The Board of Directors have pleasure in presenting the Annual Report together with Audited Balance Sheet and Profit & Loss Account of the Bank for the year ended 31st March, 2022.

Global Business Performance

The continuation of Russia-Ukraine conflict is posing a significant challenge to global recovery. At the same time, economic damage from the conflict will contribute to a significant slowdown in global growth during 2022 and significantly increase in inflation. Fuel and food prices have increased rapidly, hitting vulnerable populations in low- income countries hardest.

Global growth is projected to slow from an estimated 6.1 percent in 2021 to 3.6 percent in 2022 and 2023. This is 0.8 and 0.2 percentage points lower for 2022 and 2023 than projected in January 2022.

Indian Economy is no exception to this event. In line with global economy, India also witnessed economic disruptions during the Financial Year. India's gross domestic product (GDP) grew by 5.4 per cent in the December 2021 quarter of the fiscal year 2021-22, lower than 8.50 % growth seen in the September 2021 quarter. However, it was much higher than 0.50 % growth which was witnessed in the corresponding period (October-December) of the previous fiscal (2020-21).

Financial Performance

Banks global Business stood at Rs.4,17,960 Crores as of 31st March 2022 as compared to Rs.3,79,885 Crores as of 31st March 2021. Deposits and Advances stood at Rs.2,62,159 Crores and Rs.1,55,801 Crores as of 31st March 2022 as compared to Rs.2,40,288 Crores and Rs.1,39,596 Crores as of 31st March 2021 respectively.

On Deposits front, Bank further reduced the concentration of Bulk deposits and improved the share of low cost deposits. CASA deposits grew by 11.46 percent over 31st March 2021 and stood at Rs.1,13,877 Crores as on 31st March 2022, a milestone achievement in the history of the Bank. CASA ratio remained at 43.44 percent.

The operational efficiency of the Bank improved further during the year. Constraints on capital has restricted the Bank to expand the credit portfolio. Bank continued to accelerate the growth under Capital light advances such as Housing and jewel loan in order to protect the interest income under a falling interest rate regime. The improved non-interest income during the year has further strengthened the operating efficiency of the Bank. Bank could contain its expenditure on account of lower interest expenses. As a result, Bank could achieve operating profit to the extent of Rs.5763 Crores for FY 2021-22.

Bank could reduce the Gross Non-Performing Assets substantially from Rs 16,323 Crores to Rs 15,299 Crores and thereby brought down the GNPA percent from 11.69 % to 9.82 % through multi-pronged and focused recovery initiatives. NNPA has been brought down from Rs 4578 Crores to Rs 3825 Crores in absolute terms and from 3.58 % to 2.65 %. PCR of the Bank has improved substantially from 90.34 % as on 31.03.2021 to 91.66 % as on 31.03.2022, one of the highest in industry.

As a result of this approach, Bank could register Net profit to the tune of Rs 1710 Crores for FY 2021-22.

Income and Expenditure Analysis

The Interest on advances stood at to Rs.10,665 Crores FY 22-23 as compared to Rs.10,834 Crores received in previous year. Interest on investments has declined to Rs.5675 Crores in FY 2021-22 as against Rs.5,712 Crores in FY 2020-21. Overall interest income has also declined to Rs.16730 Crores in FY 2021-22 as against Rs.16966 Crores in FY 2020-21. The reduction in interest income during the year was mainly due to falling interest rate regime and lower Interest income recovered from NPA accounts.

Growth under low cost deposits and maintaining bulk deposits at minimal level has helped in controlling the cost of deposit. CASA has improved from Rs.102165

Crores as of 31st March-2021 to Rs.113877 Crores as of 31st March-2022 with a growth of 11.46%. CASA% has moved up from 42.52% as of 31st March-2021 to 43.44% as of 31st March-2022. Further, the falling interest rates in Savings Bank deposit and term deposits has kept interest expenditure in control.

Despite reduction in interest on advances, Net interest income has improved from Rs.5899 Crores in FY 2020- 21 to Rs.6311 Crores in FY 2021-22. Operating expenses has reduced to Rs.5451 Crores in FY 2021-22 as against Rs.5562 Crores in FY 2020-21.

