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Updated:24 May, 2019, 15:56 PM IST

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Updated:24 May, 2019, 16:01 PM IST




The Board of Directors is pleased to place before you, the 88th Annual Report of the Bank along with the Audited Balance Sheet as at March 31, 2016 and the Profit and Loss Account for the year ended March 31, 2016.


The Board of Directors recommended a dividend of 50% (taxfree in the hands of shareholders other than Individuals whose dividend income is above Rs.10 lakh), i.e., @ Rs.0.50 per Equity Share of face value of Rs.1/– per share.


The Bank had been successful in widening its network across India with 834 branches, 42 extension counters and 1287 ATMs. The Bank has opened 29 new offices (12 branches and 17 extension counters) and 87 ATMs across the country during the financial year 2015–16. The branch network now covers 30 States/Union Territories.

The Bank plans to open a maximum of 50 new offices (with a mix of Branches and Extension Counters) and 150 ATMs (including 50 Cash Deposit Machines) during the financial year 2016–17.


The Bank’s issued and paid up capital stood at Rs.135.03 crore as on March 31, 2016. During the year, 157005 stock options granted under Employee Stock Option Scheme had been exercised by eligible employees.

The capital plus reserves of the Bank has moved up from Rs.3,589.40 crore to Rs.3,841.93 crore on account of exercise of options and plough back of profits during the year.


The Capital to Risk Weighted Assets Ratio (CRAR) of the Bank as on March 31, 2016 according to Basel III guidelines is 11.82 as against the statutory requirement of 9.625 (including Capital Conservation Buffer). Tier I CRAR constitutes 9.83 while Tier II CRAR works out to 1.99.

The Bank follows standardized approach, Standardized Duration approach and Basic Indicator approach for measurement of capital charge in respect of credit risk, market risk and operational risk respectively.

Listing Agreement WITH stock Exchanges

The Bank’s shares continue to be listed on BSE Ltd. and The National Stock Exchange of India Ltd. During the year, the Bank has executed a uniform Listing Agreement with BSE Ltd. and The National Stock Exchange of India Ltd. pursuant to SEBI (LODR) Regulations 2015. The Bank confirms that it has paid the listing fees to all the Stock Exchanges for the year 2016–17.


The Bank has achieved a Gross Business of Rs.97,191.52 crore, consisting of Total Deposit of Rs.55,720.73 crore and Gross Advances of Rs.41,470.79 crore as on March 31, 2016.


The total deposits of the Bank increased from Rs.51,912.49 crore as on March 31, 2015 to Rs.55,720.73 crore registering a growth of 7.34%.

The Bank during the year focused on Core Deposit, the segment witnessed a growth of 14.24%. Savings Bank Deposits grew by 18.12% on a year on year basis. During the financial year 2015–16, the Bank had opened 3.89 lakh new Savings Bank Accounts and 11,035 Current Accounts. The Bank, as a part of effective cost management of liabilities, took steps to shed Bulk Deposits and Certificate of Deposit of Rs.2,055.43 crore. NRI Deposits has grown by 25.54% to Rs.14,303.09 crore.

The Bank has accorded priority to meaningful financial inclusion during the period under reporting while opening new deposit relationships.


During the year, the gross advances of the Bank registered a subdued growth of 9.93%, to touch Rs.41,470.79 crore. Low growth reflects, inter–alia, slow off take of credit and also a focused approach towards credit underwriting to ensure quality of assets. Total Priority Sector advances as at the end of the financial year stood at Rs.19,144.65 crore, constituting 47.44% of the Adjusted Net Bank Credit (ANBC). Exposure to agricultural sector amounted to Rs.7,902.37 crore forming 19.58% of ANBC as at the end of the financial year. Break–up of exposure under Priority Sector is furnished below:


Bank’s gross investment portfolio stood at Rs.14,618.93 crore as on March 31, 2016 compared to Rs.14,086.14 crore as on March 31, 2015, registering a growth of 3.78%. Investment Deposit ratio moved from 27.13 as on March 31, 2015 to 26.24 as on March 31, 2016.

Profit on sale of investment for FY 2015–16 stood at Rs.136.54 crore. Total interest income from investments for the year was Rs.1,007.78 crore. Yield on Investments (Profit + interest earned to average investments) during FY 16 was 8.48%.


During the year 2015–16, as a result of focused and sustained efforts for early recovery of NPAs, through prompt and effective measures under the SARFAESI Act, follow up of recovery cases pending before DRTs and civil courts, one time compromise settlements of accounts, asset sale to ARC, etc., Bank could recover NPAs to the extent of Rs.451.38 crore (recovery including up–gradation Rs.134.63 crore), as against the target of Rs.350.00 crore. Special thrust was given on selection and underwriting of credit, adequate due diligence and improvement in credit administration to ensure improvement in the quality of assets.

During the year, the Gross NPA of the Bank has increased from Rs.643.45 crore as on March 31, 2015 to Rs.1,562.36 crore as on March 31, 2016 and Net NPA increased from Rs.357.05 crore as on March 31, 2015 to Rs.1185.26 crore as on March 31, 2016.

Despite improvement in recovery of NPAs, fresh slippage to the tune of Rs.1,342.52 crore during the year led to increase in the level of gross NPA to Rs.1,562.36 crore. In terms of percentages, the GNPA increased from 1.71% as on March 31, 2015 to 3.77% as on March 31, 2016 and Net NPA increased from 0.96% as on March 31, 2015 to 2.89% as on March 31, 2016.


Ever growing dependence on technology and digitalization has changed the contour of delivery channels of financial services in the Industry. Customers, today have the convenience of technology to Bank anywhere, anytime.

Information Technology and its huge potential to offer innovative solutions have paramount importance for growth and sustenance of the Banks. The demand and expectations of the customers have increased and the turnaround time for rolling out a technology product in banks has visibly diminished, which essentially calls for a robust, agile and adaptable system in place to execute projects right from initiation to consumption.

The Bank, an early adopter of technology with a view to providing safe ,secure and convenient banking facilities to its customers, has introduced host of services and facilities for enhancing customer satisfaction. The Bank has been successfully functional with Finale Core Banking Solution (CBS) from Infosys for several years and is the third Bank in the country to have migrated the latest Finale 10 version from the old Finale 7 version. Being one among the first banks to do so, ensures that the Bank would have a very robust and renewed platform, which can be leveraged for great customer service.

In its constant Endeavour to ensure customer delight, the Bank has introduced.

• ATM network across the country, which supports MasterCard, VISA and Ropeyards allowing customer quick access to money

• All variants of Debit Cards to customers (VISA, MAESTRO and Repay) ensuring cashless purchases

• Mobile Banking and M–commerce (with support for other bank money transfer through IMPS, P2A, P2M (issuer), Unstructured Supplementary Service Data (USSD code *99#), Missed call services for retrieving balance through SMS etc) for next generation customers

• Investment in equity through primary and secondary market using ASBA (Application Supported by Blocked Amount), Demat Accounts and tie–up with leading broking firms through online trade, to help customers diversify their investment portfolio.

• Foreign inward Instantaneous remittance with own payment Hub system which is real–time integrated with exchange houses abroad, so as to allow Bank’s Diaspora to send funds to their near and dear back home.

• Point of Sale(POS)terminals to merchant customers, who would then be able to digitize their collections, without resorting only to cash receipts.

• Portfolio Investment Scheme for NRI Community, allowing them to invest in Indian equity market

• Central Plan Scheme Monitoring System (CPSMS), which links to the DBT (direct beneficiary transfer) for instant receipt of Govt. subsidies to the beneficiaries of various Govt. schemes

• Kiosk based Financial Inclusion Solution to enable the Bank reach nook and corner of the country, even in remote villages using technology enabled tools.

• Cash Deposit Machines, for customers who wish to deposit money in their accounts quickly at any time.

• Advanced version of Internet Banking Application with augmented security controls and enhanced customer friendly features, which offers 24/7/365 banking.

• Captive Security Operation Centre (CSOC) in line with GKC (Gopalakrishna Committee recommendations of RBI for monitoring and management of IT Systems) which does round the clock monitoring of security attacks.

• Fraud Risk Management Solution (FRM) for ATM / POS / CNP channel to ensure customer is alerted when unauthorized transactions happen in their accounts.

• Business Process Management solution leading to a paperless environment and reduced turnaround time for customer service (Liabilities and Assets Opening)

• Payment Options such as Automated Clearing House (ACH) Payment Service, Cheque Truncation System, RTGS/ NEFT etc.

• Account Opening for NRI/MSME directly from website IT initiatives/solutions embarked during the year

The following list demonstrates a few of the IT enabled services/ solutions that the Bank has launched during the year to serve its Customers in a better and efficient way.

