA deposits.

55% of the new accounts are opened by either students or youth which reflect the

penetration to the younger age groups of the population.

Nearly 73% of the total deposit in the newly opened accounts are contributed by youth

and Middle aged customers ranging from 20 years to 60 years which shows the

effective linkage to salaried/ Income earning segments of the society.

8

Mahalakhpati Campaign

To encourage the habit of regular monthly savings among customers, we have made

our recurring deposit scheme popular through a special campaign called Mahalakhpati

RD Campaign. The campaign was focused on the opening of high value recurring deposit

with a maturity value of `10 lakh and above. We could mobilize 27,397 new Millionaire

Recurring Deposit accounts during the two months of the campaign. We could open

70,084 Recurring Deposit accounts during the year.

SBBJ Vaibhav & SBBJ Dhanshakti

We could mobilize `1,190 Cr in a specially designed term deposit/product called SBBJ

Vaibhav launched during the year. SBBJ Dhanshakti another deposit product for short

term deposit has mobilized `104.74 Crores during the year.

Personal Finance

The Personal finance portfolio has crossed a landmark of `10,000 Cr during the

financial year 2013-14. The Bank continued to be active in catering the credit

requirements of P segment customers mainly by way of Home Loans, Car Loans,

Education Loans and Personal Loans. The advances under the personal segment rose to a

level of `10,295 Cr as at Mar 2014 from `9,131 Cr as at the end of March 2013.

During the year under review 7,631 home loans aggregating to `816 Crore were

granted, taking the outstanding home loan level to `3,768

Crores as on 31.03.2014. Similarly 14,507 Car Loans aggregating `648 Cr were

granted during the same period taking outstanding car loan level to `1,452 Cr as on

31.03.2014. We could disburse 37,741 Personal loans aggregating `1,116 Cr during

the same period.

As in the previous years, the Bank contributed to support the younger generation to

pursue higher studies by extending Education Loan. To support the efforts of

Government of India to boost the sentiments of retail/consumer durable segments,

Bank has introduced a new scheme for financing of Consumer Durables during the

year. The other retail segment products like Max Gain Scheme, Rent Plus and Home

Cash have been revamped during the year to make them more customer/market

friendly.

PRIORITY SECTOR LENDING(PSL)

Priority Sector Lending is the major thrust area of the Bank's operations. As at the end of

March, 2014, the Bank's priority sector advances increased to a level of `23662 crore as

compared to `20807 Crore in the previous year i.e. growth of 13.72% over March 2013.

The PSL constituted 40.73% of the Adjusted Net Bank Credit, against the RBI

benchmark of 40%. However, Priority Sector Lending in Rajasthan stood higher at

66.40% of Rajasthan's ANBC.

9

AGRICULTURE

Lending to agriculture remains one of the major thrust areas of the Bank. The outstanding

level of agriculture advance increased from `9188 crore as at the end of March 2013 to

`10982 crore as at the end of March 2014, a growth of 19.52%. Our Bank‟s total direct

agriculture lending is 99.35% of total Agriculture advances amounting to `10911 crore, and

has registered a growth of ` 2658.90 crore during the Financial Year under review. The

flow of credit to agriculture stood at ` 7644 crore against the annual target of `3500 crore

during the current financial year. Agriculture advance constituted 18.90% of the Adjusted

Net Bank Credit (ANBC), against RBI benchmark of 18%. In the State of Rajasthan, it is

even higher at 37.2% of ANBC for Rajasthan State.

The Bank has issued 109933 Kisan Credit Cards (KCCs) with sanctioned limits of `2302

crore during the financial year 2013-14. The total number of KCC stood at 600317 as at end

of March 2014.

FINANCIAL INCLUSION (FI)

In the first phase our Bank was allocated 829 villages with population above 2000.

Accordingly 794 USBs (Ultra Small Branches) were established using PoS technology

and BCs/BCAs were engaged covering 823 villages and in the remaining 6 villages Brick

and Mortar branches were opened. In the second phase of FI (2013-16) our Bank has

been allocated 7588 villages with population below 2000 in 1878 Gram Panchayats

which are to be covered by engaging BCs and / or opening of branches by 31.03.2016.

During the current Financial Year i.e. 2013-14 we have been allocated target to cover

1067 villages and we have covered 1070 villages by 31.03.2014.

The KIOSK Banking Software developed by M/s TCS Ltd. and provided by SBI has

been rolled out in our Bank. Our Bank has entered into agreement with M/s CSC E-

Governance Services India Limited on 07.01.2013 and with M/s. FIA Technology

Services Pvt. Ltd. (a Corpoprate BC) on 20.11.2013 for providing the BC service. M/s

CMS Computers Ltd. which is a Service Centre Agency (SCA) of M/s. CSC e-

Governance Services India Ltd. has been allotted 19 districts in Rajasthan for engaging

CSCs as BCAs in the Gram Panchayats allocated to our Bank. Pali and Barmer districts

have been allotted to M/s FIA Technology Services Pvt. Ltd. for engaging their BCAs. In

the remaining 12 districts our existing Corporate BCs namely Lupin Human Welfare &

Research Foundation Samiti / P2P Microfinance and Allied Services or Individual BCs

will continue to provide banking services.

Aadhaar Seeding and mapping on NPCI Portal: Our Bank has successfully

implemented Aadhaar based payment system (APBS/NACH) through National Payment

Corporation of India (NPCI) gateway. Seeding of Aadhaar Number in CBS account is

10

under progress. We have seeded 625759 accounts with Aadhaar of which 616746

Aadhaars have been uploaded on NPCI Portal.

Direct Benefit Transfer:

DBT has been rolled out in 121 districts across the country of which 6 districts are in the

State of Rajasthan and SBBJ is Lead Bank in two DBT districts i.e. Udaipur and Pali. In

both the districts banks have opened accounts of all the befeciaries as per the list received

from District Authorities.

MICRO, SMALL AND MEDIUM ENTERPRISES (MSMEs)

The Micro, Small and Medium enterprises (MSME), is crucial to the Indian Economy.

There are 3 crore enterprises in various industries, employing approx 7 crore persons.

Together, these account for 45% of the industrial output and 40% of the exports. This

sector is contributing approx.11% per annum to India‟s GDP and is critical for the over

all GDP growth. RBI has also emphasized to adopt suitable strategies for higher lending

to MSMEs. Accordingly, our Bank has also given high priority to this area.

We have arranged MSME customers meet at Jaipur, Alwar, Bhiwadi, Udaipur.

Chittorgarh & Bikaner centres. We have also sensitized our operating officials by way of

training & seminar etc.

The Bank has assisted 21156 new MSME units during the year 2013-14. In order to boost

MSME advances, the Bank has modified its existing MSE loan schemes to make them

most competitive.

The Bank has continued its thrust to provide collateral free loans to MSMEs under the

credit guarantee scheme of CGTMSE. During the year (April 13 to March, 14), Bank

provided new collateral free loans under Credit Guarantee Scheme of CGTMSE to MSE

units amounting to `119.11 crore, taking the CGTMSE cover accounts (cumulative) at

`405.40 Crore as at the end of March 2014.

LOANS TO WOMEN BENEFICIARIES:

The Bank finance as on 31st March, 2014 to women beneficiary has increased to

`3181.21 Crore in 212925 accounts against `2732.87 crore in 204680 accounts as on

March 2013, registering a growth of ` 448.34 crore. This constitutes 5.48 % of ANBC

against the Bench Mark of 5 %.

ASSISTANCE TO MINORITY COMMUNITIES, WEAKER SECTIONS AND

SCHEDULED CASTES / SCHEDULED TRIBES

As at end March 2014, assistance to minority communities stood at `2960.73 crore

spread over 101591 accounts.

Financing to weaker sections stood at `10998.90 crore benefiting 1014090 persons as at

the end of March, 2014. The assistance to weaker sections as a percentage of Adjusted

11

Net Bank Credit is 18.93% as at end March, 2014. This is well above the benchmark of

10% prescribed by RBI.

The outstanding assistance towards Scheduled Castes (SCs)/Scheduled Tribes (STs)

stood at `3070.27 crore in 258602 accounts under priority sector as on 31st March, 2014.

GOVERNMENT SPONSORED SCHEMES

Laying utmost emphasis on Government sponsored schemes has been amongst the major

strategies of the Bank in pursuit of financial inclusion. The Bank continued to play a

pioneering role in financing entrepreneurs under various governments sponsored

schemes. The SGSY scheme was replaced by National Rural Livelihood Mission (NRLM

scheme) w. e f. 01/04/2013. The position under various Government sponsored schemes

as on 31 March, 2014 is as under: -

Scheme Number of

Beneficiaries

Amount sanctioned during

financial year (` crore)

Swarn Jayanti Shahri Rojgar

Yojana (SJSRY)

1893 10.88

Prime Ministers Employment

Generation Programme

(PMEGP)

712 34.77

Mukhya Mantry Swavlamban

Yojana (MMSY 2564 53.00

POP 5612 22.55

LEAD BANK SCHEME

Our Bank has Lead Bank responsibility in nine Districts in the State of Rajasthan viz.

Bikaner, Barmer, Hanumangarh, Jaisalmer, Jalore, Pali, Sirohi, Rajsamand and Udaipur.

The Bank has been implementing and monitoring the Annual Credit Plan and other

developmental and poverty eradication schemes launched by the Govt. of India, Govt. of

Rajasthan and NABARD. Targets allotted for Annual Credit Plan to our Bank for the

year 2013-14 was `4011.00 crore, against which achievement of our Bank up to March,

2014, is `4670.00 crore, achieving 116%.of the annual targets.

MICRO CREDIT (SHGs)

At the end of March,2014, the Bank has credit linked a total of 44244 Self Help Groups

with outstanding amount of `200.94 crore, out of which 36363 accounts are of women

beneficiaries with outstanding amount of `169.08 crore. NABARD has ranked the Bank

as number one in Rajasthan State for its performance under Micro Credit continuously

from the year 2004-05 to 2008-09.

Ministry of Finance, Govt. of India launched a project for financing to Women Self Help

Groups with the support of Anchor NGO as SHPI in 24 backward Districts of 24 States

in the country, which was later extended to 150 back ward Districts, including 109 Left

12

Wing Extremism (LWE) districts. In Rajasthan, Barmer (our lead district), Banswara,

Dungarpur and Jhalawar districts have been selected for this purpose.

The progress in this regard is directly reviewed by Department of Financial Services,

Ministry of Finance, Govt. of India. Bank branches and NGO has been identified and

Anchor NGO, CECOEDECON has surveyed and mapped the area in Barmer District. In

Barmer District, NGO has Linked 931 SHGs by SB Linkage and 521 SHGs by Credit

Linkage during the year against the targets of 1000 up to March, 2014.

RURAL SELF EMPLOYMENT TRAINING INSTITUTES (RSETI)

In order to impart job- oriented skills to rural unemployed youth, the Bank has set-up

eight RSETIs at Bikaner, Hanumangarh, Barmer Jaisalmer, Jalore, Pali, Sirohi and

Nathdwara (Distt. Rajsamand).

By the end of March, 2014, 33702 candidates have been imparted training for various

local demand jobs in these institutions and by imparting skill trainings, 4270 candidates

have been engaged in various jobs and 15340 candidates have started their own ventures.

8935 persons have been credit linked amounting to ` 4734.45 lakh. Rating process was

introduced by MoRD, New Delhi through State Project Co-coordinator of RSETIs in the

year ending March 2013. All our RSETIs secured AA+/AB rating. Our Managing

Director and Directors of four RSETIs namely Bikaner, Barmer, Hanumangarh and

Jaisalmer were honored in the felicitation function organized by MoRD, GoI on Rseti

Diwas at Vigyan Bhawan, MoRD, Delhi on 21/11/2013.

FINANCIAL LITERACY AND CREDIT COUNSELLING CENTRES (FLCC)

During the year 2010-11, in order to educate farmers and other people in rural / urban

areas with regard to various financial products, Bank schemes and services available

from the formal financial sector, the Bank had set up 9 Financial Literacy and Credit

Counseling Centres (FLCC) in all nine lead Districts in Rajasthan. These FLCCs are

providing awareness service, free of charge. Up to 31/03/2014, 111598 persons have

been counseled by these centres out of which 23605 persons have been linked with

Banks.

A campaign was launched to arrange five awareness camps per month in nearby villages

by FLCC Counsellors, which still continues and is very beneficial to rural people. In

addition to its campaign was also run through wall paintings, brochures and pamphlets.

The FLCC Counsellors also organize awareness camps in minority concentrated blocks,

in their Districts.

13

REGIONAL RURAL BANK

The Marudhara Gramin Bank (MGB) sponsored by SBBJ with its Head office at Jodhpur

has a net work of 501 branches spread over in 12 districts of Rajasthan state namely Pali,

Jalore, Sirohi, Sriganganagar, Bikaner, Hanumangarh, Jaisalmer, Barmer, Jodhpur,

Nagaur, Jaipur & Dausa. SBBJ continues to provide managerial support and financial

assistance by way of refinance etc. to MGB. All branches of MGB are on CBS platform

and provide Electronic Fund Transfer facility. MGB has a deposit of ` 5143.57 Crore and

advance of ` 3792.89 Crore as on 31.03.2014. MGB recorded Gross profit of ` 80.60

Crore & net profit of `55.50 Crore.

GOVERNMENT BUSINESS

The Bank conducts Government Business on behalf of State/Central Government

departments through 494 authorized branches. Income Tax, Central Excise, Service Tax,

Value added tax etc. are collected through physical challans and also through the

electronic mode. The Bank has established a Centralized Pension Processing Centre

(CPPC) which calculates as well as credits pension to the accounts of pensioners across

all the branches. We also have an Online Treasury Branch for online payment of Salary

of Rajasthan Govt. employees on behalf of the State Govt. Presently our Online

Treasury Branch is processing 9 lakh State Govt. transactions received through 18000

digitally signed files in a month. During 2013-14, commission income from Government

business was ` 132 crore.

INTERNATIONAL BANKING

The Bank provides Foreign Exchange related services to exporters/ importers, other

resident and non-resident customers through a network of 68 Authorized Category "B",

184 Category „C‟ branches and 4 Trade Finance Central Processing Centres(TFCPC).

Bank's forex dealing room at Mumbai and all the authorized category „B‟ branches are

equipped with infrastructure of latest technology for real-time communication and are

connected through SWIFT network with more than 750 offices of foreign banks

throughout the world. The Bank maintains 21 NOSTRO accounts in all major currencies

and non-account correspondent banking relationship with all major banking groups in the

world. To facilitate NRI customers for inward remittances, there is online remittance

facility and tie-ups with 5 Gulf based Exchange Houses.

The Bank also undertakes proprietary Forex trading to increase profit by taking

advantage of market movements. Our Merchant forex turnover stood at `31678 crore in

the FY 2013-14 as against `26717 crore of last financial year, representing an increase of

` 4961 crore (18.57 %) during the year.

Our NRI deposits stood at `1384 crore at the end of March 2014 against the base of

`1249 crore in March 2013, registering a growth of `135 crore ( 10.80%). Our export

14

credit stood at `2740 crore at the end of March 2014 as against `2334 crore of March

2013, recording a growth of `406crore (17.39%) during the financial year.

The Bank chairs the local chapter of Foreign Exchange Dealers' Association of India

(FEDAI). The Bank is an active member of FEDAI, International Chamber of Commerce

(ICC) and Clearing Corporation of India Limited (CCIL).

INDUSTRIAL REHABILITATION

Rehabilitation / restructuring of potentially viable industrial unit remains an important

thrust area of the bank. For this purpose, the bank has its own Industrial Rehabilitation

Policy containing detailed guidelines for undertaking rehabilitation / revival package and

the same is updated from time to time. Whenever units are found non viable or not

responding to the rehabilitation / restructuring package, focus is shifted to recovery of

Bank's dues through legal recourse such as action under SARFAESI / compromise

settlement / assignment of debt / through courts/ Debt Recovery Tribunals (DRT).

As at end of 31st March 2014, the Bank had 23 large sick /weak units on its books with

aggregate outstanding of `405.39 crores. There are 42 Corporate Debt Restructuring

cases with aggregate exposure of `2091.00 crores and 24 BIFR cases with exposure of

`498.19 crores. The Bank has been acting as BIFR's Operating Agency in 4 cases. During

the year under review, 38 accounts with aggregate exposure of `1770.09 crores have

been restructured under CDR mechanism as warranted basically by the tight economic

scenario. Sustained efforts are undertaken by the Bank in restructuring the accounts and

post sanction close monitoring and follow up have resulted in retaining most of the

restructured assets as Standard Assets.

NPA MANAGEMENT

The Bank continues with its multipronged strategy of controlling Non-Performing Assets

(NPAs) through intensive monitoring of large value accounts, close follow-up with

DRT/BIFR, restructuring of viable accounts and effectively utilizing the remedies

available under the SARFAESI and RODA Acts. GMs, DGMs and AGMs posted at

Head Office have been assigned the role of mentors of Zones / Regions and Branches to

provide support and monitor the NPA level. Due emphasis has been given to follow-up

with the Court and filing of Execution Petitions. During the year, large numbers of

“Recovery Camps”, Bank Adalats and Lok Adalats were organized for NPA recovery,

the results of which were quite encouraging. Recovery camps are being held in every

village, every week. The progress in NPA / AUC recovery is being discussed / reviewed

by the Management Committee by conducting Video- conferencing with all the Zones

and DGM headed branches. The “Loan Tracking Center” monitors / tracks the irregular

standard accounts from Head Office level. Pre-emptive measures such as restructuring

etc. are also taken, as per RBI guidelines. By adopting the above measures and utilizing

the provision of SARFAESI Act effectively, Bank also received a number of acceptable

15

compromise proposals which resulted in good recovery in NPA. There has been an

addition of `2123.54 crore in NPA during 2013-14. However, there has been recovery /

up-gradation to the tune of Rs1110.77 crore. At the end of March 2014, gross NPA ratio

of the Bank Stood at 4.18% and Net NPA ratio stood at 2.76%.

Loan Tracking

The Bank had set up the Loan Tracking Centre (LTC), a Centralized Outbound Call

Centre at Jaipur in June 2011, for follow-up of Personal and SME Segment Loan

accounts in IRAC4, IRAC3, IRAC2 and IRAC1 categories to avoid slippages of account

into a hardcore NPA. Subsequently in July 2012, the LTC started following up AGR

accounts also. The Call Executives at the LTC make calls to the borrowers, where contact

details are available in CBS, in a sustained manner to recover the overdue amount and

upgrade accounts in co-ordination with Branches / CPCs.

Improvement done during the current year:

(a) LTC has been set up at all the 8 Zonal offices of the Bank.

(b) Auto-Dialer system has been installed at Head Office LTC, whereby the

telephone / mobile numbers of borrowers are dialed by the Auto-dialer system and

our staff communicates with the borrower using a Head Phone attached with the

PC.

(c) With the setting up of zonal LTCs, all the NPA borrowers of the Bank are

contacted at least once during every 2 months.

Risk Management Structure of the Bank

The Bank has an independent Risk Management Framework in place. At the apex level,

there is a Risk Management Committee of the Board (RMCB), which oversees the

policies and strategies for Risk Management in the Bank. Credit Risk Management

Committee (CRMC), Asset Liability Management Committee (ALCO), Market Risk

Management Committee (MRMC) and Operational Risk Management Committee

(ORMC) provide support to RMCB. These sub-committees are required to place all

critical issues/ development in their respective areas before the RMCB. The Bank has

Credit, Market and Operational Risks Management Policies for identification,

measurement and management of major risks. These policies are reviewed and updated

from time to time, keeping in view the dynamic business environment. Integrated Risk

Management Department (IRMD) at the Head Office, functions under a Dy. General

Manager. The IRMD acts as the nodal centre for coordination with other departments/

operating units engaged in managing risk in their respective business areas.

16

Capital Framework

BASEL II : Under Pillar-I of the New Capital Adequacy Framework (NCAF) guidelines

issued by Reserve Bank of India, the Bank is computing Capital to Risk Weighted Assets

Ratio (CRAR) using Standardised Approach for Credit Risk, Standardised Duration

Approach for Market Risk and Basic Indicator Approach for Operational Risk. Under

Pillar-II of NCAF, the Bank has assessed capital requirement for 2013-14 for other risks

in its Internal Capital Adequacy Assessment Process (ICAAP) document, a copy of

which has been submitted to RBI. Basel-II Disclosures have been made by the Bank in

the Annual Report as also on Bank's website as part of the Pillar-III guidelines of NCAF.

BASEL III : In order to improve the quality of capital and address the liquidity risk

issues, Basel III Capital Regulation has been implemented in phases in India w.e.f.

01.04.2013. Accordingly, the Bank is computing Capital to Risk Weighted Assets Ratio

(CRAR) as per Pillar-I of Basel III Framework. With a view to improve market discipline

under Pillar 3 of Basel III framework and to improve transparency of capital base, Basel-

III Disclosures have been made by the Bank in the Annual Report as also on Bank's

website.

Credit Risk

Credit Risk management remains a major task for Bank and receives prime attention.

Control and monitoring of credit risk is dealt with as per the Loan Policy and Credit Risk

Management, Credit Risk Mitigation & Collateral Management Policy of the Bank

approved by the Board. These policies cover methodologies for measuring, monitoring

and control of credit risk. In order to control the magnitude of credit risk, prudential

norms on benchmark, financing ratios, single borrower or borrower-group exposure,

industry specific and sector-specific exposure, exposure to sensitive sectors, hurdle rate

for taking a fresh exposure etc. have been set up. Credit appraisal systems and a clearly

defined delegation of powers form an integral part of the Bank's Loan Policy.

Market Risk

To monitor market risks and treasury operations, mid-offices (domestic & forex) are

functional at IRMD. Scenario Analysis on market risk covering events such as decline in

stock markets, rise in bond yields and foreign exchange rate movements are conducted

regularly as per the Stress Testing Policy of the Bank to assess resilience of Investment

portfolio.

17

Operational Risk

One of the major tools for managing operational risk is to put in place a well established

internal control system, which includes segregation of duties, clear management reporting

lines and adequate operating procedures. Most of the operational risk events are

associated with weak links in internal control systems or laxity in complying with the

existing internal control procedures. The Bank has suitable systems and procedures for

managing and control of operational risks.

Preparation for Advanced Approaches of Basel-II

Bank plans to move over to advanced approaches of Basel-II guidelines for Credit,

Market & Operational Risks in a phased manner. Letter of Intents (LOI) for all the three

Risks have been submitted to Reserve Bank of India for this purpose. On receipt of

approval from Reserve Bank of India, Internal Rating Based (IRB) Approach for Credit

Risk, Internal Models Approach (IMA) for Market Risk and Advanced Measurement

Approach (AMA) for Operational Risk will be followed under advanced approaches.

This will not only help the Bank to maintain Economic Capital, but will also strengthen

the risk monitoring framework and control aspects.

Data Cleansing

Augmentation of capital is not only costly but its availability is also scarce. Hence, efforts

are being made for optimum utilisation of the existing capital. Bank aims at conservation

of capital by improving data quality. Cleansing of data will lead to accurate computation

of the Risk Weighted Assets of the Bank and is likely to reduce requirement of additional

capital.

Asset Liability Management

A comprehensive Asset Liability Management (ALM) System is in place for effective

management of Liquidity Risk and Interest Rate Risk. These Risks are assessed and

monitored through Structural Liquidity Reports and Traditional Gap Analysis

respectively. The structural liquidity report is being prepared and reviewed on a daily

basis as per RBI guidelines. Both these risks on Foreign Assets & Liabilities are being

monitored through Maturity & Positions (MAP) and Sensitivity to Interest Rate (SIR)

statements. The monitoring of liquidity on a dynamic basis, over a time horizon spanning

1-90 days, is in place. Duration Gap Analysis is also used to manage interest rate risk for

the entire balance sheet.

18

The Asset Liability Management Policy, coupled with Investment Policy of the Bank

specify various prudential limits for management of Liquidity and Interest Rate Risks.

The Bank is regularly monitoring these limits. A comprehensive Contingency Funding

Plan and a system of daily monitoring of inflows & outflows of deposits are in place for

managing Liquidity on a day-to-day basis. Calculation of Value at Risk (VaR) on Foreign

Exchange Forward Positions and Stress Testing on Liquidity, Interest rate and Foreign

Exchange Open & Forwards Positions is also undertaken regularly.

INTERNAL CONTROL, INSPECTION AND AUDIT

The Bank has in place a well established independent audit system and structure to ensure

adequate internal control for safe and sound operations. Internal Audit is carried out

under Risk Focused Internal Audit (RFIA) as envisaged under Risk Based Supervision of

RBI with focus on assessment of risk and internal control mechanism.

The branches have been categorised into three groups as per risk perception and are

subject to varying degrees of audit. During FY 2013-14, 738 Branches and 50

Centres/Processing Centres (under Business Process Re-engineering (BPR) initiatives)

have been subjected to Internal Audit. No branch of the Bank remained overdue for audit

as on 31.12.2013.

As at the end of March, 2014, 99.90% of the Bank's branches were rated "Well

Controlled" and "Adequately Controlled ".

