we are with you! - apgvbank.in Repot 2017.pdf · V. Narasi Reddy Andhra Pradesh Grameena Vikas Bank Head Office, Warangal ‐ 506 001 01. 02 Vision Repositioning the Bank in competitive

we are with you!

th12 Annual Report 2016-17

Empowering Rural Lives

Chairman

With Best Compliments from

V. Narasi Reddy

Andhra Pradesh Grameena Vikas Bank

Head Office, Warangal ‐ 506 001

01

02

Vision

Repositioning the Bank in competitive rural market and accomplish the leadership spot in Rural Banking. Aspiring to

realize the vision of excelling in Rural Credit and SME. Pursuing the best practices for delivering the value added service

to the customers by transforming the key branches into profit and business centers.

Mission

With efficiency and service each one of us works in tandem to deliver quality rural service, no matter where our

customers choose to experience it. With the advantage of a large network in the rural hinterland, it is our duty and

obligation to serve the rural masses, the deprived and denied, retail and agriculture sectors through improved

processes, deployment of technology, with an emphasis on employment of rural youth, augmentation of agricultural

production, upliftment of the downtrodden and unabated service to rural poor with commitment to the sacred task of

rural development and women's empowerment.

Values

Commitment for rural development

Excellence in customer service

Respect to systems and procedures

Team Synergy

Vision, Mission and Values

we are with you! Annual Report 2016-17

03


Head Office : Warangal

Date: 30.06.2017

The Secretary,

Ministry of Finance, Dept. of Financial Serivies

Banking Division, Government of India

Jeevan Deep Buildings, Parliament Street,

New Delhi-110001

Dear Sir,

In accordance with the provisions of Section 20 of the Regional Rural Banks Act 1976, I forward herewith

the following documents.

stA Report of Board of Directors as to the Bank's working and its activities during the period 1 April 2016 to st31 March 2017.

stA copy of the audited Balance Sheet and Profit and Loss Account for the year ended 31 March 2017.

stA copy of the Auditor's report in relation to the Bank's accounts for the period 1 April 2016 to st31 March 2017.

Letter of Transmittal

Yours faithfully,

(V. Narasi Reddy)Chairman


What's inside

1. Board of Directors 06

2. Executives Team 07

3. Chairman's Message 11

4. Key Performance Indicators 17

5. Board of Directors Report 21

6. Auditor's Report 54

7. Balance Sheet, Profit & Loss 56

Account and Schedules

S.No. Particulars Page No.

04


Srikakulam

Saraswathi Complex, Baker sahed peta

Srikakulam 532001,

Tel 08942-221041, Fax 08942-221040

[email protected]

Vizianagaram

8-12-64/1, Beside Himagiri Theatre,

Vizianagaram 536002,

Tel 08922-273956, Fax 08922-274221

[email protected]

Visakhapatnam

52-14-77/1, APHSC Building,

Near Eenadu office, Seethammadhara

Visakhapatnam

Tel 0891-2713942, Fax 0891-2746341

[email protected]

Parvathipuram

Vizianagaram Dist. 1435-27-112, Ist Floor,

By Pass Road, Opp. Sai Ram College

Tel : 08936-220498

[email protected]

Regions in Telangana StateKhammam

Wyra Road, Khammam 507001

Tel 08742-226816, Fax 08742-228972

[email protected]

Nalgonda

Ramgiri, Nalgonda 508001

Tel 08682-229943, Fax 08682-229945

[email protected]

Warangal

ABK Mall,

Ramnagar, Hanamkonda

Warangal 506001

Tel 0870-2577884

Fax 0870-2568010

[email protected]

Mahabubnagar

8-3-3/5/F, Mettugadda

Mahabubnagar 509001

Tel 08542-242861

Fax 08542-242862

[email protected]

Sangareddy

Opp. Inspection Bunglow,

Sangareddy 502001

Tel 08455-276263

Fax 08455-276603

[email protected]

Ashoknagar

Ramachandrapuram Mandal

Dist. Sangareddy 502032

Tel 040-20040773

Fax 040-23020238

[email protected]

Bhadrachalam

Temple Road, Bhadrachalam 507111

Dist. Kothagudum.

Tel 08743-231492

Fax 08743-231020

[email protected]

Regions in Andhra Pradesh

05

Geographical Area & Regional Offices


06

BOARD OF DIRECTORS

Shri V. Narasi ReddyChairman

(General Manager on deputation

from State Bank of India)

Nominees of Central Government under Section 9 (1) (a) of the Regional Rural Bank's Act, 1976

Nominee of Reserve Bank of India under Section 9 (1) (b) of the Regional Rural Bank's Act 1976

Shri M S Harishankar Asst. General Manager,

, Reserve Bank of India, HyderabadFIDD

Nominee of NABARD under section 9 (1) (c) of the Regional Rural Bank's Act, 1976.

Shri V.S. Gupta, Deputy. General Manager

NABARD, TSRO, Hyderabad

Nominees of State Bank of India under Section 9 (1) (d) of the Regional Rural Bank's Act, 1976

Shri T.V. ReddyDeputy General Manager (ABU) State Bank of India, LHO, Hyderabad

Shri K.V. Maruthi RaoRegional Manager, State Bank of India,

Regional Business Office, Warangal

Nominees of State Government under Section 9 (1) (e) of Regional Rural Bank's Act, 1976

Ms. K. Amrapali, IASCollector & Dist. Magistrate,

Warangal(urban)


Vacant

Smt K. Sunitha, IASSecretary, Finance, (Institutional Finance) Finance Department, GOAP, Amaravathi.

Vacant

07

Executive Team

V. Narasi ReddyChairman

Shri T.V. Krishna ReddyGeneral Manager ‐II

Shri M. SatyanarayanaGeneral Manager‐I


Shri S. Prakash KumarGeneral Manager ‐ III

Shri K. RavikiranGeneral Manager ‐ IV

Heads of Departments

Regional Managers

Sri V. Raghunath ReddyChief Manager, Credit

Sri TVV PrabhakarChief Manager, Accounts

Sri A S SarmaChief Manager, P&D

Sri K Vinod ReddyChief Manager Per & HR

Sri P. Murali Mohan RaoChief Manager V&DP

On Deputation from SBI

Sri P. Purnachandra RaoChief Manager, I &A

Sri S.L.N. PrasadChief Manager, RRM

Sri S. LAXMANChief Manager, Board

Sri G.S.N. ReddyChief Manager, FIC

Sri Abdul RasheedChief Manager, SLC

Sri D V Gurunath RaoRM, Sangareddy

Sri L Sudheer ReddyRM, Vizianagaram

Sri M.B T ReddyRM, Vishakapatnam

Sri Ch RamuluRM, Khammam

Sri SV Ramana MurthyRM, Nalgonda

Sri P. RajuRM, Mahabubnagar

Sri BRV Manoj KumarRM, Ashoknagar

Sri D.VishwaprasadRM, Warangal

Sri B Srinivasa MurthyRM, Srikakulam

Sri M Manohar ReddyRM, Bhadrachalam

Sri D Rama Rao RM, Parvathipuram

Sri G. Sreedhar ReddyChief Manager, IT

08

09

Our Mentors

Shri Hardayal PrasadChief General Manager,

State Bank of India, LHO, Hyderabad

Our Supervisors

Shri V.V.V. SatyanarayanaChief General Manager,

NABARD, RO, HyderabadAP

Dr.P.Radhakrishnan

Chief General Manager,

NABARD, TSRO, Hyderabad

Shri Giridhara KiniGeneral Manager (NW‐I),

State Bank of India, LHO, Hyderabad


10

Total Business of the Bank has crossed Rs 25000 crore mark by reaching a level of Rs 25,187 crores with a growth of Rs 4383.23 cr @21.07%(Rs 3458.26 cr @ 19.94%)

Growth in Deposits Rs 2616.47 cr @ 25.65% (Rs 1922.11 Cr)

Growth in Advances Rs 1766.76 cr @16.67% (1536.15 cr)

Net profit Rs 351.99 cr @57.51% (Rs 223.47 Crore 10.84%)

Gross NPAs reduced from 2.38% to 1.69%

Net NPAs reduced from 1.40%. to 0.72%

The share of CASA has increased from 36.60 %( 31.03.2016) to 41.04% as on 31.03.2017

Cost of deposits declined from 7.62% (31.03.2016) to 6.89 % as on 31.03.2017.

Business per Branch Rs 32.80 cr (27.70 Cr)

Business per Employee Rs 8.36 cr (6.96 Cr)

Net Profit per Employee Rs 11.69 lakhs (7.48 Lakh)

Opened 17 New Branches taking total to 768 (inaugurated online by CGM, SBI, LHO, Hyd)

Miscellaneous/other Income went up by 22.12%

Agriculture Credit outstanding at Rs 4934.85 Crore (Rs.4278.79 Cr.) Disbursed Rs 4128.72 Crore (Rs.4052.60 Cr).

Agriculture borrowers increased to 842370 during the year from 786306.

Total No. of SHGs financed reached 189884 (184440) with outstanding credit of Rs 4955.71 Crore (3984.69 Cr) Disbursed Rs 3655.37 Crore (Rs.2773.82 Cr) to 126847 Groups.

Aadhar numbers have been seeded on to 35, 66,856 operative Accounts.(97%)

PMJDY – opened 2727624 Basic Savings Bank Deposit Accounts as on 31.3.2017, of which 793627 accounts were provided with RuPay Cards.

Mobile Banking‐ introduced with app in English and Telugu and Missed call facility to know the account balances

Rupay ATM Cards enabled for PoS transactions /e‐commerce and swiping at Micro ATMs at Bank Mitras.

ASSOCHAM‐ Secured two ASSOCHAM’s Social Banking Excellence Awards – winner in Best Agriculture banking category and runner in Best Social banking category.

NPCI Special Award in recognition and appreciation of highest number of transactions in National Financial Switch (NFS) ATM Network under the category of RRBs.

SKOCH‐ Skoch platinum award for best performance in Cross selling‐ Life insurance

48,36,690 transactions took place in bank mitra accounts as against 36,86,180 during previous year with an increase of 11,50,510 transactions.

Total amount involved in Bank Mitra transactions have gone up by 91% i.e., from previous FY’s Rs 298.08 Crore to Rs 569.78 Crore during the year.

Zero balance accounts have come down from 50% in previous FY to 13% during the year.

Stood first in cross selling in the country by mobilizing a New Business Premium (NBP) of Rs.18.54 crores and earned a commission of Rs 2.14 cr during the year

Highlights 2016-17

Note : (Figures in brackets pertain to previous FY)


Chairman’s Messagewe are with you! Annual Report 2016-17

11

It is with a sense of great pride that I present the performance of

the Bank for the FY 2016‐17. In spite of disruptive environment

in the Indian economy by way of unexpected demonetisation

announced on 8.11.2016, which severely impacted all Banks

and public alike, our Bank maintained its direction and made

efforts to sustain and to surpass all MoU growth levels during

the year.

Our relentless focus on basic attributes required for a Bank and

banker to be successful in the business of banking and our

responsiveness to the changes in IT and other areas, led to the

unprecedented business growth, profitability, improvement in

efficiency parameters. Rather than pondering over inherent

weaknesses, we re‐engineered the strengths present in the

system and demography of our Bank and achieved the more

than expected growth in all areas. Our quest for efficiency by

doing just the right thing, has paid off.

Record Growth

Registering a Business Growth of Rs 4383.23 Crore at 21.07%

and a Net Profit of Rs 351.99 Crore during 2016‐17 was a path‐

breaking achievement. No other RRB in the country has ever

achieved the business growth and Net Profit of this magnitude

during one year. Our Bank has joined the Rs 25000 Crore Club

RRBs by reaching Rs 25187.11 Crore. APGVB came into

existence on 31.3.2006 by amalgamation of five smaller RRBs.

The total business as on 31.3.2006 was Rs 4000 Crore

accumulated over a period of 30 years. The Business growth of

Rs 4383.23 Crore achieved this year alone was more than the

total business that the Bank had started with. Deposits have

grown by Rs 2616.46 Crore at 25.65% to reach Rs 12818.58 Crore

while Advances by Rs 1766.76 Crore at 16.66% to reach Rs

12368.53 Crore.

Net Profit

There is a growth of 57.51% over previous year’s Net Profit of Rs

223.47 Cr. The Net Profit of Rs 351.99 Crore registered for the

year 2016‐17, has not only been the highest for any RRB, it has

also outperformed many Private / Public Sector Banks.

We have focussed on all avenues leading to efficiency in our

performance, leading to profitability. The important factors

impacting the profit were; recovery from Written Off / AUCA

accounts to an extent of Rs 6.43 crore, profit from sale on

investments to a tune of Rs 50 Crore (Treasury Operations),

22.12% growth in Other income which increased to Rs 197.19 Cr

from Rs 161.47 Cr.

Strengthening treasury operations has been one of the priority

areas of the bank during the year which contributed to the

profitability significantly.

CASA

Increasing the CASA by bringing down the bulk and high interest

bearing deposit has been our priority. The Bank had been

saddled with bulk and high interest bearing term deposits

adversely impacting the cost of funds. We have consciously

discouraged bulk deposits and arrested the easy route of

achieving the deposits through big ticket deposits which usually

cost the Bank dear. During the year, CASA increased by

Rs.1527.73 Crore at a growth rate of 40.91% to reach

Rs.5261.50 crore as against Rs 3733.77 crore in previous

financial year. The share of CASA has increased from 36.60%

(31.03.2016) to 41.05% as on 31.03.2017. The growth rate of

CASA at 40.91% is much higher than total deposit growth rate of

25.65%.

Data Quality and reduction of NPAs

The data purification continues to occupy our priority. This year,

we adopted innovative approach in rectification of data gaps.

The individual accounts have been subjected to scrutiny at

various levels for data accuracy. This measure has significantly

V. Narasi ReddyChairman


12

We focussed more on reducing the Zero Balance Accounts

handled by Bank Mitras, increasing the number and volume of

transactions, aadhar seeding. Zero balance accounts as a share

of total Bank Mitra Accounts was reduced from 50% to 13%.

Transactions in Bank Mitra Accounts during the year have

grown by 31.21% over previous year.

Another important task taken up during the year is to de‐

duplicate the Bank Mitra Accounts. There are multiple

accounts for a single customer, opened for different purposes at

different points of time. We have made efforts to close the

accounts, retaining the account to which Aadhar was seeded.

This process has begun and would continue in the next FY. The

next move is that the Bank Mitras will take out the voters list and

enrol the villagers who do not have back accounts.

We have been placing paramount importance to strengthening

Alternate Delivery Channels. No. of transactions carried out

through Alternate Delivery Channels has increased by 71.69%

i.e., from 10303023 transactions to 17680940 transactions.