• Core renewal of CBS to Finacle 10, with enriched features leading to increased internal efficiency of operations, augmented control over various functions through stream lined processes.

• SIB Mirror mobile application (developed in house) with innovative features

• E–KYC solution for direct Aadhar based services

• Graphical Intelligent online manual (GIEOM) for online training of staff

• Loan Origination System to digitize and speed up turnaround time

• Launching Prime Minister Schemes

a. Pradhan Mantri Jeevan Jyothi Bheema Yojana (PMJBY)

b. Pradhan Mantri Suraksha Bheema Yojana (PMSBY)

c. Atal Pension Yojana (APY)

d. Sovereign Gold Bond Scheme (SGB)

• Green PIN Project which allows customers to create their own debit card PIN in any SIB ATM, without the need of a paper based PIN.

• Introducing OTP based 3–D secure services for online purchases using debit cards.

• Institutional Fee Payments – in multiple modes (Branch, Card based, ATM based, Web–Based, Virtual Account Number based etc.)

• Issuance of RuPay EMV Card, being one of the first banks to do so.

• Issuance of MasterCard Titanium

• Issuance of Master Card World

• Enabling e–commerce transactions in Rupay cards

• Enabling Visa Fast Fund transactions for card to card transfer

• Discover Card Acceptance in Bank’s POS machines

• Issuance of Rupay Platinum EMV

• SIB Rewardz, a exciting loyalty program for customers

• NPCI–VAS:Mobile Banking Registration & Aadhaar Number seeding Transaction through ATM

• IRCTC Integration for online ticket booking

• CRAYONS –Online user creation Process for self registration of Internet Banking through website

• Email OTP using Missed Call, for customer convenience

• IMPS Foreign Inward Remittance – to receive funds 24/7 from exchange houses

• Enabled Generate OTP and Change MPIN options through

National Unified USSD Platform in mobile banking

• ISO 27001 implementation for DC/DR and IT operations.

• Technology solution for Basel II advanced approach in Risk Management

• 24X7 Toll Free Customer Support Center

Information security and Risk Management

As banks adopt sophisticated technology to face challenges in the emerging realities of banking, they are increasingly exposed to technology risks. It is therefore imperative for each bank to work out appropriate IT risk management strategies to secure its most vital information asset and ensure that related risk management systems and processes are strengthened on continual basis to secure both present and future banking activities. Bank’s Information Security Policy and other IT Policies – IT Operation Policy, IT Governance Policy, IT outsourcing Policy and Information Security systems have already taken these aspects into consideration. Further, the Information Security of banking IT functions has been strengthened through implementation of a captive SOC (Security Operation Centre).

The Bank has been providing awareness on e–threats to its customers and staff on a continued basis so that both proactive and reactive measures can be initiated, as deemed appropriate, to mitigate potential risks associated with e–threats.

The Bank has been implementing the stipulations and guidelines articulated and issued by RBI based on the working group recommendations on Electronic Banking Technology Risk, Information Security and Cyber Frauds as part of the IT governance programme (Gopalakrishna Committee Report).

IT Training

During the year, many training programmes had been attended by the Bank’s officers in premier institutions such as IDRBT, NIBM to keep themselves abreast with the advancements in IT, Information Security, CRM etc. Further, during the financial year 2015–16, the Bank has conducted training programme on Finacle–10 and imparted training to 1,173 officers and 784 clerks.


Management Philosophy & Measures

Gopalakrishna Committee Recommendations on Information Security, Electronic Banking, Technology Risk and Cyber Frauds as applicable to the Bank have been taken up for enforcement and implementation. Effective measures have been taken to address the identified gaps in each area such as IT Governance, Information Security, IT Service outsourcing, IS Audit, IT Operations, Cyber Frauds, Business Continuity Plan (BCP), Customer Education and Legal issues. The IT Organization setup has been redrawn to suit the functions/roles specified in the recommendations with segregation of duties. Technology, Development, IT Operations and IT Assurance functions have been clearly divided and now independently headed. IT Strategy Committee of the Board, IT Steering Committee, Information Security Committee and Chief Information Officer (CIO) are in place, and Chief Information Security Officer (CISO) reports independently to the Head of Risk Management. Revamped Information Security policy incorporating the various guidelines and stipulations mentioned in the report has been approved by Board and is in place. Presently the policy is under the process of review to make it in alignment with ISO 27001 guidelines. In addition, other IT Policies such as IT Operation Policy, IT Governance Policy and IT Outsourcing Policy are also enforced.

The progress of implementation of GKC recommendations are reviewed by IT Strategy Committee of Board and Board of Directors on quarterly basis. The major items which are under process to achieve compliance to GKC recommendations are as follows:

1. Comprehensive Fraud Risk Management.

2. ISO 27001 Implementation

The full compliance with the GKC recommendation will be realized in a time bound manner with creation of various infrastructural support required for the same.


The Transaction Banking Department of the Bank has commenced its activities in a modest way under the name and style of CPC – Central Processing Centre in Thrissur in May 2015. The prime objective of CPC is to centralize the back office operations, which had been happening in branches and offices with a view to bring standardization, compliance and scalability. The operations were commenced with liability portfolio – Customer Creation and CASA opening covering SB, CD and NRI. In August 2015, a new Department namely Transaction Banking Department (TBD) has come in to being and CPC got attached to it as one of its divisions. Thereafter TBD has widened its functional operations and at present it has

6 divisions as given below:

Retail Liability Operations (TBD.CPC) – Customer Creation and Opening CASA, PIS

Retail Asset Operations (TBD.CDMC) – Opening Loan Accounts, LC and BG Payment & Settlement Operations – RTGS/NEFT, Aadhaar (TBD.PSD) Mapping

Service Operations (TBD.Service) – Delivery Channels (Debit Card, Net Banking, Mobile banking, Welcome kit)

Support Operations (TBD. Support) – Channel Reconciliation Audit & Compliance Reporting – Rectification of (TBD.A&C) Internal/External Audit comments

It functions from multiple locations. The main centre is located at Kalamassery, Ernakulam, Kerala and the first alternate centre has been functional in Coimbatore.


The Bank has institutionalized a strong compliance culture and mechanism across the organization, pursuant to its strategic goals of transparency and trust, among all its stakeholders. The Bank has a dedicated Independent Compliance Department headed by a Dy. General Manager for ensuring regulatory compliance, across all its businesses and operations. The key functions of this department includes, dissemination of key regulatory updates affecting the various business verticals of the Bank, review of processes from a regulatory compliance perspective, provide guidance on compliance–related matters, impart training to employees on compliance aspects, among others.


In order to support and monitor the existing branch network and to provide continuous focus on Business Development of the Bank, the Bank has formed an exclusive full–fledged Business Development Department by segregating the “Business Monitoring Cell” from Planning & Development Department with effect from January 7, 2016.

Business Development Department is providing continuous mentoring for both the Deposit and Advance portfolio of the Bank, monitoring of Green Channel Branches, review of daily/ weekly business position of all ROs/Branches, conducting of conference & meetings to promote Business Growth etc.


Risk is an integral part of banking business. Managing risk is fundamental to banking and is the key to sustained profitability and stability. Management of risk aims at to achieve best trade–off between risk and return and to ensure optimum Risk Adjusted Return on Capital (RAROC). Sound risk management is critical to a Bank’s success. Business and revenue growth have therefore to be aligned in the context of the risks embedded in the Bank’s business strategy and balance sheet of the various types of risks the Bank is exposed to, the most important are credit risk, market risk and operational risk. The identification, measurement, monitoring and mitigation of risks continue to be key focus areas for the Bank. The risk management function attempts to anticipate vulnerabilities at the transaction level or at the portfolio level through quantitative examinations of embedded risks. The risk management strategy of the Bank is based on a clear understanding of various risks, disciplined risk assessment, risk measurement procedures and continuous monitoring for mitigation. The policies and procedures established for this purpose are continuously evaluated and benchmarked against the best practices followed in the industry. Through continuous refinement/improvement of the risk measurement/management systems, the Bank aims to ensure regulatory compliance as well as better return on and utilization of capital.

Risk Appetite

Risk appetite of the Bank refers to the level of risk that a banking organization is prepared to accept in pursuit of its financial and strategic objectives, before action is deemed necessary to reduce the risk. It can be determined through the assessment of risk taking capabilities of the Bank in the form of sound risk mitigation techniques and capital base. Risk Appetite forms a key input to the business and capital planning process by linking business strategy to risk appetite. Risk appetite of the Bank is defined by the Board of Directors through the Risk Appetite Statement which encompasses the general risk appetite of the Bank as well as risk appetite with respect to specific categories of risks. Qualitative elements, quantitative measures, and risk tolerances as well as targeted limits for various categories of risks are included within the risk appetite and are monitored on a quarterly basis. The framework ensures that aggregate risk exposure of the Bank is always within the desired risk bearing capacity.