Concurrent Audit

106 branches and 35 Centres/ Processing Centres (under BPR initiatives) covering

66.31% of advances and 40.70% of deposits as on 31.03.2013, besides 13 Head Office

Departments have been placed under Concurrent Audit.

Information System (IS) Audit

Information System Audit Cell is in place to conduct IS audit of major IT establishments

including Core Banking Project , Zonal Computer Centres, etc. in accordance with RBI

directives and Bank's IT Security Policy.

RECONCILIATION OF INTER-OFFICE TRANSACTIONS

As per the RBI guidelines, all the entries need to be reconciled within a period of six

months from the date of their origin. By the end of March 2014, the bank has reconciled

inter-branch debit transactions originated up to 28.02.2014 i.e. well before the time limit

prescribed. The Bank shall aim at reconciling all entries within two months of their

origin.

19

INFORMATION TECHNOLOGY

1. CORE BANKING SOLUTION (CBS)

All our branches are running successfully on Core Banking Solution. We were able to

provide better customer satisfaction and services by providing many Value Added

Services like; multi functional ATMs, Internet Banking, Mobile Banking, flexi deposit

scheme, multi city cheque facility, instant credit of local and outstation cheques, etc. For

all type of Debit/Credit transactions in CBS, SMS alert is sent to customers, where

mobile number is registered with the Bank.

2. ELECTRONIC PAYMENT SYSTEMS: RTGS, NEFT & SBGRPT

Real Time Gross Settlement (RTGS) is an instant payment and settlement system and

National Electronic Fund Transfer (NEFT) is a scheme for inter-bank funds transfer

operated by the RBI. All branches of our bank are RTGS & NEFT enabled. Our

customers can make their inter-bank remittances in a faster and secured manner at very

nominal cost. SB Group Payment (SBGRPT) functionality for electronic funds transfer

within State Bank Group is also available for customer.

3. AUTOMATED TELLER MACHINES (ATMs)

The Bank has installed 467 new networked ATMs and replaced 123 ATMs during the

year to take the tally of ATMs to 1554. All the ATMs are connected to the network of

State Bank Group ATMs, there by enabling more than 62.50 lakh card holders of the

Bank to have free of cost access to over 45000 ATMs of the State Bank Group all over

the country.

4. INTERNET BANKING

All our branches are enabled to offer Internet Banking facility to our retail as well as

corporate customers. Looking to the rapid increase in the usage of Internet banking

worldwide, the Bank has introduced several new features during the year. Apart from

own account and third party transfer within bank, our customers can transfer funds to

other banks in online mode. TDS enquiry for Term Deposits from the comfort of their

homes or offices, opening / closing of e - TDR / e - STDR / e - Recurring Deposit (RD)

account, facility to view the details of Income - Tax Statement (26 -AS) and viewing of

Pension Slip is available. Retail Internet Banking facility for visually challenged persons

has also been made available. For Corporate customers, a new facility 'SB - Collect', for

on line collection of funds has been provided.

Online payment of direct and indirect taxes e.g. Income Tax, Service Tax, Excise Duty,

Customs Duty of Central Government, VAT/CST of Rajasthan State Government and

Maharashtra State Government, EGRAS facility for online collection of all Tax and non

Tax revenue of Rajasthan Government. Facility of online payment of Professional Tax of

20

Maharashtra State Govt. has also been provided. Facility of online application for IPOs

using ASBA (Application Supported with Blocked Amount) facility where investor

customer continues to earn interest during the application process is available to internet

banking users.

Facility of online booking of Railway / Air Tickets has been widely accepted. Electronic

payment of railway freight (E-Freight) is gaining popularity. We have integrated number

of Aggregators to our online system to provide the payment facility of wide range of

merchants, e-commerce services and utility bills to our Internet Banking users.

Bank has taken steps to increase awareness about Internet banking among staff as well as

customers through seminars and awareness meets. To popularize online payment of taxes

a facility of "Zero Balance Internet Current Account" has been introduced.

5. MOBILE BANKING & IMMEDIATE PAYMENT SERVICES (IMPS)

Mobile Banking facility was introduced in the year of 2009, for our customers having a

Savings / Current Account. The product is named "State Bank Freedom. Presently, there

is upper ceiling of `50000/- for fund transfer and for purchase of goods / services per day

with in overall calendar month limit of `2,50,000/-. In order to make the registration

process more robust and to eliminate the threat of frauds/ phishing attempts, our Bank

enabled registrations over ATM/CBS, only if the mobile number entered matches with

the mobile number already available in the customer‟s CIF in CBS.

"Immediate Payment Service" (IMPS) P2P (Person-to-Person), was launched in our bank

in the year of 2012 for enabling our customers to use mobile instruments as a channel for

remitting funds 24 x7 using MMID (Mobile Money Identifier) & Mobile Number.

During 2013-14, two more services P2A (Person-to-Account) & P2M (Person-to-

Merchant) has been enabled in our Bank to make fund transfer using Account No. & IFS

code and to make various utility payments at shops and commercial establishments, ticket

booking though IRCTC website etc., The upper ceiling for remittance or payment of bills

is same as in Mobile Banking facility.

6. Green Channel Counter

Bank has implemented “Green Channel Counter” facility at various branches viz., all

districts Head Quarters in Rajasthan, branches situated at Delhi NCR, Mumbai,

Bangalore and Ahmedabad, other identified Urban, Semi-Urban and Rural branches.

It is a paperless, eco-friendly and easy facility for the customers to be carried out through

ATM cum Debit Card using a Transaction Processing Device (TPD) placed at the Single

Window Operator‟s (SWO) terminal connected to CBS terminal of the SWO. Presently

this facility is available at 506 branches with 2 such counters minimum at each branch.

21

7. Prepaid Cards

The Rupee Pre-paid Card (eZPay Card) has been launched, particularly for salaried

persons and students for pocket money and scholarship payments, who undertake only

one or two transactions in a month and maintain account for the purpose. The Rupee Pre-

paid Card (eZPay Card) is equally useful for the Corporate, who have to make various

payments to their staff and vendors. The cards can be reloaded and can be used in any

ATM or with any POS merchant, any number of times during their validity period.

8. Bunch Note Acceptor (BNA)

BNA machines are installed at Banks‟ 2 branches. It is a full-functional freestanding

lobby machine installed in the Branches Banking Hall. The BNA machine is capable of

accepting `49,900/- cash in bundles and receipt is given to the customer and cash is

immediately credited to the customer on real time basis.

9. Cash Deposit Machine (CDM)

The Bank has planned to install CDM at various High Cash Receipt branches providing

24/7 availability with round the clock security in onsite ATM kiosk. The CDM machine

is operable through ATM-cum-Debit card and is capable of accepting cash up-to `

49,900/-. Receipt of the deposit transaction is given to the customer and cash is

immediately credited to customer‟s account on real time basis.

10. Self Service Kiosk (SSK)

75 Self Service Kiosks (SSKs) have been installed at various branches of our Bank.

Customers can perform financial and non-financial transactions such as passbook

printing, fund transfer etc. using State Bank ATM-cum-Debit Cards at these SSKs. The

SSK solution has user friendly touch screen based customer interface.

11. Adoption of advanced IT infrastructure products for internal housekeeping at

the branches/offices:

i. Biometric Authentication of CBS users

For improved security in Core Banking Solutions, the Bank has rolled out Biometric

Authentication Solution (BAS) at branches/offices for the front end tellers using CBS.

The solution is used as a second factor for authentication of CBS tellers, the primary

mode being the CBS password combination.

ii. ACTIVE DIRECTORY SERVICES (ADS )

For enhanced security Bank has implemented Active Directory Services within State

Bank Connect Network in all the branches/offices. Active Directory (AD) provides

centralized administration of network and security. It authenticates and authorizes all

users and computers in a Windows domain, assigning and enforcing security policies for

all computers and facilitates installing or updating software centrally.

22

iii. SB-Connect:

At present all 1100 branches/offices are connected through State Bank Connect. A

technology shift from „Point to Point‟ to MPLS has been initiated by Bank to ensure

seamless best path connectivity at all the branches with availability of redundant circuits

at all times. Wifi / Wimax / 3G and 4G modes of connectivity is also under consideration

at the Group level after ensuring information security clearance of these products in our

Bank.

iv. Online Voucher Viewing and Verification Module(OVVVM)

OVVVM has been implemented in the Bank at all branches/offices (other than single

officer branches). Same day transactions can be verified by the supervisors after posting

of the transactions in CBS. With the viewing / verifying of transactions online on the

same day, any fraud / malpractices can come to notice on near real-time basis and adverse

position can be avoided to the extent possible.

12. MGNREGA e-Payment

Government of Rajasthan has designated our Bank as the Nodal Bank for MGNREGA e-

Payments in the State of Rajasthan. MGNREGA e-Payment system has been

implemented for centralized payment of NREGA wages and other expenditures directly

to the beneficiaries' accounts. The project has been smoothly handling transactions of

about 2 to 2.5 lakh per month.

13. SMS UNHAPPY

The "Project SMS Unhappy" was launched by the Bank with the objective to provide a

simple and economical way to the customers to represent their grievances. This has

reduced complaint resolution time drastically, to below 48 hours, thereby enhancing the

customer satisfaction level and creating a loyal customer pool.

14. INSTANT LOAN SANCTION

Bank is providing the facility of online instant sanction of Housing Loan and Car loan to

the customers under the head "Home Loan in 20 minutes" and "Car Loan in 10 minutes"

respectively on Bank's website http: //www.sbbjbank.com/.

Customer gets sanction letter instantly on submitting completely filled application form

on Bank's website if he fulfills the eligibility criteria.

15. ONLINE LOAN APPLICATION TRACKING SOFTWARE

Bank has introduced a web based application for Online Tracking of Loan application for

customer and status of their application can be viewed by customer on internet

through our Bank's website.

16. INFORMATION SYSTEM (IS) SECURITY

23

With the efforts of the Bank to popularize IT enabled services, the threats and risks to our

IT assets have increased manifold. To control these threats and risks our Bank has a

formulated comprehensive IT and Information Systems (IS) Security Policy that

addresses all these concerns including maintenance of customers' confidentiality, security

and integrity of data. State Bank's data centre where our CBS data base resides (both at

the Primary and Disaster Recovery Site) has already acquired the accreditation from the

international standard for Information Security Management Systems ISO/IEC: 27001:

2005. All the Banking applications have built-in security features like access control, data

encryption and transmission through secured channels as per requirement of the

application. The threat of virus and worms is minimized by having a centralized anti-

virus solution.

Adequate Firewalls and Intrusion Detection Systems are in place so as to prevent

unauthorized access to the network. The Disaster Recovery Plan (DRP) and Business

Continuity Plan (BCP) for all branches are in place.

KNOW YOUR CUSTOMER/ANTI MONEY LAUNDERING /COMBATING

OF FINANCING OF TERRORISM MEASURES

Bank follows Reserve Bank of India/ Government of India guidelines on Know Your

Customer/ Anti Money Laundering / Combating Financing of Terrorism. Prescribed

documents relating to the identity and address are obtained from customers while opening

their accounts.

With the objective of Universal Financial Inclusion, Bank facilitates opening of 'Small

Account' by migrant labourers, street hawkers and other poorer sections of the society,

with limited KYC documents.

To facilitate inclusion of lower strata of society to mainstream banking, Basic Saving

Bank Deposit Account (BSBA) for the customer having prescribed KYC documents has

been introduced. BSBA shall not have the requirement of minimum balance. At the same

time the entire range of services available to a normal saving bank account is extended to

this product.

In order to identify and examine suspicious transactions, the Bank has installed the

AMLOCK software besides setting up an ANTI Money Laundering Cell at the Head

Office. The customers' accounts have been allocated different risk categories and alerts

are generated once any transaction exceeds a predefined threshold limit. These alerts help

in identification of suspicious transactions, which are further reported to Financial

Intelligence Unit, Government of India, in appropriate cases".

DEMAT SERVICES

Our Bank is providing Depository Participant Services with National Securities

Depository Limited (NSDL) to our customers, wherein they can hold their securities as

24

electronic book entries and transfer securities without actually handling physical scripts.

Customers can also obtain loans against Demat shares. SBBJ is registered with NSDL as

a Depository Participant.

Customer Service:

Customer Service is a top priority for the Bank. We are in a service industry and our

success to a very large extent depends on the satisfaction level of our customers. The

environment we operate in is increasingly becoming intensely competitive.

The meetings of the Customer Service Committee of the Board and Standing Committee

on Customer Service were convened at regular intervals to review the position of

customer service rendered. Similar Committees are also functioning at Branches, Zonal

and Head Offices, which helps in continuous improvement in service standards.

The Bank is a member of the Banking Codes and Standards Board of India (BCSBI) and

has voluntarily adopted a 'Code of Bank's Commitment to Customers,' which sets a

framework for setting a minimum standard of banking services to be provided by the

banks. An awareness camp for BCSBI code was organised at Jaipur on 19 November

2013 in coordination with BCSBI.

Customer Grievances Redressal Mechanism:

The Bank has put in place a multi pronged grievances redressal mechanism to suit varied

customer requirements. An aggrieved customer can either make a written complaint at

branch / regional / zonal / head office of the Bank or make an online submission in the

form provided on the Bank's website / through e-mail against acknowledgement.

DISCLOSURE OF COMPLAINTS/UNIMPLEMENTED AWARD OF BANKING

OMBUDSMENT :-

In terms of RBI circular DBOD.No.Leg BC.60/09.07.005/2006-07 dated 22.02.2007, the

information in respect of customer complaints and awards passed by the Banking

Ombudsment is given in the Table below :-

A. Customer Complaints

(a) No. of Complaints pending at the beginning of the year 71

(b) No. of Complaints received during the year(*) 6470

(c) No. of Complaints redressed during the year(*) 6434

(d) No. of Complaints pending at the end of the year 107

(*) Excluding 1499 Complaints found non maintainable.

B. Awards passed by the Banking Ombudsman (BO)

(a) No. of unimplemented Awards at the beginning of the year 01

(b) No. of Awards passed by the Banking Ombudsman during the year 17**

(c) No. of Awards implemented during the year 12

(d) No. of unimplemented Awards at the end of the year(in 2 cases Appeal

has been made before Appellate Authority and in 1 case matter in

under process)

03

25

** In 3 cases, under 1st case BO Delhi has re-examined the case and cancelled the award

against the Bank. In 2nd

case complainant not accepted the award and in another one

appeal allowed and award passed by BO is set aside by the Appellate Authority.

ATM COMPLAINTS

To monitor the ATM failed transactions related customer complaints received at the

branches, ATM Complaints Reconciliation Cell has been established at Head Office.

Reserve Bank of India has prescribed that all ATM related complaints be resolved within

7 working days. For faster resolution /redressal of complaints, an online ATM Complaint

Management System (ATMCMS) has been developed and implemented. During the year

2013-14, the Bank has received 20567 ATM failed transactions related complaints, out of

which 20477 complaints were resolved. No home bank complaint (where customer and

ATM both belong to our bank) is pending for more than 7 working days. Number of

complaints pending for more than 7 days where claim is pending with other banks is 3.

THE RIGHT TO INFORMATION (RTI)

The Right to Information (RTI) Department was constituted at the Bank's Head Office in

December, 2010 for better coordination and effective implementation of the Right to

information Act, 2005 . The Department has since then been instrumental in ensuring that

information sought for under the various RTI applications received by them is dispensed

with efficiently and effectively in a time bound manner as per the provisions of the RTI

Act, 2005 and that the appeals too, if received, are redressed timely, while also

complying with the directives of the Hon'ble Central Information Commission (CIC) in

this regard.

During financial year 2013-14, the RTI Department received 1553 applications under the

RTI Act, 2005, out of which 1532 applications were disposed off. 21 applications were

awaiting disposal as on 31st March, 2014, and these were all pending for less than 30

days.

Besides, the Department also received 73 appeals under the RTI Act, 2005 during

financial 2013-14, out of which 71 appeals were disposed off. 2 appeals were awaiting

disposal as on 31st March, 2014, and these also were pending for less than 30 days.

BUSINESS PROCESS RE-ENGINEERING

Business Process Re-engineering (BPR) Initiatives stabilized further during 2013-14 and

their coverage extended to more branches. Bank operates 12 city-centric loan CPCs, viz.

Retail Assets Central Processing Centre (RACPC)/ Small & Medium Enterprises City

Credit Centre (SMECCC)/ Retail Assets and Small & Medium Enterprises City Credit

Cell (RASMECCC) having end-state at 11 centres with 275 branches linked to them.

Coverage of Rural Central Processing Centre (RCPC) increased to 374 branches at 19

26

centres. 22 Relationship Managers-Medium Enterprises (Hub Model) and 1 Relationship

Managers-Small Enterprises are working at 14 major business centres.

Non loan CPCs/ initiatives, viz. Liability Central Processing Centre (LCPC), Trade

Finance Central Processing Centre (TFCPC), Currency Administration Cell (CAC),

Central Pension Processing Cell (CPPC), Clearing CPC (CCPC), Multi Product Sales

Team (MPST), Relationship Manager-Personal Banking (RMPB) have helped in further

improvement in customer service. The coverage of various non loan CPCs / initiatives as

on 31.03.2014 vis-à-vis 31.03.2013 was as under:

CPC / Initiative Branches Covered

31.03.2013 31.03.2014

LCPC 996 1097

TFCPC 122 124

CAC / SCAB 155 180

Clg. CPC 224 250

CPPC 844 909

Branch Re-design 185 196

During Financial Year 2013-14, following developments took place to make CPCs /

initiatives more effective and to optimize gains:

In Branch Cash Handling (IBCH) has been rolled out w.e.f. 15.06.2013.

RASMECCC at Bhiwadi centre started functioning w.e.f. 31.01.2014.

CAC at Delhi centre started functioning w.e.f. 26.02.2014.

Shifting of back office activities to loan CPCs, implementation of revised roles for branch

functionaries and better ambience in branches has not only improved the Bank‟s image

but also helped the linked branches to focus more on customer service and marketing for

business.

Currency Management Department

Being the Bank having the highest market share in Rajasthan, RBI has designated 199

branches as Currency Chest branches in the state and 15 branches in other parts of the

country. All of our Currency Chest branches are undertaking the following activities in an

efficient manner:-

1. Circulation of New Currency Notes among Public.

2. Distribution of Coins to the Public.

3. Exchange of torn/damaged/soiled/mutilated notes.

4. Providing of linkage facilities to branches of other banks which are linked to them.

5. Our 9 branches are providing facilities of Note Exchange and coin distribution on 3rd

Sunday of every month and 6 branches are providing facilities of Note Exchange and

coin distribution on 3rd

Sunday of alternate month.

27

CROSS SELLING

The Bank continues to market life and non-life insurance, mutual fund and credit card

products in order to augment its non interest income. For the purpose, the Bank has in

place tie up arrangements with SBI Life Insurance Co. Ltd., SBI General Insurance Co.

Ltd., SBI Fund Management Pvt. Ltd. and SBI Cards and Payments Services Pvt. Ltd.

Various campaigns were launched for marketing of these products, and the bank earned a

total income of ` 20.03 crore from cross selling activities.

COMMUNITY SERVICES BANKING

As a responsible Corporate Citizen, the Bank undertakes community based social

activities such as tree plantation, free health check up & blood donation camps,

establishing of water huts and water coolers, sponsoring prizes / kit for sports

competitions, honouring meritorious students etc. During the year 2013-14, the Bank

donated ` 1.00 crore for Uttarakhand Chief Minister‟s Relief Fund and `25 lakh for

Odisha Chief Minister‟s Relief Fund to assist in relief measures to people affected by

Natural Calamity. Bank also provided 5 ambulance, one each to Maheshwari Hospital &

Research Centre Trust Jaisalmer, Ram Niwas Dham Trust Shahpura Bhilwara, Sant

Sukhdev Shah Memorial Religious & Charitable Trust Alwar, L.K.C. Shri Jagdamba

Andh Vidhyalaya Samiti Sriganganagar, People Welfare Society Sikar and one Antim

Darshanika Vahini (Mortury Van) to Jagriti Jaipur.

Other activities or financial assistance by our Bank are listed as under :-

- Water purifiers and ceiling fans by every branch of the bank to its nearby

School which had scarcity of funds.

- Provided Medical equipments to Manav Sewa Sangh Jaipur, which

providing free treatment of Bone Marrow Transplantation to Thalassemia

affected children of poor family.

- Financial assistance to Society for Rational Development Jodhpur for free

education to poor children in rural areas.

- Computer, Projector, Laptop, Printer and T.T. Table to Udayan Care

Jaipur, an NGO which shelters, educate and rehabilitates,

orphaned/abandoned children.

- Computer & Projecter to I Create Jaipur, an NGO which organizes

training programmes and vocational training for youth and women.

- Provided furniture to Vimukti Sansthan helping slum area girls with free

education and vocational training .

- Donated Generator to RamaKrishana Mission, Khetri for running various

welfare activities like health support programmes (free eye surgery) and

providing nutritious food for poor children and their mothers.

28

- Branches of the Bank Continues to adopt one girl child each from a poor

family with an objective of providing financial assistance for pursuing

their studies in Government /Municipal Schools

- Distributed 200 folding sticks to poor blinds at Blind & Humanity Welfare

Centre, Mumbai.

- Provided Roti Making Machine to Manav Sewa Samiti Udaipur, serving

poor people by way of providing free meals to attendants of patients at

Hospitals.

- Provided Vela Ventilator (Life Saving Equipment) to Sheth D.C.Shroff

Ashaktashram Hospital, Surat which is charity based hospital.

Bank shall remain dedicated to respond to the needs of the less fortunate and under-

privileged members of the society and will also do its bit for a clean environment.

BRANCH EXPANSION

During 2013-14, the Bank opened 113 new fully computerized branches which includes

34 branches in unbanked rural centres in Tier V and VI. 25 branches were inaugurated

online from the Head Office on 27.02.2014.

As on 31.03.2014, the total number of branches of the Bank stood at 1148, the category

wise distribution thereof being as under:

Rural Semi Urban Urban Metro Total

416 308 214 210 1148

The Bank continued to maintain its dominant presence amongst all other banks in the

State of Rajasthan with a network of 932 branches as on 31.03.2014, with 699 branches

being located in rural and semi urban areas .

The Bank continues to play a pivotal role in the socio-economic development, alleviation

of poverty and resultant overall uplift of the masses in the State .

HUMAN RESOURCES DEVELOPMENT

The Bank‟s staff strength as on 31.03.2014 is 13359 employees, with the following break

up: -

AS ON 31.03.2014 OUT OF WHICH

STAFF

CADRE

SC ST GENERAL TOTAL WOMEN MINORITY

OFFICERS 1058 489 3837 5384 695 368

CLERKS 936 584 3744 5264 918 317

SUB-STAFF 318 219 1418 1955 125 67

SAFAI

KARAMCHARI

591 19 146 756 234 6

29

TOTAL 2903 1311 9145 13359 1972 758

Out of the Bank‟s total staff strength as on 31.03.2014, 2903 (21.73%) belong to SC and

1311 ( 9.81%) to ST categories which is well above required percentage . SC/ST cell to

safeguard interests of SC/ST employees is also well in place. Reservation policy is

implemented in our Bank as per Government guidelines.

Necessary complement of staff has been made available for working in new frontiers like

core banking solution, tele-banking, internet banking, ATMs, credit / debit cards,

marketing, cross selling, business process re-engineering etc. The Bank has been

according high priority to training and sensitization of staff members to respond to the

customers‟ expectations and deliver modern banking facilities in the technology-driven

environment."

.

Human Resource is the most important constituent and quintessence of an organization

and its progressive development has now become a major corporate concern. An

organization should be able to bring in proper integration of human resources

management strategies with the business strategies. Qualitative training for human

resources has become necessary for improvement of their efficiency. As most of senior

functionaries / operational staff are going to retire in next 2-4 years, the Bank, has

to develop a second line of expertise and enable them to cater to the needs of its

esteemed customers and the Organization . Looking to these facts, a total no of 8981

employees of all categories, including 787 employees of the sponsored RRBs , were

provided training opportunities on various subjects related to banking and technology at

all three STCs of the bank during the year.

The bank has also provided pre-promotion training to 27 SC/ST clerical candidates ,

eligible for promotion to officer cadre Group A / B & 167 SC /ST sub-staff candidates

eligible for promotion to clerical cadre during the year. In addition to this, 37 seminars /

workshops were conducted on various burning issues to up-date skills of employees.

More thrust has been accorded to Mobile Banking, Internet banking, ATM services, Soft

skills, System & Procedures, Marketing, quality services to the customers, in view of the

ever changing customer needs. In this direction we have also conducted 39 one day

Motivational Programmes for clerks encompassing 1518 clerks

Two HR conclaves were conducted by us – The first one for Top Executives was held

at Jaipur from 26.07.13 to 28.07.13, which was an open discussion for continuous

growth of our Bank , NPA management etc. The second conclave was held at Udaipur

from 29.11.13 to 30.11.13 wherein the target group was Controllers and was meant for

team building and leadership development / BPR initiatives / NPA management .