Our motto is to increase the usage of Alternate Delivery

Channels in the years to come to become more digital, which

has been the constant endeavour of our Sponsor Bank.

Our commitment to improve our efficiency and standards

brought us Awards from Social Banking Excellence Awards from

ASSSOCHAM, NPCI (Best Bank in Number of ATM Transsactions)

and SKOCH Consultancy Services (Platinum Award for Best

Performance in Cross Selling). We stand encouraged with these

Awards and will function in such way that we will be found

worthy of many more Awards in due course.

I take this opportunity to wholeheartedly thank all our

customers and stake holders for giving us opportunity to serve

them. I also place on record the commendable services

extended by all Staff members without which the Bank would

not have achieved this performance.

Yours sincerely,

(V. Narasi Reddy)

Chairman

improved the data quality to reflect correct asset classification.

Our Statutory Auditors have made a special mention that they

found the data quality to be of high order during their visits.

We have also equipped our operating staff with necessary skills

and empowerment in dealing with NPAs. Several workshops

were conducted to enlighten the staff about various recovery

methods available including OTS, Compromise and Lokadalat.

Legal recourses like Suit filing and SARFAESI were effectively

utilised to reduce the Bad loans. Special focus on AUCA also

yielded good results.

These efforts have reduced our Gross NPAs to Rs 209.74 Cr

(1.69%) from Rs 251.99 Cr (2.38%) and Net NPAs to Rs 87.57 Cr

(0.72%) from 147.67 Crore (1.40%).

Technology initiatives during the year:

The notion that the Technology is only for those who are urbane

and literate, is disappearing. The technology has become so

pervasive that the people from all walks of life are using

technology, particularly after demonetisation and avowed

efforts of Government of India for cashless transactions and

digitisation. Whether it is a vegetable vendor or Kirana shop

owner or a farmer, it is difficult to conceive a day without the

use of technology. It is time, RRBs operating in the bottom of

the pyramid of the financial system, start adopting the

technology in all possible ways. With Payment Banks, Small

Banks and FinTech Companies making deep inroads into the

rural areas, the options available for an RRB are either to adopt

technology and retain the customer base or lose to those new

players. Sufficient and timely infrastructure and support from

controllers and regulators are essential for RRBs to take on the

impending threat from these players.

Our Bank has implemented Mobile Banking, AEPS (On Us, Off

US and Issuer Off US), swiping of RuPay Card in Micro ATMs,

Missed Call facility etc., IT initiatives during the year. We have

conducted campaigns with cash back incentives to customers to

popularise these services. Mobile banking transactions started

picking up while RuPay Card transactions went up by 50.14 %

from 2747553 to 4125191.

Last Mile transactions

During the year, the position relating to Financial Inclusion and

operations of the Bank Mitras has been streamlined towards

sustaining the progress already achieved and increasing the

numbers. We have had an elaborate administrative structure to

oversee the operations of Bank Mitras. Transactions of each

Bank Mitra are monitored on daily basis at four levels, viz.,

Branch Manager of the respective Bank Mitra, FIC Nodal Officer

in Regional Office, Regional Manager and Chief Manager (FIC).

0

200

400

600

800

1000

1200

2007-08

2008-09

2009-102010-11

2011-12

2012-13

2014-15

2015-16

152221

311419

539

698

879

1080

ReservesReservesReserves (Rs in Crores)

2013-14

1400 1304


Deposits Advances Business

(Rs in Crores)

2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-140

5000

2188

1813

4001

2718

2095

4813

2934

2701

5635

3394

3304

6698

3805 38

7076

75

4795

4894

9689

5133 55

3310

686

5869 65

9012

459

6791 78

9514

687

2014-15

8280 90

6617

346

Business Business Business

2015-16

1020

210

602

2080

4

10000

15000

20000

25000

30000

35000

2016-17

1281

912

369

2518

7

1656

2016-17

1600

1800ProfitProfitProfit

0

50

100

150

200

250

300

2006-07

2007-08

2008-09

2009-10

2010-11

2011-12

2012-13

2015-16

37

69

103 108 120

159180

223

(Rs in Crores)

2013-14

2014-15

2005-06

202

1237

352

2016-17

350

400

0

500

1000

1500

2000

2500

3000

2011-12

997

Business GrowthBusiness GrowthBusiness Growth (Rs in Crores)

3500

4000

4500

1773

2228

2659

3458

4383

2012-13

2013-14

2014-15

2015-16

2016-17

13

Per Emp ProfitPer Emp ProfitPer Emp Profit

0.52

1.67

3.21

4.684.83

5.08

6.48 6.577.09

0

2.00

4.00

6.00

8.00

10.00

12.00

14.00

1.01

7.57

11.69

(Rs in Lakhs)

0

5

10

15

20

25

30

Per Branch ProfitPer Branch ProfitPer Branch Profit

4.772.44

7.65

13.14

19.14 19.5320.91

24.9225.64

2005

-06

2006

-07

2007

-08

2008

-09

2009

-10

2010

-11

2011

-12

2012

-13

2013

-140.00

5.00

10.00

15.00

20.00

25.00

Per Branch BusinessPer Branch BusinessPer Branch Business

8.28 9.9611.67 12.7

14.26

17.52 18.6

19.5320.86

2005-06

2006-07

2007-08

2008-09

2009-10

2010-11

2011-12

2012-13

2013-140

500

1000

1500

2000

25002277 2262 2215 2160 2202 2236 2354 2477

27433000

No. of StaffNo. of StaffNo. of Staff

2843

2014-15

30.00

35.00

2014

-15

23.82

27.69

3500

2015-16

2951

2015

-16

27.7

35

2005

-06

2006

-07

2007

-08

2008

-09

2009

-10

2010

-11

2011

-12

2012

-13

2013

-14

2014

-15

2015

-16

29.75

(Rs in Crores)

2005

-06

0.00

1.00

2.00

3.00

4.00

5.00

6.00

2006

-07

2007

-08

2008

-09

2009

-10

2010

-11

2011

-12

2013

-14

1.76

2.132.54

3.10

3.49

4.334.54

5.025.34

Per Emp BusinessPer Emp BusinessPer Emp Business

7.006.10

2014

-15

8.00

9.00

2015

-16

2016

-17

2012

-13

7.05

(Rs in Crores)

(Rs in Lakhs)


2016-17

3012

2016

-17

32.808.36

40

45

50

2016

-17

45.83

2005

-06

2006

-07

2007

-08

2008

-09

2009

-10

2010

-11

2011

-12

2012

-13

2013

-14

2014

-15

2015

-16

2016

-17

14

AWARDSwe are with you! Annual Report 2016-17

15

Assocham's Social Banking Excellence Awards:Our Bank is the Winner in Best Agricultural Banking category and Runner up in Best Social Banking category. This is the consecutive second time we are the winners.

Our Chairman Shri V. Narasi Reddy, receiving the Award from Assocham

Skoch Order of Merit Award for Banking and Finance Leadership 2017. Our Chairman Shri V. Narasi Reddy receiving the Award from Mr Sameer Kochar, Chairman, Skoch Group


16

SKOCH Group has conferred Skoch Platinum Award on our Bank for CROSS SELLING ‐ Life Insurance . This award is the highest independent honour in INDIA. Shri K. Ravi Kiran, Our General Manager receiving the Award.

National Payments Excellence Award presented by NPCI for highest ATM transactions – This is also the consecutive second time our Bank has got the Award. Shri G. Sreedhar Reddy, Chief Manager (IT) and G.J. Anthony, Senior Manager (IT) receiving the Award from NPCI.

Indicators 2014-15 2015-16 2016-17

A KEY PERFORMANCE INDICATORS

1 No. of Districts covered 8 8 22

2 No. of branches 728 751 768

a) Rural 520 531 494

b) Semi urban 149 156 181

c) Urban 49 49 52

d) Metropolitan 10 15 41

Ultra‐Small Branches 493 488 488

3 Total Staff (excluding Sponsor Bank Staff) 2843 2951 3012

of which, Officers 1660 1765 1821

4 Deposits 82800015 102021153 128185762

Growth % 21.92 23.21 25.65

5 Borrowings outstanding 32079962 37337981 56208413

6 Gross Loans & Advances outstanding 90656121 106017675 123685318

Growth % 14.82 16.94 16.67

of 6 above, loans to Priority Sector 77385394 91912049 110580800

of 6 above, loans to Non Target Groups 13270727 15767667 13104500

of 6 above, loans to SC/ST 16250932 19308609 25973900

of 6 above, loans to SF/MF/AL 27782661 56544544 67230826

of 6 above, loans to Minorities 4643178 5516810 5187400

7 CD Ratio 109.49 103.92 96.49

8 Investments Outstanding 48483582 51960779 84864493

SLR Investments Outstanding 17956129 22886427 43432477

Non‐SLR Investment Outstanding 30527453 29074352 41432016

B AVERAGE

9 Average Deposits 73893516 91112765 115515029

Growth % 22.74 23.30 26.78

10 Average Borrowings 26247121 41665867 45458048

Growth % ‐8.75 58.74 9.10

11 Average Gross Loans And Advances 80183390 94881573 110060777

Growth % 13.48 18.33 16.00

12 Average Investments 32715306 49375579 58850454

Growth % 18.10 50.93 19.19

Average SLR investments 16897617 22503871 30843910

as % to average deposits 22.87 24.70 26.70

Average Non‐SLR Investments 15817689 26871708 28006544

as % to Average deposits 21.41 29.49 24.24

13 Average working funds 123134237 158988248 192895148

C LOANS ISSUED DURING THE YEAR

14 Loans issued during the year 62838416 78679981 99600988

Growth % 21.17 25.21 26.59

KEY PERFORMANCE INDICATORS Rs. in 000's


17

Indicators 2014-15 2015-16 2016-17

Rs. in 000's


of 14 above, loans to Priority Sector 51332447 71366527 83310200

of 14 above, loans to Non‐target Groups 16643403 23077341 16290788

of 14 above, SC/ST 14274928 1926191 16076269

D PRODUCTIVITY

15 Per Branch 238264 277016 327957

Per Staff 61012 70498 83623

E RECOVERY PERFORMANCE

16 TOTAL

Demand 61206745 77776039 102622694

Recovery 47524012 64303445 87597449

Over dues 13682733 13472594 15025245

Recovery % 77.65 82.68 85.36

(June position)

17 FARM SECTOR

Demand 20130889 37592669 40200604

Recovery 9261699 30211300 37943901

Over dues 10869190 7381369 2256703

Recovery % 46.01 80.36 94.39

(June position)

18 NON‐FARM SECTOR

Demand 41075856 40183370 62422090

Recovery 38262313 34092144 49653548

Over dues 2813543 6091226 12768542

Recovery % 93.15 84.84 79.54

(June position)

F ASSETS CLASSIFICATION

19 (a) Standard 87665819 103497691 121587921

(b) Sub‐Standard 1650916 776023 366930

(c) Doubtful 1332516 1736300 1716141

(d) Loss 6870 7661 14326

Total 90656121 106017675 123685318

20. Std.Assets as % to Gross Loans & Advances out standings 96.70 97.62 98.31

G PROFITABILITY ANALYSIS

21 Interest paid on

a) Deposits 5787730 6946094 7963182

b) Borrowings 2035532 2739088 3126205

22 Salary 1514481 2357204 2013540

23 Other Operating Expenses 718632 1010451 961124

24 Provisions made during the year

(a) Against NPA's 62810 303445 244916

(b) Other Provisions 385028 ‐306919 44690

(c) Amortization ‐ ‐ ‐

18

Rs. in 000's

Indicators 2014-15 2015-16 2016-17


25 Interest received on

(a) Loans & Advances 9939772 11047289 13099251

(b) Investments 2498841 3799661 4488826

(c) Others Nil Nil 20649

26 Other Income 1000939 1614741 1971914

27 Loss / Profit 2016072 2234707 3519912

H Other information

28 Share Capital Deposit Received 890850 Nil Nil

29 DI & CGC Nil Nil Nil

(a) Claims settled cumulative ‐ ‐ ‐

(b) Claims received but pending adjustment ‐ ‐ ‐

(c) Claims pending with Corporation ‐ ‐ ‐

30 Cumulative Provision ‐

(a) Against NPAs 750217 1043312 1221643

(b) Against Standard Assets 248155 292611 342625

(c) Against Intangible Assets Frauds etc. 472563 121188 115864

31 Interest Derecognized

(a) During the year Nil Nil Nil

(b) Cumulative Nil Nil Nil

32 Loans Written off during the year

(a) No. of Accounts 137 35 3795

(b) Amount 2277.82 2600 59029

33 Accumulated loss Nil Nil Nil

34 Reserves 10802618 13037325 16557237

Net NPAs 2224258 1476672 875754

% Provisions to gross NPAs 25.08 41.40 58.25

% Gross NPAs to advances 3.30 2.38 1.69

% Net NPAs advances 2.48 1.41 0.72

CRAR 13.45 13.48 14.05

19

Commerical Loan for Hospital

Building Construction Rs. 2.00

Crores financed by our

Pothireddy Pally X Road Branch

(Sangareddy)

Housing Loans for purchase of

flats financed by our Branches

under RASMECCC,

Vishakapatnam


20

Walkathon was taken up by our staff as part of Mega sports meet, to create awareness on digital banking, cashless transactions and financial literacy.

Board of Directors Report

2016-17

Teaming Up

we are with you! Annual Report 2016-17we are with you! Annual Report 2016-17

0101010101010121

We�are�with�you

BOARD OF DIRECTOR'S REPORT 2016-17

Profit Analysis

The Bank registered a Net Profit of Rs 351.99 Crore for the year

2016‐17 as against Rs 223.47 Crore for the previous FY 2015‐

16 at a growth rate of 57.51% which is highest ever so far.

Increase in interest income by Rs.276.18 cr (which includes

increase in interest on investment by Rs.68.92 cr), recovery of

AUCA to the extent of Rs 6.44 Crore, increase in miscellaneous

income by Rs 16 Crore, profit from sale of investments to the

tune of Rs 49.60 Crore and reduction in NPAs by Rs 42.26

Crore, thus requiring less additional provisions have impacted

the net profitability of the Bank.

The Operating profit of the Bank stood at Rs 522.70 Crore as

on 31.3.17 vis‐à‐vis previous FY's figure of Rs 341.23 Crore.

The increase of Rs 181.47 Crore in operating profit during this

year is impressive when compared with the increase of Rs

47.70 Crore during 2015‐16. This is due to increase in income

in all areas i.e., interest on advances, investments, decrease in

operating expenditure and decrease in cost of deposits from

7.62% to 6.89% during the year.