Risk Management Policy Framework

The Bank has a comprehensive policy framework which contains separate policies for identification, measurement and management of all material risks including but not limited to credit, market, operational, liquidity and other Pillar–II risks. The Bank has put in place an integrated risk management policy which ensures independence of the risk governance structure.

The details of risk management practices are provided in Management Discussion and Analysis Report annexed to the

Compliance with Basel III and Basel II framework

In compliance with regulatory guidelines on Pillar I of Basel III norms, Bank has computed capital charge for credit risk as per the Standardized Approach, for market risk as per the Standardized Duration Method and for operational risk as per the Basic Indicator Approach. To address the issues of Pillar II, the Bank has implemented ICAAP (Internal Capital Adequacy Assessment Process), integrating capital planning with budgetary planning and to capture residual risks which are not addressed in Pillar I, like credit concentration risk, interest rate risk in the banking book, liquidity risk, earnings risk, strategic risk, reputation risk, pension obligation risk etc. the Bank has adopted a common framework for additional disclosures under Pillar III for adhering to market discipline of Basel II and Basel III guidelines. This requires the Bank to disclose its risk exposures, risk assessment processes and its capital adequacy to the market in a more consistent and comprehensive manner

The Bank has initiated steps for moving over to Advanced Approach under the Basel II framework for CRAR computation in line with the relevant guidelines issued by Reserve Bank of India. In this regard, consultants and system implementation partners have been engaged and the implementation process has started.


The total forex business turnover of the Bank for the year ended 31st March 2016 was Rs.17,7381.86 crore (comprising Merchant Turnover Rs.12,362.72 crore and Interbank Turnover Rs.1,65,019.14 crore). The Bank earned an exchange profit of Rs.45.18 crores recording an increase of 42.67%. The Bank has also earned a profit of Rs.0.32 crores from bullion business and has sold 6.037 kg of gold during the FY 2015–16.

At present the Bank is having rupee inward remittance arrangement with 5 Banks and 31 Exchange Houses and turnover for the year ended March 2016 was Rs.7,390.02 crore registering an increase of 2.92% as compared to the previous financial year. During the FY 2015–16 the Bank continued providing managerial support to M/s. Hadi Express Exchange, UAE. The Bank has presently deputed 19 officers of the Bank to manage the operations of Hadi Express Exchange. Considering the scope in improving Bank’s remittance business through arrangements with EH’s, the Bank has deputed four officers to UAE with UAE Exchange Centre, Al Ansari Exchange and Al Fardan Exchange.

The International Banking Division of the Bank has initiated the centralization of trade finance operations in stages. By centralized trade finance operations at a single location, deploying talented sources, Bank will be able to impart professional services to its trade finance customers ensuring strict FEMA / RBI guidelines. Presently all inward remittances have been centralized and centralization of outward remittances is in progress. Rest of the trade finance operations is scheduled to be completed in due course.


The NRI deposits constitute 26% of the total deposits and 30% of the Core Deposits of the Bank. The Bank is having a separate NRI Division, in Kalamassery, Kochi, headed by an Assistant General Manager and its functions and working are monitored by a Deputy General Manager and General Manager in the Marketing Department of the Bank. The dedicated officers and staff working in NRI Division are rendering support and assistance to NRIs and all the Branches gave an impetus to the growth of NRI business of the Bank. The Branch level NRI Relationship Officers and the NRI Desk functioning in major NRI business Branches are giving special care and attention to all of the Bank’s NRI patrons.

NRI Division is also taking care of NRE/NRO welcome kit account opening through which instant activation and operation of Account is possible. Such accounts are available at all the Branches of Hadi Express Exchange, UAE; selected SIB branches and to the marketing officers deputed to various Exchange Houses in UAE. The welcome kit account opening is widely accepted in the market and added momentum to the NRE/NRO SB Accounts opening, which improves the share of low cost Deposits of the Bank. The NRI CASA deposits (NRE/NRO SB and CD) constitute 24% of the total CASA of the Bank.

The online NRE/NRO account opening facility available in Bank’s website is enabling NRIs across the world in opening NRI accounts in your Bank at the comfort of their home/office. The Skype calling (Skype id: talk2nricell) in NRI Division make possible for NRIs for an audio video talk with officials working in Head Office NRI Division. In order to have a personal interaction and get together with the top executives of the Bank, NRI meets were held at eleven centers in Kerala. All these efforts coupled with the service and efforts of SIBIANs working all over India resulted in achieving 26% growth in the total NRI Deposit during the financial year 2015–16.


The Bank accords utmost importance to the process of skill enhancement. Training Programme are conducted at SIB Staff Training College (SIBSTC), Thrissur and at 6 Regional Training Centres (RTCs) at Regional Office for enhancement of professional skills of the staff. The training programmes are designed to develop competency of operating personnel while imbibing the SIBIANS' spirit and culture through an effective learning process. The success of these programmes reflects on the enhanced organizational productivity. SIBSTC and the RTCs identify gaps in skill of the personnel and provide learning to them for qualitative improvement. During the financial year 2015–16, the Bank has imparted training to 3,203 officers, 1,358 clerks and 121 sub staff in various aspects of banking operations. Further, during the financial year 2015–16, the Bank has conducted training programme on Finacle–10 and imparted training to 1,173 officers and 784 clerks. Thus, the Bank has provided training to a total of 6,639 personnel, which is about 85.33% of total staff strength of 7,780 as on March 31, 2016.

This is in consonance with the Bank’s vision towards continuous up–gradation of skills to ensure that the staff members meet the rising expectations of customers and discharge services professionally covering the entire gamut of banking operations.


The Marketing Department of the Bank plays a critical role in generating new business for the Bank through customer acquisition. The department also takes initiatives in product development and promotion by creating awareness on products and by driving customer–centric campaigns.

The products and services under the domain of Marketing Department can be broadly classified as Technology, Third Party Products and Value added services.

Technology Products of the Bank

The Bank has effectively leveraged technology and introduced several variants of traditional products and new e–based services, tailor–made to the diversified needs of customers. Technology services like ATM/Debit cards, internet banking, mobile banking etc. have transformed the customers’ banking experience from branch banking to anytime, anywhere banking. Bank has set up a separate Digital Products Division to take care of product development, process improvement and promotion of all technology products.

• Any Branch Banking system: All the branches of the Bank are inter–connected and are capable of providing online, real–time transactions to its customers. As information is centralized and updates are available simultaneously at all places, single–window service has become possible, leading to effective service–delivery to customers. Customers can Deposit/Withdraw freely without any tariff charge from any branch.

• SIB ATM cum Debit Cards: The Bank is offering Visa, Master and Repay debit cards to its customers. Using SIB debit cards, Bank’s customers can withdraw cash through ATMs of any Bank in India and international usage is allowed through EMV chip cards. The Bank has also enabled its debit cards for POS/Online transactions.

Co–branded Foreign Currency Travel Card launched in association with Axis Bank is specifically designed for customers who travel abroad and is available in 8 foreign currencies – USD, GBP, AUD, EUR, CHF, CAD, SGD and JPY. The Bank is issuing only EMV Chip cards, from February 1, 2016 facilitating highly secure international card transactions. Currently Bank issues Visa Classic EMV, RuPay Classic EMV, RuPay Platinum EMV, MasterCard Titanium EMV and MasterCard World EMV cards which can be used both in International and Domestic ATM/POS/ONLINE.

Green PIN facility is available for all Debit cards, by Bank’s Customers can Self generate/reset their ATM PIN at any SIB ATM counters and the service is available 24 x 7. This project is part of SIB’s Green initiatives and helps to save paper. SIB Rewardz is the loyalty program from SIB, by which customers can earn reward points while shopping using their SIB debit cards. These points can be redeemed for a number of exiting products and services through the portal and through offline stores. Customers are also given the option of 3D secure password or One Time Password (OTP) to complete their Online transactions using SIB Debit cards, thus making the process a lot more convenient and secure.

VISA Fast Funds is a service offered to the customers to receive money to their VISA Debit card. Customers can receive money instantly to their VISA Debit card any time 24 x 7 without any additional cost.