30

Apart from in-house training, the Bank has provided facility of training to its officers in

specialized areas at Apex Training Institutes like State Bank Academy Gurgaon, State

Bank Staff College, Hyderabad, SBIICM Hyderabad and SBIRD Hyderabad. During the

said period 1308 officers have been trained at these external agencies in different areas of

Banking. For Various other programmes we have also deputed our officers for training

to IDBRT , NIBM-Pune, CAB-Pune and FEDAI Mumbai.

During the current financial year, we have deputed 10 officers for specialized training

programmes abroad viz : – 24th

Annual Forex Assembly of Forex Association of India

at Dubai, Deutche Bank International Banking Seminar at New York, Seminar & Annual

Meeting of the IMF & World Bank Group at Washington,DC (USA), 12th

Advanced

Management Programme towards Next Orbit :Indian Banking Sector at Delhi, Paris

,Milan and Berlin, Programme on Leadership Development for Corporate Excellence in

Collaboration with Kellogg School of Management - North Western University, USA,

13th

Advanced Management Programme “Building Global Competitive Edge in the

Banking Sector” held at Delhi, Paris ,Milan and Berlin. .

Our "Gyanodaya" e-learning (anywhere, anytime learning) portal is in full swing. Due to

our efforts for increasing the number of registrations by providing incentive of

recognition and reward , a link to access the portal from the intranet site and by making

it mandatory for newly promoted clerks/officers to pass at least 10/15 tests, the number

of registrations has increased to 3297 (27.03.2014) and is increasing every day.

In the scheme of deputing top executives (GMs and DGMs) of the bank to one training

programme of their choice, at reputed external training institutions, we have deputed

DGMs to IIM Ahmedabad and IIM Banglore. We have also conducted 05 training

programmes in the specialized area of Credit Management / SME Business / Analysis of

Financial Statements / Corporate Credit with the support of outside faculty.

ORGANISATIONAL PLANNING

For faster credit dispensation by bringing credit decision nearer to business centres and

customers, to meet competition from other banks, the delegation of powers of various

credit committees were revised and new credit committees (NWCC & RCC) were

constituted to ease pressure on the HOCC- II & ZOCC. The financing powers for allied

& general matters and advance related matters were also steamlined to impart more

effectiveness. The delegation of financial powers up to Scale –V was consolidated for

ready reference to the staff. ATM Cell Mumbai was rechristened as ATM nodal office,

Mumbai and reallocated under DGM (IT) in line with the other Associates Banks for sake

of uniformity. The calendar of reviews submitted to the Board/ ACB/ M.Com was

streamlined to impart more efficiency in the decision making process.

31

STAFF WELFARE

The Bank believes in keeping the morale and motivation of the employees high,

considers employees as its most important assets and accords high priority to their

welfare.

The Bank undertook following staff welfare activities

1. Granting of Scholarship to the meritorious wards of the employees,

2. Providing free medical consultancy services at various hospitals.

3. Insurance cover for employees to the extent of `8.00 lakh (`16.00 lakh for

accidental death) under Group Insurance scheme of SBI Life.

4. A total amount of `3.00 lakh outstanding in various loan a/cs viz. Housing Loan,

Overdraft limit (Personal loan), PF Loan, Conveyance Loan is allowed to be

waived for employees who die in harness .

5. A one-time award of ` 10,000/- for education to one ward of the deceased

employee is also paid.

6. Reimbursement of Funeral Expenditure is being made to the extent of `10,000/-

from staff welfare fund for both serving and retired employees.

7. Annual Health Check up scheme is extended to the spouse of the employees who

are within the age group of 41 to 49 years.

8. For employees who are on leave for debilitating sickness and are on loss of pay,

an amount of ` 15000/- per month (upto 24 months during the entire service

period) is paid.

9. The Bank has set up Holiday Homes at Jaisalmer, Chandigarh, Mussoorie, Jaipur,

Manali, Mumbai, Goa, Delhi, Haridwar, Katra, Bengaluru, Mt. Abu, Vrindavan

and Udaipur. This facility is also available for retired employees.

10. Various cultural and sports activities were organized during the year.

INDUSTRIAL RELATIONS

The Bank has a long history of harmonious and cordial relations with both supervising as

well as workmen employees enlisting their total commitment, support and cooperation.

The Employee‟s Union and Officers‟ Association have extended their wholehearted

cooperation for the all-round growth of the Bank. A well established and on going

consultative machinery is functioning at various tiers of the administration for resolving

issues through joint consultations and negotiations.

VIGILANCE ADMINISTRATION

Vigilance Administration is an integral part of the management. Vigilance activities are

accorded high priority in the Bank. Keeping in view the paramount importance of the

preventive vigilance, greater emphasis is laid on the preventive measures. Preventive

Vigilance training programs have been conducted to improve skills of the staff. In other

training programs conducted at Bank‟s training centers also, areas with focus on “How to

be a Vigilant Employee” and “Areas of Concern from Vigilance Angle” are dealt with.

The training platform of the Bank has been effectively used to create awareness amongst

all officials about Vigilance function, areas of concern where officials need to pay more

attentions, nature of fraud/serious irregularities taking place, determination of vigilance

angle and how bonafide actions of the officials can be protected. The interaction and

32

feedback from the participants has been used to identify operational risk areas and to

suggest systematic improvement if any. Sensitization of officials on Vigilance related

issues was also done at various Zones. Preventive Vigilance Committee set up has been

revamped. Accordingly, branches having staff of 10 or more, processing centers

irrespective of staff strength, unsatisfactory rated branches and fraud detected branches

have been included for formation of Preventive Vigilance Committee. Meeting of

preventive vigilance committees are held regularly where staff is sensitized towards

preventive vigilance measures. Complaints received in the Vigilance Department are

dealt expeditiously and investigations were conducted wherever needed. An independent

Internal Advisory Committee is functioning to examine all cases to decide whether there

is a Vigilance Angle. Significant emphasis is laid on the transparency in the tendering

process (procurement of goods and services, auctions, etc.) by the Bank. The tenders

issued by the Bank are uploaded on the Bank‟s website as well as Government of India

website. An In-house magazine titled as “Vigilance Bulletin” is published every quarter

with an objective to create vigilance awareness amongst staff. Many new initiatives have

been taken as preventive measures like Biometric login system, Electronic Voucher

Verification, On line Tracking of status of loan application by the applicant, better pre-

sanction due diligence process etc. Scheme of Recognition & Alertness Award for staff

in respect of detection / foiling of frauds has been revamped and amount of incentive has

been increased. Whistle Blower Policy has been implemented in the Bank whereby any

staff member can provide information on any malpractices or instances of misuse of

official powers where the identity of informer will be protected

The department has disposed of 440 complaints, 104 Investigations have been conducted

and 32 preventive vigilance inspections were conducted. 90 disciplinary cases having

vigilance angle have been concluded during the year 2013.-14.

USE OF HINDI

The implementation of Official Language Policy in the Bank is not only a statutory

requirement but also a business need. The Bank made all possible efforts to comply with

the statutory provisions relating to the official Language Policy of the Govt. of India

during the year and took several initiatives to provide benefit of Bank's different schemes

to the masses through Hindi Language.

During the year 2013-14, the Bank made significant progress in promoting and

propagating the use of Official Language and ensured compliance of various other

statutory requirements framed under the Official Language Act /Official Language Rules.

The Bank made all possible efforts to achieve the targets set by Official Language Deptt.

Ministry of Home affairs, Govt. of India.

Bank continued its efforts to promote use of Hindi in the field of information

Technology. A portal of Rajbhasha Vibhag was made available on Bank's infonet site.

33

Various useful materials like hindi typing tool, format of Quarterly Progress Report,

Annual Programme etc. were made available on the portal. Officers/employees were

imparted desk training to work on computer in Hindi with the help of Unicode.

Hindi Day and Hindi-fortnight were celebrated in Offices/Branches of the Bank in the

month of September 2013 and various competitions were conducted for the staff

members. An All India Hindi Essay competition was also conducted by the Head Office.

To increase progressive use of Hindi Head Office Rajbhasha Trophy competition (Head

office and Zonal level) was organized during the year.

Bank's quarterly in House Rajbhasha magazine "Upwan" is being published regularly.

Since last two years this magazine had been awarded consolation prize by Reserve Bank

of India. During the year State Bank of Bikaner and Jaipur has been awarded consolation

Prize by RBI for the progressive use of Hindi among Region "A".

Representative of Govt. of India also visited our Zonal Office Delhi , Kota , Regional

Office Chandigarh, Sonipat, Amritsar, Ghaziabad and Saket Branch and appreciated our

efforts. Bank TOLIC Jaipur and Kolkata and TOLIC of Jodhpur and Kota also awarded

our bank for official Language implementation.

AUDIT

State Bank of India, with the concurrence of the Reserve Bank of India, approved the

appointment of 5 firms of Chartered Accountants viz. M/s. Agarwal Anil & Co. of Delhi,

M/s. M K Aggarwal & Co. of Delhi, M/s. Chaturvedi & Co. of Kolkata, M/s. Uberoi,

Sood & Kapoor of Delhi and M/s. P S D & Associates of Jaipur as the Statutory Central

Auditors of the Bank for the year 2013-14. During the period under review the scope of

audit covered 664 branches / centralized processing units as against of 587

branches/centralized processing units covered in 2012-13.

RESPONSIBILITY STATEMENT

The Board of Directors hereby states:

1. That in the preparation of the annual accounts, the applicable accounting

standards have been followed along with proper explanation relating to

material departures;

2. That they have selected such accounting policies and applied them

consistently and made judgments and estimates that are reasonable and

prudent so as to give a true and fair view of the state of affairs of the Bank as

on the 31st March 2014, and of the profit or loss of the Bank for the year

ended on that date;

3. That they have taken proper and sufficient care for the maintenance of

adequate accounting records in accordance with the provisions of the Banking

Regulation Act, 1949, and State Bank of India (Subsidiary Banks) Act, 1959

for safeguarding the assets of the Bank and preventing and detecting frauds

and other irregularities; and

4. That they have prepared the annual accounts on a going concern basis.

34

CORPORATE GOVERNANCE

The details on Corporate Governance are annexed.

ACKNOWLEDGMENT

The Board of Directors is grateful to the valued customers, esteemed shareholders and the

public at large for their patronage and confidence reposed in the Bank and places on

record its deep appreciation. The Board of Directors thanks the Government of India,

State Bank of India, Reserve Bank of India and other regulatory agencies for their

valuable support and guidance throughout the year.

The Board of Directors places on record its deep appreciation of the commitment, sense

of involvement and dedication exhibited by each staff member and constructive role

played by the Employees‟ Union and Officers Association in the overall development,

growth and prosperity of the Bank.

For and on behalf of the Board of Directors

Place B. Sriram

Dated Managing Director

CORPORATE GOVERNANCE

BANK’S VISION AND MISSION

The Bank has codified its ethos, values, culture and aspirations in its Vision and Mission

statements. The Vision and Mission statements of the Bank are as under:-

Vision: “To be a state-of-the-art, customer-centric, values driven and professionally managed

banking organisation; committed to the highest standards of good corporate governance

practices; perpetual enhancement of the wealth of the shareholders and welfare of all

stakeholders and the society”.

Mission: “To provide one stop solutions to all the banking needs of customers through a highly

motivated, professional and efficient human resources pool with quality of service, customer

care and customers’ business in focus by efficient use of Information Technology in a cost

effective manner; meeting the expectations of all stakeholders through transparent, true and fair

disclosures and responsive management principles in all the activities; to strive to fulfil

corporate social responsibility with special emphasis on financial inclusion throughout the State

of Rajasthan and aiming to provide the best banking services to one and all”.

As such, the vision and mission statements lay emphasis on being state-of-the-art bank, adopting

good corporate governance practices, welfare of all stakeholders and the society, providing one

stop solution to all customers, efficient use of information technology in a cost effective manner,

transparent/ true/ fair disclosures, responsive management principles, fulfilling corporate social

responsibility and implementing financial inclusion in the State of Rajasthan.

BANK’S CODE OF CORPORATE GOVERNANCE

Adoption of best corporate governance and practices is the first step in realising the goals set

forth in our Vision and Mission statement and accordingly the Bank has adopted its code of

Corporate Governance:

The State Bank of Bikaner and Jaipur is committed to the best practices in the area of Corporate

Governance. The Bank believes that proper Corporate Governance facilitates effective

management and control of business, which in turn, enables the Bank to deliver the best results

to all its stakeholders. The objectives can be summarised as:

To enhance shareholders' value.

To protect interests of shareholders and other stakeholders including customers,

employees and society at large.

To comply with directives of RBI, SEBI and other regulatory authorities.

To ensure transparency and integrity in communication and to make available full,

accurate and clear information to all concerned.

To ensure accountability for performance and to achieve excellence at all the levels.

To provide corporate leadership of the highest standard for others to emulate.

The Bank is committed to:

Ensure that the Bank's Board of Directors meets regularly, provides effective leadership,

exercises control over management and monitors executive performance.

Establish a framework of strategic control and continuously review its efficacy.

Establish clearly documented and transparent management processes for policy

development, implementation and review, decision-making, monitoring, control and

reporting.

Provide free access to the Board to all relevant information, advice, resources as are

necessary to enable it to carry out its role effectively.

Ensure that the Managing Director has line of responsibility for all aspects of executive

management and is accountable to the Board for the ultimate performance of the Bank

and implementation of the policies laid down by the Board. The role of the Managing

Director is also guided by the State Bank of India (Subsidiary Banks) Act, 1959 and

Subsidiary Banks General Regulations, 1959 with all amendments.

2

Ensure that a senior executive is made responsible to the Board to ensure compliance

with all applicable statutes, regulations and other procedures, policies as laid down by the

Board and report deviation, if any, to the Board.

BOARD OF DIRECTORS

The State Bank of Bikaner & Jaipur was formed in 1963 by amalgamation of the State Bank of

Bikaner & State Bank of Jaipur. The Bank is governed by State Bank of India (Subsidiary

Banks) Act, 1959 and Subsidiary Banks General Regulations, 1959, as amended from time to

time. Board of Directors is constituted according to the provisions of the Act and also complies

with the provisions of the Listing Agreement entered with the Stock Exchanges.

The Board of Directors is headed by the Chairman of State Bank of India, as ex-officio

Chairman of the Bank. Other members of the Board are; the Managing Director (Executive),

two nominee Directors (one from the Govt. of India and other from RBI), not more than 5

Directors nominated by State Bank of India, of whom not more than 3 shall be officers of that

Bank (nomination of non-official director by SBI shall be in consultation with Central

Government) , one Director each from employees - workmen and non workmen, respectively

and not more than three Directors elected in the prescribed manner by the shareholders

(including nominated by SBI).

At present, besides the Chairman and the Managing Director, there are 11 Directors on the Board

including three Directors elected/ nominated by the shareholders.

Details of attendance of each Director at the meetings of the Board of Directors and number of

other Committees of the Board of Directors in which he is a member or chairperson are given in

annexure I(a) and I(b) respectively. Brief resume of the other non-executive Directors are also

presented in Annexure II.

The Directors are paid sitting fee of Rs.10,000/- for attending every meeting of the Board of

Directors and Rs.5000/- for attending meetings of the various Committees of the Board (w.e.f.

18.10.2011) apart from reimbursement of usual traveling and halting expenses. Sitting fees are

not paid to the Chairman, the Managing Director and the Directors who are officials of SBI, RBI

and Government of India.

All the non-executive Directors have declared that they do not have any pecuniary relationship

vis-à-vis the Bank.

SALARY AND ALLOWANCES PAID TO THE MANAGING DIRECTOR IN 2013-14

A sum of ` 24,83,450.99/- was paid as total remuneration to Shri B. Sriram, Managing Director

during the financial year 2013-14. It includes tax on perquisites paid by the Bank and incentives

as given below:

S.No. Name Salary &

Allowance

Incentive Perquisites Tax on

Perquisites

Total

1 Shri B. Sriram 2013939.99 64329.00 273142.00 132040.00 2483450.99

SITTING FEES PAID TO DIRECTORS IN 2013-14

A sum of ` 700,000/- was paid as total sitting fees to the Directors for the meetings of the Board

and its various Committees during the financial year 2013-14.

3

BOARD OF DIRECTORS : CHANGES DURING THE YEAR

Smt Arundhati Bhattacharya, Chairman, State Bank of India, appointed as ex-officio Director/

Chairman on the Board of our Bank w.e.f. 7.10.2013 vice Shri Pratip Chaudhuri who demitted

the office on 30.09.2013 on his superannuation.

Shri S. Vishvanathan, Managing director & Group Executive (A&S), SBI, nominated on the

Board w.e.f. 17.7.2013.

Shri Purna Chandra Jena, General Manager (A & S Group), SBI nominated on the Board by

SBI on 26.11.2013 vice Shri Pradip Kumar Sanyal, who relinquished the office on 20.11.2013

on his transfer from Corporate Office.

Shri Gulab Singh, Dy. Secretary, Ministry of Finance, Deptt. of Financial Services (Banking

Division) nominated by Govt of India, a Director under clause (e) of sub-section (1) of the

Section 25 of the SBI (Subsidiary Banks) Act 1959, vice Shri Mihir Kumar and joined the

Board on 15.10.2013.

Shri Arun Koolwal, Workmen Employee Director, under clause (ca) of sub-section (1) of the

Section 25 of the SBI (Subsidiary Banks) Act 1959 joined the Board on 12.1.2014 vise Shri D.K.

Jain, who retired on 11.1.2014 after completion of tenure.

Shri Ratan Kumar Roongta, Director, under clause (d) of sub-section (1) of the Section 25 of

the SBI (Subsidiary Banks) Act 1959 elected on 12.8.2013 vice Shri Kunal Dalmia who

demitted the office after completion of his tenure on 11.08.2013.

The Board of Directors places on record its deep sense of appreciation for the valuable

contributions made by Shri Pratip Chaudhuri, Shri Pradip Kumar Sanyal, Shri Mihir Kumar, Shri

Kunal Dalmia and Shri D.K. Jain during their association with the Board and welcomes the new

Directors on the Board.

BIO-DATA OF THE NEW DIRECTORS OF THE BOARD

Brief resume of the Directors who joined the Board of Directors during 2013-14 is furnished

below: -

Smt Arundhati Bhattacharya, Chairman, State Bank of India has held several key

positions during her 36-year career with the bank which includes, Chief Executive of

the bank's merchant banking arm- State Bank of India Capital Markets; Chief General

Manager in charge of new projects. She has been actively involved in the launch of

several new businesses such as SBI General Insurance, SBI Custodial Services and

the SBI Macquarie Infrastructure Fund.

Shri S. Vishvanathan, Managing Director & Group Executive (A&S), SBI, has over three

decades experience in SBI. During his career with SBI, he handled various assignments. As a

Chief General Manager, he was responsible for running over 15 Regions in the most difficult

terrains of the North Eastern part of India. Mr Vishvanathan has headed the Investment Banking

arm of SBI i.e. SBI Capital Markets Ltd. for over 3 years.

Shri Purna Chandra Jena is General Manager (A&S), SBI and having more than three decade

experience in banking.

Shri Gulab Singh is Dy. Secretary, Ministry of Finance. He has 28 years experience in different

capacity in the field of accounts and administrative matters. He joined in Cabinet Secretariat in

1985 and served in Ministry of Programme Implementation, National Crime Records Bureau and

attached office of Ministry of Home Affairs and Department of School Education & Literacy. He

is also Nodal Officer for State Level Bankers Committees (SLBC) of Assam, Arunachal Pradesh,

Manipur, Meghalaya, Mizoram and Nagaland.

4

Shri Ratan Kumar Roongta, elected by the shareholders, is a retired bank officer having over

three decades of experience in the area of Corporate finance, International banking, Risk

Focused Audit and Inspection, Information Technology and public relations. He was also on the

Board of the Bank from 2008-2011.

Shri Arun Koolwal is Workmen Employee Director and SWO in our Bank.

Brief Bio-Data of other Non Executive Directors is furnished in Annexure-II.

BOARD MEETINGS

During the year 2013-14, 8 meetings of the Board of Directors were held on 6.5.2013, 7.6.2013,

28.6.2013, 23.7.2013, 10.9.2013, 29.10.2013, 4.02.2014 and 25.3.2014. Details of the attendance

of the Directors are as per Annexure I (a).

GENERAL BODY MEETINGS :

52nd

Annual General Meeting of the shareholders of the Bank for the financial year 2012-13 was

held at Maharana Pratap Auditorium, Jaipur on, 07.06.2013 at 11.30 a.m. and was attended by

the following 7 Directors on the Board:

Shri Pratip Chaudhuri Shri B. Sriram

Shri P.K. Sanyal Shri Bharat Rattan

Shri Rajesh T. Manubarwala Shri Sunil Dutt Bali

Shri D.K. Jain

The previous two Annual General Meetings for the financial year 2010-11 and 2011-12 were

held at Jaipur on 06.06.2011 (12.00 noon) and 24.05.2012 (11.30 a.m.) respectively. Besides,

during the year, a meeting of the General Body of shareholders was convened at Jaipur on

08.08.2013 to elect a director under clause (d) of sub section (1) of Section 25 of the State Bank

of India (Subsidiary Banks) Act, 1959. The meeting was attended by directors viz. Bharat Rattan,

Chairman of the Meeting, Shri B. Sriram, Managing Director, Shri S.D. Bali and Shri D.K. Jain,

Directors of the Bank. Shri Ratan Kumar Roongta was declared elected as Director in the

Meeting.

COMMITTEES OF THE BOARD

The Board of Directors has constituted 10 Committees of the Board, viz.

1. Executive Committee of the Board

2. Audit Committee of the Board

3. Risk Management Committee of the Board

4. Directors' Committee of the Board

5. Special Committee to Monitor Large Value Frauds

6. Customer Service Committee of the Board

7. Shareholders’/Investors’ Grievance Committee of the Board

8. Remuneration Committee of the Board

9. Nomination Committee of the Board

10. Recovery Committee of the Board

EXECUTIVE COMMITTEE OF THE BOARD (EC)

The Executive Committee of the Board is constituted as per the regulation 38(1) (a), (b) and (c)

of the Subsidiary Banks General Regulations 1959, and consists of Managing Director, three

Directors nominated under clause (c) of sub section (1) of Section 25 of the SBI (SB) Act, 1959

by State Bank of India of whom not more than two shall be officers of the State Bank of India,

5

and one Director elected by the shareholders under clause (d) of sub section (1) of Section 25 of

the Act. The Committee was last reconstituted on 25/10/2013. The members of Executive

Committee as on 31.03.2014 are:

i) Managing Director- Chairman ii) Shri Rajeev N. Mehra

iii) Shri P.C. Jena iv) Shri Bharat Rattan

v) Shri Ratan Kumar Roongta

Any other Director wishing to attend the meeting has an option to do so. The Executive

Committee, apart from the special or general directions of the Board given from time to time, is

empowered to take decisions in respect of all current business of the Bank.

The meeting of the Executive Committee is required to be held at least once in a calendar month.

13 meetings of the Executive Committee were held during the year 2013-14 {details given in

Annexure 1(c)}.

AUDIT COMMITTEE OF THE BOARD (ACB)

The Audit Committee of the Board was reconstituted on 24.05.2012. The ACB functions as per

RBI guidelines and complies with the provisions of Clause 49 of the Listing Agreement to the

extent that they do not violate the directives/guidelines issued by RBI. ACB has 4 members of

the Board of Directors, including RBI and SBI Nominee Directors and two independent non-

executive Directors. Shri Bharat Rattan, is the Chairman of the Committee w.e.f. 06/06/2011.

The members of ACB as on 31.03.2014 are:

i) Shri Bharat Rattan- Chairman ii) RBI Nominee Director - Member

iii) SBI Nominee Director – Member iv) Shri Rajesh T Manubarwala- Member

ACB provides directions as also oversees the total audit function in the Bank. The major role,

functions and powers of the ACB include: -

to oversee the Bank’s financial reporting process and disclosure of its financial information

to ensure that the financial statement is correct, sufficient and credible.

to approve any payment to Statutory Auditors for any other service rendered by the Statutory

Auditors.

to review, with the Management, the annual financial statements before submission to the

Board for approval, with particular reference to:

(a) Matters required to be included in the Director’s Responsibility Statement to be included

in the Board’s Report.

(b) Changes, if any, in accounting policies and practices and reasons for the same.

(c) Major accounting entries involving estimates based on the exercise of judgment by

Management.

(d) Significant adjustments made in the financial statements arising out of audit findings.

(e) Compliance with listing and other legal requirements relating to financial statements.

(f) Disclosure of any related party transactions.

(g) Qualifications in the draft audit report.

Review, with the Management, the quarterly financial statements before submission to the

Board for approval.

Review, with the Management, performance of Statutory and Internal Auditors, adequacy of

the internal control systems.

Review the adequacy of inspection and audit function, if any, including the structure of the

Internal Audit Department, staffing and seniority of the official heading the Department,

reporting structure, coverage and frequency of internal audit.