Income and Expenditure (Rs in Crores)

ProfitProfitProfit

0

50

100

150

200

250

300

2007-08

2008-09

2009-10

2010-11

2011-12

2012-13

2016-17

37

69

103 108 120

159 180

223

352 (Rs in Crores)

thWe have pleasure in presenting the 12 Annual Report of

Andhra Pradesh Grameena Vikas Bank (APGVB) together with

the Audited Statement of Accounts, Auditors' Report and the

report on business and operations of the Bank for the financial styear ended on 31 March 2017.

Business Review

The Bank's business has registered a growth of Rs 4383.23 stCrore at 21.07% to reach Rs 25187.11 Crore as on 31 March

2017 as against Rs 20803.88 Crore as on 31.3.16. This growth

in business over March 2016 level is impressive vis‐à‐vis the

growth of Rs 3458.26 Cr in 2015‐16.

60% of the business growth of Rs 4383.23 Crore was

contributed by Deposits and the remaining 40% by loans and

advances with an absolute growth of Rs 2616.47 Cr and Rs

1766.76 Cr respectively. The distribution of growth between

deposits and advances in FY 2015‐16 was in the ratio of 56%

and 44%.

2013-14

2014-15

202


TOTAL BUSINESSTOTAL BUSINESSTOTAL BUSINESS

2007-08

2008-09

2009-10

2010-11

2011-12

2012-13

2013-140

(Rs in Crores)

2014-15

5000

10000

15000

20000

25000

30000

2015-16

2016-17

5635

6698 7675 96

89 1068

6

1245

9

2080

4

1468

7 1734

6

2518

7

350

400

Particulars 2014‐15 2015‐16 2016‐17 Growth %

Interest Income 1243.86 1484.70 1760.87 18.60

Interest Expenditure 782.33 968.52 1108.94 14.50

Non‐Interest Income 100.09 161.47 197.19 22.12

Non‐Interest Expenditure 223.31 336.76 297.46 ‐11.67

Gross Profit/Operating profit 338.32 340.89 551.66 61.83

Taxes 90.00 107.62 169.06 57.09

Deferred Tax Asset & Earlier year adjustments (excess) 1.93 10.14 1.65 ‐83.73

Provisions and Contingencies 44.78 ‐0.35 28.96 ‐

Prior Perioddepreciation & rent 0 0 0 0

Net Profit 201.61 223.47 351.99 57.51

22

2015-16

Net Interest Income

Total interest income earned during the year is Rs 1760.87 crores where as total interest expenditure is at Rs 1108.94 crores. The net interest income has increased to Rs 651.93 crore during the year vis‐à‐vis Rs 516.18 crores in 2015‐16 with a growth rate of 26.30%. Growth in interest income by Rs.276.18 cr and growth in CASA this year from 36.60% to 41.04% has impacted the rise in Net Interest Income during the year.

Interest Expenditure

Interest paid on deposits has increased to Rs 796.32 Crore from the last FY's figure of Rs 694.61 Crore by Rs 101.71 Crore (14.64%). The increase in interest paid on deposits was subdued vis‐à‐vis deposits growth of 25.65%, due to increase in CASA from 36.60% to 41.04% during the year.

The Bank has paid Rs 312.62 Crore towards interest on borrowings (refinance from NABARD, SBI and NHB) during the year as against Rs 273.91 Crore of FY 2015‐16 with an increase of Rs 38.71 Crore.

2008-09

2009-10

2010-11

2011-12

2012-13

2013-140.00

500

1000

1500

2000

447.

1726

2.18

577.

3932

6.00

642.

9835

7.29

785.

6051

2.74

590.

4096

5.32

1102

.62

703.

52

Interest Income

Interest Expenditure

1243

.86

782.

32

2014-15

Operating expenditure

Operating expenditure has declined by Rs 39.30 Crore

(at ‐11.67%) from Rs 336.77 Crore in 2015‐16 to Rs

297.47 Crore in current fiscal.(in previous year, arrears

of staff wages on account of wage revision were

included)

The other operating expenses (other than staff cost)

reduced by Rs.9.79 Crores over previous year 2015‐16

from Rs.107.59 crores to Rs.97.80 Crores.

Interest Income

Interest income increased from Rs 1484.69 Crore to Rs

1760.87 Crore during the FY with an absolute growth of

Rs 276.18 Crore (at 18.60%)

The Bank has earned an interest income of Rs 1309.93

Crore from loans and advances in current fiscal as

against Rs 1104.73 Crore in 2015‐16 with an increase of

Rs 205.20 Crore (@ 18.57%).

The interest income received from investments has

increased by Rs 68.91 Crore at 18.14% to reach Rs

448.88 Crore as against Rs 379.97 Crore in the previous

FY. Cash payout of Rs 1320.00 Crore by State Bank of

India on account of participation in IBPC, which was

invested in STDR with them (SBI) has yielded good

interest income.

2015-16

1760

.87

1108

.94

(Rs in Crores)

Interest paid on Borrowings

Interest paid on Depostits

0.00

100.00

200.00

300.00

400.00

500.00

600.00

169.

9492

.24

212.

6311

3.37

227.

4712

9.82 32

6.93

185.

82

200.

0839

0.32 46

3.34

240.

18

700.00

578.

77

203.

55

2008-09

2009-10

2010-11

2011-12

2012-13

2013-14

2014-15

2016-17

800.00

694.

6127

3.91

(Rs in Crores)


1484

.70

968.

52

2016-17

900.00

796.

3231

2.62

2015-16

(Rs in Crores)Interest Income on Advances

Interest Income on Investments

2008-09

2009-10

2010-11

2011-12

2012-13

2013-140.00

200.00

400.00

600.00

800.00

1000.00

1200.00

319.

7112

7.46

428.

3314

9.06

515.

7612

7.23

599.

4918

6.12 20

2.83

762.

40 865.

9223

8.83

1309

.93

448.

89

2015-16

2014-15

993.

9824

9.89

1400.00

1600.00

1104

.73

379.

97

2016-17

23

Provision for NPAs:

The Bank has made a provision of Rs 24.49 Cr on NPAs during the year, taking the total Provisions available on

Advances to Rs 156.43 Cr (including cumulative provision of Rs 34.26 Cr on Standard Assets).

(Rs in Crore)

Ratio Analysis

S.No. Ratios 2013‐14 2014‐15 2015‐16 2016‐17

Amt / Ratio % Change

1 Yield on advances 12.25 12.40 11.64 11.90 2.23

2 Yield on investments 8.58 7.73 8.29 8.47 2.17

3 Cost of deposits 7.70 7.83 7.62 6.89 ‐9.58

4 Cost of borrowings 8.35 7.76 6.57 6.88 4.72

5 Avg. cost of funds 6.45 6.35 6.09 5.75 ‐5.58

6 Avg. return of funds 10.13 10.13 10.35 10.15 ‐1.93

7 Cost of management 2.14 1.81 2.12 1.54 ‐27.36

8 Misc .Income as % to Working Funds 0.68 0.79 0.83 0.77 ‐7.23

9 Net Margin 2.36 2.14 2.98 2.99 0.34

10 Financial Margin 3.76 3.78 4.26 4.40 3.29

11 Risk Cost 0.68 0.62 0.67 0.64 ‐4.48

12 Return on Assets 10.9 1.64 1.41 1.82 29.08

13 Gross Rate of return 1.38 1.31 1.20 1.56 30.00

14 Expenses ratio 46.79 39.76 49.70 35.03 ‐29.52

15 Gross NPAs 343.28 299.03 252.00 209.74 ‐ 16.77

16 Net NPAs 228.56 224.25 147.67 87.58 ‐ 40.69

17 % Provisions to gross NPAs 26.81 25.08 41.40 58.27 40.74

18 % Gross NPAs to advances 4.35 3.30 2.38 1.69 ‐29.00

19 % Net NPAs to advances 2.94 2.47 1.40 0.72 ‐48.57

20 CRAR 13.26 13.45 13.48 14.05 4.23

Balance Sheet Size

The balance sheet size amounted to Rs.21047.15 crores

(including IBPC gap of Rs 1320.00 Crore) with an increase of

Rs.4873.81 Crores over March 2016 level.

Capital & Reserves

Authorized Capital:

Pursuant to The Regional Rural Banks (Amendment Act)

2015,Raised the Authorized Capital of the Bank from 5,00,000

Equity Shares of Rs. 100/‐ each aggregating to Rs. 5 Crores to

200,00,00,000 Equity Shares of Rs. 10/‐ each aggregating to

Rs. 2000 Crores

Paid up Capital:

The Bank's paid up capital stood at Rs 94,08,50,000

(9,40,85,000 shares of Rs 10 each), subscribed by

Government of India, State Government and State Bank of

India in the ratio of 50:15:35. The Reserves increased by Rs

351.99 Crore at 27% from Rs 1303.73 Cr as on 31.03.16 to Rs

1655.72 Cr as on 31.03.17.


Assets 2013‐14 2014‐15 2015‐16 2016‐17

O/s Provisions O/s Provisions O/s Provisions O/s Provisions

Standard 7545.60 21.68 8766.58 24.82 10349.77 29.26 12158.79 34.26

Sub Standard 159.53 15.11 165.09 17.36 77.60 12.00 36.69 5.94

Bad & Doubtful 189.24 55.25 133.25 56.98 173.63 91.56 171.61 114.79

Loss 1.05 0.99 0.68 0.68 0.76 0.76 1.43 1.43

Total 7895.42 93.03 9065.60 99.84 10601.77 133.59 12368.53 156.43

24

3. a. Adjusted value of funded risk assets i.e., balance sheet items 9256.00 10663.00 12754.79

b. Adjusted value of non‐ funded risk assets i.e., balance sheet items 0 0 21.98

c. a+b 9256.00 10663.00 12776.77

d. Percentage of Capital (Tier‐I + Tier II) to Risk Weighted Assets 13.45 13.48 14.05

2 Tier‐II a. Undisclosed Reserves b. Revaluation Reserves c. General Provisions & Reserves 70.49 39.94 45.85 d. Investment fluctuations Reserves / Fund Total Tier‐II Capital 70.49 39.94 45.85 Grand Total (Tier I + Tier II) 1244.84 1437.75 1795.65

Net worth

Net worth of the Bank stood at Rs. 1749.81 Crore with a

growth of Rs 351.99 Crore (25.18%) over previous FY's figure

of Rs 1397.82 Crore.

The Capital Adequacy Ratio has further strengthened to reach

14.05% at the end of the year vis‐à‐vis 13.48% as on 31.03.16

well above the level of minimum 9% stipulated by Dr. K.C

Chakravarthi Committee.

The following table gives the position of Tier‐I, Tier‐II

Capital, Reserves and computation of CAR.(Rs in Crore)

Deposits

Deposits registered an impressive growth of Rs 2616.47 Crore

over March 2016 level at a growth rate of 25.65%. This

growth is the highest in the history of the Bank. Total deposits

as on 31.3.2017 stands at Rs 12818.58 Crore as against Rs

10202.11 Crore as on 31.3.2016.

Deposits growth in 2016‐17

There has been a consistent growth on month to month basis

except a marginal fall in April 2016 and January'2017.

(Rs. In Cr.)Month wise Total Deposits During 2016-17

0

2000

6000

4000

8000

April

10000

12000

(Rs. In Crores)DepositsDepositsDeposits

0

2000

6000

4000

8000

2934 3394 38054795

51535869

6791

10202.11

2007-08

2008-09

2009-10

2010-11

2011-12

2012-13

2013-14

2014-15

2015-16

8280.0010000

1200010

171.

69


0

200

400

600

800

1000

1200

2007-08

2008-09

2009-102010-11

2011-12

2012-13

2014-15

2016-17

152221

311419

539

698

879

1080

ReservesReservesReserves (Rs in Crores)

2013-14

1400 1304

1656

1600

1800

2015-16

14000 12818.58

2016-17

14000

May June

July

Augus

tSep

tembe

rOcto

ber

Novem

ber

Decem

ber

Janu

ary

Febr

uary

March

1041

1.98

1074

5.02

1088

9.42

1106

9.71

1117

7.83

1262

9.09

1271

0.59

1268

5.20

1268

7.30

1281

8.38

1062

1.99

Deposit Mix

CASA deposits grew by Rs 1527.75 Crore at 40.91% to

reach Rs 5261.51 as against Rs 3733.77 Cr. Term

Capital� 2014-15� 2015-16� 2016-171 Tier‐I

a. Paid up Capital 5 94.08 94.08

b. Share Capital Deposit 89.08 0 0

c. Statutory Reserves & Surplus 217.39 262.08 332.48

d. Capital Reserves 0.01 0.01 0.01

e. Other Reserves 14.31 14.31 14.31

f. Spl.Reserve u/s 36(1)(Viii) of income Tax act 1961 0 0 3.85

g. Surplus in P&L 848.55 1027.33 1305.07

Total reserves (b+c+d+e+ f+g) 1080.26 1303.73 1655.72

Total Tier‐I Capital 1174.35 1397.81 1749.80

25

Deposit mix 2011‐12 2012‐13 2013‐14 2014‐15 2015‐16 2016‐17

Current A/c 123.56 122.96 55.41 52.44 59.34 126.87

Growth ‐55.82 ‐0.6 ‐67.55 ‐2.97 6.90 67.53

Growth %age ‐31.12 ‐0.49 ‐54.94 ‐5.36 13.16 113.80

Savings Bank A/c 1839.50 2154.50 2398.34 2924.33 3674.42 5134.63

Growth ‐372.7 315.02 243.84 525.99 750.09 1460.20

Growth %age ‐16.85 17.13 11.32 21.93 25.65 39.74

Total CASA 1963.10 2277.5 2453.75 2976.77 3733.76 5261.51

Growth ‐428.52 314.40 176.25 523.02 756.99 1527.72

Growth %age ‐17.92 16.01 7.74 21.32 25.43 40.91

Term Deposits 3183.60 3591.70 4337.43 5303.23 6468.35 7557.07

Growth 780.47 408.09 745.73 965.8 1165.12 1088.73

Growth %age 32.48 12.82 20.76 22.27 21.97 16.83

Total deposits 5146.70 5869.20 6791.18 8280.01 10202.11 12818.58

Growth 351.96 722.47 921.99 1488.82 1922.10 2616.47

Growth %age 7.34 14.04 15.71 21.92 23.21 25.65

(Rs. in Crores)The share of CASA has increased from 36.6% (31.03.2016) to 41.04% as on 31.03.2017


Deposits grew by Rs 1088.73 Crore to reach a level of Rs 7557.07 Crore at 16.83% as against Rs 6468.34 Crore. The

growth of 40.91% in CASA during the year 2016‐17 has been stupendous when compared with CASA growth rates of

7.74% in 2013‐14 and 16.01% in 2012‐13, 21.32% in 2014‐15 and 25.43% in 2015‐16.