• Internet Banking: The internet banking service under the brand name“SIBerNet” has helped to position the Bank as a technology–driven Bank offering superior banking services to both retail and corporate customers. With new online service called CRAYONS, now customers can register and activate for SIBerNet service through online without visiting the branch. Increased transactional limits, Fund Transfers (RTGS/NEFT/Within Bank), online bill payments, Online deposit opening, online offerings to deity and also to avail booking of doctors online, Block Debit card, stop payment of cheque online, Direct IRCTC ticket booking, KSEB bill payments, Apply for IPO (Initial Public offering through SIBerNet–ASBA) retrieval of forgot SIBer Net User ID etc. are a few of the services offered through SIBer Net. In addition to these, the Bank has also introduced Direct and Indirect

Tax Payment facility for its retail and corporate Customers.

• Mobile Banking: Banks are in process of transforming Mobile Banking application into a Digital Bank. Your Bank’s Pride,’ SIB Mirror’, an in–house built Mobile banking application, which has become a magic in the Mobile banking space and a symbol of technological excellence among Mobile banking Applications .It has been enriched with lot of Unique features such as Shake to Know Balance, Shake to Transfer funds, Augmented Reality, Click to Share Account Info, along with E–Statement of all accounts (SB/ CD/Loan/Deposit), Fund Transfers, Mobile/DTH recharge, ATM Card Block, Social Money, Cheque status, Clearing cheque info, Complaint module etc. and it is available in all platforms. ‘SIB Mirror’ has won third prize in IDRBT Banking Application Contest 2016.

Other mobile banking services offered by the Bank are SIB M–Pay, SMS Banking and SIB missed Call service. SIB M–Pay allows customers to make instant inter/intra Bank fund transfers 24X7. SIB M–Pay uses NPCI’s IMPS fund transfer mechanism to transfer funds instantly to other Bank accounts. Customer are also able to do online/merchant payments, access m–passbook and other value–added services like mobile recharge and DTH recharge. Through SIB Missed call service, the customers are able to know the balance with just a missed call.

• Point of Sale (POS): The Bank, in association with M/s. Atos Worldline India Pvt. Ltd. is offering two types of POS terminals – PSTN (wired terminal) & GPRS (wireless). Atos is the market leader in India in this segment and the primary service provider for POS acquiring services to a number of leading public sector and private sector Banks in the country.

Third Party Products

To cater to the needs of a diverse customer base, the Bank has made arrangements with several companies to distribute products like insurance, pension and mutual funds to customers. Insurance (Life/general): The Bank acts as a corporate agent for the distribution of insurance products of both M/s Life Insurance Corporation of India and M/s Bajaj Allianz General Insurance Company for life insurance and general insurance respectively.

Mutual Funds: Mutual Fund is a popular form of investment since it provides the advantages of professional portfolio management and dividend reinvestment. The Bank has tie up with 14 leading Mutual Fund companies thereby offering a variety of mutual fund products to customers.

Bonds: The Bank has been enrolled as a Channel Partner for the distribution of bonds issued by different companies, through Bank’s tie up with IFIN – a subsidiary of IFCI (Industrial Financial Corporation of India) Financial services Limited. Through this tie up the Bank has been enrolled as a channel partner of IFCI for the distribution of capital gain bonds and tax free bonds. Depository services: The Bank offers Depository services for the benefit of its customers. Through this facility, customers can hold their securities in electronic form in demat account with M/s Central Depository Services (India) Ltd. (CDSL). For e–trading, the Bank offers SIBerTrade – the online trading facility to buy /sell stocks for its domestic customers from stock exchanges in India through tie–up with M/s. Geojit BNP Paribas Financial Services Ltd. & M/s. Religare Securities Ltd. SEBI has also registered the Bank as Self Certified Syndicate Bank (SCSB) for accepting application under Application Supported by Blocked Amount (ASBA) through all the branches of the Bank.

ASBA enables the Bank’s customers to apply for IPO/FPO, rights issues etc. by marking a lien on the account instead of actual debit at the time of applying, which is more beneficial for the customers. Bank is also offering Portfolio Investment Scheme (PIS) – an extensive share trading facility for its NRI customers through tie–up with M/s. Geojit. Under PIS, NRI customers can directly invest in the Indian securities market through recognized stock exchanges under repatriable/non–repatriable basis. New Pension system: The Bank acts as a Point of Presence to provide services to subscribers of New Pension System introduced by Pension Fund Regulatory and Development Authority (PFRDA). All branches of the Bank are designated for collecting NPS applications and contributions. An additional tax benefit of Rs. 50000/– under Sec 80 CCD (1B) was introduced for NPS contributions. APY was introduced by Govt. of India in place of NPS Lite providing minimum assured pension from Rs.1000 to Rs.5000 to subscribers is also available to Bank’s customers.

PAN Application servicing: The Bank has made arrangement with M/s UTI Technology Services Ltd. (UTITSL) for servicing applications for PAN card. On an average the Bank processes 15,000 applications per year.

SIB E–Pay: In association with BSNL, the Bank is facilitating the payment of BSNL Landline bill of its customers through their accounts maintained with the branches. A customer can avail this facility by submitting a mandate form at the branch where the account is being maintained. Once registered, the BSNL landline bill of the customer will be automatically debited from the customer’s account every month. The key feature of this facility is that it is totally hassle free and is offered free of cost to the customers.

Cash Management service (Premium Collection): The Bank is offering Cash Management Service (Premium Collection) to customers in association with Tata AIG, Exide Life Insurance Co. Ltd (formerly known as ING Vysya) and ICICI Prudential Life Insurance Co. Ltd. Under this arrangement, Bank’s customers as well as walk–in customers can remit life insurance premium through branch counters. This facility is offered free of cost to customers.

Centralized Direct Debit service: The Bank has entered into tie–up with leading aggregator M/s. Billdesk Services for Centralized Direct Debit arrangement. Through this tie up Bank’s customers will be able to make regular payments like monthly/ quarterly/half yearly payments of Mutual Fund SIP investments/ Loan EMIs (Vehicle/Equipment Loans)/Insurance premium etc. by directly debiting their account and thereby making the payments to various billers/institutions. This facility is available to all customers irrespective of their branches being located in ECS/non–ECS locations. The Bank has similar arrangements with 3 companies – TVS Credit Services, Sundaram Finance Ltd and Shriram City Union Finance.


The Bank has subscribed to toll free numbers from Idea Cellular Ltd. (Toll Free number– 1800 843 1800) and BSNL (Toll Free Number– 1800 425 1809) to enable customers to contact the Bank without incurring any cost. In addition, a land–line connection dedicated for international customers is also available. Toll free centre is now functioning in 4 shifts, 24 x 7 with staff members who are capable of handling multiple languages. In addition to this a channel support team is working 24 x 7 at the same premises who are focused to support and escalation of issues related to technology products. Marketing and promotional activities of the Bank are vital in identifying customer needs and designing differentiated products to cater to those needs. While the department is keen to introduce new and varied products, facilitating customer adoption and providing customer assistance assumes equal significance during its operation. The Bank strives to comply with regulatory requirements during the entire sales process, and thereafter during support.

Visibility Enhancement initiatives

The Bank has undertaken many brand promotion initiatives in various media like Newspaper, Television, Radio, hoarding and online social media. Outdoor branding was mainly focussed in major metros like Bangalore, Delhi, Chennai and Hyderabad by the way of branding bus shelters and by placing hoardings at prime locations. The Bank had branded Ernakulam South Railway station in Kerala and have introduced innovative branding in NMMT Volvo bus in Mumbai. The Bank has conducted two press conferences and more than 10 press releases on major product launch or events done by the Bank.

Two television commercials were produced during this financial year starring Bank’s Brand Ambassador Sri Mammootty. These TV commercial were launched in all the prominent TV channels in Kerala and also in the main English Finance/Business channels for Bank’s brand promotion. Subsequently the Bank has also aired its TVC in major high end theatres of metro cities during the launch of Film ‘Dilwale’. During the national pre budget and Budget period the Bank has aired its TVC in the channels like CNN IBN, CNBC, Times Now, ET now and Zee Business. FM radio advertisement for gold loan promotion was done in the leading FM stations of the cities Chennai, Coimbatore, Bangalore and Hyderabad. Also the Bank had joined national campaign of CNBC named “Inside Kerala” that has established the Bank’s national brand presence. The Bank had also sponsored the 35th Annual National management Convention of Kerala Management Association. The Bank had published its corporate advertisement starring Sri Mammootty in main dailies during Valentine’s Day and product promotion of SIB mirror.

The Bank had associated with Global media events for the programme ‘Golden Achievement Awards Dubai’ 3rd Edition 2015 that had good coverage in Middle East. Interview with MD and CEO was done by leading dailies like Business Line, Mathrubhumi and The New Indian Express, which enhanced your Bank’s brand image in the market.