ACB reviews the Bank’s financial , Risk Management, IS Audit Policies and Accounting

policies/ systems of the Bank to ensure greater transparency.

Discuss with Internal Auditors of any significant findings and follow up thereon.

Review the findings of any internal investigations by the Internal Auditors into matters where

there is suspected fraud or irregularity or a failure of internal control systems of a material

nature and reporting the matter to the Board.

Discuss with Statutory Auditors before the audit commences, about the nature and scope of

audit as well as post-audit discussion to ascertain any area of concern.

6

Look into the reasons for substantial defaults in the payment to the depositors, debenture

holders, shareholders (in case of non-payment of declared dividends) and creditors.

Review the functioning of the Whistle Blower mechanism.

Focus on follow up of KYC-AML guidelines, compliance of clause 49 and other guidelines

issued by SEBI from time to time, Inter-Branch adjustment account, unreconciled long

outstanding entries in Inter-Bank & Nostro Accounts, arrears in balancing books of branches,

frauds, other areas of housekeeping and status of implementation of Ghosh & Jilani

Committee recommendations.

ACB follows up on all the issues raised in RBI’s Annual Financial Inspection Reports under

Section 35 of Banking Regulation Act, 1949 and Long Form Audit Reports of the Statutory

Auditors and other Internal Audit Reports.

The Audit Committee also reviews the following information:

(a) Management discussion and analysis of financial condition and results of operations.

(b) Statement of significant related party transactions (as defined by the Audit Committee),

submitted by Management.

(c) Management letters/letters of internal control weaknesses issued by the Statutory

Auditors.

(d) Internal Audit reports relating to internal control weaknesses.

In fulfillment of the above role, the Audit Committee has the powers to investigate any activity

within its terms of reference, to seek information from employees and to obtain outside legal and

professional advise.

5 meetings of ACB were held during the year 2013-14, with at least one meeting in each quarter

{details furnished in Annexure 1(d)}.

RISK MANAGEMENT COMMITTEE OF THE BOARD (RMCB)

The RMCB consists of 5 members of the Board of Directors viz. Managing Director, SBI

Nominee Director and three Non-Executive Directors (viz. Shri Arun Kumar Saraf, Shri Bharat

Rattan and Shri Rajesh T. Manubarwala) as on 31.3.2014. The RMCB was last reconstituted on

24.05.2013. RMCB oversees the policy and strategy for integrated risk management related to

various risk exposures of the Bank. 6 meetings of RMCB were held during the year 2013-14.

DIRECTORS' COMMITTEE OF THE BOARD

In terms of Govt. of India directives dated 24.10.1990, the Directors’ Committee of the Board is

functioning in the Bank. The Committee consists of Managing Director & Group Executive

(Associate Banks) SBI, the Managing Director (SBBJ), RBI Nominee Director and the Govt.

Nominee Director. The Committee is required to review the disposal of vigilance and other

disciplinary action cases. 5 meetings of the Committee were held during the year 2013-14.

SPECIAL COMMITTEE TO MONITOR LARGE VALUE FRAUDS

In terms of RBI guidelines, a Special Committee of Directors was constituted for monitoring and

follow-up of cases of frauds involving amounts of Rs.1 crore and above. The committee was

reconstituted on 4.2.2014. The Special Committee meets and reviews at least four times in a year

and as and when a fraud involving an amount of Rs.1 crore and above comes to light. The

members of the Committee as on 31.3.2014 are, Managing Director, SBI Nominee Director,

Govt Nominee Director, Shri Bharat Rattan, and Shri Arun Kumar Saraf. 4 meetings of this

Committee were held during the year 2013-14.

CUSTOMER SERVICE COMMITTEE OF THE BOARD

The Customer Service Committee of the Board was constituted in terms of RBI guidelines. The

Committee was reconstituted on 12/8/2013. The present Committee consists of 3 members viz.

Managing Director, Shri Rajesh T. Manubarwala and Shri Ratan Kumar Roongta (Non-

Executive Directors) as on 31.3.2014. 4 meetings of the Committee were held during the year

2013-14.

7

SHAREHOLDERS/ INVESTORS GRIEVANCE COMMITTEE OF THE BOARD

In terms of Clause 49 of the Listing Agreement with the Stock Exchanges, the

Shareholders/Investors Grievance Committee of the Board (SGCB) has been reconstituted on

29/10/2013 under the Chairmanship of an independent Director. The SGCB as on 31.3.2014

consists of the following Directors, viz. Shri Arun K. Saraf, Shareholder Director-Chairman,

Managing Director-Member and Shri Ratan Kumar Roongta, Shareholder Director– Member.

The SGCB held 4 meetings (quarterly) during 2013-14 to review the position of complaints

received. During the year, 23 complaints were received and all were satisfactorily resolved. As

on 31.03.2014, no complaint was pending. No application for transfer of shares was pending for

more than one month as on 31.03.2014. The Bank is regularly following up with the

shareholders in the matter of unclaimed dividends.

REMUNERATION COMMITTEE OF THE BOARD

In terms of Government of India, Ministry of Finance, Department of Economic Affairs

(Banking Division) letter F.No.20/1/2005-BO.I dated March 9, 2007, the Government has

decided that the whole time Directors of Public Sector Banks would be entitled to performance

linked incentives subject to achievement of broad quantitative and qualitative parameters under

the Statement of Intent (SoI) entered into with the Government of India. The evaluation of

performance would be done by a Sub-Committee of the Board consisting of (i) Government

Nominee Director, (ii) RBI Nominee Director, and (iii) two other Directors. The Remuneration

Committee was reconstituted on 24.05.2013 with the Directors viz. Government Nominee

Director RBI Nominee Director and two other Directors, viz. (i) Shri Rajesh T Manubarwal (ii)

Shri Bharat Rattan. One meeting of the Committee was held during 2013-14 on 28.11.2013.

NOMINATION COMMITTEE OF THE BOARD

In terms of RBI's guidelines, a Nomination Committee of the Board was constituted to determine

‘fit and proper’ status of the elected Directors. The Committee was reconstituted on 25/07/2013.

The Committee consists of the following Directors viz. (i) Shri Bharat Rattan – Chairman, (ii)

Government Nominee Director, and (iii) SBI Nominee Director. During the year, one meeting

of the Committee was held.

RECOVERY COMMITTEE OF THE BOARD

In terms of Govt. of India guidelines, the Recovery Committee has been constituted to monitor

progress in recovery in NPA accounts. The Committee consists of Managing Director, Govt

Nominee Director, an Independent Director (Shri Arun Kumar Saraf), Chief General Manager

(Retail Banking) and Chief General Manager(Commercial Banking). The meeting of the

Recovery Committee is required to be held at least once in a calendar month. 12 meetings of the

Recovery Committee were held during the year 2013-14.

NAME AND DESIGNATION OF COMPLIANCE OFFICER (SHARES AND BONDS)

Smt Aruna Nitin Dak, Chief Manager (Share & Bonds) has been designated as the Compliance

Officer.

CHANGES IN ACCOUNTING TREATMENT

The financial statements of the Bank are prepared under the historical cost convention. They

conform to the Generally Accepted Accounting Principles in India, which comprise the statutory

provisions, regulatory/ RBI guidelines, accounting standards/ guidance notes issued by the

Institute of Chartered Accountants of India (ICAI) and the practices prevalent in the banking

industry in India. Detailed disclosures as per RBI guidelines/ accounting standards of ICAI and

accounting treatment are given in Schedule 18 of the Balance Sheet. During the year there has

been a change in the accounting policies for which disclosures have been made, wherever

required.

CORPORATE SOCIAL RESPONSIBILITY

As a responsible Corporate Citizen, the Bank undertakes community based social activities such

as tree plantation, free health check up and blood donation camps, establishing of water huts and

8

water coolers, sponsoring prizes / kit for sports competitions, honouring meritorious students etc.

During the year 2013-14, the Bank donated Rs. 1.00 crore for Chief Minister’s Relief Fund,

Uttarakhand and Rs.25 lac for Chief Minister’s Relief Fund, Odisha towards relief measures for

the people affected by Natural Calamities. Bank also provided 5 ambulances, one each to

Maheshwari Hospital & Research Centre Trust, Jaisalmer, Ram Niwas Dham Trust, Shahpura,

Bhilwara, Sant Sukhdev Shah Memorial Religious & Charitable Trust, Alwar, L.K.C. Shri

Jagdamba Andh Vidhyalaya Samiti, Sriganganagar, People’s Welfare Society, Sikar and one

Mortury Van to Jagriti Sansthan, Jaipur.

Other activities or financial assistance by our Bank are listed as under :

- Water purifiers and ceiling fans by every branch of the Bank to a nearby School

which had scarcity of funds.

- Provided Medical equipments to Manav Sewa Sangh, Jaipur which runs a hospital

and is providing free treatment for Bone Marrow Transplantation to thalassemia

affected children from poor families.

- Financial assistance to Society for Rational Development, Jodhpur for free

education to poor children in rural areas.

- Computer, Projector, Laptop, Printer and T.T. Table to Udayan Care Jaipur, an

NGO which shelters, educates and rehabilitates, orphaned/ abandoned children.

- Computer and Projecter to I Create Jaipur, an NGO which organizes training

programmes and vocational training for youth and women.

- Provided furniture to Vimukti Santhan, Jaipur helping slum area girls with free

education and vocational training .

- Donated a Generator to Ramakrishana Mission, Khetri for power back-up to

various welfare activities like running a primary school for local children and a

liabrary cum reading room alongwith health support programmes e.g. free eye

surgery etc. and providing nutritious food for poor children and their mothers.

- Branches of the Bank Continue to adopt one girl child each from poor families

with an objective of providing financial assistance for pursuing their studies in

Government/ Municipal Schools

- Distributed 200 folding sticks to poor blinds through Blind & Humanity Welfare

Centre, Mumbai.

- Provided Roti Making Machine to Manav Sewa Samiti, Udaipur which serves

poor people by way of providing free meals to attendants of patients at hospitals.

- Provided Vela Ventilator (a Life Saving Equipment) to Sheth D.V.Shroff

Ashaktashram Hospital, Surat which is a charitable one.

Bank shall remain dedicated to respond to the needs of the less fortunate and under- privileged

members of the society. It will also do its bit for a cleaner environment.

CODE OF CONDUCT

In terms of Clause 49 of the Listing Agreement entered into with the Stock Exchanges, the Bank

has adopted a Model Code of Conduct for its Board Members and senior management

functionaries, which has also been uploaded on the Bank’s website. The declaration for

compliance with the Code of Conduct has been taken from the persons concerned and a

certificate affirming the compliance is placed at Annexure-III.

9

The Bank has also framed a code of conduct for its Directors and designated employees for

prevention of insider trading in Bank’s securities. Number of Bank’s shares held by the Directors

as on 31.03.2014 is given in Annexure 1(e).

OTHER DISCLOSURES

The Bank has not entered into any materially significant related party transactions with its

Promoters, Directors, or Management, their subsidiaries or relatives, etc. that may have potential

conflict with the interests of the Bank at large.

The Bank has complied with applicable rules and regulations prescribed by stock exchanges,

SEBI, RBI or any other statutory authority relating to the capital markets during the last three

years. No penalties or strictures have been imposed by them on the Bank.

A Whistle Blower Policy has been put in place and displayed on the Bank’s website for reporting

any unethical practices and behavior by employees in violation of their service rules, with a

provision for protection of interest/ identity of the whistleblower.

The Bank has complied in all respects with the requirements of Clause 49 of the Listing

Agreement with the Stock Exchanges, to the extent that the requirements of the Clause do not

violate the provisions of State Bank of India (Subsidiaries Banks) Act, 1959, the Rules and

Regulations made thereunder, and guidelines or directives issued by the Reserve Bank of India

and State Bank of India.

Mandatory requirements of Clause 49 as to the composition of the Board of Directors,

composition and quorum of the Audit Committee, Non-executive directors’ compensation, the

appointment, re-appointment of the statutory Auditors and fixation of their fees are not binding

on the Bank, as separate provisions in the State Bank of India (Subsidiary Banks) Act 1959,

General Regulations and the Reserve Bank of India guidelines deal with the same.

The Bank has complied with all applicable non-mandatory requirements of Clause 49, except for

sending half-yearly declaration of financial performance and summary of significant events to

the households of shareholders, since detailed information on same is posted on the website of

the Bank.

CERTIFICATE OF COMPLIANCE

A certificate of compliance of conditions of Corporate Governance, as stipulated in Clause

49(vii) of the Listing Agreement with the Stock Exchanges has been obtained from the Auditors

and placed at Annexure-IV. It is confirmed that stipulations of Clause 49 have been complied

with.

ANNUAL GENERAL MEETING FOR THE FINANCIAL YEAR 2012-13

The important observations in respect of the matters pertaining to the “Profit and Loss Account

and the Balance Sheet” made by the shareholders in the last Annual General Meeting held on

07.06.2013 and the Bank’s responses are given in Annexure V.

DISCLOSURES UNDER BASEL-II/ BASEL-III

The Bank has migrated towards Basel-II norms w.e.f. March 31, 2008 and Basel III w.e.f.

April 1, 2013. In terms of RBI guidelines, the various disclosures under Basel-II/ Basel III are

given in Annexure VI.

MEANS OF COMMUNICATION

The Bank strongly believes that all stakeholders should have access to complete information on

its activities, performance and product initiatives. Annual, half-yearly and quarterly results of the

Bank for the year 2013-14 were published in one English financial daily (all editions) and

one/two Regional Hindi newspapers (all Rajasthan editions). The results were also displayed on

the Bank’s website www.sbbjbank.com. The Annual Report is sent to all shareholders of the

Bank. After the announcement of quarterly, half-yearly and annual results a Press cum Analyst

meet is held on the same day, in which the Managing Director makes a presentation on Bank’s

performance and answers the queries of the media and investment analysts. The presentation is

thereafter published on the website of the Bank.

10

GREEN INITIATIVE

The Ministry of Corporate Affairs (M C A), Government of India, has advocated "Green

Initiative in Corporate Governance" through its Circular No. 17/2011 dated 21.04.2011 read

with Circular No. 18/2011 dated 29.04.2011 by allowing paperless compliances through

electronic mode for service of documents. In line with the Government initiative as above, the

Bank will send notices/documents including Annual Report comprising of balance sheet, profit

and loss account, director's report, auditor's report etc. in electronic form to the email address

provided by the shareholders and made available to the Bank by the Depositories.

Full text of the documents will also be made available on the Bank's website

www.sbbjbank.com. As before, physical copies of the notices/documents including Annual

Reports, will be available for inspection during office hours at the Registered Office of the Bank.

Registration of email address:

For shares held in physical form, shareholders can register their email address at

'[email protected]' mentioning their name and folio number or write to the Bank. For

shares held in electronic form, Shareholders are requested to register their email address with

their Depository Participant (DP).

UNCLAIMED SHARES

As per SEBI’s circular CIR/CFD/DIL/10/2010 dated December 16, 2010 read with clause 5A of

the listing Agreement, the Bank has transferred the unclaimed shares in unclaimed suspense

Account, i.e. “Unclaimed Suspense Account-SBBJ”. In terms of the said SEBI’s circular read

with clause 5A of the listing Agreement, the details with respect to the unclaimed shares of the

company for the year ended 31st March, 2014 is as under:

S.No. Particulars No. of Shareholders No. of shares

1 Aggregate number of shareholders and the

outstanding shares transferred to the Unclaimed

Suspense Account during the year.

39 2680

2 No. of shareholders who approached for transfer

of shares from the Unclaimed Suspense Account

during the year

0 0

3 Number of shareholders to whom shares were

transferred from the Unclaimed Suspense

Account during the year

0 0

4 Aggregate number of shareholders and the

outstanding shares lying in the Unclaimed

Suspense Account at the end of the year.

39 2680

INFORMATION FOR GENERAL SHAREHOLDERS a) Annual General Meeting

Place

Venue

Date & Time

Jaipur

Maharana Pratap Auditorium, Bhartiya Vidya Bhawan, K.M. Munshi

Marg, Opp. O.T.S., Jaipur

Monday, 2nd

June, 2014 at 11.30 a.m.

b) Financial Year 01.04.2013 to 31.03.2014

c) Date of Book Closure/

Record Date

Record Date for Interim Dividend: 31.03.2014

Book Closure for AGM: 26th May 2014 to 1

st June, 2014

d) Dividend Payment Date Interim Dividend :- 10.04.2014

e) Listing on Stock Exchanges BSE & NSE, Mumbai and JSE, Jaipur

f) Stock Code 501061 (BSE), SBBJ (NSE), 231 (Jaipur Stock Exchange)

g) Share Transfer Agent M/s. MCS Limited

F 65, 1st Floor, Okhla Industrial Area, Phase I, New Delhi- 110020

h) Share Transfer System Through Share Transfer Agent. Transfer/Transmission of shares

approved by the Bank’s “In-house Share Transfer Committee”.

i) Dematerialisation of Shares

And liquidity

The Shares of the Bank have been dematerialized. The ISIN No.

allotted by NSDL/CDSL is INE 648A01026. As on 31.03.2014,

95.30% shares of the bank have been dematerialized.

11

j) Details of outstanding

GDRs/ ADRs/ warrants or

any convertible instruments,

conversion date and likely

impact on equity.

NIL

k) Unclaimed Dividend The shareholders who have not encased their dividend warrants or

have not received dividend of previous years, are advised to approach

the Bank’s Registrar and Share Transfer Agent MCS Limted or Shares

& Bonds Department at Head Office, Jaipur for issue of duplicate

dividend warrants on the below mentioned address:

Shareholders are requested to carefully note that pursuant to amendment in State Bank of India

(Subsidiary Banks) Act, 1959 vide State Bank of India (Subsidiary Banks Laws) Amendment

Act, 2007 (w.e.f. 09.07.2007), it is required to transfer amount remaining unpaid/unclaimed in

dividend accounts of earlier years on the commencement of the aforesaid Act, and also dividend

declared after the commencement of the said Act, to “Unpaid Dividend Account”. The amount

transferred to the said “Unpaid Dividend Accounts” and remaining unclaimed/unpaid for a

period of seven years from the date of transfer, is required to be transferred to the Investors

Education and Protection Fund (IEPF) established under Section 125 of the Companies Act,

2013, which shall be used for the purpose and in the manner specified in the Section and

thereafter no claim for payment shall lie in respect thereof to the Bank or the Fund.

MARKET PRICE DATA

MONTHS SBBJ’s Share

Price BSE

BSE SENSEX BANKEX

HIGH LOW HIGH LOW HIGH LOW

April 2013 442.00 401.00 19622.68 18144.22 14576.15 12491.73 May 2013 445.50 395.00 20443.62 19451.26 15335.89 13952.17 June 2013 449.00 388.35 19860.19 18467.16 14319.88 12616.63 July 2013 408.00 342.05 20351.06 19126.82 13496.12 11260.14 August 2013 357.00 307.10 19569.20 17448.71 11672.06 9535.75 September 2013 367.85 318.15 20739.69 18166.17 12771.76 9776.92 October 2013 332.00 314.45 21205.44 19264.72 13121.84 10912.25 November 2013 357.00 315.00 21321.53 20137.67 13401.76 11889.58 December 2013 329.00 310.00 21483.74 20568.70 13928.88 12607.90 January 2014 338.00 297.00 21409.66 20343.78 13225.73 11564.70 February 2014 304.75 287.10 21140.51 19963.12 12310.09 11373.07 March 2014 331.75 281.90 22467.21 20920.98 14724.14 12134.58

Address for

correspondence:

Chief Manager (Shares & Bonds)

State Bank of Bikaner and Jaipur

Head Office, Tilak Marg,

“C” Scheme,

JAIPUR - 302 005

Phone : 0141- 5101539 ;

Fax : 0141-5101176

E-mail : [email protected]

MCS Limited

Unit: SBBJ

F-65, 1st Floor,

Okhla Industrial Area, Phase- I,

New Delhi- 110020

Phone: 011- 41406149

Fax: 011-41406148

Email: [email protected]

12

SHAREHOLDING PATTERN AS ON 31.03.2014

SHAREHOLDERS’ CATEGORY No. of shares held % of shares held to

Total No. of shares

Promoter : State Bank of India 5,25,49,924 75.07

Mutual Funds /UTI 36,30,812 5.19

Financial Institutions /Banks 2,54,351 0.36

Insurance Companies 15,27,304 2.18

Foreign Institutional Investors 12,43,115 1.78

Bodies Corporate 15,00,855 2.14

Individuals 91,31,119 13.04

Non Resident Indians 1,56,336 0.22

Trust & Foundations 6,184 0.01

Total 7,00,00,000 100.00

DISTRIBUTION OF SHAREHOLDERS AS ON 31.03.2014-CATAGORY WISE

Sno Category Cases % of Cases Shares % share

1 upto 1 - 500 61757 95.86 5451029 7.79

2 501 - 1000 1359 2.11 996724 1.42

3 1001 - 2000 670 1.04 998288 1.43

4 2001 - 3000 294 0.46 761344 1.09

5 3001 - 4000 119 0.18 411718 0.59

6 4001 - 5000 55 0.09 253687 0.36

7 5001 - 10000 103 0.16 751368 1.07

8 10001 - 50000 51 0.08 1117741 1.60

9 50001 - 100000 8 0.01 616174 0.88

10 100001 & ABOVE 8 0.01 58641927 83.77

Total: 64424 100.00 70000000 100.00

13

ANNEXURE- I(a)

Details of Attendance of Directors at the Meetings of Board of Directors during 2013-14

S.No. Name of Director Meetings

held during

his / her

tenure

Meetings

Attended

Whether

attended

AGM

No. of other BODs /

Board Committees

he/ she is a member

Director/

Chairperson

1. Shri Pratip Chaudhuri

(upto 30.09.2013)

5 3 P Chairman/Director-

N.A.

Committee member/

Committee

Chairman-N.A.

2. Smt Arundhati Bhattacharya

(w.e.f. 7/10/2013)

3 1 N.A. Chairman/Director-

13

Committee member/

Committee

Chairman-16

3. Shri S. Vishvanathan

(w.e.f. 17/7/2013)

5 4 N.A. Chairman/Director-

16

Committee member/

Committee

Chairman-11

4. Shri B. Sriram

8 8 P Chairman/Director-

Nil

Committee member/

Committee

Chairman-Nil

5. Smt Malvika Sinha

8 6 N Chairman/Director-

Nil

Committee member/

Committee

Chairman-Nil

6. Shri Rajeev N.Mehra

8 7 N Chairman/Director- 7

Committee member/

Committee

Chairman-Nil

7. Shri Pradip Kumar Sanyal

(upto 20.11.2013)

6 5 P Chairman/Director-

N.A.

Committee member/

Committee

Chairman-N.A.

8. Shri Purna Chandra Jena

w.e.f. 26.11.2013)

2 1 N.A. Chairman/Director- 5

Committee member/

Committee

Chairman-Nil

9. Shri Ratan Kumar Roongta

(w.e.f. 12/8/2013)

4 4 N.A. Chairman/Director- 1

Committee member/

Committee

Chairman-

14

10. Shri Kunal Dalmia

(Upto 11.8.2013)

4 - N Chairman/Director-

N.A.

Committee member/

Committee

Chairman-N.A.

11. Shri Gulab Singh

(w.e.f. 15.10.2013)

3 3 N.A. Chairman/Director-

Nil

Committee member/

Committee Chairman

Nil

12. Shri Mihir Kumar

(upto 30.09.2013)

5 4 N Chairman/Director-

N.A.

Committee member/

Committee

Chairman-N.A.

13. Shri D.K. Jain

(Upto 11.1.2014)

6 6 P Chairman/Director-

N.A.

Committee member/

Committee Chairman

N.A.