NRE/NRO Accounts‐Introduction

We have during the year introduced NRI Banking services to enable our customers to receive funds from foreign countries. This facility has been started in collaboration with our sponsor bank, SBI which is providing the intermediary services for conversion of foreign currency in to Indian Rupees and vice‐versa. Bank has received authorization to open and maintain NRE/NRO accounts in rupees from Reserve Bank of India vide letter No.HY.FE.SD‐I/1369/11.10.022/2016‐17 dated 13.01.2017 and the facility was formally launched by Chief General Manager, SBI,LHO, Hyderabad on 30.03.2017.

Borrowings

The aggregate borrowings of the Bank as on 31st March 2017 stood at Rs. 5620.84 Crore whereas it was Rs. 3733.80 Crore as on 31st

march 2016.

Institution � 2016‐17 � 2015‐16� Variance�

1 NABARD 1036.18

2 SBI 890.00

3 NHB ‐39.14

2648.53

1004.61

80.66

3733.80 1887.04

S.No

3684.71

1894.61

41.52

5620.84

The Bank has availed refinance against Crop loan disbursements from NABARD @ 20%. Refinance against SHG disbursements and

Rural Housing was provided by NABARD and NHB respectively @ 100%. The borrowings from SBI pertaining to overdrafts availed

against our TDRs .

26

(Rs. in Crores)

Investments 2011‐12 2012‐13 2013‐14 2014‐15 2015‐16 2016‐17

SLR 1104.97 1339.44 1663.34 1795.61 2288.64 4343.25

Growth 105.28 234.47 323.90 132.27 493.03 2054.61

Growth %age 10.53 21.22 24.18 7.95 27.46 89.77

Non SLR 1272.01 1778.29 996.56 3052.74 2907.44 4143.20

Growth 124.43 506.28 ‐781.73 2056.18 ‐145.3 1235.76

Growth %age 10.84 39.80 ‐43.96 206.33 ‐4.76 42.50

Total Investments 2376.98 3117.73 2659.90 4848.35 5196.08 8486.45

Growth 229.70 740.75 ‐457.83 2188.45 347.73 3290.37

Growth %age 10.70 31.16 ‐14.68 82.28 7.17 63.32

Assets

Investments

Total investments portfolio– both SLR and Non‐SLR ‐ of the Bank has increased to Rs 8486.45 Crore as on 31.3.17 from previous

year's level of Rs 5196.08 Crore by Rs 3290.37Crore @63.32%. (Rs in Crores)

Investment Policy

The Bank has an Investment Policy in conformity with the

instructions received from RBI/NABARD/Sponsor Bank,

approved by the Board, in terms of which investments are

made.

The Investment Committee comprising of the following 8

members take investment decisions and the quorum is five.

1. Chairman

2. General Manager ‐ I

3. General Manager ‐ II

4. General Manager – III

5. General Manager – IV

6. Chief Manager (Accts)

7. Chief Manager (Planning & Devp)

8. Chief Manager (Credit)

The Investment Committee meets periodically to review the

funds position and decide the deployment of funds in SLR and

Non‐SLR avenues.

SLR Investments

In terms of Section 24 of the BR Act 1949, the Bank has

maintained investments in the avenues laid down in the Policy,

to fulfill the SLR requirements. All SLR investments are made

in GOI/State Govt Securities only. The purchase and sale of

Govt Securities are undertaken by the Portfolio Management

Services Department of State Bank of India.

Non SLR Investments

Non‐SLR investments are invested in TDRs of Banks. The Bank

has been monitoring and following up for prompt receipt of

interest due from Govt Securities /Bonds. There was no

instance of income leakage from Non‐SLR investments

portfolio.

CRR and SLR

The Bank has complied with the regulatory requirement of

maintenance of adequate balances towards CRR and SLR.

There is a well laid down system of assessing the CRR and SLR

requirements taking into account the NDTL. There was no

default in maintenance of adequate balances during the year.

The Bank has kept Rs 545.48 crore in CRR and Rs 4552.39

crores in SLR as on 31.03.2017.

Cash Management Product (CMP):

CMP was introduced with SBI/SBH covering 165

Branches/Regional Offices. Under the scheme, amounts will

be transferred every day morning and at the end of the day

the available balances will be transferred to our OD accounts

at SBI/SBH, Hanamkonda.

Centralization of TDS

During the year, we have centralized the payment of TDS at


* IBPC – an amount of Rs 1320 Crore received from State Bank of India, on account of gap in IBPC, is kept as TDR in Banks which has to be returned on the expiry date of IBPC i.e., 12.08.2017.

27


Regional Offices level on 11 TANs instead of making payment

through branch wise TANs. This has not only reduced the cost

of operations but also ensured proper and timely tax

compliance .

Credit Portfolio

The credit portfolio of the Bank rose by 16.67 % to Rs 12368.53

Crore during the financial year ended 31.03.2017 from the

previous year level of Rs 10601.76 Crore, thus showing an

absolute growth of Rs. 1766.77 Crore as against the target of

Rs 1060.18 Crore

Credit to Agriculture

Total credit to agriculture and allied activities including

agriculture‐portion of SHG lending, stood at Rs 8403.85 Crore

as on 31.3.2017 as against Rs 7068.19 Crore with a growth of

Rs 1335.66 Crore (@ 18.89 %). Total number of Bank's

borrowers in Agriculture sector has increased to 975289 vis‐a‐

vis 915414 in FY 2015‐16, with an increase of 59875. More

than 90 % of the credit to SHG finance is also towards

agricultural operations.

The Bank has disbursed Rs. 6687.77 Crore to agriculture

during the year as against the previous year's disbursal of Rs

5716.29 Crore. Total credit to agriculture and allied activities

constitutes 67.95 % of the total credit portfolio as on

31.3.2017 vis‐à‐vis 66.67 % as at the end of previous FY.

Crop loans under revised Kisan Credit Card System

As per the directions of Government of India and NABARD, we

have implemented revised Kisan Credit Card System for crop

loan borrowers from Kharif 2012. According to the guidelines

of revised KCC, we have introduced a new product KCC‐cum‐

SB account in the CBS for a period of 5 years. As per this

system, the farmers can remit their surplus funds in their KCC

account and can draw according to their requirement and they

need not maintain separate Savings Bank account. There is a

provision for giving interest as applicable for Savings Bank

account for the credit balances in the KCC account. Further,

loan limits will be fixed for 5 years and documents will be

obtained for the terminal limit. Year‐wise limits will be fixed

basing on present Scales of Finance and keeping in view the

future cost of investment.

We have issued 808713 KCCs as on 31.3.2017 with an

outstanding credit of Rs 4727.55 Crore as against previous FY

level of 765573 KCCs for Rs 4141.60 crores.

During the year 2016‐17, we have disbursed an amount of Rs

3990.71 Crore to 704471 KCC card holders as against Rs

3888.24 Crores to 650989 card holders during the year 2015‐

16. Instructions were issued to all the branches to cover all

KCC holders up to the age of 70 under Personal Accident

Insurance Scheme(PAIS) during the three year card holding

period, with risk coverage of Rs.50,000/‐ The annual premium

of Rs.20/‐ was jointly borne by the Bank Rs.13/‐ and the

borrower Rs.7/‐

Crop Loans ‐ Vaddileni Runalu / Pavala Vaddi

Government of unified Andhra Pradesh had implemented

“Vaddileni Runalu/ Pavala vaddi” scheme i.e.,

reimbursement of interest subvention and incentive

subvention for prompt payers of crop loan borrowers from

Rabi 2011‐12. Under the VLR Scheme, farmers need not pay

the interest portion. The scheme has been in existence and

continued by both the states of Telangana and A.P. We have

submitted our claim of Rs 32,87,13,339/‐ and Rs

11,05,16,465/‐ to the State Governments of Telangana and

Andhra Pradesh respectively during the year 2016‐17.

Interest Subvention

As per Government of India guidelines, Bank is implementing

7% interest rate to all the crop loan borrowers up to Rs.3.00

lakhs and accordingly claimed an amount of Rs

54,04,84,607/‐ towards 2% interest subvention from the GOI

during the year 2016‐17. As per the directives of Government

of India, we had passed on the benefit relating to interest

subvention incentive to the extent of Rs 34,60,61,924 /‐ to the

prompt repayers and claim submitted accordingly

Crop Loan Waiver Scheme in Telangana State

Our Bank has implemented Crop Loan Waiver Scheme

announced by the Government of Telangana. Under the

Scheme, all crop loans and crop loans against gold ornaments

outstanding as on 31.3.2014 have been covered to the extent

of Rs 1 Lakh (including interest upto 31.8.14) per farmer. In

case the borrower took loan from multiple bank branches, the

outstanding loan amounts are clubbed for the purpose of

waiver.

Accordingly, we have submitted the data of all eligible loans

amounting to Rs 2401.42 Crores and Government of

Telangana released fourth phase of 25% of the total eligible

amount for credit to respective accounts.

28


Crop Loan Waiver Scheme in Andhra Pradesh State

Our Bank has implemented Crop Loan Waiver Scheme

announced by the Government of Andhra Pradesh. Under the

Scheme, all crop loans, crop loans against gold ornaments and

the crop loans converted to MTL, which were outstanding as

on 31.12.2013 including interest are eligible for waiver. The

maximum ceiling for waiver of the loans was Rs 1.50 Lakhs.

Entire family is taken as a unit and loans taken from multiple

Bank branches are clubbed for arriving at the maximum

waiver.

Accordingly, we have received an amount of Rs. 352.27 crores,

out of which 352.08 crores was utilized and credited to

respective loan accounts. We have refunded an amount of Rs.

0.19 crores as ineligible amount.

Conducting of Grama Sabhas

All branches have conducted Grama Sabhas for the customers,

mainly for the purpose of educating the farmers in renewing

the crop loans to avail the benefit of Debt Waiver Schemes

announced by the State Governments. To ensure maximum

coverage of farmers, Grama Sabhas were conducted in the

evenings and mornings and sensitized farmers to renew their

crop loans to be eligible for Debt waiver benefits. Apart from

operating staff at Branches, functionaries from ROs, Head

Office right from Messenger to Chairman have participated in

the Grama Sabhas, which yielded very good results in

successfully implementing the Debt Waiver programmes

Tenant Farmers – Loan Eligibility Card Holders

We have financed 6679 tenant farmers under the Loan

Eligibility Cards Scheme with a credit outstanding of Rs 13.35

Crore during the year 2016‐17. AP Land Licensed Cultivators

Ordinance aims at ensuring loan and other benefits to tenant

farmers, by means of Loan Eligibility Cards.

Joint Liability Groups (JLGs)

JLGs are expected to overcome the problem of tenant farmers

getting deprived of institutional credit. The Bank has financed

an amount of Rs 91.83 Crores to the JLGs as on 31.03.2017.

During the year 2301 groups were financed amounting Rs.

41.03 crores.

NABARD has sanctioned a grant assistance of Rs 123.40 lakhs

for formation and linkage of 6170 JLGs during the year in both

states.

Self Help Groups

Our Bank has financed 189884 Self Help Groups (Covering

about 26.50 Lakh rural women) with an outstanding portfolio

of Rs 4955.71 Crore as on 31.3.2017 as against previous year's

level of 184440 Groups with outstanding credit of Rs 3984.69

Cr. The total loans outstanding under SHG segment has

increased by Rs 971.02 Crore at a growth rate of 24.37%

during the year 2016‐17 against previous year growth of Rs

581.38 Crore (@ 17.08%).

The Bank has disbursed Rs 3655.37 Crore to 126847 Groups

during the year as against Rs 2773.82 Crore disbursed to

164382 SHGs during the previous year. The Bank has highest

number of Self Help Groups linked to Bank and loan amount

outstanding, among all RRBs in the country.

29

Conducted awareness camp for SHG members and Disbursement of Loans to a tune of

Rs. 25 Crores to SHGs on the occasion of International Women’s Day

2005

-06

2006

-07

2007

-08

2008

-09

2009

-10

2011

-12

2012

-13

2010

-11

0

500

1000

1500

2000

2500

3000

3500

4000

216

332 60

6 905 11

64 1472

1665

2016

Amt o/sAmt o/sAmt o/s

2013

-14

2513

2015

-16

3403

(Rs. In Crores)

2014

-15

3985


As per the directions of Government of India and NABARD, we have been implementing Cash Credit System for SHG loans with effect from January 2012. Accordingly, we have arranged for fixing limits for a period of 5 years basing on their present corpus and proposed thrift. The limit will be fixed as 8 times of corpus (1:8) for the current year and for the subsequent years, the limit will be 1:8 of present corpus PLUS expected thrift.

2016

-17

1898

84

4500

5000 4956

2016

-17

SHGs ‐ Vaddileni Runalu

Both the State Governments i.e., Telangana and A.P have been

implementing “Vaddileni Runalu” scheme i.e. reimbursement

of interest for prompt payers of Self Help Groups upto loan

limit of Rs.5.00 lakhs. The Bank would provide particulars of

transactions in SHG accounts relating to all the branches to the

SERP and basing on that, the SERP, Hyderabad, arrives at the

list of SHG accounts eligible for VLR scheme and accordingly

release the interest amount which is credited to the respective

SHG accounts directly.

As per the directions of Government of India, SHG Cash Credit

loans are also to be treated as normal Cash Credit Loans for the

purpose of classification of asset etc. But, as per the

guidelines of VLR scheme the SHGs have to repay a minimum

of 3% of drawing power every month to become eligible for

reimbursement of interest. We have, therefore, insisted the

SHGs for repayment of 3% of drawing power towards EMI,

though it is sufficient if they pay only the interest and other

charges if any, every month.

National Rural Livelihood Mission (NRLM) ‐ Aajeevika –

Interest Subvention Scheme

Our Bank has implemented NRLM Scheme as per the

guidelines issued by NABARD vide their letter No 249/MCID‐

LS/2013‐14 dated 26.11.2013.

The government restructured Swarnajayanthi Grama

Swarozgar Yojana ‐ SGSY (which was in existence since FY

2010‐11) into National Rural Livelihoods Mission (NRLM) to

provide greater focus and momentum for poverty reduction.

The Mission aims at creating efficient and effective

institutional platforms of the rural poor enabling them to

increase household income through sustainable livelihood

enhancements and improved access to financial services.