The Social Media arm of the Bank functioning in Marketing Department constantly launches various brand and product promos in the diverse social media platforms maintained by your Bank. Presently your Bank maintains official page in face book, Twitter, YouTube and Google plus. The page gives facility for the customers to input their valuable suggestions/feedbacks and also seek queries regarding new products and services rendered by your Bank.


Human Resource is the single most important catalyst for effective and efficient operation of any organization. Competition has rendered this dimension still more critical. The Bank has a team of committed, self–motivated and empathetic workforce who strive to meet the customers’ requirements. To augment the existing manpower in line with the Bank’s healthy and sustained growth and expansion of network, the Bank has continued its initiatives of major talent acquisition and retention policies in the FY 2015–16.

Infusion of young personnel has brought down the average age of employees of the Bank to 34 years as on March 31, 2016.

Maintenance of Personnel data

Maintenance of staff records was streamlined under “HRMSS” (Human Resources Management Software Solution System). The personnel data can be accessed by all controlling offices and various reports based on the data can be generated for the quick disposal of staff related matters. To make HRMSS more comprehensive, the Bank had introduced new modules such as Travelling Allowance, User feedback and suggestions, Subsistence Allowance etc., in addition to the existing modules like Expense Maintenance, Pension Maintenance, Marketing Excellence, Transfers, Promotion Maintenance, HRA, Leave and LFC, Training, Online Annual Performance Appraisal of Officers upto Chief General Manager cadre, Service Record, etc.

Motivational Initiatives

Some of the initiatives undertaken by the Bank in order to boost the morale of the Bank employees are as under:

a) Promotions: The Bank has been offering healthy career progression opportunities. During the financial year, 234 clerical staff had been promoted to Scale I, 158 officers to Scale II and 124 Officers to various senior cadres.

b) Implementation of the Xth wage revision settlement – Settlement signed between IBA and Officers/Workmen unions on salary revision of Officers and Award staff had been successfully implemented and the revised salary and arrears for the period from November 1, 2012 released to all the eligible staff members on June 29, 2015.

c) New medical insurance scheme in lieu of the existing hospitalization scheme – The Bank has implemented the new medical insurance scheme formulated by IBA with United India Insurance Company (UIIC) in lieu of the erstwhile hospitalization scheme on the terms and conditions specified by IBA. Under this scheme the premium amount is borne by the Bank.

Industrial Relations

Industrial relations in the Bank have been cordial and harmonious. The representatives of Workmen Union, Officers Association and Management have been working collectively with a sense of ownership for the shared objective of all–round growth and prosperity of the Bank. On account of the cordial industrial relations with both the associations, Bank has achieved considerable growth over the years.

EMPLOYEE stock OPTION scheme (EsOs)

During the financial year 2008–09, the Bank instituted an Employee Stock Option Scheme to enable its employees to be a partner in the future growth and financial success of the Bank. The Banks’ shareholders approved the plan on August 18, 2008 for the issuance of stock options to the employees. Till March 31, 2016, 3,80,32,680 stock options were vested, out of which 2,02,44,141 stock options were exercised by eligible employees. The money realized due to exercise of the said options was Rs.26,31,64,978.30/– and consequently 2,02,44,141 shares of Rs.1/– each have been allotted to the employees/legal heirs concerned.

A Certificate of Auditors pursuant to Regulation 13 of SEBI (Share Based Employee Benefits) Regulations 2014 will be placed to the AGM for the scrutiny of Shareholders. The total options granted under seven phases of SIB ESOS 2008 works out to 4.21% of the paid up share capital of the Bank as at March 31, 2016. The scheme has generated intended motivation amongst the staff. Statutory disclosures regarding details of the stock options granted, vested, exercised and forfeited and expired during the year under review are annexed to this Report.

SIB– Executive Brief

“SIB Executive Brief” – a daily news update on Banking, Finance, Economy, Industry, Market Rates etc. is being provided by SIB Staff Training College. It is E–mailed on a daily basis to Board members, to the executives and it is also made available at SIB–Insight for access to all the staff members.

E–Learning Tests

The Bank has completed 12 online tests through E–learning Application during the year 2015–16 on various topics such as Manual of Instruction – Documentation, Finacle 10 etc. Prizes were awarded for the toppers in these tests. It is encouraging to note that the learning process is taken up with great enthusiasm and competitive spirit, the fruit of which is visible in the increasing number of branches/offices emerging as toppers. The E–learning platform will be utilized increasingly for improving the knowledge level of the staff members.

E– Learning test for Prob. Officers

From January 2016, onwards the Bank is conducting an E–Learning test for Prob. Officer on a monthly basis to upgrade their knowledge level on a continuous basis.


The Bank has since migrated to issuance of e–circulars in place of manual circulars. All the circulars of the Bank are uploaded using the ‘e–circular software’. In e–circular, Bank’s policies, Guidelines and Forms are also uploaded so as to empower the branches with readily accessible pool of information/guidelines.


Students' Economic Forum is a monthly publication from the SIB Staff Training College and it provides an analysis of contemporary themes relating to developments in Economy, Banking and Finance. So far, 292 themes have been published since the first publication which was launched in December 1991. The publication is celebrating its “silver Jubilee” year.

During the year the Bank has published the fifth volume of compendium, comprising the theme 202 to 280. In response to the requests from readers, the first 201 themes of this publication were compiled in 4 volumes and published. The objective of this venture is to kindle interest in economic affairs among the younger generation and also to provide a learning platform to the student community. The hard copies of the publication numbering about 3,100 are being sent to all the branches/ offices, reputed schools / colleges / academic institutions, RBI offices, other Banks, government organizations and corporate offices. It has wide acceptance among students, bankers and academic community. The Subjects discussed during Financial year 2015–16 are – Bitcoin, GIRO, Railway Budget, Economic Survey and Union Budget 2015–16 (Part – I), Railway Budget, Economic Survey and Union Budget 2015–16 (Part – II), Foreign Trade Policy 2015–2020, Information Security, Electronic Banking, Technology Risk Management and Cyber Frauds– Part – I, Information Security, Electronic Banking, Technology Risk Management and Cyber Frauds – Part – II, Gold Monetization Scheme and Sovereign Gold Bonds Scheme, Payment Banks and Small Banks, Ease of Doing Business, Railway Budget and Economic Survey, Union Budget Part – I. These themes are made available in the Bank’s Website.

Awards & Accolades

The Bank has received following awards/rewards during the financial year:

Social Banking Excellence Award 2015 (Runner up position in Rural Banking–Small Bank) instituted by ASSOCHAM Inspiring Work Places Award 2015 for best HR & Talent Practices among Private Sector Banks instituted by the Banking Frontiers.

? Banking Technology Excellence Award 2014–15 for “Cyber Security Risk Management” from IDRBT, the technical arm of Reserve Bank of India.

? The SIB’s green initiative ‘Green PIN’ won award at the MasterCard Payment Strategy Workshop 2015 held in Pune.

? Prize in IDRBT Banking Application Contest for the innovative mobile banking app “SIB Mirror”.


The Personnel Department of the Bank received the ISO 9001:2008 Certification. This certification acknowledges that the policies, practices and methods adopted by the department are system oriented and in tandem with international standards.

Achievements and milestones:

The Bank has signed MOU with NSIC, to facilitate loans to MSE and thus promotes the MSME credit portfolio of the Bank.

Foreign Exchange Advisory Cell

The Bank has launched Foreign Exchange Advisory Cell to advisory services by subject experts on FEMA rules and trade finance related issues to the general public. The complimentary service is available to all Foreign Exchange Trade Fraternity.


The Bank has undertaken various initiatives for energy conservation at its premises. Further, the Bank has used information technology extensively in its operation and consistently pursuing its goal of technological up–gradation in a cost efficient manner for delivering quality customer service.

The Bank, being a banking company and an authorized dealer in Foreign Exchange, has taken all possible steps to encourage export credit.

Number of cases filed, if any, and their disposal under section 22 of the sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressed) Act, 2013

The Bank has zero tolerance approach towards any action on the part of any executive/employees which may fall under the ambit of ‘Sexual Harassment’ at workplace, and is fully committed to uphold and maintain the dignity of every women staff working in the Bank. The Policy provides for protection against sexual harassment of women at workplace and for prevention and redressal of such complaints. All the employees (permanent, contractual, temporary, trainees) are covered under this policy.

Number of complaints pending as at the beginning of the financial year – Nil

Number of complaints filed during the financial year – Nil

Number of complaints pending as at the end of the financial year – Nil

Particulars of Employees

Information as required by the provisions of Section 197 of the Companies Act, 2013, read with Rule 5 of Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014, is given under:

The ratio of the remuneration of each director to the median employee’s remuneration and other details in terms of subsection 12 of Section 197 of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are annexed to this report.