14. Shri Sunil Dutt Bali

8 8 P Chairman/Director-

Nil

Committee member/

Committee Chairman

Nil

15. Shri Rajesh T. Manubarwala

8 5 P Chairman/Director-

Nil

Committee member/

Committee Chairman

Nil

16. Shri Bharat Rattan

8 8 P Chairman/Director-

Nil

Committee member/

Committee Chairman

Nil

17. Shri Arun K. Saraf 8 4 N Chairman/Director-

Committee member/

Committee

Chairman-

18. Arun Koolwal

(w.e.f. 12.1.2014)

2 2 N.A. Chairman/Director-

Nil

Committee member/

Committee

Chairman-Nil

P -Attended N - Not attended N.A. - Not applicable

15

ANNEXURE – I (b)

LIST OF BOARD OF DIRECTORS AS ON 31.03.2014

Name of Director Designation Appointed

since

Address No. of Committees of

which he/ she is a

Member/Chairperson

1 Smt Arundhati

Bhattacharya

Chairman 07.10.2013 Chairman

State Bank of India,

Corporate Centre

Madame Cama Road,

Mumbai-400021

Chairman- NIL

Committee Member- NIL

2 Shri S. Vishvanathan

MD &

GE(A&S)

17.7.2013 Md&GE (A&S),

State Bank of India,

Corporate Centre

Madame Cama Road,

Mumbai-400021

Chairman- 1

Committee Member- NIL

3 Shri B. Sriram Managing

Director

01.03.2013

Managing Director

State Bank of

Bikaner and Jaipur

Head Office, Tilak

Marg

Jaipur - 302 005

Chairman- 5

Committee Member- 2

4 Smt Malvika Sinha RBI

Nominee

Director

22.08.2012 Chief General

Manager,

Customer Service

Deptt, Reserve Bank

of India, Amar

Building, Ist Floor,

Sir P.M. Road, Fort,

Mumbai-1

Chairman- Nil

Committee Member- 3

5 Shri Rajeev N. Mehra SBI Nominee

Director

01.12.2012

Chief General

Manager (A & S

Group)

State Bank of India,

Corporate Centre,

Mumbai

Chairman- Nil

Committee Member- 4

6 Shri Purna Chandra

Jena

SBI Nominee

Director

26.11.2013 General Manager

(A&S)

Associate Banks

Department

State Bank of India

Corporate Centre,

Mumbai-400021

Chairman- NIL

Committee Member- 4

7 Shri Rajesh T.

Manubarwala

Director 20.04.2011

9, Amijadav

Bunglows, Near

Hotel Ashish, ABC

Chokdi,

Bharuch -392001

Chairman- Nil

Committee Member- 5

8 Shri Bharat Rattan

Director

15.05.2011

B. Rattan &

Associates,

Shop No. 408-409,

Mahak Tower,

Kailash Cinema

Road, Civil Lines

Ludhiana-141001

Chairman- 2

Committee Member- 4

9 Shri Arun K Saraf Shareholder's

elected

director

12.08.2011

Managing Director,,

Juniper Hotels Pvt

Ltd., Grand Hyatt

Mumbai, Santacruz,

MUMBAI-400005

Chairman- 1

Committee Member- 3

10 Shri Ratan Kumar

Roongta

Shareholder's

elected

director

12.08.2013

61/45, Pratap Nagar,

Sanganer, Jaipur

Chairman- Nil

Committee Member- 3

16

11 Shri Gulab Singh

Central

Government

Nominee

Director

15.10.2013 Dy. Secretary, Govt.

of India, Ministry of

Finance, Deptt. of

Financial Services

(Banking Division),

3rd

Floor, Jeevan

Deep Bldg.,

Parliament Street,

New Delhi.-110001

Chairman- Nil

Committee Member- 5

12 Shri Sunil Dutt Bali

Officer

Employee

Director

1.11.2012 'Muskan',

House No. 83,

Sector-4,

Vidhyadhar Nagar,

Jaipur

Chairman- Nil

Committee Member-Nil

13 Shri Arun Koolwal

Workmen

Employee

Director

12.01.2014 S. W. O. State Bank

of Bikaner & Jaipur,

Z. O.,Jaipur

Chairman- Nil

Committee Member-Nil

* Shri Rajeev N. Mehra & Shri Purna Chandra Jena are nominated on the Audit Committee of the Board

in their respective capacities.

ANNEXURE - I(c)

ATTENDENCE OF EC MEETINGS DURING 2013-14

S.No. NAME OF DIRECTOR MEETINGS HELD DURING

HIS/HER TENURE

MEETINGS

ATTENDED

1. Managing Director

Shri B. Sriram

13

13

2. SBI Nominee

Shri R.N. Mehra

Shri P.C. Jena

Shri Pradip Kumar Sanyal

Shri S.B. Joshi

13

2

1

8

2

3. Shri Ratan Kumar Roongta 8 3*

5

4. Shri D. K. Jain 10 6*

5. Shri Arun Koolwal 3 2*

6. Shri Rajesh T. Manubarwala 13 4*

7. Bharat Rattan 13 12

8. Sunil Dutt Bali 13 13*

*Meeting attended as non member of the Committee.

17

ANNEXURE - I(d)

ATTENDENCE OF ACB MEETINGS DURING 2013-14

S.NO NAME OF DIRECTOR MEETINGS HELD

DURING HIS/HER

TENURE

MEETINGS

ATTENDED

1. Shri Bharat Rattan

(Non Executive Director,

Chairman)

5 5

2. RBI Nominee

Smt. Malvika Sinha

5

5

3. SBI Nominee 5

Shri Rajeev N Mehra

Shri Pradip Kumar Sanyal

Shri Purna Chandra Jena

2

3

2

4. Shri Rajesh T. Manubarwala

Non Executive Director

5 5

ANNEXURE -I(e)

NUMBER OF SHARES HELD BY THE DIRECTORS

(As on 31.03.2014)

No. Name of Director No. of Shares held by the Director

1. Smt Arundhati Bhattacharya Nil

2. Shri S. Vishvanathan Nil

3. Shri B. Sriram Nil

4. Smt Malvika Sinha Nil

5. Shri Rajeev N Mehra Nil

6. Shri Purna Chandra Jena Nil

7. Shri Rajesh T. Manubarwala Nil

8. Shri Bharat Rattan, Nil

9. Shri Arun K Saraf 100

10. Shri Ratan Kumar Roongta 160

11. Shri Gulab Singh Nil

12. Shri Sunil Dutt Bali 225

13. Shri Arun Koolwal Nil

18

ANNEXURE – II

BRIEF RESUME OF OTHER NON-EXECUTIVE DIRECTORS

Shri Rajesh T. Manubarwala, is a Tax consultant by profession and also having Bar Council

membership. He is having 35 years experience in his profession. He is also trustee in

Sanskardeep School, GIDC, Ankleshwar

Shri Bharat Rattan, is a Chartered Accountant by profession having experience of 17 years. He

has been engaged with various type of audits (Concurrent audit, Special Audit, Statutory Audit )

of various banks, Govt Deptt, Insurance Companies. He is also having license of Insurance

Surveyor.

Shri Arun Kumar Saraf, is well known businessman and Director on the Boards of various

companies engaged in hotel business. He is having rich experience of development of new

hotels, mobilizing funds for the projects, inking various land-purchase agreements.

ANNEXURE – III

DECLARATION OF COMPLIANCE WITH THE CODE OF CONDUCT

I confirm that all Board Members and Senior Management have affirmed Compliance with the

Bank's Code of Conduct for the financial year 2013-14.

New Delhi (B. Sriram)

23.04.2014 Managing Director

19

ANNEXURE – IV

AUDITORS’ CERTIFICATE ON CORPORATE GOVERNANCE

To the Members of

State Bank of Bikaner and Jaipur

We have examined the compliance of conditions of corporate governance by the State Bank of

Bikaner and Jaipur, for the year ended on the 31st March, 2014 as stipulated in Clause 49 of the

Listing Agreement of the State Bank of Bikaner and Jaipur with Stock Exchanges.

The compliance of conditions of Corporate Governance is the responsibility of the management.

Our examination was limited to procedures and implementation thereof, adopted by the State

Bank of Bikaner and Jaipur for ensuring the compliance of the conditions of the Corporate

Governance. It is neither an audit nor an expression of opinion on the financial statements of the

State Bank of Bikaner and Jaipur.

In our opinion and to the best of our information and according to the explanation given to us,

we certify that the State Bank of Bikaner and Jaipur has complied in all material respects with

the conditions of Corporate Governance as stipulated in the above mentioned Listing Agreement.

We state that no investor grievance is pending for a period exceeding one month against the State

Bank of Bikaner and Jaipur as per the records maintained by the Shareholders’/Investors

Grievance Committee.

We further state that such compliance is neither an assurance as to the future viability of the

State Bank of Bikaner & Jaipur nor the efficiency or effectiveness with which the management

has conducted the affairs of State Bank of Bikaner & Jaipur.

For. Agarwal Anil & Co.

Chartered Accountants

FR NO. 003222 N

(CA Anil Agrawal)

(M.No.82103)

Partner

For Chaturvedi & Co.

Chartered Accountants

FR NO.302137 E

(CA Satish Chandra

Chaturvedi) (M.No.12705)

Partner

For M. K. Aggarwal & Co.

Chartered Accountants

FR NO. 01411N

(CA Atul Aggarwal)

(M.No.99374)

Partner

For. P S D & Associates.

Chartered Accountants

FR NO. 004501 C

(CA Prakash Sharma )

(M.No.072332 )

Partner

For Uberoi Sood & Kapoor

Chartered Accountants

FR NO. 001462 N

(CA Sanjay Sood)

(M.No.80527)

Partner

Place : Mumbai

23rd

April, 2014

20

ANNEXURE - V

Shareholders’ queries with regard to Profit and Loss Account and Balance Sheet raised in

the last Annual General Meeting held on 7th June 2013 and their responses

1. Why NPAs are increasing. What is the reason for lower achievement in percentage terms,

as compared to the previous year, in cost of deposit, net interest income, net profit,

priority sector lending, assistance to minority communities, return on assets of Bank,

return on equity and commission earned on Govt. business.

Reply

The increase in Gross NPA during the past 2 years is attributed to General economic

slowdown as would be evident from the rising NPAs in almost all the Banks in India and

slippages of a few High Value Corporate Accounts to NPA, which is corroborated by the

fact that NPA in Corporate Segment constituted 44.47% and 38.90% during the years

2011-12 & 2012-13 respectively.

Cost of deposit has gone up during the year mainly on account of lower growth of CASA

(10.68% as compared to total deposit growth of 17.12%). During the year, Bank had

introduced a new 50 weeks' Term Deposit product named "Golden Jubilee Deposit"

w.e.f. 01.05.2012 to 31.12.2012, which carried a higher interest rate ranging from 9.05%

p.a. to 9.60% p.a. and Rs. 882 crore was mobilized in this product. Net interest income

and ROA/ROE has come down on account of reversal of interest due to addition of fresh

NPA during the year. Interest cost has also gone up during the year on account of

Subordinate Bonds of Rs.500.00 crores raised by the Bank on 21.03.2012. Other

parameters may be overall considered satisfactory.

2. What is the reason of loss in treasury operations?

Reply:

The treasury segment receives funds from the other two segments viz, the corporate and

retail banking segments at a notional cost, which is computed based on cost of deposits of

other segments plus operating expense incurred for mobilizing funds. Therefore, the loss

is only notional.

3. As per Companies Act, the dividend should be declared in AGM, how bank has already

declared and paid the dividend without the approval of shareholders..

Reply:

The Bank is governed by State Bank of India (Subsidiary Banks) Act, 1959 and

provisions of Companies Act, 1956 are not applicable to the Bank. As per Section 40(2)

of the SBI (SB) Act, 1959, the rate of dividend is determined by the Board of Directors.

Therefore approval of the shareholders was not taken in this regard.

4. One branch in all major cities to be made ‘Seven days’ banking branch’, for the benefit of

service class people.

Reply:

The suggestion will be examined. However, it is seen that the need to open branches on

Sundays has significantly come down over the years since other channels of banking such

as Internet banking; Mobile banking and ATMs are available.

5. What is the status of KYC and Anti Money Laundering compliance done by the Bank?.

Reply:

The Bank is following zero tolerance policy on KYC and AML. KYC and AML rules are

strictly followed by the Bank as changed from time to time. Instructions are already in

place regarding display of the required documents for KYC.

BASEL DISCLOSURES

The Bank migrated to Basel-II framework w.e.f. 31st March, 2008. Basel-III guidelines have also

been implemented w.e.f. 1st April, 2013. Accordingly, Pillar-III Disclosures of the Bank as on

31.03.2014 are as under:

Capital Management

Capital management is aimed at ensuring that there is sufficient capital to meet the requirement

of the Bank as determined by its underlying business strategy and also that sufficient cushion is

available to absorb unexpected shocks that could arise out of adverse market conditions and

external factors.

The Bank aims to maintain Capital Adequacy Ratio (CAR) well above the regulatory minimum

level of 9%. Excess capital above the regulatory minimum is for supporting anticipated future

business growth and to serve as a buffer for any unexpected shocks thereby ensuring that the

Bank‟s CAR does not fall below the regulatory minimum level even in adverse conditions.

Risk Management

The risk management processes and practices employed by the Bank have been developed in the

wider context of the relationships between risk, capital and earnings.

The strategic objectives set by the Board determine the Bank‟s risk appetite, which is an

important input for its capital planning and performance management. Risk appetite is the

maximum risk the Bank is willing to accept in executing its business strategy while staying

protected against events that may have an adverse impact on its profitability and capital base.

Risks are being managed by using limits or checkpoints set across all dimensions of capital,

earnings volatility and concentration risk. These limits are determined by a well-defined

maximum risk appetite.

By adopting an integrated risk management approach, the Bank seeks to improve its methods for

identifying and quantifying risks, to develop a more effective risk management system, to

achieve a stable balance between earnings and risk, to eliminate concentrations of specific risks,

to create an appropriate capital structure, to achieve optimal allocation of resources, and to

sustain high asset quality. This contributes to the strengthening of the financial health of the

Bank and maximizing of shareholders‟ value.

The Bank broadly classifies and defines risk types as under:

Credit Risk The risk of financial loss in credit assets (including off-balance sheet

instruments) caused by deterioration in the credit conditions of

counterparties.

Market Risk The risk of financial loss where the value of assets and liabilities could be

adversely affected by changes in market variables such as interest rates,

securities prices and foreign exchange rates.

Liquidity Risk The risk to earnings and capital arising from a bank‟s potential inability to

meet its liabilities when they become due without incurring unacceptable

losses.

Operational Risk The risk of loss resulting from inadequate or failed internal processes,

people or systems, or from external events.

Interest Rate Risk

in Banking Book

The risk that the value of bank‟s financial assets may decrease and/or the

value of the bank‟s liabilities may increase because of changes in interest

rates. Interest Rate Risk arises primarily from the maturity mismatch of

assets and liabilities. The overall objective is to manage current and future

earnings sensitivity to interest rate risk exposure.

The Bank has the following risk management committees in place for its overall risk

management: Risk Management Committee of the Board, Credit Risk Management Committee,

Market Risk Management Committee and Operational Risk Management Committee. Besides

these committees, the Bank‟s Assets-Liabilities Management Committee (ALCO) and Balance

Sheet Management Group monitor the build-up of assets and liabilities across maturities for

liquidity tracking and assessing rate sensitivity on an ongoing basis.

The various risk management committees discuss and dynamically manage the different types of

risks both from qualitative and quantitative perspectives. The Board of Directors lays down the

Bank‟s risk management policies for various types of risk based on the discussions held by these

committees.

In terms of RBI guidelines on Basel-II framework, the Bank has adopted the Standardised

Approach for Credit Risk, Standardised Duration Approach for Market Risk and Basic Indicator

Approach for Operational Risk. In addition to regulatory capital requirement of computation as

per Pillar-I, the Bank also assesses Liquidity Risk and Interest Rate Risk, and carries out stress

tests on a regular basis to assess adequacy of the capital available as a cushion to withstand

shocks from market forces and external factors.

BASEL-II Disclosures

In terms of Reserve Bank of India guidelines on New Capital Adequacy Framework (NCAF) and

our Disclosure Policy, Qualitative and quantitative disclosures of Basel-II framework are

appended in the Disclosure Tables (DF) 1 to 10.

DF-1

SCOPE OF APPLICATION

Basel-II framework is applicable to the Bank at solo level. It has no subsidiary. However,

investment in Marudhara Gramin Bank, Jodhpur (in which Bank has 35% equity stake) has been

deducted from Tier-I and Tier-II capital -50% each.

DF-2

CAPITAL STRUCTURE:

Qualitative Disclosures:

(a) Summary:

Type of

Capital

Features

Equity (Tier-I) Shares issued to

SBI (75.07%)

Public (24.93%)

Innovative

Instruments

(Tier-I)

Innovative Perpetual Debt Bonds: Unsecured, non-convertible, subordinated,

perpetual Bonds in the nature of Promissory Notes. Call option and step-up

coupon available after 10 years (subject to RBI approval at the time).

Tier-II Subordinated Debt Instruments i.e. Upper Tier-II and Lower Tier-II bonds

issued by the Bank are unsecured, redeemable, non-convertible bonds. Call

option available for Upper Tier-II bonds after 10 years (subject to RBI approval

at the time)

Period : ranges from 111 months to 180 months

Details of Tier-I and Tier-II debt issues given in Appendix VII.

Quantitative Disclosures:

(Rs. in Crores)

(b) Tier-I Capital : 5527.72

Paid-up Share Capital : 70.00

Reserves : 5285.92

Innovative Instruments : 200.00

Other Capital Instruments : 0.00

Amount deducted from Tier-I Capital

(i.e. Deferred Tax Asset & Investment in RRB)

: 28.20

(c) (c ) Total Eligible Tier -2 Capital (Net of deductions)

(i+ii+iii-v)

: 1512.33

(i) Debt Capital Instruments eligible for inclusion in Upper

Tier-2 capital:

:

Total amount outstanding : 450.00

Of which raised during Current year : 0.00

Amount eligible for being reckoned as Capital : 450.00

(ii) Subordinated Debt eligible for inclusion in Lower Tier-

2 Capital:

:

Total amount outstanding : 1500.00

Of which amount raised during current year : 0

Amount eligible for being reckoned as Capital : 700.00

(iii) General Provision : 390.53

(iv) Deduction from Tier- 2 Capital, if any : 28.20

(d) Total Tier-III capital, if any : 0.00

(e) Total Eligible Capital (net of deductions from Tier I &

Tier II Capital)

[Total of (b), (c), (d)]

: 7040.05

DF-3

CAPITAL ADEQUACY

Qualitative Disclosures:

Bank has a Board-approved ICAAP(Internal Capital Adequacy Assessment Process)

Policy

Capital requirement for current business levels and estimated future business has been

assessed as per ICAAP

CAR (Capital Adequacy Ratio) has been worked out based on Basel-II guidelines. CAR

is estimated to be above the regulatory minimum level of 9%

Quantitative Disclosures:

(Rs. in Crores)

(b) Capital requirements for credit risk:

Portfolios subject to standardised approach : 4902.56

(c) Capital requirements for market risk:

Standardised duration approach : 84.85

(d) Capital requirements for operational risk:

Basic indicator approach : 424.84

Total Capital Requirement at regulatory minimum level of 9% : 5412.25

(e) Total and Tier I capital adequacy ratio : Total CAR : 11.71%

:CAR (Tier-I) : 9.19%

DF-4

CREDIT RISK: GENERAL DISCLOSURES: (INCLUDING EQUITIES):

Qualitative Disclosures:

(a) General Qualitative Disclosures

I. Definitions of “Impaired Assets”: Bank is following extant RBI definitions of these categories.

(The definitions used are given in Appendix-VIII).

II. Credit Risk Management:

Risk Governance Structure is in place (organization chart as per Appendix-VI).

Credit Risk Management Committee and Risk Management Committee of the Board are

the principal committees that review credit risk management

Following Board-approved policies with regard to credit risk are in place:

o Credit Risk Management and Loan Policy

o Credit Risk Mitigation & Collateral Management Policy

o Stress Testing Policy

Bank‟s policies take into account the need for better credit risk management and

avoidance of risk concentration

Policies are reviewed periodically.

Exposure limits for Single Borrower, Group Entities, different categories of borrowers,

specific industry /sector, etc. have been stipulated.

Specific norms and guidelines for appraisal and sanction, documentation, inspection and

monitoring, renewal, maintenance, rehabilitation and management of assets have been

stipulated in the Credit Risk Management and Loan Policy, with provision of adequate

leg room for innovation and deviation permissible under a proper authority structure.

Stress test on advances is carried out at half-yearly intervals and placed before the CRMC

and RMCB for review.

Quantitative Disclosures:

Amount in Rs. Crores

Fund Based

Non Fund

Based Total

Total Gross Credit Risk Exposures 65332.66 40710.31 106042.97

Geographic Distribution of Exposures : FB / NFB

i- Overseas 0 0 0

ii- Domestic 65332.66 40710.31 106042.97

Industry Type Distribution of Exposures as per DSB

returns Please refer to Table “A”

Fund based / Non Fund Based separately

Residual Contractual Maturity Breakdown of Assets

as used in ALM returns Please refer to Table “B”

Amount of NPAs (Gross) i.e. SUM of (i to v) 2732.78

i. Substandard 1355.90

ii. Doubtful 1 636.04

iii. Doubtful 2 512.46

iv. Doubtful 3 66.57

v. Loss 161.81

Net NPAs 1770.85

NPA Ratios

i) Gross NPAs to gross advances (%) 4.18%

ii) Net NPAs to net advances (%) 2.76%

Movement of NPAs (Gross)

i) Opening balance 2119.49

ii) Additions 2123.54

iii) Reductions 1510.25

iv) Closing balance 2732.78

Movement of Provisions for NPAs

i) Opening balance 816.21

ii) Provisions made during the period 534.73

iii) Write-off 389.02

iv) Write-back of excess provisions 0

v) Closing balance 961.92

Amount of Non-Performing Investments 4.89

Amount of Provisions held for Non-Performing

Investments

4.89

Movement of Provisions for Depreciation on

Investments

Opening balance 16.79

Provisions made during the period 6.51

Write-off 6.92

Write-back of excess provisions 0

Closing balance 16.38

GROSS ADVANCES 65332.66

NET ADVANCES 64172.09

TABLE A

INDUSTRY-TYPE DISTRIBUTION OF EXPOSURES

(Rs. In Crores)

Code INDUSTRY Fund based Outstanding NF O/S Total Exposure

Standard NPA Total

1 Coal 198.51 0.31 198.82 97.42 296.23

2 Mining 851.86 48.98 900.84 47.46 948.31

3 Iron & Steel 4650.21 170.45 4820.66 1391.96 6212.62

4 Metal Products 849.44 59.66 909.10 217.41 1126.51

5 All Engineering 2317.39 65.52 2382.91 1618.21 4001.12

5.1 Of which (005) Electronics 1143.08 53.17 1196.24 482.15 1678.40

6 Electricity 3080.98 58.87 3139.85 638.88 3778.73

7 Cotton Textiles 1936.57 91.61 2028.18 138.11 2166.29

8 Jute Textiles 8.06 1.17 9.23 65.93 75.16

9 Other Textiles 1479.20 240.65 1719.85 191.41 1911.26

10 Sugar 69.51 0.02 69.53 0.02 69.55

11 Tea 8.68 0.31 8.99 0.15 9.14

12 Food Processing 1192.28 34.38 1226.66 133.97 1360.63

13 Vegetable Oils & Vanaspathi 547.04 14.67 561.72 393.48 955.19

14 Tobacco/Tobacco Products 32.13 0.05 32.18 4.73 36.91

15 Paper / Paper Products 326.56 173.32 499.88 133.82 633.69

16 Rubber / Rubber Products 905.70 10.51 916.21 280.58 1196.79

17 Chemicals/Dyes/Paints Etc 1090.62 62.23 1152.85 256.04 1408.89

17.1 of which fertilisers 240.58 0.31 240.90 9.75 250.64

17.2 of which Petrochemicals 124.98 0.00 124.98 0.55 125.53

17.3

of which Drugs&

Pharmaceuticals 197.57 58.06 255.63 43.53 299.16

18 Cement 757.33 3.22 760.55 174.21 934.76

19 Leather & Leather Products 62.67 5.05 67.72 28.85 96.57

20 Gems & Jewellery 1021.32 105.34 1126.66 214.65 1341.32

21 Construction 44.38 7.90 52.28 19.71 71.99

22 Petroleum 70.29 0.03 70.32 620.06 690.38

23 Automobiles & Trucks 609.67 2.20 611.87 49.36 661.24

24 Computer Software 0.00 0.00 0.00 0.00 0.00

25 Infrastructure 5237.37 158.77 5396.13 1182.69 6578.82

25.1 of which Power 2040.23 76.25 2116.48 541.31 2657.79

25.2

of which

Telecommunications 153.22 0.04 153.26 113.81 267.08

25.3 of which Roads & Ports 2757.94 65.74 2823.68 181.37 3005.05

26 Other Industuries 825.50 69.04 894.53 105.12 999.66

27 NBFCs & Trading 5911.19 0.00 5911.19 74.19 5985.38

28

Res. Adv to Bal. Gross

Advances 28515.43 1348.52 29863.95 32631.88 62495.83

Total 62599.88 2732.78 65332.66 40710.31 106042.97

TABLE B

Residual Contractual Maturity Breakdown of Assets as on 31.03.2014

Rs. in crores

INFLOWS 1-14

DAYS

15-28

days

29 days

and upto

3 months

Over 3

months

and upto

6 months

Over 6

months

and

upto 1

year

Over 1

year and

upto 3

years

Over 3

years

and

upto 5

years

Over

5 years

TOTAL

1 Cash 432.77 0.00 0.00 0.00 0.00 0.00 0.00 0.00 432.77

2 Balances

with RBI 3358.42 17.04 120.12 128.01 68.18 1208.06 723.15 690.65 6313.63

3 Balances

with other

Banks 260.27 0.00 0.00 0.00 0.00 0.00 0.00 0.00 260.27

4 Investments 302.77 619.26 815.08 441.32 1262.51 3395.99 4463.01 6450.34 17,750.28

5 Advances 2866.34 409.78 1736.07 2056.99 4004.84 39689.72 3575.94 9832.41 64172.09

6 Fixed

Assets 0.00 0.00 0.00 0.00 0.00 0.00 0.00 264.19 264.19

7 Other

Assets 571.08 1.50 520.98 474.83 45.12 45.37 5.76 19.10 1683.74

TOTAL 7791.65 1047.58 3192.25 3101.15 5380.65 44339.14 8767.86 17256.69 90,876.97

DF-5

CREDIT RISK: DISCLOSURES FOR PORTFOLIOS SUBJECT TO STANDARDISED

APPROACH:

Qualitative Disclosures:

5(a) Qualitative Disclosures Remarks

I

Names of credit rating

agencies used

Domestic Credit Rating Agencies:

CRISIL, ICRA, CARE, India Ratings & Research Pvt. Ltd.,

Brickwork Rating and SME Rating Agency of India

Ltd.(SMERA)

International Rating Agencies (IRA):

FITCH Ratings, Moody‟s and S& P

II. Changes, if any, since

prior period disclosures

in the identified rating

agencies and reasons

for the same

No Change

III Types of exposures for

which each agency

used/ to be used

Ratings done by the identified rating agency are to be used for

various types of exposures as follows:

(i) For exposures with a contractual maturity of less than or

equal to one year (except Cash Credit, Overdraft and other

Revolving Credits), Short-term Ratings will be applicable.