Under the Scheme, all Women SHGs promoted by NRLM or

other Central or State Government Line Departments or

NABARD or any NGOs, which are linked with our Bank, are

eligible to avail the benefits of the Scheme. As per the

Scheme, GOI identified 250 backward districts all over the

country under Category‐I, of which we have six districts in our

notified area namely Warangal, Khammam, Mahabubnagar

(erstwhile districts in Telangana state) and Srikakulam,

Vizianagaram, Visakhapatnam in Andhra Pradesh.

All such Women SHGs in the six districts have been extended

credit at 7% rate of interest upto Rs 3 Lakhs and Government

would subvent to the extent of difference between 7% and

actual rate of interest (12.5% ) subject to a maximum of 5.5%.

Apart from this, prompt paying SHGs will be extended an

additional 3% subvention. SERP (Society for Elimination of

Rural Poverty) would credit the remaining 4% interest for

30


prompt repayers reducing ‘ZERO’ interest burden to the

groups.

We have claimed an interest subvention @ 5.5%

Rs 103,69,19,582/‐ and 3% interest Incentive subvention Rs

47,53,21,596/‐ during the year 2016‐17 under NRLM.

We have two districts among the Category‐II districts (other

than the above 250 districts) under NRLM namely Nalgonda

and Medak. Funding for this subvention will be provided by

the SRLM (State Rural Livelihood Mission).

SRLM and SERP will provide each 7% interest as subvention for

prompt repayers through e‐transfer to the SHGs accounts

under the Scheme for Category‐II districts.

National Urban Livelihood Mission (NULM)

Government of India restructured Swarna Jayanti Shahari

Rozgar Yojana (SJSRY) as National Urban Livelihood Mission

(NULM). The SEP (Self Employment programme) component

of NULM focus on providing financial assistance through a

provision of interest subsidy on loans to support

establishment of Individual and Group Enterprises and SHGs

of urban poor. Under the Scheme, (a) Interest subsidy, over

and above 7% of ROI is available on a Bank loan of Rs 2 Lakh to

individual enterprises and Rs 10 Lakh for Group Enterprises.

The difference between 7% p.a. and the prevailing ROI will be

provided to Banks under NULM; (b) SHGs in urban areas can

avail Bank loan at 7% ROI. The difference between 7% p.a. and

the prevailing ROI will be provided to Banks under NULM.

Further, an additional 3% interest subvention will be provided

to all women SHGs for prompt repayment as per repayment

schedule by GOI. Apart from this, as per State Government of

Andhra Pradesh, the balance portion of interest will also be

released under VLR Scheme as per the eligibility.

Priority Sector Lending

In terms of RBI Circular No: FIDD.CO.Plan. BC.No.

14/04.09.01/2015‐16 dated December 3, 2015, w.e.f

01.01.2016 75 per cent of outstanding advances should be

towards Priority Sector, which constitutes loans extended to

(a) Agriculture (Farm credit , Agriculture infrastructure,

Ancillary activities ) (b) Micro, Small and Medium Enterprises

(Manufacturing and Service Sector, KVI and OD to PMJDY) (c)

Education (d) Housing (e) Social Infrastructure (f) Renewable

Energy (g) Weaker Sections and (h) Others (SHG/JLG,

distressed persons, Loans to State Sponsored Organizations

for Scheduled Castes/ Scheduled Tribes).

RRBs will have a target of 75 per cent of their outstanding

advances for priority sector lending and sub‐sector targets as

indicated in table below.

The Bank’s priority sector lending constitutes 89.41 % of total advances. In absolute terms, total priority sector lending stood at Rs 11058.08 Crore as on 31.03.2017 as against Rs 9191.21 Crore as on 31.03.2016. There is a growth of Rs 1866.87 Crore @ 20.31%. The Weaker Sections Loans stood at Rs 8895.42 Crore, which forms 71.92 % of total lending

(Rupees in Crore)

Inter Bank Participation Certificates (IBPC)

In accordance with the RBI guidelines,

a) During the last year i.e. 2015‐16 Bank had participated in

IBPC with SBI for Rs. 648 crores and issued for Rs.1283

crores(cash payout Rs.635 crores) which was expired on

20.05.2016.

b) During the year 2016‐17, the Bank had issued Agri

priority sector advances on cash payout twice. First

issued for Rs 1036 crores on 13.07.2016, which was

expired on 9th January 2017 and second time for Rs. 1320

crores issued on 13.02.2017.

Categories Targets

Total Priority Sector 75% of total outstanding

Agriculture 18% of total outstanding

Small and Marginal Farmers 8% of total outstanding

Micro Enterprises 7.5% of total outstanding

Weaker Sections 15% of total outstanding

2014‐15 2015‐16 2016‐17

No. of O/s No. of O/s No. of O/s A/cs A/cs A/cs

1. Weaker Sections 823030 6616.45 844428 8144.27 972702 8895.42

2. Women borrowers 445768 3082.31 468947 3847.03 480029 4488.13

3. Minorities 46923 362.62 47861 444.64 48992 518.74

4. SCs/STs 211153 1541.15 217487 2226.37 222626 2597.39

31

Poultry unit financed by our Tadur Branch (Mahabubnagar RO) Rs. 1.50 Cr

(Rs in Lakhs)

(Rs in Lakhs)


Participation in State Credit PlansThe Bank's participation in State Credit Plans is as under: (Rs in Crore)

Retail Lending

During the year, we have focused more on increasing the share of retail lending to Housing, Education Loans, Mortgage

Loans, Personal Gold Loans, MSME etc. Capacity building of the operating staff has been given top priority by conducting

training programmes to diversify the credit portfolio to increase our profitability.

In the branches covered under RASMECCC, Vishakapatnam retail segment has increased by Rs 33.64 Crore over previous

year, of which Housing loan segment has accounted for Rs 24.85 Crore. Total outstandings increased to Rs 53.03 crore

from Rs 19.39 crore at 173.44 %.

Scheme Target Achievement

No. of Amt. No. of Units Units Amt.

SCAP 4223 3131.32 3918 2685.78

BCAP 2813 833.30 2445 721.28

STAP 936 318.89 881 296.01

Minorities 723 451.41 618 386.25

Weavers 591 277.75 476 216.58

Pasukranthi / PPK 1296 2020.20 926 1389.88

MEPMA 389 224.23 233 129.31

PHC 533 389.89 411 297.15

Others 784 531.26 622 411.38

Solar water pumpSystem 19 22.29 19 22.29

Total 12307 8200.54 10549 6555.91

Achievement % 86% 80%

Scheme Outstanding Disbursement from as on 31.3.17 1.4.16 to 31.3.17

No. of Amt. No. of Amt. Units Units

RYS 868 2075.98 0 0.00

SCAP 27332 7709.79 3918 2685.78

BCAP 21232 5587.54 2445 721.28

STAP 24833 5480.62 881 296.01

Minorities 4777 1916.92 618 386.25

VAMBAY/Indiramma 1896 87.87 0 0

Palapragathi/PPK 7173 3472.72 926 1389.88

Others 10851 6884.41 1761 1076.71

Total 98962 33212.85 10549 6555.91

2014‐15 2015‐16 2016‐17

Target Achievement Target Achievement Target Achievement

1. Crop Loans 2223.74 2759.62 2800.00 3888.24 3200.00 3990.71

2. Total Agr& allied activities 100.00 60.42 200.00 164.36 200.00 212.36

3. NFS 108.25 90.74 120.00 211.67 552.00 561.12

4. OPS 1764.22 2070.13 1922.00 3249.82 2289.00 3566.83

5. Total Priority Sector 4196.21 4980.91 5042.00 7514.09 6241.00 8331.02

% of achievement 118.70% 149.03% 133.49%

32

Government Sponsored Schemes

The Bank has participated in Govt Sponsored Schemes actively

during the year and as on 31.3.2017, the total finance

extended under various Schemes and loan outstandings in

various schemes are as under.

Brick making unit financed by our Nalgonda Branch under Prime Mininster employment Generation Programme (PMEGP)

(Rs in Crore)


CSIS Scheme

Government of India has introduced CSIS Scheme (Central

Scheme for Interest Subsidy) for providing relief to students

who were sanctioned / disbursed from 01.04.2009. Education

loans availed by the students from economically weaker

sections whose annual gross family income is upto Rs 4.50

Lakhs, are eligible under the scheme. Our bank has been

claiming Interest subsidies under this scheme for the eligible

students since 2009‐10 to 2014‐15 on the CSIS portal of

Canara Bank (Nodal Agency) every year. All the claims for all

years has been settled to our bank and partially settled for FY‐

2014‐15.

For the FY 2014‐15 ,we have claimed an amount of Rs

2,09,89,550/‐ in respect of 463 education loan accounts and

received Rs 1,99,87,196/‐ from the Government of India. The

balance of Rs.10,02,354/‐ yet to be released to our Bank by

GoI.

For the FY‐2015‐16 , we have claimed an amount of

Rs.96,88,739/‐ in respect of 353 education loan accounts and

received Rs11,71,905/‐ for SC/ST students. Remaining

subsidy for General students yet to be released by GoI.

ACSISOBCEBC: Further GoI has introduced Dr.Ambedkar's

Central Scheme of Interest Subsidy for Other Backward Caste

(OBC) and Economically Backward Caste (EBC) for providing

relief to students Studying in abroad, who were sanctioned /

disbursed from 01.04.2014. Education loans availed by the

O/s March 2014‐15 O/s March 2015 ‐16 O/s March 2016‐17

S.No Segments No of A/Cs Amount No of A/Cs Amount No of A/Cs Amount

1 Housing Loans 6291 411.26 7012 551.21 8234 773.14

2 Mortgage Loans 2171 53.53 2217 79.62 2567 117.76

3 Education Loans 4106 76.48 3760 84.45 3162 82.66

4 Demand Loans 25054 188.46 22970 210.02 18368 181.78

5 NFS ‐ Term Loan/MSME 43067 124.67 70571 252.33 98167 932.59

6 Personal Loans 18476 229.55 16304 283.49 13259 290.01

7 Personal Gold Loans 145942 691.67 142352 658.45 115201 538.84

Total 245107 1775.62 265186 2119.57 258958 2916.78

33

Financing a Cargo Auto by our Mucharla Branch (Warangal RO) Under

Tie up with Bajaj Auto, Our Chairman Handing over the keys to the Borrower

JCB unit finanaced by our Jinnaram Branch (Ashoka Nagar Region)

under Govt. sponsored SC Action plan


students from Economically Backward Caste (EBC) whose

annual gross family income is upto Rs 1.00 Lakhs, and for

Other Backward Caste (OBC) income is upto Rs.3.00 Lakhs are

eligible under the scheme. Our bank has been claiming

Interest subsidies under this scheme for the eligible students

on the ACSISOBCEBC portal of Canara Bank (Nodal Agency) for

quarterly intervals , during the year 2016‐17, we have

claimed RS. 9,09,841/‐ for 8 accounts and received claim of

Rs.1,63,210 for two accounts (Girl students on 08.03.2017) .

Jawaharlal Nehru National Solar Mission(JNNSM)

The Jawaharlal Nehru National Solar Mission aims at

addressing one of the most severe problems of the country

today i.e., energy conservation. The Bank has taken the

initiative of financing the solar lighting systems, supporting

the national cause. Total financing under JNNSM stood at 3127

a/cs with amount outstanding Rs.6.59 crore as on 31.03.2017.

Central Registry of Securitisation Asset Reconstruction and

Security Interest of India (CERSAI)

Our Bank had registered with CERSAI in terms of RBI guidelines

and complied with the instructions. Equitable/Registered

mortgages and Hypothecation in respect of all our loans,

which are covered under Securitization and Reconstruction of

Financial Assets and Enforcement of Security Interest Act,

2002 (SARFAESI Act) as on 31.03.2017 have been registered

with CERSAI.

With this, the details of the security interest created in favour

of our bank is available on a public domain for search by

citizens / other banks / FIs as a result of which the potential

fraud / multiple financing against the same property can be

prevented.

Credit Guarantee Fund Trust For Micro & Small Enterprises

(CGTMSE)

The objective of the Scheme is to make bank credit available to

the first generation entrepreneurs without the hassles of

collaterals / third party guarantees to realize their dream of

setting up a unit of their own Micro and Small Enterprise

(MSE). The Credit Guarantee Scheme (CGS) seeks to reassure

the lender that, in the event of a MSE unit, which availed

collateral free credit facilities, fails to discharge its liabilities to

the lender, the Guarantee Trust would make good the loss

incurred by the lender.

ISB Sector loans excluding retail trade advances and including

Small Road and Transport loans are eligible for guarantee

cover of CGTMSE up to a limit of Rs.10.00 lakhs, as per the

directions of Reserve Bank of India. The coverage of loans

under CGTMSE is as under

Credit Information Companies

Our Bank has been a member of CIBIL (Credit Information

Bureau (India) Limited). CIBIL is the first Credit Information

Company licensed by the RBI and governed by the Credit

Information Companies (Regulation) Act of 2005. CIBIL

collects and maintains records of individuals' and non‐

individuals' (commercial entities) payments pertaining to

loans and credit cards from Banks and other lenders on a

monthly basis. Using this information a Credit Information

Report (CIR) and Credit Score is developed, enabling lenders

to evaluate and approve loan applications.

Our Bank has been uploading the data regularly and all our

Regional Offices and Branches are accessing the credit history

of the loan applicants in their credit decisions.

Three other CICs, viz., Equifax Credit Information Services

Private Limited, Experian Credit Information Company of

India Private Limited and CRIF High Mark Credit Information

Services Private Limited have been granted Certificate of

Registration by RBI.

Reserve Bank of India vide its letter No. DBR No.

CID.BC.60/20.16.056/2014‐15 dated 15.01.2015 has advised

us that all Credit Institutions have a mandate to become

members of all CICs. Accordingly we have become members

of the above three CICs also.

Asset Quality – Management of Non Performing Assets

The Non‐Performing Assets have decreased by Rs. 42.26

Crores from Rs. 252.00 Crores as on 31st March 2016 to

Rs.209.74 Crores as on 31st March 2017. Gross NPAs as a

percentage to total advances has come down from 2.38% as

on 31.3.2016 to 1.69% as on 31.3.2017. Net NPAs (as a %age

to Net advances) has come down from 1.40% to 0.72%. In

absolute terms, Net NPAs was reduced from Rs 147.89 Crore

to Rs 87.58 Crore.

The NPAs have come down in all segments except AATL & SHG

segments which is on account of slippage of some Allied

Agricultural term loans sanction under Govt. sponsored

No.of A/cs Amount

During 2016‐17 2065 1231.29

Cumulative 6453 3800.53

34

Rs. in Lakhs


programmers by 1.15 Cr and in SHG by Rs.1.6 Cr. This is due to

nonpayment of instalments amounts on account of migration

of some members.