A brief outline of the Bank’s CSR Policy, including overview of projects or programs to be undertaken /undertaken. south Indian Bank’s CSR Policy:

South Indian Bank is grateful to the society for the support and encouragement in the Bank's growth and development. The Bank believes that no organization can make sustainable development without the patronage of the society. The Bank is committed in the integration of social and environmental concerns in its business operations and also in the interactions with its stakeholders. The Bank shall continue to have among its objectives, the promotion and growth of the national economy and shall continue to be mindful of its social and moral responsibilities to customers, shareholders, employees and society. Bank is committed to financing the economic and developmental activities of the nation with concern for human rights and environment.

Overview of Activities:

In line with the CSR policy and in accordance with Schedule VII of the Companies Act 2013, South Indian Bank undertook various activities during the FY 2015–16 which had significant impact on the society.

These activities include:

Setting up homes and hostels for women and orphans.

Training to promote sports.

Making available safe drinking water.

Conservation of natural resources.

Eradicating hunger, poverty and malnutrition.

Promoting education, including special education and employment enhancing vocational skills especially among children, women, elderly and the differently abled.

Promoting Preventive healthcare and sanitation.

Contribution to the Prime Minister’s National Relief Fund.

Web–Link to the CsR Policy: kIdLvl2=215&LinkIdLvl3=778&linkId=778

Composition of CSR Committee:

The Bank understands its responsibility towards the society and environment in which it operates. The Bank has constituted Corporate Social Responsibility Committee at the board level to monitor the CSR activities.

Members of the Committee are:

1. Sri Francis Alapatt (Chairman of the Committee)

2. Sri V. G. Mathew (MD & CEO)

3. Sri Mohan E. Alapatt (Member)

4. Smt. Ranjana S. Salgaocar (Member)

The composition is as per Companies Act, 2013 and Companies (Corporate Social Responsibility Policy) Rules, 2014. Average net profit before tax of the Company for the last three financial years: Rs.578.54 crore Prescribed CSR Expenditure (two per cent of the amount as above): Rs.11.57 crore.

Details of CSR spent during the Financial Year:

a. Total amount to be spent for the Financial Year 2015–16:


b. Amount unspent, if any: Rs.9,26,81,520/–.

The Bank’s CSR mission is to contribute to the social and economic development of the community. Through a series of interventions, the Bank seeks to mainstream economically, physically and socially challenged groups and to draw them into the cycle of growth, development and empowerment

Reason for not spending the two percent of average net profit of the last three financial years or any part thereof:

In the FY 2015–16, the Bank revamped its CSR activities to fall in line with the new rules and regulations in accordance with the Companies Act, 2013 and Companies (Corporate Social Responsibility Policy) Rules, 2014. In the FY 2015–16, the Bank spent Rs.2.30 crore towards CSR activities, which constitutes 19.90% of CSR Budget of the year. The Bank stays committed to its corporate social responsibility and intends to continually increase the impact of its CSR initiatives. The Bank has utilised the reporting year to lay a foundation on which to build and plan future projects and currently in the process of evaluating strategic avenues for CSR expenditure in order to deliver maximum impact. In the years to come the Bank will maximise its efforts to meet the targeted CSR spends.

Responsibility statement:

The CSR Committee confirms that the implementation and monitoring of CSR Policy is in compliance with CSR objectives and Policy of the Bank.


Financial inclusion aims to ensure the availability of formal and basic banking services to all Indian households, including those in the un–banked and under–banked areas. South Indian Bank has adopted several financial inclusion initiatives, including Kiosk banking.

Kiosk Banking Model – Bank Mitra / Business Correspondent (BC)

The Kiosk banking complies with the open standards recommended by the Indian Banks' Association (IBA) and the Institute for Development and Research in Banking Technology (IDRBT) and is capable of incorporating the Unique Identity Solution being implemented by the Unique Identity Authority of India (UIDAI). Under Kiosk Banking Model, the Bank is able to provide basic banking services in un–banked/ under banked areas through outlets such as common service centres, Individual Business Correspondents [BC], small retail shops, etc.

with a laptop based solution.

Kiosk centres offers basic banking services such as customer enrollment, deposits, withdrawal, fund transfers, balance enquiry, FD, RD remittance etc. to potential customers.

Customers can open new basic savings account in Kiosk centres by providing KYC documents and biometrics. The Bank has implemented Kiosk Banking Model in the state of Kerala through 53 Akshaya centers, who are acting as common service centres in the state and 76 Individual BC’s in Tamil Nadu. As on March 31, 2016, 39,016 customers have opened accounts under the Bank’s Kiosk Banking Model.

Financial Literacy Centers

Financial Literacy is the ability to understand how money works in our day to day life and how someone manages it, how he/she invests it and how a person offers it to others. More specifically, it refers to the set of skills and knowledge that allows an individual to make informed and effective decisions with their financial resources. 12 FLCs have been allotted to the Bank by SLBC in the state of Kerala to disseminate financial literacy to the people and it is functioned through retired bank employees, school teachers and retired government employees.

Pullu – Model Village of south Indian Bank

The Bank has been servicing Pullu Village in Chazhoor Panchayat of Thrissur Dist. in Kerala under Bank’s Financial Inclusion initiative since 2010. In order to ensure meaningful Financial Inclusion and to facilitate BC based operations in the village, Bank has opened Ultra Small Branch at Pullu on November 1, 2013. The village was since adopted by the Bank and various welfare measures were initiated in Pullu. Propagation of Bio farming, conducting financial literacy sessions, providing agricultural credit, organizing medical camps are few of such initiatives the Bank has undertaken in the village. The only L.P School in Pullu village which was struggling for survival was given a helping hand by the Bank and they were provided with furniture worth Rs.1.00 lakh. A model poultry unit was set up in the school compound in order to take care of the nutritional needs of the children.

Government Of India Scheme – PMJDY

Pradhan Mantri Jan Dhan Yojana (PMJDY), is conceived as a national mission on financial inclusion initiated by Honourable Prime Minister on August 15, 2014. The scheme envisages universal access to banking facilities, with at least one basic banking account for every household. In line with the directives given by Ministry of Finance and SLBC, PMJDY scheme is implemented in the Bank since August 18, 2014.

A survey on 2,68,690 Households was conducted by the Bank under PMJDY to identify Households not having bank accounts. The Bank has opened 1, 03,108 BSBDA accounts as on January 31, 2016 under PMJDY and balance outstanding in those accounts exceeds Rs.14.21 crore at present. Rupay Debit Cards has been issued in PMJDY accounts providing customers with the benefit of accidental insurance coverage of Rs.1.00 Lac. Social Security schemes in insurance and pension sectors (PMJJBY, PMsBY & APY), introduced by the Government of India were given high priority by the Bank and 2,40,777 customers have already joined the schemes through the Bank. Pradhan Mantri Mudra Yojana (PMMY), Government scheme intended to support the micro enterprises is also implemented in the Bank as part of social banking. green Initiatives in Corporate governance

As a responsible corporate citizen, the Bank supports and pursues the ‘Green Initiative’ of the Ministry of Corporate Affairs (“MCA”). In conformance with such initiatives, the Bank will effect electronic delivery of documents including the notice and explanatory statement of Annual General Meeting, Audited Financial Statements, Directors’ Report, Auditors’ Report etc., for the year ended March 31, 2016, to the e–mail address which the Shareholders have previously registered with their Depository Participant (DP) as their valid e–mail address. Investors desirous of refreshing / updating their e–mail addresses are requested to do so immediately in their respective DP accounts. The e–mail addresses indicated in respective DP accounts which will be periodically downloaded from NSDL/ CDSL will be deemed to be their registered e–mail address for serving notices / documents including those covered under Section 136 of the Companies Act, 2013.

Shareholders holding shares in physical form and desirous of availing electronic form of delivery of documents are requested to update their e–mail addresses with Bank’s Registrar and Transfer Agents by a written request. A request format for registering e–mail ids with the Registrar is enclosed. Shareholders holding shares in demat segment are requested to inform their e–mail ids to their respective DPs.


Transactions processed through the Core Banking Solution are monitored for detecting suspicious transactions, using TCS Bancs Compliance, an AML application to comply with the provisions under Prevention of Money Laundering Act (PMLA). The Bank has set up a Centralized Processing Centre (CPC) for liability side customer creation with the objective of full KYC compliance and to use KYC as a fraud prevention tool. The Bank has brought all branches under the CPC model during the Financial Year 2015–16.

The Bank had implemented UIDAI's e–KYC services for Aadhaar authentication, in 50 branches during the Financial Year 2015–16, which will be scaled up to all the branches during the current year.