(ii) For domestic Cash Credit, Overdraft and other Revolving

Credits (irrespective of the period) and for Long Term

exposures of over 1 year, Long Term Ratings will be

applicable.

(iii) For overseas exposures, irrespective of the contractual

maturity, Long Term Ratings given by IRAs will be

applicable.

IV Description of the

process used to transfer

public issue ratings onto

comparable assets in the

banking book

Long-term issue-specific ratings (our own exposures or other

issuance of debt by the same borrower-constituents/counter-

party) or issuer (borrower-constituents/ counter-party) ratings

can be applied to other unrated exposures of the same

borrower-constituents/ counter-party in the following cases:

(i) If the issue-specific rating or issuer rating maps to a risk

weight equal to or higher than the unrated exposures any other

un-rated exposure on the same counter-party will be assigned

the same risk weight, if the exposure ranks pari-passu or junior

to the rated exposure in all respects.

(ii) In cases where the borrower-constituent/ counter-party has

issued a debt (which is not a borrowing from our Bank), the

rating given to that debt may be applied to Bank‟s unrated

exposures if the Bank‟s exposure ranks pari-passu or senior to

the specific rated debt in all respects and the maturity of

Bank‟s unrated exposures are not later than maturity of rated

debt.

Quantitative Disclosures:

The exposure amount after Risk Mitigation subject to Standardised Approach i.e. amount of

outstanding (rated and unrated taken together) in different risk-buckets as well as the amount

that are deducted, if any:

(Rs. in Crore)

Below 100 % Risk Weight : Rs. 60655.40

@100% Risk Weight: Rs. 30533.70

More than 100% Risk weight: Rs. 10800.59

Amount Deducted, if any: Rs. 4053.28 (credit risk mitigation including from staff)

TOTAL Rs. 106042.97

DF-6

CREDIT RISK MITIGATION: DISCLOSURES FOR STANDARDISED APPROACH:

(a) General Qualitative Disclosures:

I Policies and Processes for Collateral Valuation and Management

A Credit Risk Mitigation and Collateral Management Policy, addressing the Bank‟s approach

towards the credit risk mitigants used for capital calculation is in place. The objective of this

Policy is to enable classification and valuation of credit risk mitigants in a manner that allows

regulatory capital adjustment to reflect them.

The Policy adopts the Comprehensive Approach, which allows full offset of collateral (after

appropriate haircuts) against exposures, by effectively reducing the exposure amount by the

value ascribed to the collateral. The following issues are addressed in the Policy:

(i) Classification of credit risk mitigants

(ii) Acceptable credit risk mitigants

(iii) Documentation and legal process requirements for credit risk mitigants

(iv) Valuation of collateral

(v) Custody of collateral

(vi) Insurance

(vii) Monitoring of credit risk mitigants

II Main types of credit risk management techniques:

S.No. Qualitative

Disclosures

Remarks

i) Eligible financial

collaterals (i) Cash (as well as certificates of deposit or comparable

instruments, including fixed deposit receipts, issued by the

lending bank) on deposit with the Bank

(ii) Gold including both bullion and jewellery. However, the

value of the collateralized jewellery is arrived at after notionally

converting these to 99.99 % purity.

(iii)Securities issued by Central and State Governments.

(iv) Kisan Vikas Patra and National Savings Certificates for which

no lock-in-period is operational and where they can be encashed

within the holding period.

(v) Life insurance policies with a declared surrender value of an

insurance company which is regulated by an insurance sector

regulator.

(vi) Debt securities rated by a recognized Credit Rating Agency

in respect of which the Bank is sufficiently confident about the

market liquidity, where these are rated

a) at least BBB(-) when issued by public sector entities

and by other entities (including banks and Primary

Dealers); or

b) at least PR3/P3/F3/A3 for short-term debt instruments.

(vii) Debt securities not rated by a recognized Credit Rating

Agency where these are:

a) issued by a bank; and

b) listed on a recognized exchange; and

c) classified as senior debt; and

d) all rated issues of the issuing bank of the same seniority

are rated at least BBB(-) or PR3/ P3 / F3 / A3 by a

chosen Credit Rating Agency; and

e) there is no information available that suggests that the

issue justifies a rating below BBB(-) or PR3/ P3 / F3 /

A3 (as applicable) and;

f) Bank is sufficiently confident about the market liquidity

of the security.

(viii) Units of Mutual Funds regulated by the securities regulator

in the jurisdiction of the Bank‟s operation, where:

a price for the units is publicly quoted daily i.e., where the

daily NAV is available in public domain; and

the mutual fund is limited to investing in the instruments

listed in this paragraph, para II (i).

ii) On-balance sheet

netting

Where the Bank

a) has a well-founded legal basis for concluding that the netting

or offsetting agreement is enforceable in each relevant

jurisdiction regardless of whether the counter-party is insolvent

or bankrupt;

b) is able at any time to determine the loans/advances and

deposits with the same counter-party that are subject to the

netting agreement; and

c) monitors and controls the relevant exposures on a net basis,

iii) Guarantees Where guarantees are direct, explicit, irrevocable and

unconditional and satisfy the operational requirements detailed in

the RBI guidelines

III. Main types of guarantor counter-party and their creditworthiness:

Range of eligible guarantors (counter-guarantors):

i) Sovereigns, sovereign entities (including BIS, IMF, European Central Bank and

European Community as well as MDBs referred to in RBI guidelines, ECGC and

CGTSI), banks and primary dealers with a lower risk weight than the counter-party;

(ii) Other entities rated AA(-) or better. These include guarantee cover provided by

parent, subsidiary and affiliate companies that have a lower risk weight than the obligor.

The rating of the guarantor should be an entity rating which has factored in all the

liabilities and commitments (including guarantees) of the entities.

IV Information about (credit or market) risk concentration within the mitigation taken:

Financial Risk Mitigants Outstanding amount of Risk

Mitigants (after haircut)(For

Fund Based & Non Fund Based

Exposures)

Rs.cr

Risk Concentration %

Cash & Bank Deposit 1683.35 41.53

Gold 9.93 0.24

LIC 0.00 0.00

NSCs, KVP, IVP 148.53 3.66

Shares and Debentures 51.17 1.26

Margin Money fro LC / BG 999.73 24.66

Guarrantors & Counter Parties 0.00 0.00

Government Securities Excluding NSC 0.00 0.00

Mutual Funds 0.00 0.00

Others 1160.57 28.63

TOTAL 4053.28 100.00

Quantitative Disclosures:

(b) For each separately disclosed credit risk portfolio the total exposure (after, where applicable,

on-or off balance sheet netting) that is covered by eligible financial collateral after the

application of haircuts.

Eligible Financial Collateral after haircuts (excl. Staff loans): Rs. 4053.28 crores

(c) For each separately disclosed portfolio the total exposure (after, where applicable, on-or off-

balance sheet netting) that is covered by guarantees/credit derivatives (whenever specifically

permitted by RBI): NIL

DF-7

SECURITISATION: DISCLOSURE FOR STANDARDISED APPROACH

Qualitative Disclosures

Bank's objective in relation to Securitisation activity is to achieve improvements in

leverage ratios, asset performance & quality and to achieve desirable investment &

maturity characteristics.

Loss on sale on transfer of assets to Special Purpose Vehicle (SPV) shall be recognized

upfront by the Bank.

Bank shall amortize the profit on sale of the securitised assets over the life of the Pass

Through Certificates (PTC) assets issued or to be issued by SPV.

Quantitative Disclosures:

a) Banking Book: The amount of exposure securitized: NIL

b) Trading Book: The amount of exposure securitized which is subject to market risk: NIL

DF-8

MARKET RISK IN TRADING BOOK

Qualitative Disclosures:

The following portfolios are covered by the Standardised Duration approach for

calculation of Market Risk:

• Securities held under the Held for Trading (HFT) and Available for Sale (AFS)

categories.

• Derivatives entered into for hedging HFT & AFS securities and Derivatives entered

into for Trading.

Board approved Trading Policies, Investment Policy, Market Risk Management Policy

with defined market risk management parameters for various asset classes are in place.

Market Risk Management Department and Mid-Office are responsible for identification,

assessment, monitoring and reporting of market risk in treasury operations.

Risk monitoring is an on-going process with the position reported to the top management,

Market Risk Management Committee and Risk Management Committee of the Board at

stipulated intervals.

No Derivatives have been entered into for AFS securities or Trading.

Risk management and reporting is based on parameters such as Modified Duration,

PVO1, Exposure and Gap Limits, VaR, etc.,

Forex Open Position limits (Daylight / Overnight), deal-wise cut-loss limits stop-loss

limit, Profit / Loss in respect of cross currency trading are properly monitored and

exception reporting is regularly carried out.

Quantitative Disclosures:

Capital Requirement for Market Risk under Standardised Duration Approach (@ 9%):

(Rs. in Crores)

Interest Rate Risk : 54.24

Equity Position Risk : 28.36

Forex Risk : 2.25

TOTAL : 84.85

DF-9

OPERATIONAL RISK

Qualitative Disclosures:

A. The structure and organization of Operational Risk Management function

The Operational Risk Management Department is functioning as part of the Integrated

Risk Governance Structure under the control of Chief Risk Officer.

B. Policies for control and mitigation of Operational Risk:

The following policies, manuals and frameworks are in place :

Policies

Operational Risk Management Policy seeks to establish Operational Risk

Management Framework (ORMF) for systematic and proactive identification,

assessment, measurement, monitoring, mitigation and reporting of the Operational

Risks.

Business Continuity Policy (BCP)

Loss Data management Policy

KYC Standards and AML measures Policy

Policy on Fraud Risk Management

Outsourcing Policy

Stress testing Policy

Manuals and Frameworks

Operational Risk Management manual

Loss Data Manual

Business Continuity Plan (BCP) Manual

Scenario Analysis framework

Internal Audit Framework for convergence

Capital Computation Framework

C. Strategies and Processes

The following measures are being used to control and mitigate Operational risk:

“Book Of Instructions (i.e. Manual on General Instructions, Manual on Loans

&Advances) which contains detailed procedural guidelines for processing various

banking transactions. Amendments and modifications to update these guidelines

are being carried out regularly through e- Circulars, training programs, etc.

Manuals and operating instructions relating to Business Process Re-engineering

(BPR) Units.

Delegation of Financial powers, which gives details sanctioning powers of various

levels of officials for different types of financial and non- financial transactions.

The process of building a comprehensive database of losses due to Operational

Risks in addition to root cause analysis has been initiated, to facilitate better risk

management.

An excel based template for collecting loss data, including Near Misses, from

branches has been developed to facilitate better risk management.

Training of Staff –Inputs on Operational Risk are included as a part of the

trainings programmes.

Insurance cover is obtained for most of the potential operational risks excluding

frauds.

Internal Auditors are responsible for the examination and evaluation of the

adequacy and effectiveness of the control systems and the functioning of specific

control procedures. They also conduct review of the existing systems to ensure

compliance with legal and regulatory requirements, code of conduct and the

implementation of policies and procedures.

Risk and Control Self Assessment (RCSA) exercise is being conducted at the

various Business units through workshops. The Top risks identified will be placed

before ORMC and used as inputs for finalizing Key Risk Indicators (KRIs) and

building Scenarios.

The bank has finalized the Key Risk Indicators and is monitoring the Indicators

where the levels are above the threshold.

In order to successfully embed the operational Risk management culture across

the Bank, Risk Management Committee have been constituted at the Zonal Level

in addition to the Operational Risk Management Committee (ORMC) at the head

office.

Overall product Committee for vetting of new products and Outsourcing Vetting

Committee are also in place.

In order to ensure business continuity, resumption and recovery of critical

business process after a disaster, the Bank has Business continuity Management in

place.

The Bank has in place the Operational Risk Management Framework (ORMF) as

required under Basel II and has applied for migration to Advanced Measurement

Approach (AMA) to RBI in Q2FY14.

D. The scope and nature of Risk Reporting and Measurement Systems

A system of prompt submission of reports on Frauds is in place.

A comprehensive system of preventive vigilance has been established.

Significant risk thrown up are reported to the Top management and shared with

Business units and ZRMC so as increase the awareness at the grass root level.

Basic Indicator Approach with a Capital charge of 15% of gross income for

previous 3 years applied for Operational Risk.

Quantitative Disclosures:

Capital Charge on Operational Risk : Rs. 424.84 crores (As per minimum regulatory capital requirement)

DF-10

INTEREST RATE RISK IN BANKING BOOK (IRRBB)

Qualitative Disclosures:

Earning at Risk (EaR) is measured as per ALM guidelines of RBI using Traditional

Gap Analysis method.

Impact of change in Interest Rates on Market Value of Equity (MVE) is measured

using Duration Gap Analysis method, taking whole Balance Sheet, as per RBI

guidelines.

MVE is also measured using Duration Gap Analysis method, taking only Banking

Book exposures into account as per RBI guidelines on Supervisory Review Process

(Pillar-II of Basel-II framework).

Key Assumptions used based on behavioral studies:

a) Saving Bank Deposits: 100% of such deposits treated as interest bearing

b) Term deposits: 4% of such deposits prepaid due to embedded option

c) Current deposits: taken as rate sensitive for IRR purpose as per RBI guidelines

d) Term Loans: prepayment @ 0.08% of total term loans

Quantitative Disclosures:

(i) Change in NII:

At the present level of our assets / liabilities, NII is likely to increase / decrease by Rs.241.54 crore, if

there is a upward / downward movement in interest rate by 1% (assuming parallel interest rate change

on both assets and liabilities except Savings Bank rate that will remain constant at 4%).

(ii) Change in MVE:

e) Taking the whole Balance Sheet into account, Market Value of Equity (MVE) will increase /

decrease by Rs.336.91 crore if there is an upward / downward movement in interest rate by 1%.

f) Taking only Banking Book exposures into account, Market Value of Equity (MVE) will increase

/ decrease by Rs.417.43 crore if there is an upward / downward movement in interest rate by 1%.

Appendix VI

General Manager

(Risk Management, Credit Policy &

Procedure) & CRO

Dy. General Manager

(Integrated Risk Management)

Asstt. General Manager

(Market Risk Management)

Asstt. General Manager

(Integrated Risk Management)

Mid Office -

Domestic Treasury Mid Office -

Forex Treasury

Asset Liability

Management Credit Risk

Management Operational Risk

Management Basel Cell

Appendix – VII

Summary information on the terms and conditions of the main features of all capital instruments, including

innovative, complex or hybrid capital instruments eligible for inclusion in Tier-I or Tier-II capital :

Type of Capital Main features

Innovative Perpetual

Debt Instruments

20.03.2008

Unsecured, non-covertible, subordinated, Perpetual Bonds in the nature of

Promissory Notes. Call option and step-up coupon available after 10 years (subject

to RBI permission at the time).

Other details:

Amount: Rs. 200 cr.

Tenor : Perpetual (call option available after 10 years with permission of RBI).

Coupon: 9.85% payable annually.

Ratings: AAA by CARE and AAA-Stable by CRISIL.

Upper Tier-II

Subordinated Bonds

22.03.2007

Type of Instrument : Unsecured, redeemable, non-convertible Subordinated Upper

Tier-II Bonds in the nature of Promissory Notes. Call option is available after 120

months (subject to RBI permission at the time).

Other details:

Amount : Rs. 150 cr

Tenor : 180 months maturing on: 22.03.2022

Coupon : 10.25% (fixed, payable annually)

Rating : CARE „AAA‟ and CRISIL „AAA/Stable‟

Upper Tier-II

Subordinated Bonds

15.10.2007

Type of Instrument : Unsecured, redeemable, non-convertible Subordinated Upper

Tier-II Bonds in the nature of Promissory Notes. Call option is available after 120

months (subject to RBI permission at the time).

Other details:

Amount : Rs. 300 cr

Tenor : 180 months maturing on: 15.10.2022

Coupon : 9.78% (fixed, payable annually)

Rating : CARE „AAA‟ and CRISIL „AAA/Stable‟

Lower Tier-II

Subordinated Bonds

(Third Series)

21.02.2005

Type of instrument : Unsecured, redeemable, non-convertible subordinated bonds in

the nature of Promissory Note. These are plain vanilla bonds with no special features

like put or call option.

Other details: Amount : Rs. 200 cr

Tenure : 111 months maturing on: 21.05.2014

Coupon : 7.20% (fixed, payable annually)

Rating : „AAA‟ by CRISIL

Lower Tier-II

Subordinated Bonds

(Fourth Series)

17.11.2005

Type of instrument : Unsecured, redeemable, non-convertible subordinated bonds in

the nature of Promissory Note. These are plain vanilla bonds with no special features

like put or call option.

Other details: Amount : Rs. 300 cr

Tenure : 111 months maturing on: 17.02.2015

Coupon : 7.45% (fixed, payable annually)

Rating : „AAA‟ by CRISIL and „LAAA‟ by ICRA

Lower Tier-II

Subordinated Bonds

(Fifth Series)

10.08.2006

Type of instrument : Unsecured, redeemable, non-convertible subordinated bonds in

the nature of Promissory Note. These are plain vanilla bonds with no special features

like put or call option.

Other details: Amount : Rs. 500 cr

Tenure : 120 months maturing on: 10.08.2016

Coupon : 9.15% (fixed, payable annually)

Rating : AAA/Stable (CRISIL)

LAAA (Stable) (ICRA)

Lower Tier-II

Subordinated Bonds

20.03.2012

Type of instrument : Unsecured, redeemable, non-convertible subordinated bonds in

the nature of Promissory Note. These are plain vanilla bonds with no special features

like put or call option.

Other details: Amount : Rs. 500 cr

Tenure : 120 months maturing on: 20.03.2022

Coupon : 9.02% (fixed, payable annually)

Rating : „AAA‟ by CRISIL and „LAAA‟ by ICRA

Appendix - VIII

DEFINITIONS OF IMPAIRED ASSETS

Non-performing assets

An asset, including a leased asset, becomes non-performing when it ceases to generate income for the bank.

Non-Performing Asset (NPA) is a loan or an advance where:

Interest and/ or installments of principal remain overdue for a period of more than 90 days in respect of a

Term Loan,

The account remains „out of order‟, in respect of an Overdraft/ Cash Credit (OD/ CC),

The bill remains overdue for a period of more than 90 days in the case of bills purchased and discounted,

The installment of principal or interest thereon remains overdue for two crop seasons for short duration

crops,

The installment of principal or interest thereon remains overdue for one crop seasons for long duration

crops,

The amount of liquidity facility remains outstanding for more than 90 days, in respect of a securitisation

transaction undertaken in terms of guidelines on securitisation dated February 1, 2006.

In respect of derivative transactions, the overdue receivables representing positive mark-to-market value of

a derivative contract, if these remain unpaid for a period of 90 days from the specified due date for

payment.

In case the interest due & charged during any quarter is not serviced fully within 90 days from the end of

the quarter the account is classified as NPA

'Out of order' status

An account is treated as 'out of order' if the outstanding balance remains continuously in excess of the

sanctioned limit/ drawing power. In cases where the outstanding balance in the principal operating account

is less than the sanctioned limit/ drawing power, but either there are no credits continuously for 90 days in

the account as on the date of balance sheet or the credits are not enough to cover the interest debited during

the same period, these accounts are also treated as „out of order‟.

Overdue: Any amount due to the bank under any credit facility is „overdue‟ if it is not paid on the due date

fixed by the bank.

*****

Basel III

Table DF-1 : Scope of Application

Name of the head of the banking group to which the framework applies -

State Bank of Bikaner and Jaipur

(i) Qualitative Disclosures

a. List of group entitities considered for consolidation

Name of the entitity / Country of incorporation

Whether the entity is included under accounting scope of consolidation (Yes / no)

Explain the method of consolidation

Whether the entity is included under regulatory scope of consolidation (Yes / no)

Explain the method of consolidation

Explain the reasons for difference in the method of consolidation

Explain the reasons if consolidated under only of of the scopes of consolidation

N I L

b. List of group entitites not considered for consolidation both under the accounting and regulatory scope of consolidation

Name of the entitity / Country of incorporation

Principle activity of the entity

Total balance sheet equity (as stated in the accounting balance sheet of the legal entity

%age of bank's holding in the total equity

Regulatory treatment of bank's investments in the capital instruments of the entity

Total balance sheet assets (as stated in the accounting balance sheet of the legal entity

Marudhara Gramin Bank

Banking 5 crore 35% Risk Weighted

7219.57 crore

(ii) Quantitative Disclosures :

c. List of group entitites considered for consolidation

Name of the entitity / Country of incorporation (as indicated in (i)a above

Principle activity of the entity

Total balance sheet equity (as stated in the accounting balance sheet of the legal entity

Total balance sheet assets (as stated in the accounting balance sheet of the legal entity

N I L

d. The aggregate amount of capital deficiencies in all subsidiaries which are not included in the regulatory scope of consolidation i.e. that are deducted

Name of the entitity / Country of incorporation

Principle activity of the entity

Total balance sheet equity (as stated in the accounting balance sheet of the legal entity

%age of bank's holding in the total equity

Capital deficiencies

N I L

e. The aggregate amounts (e.g. current book value) of the bank's total interest in insurance entities, which are risk weighted :

Name of the entitity / Country of incorporation

Principle activity of the entity

Total balance sheet equity (as stated in the accounting balance sheet of the legal entity

%age of bank's holding in the total equity /proportion of voting power

Quantitative impactd on regulatory capital of using risk wiegfhting method versus using the full deduction method

N I L

f. Any restrictions or impediments on transfer of funds or regulatory captial within the banking group : ------N.A.------

DF-2

CAPITAL ADEQUACY

Qualitative Disclosures:

Bank has a Board-approved ICAAP(Internal Capital Adequacy Assessment Process) Policy

Capital requirement for current business levels and estimated future business has been assessed as

per ICAAP

CAR (Capital Adequacy Ratio) has been worked out based on Basel-I and Basel-II guidelines. CAR

is estimated to be above the regulatory minimum level of 9%

Quantitative Disclosures :

(Rs. in crores)

Capital requirements for credit risk 4908.33

Portfolios subject to standardized approach 4908.33

Securitisation exposures

Capital requirements for market risk 84.85

Standardised duration approach;

- Interest rate risk 54.24

-Foreign exchnage risk (including gold) 2.25

-Equity risk 28.36

Capital requirements for operational risk 424.84

Basic indicator approach 424.84

TOTAL 5418.02

Common Equity Tier 1, Tier 1 and Total

Capital ratio 8.77%, 9.04%, 11.55%

(Rs. in crores)

Total and Tier-1 capital adequacy ratio

estimated at a capital level of Rs 6951.56

and Tier-1 capital of Rs 5439.02

as per Table 2 above Total CAR 11.55%

CAR (Tier-1) 9.04%

(Rs. in crores)

RWA 60200.23

T-1 Capital

(DF2) 5439.02

Total Cap

(DF2) 6951.56

DF-3

CREDIT RISK: GENERAL DISCLOSURES: (INCLUDING EQUITIES):

Qualitative Disclosures:

(a) General Qualitative Disclosures

I. Definitions of “Impaired Assets”: Bank is following extant RBI definitions of these categories. (The

definitions used are given in Appendix-I).

II. Credit Risk Management:

Risk Governance Structure is in place (organization chart as per Appendix-II).

Credit Risk Management Committee and Risk Management Committee of the Board are the

principal committees that review credit risk management

Following Board-approved policies with regard to credit risk are in place:

o Credit Risk Management and Loan Policy

o Credit Risk Mitigation & Collateral Management Policy

o Stress Testing Policy

Bank‟s policies take into account the need for better credit risk management and avoidance of risk

concentration

Policies are reviewed periodically.

Exposure limits for Single Borrower, Group Entities, different categories of borrowers, specific

industry /sector, etc. have been stipulated.

Specific norms and guidelines for appraisal and sanction, documentation, inspection and

monitoring, renewal, maintenance, rehabilitation and management of assets have been stipulated in

the Credit Risk Management and Loan Policy, with provision of adequate leg room for innovation

and deviation permissible under a proper authority structure.