SARFAESI Act and Suit filing

Notices under SARFAESI Act were issued immediately after the

account becoming NPA. This was monitored by Head Office at

monthly intervals. Our actions in this regard have yielded

good results. We have taken demonstrative actions

particularly under SARFAESI. One desk officer each has been

posted to all Regions exclusively for the purpose of monitoring

NPAs who will be responsible for initiating action under

SARFAESI, Suit Filed, vehicle seizure etc., and also closure of

suit filed cases, AUCA recovery etc. Focus was given for

recovery of Recalled debts/ Suit filed accounts. Meetings

with Advocates were conducted in regions for expediting

disposal of suits.

SARFAESI (Rs.in lakhs)

Suit filed Cases

Suit filed Decreed EP filedRecovery after

filing Suit

Cases

1942

Amt

4325.00

Cases

1073

Amt

2037.00

Cases

477

Amt

980.00 159

AmtCases

508

Lokadalat

Lokadalat inter‐alia, is one of the modes of Alternative

Dispute Resolution, of late, gaining popularity as the award

of the Lokadalat shall be deemed to be a decree of Civil

Court. The significant feature of the Lokadalat is that legal

experts holding Lokadalat bench guide the parties in

arriving at a compromise or settlement in a friendly and

harmonious atmosphere.

In order to have uniformity, we have advised the percentage

of remission to be allowed while referring the cases to

Lokadalat Accordingly our branches have participated

exceedingly well and many branches have participated in

Lokadalats. During the year, 281 cases for an amount of

Rs.2.76 Crores were referred to Lokadalats of which 197

cases were settled for an amount of Rs.1.85 Crores. Of

which an amount of Rs.1.23 Crores was recovered.

Compromise settlements

Bank has recovered huge amounts of NPAs in ATL and ISB

Sector during the year 2016‐17 under compromise

settlement which are overdue for several years and where

sufficient provisions are available.

Compromise

No of A/Cs

Amount in Lakhs

2014‐15

754

767.00

2015‐16

1415

1114.63

2016‐17

2656

3536.20

Demand Notice issued Possession notice issued Possession Taken Auctioned Regularised

A/Cs Amt A/Cs Amt A/Cs A/Cs Amt A/C Amt

883 3239.00 405 1496.00 14 9 146 469 1597.00

35

(Rs.in lakhs)

The following strategies were adopted to reduce / contain the

NPAs:

1. One desk officer each has been posted to all regions for

the purpose of monitoring NPAs who will be responsible

for initiating action under SARFAESI, Suit Filed, vehicle

seizure etc., and also closure of suit filed cases, AUCA

recovery etc.

2. Chief Managers at Head Office (HODs) have been

allocated one Region each to monitor NPA position

regularly and visited branches, meeting NPA borrowers.

3. NPA accounts above Rs.20.00 Lakhs outstanding are being

monitored by Chairman personally.

4. Top 100 NPA branches were monitored personally by

Chairman, four General Managers for reduction of NPA.

Combined Paddy Harvesting machine financed by our JagdevpurBranch (Ashoknagar RO) Under Govt. Sponsored Scheme


5. Chronic NPA branches have been allotted to officials at

Head Office to monitor and reduce the NPAs.

6. NPAs between Rs.6.00 Lakhs to Rs.20.00 Lakhs in the

allotted regions were monitored by General Managers.

7. Review mechanism has been put in place. Regular review

meetings are being conducted for Manager (Advances)

and Regional Managers.

8. Wide publicity was given with regard to advantages on

renewal of crop loans viz., enhanced scales of finance,

crop insurance facility, interest subvention incentive from

GOI and Vaddi Leni Runalu other government sponsored

schemes by way of arranging meetings, displaying wall

posters, Banners etc.

Asset Classification (Rs in Crores)

Internal Control System – Inspection & Audit

The Risk Focused Internal Audit Report System has been implemented in the Bank from July 2009, as suggested by our Sponsored

Bank i.e. State Bank of India. To tighten the criteria to qualify for better ratings, the Bank has raised the benchmark for the Inspection

ratings with effect from 01.09.2011.

For further strengthening of the audit system the new format of RFIA has been introduced in the Bank w.e.f.01.10.2016 as advised

by our Sponsored Bank. As per the revised format the nomenclature of ratings have been changed as under:

Assets 2013‐14 2014‐15 2015‐16 2016‐17

O/s % O/s % O/s % O/s %

Standard 7545.61 95.57 8766.58 96.70 10349.77 97.62 12158.79 98.30

Sub Standard 159.53 2.02 165.09 1.82 77.60 0.73 36.69 0.30

Bad & Doubtful 189.23 2.40 133.25 1.47 173.63 1.64 171.61 1.39

Loss 1.05 0.01 0.68 0.01 0.76 0.01 1.43 0.01

Total NPAs 349.81 4.43 299.03 3.30 251.99 2.38 209.74 1.69

Total Advances 7895.42 100 9065.61 100 10601.76 100 12368.53 100

9. Top management has conducted audio conferences at

frequent intervals with Regional Managers, Manager

(Adv.), Desk Officers (NPAM),BMs for reviewing the

reduction of NPAs.

10. Account Tracking Centre (ATC) ‐ The officials posted at ATC

continuously called borrowers under IRAC 1, 2, 4 and

above for up‐gradation of accounts.

11. Five to six clusters in each region have been formed with

officials having good track record for capacity building

and reduction of NPAs.

12. Conducted auction for Gold ornaments pertaining to

Personal Gold Loans which became overdue, at common

date at quarterly intervals.

Existing Rating Revised Rating Range of Marks

Excellent Well Controlled ‐ A+ >=850

Good Adequately Controlled ‐ A >700 and <=850

Satisfactory Moderately Controlled ‐ B >600 and <=699

Not Satisfactorily Run Unsatisfactorily Controlled ‐ C <600

36


The marks allotted under each parameter have also been revised as under:

Branches with 'Excellent/Well Controlled – A+' and 'Good/

Adequately Controlled ‐ A' ratings are audited within 18

months from the previous audit date while the Branches with

'Satisfactorily/ Moderately Controlled ‐ B' and 'Not

Satisfactorily Run/ Unsatisfactorily Controlled ‐ C' rated

branches are audited within a year.

During the year 476 branches have fallen due for Audit and all

476 branches have been audited. Rating acquired by 476

branches is as under:

∙ 43 Branches have upgraded from 'Good' to

'Excellent/Well Controlled – A+';

∙ 234 Branches have retained 'Excellent/ Well Controlled –

A+'' rating;

∙ 114 Branches have retained 'Good/Adequately

Controlled ‐ A' rating;

∙ Totally 62 Branches have downgraded to a lower grade.

∙ 23 New branches audited.

∙ No “Satisfactory/ Moderately Controlled ‐ B” and “Not

satisfactory /Unsatisfactorily Controlled ‐ C” Branches as

on 31.03.2017

No

The break‐up of rating of total branches is as under:

S. Parameter Existing Revised No Format ‐ Format ‐ Marks Marks

1 Business Development 230 100

2 Credit Risk Management 250 450

3 Operational Risk Management 460 410

4 External Compliance 60 30

5 Self‐Audit 0 10

Rating Out of 474 Branches audited Out of 476 Branches audited

during 2015‐16 % during 2016‐17 %

Excellent 326 69 296 62

Good 148 31 180 38

Satisfactory ‐ ‐ ‐

Not Satisfactorily Run ‐ ‐

474 100 476 100

Sl. Particulars Position as on

31‐3‐13 31‐3‐14 31‐3‐15 31‐3‐16 31‐3‐17

01 Excellent/ Well Controlled ‐ A+ 247 320 395 484 486

02 Good/ Adequately Controlled ‐ A' 301 310 307 244 265

03 Satisfactory/ Moderately Controlled‐ B 26 03 02 0 0

04 Unsatisfactory/ Unsatisfactorily Controlled‐C ‐ ‐ 0 0 0

05 New Branches 64 71 24 23 17

06 Total 638 704 728 751 768

37


Out of 465 Audit Reports which have fallen due for closure

during the year, 451 have been dealt with and remaining 14

Reports are pending for closure. These reports are overdue for

closure for less than 3 months.

During the year, we have also audited 11 Regional Offices and

Ratings have been assigned to ROs to infuse competitive

environment among ROs to secure excellence in their

operations. Audit was also carried out in Accounts

Department, RASMECCC at Head Office.

The reports submitted by the Auditors have been dealt with by

taking corrective measures, wherever necessary. The

Department has carried out its operations with fair and

without prejudice which helped in strengthening the systems

and procedures.

Apart from this, the following audits have also been carried

out to enhance the efficiency levels:

Snap Audit – The schedule of Snap Audits have been advised

to ROs on monthly basis to depute Officials from Region to

other Region to carry out the Snap Audit of Branches to have

effective audit of the Branches. 963 Snap Audits have been

conducted during the year 2016‐17.

Income Audit – 384 branches have been subjected to Income

Audit during the year 2016‐17 and income leakage identified

and plugged to the extent of Rs 2.48 Cr.

Special Audit of segments: During the year top 37 branches

under Gold Loan Segment have been audited in all aspects to

ascertain quality of assets and documentation , apart from

adherence to the systems and procedure as per extant

instructions.

Compliance Audit:

Compliance audit is introduced with a graded system of

penalty. 10% of branches audited during the previous year

have been covered under compliance audit. Compliance Audit

has been conducted at 48 branches during the year 2016‐17.

Concurrent Audit

As a part of internal control system in our Bank, Concurrent

Audit is introduced from the financial year 2012‐13 as per the

policy guidelines issued by NABARD. Keeping in view the staff

availability, the Concurrent Audit is being conducted at 36

branches with the help of three Auditors. We propose to

extend the said Audit to cover at least 50% of the Credit and

other exposures of the Bank under Concurrent Audit System in

compliance with the guidelines issued by NABARD.

The Scope of Concurrent Audit is designed to cover (a)

handling of cash (b) safe custody of securities (c) exercise of

discretionary powers (d) sundry and suspense accounts (e)

clearing differences (f) off balance sheet items, security

aspects, verification of Assets Quality etc.

Audit Committee of the Board

The Audit Committee, constituted with one SBI‐nominee‐

director as Chairman and nominee directors of RBI , NABARD

and Govt. of India as members has met 3 times during the year

and reviewed the Financial Statements, Quarterly Profit &

Loss, Balance Sheet etc., of the Bank, audit function, quality of

the audit system, common irregularities observed by the

Auditors and compliance thereof and transparency and

accuracy that the audit system has carried.

Management Audit

Our Sponsor Bank (State Bank of India) has conducted

Management Audit of the Bank during the year, under section

24 A of Regional Rural Banks Act 1976 covering the period

from 01.04.2015 to 31.3.2016. The Management Audit

Report was duly complied with and compliance report

submitted to our Sponsor Bank, State Bank of India, within the

stipulated time.

NABARD Inspection under Section 35(6) of the Banking

Regulation Act 1949

National Bank for Agriculture and Rural Development

(NABARD) under Section 35(6) of the Banking Regulation Act

1949 has also conducted VIth Statutory Inspection of our

Bank with reference to the financial position as on

31.03.2016.

Branch Expansion

The Bank has opened new Branches at 17 new locations

during FY 2016‐17 taking the total number of branches to 768

as on 31.3.2017.

38

Online inauguration of 13 new branches by Sri Hardayal prasad,

CGM,SBI,LHO Hyderabad on 30.03.2017


Financial Inclusion

Access to financial services through alternative delivery

channels particularly Business Correspondent Agents (Bank

Mitras) has been a priority area for the Bank. Significant

efforts were made to strengthen the Bankmitra in terms of (a)

increasing outreach (b) technology up‐gradation (c) de‐

duplication of bankmitra accounts (d) activation of zero

balance accounts (e) stabilization of the reporting and

monitoring system (f) capacity building (g) building trust on BC

model banking among public to formalize their activities in the

rural areas and more importantly (h) increasing Bank Mitra

transactions so as to enhance the commission for Bank Mitras.

1867 Bank Mitras are operating in 4444 villages which do not

have a formal banking outlet of any Bank. Out of 4444, 825

villages are with population of 2000 and above and remaining

3619 villages with a population less than 2000).

Various products/transactions viz., Savings, Remittance,

Recurring Deposits, Insurance and Self Help Groups have been

rolled out through Business Correspondent Agents (BCAs) /

Bank Mitras to provide access to Banking and Financial

Services to the people living in the backward / unbanked

villages.

The focus on Bank Mitras during the year has reflected in the

following statistics:

∙ 48,36,690 transactions took place in bank Mitra accounts

as against 36,86,180 during previous year with an

increase of 11,50,510 transactions.

∙ Total amount involved in the transactions has also gone

up by 91% i.e., from previous FY's Rs 298.08Crore to

Rs569.78Crore during the year.

∙ Zero balance accounts have come down from 50% during

previous FY to 13% during the year.

FI operations

The entire Financial Inclusion (FI) operations at BCAs work on

the principle of Biometric verification of the beneficiaries by

using micro ATMs and are online, hitting our CBS server

instantly through Third Party Integration, which facilitates

updation of transactions carried out by BCAs on real time

basis, in CBS Server, via TSPs' Servers. All these devices have

the features stipulated by UIDAI. For more transparent Bio‐

Metric payment system, the Bank has started the process of

seeding Aadhaar numbers for both the old and new accounts

to initiate the Aadhaar Enabled Payment System (AEPS). The

Bank has already seeded 36,87,406 accounts with Aadhaar

and placed in NPCI mapper.

Pradhan Manthri Jan DhanYojana (PMJDY)

After the launch of PradhanMantri Jan DhanYojana (PMJDY)

on 15.08.2014 by the Hon'ble Prime Minister of India, the

Bank has opened 2.83 Lakh Basic Savings Bank Deposit

Accounts taking to total to 14,89,167 PMJDY Accounts and

almost saturated all the Households in 4,444 villages through

1867 Business Correspondent Agents (BCAs) and 768 Brick

and Mortar branches.

PMJDY is a wonderful and huge step which seeks to improve

the state of Financial Inclusion which has already been on in

India. The salient features of Accounts opening under PMJDY,

which makes the initiative more forward looking vis‐à‐vis

previous initiatives of GOI in Financial Inclusion are providing

39

Conducted Financial Literacy camps by our FLCs in Vishakapatanam Region to create awareness on bank’s products,

SHG Lendings, cashless transactions, Mobile banking etc.


Basic Savings Banking Accounts with (a) overdraft facility (b)

RuPay Debit card and (c) Personal Accidental Insurance

coverage of Rs 1 Lakh to the card holder.