The Board has nominated Mr. V. G. Mathew, MD & CEO as the “designated director”, as per PMLA Act.

The Bank has attached great importance for compliance of KYC/AML/CFT norms by the customers as per the Reserve Bank of India directive.


The Bank has registered as a reporting entity under FATCA, under GIIN No. IIK7HU.99999.SL.356, to comply with the reporting requirement under the inter Governmental agreement entered between Indian and US Government.


The composition of the Board of Directors is governed by the Banking Regulation Act, 1949, the Companies Act, 2013, SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 and the Code of Conduct on Corporate Governance adopted by the Bank. The Board comprises of 10 Directors as on the date of this report, with rich experience and specialized knowledge in various areas of relevance to the Bank, including banking, accountancy, small scale industry, agriculture, and information technology.

Excluding the MD & CEO, all other members of the Board are Non–Executive Directors and Seven Directors out of the total 10 Directors are Independent Directors. Declaration has been obtained from the Independent Directors as required under the RBI Regulations, SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 and Companies Act, 2013.

The remuneration and other benefits paid to MD & CEO of the Bank and other Non–Executive and Independent Directors during the financial year 2015–16 are disclosed in Corporate Governance Report.

Composition of Audit Committee

The Audit Committee of the Board is chaired by Sri K. Thomas Jacob, who is a Chartered Accountant. The other members of the committee are Sri Salim Gangadharan (Non–Executive Independent Director), Sri Cheryan Varkey (Non–Executive Director) and Sri Mohan E. Alapatt (Non–Executive Independent Director) The constitution of the Committee is in compliance with the regulatory requirements. The terms of reference of the Audit Committee, incorporated in the Bank’s Code of Corporate Governance, are in accordance with the SEBI (LODR) Regulations, 2015 entered into by the Bank with Stock Exchanges where the Bank’s shares are listed, Companies Act, 2013 and RBI guidelines.

Independent Directors

In terms of the definition of Independence of Director as prescribed under Regulation 27(2) of the SEBI (LODR) Regulations, 2015 and Section 149(6) of Companies Act, 2013 and based on the confirmation / disclosures received from the Directors, the following Directors are Independent Directors of the Bank as on the date of this report

1. Sri Mohan E. Alapatt (DIN: 00025594)

2. Sri K.Thomas Jacob (DIN: 00812892)

3. Dr. John Joseph Alapatt (DIN: 00021735)

4. Sri Francis Alapatt (DIN: 01419486)

5. Sri Salim Gangadharan (DIN: 06796232)

6. Smt. Ranjana S. Salgaocar (DIN: 00120120)

7. Sri Parayil George John Tharakan (DIN: 07018289)

Woman Director

In terms of the provisions of Section 149 of the Companies Act, 2013 and Regulation 17 of the SEBI (LODR) Regulations 2015, the Bank has appointed Smt. Ranjana S. Salgaocar as Woman Director on the Board of the Bank.

Bank’s policy on directors’ appointment and remuneration including criteria for determining qualifications, positive attributes, independence of a director and other matters provided under sub–section (3) of section 178; Criteria for appointment as Director of the Bank Nomination Committee of the Board shall identify and ascertain the integrity, qualification, expertise and experience of the person who is considered for being appointed/reappointed as Director of the Bank and apply due diligence in compliance with the Banking Regulation Act, 1949, Reserve Bank of India directives on Fit & Proper Criteria, all other applicable provision of the Companies Act, 2013, SEBI (LODR) Regulations, 2015 including any amendments from time to time and Nomination Policy of the Bank.

Criteria For Determining Qualifications, Positive Attributes

a) The professional and personal ethics, integrity and track record.

b) Special knowledge or practical experience in Banking, accountancy, agriculture and rural economy, co–operation, economics, finance, Marketing, Information Technology, law, small–scale industry or any other field useful to the Banking Company in the opinion of Reserve Bank of India.

c) Ability to provide insights and practical wisdom based on their experience and expertise relevant to the Bank’s line of business.

d) Details of his/her association with other Companies/LLPs/ Firms (including NBFC).

e) Details of substantial interest in other Companies/LLPs/Firms (including NBFC).

f) Details of financial facilities, if any, availed from the Bank.

g) Details of default in the re–payment of loans, availed from the Bank or any other bank, if any.

h) Commitment to enhancing stockholder value.

i) Ability to develop a good working relationship with members of the Board and contribute to the working relationship with senior management of the Bank.

j) Whether he/she suffers from any of the disqualifications envisaged under the provisions of Banking Regulation Act, 1949, Companies Act, 2013 and SEBI (LODR) Regulations, 2015.

k) Any other factors as the Committee may deem fit and in the best interests of the Bank and its stockholders.

Criteria for determining Independence of a director

The Criteria of Independence of a director is determined based on conditions as laid down in the Companies Act, 2013. The independent director shall at the first meeting of the Board in which he/she participates as a director and thereafter at the first meeting of the Board in every financial year or whenever there is any change in the circumstances which may affect his/her status as an independent director, give a declaration that he/she meets the criteria of independence.


Remuneration Policy for Employees of the Bank:

The Bank has a Board approved Compensation Policy which deals with the Compensation & Benefits of the Employees of the Bank and Whole–time Directors.

The objectives of the Compensation Policy of the Bank inter–alia includes, to provide a fair and persistent basis for motivating, inspiring and rewarding the employees appropriately, according to their jobs/role size, performance, accomplishments, contribution, skill, aptitude and competence to implement standards on sound compensation practices and incentives and to provide effective governance of compensation payable to the WTDs/CEO and other staff, alignment of compensation with prudent risk taking and effective supervisory oversight. The disclosure requirement of the remuneration is separately provided in “Disclosure under Basel III norms.”


Remuneration of MD & CEO and Other Employees (including Key Managerial Personnel):

The Board approved Compensation Policy deals with the Compensation & Benefits of the Whole–time Directors/MD & CEO. The remuneration of the Whole–time Directors/MD & CEO is recommended by the Nomination & Remuneration Committee (NRCB) to the Board for approval after considering the factors prescribed under the Compensation Policy.

The Board considers the recommendations of NRCB and approves the remuneration, with or without modifications, subject to shareholders’ and regulatory approvals. The remuneration payable to Whole–time Directors/MD & CEO is subject to prior approval of the Reserve Bank of India (RBI). Therefore, the remuneration or any revision in remuneration to Whole–time Directors/MD & CEO is payable only after receipt of the approval from RBI.

For the other employees (including Key Managerial Personnel and Compliance staff), the Board, based on the recommendation of the NRCB may devise appropriate compensation structure.

The compensation paid to other employees that include Award Staff, Officers coming under Scale I to IV and executives coming under Scale V to VII is fixed based on the periodic industry level settlements with Indian Banks Association.

The variable compensation paid to functionaries is based on the Performance Linked Incentive Scheme, which has been formulated on the basis of performance parameters set in Performance Management System.

Remuneration of Chairman:

The NRCB recommends the remuneration of the non–executive Chairman to the Board which is considered and approved by the Board in the same manner subject to Shareholders’ and regulatory approvals. The NRCB, while recommending the remuneration of the part–time Chairman considers the Function, Role and Responsibilities of the Chairman and Regulatory guidelines as applicable etc.

The remuneration payable to the Chairman is subject to prior approval of the Reserve Bank of India (RBI). Therefore, the remuneration or any revision in remuneration of the Chairman is payable only after receipt of the approval from RBI.

Remuneration of Non–Executive Directors (NEDs):

The NEDs are paid sitting fees for attending each meeting of the Board of Directors or any committee thereof as approved by the Board, within the permissible limit prescribed under the Companies Act, 2013, SEBI (LODR) Listing Regulations 2015 and other regulatory guidelines, as amended from time to time. The Board while recommending the change in the sitting fees considers various factors like size and complexity of organization, Comparison with the peer Banks and Regulatory guidelines as applicable etc. while recommending the change in the sitting fees to the Board.

Policy on Board Diversity:

Pursuant to SEBI (Listing Obligations and Disclosure Requirements), Regulations, 2015 to ensure compliance with the applicable provisions, the Bank has devised a policy on Board diversity to ensure adequate diversity in its Board of Directors. The Bank believes that diversity underpins the successful operation on an effective Board and embraces diversity as a means of enhancing the business. With a view to achieve sustainable and balanced development, the Bank sees increasing diversity at the Board level as an essential element in supporting the attainment of its strategic objectives. A diverse Board includes and makes good use of differences in the skills, regional and industry experience, background, race, gender and other qualities of directors.