Stress test on advances is carried out at quarterly intervals and placed before the CRMC and RMCB

for review.

Quantitative Disclosures :

Amount in Rs. Crores

Fund Based

Non Fund

Based Total

Total Gross Credit Risk Exposures 65332.66 40710.31 106042.97

Geographic Distribution of Exposures : FB / NFB

i- Overseas 0 0 0

ii- Domestic 65332.66 40710.31 106042.97

Industry Type Distribution of Exposures as per DSB

returns Please refer to Table “A”

Fund based / Non Fund Based separately

Residual Contractual Maturity Breakdown of Assets

as used in ALM returns Please refer to Table “B”

Amount of NPAs (Gross) i.e. SUM of (i to v) 2732.78

i. Substandard 1355.90

ii. Doubtful 1 636.04

iii. Doubtful 2 512.46

iv. Doubtful 3 66.57

v. Loss 161.81

Net NPAs 1770.85

NPA Ratios

i) Gross NPAs to gross advances

(%)

4.18%

ii) Net NPAs to net advances (%) 2.76%

Movement of NPAs (Gross)

i) Opening balance 2119.49

ii) Additions 2123.54

iii) Reductions 1510.25

iv) Closing balance 2732.78

Movement of Provisions for NPAs

i) Opening balance 816.21

ii) Provisions made during the period 534.73

iii) Write-off 389.02

iv) Write-back of excess provisions 0

v) Closing balance 961.92

Amount of Non-Performing Investments 4.89

Amount of Provisions held for Non-Performing

Investments

4.89

Movement of Provisions for Depreciation on

Investments

Opening balance 16.79

Provisions made during the period 6.51

Write-off 6.92

Write-back of excess provisions 0

Closing balance 16.38

GROSS ADVANCES 65332.66

NET ADVANCES 64172.09

TABLE A

INDUSTRY-TYPE DISTRIBUTION OF EXPOSURE (Rs. In Crores)

Code INDUSTRY Fund based Outstanding NF O/S

Total

Exposure

Standard NPA Total

1 Coal 198.51 0.31 198.82 97.42 296.23

2 Mining 851.86 48.98 900.84 47.46 948.31

3 Iron & Steel 4650.21 170.45 4820.66 1391.96 6212.62

4 Metal Products 849.44 59.66 909.10 217.41 1126.51

5 All Engineering 2317.39 65.52 2382.91 1618.21 4001.12

5.1 Of which (005) Electronics 1143.08 53.17 1196.24 482.15 1678.40

6 Electricity 3080.98 58.87 3139.85 638.88 3778.73

7 Cotton Textiles 1936.57 91.61 2028.18 138.11 2166.29

8 Jute Textiles 8.06 1.17 9.23 65.93 75.16

9 Other Textiles 1479.20 240.65 1719.85 191.41 1911.26

10 Sugar 69.51 0.02 69.53 0.02 69.55

11 Tea 8.68 0.31 8.99 0.15 9.14

12 Food Processing 1192.28 34.38 1226.66 133.97 1360.63

13 Vegetable Oils & Vanaspathi 547.04 14.67 561.72 393.48 955.19

14 Tobacco/Tobacco Products 32.13 0.05 32.18 4.73 36.91

15 Paper / Paper Products 326.56 173.32 499.88 133.82 633.69

16 Rubber / Rubber Products 905.70 10.51 916.21 280.58 1196.79

17 Chemicals/Dyes/Paints Etc 1090.62 62.23 1152.85 256.04 1408.89

17.1 of which fertilisers 240.58 0.31 240.90 9.75 250.64

17.2 of which Petrochemicals 124.98 0.00 124.98 0.55 125.53

17.3

of which Drugs&

Pharmaceuticals 197.57 58.06 255.63 43.53 299.16

18 Cement 757.33 3.22 760.55 174.21 934.76

19 Leather & Leather Products 62.67 5.05 67.72 28.85 96.57

20 Gems & Jewellery 1021.32 105.34 1126.66 214.65 1341.32

21 Construction 44.38 7.90 52.28 19.71 71.99

22 Petroleum 70.29 0.03 70.32 620.06 690.38

23 Automobiles & Trucks 609.67 2.20 611.87 49.36 661.24

24 Computer Software 0.00 0.00 0.00 0.00 0.00

25 Infrastructure 5237.37 158.77 5396.13 1182.69 6578.82

25.1 of which Power 2040.23 76.25 2116.48 541.31 2657.79

25.2 of which Telecommunications 153.22 0.04 153.26 113.81 267.08

25.3 of which Roads & Ports 2757.94 65.74 2823.68 181.37 3005.05

26 Other Industuries 825.50 69.04 894.53 105.12 999.66

27 NBFCs & Trading 5911.19 0.00 5911.19 74.19 5985.38

28

Res. Adv to Bal. Gross

Advances 28515.43 1348.52 29863.95 32631.88 62495.83

Total 62599.88 2732.78 65332.66 40710.31 106042.97

TABLE B

Residual Contractual Maturity Breakdown of Assets as on 31.03.2014

Rs. in crores

INFLOWS 1-14

DAYS

15-28

days

29 days

and upto

3 months

Over 3

months

and upto

6 months

Over 6

months

and

upto 1

year

Over 1

year and

upto 3

years

Over 3

years

and

upto 5

years

Over 5

years

TOTAL

1 Cash 432.77 0.00 0.00 0.00 0.00 0.00 0.00 0.00 432.77

2 Balances

with RBI 3358.42 17.04 120.12 128.01 68.18 1208.06 723.15 690.65 6313.63

3 Balances

with other

Banks 260.27 0.00 0.00 0.00 0.00 0.00 0.00 0.00 260.27

4 Investments 302.77 619.26 815.08 441.32 1262.51 3395.99 4463.01 6450.34 17,750.28

5 Advances 2866.34 409.78 1736.07 2056.99 4004.84 39689.72 3575.94 9832.41 64172.09

6 Fixed

Assets 0.00 0.00 0.00 0.00 0.00 0.00 0.00 264.19 264.19

7 Other

Assets 571.08 1.50 520.98 474.83 45.12 45.37 5.76 19.10 1683.74

TOTAL 7791.65 1047.58 3192.25 3101.15 5380.65 44339.14 8767.86 17256.69 90,876.97

DF-4

CREDIT RISK: DISCLOSURES FOR PORTFOLIOS SUBJECT TO

STANDARDISED APPROACH: Qualitative Disclosures:

5(a) Qualitative Disclosures Remarks

I

Names of credit rating

agencies used

Domestic Credit Rating Agencies:

CRISIL, ICRA, CARE India Ratings & Research Pvt. Ltd.,

Brickworks Ratings and SME Ratings Agency of India

limited (SMERA)

International Rating Agencies (IRA):

FITCH, Moody‟s and S& P

II. Changes, if any, since

prior period disclosures

in the identified rating

agencies and reasons

for the same

No change

III Types of exposures for

which each agency

used/ to be used

Ratings done by the identified rating agency are to be used for

various types of exposures as follows:

(i) For exposures with a contractual maturity of less than or

equal to one year (except Cash Credit, Overdraft and other

Revolving Credits), Short-term Ratings will be applicable.

(ii) For domestic Cash Credit, Overdraft and other Revolving

Credits (irrespective of the period) and for Long Term

exposures of over 1 year, Long Term Ratings will be

applicable.

(iii) For overseas exposures, irrespective of the contractual

maturity, Long Term Ratings given by IRAs will be

applicable.

IV Description of the

process used to transfer

public issue ratings onto

comparable assets in the

banking book

Long-term issue-specific ratings (our own exposures or other

issuance of debt by the same borrower-constituents/counter-

party) or issuer (borrower-constituents/ counter-party) ratings

can be applied to other unrated exposures of the same

borrower-constituents/ counter-party in the following cases:

(i) If the issue-specific rating or issuer rating maps to a risk

weight equal to or higher than the unrated exposures any other

un-rated exposure on the same counter-party will be assigned

the same risk weight, if the exposure ranks pari-passu or junior

to the rated exposure in all respects.

(ii) In cases where the borrower-constituent/ counter-party has

issued a debt (which is not a borrowing from our Bank), the

rating given to that debt may be applied to Bank‟s unrated

exposures if the Bank‟s exposure ranks pari-passu or senior to

the specific rated debt in all respects and the maturity of

Bank‟s unrated exposures are not later than maturity of rated

debt.

Quantitative Disclosures:

The exposure amount after Risk Mitigation subject to Standardised Approach i.e. amount of outstanding

(rated and unrated taken together) in different risk-buckets as well as the amount that are deducted, if

any:

(Rs. in Crore)

Below 100 % Risk Weight : Rs. 60655.40

@100% Risk Weight: Rs. 30533.70

More than 100% Risk weight: Rs. 10800.59

Amount Deducted, if any: Rs. 4053.28 (credit risk mitigation including from staff)

TOTAL Rs. 106042.97

DF-5

CREDIT RISK MITIGATION: DISCLOSURES FOR STANDARDISED APPROACH:

(a) General Qualitative Disclosures:

I Policies and Processes for Collateral Valuation and Management

A Credit Risk Mitigation and Collateral Management Policy, addressing the Bank‟s approach towards

the credit risk mitigants used for capital calculation is in place. The objective of this Policy is to enable

classification and valuation of credit risk mitigants in a manner that allows regulatory capital

adjustment to reflect them.

The Policy adopts the Comprehensive Approach, which allows full offset of collateral (after appropriate

haircuts) against exposures, by effectively reducing the exposure amount by the value ascribed to the

collateral. The following issues are addressed in the Policy:

(i) Classification of credit risk mitigants

(ii) Acceptable credit risk mitigants

(iii) Documentation and legal process requirements for credit risk mitigants

(iv) Valuation of collateral

(v) Custody of collateral

(vi) Insurance

(vii) Monitoring of credit risk mitigants

II Main types of credit risk management techniques:

S.No. Qualitative

Disclosures

Remarks

i) Eligible financial

collaterals (vii) Cash (as well as certificates of deposit or comparable instruments,

including fixed deposit receipts, issued by the lending bank) on deposit

with the Bank

(viii) Gold including both bullion and jewellery. However, the value of

the collateralized jewellery is arrived at after notionally converting these

to 99.99 % purity.

(ix) Securities issued by Central and State Governments.

(x) Kisan Vikas Patra and National Savings Certificates for which no

lock-in-period is operational and where they can be encashed within the

holding period.

(xi) Life insurance policies with a declared surrender value of an insurance

company which is regulated by an insurance sector regulator.

(xii) Debt securities rated by a recognized Credit Rating Agency in

respect of which the Bank is sufficiently confident about the market

liquidity, where these are rated

c) at least BBB(-) when issued by public sector entities and by

other entities (including banks and Primary Dealers); or

d) at least PR3/P3/F3/A3 for short-term debt instruments.

(vii) Debt securities not rated by a recognized Credit Rating Agency

where these are:

g) issued by a bank; and

h) listed on a recognized exchange; and

i) classified as senior debt; and

j) all rated issues of the issuing bank of the same seniority are rated

at least BBB(-) or PR3/ P3 / F3 / A3 by a chosen Credit Rating

Agency; and

k) there is no information available that suggests that the issue

justifies a rating below BBB(-) or PR3/ P3 / F3 / A3 (as

applicable) and;

l) Bank is sufficiently confident about the market liquidity of the

security.

(viii) Units of Mutual Funds regulated by the securities regulator in the

jurisdiction of the Bank‟s operation, where:

a price for the units is publicly quoted daily i.e., where the daily

NAV is available in public domain; and

the mutual fund is limited to investing in the instruments listed in

this paragraph, para II (i).

ii) On-balance sheet

netting

Where the Bank

a) has a well-founded legal basis for concluding that the netting or

offsetting agreement is enforceable in each relevant jurisdiction

regardless of whether the counter-party is insolvent or bankrupt;

b) is able at any time to determine the loans/advances and deposits with

the same counter-party that are subject to the netting agreement; and

c) monitors and controls the relevant exposures on a net basis,

iii) Guarantees Where guarantees are direct, explicit, irrevocable and unconditional and

satisfy the operational requirements detailed in the RBI guidelines

III Main types of guarantor counter-party and their creditworthiness:

Range of eligible guarantors (counter-guarantors):

i) Sovereigns, sovereign entities (including BIS, IMF, European Central Bank and European

Community as well as MDBs referred to in RBI guidelines, ECGC and CGTSI), banks and primary

dealers with a lower risk weight than the counter-party;

(ii) Other entities rated AA(-) or better. These include guarantee cover provided by parent,

subsidiary and affiliate companies that have a lower risk weight than the obligor. The rating of the

guarantor should be an entity rating which has factored in all the liabilities and commitments

(including guarantees) of the entities.

IV Information about (credit or market) risk concentration within the mitigation taken:

Financial Risk Mitigants Outstanding amount of Risk

Mitigants (after haircut)(For

Fund Based & Non Fund Based

Exposures)

Rs.cr

Risk Concentration %

Cash & Bank Deposit 1683.35 41.53

Gold 9.93 0.24

LIC 0.00 0.00

NSCs, KVP, IVP 148.53 3.66

Shares and Debentures 51.17 1.26

Margin Money fro LC / BG 999.73 24.66

Guarrantors & Counter Parties 0.00 0.00

Government Securities Excluding NSC 0.00 0.00

Mutual Funds 0.00 0.00

Others 1160.57 28.63

TOTAL 4053.28 100.00

Note : i. Loans and advances to staff members excluded

Quantitative Disclosures:

For the disclosed credit risk portfolio under the standardized approach, the total exposure that

is covered by :

(Rs. in crores)

Eligible Financial Collateral (excl. staff loans) 4053.28

(Tallies with the total given in the preceding table)

Other eligible Collateral (after Haircuts @) 0

@ If haircuts are not applicable, this need not be netted off

DF-6

SECURITISATION: DISCLOSURE FOR STANDARDISED APPROACH

QUALITATIVE DISCLOSURES

(a) The general qualitative disclosure requirement with

respect to securitisation including a discussion of:

The Bank does not have securitisation

exposure

• the bank‟s objectives in relation to securitisation

activity, including the extent to which these activities

transfer credit risk of the underlying securitised

exposures away from the bank to other entities.

1. Bank's objective in relaion to

Securitisation activity is to achieve

improvements on leverage ratios, asset

performance & quality and to achieve

desirable investment & maturity

characteristics. 2. Loss on sale of

transfer of assets to Special Purpose

Vehicle (SPV) shall be recognised

upfront by the Bank. 3. Bank shall

amortize the profit on dsale of the

securitised assets over the life of the

Pass Through Certificates (PTC)

assets issued or to be issued by SPV.

• the nature of other risks (e.g. liquidity risk) inherent in

securitised assets;

NA

• the various roles played by the bank in the

securitisation process (For example: originator, investor,

servicer, provider of credit enhancement, liquidity

provider, swap provider@, protection provider#) and an

indication of the extent of the bank‟s involvement in

each of them;

NA

@ A bank may have provided support to a securitisation

structure in the form of an interest rate swap or currency

swap to mitigate the interest rate/currency risk of the

underlying assets, if permitted as per regulatory rules. NA

# A bank may provide credit protection to a

securitisation transaction through guarantees, credit

derivatives or any other similar product, if permitted as

per regulatory rules. NA

• a description of the processes in place to monitor

changes in the credit and market risk of securitisation

exposures (for example, how the behaviour of the

underlying assets impacts securitisation exposures as

defined in para 5.16.1 of the Master Circular on NCAF

dated July 1, 2009 ). NA

• a description of the bank‟s policy governing the use of

credit risk mitigation to mitigate the risks retained

through securitisation exposures; NA

(b)

Summary of the bank‟s accounting policies for

securitisation activities, including:

• whether the transactions are treated as sales or

financings; NA

• methods and key assumptions (including inputs)

applied in valuing positions retained or purchased NA

• changes in methods and key assumptions from the

previous period and impact of the changes; NA

• policies for recognising liabilities on the balance sheet

for arrangements that could require the bank to provide

financial support for securitised assets. NA

(c ) In the banking book, the names of ECAIs used for

securitisations and the types of securitisation exposure

for which each agency is used. NA

Quantitative Disclosures: Banking Book

(d) The total amount of exposures securitised by the bank. NIL

(e) For exposures securitised losses recognised by the bank

during the current period broken by the exposure type

(e.g. Credit cards, housing loans, auto loans etc. detailed

by underlying security) NIL

(f) Amount of assets intended to be securitised within a year NIL

(g)

Of (f), amount of assets originated within a year before

securitisation. NIL

(h) The total amount of exposures securitised (by exposure

type) and unrecognised gain or losses on sale by

exposure type. NIL

(i) Aggregate amount of:

• on-balance sheet securitisation exposures retained or

purchased broken down by exposure type and NIL

• off-balance sheet securitisation exposures broken down

by exposure type NIL

(j) • Aggregate amount of securitisation exposures retained

or purchased and the associated capital charges, broken

down between exposures and further broken down into

different risk weight bands for each regulatory capital

approach NIL

• Exposures that have been deducted entirely from Tier 1

capital, credit enhancing I/Os deducted from total

capital, and other exposures deducted from total capital

(by exposure type). NIL

Quantitative Disclosures: Trading Book

(k) Aggregate amount of exposures securitised by the bank

for which the bank has retained some exposures and

which is subject to the market risk approach, by

exposure type. NIL

(I) Aggregate amount of: NIL

• on-balance sheet securitisation exposures retained or

purchased broken down by exposure type; and NIL

• off-balance sheet securitisation exposures broken down

by exposure type. NIL

(m) Aggregate amount of securitisation exposures retained or

purchased separately for: NIL

• securitisation exposures retained or purchased subject

to Comprehensive Risk Measure for specific risk; and NIL

• securitisation exposures subject to the securitisation

framework for specific risk broken down into different

risk weight bands. NIL

(n) Aggregate amount of: NIL

• the capital requirements for the securitisation

exposures, subject to the securitisation framework

broken down into different risk weight bands. NIL

• securitisation exposures that are deducted entirely from

Tier 1 capital, credit enhancing I/Os deducted from total

capital, and other exposures deducted from total

capital(by exposure type). NIL

DF-7

MARKET RISK IN TRADING BOOK

Qualitative Disclosures:

The following portfolios are covered by the Standardised Duration approach for calculation of

Market Risk:

• Securities held under the Held for Trading (HFT) and Available for Sale (AFS) categories.

• Derivatives entered into for hedging HFT & AFS securities and Derivatives entered into for

Trading.

Board approved Trading Policies, Investment Policy, Market Risk Management Policy with defined

market risk management parameters for various asset classes are in place.

Market Risk Management Department and Mid-Office are responsible for identification,

assessment, monitoring and reporting of market risk in treasury operations.

Risk monitoring is an on-going process with the position reported to the top management, Market

Risk Management Committee and Risk Management Committee of the Board at stipulated

intervals.

No Derivatives have been entered into for AFS securities or Trading.

Risk management and reporting is based on parameters such as Modified Duration, PVO1,

Exposure and Gap Limits, VaR, etc.,

Forex Open Position limits (Daylight / Overnight), deal-wise cut-loss limits stop-loss limit, Profit /

Loss in respect of cross currency trading are properly monitored and exception reporting is

regularly carried out.

Quantitative Disclosures:

Capital Requirement for Market Risk under Standardised Duration Approach (@ 9%):

(Rs. in crores)

Interest Rate Risk 54.24

Equity Position Risk 28.36

Forex open position 2.25

Total for market risk 84.85

DF-8

OPERATIONAL RISK

Qualitative Disclosures:

A. The structure and organization of Operational Risk Management function

The Operational Risk Management Department is functioning as part of the Integrated Risk

Governance Structure under the control of Chief Risk Officer.

B. Policies for control and mitigation of Operational Risk:

The following policies, manuals and frameworks are in place :

Policies

Operational Risk Management Policy seeks to establish Operational Risk Management

Framework (ORMF) for systematic and proactive identification, assessment, measurement,

monitoring, mitigation and reporting of the Operational Risks.

Business Continuity Policy (BCP)

Loss Data management Policy

KYC Standards and AML measures Policy

Policy on Fraud Risk Management

Outsourcing Policy

Stress testing Policy

Manuals and Frameworks

Operational Risk Management manual

Loss Data Manual

Business Continuity Plan (BCP) Manual

Scenario Analysis framework

Internal Audit Framework for convergence

Capital Computation Framework

C. Strategies and Processes

The following measures are being used to control and mitigate Operational risk:

“Book Of Instructions (i.e. Manual on General Instructions, Manual on Loans &Advances)

which contains detailed procedural guidelines for processing various banking transactions.

Amendments and modifications to update these guidelines are being carried out regularly

through e- Circulars, training programs, etc.

Manuals and operating instructions relating to Business Process Re-engineering (BPR)

Units.

Delegation of Financial powers, which gives details sanctioning powers of various levels of

officials for different types of financial and non- financial transactions.

The process of building a comprehensive database of losses due to Operational Risks in

addition to root cause analysis has been initiated, to facilitate better risk management.

An excel based template for collecting loss data, including Near Misses, from branches has

been developed to facilitate better risk management.

Training of Staff –Inputs on Operational Risk are included as a part of the trainings

programmes.

Insurance cover is obtained for most of the potential operational risks excluding frauds.

Internal Auditors are responsible for the examination and evaluation of the adequacy and

effectiveness of the control systems and the functioning of specific control procedures. They

also conduct review of the existing systems to ensure compliance with legal and regulatory

requirements, code of conduct and the implementation of policies and procedures.

Risk and Control Self Assessment (RCSA) exercise is being conducted at the various

Business units through workshops. The Top risks identified will be placed before ORMC

and used as inputs for finalizing Key Risk Indicators (KRIs) and building Scenarios.

The bank has finalized the Key Risk Indicators and is monitoring the Indicators where the

levels are above the threshold.

In order to successfully embed the operational Risk management culture across the Bank,

Risk Management Committee have been constituted at the Zonal Level in addition to the

Operational Risk Management Committee (ORMC) at the head office.

Overall product Committee for vetting of new products and Outsourcing Vetting Committee

are also in place.

In order to ensure business continuity, resumption and recovery of critical business process

after a disaster, the Bank has Business continuity Management in place.

The Bank has in place the Operational Risk Management Framework (ORMF) as required

under Basel II and has applied for migration to Advanced Measurement Approach (AMA) to

RBI in Q2FY14.

D. The scope and nature of Risk Reporting and Measurement Systems

A system of prompt submission of reports on Frauds is in place.

A comprehensive system of preventive vigilance has been established.

Significant risk thrown up are reported to the Top management and shared with Business

units and ZRMC so as increase the awareness at the grass root level.

Basic Indicator Approach with a Capital charge of 15% of gross income for previous 3 years

applied for Operational Risk.

Quantitative Disclosures:

Capital Charge on Operational Risk : Rs. 424.84 crores

(As per minimum regulatory capital requirement)

DF-9

INTEREST RATE RISK IN BANKING BOOK (IRRBB)

Qualitative Disclosures:

Earning at Risk (EaR) is measured as per ALM guidelines of RBI using Traditional Gap

Analysis method.

Impact of change in Interest Rates on Market Value of Equity (MVE) is measured using

Duration Gap Analysis method, taking whole Balance Sheet, as per RBI guidelines.

MVE is also measured using Duration Gap Analysis method, taking only Banking Book

exposures into account as per RBI guidelines on Supervisory Review Process (Pillar-II of Basel-

II framework).

Key Assumptions used based on behavioral studies:

a) Saving Bank deposits: 25% of such deposits treated as non-interest bearing

b) Term deposits: 4% of such deposits prepaid due to embedded option

c) Current deposits: taken as rate sensitive for IRR purpose as per RBI guidelines

d) Term Loans: prepayment @ 0.08% of total term loans

Quantitative Disclosures:

(i) Change in NII

At the present level of our assets/ liabilities, NII is likely to increase / decrease by Rs. 241.54 cr.with upward /

downward movement in rate by 1% (assuming parallel rate change on assets and liabilities except Savings

Bank rate that will remain at 4.0%).

(ii) Change in MVE

1. Taking the whole Balance Sheet, MVE will increase / decrease by Rs.336.91 cr. if there is an upward /

downward movement in interest rate by 1%.

2. Taking only Banking Book exposures into account, MVE will increase / decrease by Rs.417.43 cr. if there

is an upward / downward movement in interest rate by 1%.

DF-10

General Disclosure for Exposures Related to Counterparty Credit Risk

Qualitative Disclosures:

The exposure on account of entering into such derivative contracts is arrived at through CEM method

wherein 2% of the notional principal is taken as Potential Future Exposure and Positive MTM, if any, is

taken as Current exposure. The credit equivalent or the exposure against the counterparty as per RBI

guidelines, on account of such contracts, is derived by adding the PFE and CE

Quantitative Disclosures :

(Rs. In crore)

MTM Value

Current Credit

Exposure

Currency Swaps 0 0

Forward Rate Agreement 0 0

Currency Futures 0 0

Caps / Floors 0 0

Options 0 0

Foreign Exchange Contract 18723.93 408.23

Credit Default Swaps - Buy protection 0 0

Credit Default Swaps - Sell protection 0 0

Total 18723.93 408.23

DF-11 (Rs. in crore)

Basel III common disclosure template to be used during the transition of

regulatory adjustments (i.e. from March 31, 2013 to December 31, 2017)

Amounts Subject

To Pre-Basel III

Treatment Ref No.