We are targeting issue of RuPay Cards to all PMJDY account

holders loaded with insurance coverage and overdraft facility

during the year 2017‐18. NABARD was kind enough to

sanction a grant assistance of Rs.2.00 crores, i.e., 80% of the

total project cost of Rs.2.50 crores for distribution of 10 lakh

RuPay Debit cards to those customers only whose accounts

have been opened or being opened under Financial Inclusion

Plan (FIP)

Ultra Small Branches (USBs) in villages having population of

2000 and above

As per the GOI and RBI guidelines, the Bank has 493 USBs as at

the end of the current financial year in the FI villages having

population of 2000 and above. The Business Correspondent

Agents operate from these USBs. The USBs are provided with

minimum required space, furniture, stationery / registers for

enrollment and transactions maintenance. We have also

assigned a common signage to these USBs and provided the

boards for the Bank identity.

These USBs will turn into full fledged brick and mortar

branches in the coming months depending on the volume of

business garnered. Bank has provided the requisite

infrastructure like Tables / Chairs / Almirahs. The Bank has also

assigned a common signage to these USBs and provided the

boards for the Bank identity.

Direct Benefit Transfer ‐ Aadhar Payment Bridge System

(APBS):

Our Bank has been allotted all the 8 operating districts viz.,

SrikakulamVizianagaram, Visakhapatnam in AP and undivided

Khammam, Warangal, Nalgonda, Mahabubnagar and Medak

districts in Telangana for DBT Rollout.

We have successfully on boarded to Aadhar Payment Bridge

System (APBS), being the 1st RRB from the State Bank group in

the Country to implement Direct Benefit Transfer (DBT) for

LPG subsidy. We have so far received LPG subsidy benefit to

the 6267365 customers amounting to Rs 71.45 crores.

Aadhar Enabled Payment System (AEPS):

Aadhar Enabled Payment System was implemented by our

Bank during 2016‐17 and transactions were enabled in the

month of October 2015. Now all the customers holding

Aadhar seeded accounts can avail banking services at any

CSP/Branch of the bank. (Out of 1867 CSPs). The total number

of successful transactions are 23,35,991 (ONUS – 10,11,992

and OFFUS – 13,23,999) as on 31.03.2017.

FI‐CSP connectivity

In order to provide uninterrupted service to FI customers'

connectivity and other back end infrastructure continuous

monitoring mechanism is put in place. This has brought

improvement in FI transactions being carried out by CSP's.

FI (CSP) Transactions for the year 2016‐17

Financial Literacy Centres (FLCs):

With a prime objective to impart financial literacy in the form

of simple messages like 'why save with Banks, why borrow

from Banks, why repay the loans in time' the Reserve Bank of

India has advised all the Banks to set up one Financial Literacy

Center (FLC) each in the operating districts of the Bank. The

Bank has opened 8 such Financial Literacy Centres in 8

districts viz., Srikakulam, Vizianagaram, Visakhapatnam,

Khammam, Warangal, Nalgonda, Mahbubnagar and Medak

in tune with the guidelines issued by the NABARD. The

NABARD has sanctioned Grant Assistance of Rs.32.00 lacs

@Rs.4.00 lacs per FLC for operation of these 8 FLCs. The Bank

has posted retired Bank staff to look after the affairs of FLCs as

counselors. These FLCs are located at the district centres and

housed in the Regional Offices.

Financial Literacy Awareness Camps (FLACs)

The Bank has taken several Financial Literacy initiatives by

organizing 931 Financial Literacy Awareness Camps (FLACs)

and 1369 Grama Sabhas with Magic Shows, Street Plays and

Local Folks to educate the rural people to avail the Banking

and Financial Services at their door steps through Business

Correspondent Agents.

The publicity material in the form of pamphlets, brochures

and banners were distributed during the camps to spread the

message of financial awareness among the rural people. The

Bank has appointed Nodal Officers at each Regional Office

exclusively to monitor, supervise the FI activity and increase

business. The National Bank has sanctioned Grant Assistance

of Rs. 48.00 lacs under FIF for organizing these FLACs.

Financial Literacy and Credit Counseling Centres (FLCCs)

The Bank has joined hands with SBI, SBH and Telangana

Grameena Bank (all State Bank entities) for establishment of

Aardhika Viveka Aacharana (AVA)/FLCCs with contributions at

Transaction type No of Transactions Amount

Deposits 23,09,121 259.36

Withdrawals 25,27,569 310.42

40

Rs. In Crores


the ratio of 5:4:1:1, in the State in terms of RBI's directives. A

Governing Body has been formed under the Chairmanship of

General Manager (NW‐II), State Bank of India with our Bank's

Chairman as member. 12 FLCCs were established in the State

and created a corpus of Rs 42.78 Lacs to which our Bank had

contributed its share of Rs 3.89 Lacs.

The FLCCs benefit the citizens and SHGs by providing

necessary information on utilizing financial products available

suiting individual requirements and plans for future

development. Interest rates in deposits and advances,

selecting the right kind of deposit, availing loans depending on

the need, income generation, repaying capacity, preparation

of debt restructuring plan, customer rights, etc., are part of

the counseling services.

Cross Selling

SBI Life Insurance

The Bank is a corporate agent of SBI Life Insurance Corporation

Limited, to meet the life insurance needs of the Bank's

customers, as part of Financial Inclusion apart from earning

non‐interest income. The Bank stood No.1 in the country by

mobilizing a New Business Premium (NBP) of Rs.18.54 crores

during the year 2016‐17 and earned a commission of Rs 2.14

cr. The performance highlights are as under:

We have also achieved a business share of 20% of State Bank

Group RRBs in both the premium and business commission for

the year 2016‐17.

SBI General Insurance

We have commenced SBI General Insurance Business during

the year 2015‐16 as a Corporate Agent and mobilized a

business premium of Rs 757.70 lacs during the year 2016‐

17,with an increase of more than 800% over the previous

Year's Rs 92.70 Lacs. Marketed two Insurance products viz.,

group Health Insurance Scheme and Group Personal

Accidental Insurance Scheme apart from insurance to the

Assets financed by the Bank to the eligible and willing

customers.

Information Technology

Demonetization Environment

The financial year 2016‐17 was a year of reckoning for the

banking industry in the demonetization environment

announced by the Government of India. The banking industry

was under pressure in meeting the expectations of the

customers and statutory authorities in meeting the

challenges thrown on account of demonetization such as

improving cash less transactions, strengthening the alternate

delivery channels, improving infrastructure in information

technology etc.

Our bank rose to the occasion by evaluating its alternate

delivery channels and reorienting its operations towards

educating its customers in delivery and use of alternate

delivery channels at the customer's door steps. The following

strategies were adopted in spreading of cash less

transactions in bank's area of operations:

a) Village meets were organized to explain cashless

transactions.

b) Rupay KCC and PMJDY debit cards were delivered to bank

customers at their door step by organizing camps.

c) Bank's ATMs were got re‐calibrated and arrangements

were made to see that cash was dispensed by the

machines at all times. This has won the bank a number of

accolades from the customers/citizens.

d) Bank's Mobile ATM was deployed in villages and towns in

the area of operation of our bank to dispense cash to the

needy.

e) The CBS environment was timely re‐oriented to function

as per the RBI directives in the demonization period.

Parameter Budget for Achievement 2016‐17

New Business Premium 14.25 18.54

Business commission 1.50 2.14

Parameter State Bank APGVB Business share Group RRBs

New Business Premium 93.33 18.54 20 %

Business commission 12.93 2.14 17%

41

Rs. In Crores

Rs. In Crores

Creating awareness on Mobile Banking,

Cashless transactions and RuPay ATM Cards


Rupay ATM Debit Card transactions

Point of Sale Machines (PoS): PoS transactions increased by 416% over the previous year which indicated that bank's customers

adopting cashless transactions to meet their financial transactions

Immediate Payment System (IMPS)As sub‐member of our sponsor bank SBI, our bank is permitted on IMPS platform of NPCI as Beneficiary bank only. At present bank's

IMPS services limited to inward remittances only and there is considerable growth in transactions during the year.

Mobile Banking Services (MBS)

To provide our customers the latest banking technology product, Mobile banking facility was launched in May 2016. The mobile

banking facility has been rolled out on Android, IOS and windows mobile operating systems. Bank's Mobile banking app is a

bilingual one and available both in Telugu and English languages.

42

Period 2015‐16 2016‐17

Type of Transactions No.of Transactions (Rs. in crores) No.of Transactions (Rs. in crores)

ATM‐Issuer 27,36,866 536.53 40,59,575 750.62

ATM‐Acquirer 10,687 2.00 65,616 10.27

POS Transactions

Period 2015‐16 2016‐17


As Beneficiary Bank 1,40,972 10.09 7,28,617 96.43

Period 2015‐16 2016‐17


As Beneficiary Bank 570 1.02 55,409 65.89

IMPS transactions

ATM TransactionsThe ATM transactions increased by 48% in the issuer category and an increase of 513 % in the acquirer category. The growth in the issuer ATM transactions was on account of making cash available at our onsite ATM's during the demonetization period and thereafter.

Launching of Mobile Banking by Shri. Hardayal Prasad,

CGM SBI LHO, Hyderabad

Hon’ble Central Minister Shri Bandaru Dattatreya Visited the Stall arranged by bank to create awarness on cash less banking,

Mobile Banking, ATM Cards, Micro ATMs by Business correspondents etcin Digidhan Mela held on 18‐01‐2017 at Hyderbad


INTERNET BANKING

After complying with the directives of RBI, Internet Banking

with view rights was rolled out to our customers by the bank.

There is good demand from our customers for roll out of

transaction rights also for which we are expecting permission

from RBI. As on 31.03.2017, internet banking view rights has

been enabled to 1932 customers.

RTGS & NEFT

A popular mode of funds remittance among our customers.

The NEFT transactions grew by 44% and RTGS transactions by

59% during the year.

NEFT & RTGS Transactions

National Automated Clearing House (NACH): During the year, our bank on boarded NPCI’s NACH platform as sponsor bank for

enabling debit transactions. Our bank participates in NACH and ABPS transactions and the trends of transactions during the year

were as follows:

Bank Mitra Transactions: The banking transactions at Bank Mitra points have been increased considerably during the year with

the enablement of Rupay cards ,regular monitoring of bank mitra activities. In order to take banking transactions to the last mile in

Financial Inclusion, AEPS transactions both Onus and Offus were enabled at Bank Mitra points in August 2016.

43

Period 2015‐16 2016‐17


NEFT (Inward) 47,01,219 2667.46 65,69,064 4686.13

NEFT (Outward) 2,87,918 1396.31 6,29,086 2942.66

RTGS (Inward) 7,816 1137.86 11,534 944.00

RTGS (Outward) 7,627 966.64 13,047 1251.60

ABPS & NACH Trancsactions

Period 2015‐16 2016‐17


ACH ‐ Cr 11,36,372 42.87 16,67,668 56.46

ABPS 25,91376 54.64 62,67,365 71.45

Bank Mitra (FI) Transactions

Period 2015‐16 2016‐17


Deposits 22,31,202 149.39 23,09,121 259.36

Withdrawals 14,54,978 148.69 25,27,569 310.42

No of SB Accounts opened 1,66,549 ‐ 51,449 ‐

No of RD Accountsopened 34,631 ‐ 24,455 ‐

Nature of complaint Officer in Officer in At Head Office level charge at Branch charge at RO

General Complaints (other than Branch Manager Regional Manager Chief Manage (Board) vigilance nature) & complaints under the control of General Manager‐IIIfrom / through the Banking Ombudsman

Complaints of vigilance nature Branch Manager Regional Manager Chief Manage (Vig) under the control of General Manager‐I


The AEPS transaction carried out in this financial yearare as follows:

Security Day on Information Technology

Bank has observed Security day on 30.11.2016 as part of

educating the bank's staff and customers on safety measures

to be taken in use of technology, Do's and Don't s in use of

hardware/software, precautions to be taken in conducting

banking operations. Customers meets were conducted to

educate them and Pamplets containing the safety measures

were distributed to them.

Liability Central Processing Center: Bank has provided to its

customers with personalized cheque books during the year.

This facility would lead to enhanced brand image of the bank.

Security Measures – Installation of CCTVs and Burglar Alarm

Systems

Physical security systems that effectively protect the Bank

assets, customers, and employees assume paramount

importance, in view of increasing incidence of robberies,

mischief. The Bank has provided CC Cameras & Burglar Alarms

to all 768 branches of the Bank.

Project Ambiance

Providing facelift and pleasant ambiance at Branches has

been one of the focused areas of the Bank as part of

enhancing customer service and satisfaction. The Bank has

spent Rs 1.80 Crore during the year 2016‐17 and 51 Branches

have been given for facelift.

Construction of own building

Bank has taken possession of 3 own buildings at

Mahabubnagar (Gopalpet & Elkur) & Nalgonda(Atmakur) ,

whereas construction of own buildings at our own sites in

Khammam, Nalgonda & Sangareddy districts are in progress

Customer Service & Complaints handling

All Branches are conducting customer meets every quarter

and important customers are invited. Their views and

opinions were solicited in order to take corrective steps,

wherever necessary. Regional Managers concerned are

attending the customer meetings whenever feasible.

The Bank has put in place complaint‐handling‐policy to

redress the grievances of the customers and improve the

quality of customer service. The following system of

monitoring of complaints for their redressal and submission

of compliance is in vogue:

Type of Transactions No. of Transactions

AEPS (Onus) 10,11,992

AEPS (Offus) 13,23,999

Total AEPS 23,35,991

44

Whistle Blowing Policy with an objective of providing an avenue for raising concerns related to frauds, corruption or any other misconduct is also in place. The Bank has also installed a Toll Free Number to receive feedback from the customers on the Bank's services.

Right to Information Act

The Bank implemented the Right to Information Act, 2005 in letter & spirit setting out the practical regime of right to information for citizens to secure access to information under the control of bank in order to promote transparency and

accountability in the working of bank's various functionaries.

At the Branch level, the Branch Manager has been designated as Central Assistant Public Information Officer while the Regional Manager concerned is designated as the Central Public Information Officer. At Head Office level, the Law Officer is the Central Assistant Public Information Officer and the Chief Manager (Audit & Inspection) is the Central Public Information Officer. The General Manager – III has been designated as Appellate Authority in the Bank, under RTI Act.

During the year 2016‐17, the Bank has received 181 applications and 29 appeals and disposed off all applications and appeals within the stipulated time frame.