Yield on Advances has decreased from the level of 8.00 % in FY 2020-21 to 7.38 % in FY 2021-22. Cost of deposits has been brought down from 4.70 % in FY 2020-21 to 4.22 % in FY 2021-22. As a result, Net Interest Margin (NIM) stood higher by 2 bps at 2.41 percent in FY 2021-22 as against 2.39 percent in FY 2020-21.

Capital Raised during 2021-22

Capital Infusion by Government of India

For the capital infusion by Government of India (Rs.4,100 crore received on 31.03.2021) the Bank had issued & allotted 246,54,23,932 equity shares of Rs.10/- each for cash at an issue price of Rs.16.63 per share (including premium of Rs.6.63 per equity share) aggregating to Rs.4,100 crore Government of India, on preferential basis on 02.06.2021.

During the year under review, the shareholding of Government of India has increased to 96.38% from 95.84% and the public shareholding stands at 3.62%. The paid-up capital of the Bank has increased to Rs.18, 902.41 crore from Rs.16, 436.99 crore.

Raising of Tier II Bonds

Bank has raised Basel III compliant Tier II Bonds (Series IV) aggregating to Rs.665 crore on private placement basis at a coupon rate of 8.60% with a tenor of 10 years from the date of allotment with a call option at the end of 5th year & on subsequent coupon payment date. The instrument was rated by M/s India Ratings and M/s CARE Ratings and they had assigned ratings of AA-/Stable.

Corporate Governance

Corporate Governance reflects the built in value system of the Bank in conducting its day to day affairs. The Bank recognizes the critical importance of effective Corporate Governance for the safe and sound functioning of the Bank and lays emphasis on ensuring that structures, processes and systems are put in place to establish strategic objectives to serve the interest of the Bank and its stakeholders which also facilitate effective monitoring.

SEBI (Listing Obligations and Disclosure Requirements Regulations), 2015 (LODR)

As per SEBI (LODR),

• The Bank is providing remote e-voting facility to its shareholders, in Annual General Meetings/ Extraordinary General Meetings.

• The Code of Conduct is applicable to all members of the Board and the Senior Management (i.e., General Managers of the Bank).

• The Bank is submitting a quarterly compliance report on Corporate Governance to the Audit Committee of the Board and to BSE & NSE, where the shares of the Bank are listed.

• The Bank is also submitting Quarterly Investor Grievance Report to BSE & NSE.

Investor Education & Protection Fund (IEPF)

As per the guidelines of Ministry of Corporate Affairs (MCA), Government of India, the Bank has transferred Unpaid Dividend amount pertaining to the year 2013-14 to IEPF.

Bank is complying with all guidelines/regulations laid down by the Regulatory Authorities and Government of India from time to time. The Bank redresses the shareholders grievances without any delay.

Capital Adequacy Ratio

The Bank's capital adequacy ratio as on 31st March 2022 stood at 13.83 % as per Basel III norms.

Branch Network

The Bank has 3,214 domestic Branches as on 31st March 2022 as against 3,217 Branches as on 31st March 2021, comprising of 902 Rural Branches (28.06%), 961 Semi Urban Branches (29.90%), 653 Urban Branches (20.32%) and 698 Metropolitan Branches (21.72%). The Bank also has 48 Regional Offices, 3 Extension Counters, 1 Satellite Office, 3 City Back Offices and 6 Nodal Audit Offices. During the year under review (FY 2021-22), the Bank has merged 3 Branches with other existing branches.

Board of Directors

The business of the Bank is vested with the Board of Directors. The MD & CEO and EDs function under the superintendence, direction and control of the Board. The strength as on date is nine directors comprising three whole time Directors, one GOI Nominee Director, one RBI nominee director, one director elected from amongst the shareholders to duly represent their interest and three part time non-official directors. The MD & CEO presides over the meetings of the Board as Chairman.

The position of the terms of directors during the FY 2021-22 is as under:

During the FY 2021-22, the following director's tenure ended as below:

For and on behalf of the Board of Directors