Policy on Board Diversity of the Bank mainly depends on the qualifications for appointment of Directors of the Bank as contained in the Banking Regulation Act,1949 and satisfying the Fit and Proper Criteria for directors as per the regulatory requirement of RBI.

The Bank continuously seeks to enhance the effectiveness of its Board and to maintain the highest standards of corporate governance and recognizes and embraces the benefits of diversity in the boardroom. Diversity is ensured through consideration of a number of factors, including but not limited to skills, regional and industry experience, background and other qualities. In informing its perspective on diversity, the Bank also take into account factors based on its own business model and specific needs from time to time.

The NRCB has the responsibility to lead the process for Board appointments and for identifying and nominating, candidates for appointment to the Board. The benefits of diversity continue to influence succession planning and continue to be the key criteria for the search and nomination of directors to the Board. Board appointments are based on merit and candidates will be considered against objective criteria, having due regard for the benefits of diversity on the Board, including gender. The Policy of Board Diversity is displayed in banks website.(https://www. on_Board_diversity.pdf)

Board Level Performance Evaluation

The Companies Act, 2013 and SEBI (LODR) Regulations, 2015 stipulates the performance evaluation of the Directors including Chairman, Board and its Committees.

Considering the said provisions, the Bank has devised the process and the criteria for the performance evaluation which has been recommended by the Nomination & Remuneration committee and approved by the Board.

The process for formal annual performance evaluation is as under:

• Committee of Independent Directors at their separate meeting evaluates the performance of Non–Independent Directors including Chairman of the Bank and the Board as a whole.

• The Board evaluates the performance of the Independent Directors (excluding the director being evaluated) and submit its report to the Nomination & Remuneration committee.

• The Board Evaluate the performance of Board level committees.

• Nomination & Remuneration Committee evaluated/ review the performance of each Director recommends the appointment/reappointment/ continuation of Directors to the Board. Based on the recommendation of Nomination & Remuneration Committee, Board will take the appropriate action.

The criteria for performance evaluation are as under:

Performance Evaluation of Non–Executive Directors, MD & CEO and Chairman

Participation at Board/Committee Meetings, Managing Relationship, Knowledge and skill, Personal attributes, Compliance and Corporate Governance; Leadership; Strategy Formulation, Strategy Execution, Financial Planning/ Performance, Relationships with the Board, Human Resource Management and Succession Planning, Personal Qualities;

Resources; Conduct of Meetings.

Performance Evaluation of Board

Composition and Diversity; Strategic Foresight, Value Creation, Process and Procedures, Oversight of the Financial Reporting Process and Internal Controls, Oversight of Audit Functions, Corporate Governance, Corporate Culture, Monitoring of business activities, Understanding of the business of the Bank and Regulatory environment; Contribution to effective corporate governance and transparency in the Company’s Operations; Deliberations/decisions on the Company’s strategies, policies, plans and guidance to the Executive Management.

Performance Evaluation of the Board Level Committees The performance and effectiveness of the Committee; Frequency and duration; Spread of talent and diversity in the Committee; Understanding of regulatory environment and developments; Interaction with the board.


a) statutory Auditors:

The shareholders at its 87th Annual General Meeting held on July 15, 2015, appointed M/s Deloitte Haskins & Sells, Chartered Accountants, Chennai as Statutory Central Auditors of the Bank for the audit of Bank’s accounts for the year 2015–16.

M/s Deloitte Haskins & Sells, Chartered Accountants, vacates the office at the end of the Annual General Meeting to be held this year but are eligible for re–appointment for the Financial Year 2016–17.

b) secretarial Auditors and secretarial Audit Report Pursuant to Section 204 of the Companies Act, 2013, the Bank had appointed M/s KSR & Co., Company Secretaries LLP, Practicing Company Secretaries, Coimbatore as its Secretarial Auditors to conduct the secretarial audit of the Bank for the FY 2015–16. The Bank provided all assistance and facilities to the Secretarial Auditor for conducting their audit. The Report of Secretarial Auditor for the FY 2015–16 is annexed to this report.

Audit and Inspection

Regular Inspection of the branches is conducted at periodical intervals on the basis of Risk Based Internal Audit approach. From August 2015 onwards, RBIA of branches is being conducted more objectively through audit software. Concurrent audit at branches is done by qualified Chartered Accountants/ retired officers covering 68% of business of the Bank. Bank has brought almost all isolated remote branches under the ambit of concurrent audit, irrespective of the business volume of such branches. Concurrent audit of International Banking Division, Treasury Department, Credit Department and Data Centre is also conducted. In the light of centralization of activities like account opening, retail loan processing, etc., the Bank has implemented concurrent audit system in Transaction Banking Dept. and Retail Hub during the year 2015–16. In addition to the above, the Bank conducts Stock Audit, Credit Audit, KYC/AML Audit, Information System Audit, Revenue Audit, Surprise Inspection of gold & cash, exclusive Gold Loan asset verification etc. at branches. Information System Audit of CBS and major applications for the financial year 2015–16 was done by external audit firm.

Besides, all the branches are subjected to statutory audit on yearly basis. Transaction monitoring alerts are generated from software on certain rules set. These alerts are monitored at HO and clarifications are called for from branches wherever necessary. ROs are having facilities for scrutiny of all alerts wherever needed. The branch operations are centrally analyzed for ensuring compliance to KYC/ AML/CFT guidelines with the help of AML software. Fraud Risk Monitoring Cell (FRM Cell) is established to prevent fraudulent activity in the customer accounts in which almost 20 rules have enabled w.r.t. card related activities to generate alerts.


The Auditors report for the year 2015–16 does not contain any qualification.


A separate report profiling Corporate Governance as required under applicable regulations of the SEBI (LODR) Regulations 2015 and a certificate from M/s Deloitte Haskins & Sells, Chartered Accountants, Statutory Auditors of the Bank, are annexed to this Report.

Extracts of Annual Return

Pursuant to sub–section 3(a) of Section 134 and sub–section (3) of Section 92 of the Companies Act, 2013, read with Rule 12 of the Companies (Management and Administration) Rules, 2014 the extracts of the Annual Return as at March 31, 2016 in form no. MGT–9 is annexed to this report.


The Bank did not have any subsidiary Company during the previous financial year. The Board of Directors has formulated a policy for determining ‘material’ subsidiaries pursuant to the provisions of the Listing Regulations. The same is displayed on the website of the Bank ( content/viewContentLvl1.aspx?linkIdLvl2=215&LinkIdLvl3=781 &linkId=781).

Related Party Transactions

The Board of Directors has formulated a policy on materiality of Related Party Transactions and also on dealing with Related Party Transactions pursuant to the provisions of the Companies Act, 2013 and SEBI (LODR) Regulations, 2015. The same is displayed on the website of the Bank ( aspx?linkIdLvl2=215&LinkIdLvl3=782&linkId=782).

Since there were no Related Party tranctions, Form AOC–2 is not applicable to the Bank.


During the last three years, there were no penalties or strictures imposed on the Bank by the Stock Exchange(s) and/or SEBI and/ or any other statutory authorities on matters relating to capital market.


This has been dealt with in a separate section in the Annual Report.

Directors’ Responsibility statement

Pursuant to the requirement under Section 134(5) of the Companies Act, 2013, with respect to the Director’s Responsibility Statement, it is hereby confirmed that:

(a) in the preparation of the annual accounts for the financial year ended March 31, 2016, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(b) the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Bank at the end of the financial year 2015–16 and of the profit of the Bank for that period;

(c) the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Bank and for preventing and detecting fraud and other irregularities;

(d) the directors had prepared the annual accounts for the financial year ended on March 31, 2016, on a going concern basis;

(e) the directors had laid down internal financial controls to be followed by the Bank and that such internal financial controls are adequate and were operating effectively; and

(f) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.


The Board of Directors places on record its gratitude to the Reserve Bank of India, Securities and Exchange Board of India, Government of India, Government of Kerala and all other state Governments where the Bank operates, other Government and Regulatory Authorities, including stock exchanges, where the Bank’s shares are listed and correspondent Banks for their strong support and guidance, during the year. The Board also places on record its gratitude to the Bank’s shareholders and customers for their continued support, patronage and goodwill. The Board further places on record its appreciation for the valuable services rendered by M/s Deloitte Haskins & Sells, Statutory Auditors, during their tenure. The single most important pillar of any Institution is its personnel, more so in the case of a service entity like a Bank. The Bank gladly acknowledges this fact and thanks all of them for their diligence and loyalty towards the Bank. The Board expresses its sincere appreciation for the dedicated services rendered by officers and employees of the Bank at all levels.

By Order of the Board


CHAIRMAN DIN : 02836707

(V. g. MATHEW)


Place : Hyderabad

Date : June 1, 2016