Common Equity Tier 1 capital: instruments and reserves

1

Directly issued qualifying common share capital plus related

stock surplus (share premium) 936.64 (a+b)

2 Retained earnings 0

3

Accumulated other comprehensive income (and other

reserves) 4419.27 (c )

4

Directly issued capital subject to phase out from CET1

(only applicable to non-joint stock companies) 0

Public sector capital injections grandfathered until 1

January 2018 0

5

Common share capital issued by subsidiaries and held by

third parties (amount allowed in group CET1) 0

6 Common Equity Tier 1 capital before regulatory

adjustments 5355.91

Common Equity Tier 1 capital: regulatory adjustments

7 Prudential valuation adjustments 0

8 Goodwill (net of related tax liability) 0

9

Intangibles other than mortgage-servicing rights (net of

related tax liability) 0

10 Deferred tax assets 0

11 Cash-flow hedge reserve 0

12 Shortfall of provisions to expected losses 0

13 Securitisation gain on sale 0

14

Gains and losses due to changes in own credit risk on fair

valued liabilities 0

15 Defined-benefit pension fund net assets 0

16

Investments in own shares (if not already netted off paid-in

capital on reported balance sheet) 0

17 Reciprocal cross-holdings in common equity 0

18

Investments in the capital of banking, financial and insurance

entities that are outside the scope of regulatory consolidation,

net of eligible short positions, where the bank does not own

more than 10% of the issued share capital (amount above

10% threshold) 0

19

Significant investments in the common stock of banking,

financial and insurance entities that are outside the scope of

regulatory consolidation, net of eligible short positions

(amount above 10% threshold) 0

20 Mortgage servicing rights (amount above 10% threshold) 0

21

Deferred tax assets arising from temporary differences

(amount above 10% threshold, net of related tax liability) 0

22 Amount exceeding the 15% threshold 0

23

of which: significant investments in the common stock

of financial entities 0

24 of which: mortgage servicing rights 0

25

of which: deferred tax assets arising from temporary

differences 0

26 National specific regulatory adjustments (26a+26b+26c+26d) 76.89 (d)

26a

of which: Investments in the equity capital of unconsolidated

insurance subsidiaries 0

26b

of which: Investments in the equity capital of unconsolidated

non-financial subsidiaries 0

26c

of which: Shortfall in the equity capital of majority owned

financial entities which have not been consolidated with the

bank 0

26d of which: Unamortised pension funds expenditures 76.89

Regulatory Adjustments Applied To Common Equity Tier 1

In Respect Of Amounts Subject To Pre-Basel III Treatment 0

of which: [INSERT NAME OF ADJUSTMENT]

For example: filtering out of unrealised losses on AFS debt

securities (not relevant in Indian context) 0

of which: [INSERT NAME OF ADJUSTMENT e.g.

DTAs] 0

of which: [INSERT NAME OF ADJUSTMENT e.g.

intangible assets] 0

27

Regulatory adjustments applied to Common Equity Tier 1

due to insufficient Additional Tier 1 and Tier 2 to cover

deductions 0

28 Total regulatory adjustments to Common equity Tier 1 76.89

29 Common Equity Tier 1 capital (CET1) 5279.02

Additional Tier 1 capital: instruments

30

Directly issued qualifying Additional Tier 1 instruments plus

related stock surplus (31+32) 0

31

of which: classified as equity under applicable

accounting standards (Perpetual Non-Cumulative Preference

Shares) 0

32

of which: classified as liabilities under applicable

accounting standards (Perpetual debt Instruments) 0

33

Directly issued capital instruments subject to phase out from

Additional Tier 1 160.00

80% of

(e)

34

Additional Tier 1 instruments (and CET1 instruments not

included in row 5) issued by subsidiaries and held by third

parties (amount allowed in group AT1) 0

35

of which: instruments issued by subsidiaries subject to

phase out 0

36 Additional Tier 1 capital before regulatory adjustments 160.00

Additional Tier 1 capital: regulatory adjustments

37 Investments in own Additional Tier 1 instruments 0

38 Reciprocal cross-holdings in Additional Tier 1 instruments 0

39

Investments in the capital of banking, financial and insurance

entities that are outside the scope of regulatory consolidation,

net of eligible short positions, where the bank does not own

more than 10% of the issued common share capital of the

entity (amount above 10% threshold) 0

40

Significant investments in the capital of banking, financial

and insurance entities that are outside the scope of regulatory

consolidation (net of eligible short positions) 0

41 National specific regulatory adjustments (41a + 41b) 0

41a

Investments in the Additional Tier 1 capital of

unconsolidated insurance subsidiaries 0

41b

Shortfall in the Additional Tier 1 capital of majority owned

financial entities which have not been consolidated with the

bank 0

Regulatory Adjustments Applied To Additional Tier 1 In

Respect Of Amounts Subject To Pre-Basel III Treatment 0

of which: [INSERT NAME OF ADJUSTMENT e.g.

DTAs] 0

of which: [INSERT NAME OF ADJUSTMENT e.g.

existing adjustments which are deducted from Tier 1 at 50%] 0

of which: [INSERT NAME OF ADJUSTMENT] 0

42

Regulatory adjustments applied to Additional Tier 1 due to

insufficient Tier 2 to cover deductions 0

43 Total regulatory adjustments to Additional Tier 1 capital 0

44 Additional Tier 1 capital (AT1) 160.00

44a Additional Tier 1 capital reckoned for capital adequacy 160.00

45 Tier 1 capital (T1 = CET1 + AT1) (29 + 44a) 5439.02

Tier 2 capital: instruments and provisions

46

Directly issued qualifying Tier 2 instruments plus related

stock surplus 0

47

Directly issued capital instruments subject to phase out from

Tier 2 1128.00

(f)

*grand-

fathering

48

Tier 2 instruments (and CET1 and AT1 instruments not

included in rows 5 or 34) issued by subsidiaries and held by

third parties (amount allowed in group Tier 2) 0

49

of which: instruments issued by subsidiaries subject to

phase out 0

50 Provisions 390.54 (g)

51 Tier 2 capital before regulatory adjustments 1518.54

Tier 2 capital: regulatory adjustments

52 Investments in own Tier 2 instruments 0

53 Reciprocal cross-holdings in Tier 2 instruments 6 9

54

Investments in the capital of banking, financial and insurance

entities that are outside the scope of regulatory consolidation,

net of eligible short positions, where the bank does+B84 not

own more than 10% of the issued common share capital of

the entity (amount above the 10% threshold) 0

55

Significant investments in the capital banking, financial and

insurance entities that are outside the scope of regulatory

consolidation (net of eligible short positions) 0

56 National specific regulatory adjustments (56a+56b) 0

56a

of which: Investments in the Tier 2 capital of unconsolidated

subsidiaries 0

56b

of which: Shortfall in the Tier 2 capital of majority owned

financial entities which have not been consolidated with the

bank 0

Regulatory Adjustments Applied to Tier 2 in Respect of

Amounts Subject to Pre-Basel III Treatment 0

of which: [INSERT NAME OF ADJUSTMENT e.g.

existing adjustments which are deducted from Tier 2 at 50%] 0

of which: [INSERT NAME OF ADJUSTMENT] 0

57 Total regulatory adjustments to Tier 2 capital 6

58 Tier 2 capital (T2) 1512.54

58a Tier 2 capital reckoned for capital adequacy 1512.54

58b Excess Additional Tier 1 capital reckoned as Tier 2

capital 0

58c Total Tier 2 capital admissible for capital adequacy (row

58a + row 58b) 1512.54

59 Total capital (TC = T1 + T2) (45+ 58c) 6951.56

Risk Weighted Assets in respect of Amounts Subject to Pre-

Basel III Treatment 1.85

of which: Reciprocal cross holding of T2 Bonds of Rs.

15 crore 1.80

of which: …

60 Total risk weighted assets (60a + 60b + 60c) 60200.23

60a of which: total credit risk weighted assets 54536.97

60b of which: total market risk weighted assets 942.82

60c of which: total operational risk weighted assets 4720.44

Capital ratios

61

Common Equity Tier 1 (as a percentage of risk weighted

assets) 8.77

62 Tier 1 (as a percentage of risk weighted assets) 9.04

63 Total capital (as a percentage of risk weighted assets) 11.55

64

Institution specific buffer requirement (minimum CET1

requirement plus capital conservation and countercyclical

buffer requirements, expressed as a percentage of risk

weighted assets) 0

65 of which: capital conservation buffer requirement 0

66

of which: bank specific countercyclical buffer

requirement 0

67 of which: G-SIB buffer requirement 0

68

Common Equity Tier 1 available to meet buffers (as a

percentage of risk weighted assets) 2.27

National minima (if different from Basel III)

69

National Common Equity Tier 1 minimum ratio (if different

from Basel III minimum) 5.00

70

National Tier 1 minimum ratio (if different from Basel III

minimum) 6.50

71

National total capital minimum ratio (if different from Basel

III minimum) 9.00

Amounts below the thresholds for deduction (before risk weighting)

72 Non-significant investments in the capital of other financials 0

73

Significant investments in the common stock of financial

entities 56.40

74 Mortgage servicing rights (net of related tax liability) 0

75

Deferred tax assets arising from temporary differences (net of

related tax liability) 0

Applicable caps on the inclusion of provisions in Tier 2

76

Provisions eligible for inclusion in Tier 2 in respect of

exposures subject to standardised approach (prior to

application of cap) 390.54

77

Cap on inclusion of provisions in Tier 2 under standardised

approach 681.71

78

Provisions eligible for inclusion in Tier 2 in respect of

exposures subject to internal ratings-based approach

(prior to application of cap) 0

79

Cap for inclusion of provisions in Tier 2 under internal

ratings-based approach 0

Capital instruments subject to phase-out arrangements

(only applicable between April 1, 2018 and March 31, 2022)

80

Current cap on CET1 instruments subject to phase out

arrangements 0

81

Amount excluded from CET1 due to cap (excess over cap

after redemptions and maturities) 0

82

Current cap on AT1 instruments subject to phase out

arrangements 160.00

83

Amount excluded from AT1 due to cap (excess over cap after

redemptions and maturities) 40.00

84

Current cap on T2 instruments subject to phase out

arrangements 1128.00

85

Amount excluded from T2 due to cap (excess over cap after

redemptions and maturities) 22.00

Notes to the template

Row

No. Particular Rs. in Crore

10

Deferred tax assets associated with accumulated losses

Deferred tax assets (excluding those associated with

accumulated losses) net of Deferred tax liability 0

Total as indicated in row 10 0

19

If investments in insurance subsidiaries are not deducted

fully from capital and instead considered under 10%

threshold for deduction, the resultant increase in the capital

of bank 0

of which: Increase in Common Equity Tier 1 capital 0

of which: Increase in Additional Tier 1 capital

of which: Increase in Tier 2 capital 0

50

Eligible Provisions included in Tier 2 390.54

Eligible Revaluation Reserves included in Tier 2 0

Total of row 50 390.54

44a

Excess AT1 not reckoned for capital adequacy (difference

between AT1 as reported in row 44 and admissible AT1 as

reported in 44a 0

of which: Excess AT1 which is considered as Tier 2 capital

under row 58b 0

58a

Excess T2 not reckoned for capital adequacy (difference

between T2 as reported in row 58 and T2 as reported in 58a)

26b

If investments in the equity capital of unconsolidated non-

financial subsidiaries are not deducted and hence, risk

weighted then:

(i) Increase in Common Equity Tier 1 capital 56.40

(ii) Increase in risk weighted assets 141.00

DF-12

STEP - 1

There is no difference between the regulatory consolidation and accounting consolidation of the Bank.

DF-12 STEP -2

(Rs. in Crores)

Balance sheet as in

published financial

statements

Under regulatory

scope of

consolidation

As on 31.03.2014 As on 31.03.2014

Capital & Liabilities

Paid-up Capital 70.00 70.00

of which: Amount eligible for CET1 70.00 70.00(a)

of which: Amount eligible for AT1 0.00 0.00

Reserves & Surplus 5285.91 5285.91

of which : Share Premium 866.64 866.64 (b)

Of which : Balance in P&L Account 0.00 0.00

Of which : Other Reserves 4419.27 4419.27(c )

Minority Interest 0.00 0.00

Total Capital 5355.91 5355.91

Deposits 73874.72 73874.72

of which: Deposits from banks 942.62 942.62

of which: Customer deposits 72932.10 72932.10

of which: Other deposits (pl. specify) 0.00 0.00

Borrowings 6706.36 6706.36

of which: From RBI 0.00 0.00

of which: From banks 913.84 913.84

of which: From other institutions & agencies 3103.29 3103.29

of which: Others (Subordinate Debts) 1950.00 1950.00 (f)

of which : others (Outside India) 539.23 539.23

of which: Capital instruments (IPDI) 200.00 200.00 (e)

Other liabilities & provisions 4939.97 4939.97

of which: DTLs related to goodwill 0.00 0.00

of which: DTLs related to intangible assets 0.00 0.00

of which : Provision for Standard Assets 390.54 390.54 (g)

of which : Others (remaining) 4549.43 4549.43

Total 90876.97 90876.97

Assets

Cash and balances with Reserve Bank of India 6746.40 6746.40

Balance with banks and money at call and short notice 260.27 260.27

Investments 17750.28 17750.28

of which: Government securities 16527.64 16527.64

of which: Other approved securities 0.00 0.00

of which: Shares 119.79 119.79

of which: Debentures & Bonds 476.61 476.61

of which: Subsidiaries / Joint Ventures / Associates 56.40 56.40

of which: Others (Commercial Papers, Mutual Funds etc.) 569.84 569.84

Loans and advances 64172.09 54172.09

of which: Loans and advances to banks 650.19 650.19

of which: Loans and advances to customers 63521.90 63521.90

Fixed assets 264.19 264.19

Other assets 1683.74 1683.74

of which: Goodwill and intangible assets

out of which: 76.89 76.89

goodwill 0.00 0.00

Other intangibles (excluding MSRs) Unamortised Pension &

Gratuity Liability 76.89 76.89 (d)

Deferred tax assets 0.00 0.00

Goodwill on consolidation 0.00 0.00

Debit balance in Profit & Loss account 0.00 0.00

Total Assets 90876.97 90876.97

DF-13

Disclosure template for main features of regulatory capital instruments

Equity Lower tier-

II (Serie-III)

Lower tier-

II (Serie-IV)

Lower tier-

II (Serie-VI)

Lower tier-

II (Serie-V)

Upper tier-

II (Serie-I)

Upper tier-

II (Serie-II)

IPDI Bonds

(Series-1)

1 Issuer State Bank of Bikaner and Jiapur

2 Unique identifier (e.g. CUSIP,

ISIN or Bloomberg identifier for

private placement)

INE-

648A01026

INE-

648A09011

INE-

648A09029

INE-

648A09037

INE-

648A09078

INE-

648A09045

INE-

648A09052

INE-

648A09060

3 Governing law(s) of the instrument

Indian Laws

Regulatory treatment

4 Transitional Basel III rules CET1 T2 T2 T2 T2 T2 T2 AT1

5 Post-transitional Basel III rules CET1 Ineligible Ineligible Ineligible Ineligible Ineligible Ineligible Ineligible

6 Eligible at solo/group/ group &

solo

Solo Solo Solo Solo Solo Solo Solo Solo

7 Instrument type Equity Bonds Bonds Bonds Bonds Bonds Bonds Bonds

8 Amount recognised in regulatory capital (Rs. in crore, as of most

recent reporting date) 70 200 300 500 500 150 300 200

9 Par value of instrument 10/- 10,00,000/- 10,00,000/ 10,00,000/ 10,00,000/ 10,00,000/ 10,00,000/ 10,00,000/

10 Accounting classification Shareholder

Equity

Liability Liability Liability Liability Liability Liability Liability

11 Original date of issuance Various date 21.02.2005 17.11.2005 10.08.2006 20.03.2012 23.03.2007 15.10.2007 20.03.2008

12 Perpetual or dated Perpetual Dated Dated Dated Dated Dated Dated Perpetual

13 Original maturity date No maturity 21.05.2014 17.02.2015 10.08.2016 20.03.2022 23.03.2022 15.10.2022 No maturity

14 Issuer call subject to prior supervisory approval

No No No No No Yes Yes Yes

15 Optional call date, contingent call

dates and redemption amount

NA NA NO NO NO 22.03.2017

Rs.150 Crore

15.10.2017

Rs. 300 crore

20.03.2018

Rs.200 crore

16 Subsequent call dates, if applicable NA NA NA NA NA No No No

Coupons / dividends Dividends Coupons Coupons Coupons Coupons Coupons Coupons Coupons

17 Fixed or floating dividend/coupon Floating FIXED FIXED FIXED FIXED FIXED FIXED FIXED

18 Coupon rate and any related index NA 7.20% 7.45% 9.15% 9.02% 10.25% 9.78% 9.85%

19 Existence of a dividend stopper No NA NA NA NA NA NA NA

20 Fully discretionary, partially discretionary or mandatory

Fully discretionary

Mandatory Mandatory Mandatory Mandatory partially discretionary

partially discretionary

partially discretionary

21 Existence of step up or other

incentive to redeem

NA No No No No Yes Yes Yes

22 Noncumulative or cumulative NA Non cumulative

Non cumulative

Non cumulative

Non cumulative

Non cumulative

Non cumulative

Non cumulative

23 Convertible or non-convertible NA Non-

convertible

Non-

convertible

Non-

convertible

Non-

convertible

Non-

convertible

Non-

convertible

Non-

convertible

24 If convertible, conversion trigger(s) NA NA NA NA NA NA NA NA

25 If convertible, fully or partially NA NA NA NA NA NA NA NA

26 If convertible, conversion rate NA NA NA NA NA NA NA NA

27 If convertible, mandatory or

optional conversion

NA NA NA NA NA NA NA NA

28 If convertible, specify instrument

type convertible into

NA NA NA NA NA NA NA NA

29 If convertible, specify issuer of

instrument it converts into

NA NA NA NA NA NA NA NA

30 Write-down feature No No No No No No No No

31 If write-down, write-down

trigger(s)

NA NA NA NA NA NA NA NA

32 If write-down, full or partial NA NA NA NA NA NA NA NA

33 If write-down, permanent or NA NA NA NA NA NA NA NA

temporary

34 If temporary write-down, description of write-up mechanism

NA NA NA NA NA NA NA NA

35 Position in subordination hierarchy

in liquidation (specify instrument type immediately senior to

instrument)

Most

subordinated claim in

liquidation

of the Bank

Fully paid-

up, unsecured,

subordinated

to the claims of other

creditors

Fully paid-

up, unsecured,

subordinated

to the claims of other

creditors

Fully paid-

up, unsecured,

subordinated

to the claims of other

creditors

Fully paid-

up, unsecured,

subordinated

to the claims of other

creditors

(a) Superior

to the claims of

investments

in instruments

eligible for

inclusion in Tier-I capital

and (b)

Subordinated to the claims

of all other

creditors

(a) Superior

to the claims of

investments

in instruments

eligible for

inclusion in Tier-I capital

and (b)

Subordinated to the claims

of all other

creditors

Superior to

the claims of investors in

equity shares

and subordinated

to the claims

of all other creditors

36 Non-compliant transitioned

features

No Yes Yes Yes Yes Yes Yes Yes

37 If yes, specify non-compliant features

NA No loss absorption

features

No loss absorption

features

No loss absorption

features

No loss absorption

features

No loss absorption

features

No loss absorption

features

No loss absorption

features

Table DF-14: Full Terms and Conditions of Regulatory Capital Instruments

Type of Capital Main features

Innovative Perpetual Debt

Instruments 20.03.2008

Unsecured, non-covertible, subordinated, Perpetual Bonds in the nature of Promissory Notes. Call option

and step-up coupon available after 10 years (subject to RBI permission at the time).

Other details:

Amount: Rs.200 cr.

Tenor : Perpetual (call option available after 10 years with permission of RBI).

Coupon: 9.85% payable annually.

Ratings: AAA by CARE and AAA-Stable by CRISIL.

Upper Tier-II Subordinated Bonds Type of Instrument : Unsecured, redeemable, non-convertible Subordinated Upper Tier-II Bonds in the

nature of Promissory Notes. Call option and step up is available after 120 months(subject to RBI

permission at the time)

22.03.2007 Other details:

Amount : Rs.150 cr

Tenor : 180 months maturing on: 22.03.2022

Coupon : 10.25% (fixed, payable annually)

Rating : CARE „AAA‟ and CRISIL „AAA/Stable‟

Upper Tier-II Subordinated Bonds Type of Instrument : Unsecured, redeemable, non-convertible Subordinated Upper Tier-II Bonds in the

nature of Promissory Notes. Call option and step up is available after 120 months(subject to RBI

permission at the time)

15.10.2007 Other details:

Amount : Rs.300 cr

Tenor : 180 months maturing on: 15.10.2022

Coupon : 9.78% (fixed, payable annually)

Rating : CARE „AAA‟ and CRISIL „AAA/Stable‟

Lower Tier-II Subordinated

Bonds

Type of instrument : Unsecured, redeemable, non-convertible subordinated bonds in the nature of

Promissory

Note. These are plain vanilla bonds with no special features like put or call option.

(Third Series) Other details:

21.02.2005 Amount : Rs.200 cr

Tenure : 111 months maturing on: 21.05.2014

Coupon : 7.20% (fixed, payable annually)

Rating : „AAA‟ by CRISIL

Lower Tier-II Subordinated

Bonds

Type of instrument : Unsecured, redeemable, non-convertible subordinated bonds in the nature of

Promissory Note. These are plain vanilla bonds with no special features like put or call option.

Other details:

(Fourth Series) 17.11.2005 Amount : Rs.300 cr

Tenure : 111 months maturing on: 17.02.2015

Coupon : 7.45% (fixed, payable annually)

Rating : „AAA‟ by CRISIL and „LAAA‟ by ICRA

Lower Tier-II Subordinated

Bonds

Type of instrument : Unsecured, redeemable, non-convertible subordinated bonds in the nature of

Promissory Note. These are plain vanilla bonds with no special features like put or call option.

Other details:

(Fifth Series) Amount : Rs.500 cr

10.08.2006 Tenure : 120 months maturing on: 10.08.2016

Coupon : 9.15% (fixed, payable annually)

Rating : AAA/Stable (CRISIL)

LAAA (Stable) (ICRA)

Lower Tier-II Subordinated

Bonds

Type of instrument : Unsecured, redeemable, non-convertible subordinated bonds in the nature of

Promissory Note. These are plain vanilla bonds with no special features like put or call option.

Other details:

20.03.2012 Amount : Rs.500 cr

Tenure : 120 months maturing on: 20.03.2022

Coupon : 9.02% (fixed, payable annually)

Rating : „AAA‟ by CRISIL and „LAAA‟ by ICRA

Appendix - I

DEFINITIONS OF IMPAIRED ASSETS

Non-performing assets

An asset, including a leased asset, becomes non-performing when it ceases to generate income for the bank.

Non-Performing Asset (NPA) is a loan or an advance where:

Interest and/ or installments of principal remain overdue for a period of more than 90 days in respect of a

Term Loan,

The account remains „out of order‟, in respect of an Overdraft/ Cash Credit (OD/ CC),

The bill remains overdue for a period of more than 90 days in the case of bills purchased and discounted,

The installment of principal or interest thereon remains overdue for two crop seasons for short duration

crops,

The installment of principal or interest thereon remains overdue for one crop seasons for long duration

crops,

The amount of liquidity facility remains outstanding for more than 90 days, in respect of a securitisation

transaction undertaken in terms of guidelines on securitisation dated February 1, 2006.

In respect of derivative transactions, the overdue receivables representing positive mark-to-market value of

a derivative contract, if these remain unpaid for a period of 90 days from the specified due date for

payment.

In case the interest due & charged during any quarter is not serviced fully within 90 days from the end of

the quarter the account is classified as NPA

'Out of order' status

An account is treated as 'out of order' if the outstanding balance remains continuously in excess of the

sanctioned limit/ drawing power. In cases where the outstanding balance in the principal operating account

is less than the sanctioned limit/ drawing power, but either there are no credits continuously for 90 days in

the account as on the date of balance sheet or the credits are not enough to cover the interest debited during

the same period, these accounts are also treated as „out of order‟.

Overdue: Any amount due to the bank under any credit facility is „overdue‟ if it is not paid on the due date

fixed by the bank.

Appendix -II

*****

General Manager

(Risk Management, Credit Policy &

Procedure) & CRO

Dy. General Manager

(Integrated Risk Management)

Asstt. General Manager

(Market Risk Management)

Asstt. General Manager

(Integrated Risk Management)

Mid Office -

Domestic Treasury Mid Office -

Forex Treasury

Asset Liability

Management Credit Risk

Management Operational Risk

Management Basel Cell