Our Chairman distributing PoS Machines to Bank Mitras, during a Programme

on Cashless Transactions held in Yerravalli & Narsannapet Villages

45


Our Chairman felicitating Top performers in NPA Reduction

during the year 2016‐17

FINANCING POLY HOUSES FOR CULTIVATION OF FLOWERS & VEGETABLES

SIDDIPET BRANCHSIDDIPET BRANCHSIDDIPET BRANCH SHADNAGAR BRANCHSHADNAGAR BRANCHSHADNAGAR BRANCH

Poly houses of Cultivation of Gerbara Flowers Financed by our siddipet & Shadnagar Branches with subsidy support from Govt. /NABARD

Poly house financed by our saluru branch (Parvathipuram Region) for cultivation of vegetables

Officers S‐IV 48

Officers S‐III 170

Officers S‐II 486

Officers S‐I 1117

Office Assistants 1097

Office Attendants 94

Total 3012


During the year, 104 staff members have retired from the

Bank's Service. 81 staff members have resigned two staff

members were removed from service. Eleven Staff members

expired during the year.

182160.46%

109736.42%

943.13%

Officers

Office Assistants

Office Attendants

Recruitments

Since 2009‐10, the Bank has been recruiting staff through

IBPS, as per manpower assessment and requirement stundertaken as on 31 March of every year in terms of Thorat

Committee recommendations, presently as per Mitra

committee recommendations approved by GOI. Last seven

years have witnessed mass retirements of those staff

members who had joined erstwhile RRBs in late 1970s and in

1980s.

Accordingly, based on the business volumes as on 31.3.2016,

the Bank has taken up recruitment exercise for augmentation

of staff in various grades, including lateral recruitment of

Scale‐II and Scale‐III Officers in General Banking and with

specialization in Law, IT, Marketing, Treasury, CA etc

Grade No. of Candidates recruited during the year

1 Office Assistants 130

3 Officers Scale‐I 40

4 Officers Scale‐II 21

5 Officers Scale‐III 03

194

46

Human Resource Management

As the end of FY 2016‐17, the staff strength (excluding those who exited the Bank service in the month of March 2017 on account of retirements / resignations) and its composition is as under:

As at the end of FY 2016‐17, there are 128 Scale‐II Officers and

23 Scale‐III Officers directly recruited from the market

laterally.

The Bank's in house Learning Centre has been working

continuously to train and re‐train the new recruits imparting

skills and supply inputs in all areas to equip them to handle the

day to day functions well. All the recruitments have been

completed through the Common Written Test including

interviews conducted by IBPS.

Promotions

Keeping in view the Bank's policy of giving promotions

promptly to staff, we have taken up promotion exercise in

terms of manpower assessment as on 31.03.2016 and

promoted as many as 162 people in various cadres to next

higher grade as under. Written Test for promotion was

arranged through IBPS online from this FY onwards.

Promoted to No. of Posts

1 Officers Scale‐I 62

2 Officers Scale‐II 37

3 Officers Scale‐III 51

4 Officers Scale‐IV 12

5. Office Asst. 0

162

The Bank has fulfilled the statutory requirement of giving pre‐

promotion training to all SC/ST candidates, eligible for

promotion, prior to written test. This has enabled the SC/ST

candidates to prepare themselves better, to take on the

written test.

Training ‐ Staff Learning Centre

The Bank had laid down a Training Policy which envisages

training to all staff members, atleast once in three years.

During the year, APGVBSLC has conducted 61 training

programmes and provided training to 1686 staff members.

The participants include all cadres of staff (Officers‐1079,


Off.Assts‐604 & Off.Attendents ‐3)

The Bank has also deputed 48 staff members, essentially in

the higher cadres, to external training institutions like BIRD

(Lucknow), RBI (CAB, Pune), BIRD (Mangalore), State Bank

Learning Centres on important subjects like AML, ALM, KYC,

RTI Act, Treasury Management, Business Development etc.

Staff welfare measures

Mediclaim policy

The Bank has renewed the Group Medi Claim Floater Policy

with United India Insurance Company Limited, after following

CVC guidelines. The Floater Policy covered the

Hospitalisation expenses upto Rs 4 Lakh for the Staff and their

spouse including buffer amount of Rs 2 Lakh. The Scheme,

apart from facilitating hassle free admission into the hospital

immediately and payment of cash, makes the settlement of

hospitalization expenses become much easier, saving

administrative time considerably. The scheme also covers

domiciliary treatment expenses up to Rs 20,000/‐

Gratuity and Leave Encashment Fund

The Bank has taken care of provisional requirements in

respect of Gratuity. The total corpus as on 31.3.2017 is to the

tune of Rs 153,22,07,375 towards Gratuity and

Rs 86,31,76,980 towards Leave Encashment.

Industrial Relations

The Management and Officers Association and Employees

Union have worked in tandem for the welfare of the staff

members and business development, sorting out amicable

solutions for routine issues that cropped up during the year.

Cordial and amiable working atmosphere has prevailed

during the year.

Welfare of SC/ST and OBC Employees

The Bank has maintained cordial relations with the SC/ST

Welfare Association and OBC Welfare Association and

complied with statutory requirements in all aspects of

recruitments, promotions etc. The Bank has held regular

meetings with the representatives of Welfare Associations

and Liaision Officers to redress their grievances.

The Bank has taken all steps to keep up the morale and

motivation of the employees.

47

Settlement of Terminal Benefits

The Bank has made a policy that all terminal benefits are

settled on the date of retirement of staff members. The

process begins two months in advance of retirement to ensure

that all formalities are completed to make payment on the

date of retirement.

Payment of Ex‐gratia

The Bank has implemented the GOI instructions, contained in

their notification No: F.20/5/2003—RRB dated 9.6.2006, on

payment of ex‐gratia in lieu of appointment on compassionate

grounds for the legal heirs of the bereaved staff members and

also to the staff who are chronically sick and immobile on sick

grounds. The cadre‐wise ceiling of ex‐gratia and total amount

paid are as under:

Grade Ceiling of Amount paid Ex‐gratia during the year

1 Officers Rs 8 Lakhs Rs 5,98,965/‐

2 Clerical Staff Rs 7 Lakhs Rs 7,00,000/‐

3 Sub‐Staff Rs 6 Lakhs Rs 12,98,965/‐

Vigillance Awareness WeekBank has observed Vigilance Awareness Week from 31.10.2016 to 05.11.2016 throughout the bank. All Staff members have taken e‐pledge and conducted Vigilance Awareness Programmes at branches

Chairman, General Managers and all the staff membersat Head office taking Oath in connec�on with

Vigilance Awareness Week


48

Our Bank has celebrated International Women's Day on 8.3.2017 by involving our lady staff members from Branches. We have also organised Sessions by Dr. Swaroopa Rani and Dr. Rajitha Reddy for the benefit of our lady staff on effective management of the personal and professional life.

MEGA SPORTS MEET

Bank has conducted first ever Mega Sports meet with four events namely Cricket, Shuttle Badminton, Carroms and Chess. Totally 250 Staff members participated in the events. It motivated the staff members particularly the younger generation and developed a bond among staff

from various regions.

49



Attendance of Directors at Board Meetings during the calendar year 2016

S. No. Name of the Director WEF No. of Meetings No. of Meetings

held attended

1 Shri V. Narasi Reddy 21.07.2014 6 6

2 Shri CL Naidu 28.06.2013 6 *4

3 Shri V. Hanumantha Reddy 27.09.2013 6 *4

4 Shri M.S.Harishankar 24.06.2016

Shri S. Chellapandi 22.07.2014 6 6

5 Shri V.S.Gupta 03.08.2015 6 6

6 Shri T.V. Reddy 28.07.2014 6 4

7 Shri KV Maruthi Rao 24.10.2014 6 4

8 Smt K.Sunitha,IAS 27.06.2015 6 Nil

9 Ms. K.Amrapali,IAS 11.10.2016

Smt. V. Karuna, IAS 11.01.2015 6 Nil

which were confirmed by the Board in the following

Meetings.

The Board has undergone the following changes in the

composition on account of transfer of officials during the year.

Shri S.Chellapandi, Asst. General Manager, RBI,

Hyderabad, RBI nominee director on the Bank's Board

has been replaced by Shri M.S.Harishankar Asst. General

Manager, FIDD,RBI, Hyderabad during the year.

Smt. V.Karuna, IAS, Dist collector & Magistrate,

Warangal, Telangana State Government nominee

director on the Bank's Board has been replaced by her

successor Ms.K.Amrapali, IAS, Dist collector &

Magistrate, Warangal (urban) during the year.

Both the Govt.of India nominee directors Shri V.

Hanumantha Reddy and Shri C.L Naidu have left the

board on completion of their term during the year.

The Bank places on record the invaluable services

rendered by the Directors Shri S.Chellapandi, AGM,

RBI, Hyderabad, Smt. V.Karuna,IAS, Dist collector &

Magistrate, Warangal, Shri V. Hanumantha Reddy and

Shri C.L Naidu, GOI nominee directors who left the Board

during the year.

50

Board

The Board of the Bank is constituted by

(a) Chairman of the Bank

(b) two non‐official directors appointed by Govt. of India

(C) one nominee director each from Reserve Bank of India

and NABARD

(d) two nominee directors from Sponsor Bank

(e) two nominee directors from State Government of

Telangana / AP

With Chairman of the Bank as Chairman of the Board.

Board Meeting Rules stipulate that the Board meets minimum

six times a year, at least once in a quarter. Minimum quorum

for the Board Meeting to transact business is four directors

and no meeting was adjourned for want of quorum.

*The term of Govt of India nominee directors have completed

during the year and Proposals sent to Govt of India through

NABARD/SBI for fresh appointment of directors. Govt of India

yet to appoint the directors, presently these two posts are

vacant.

During the intervening period of two Board Meetings, as and

when warranted, the Board has transacted the business by

means of Circulation of 18 agenda notes during the year,


51

For and on behalf of Board of Directors of Andhra Pradesh Grameena Vikas Bank

(V. Narasi Reddy)Chairman

Acknowledgements

The Board of Directors of the Bank would like to express their

sincere gratitude for the continued trust and patronage

received from the customers who have stood with the Bank all

through. The feedback received from customers by way of

suggestions / complaints/ interactions during the meetings on

the service element have helped the Bank to take corrective

measures and new initiatives to improve our efficiency levels.

The Board takes immense pleasure in expressing their

gratitude for the guidance and cooperation received from the

Sponsor Bank, Government of India, both the state

Governments Telangana and Andhra Pradesh, Reserve Bank of

India, NABARD, other Financial Institutions and Banks for their

unflinching and valuable support to the Bank from time to

time.

Further, the Board would like to convey its gratitude to

Shri Hardayal Prasad, Chief General Manager, Shri Giridhara

Kini, General Manager (Network‐I), Shri Ravindra Pandey

General Manager (Network‐II); Shri U.N.N.Maiya , General

Manager (Network‐III), State Bank of India LHO Hyderabad

Shri S. Ganesan, DGM (RRBs & LLB), SBI, CC, Mumbai, Shri P.

Venkata Rao, AGM (RRBs), SBI, LHO, Hyderabad. They shared

their knowledge, their ideas, and numerous tips all of which

were extremely useful in taking this Bank forward. The Bank is

indebted to these executives for their constant handholding.

We will be failing in our duty if we do not acknowledge the

help extended by NABARD and State Bank of India, Local Head

Office, Hyderabad in sparing their Officers to be members of

the Selection Committees constituted for promotions.

The Board conveys its gratitude to Shri R.Subramanian,

Regional Director, Reserve Bank of India, Hyderabad; Smt.

Reeny Ajith, Banking Ombudsman, RBI, Hyderabad for their

support.

The Board also acknowledges the great support and

affectionate guidance from Shri Dr. P.Radhakrishnan and Shri

V.V.V.Sathyanarayana, Chief General Managers, National Bank

for Agriculture and Rural Development (Telangana & A.P)

Hyderabad, and their team of General Managers Shri P.N.

Satya Prasad and Shri D.Nageswar Rao.

The Board also expresses sincere thanks to all the District

Collectors, Project Directors of DRDA, IKP, DWMA, SC/ST/BC

Minorities and Housing Corporations of all the districts in

Telangana and Andhra Pradesh where our Bank is operating,

for their support and encouragement.

The Board would like to gratefully acknowledge the support

rendered by our Technology Service Providers viz., M/s C‐

Edge Technologies, Mumbai, M/s Irix Technologies and M/s

National Payments Corporation of India.

Apart from our customers, the support received from the

Government Departments / Institutions of both Telangana

and Andhra Pradesh states was immense and augmented our

resources. The Board wishes to thank Pollution Control

Boards, Sthree Nidhi credit co‐op federation ltd, Markfed,

Industrial Development Corporations, endowments

departments of both Telangana and A.P States for their

patronage. We also place on record our sincere thanks to A.P

state co‐op Bank ltd(APCOB), Sri Konda Laxman Telangana

state Horticultural University, Advocates Mutually Aided co‐

op socity, Hyderabad and all other departments/Institutions

for their remarkable patronage.

The Board extends its heartfelt gratitude to M/s Bhaskar Rao

& Co, the Central Statutory Auditors of the Bank and other

Statutory Branch Auditors for their cooperation in completing

the Audit of the Bank's Financial Year 2016‐17 in time.

The Board also expresses its gratitude to all Public Relations

Officers, Press and media for their cooperation in giving wide

publicity for the Bank. The Board also thanks the Officers

Association, Employees Union and SC/ST/OBC Welfare

Associations for their constructive role played in overall

development of the Bank.

Words are not adequate to recall the excellent performance,

sense of involvement, ownership and dedicated services

rendered by each and every staff member in achieving the

sustained business growth and profit and surpassing all the

targets set out for the year under MoU with our sponsor bank.

Amazing work by the individuals is always valued and kept on

record.


52

Balance Sheet

Profit & Loss A/c

Schedules

Notes to Accounts

Performance in Figures


53

INDEPENDENT AUDITORS' REPORT

M Bhaskara Rao & Co.Chartered AccountantsTo

The ShareholdersAndhra Pradesh Grameena Vikas BankReport on the Financial Statements

1. We have audited the accompanying financial statements of Andhra Pradesh Grameena Vikas Bank (”the Bank”) as at

the March 31, 2017, which comprises the Balance sheet as at March 31, 2017, and profit and Loss Account and the cash

flow statement for the year then ended, and a summary of significant accoun�ng policies and other explanatory

informa�on. Incorporated in these financial Statements are the returns of:

I. The Head Office, 21 Branches audited by us;

ii. 348 Branches audited by Other Auditors.

2. The branches audited by us and those audited by other auditors have been selected by the Bank in accordance with the

guidelines issued to the Bank by the Na�onal Bank for Agriculture and Rural Development (NABARD). Also

incorporated in the Balance Sheet and the profit and Loss Account are the returns from 400 branches (including other

accoun�ng units) which have not been subjected to audit. These unaudited branches account for 24.98% of advances,

32.78% of deposits,18.05% of interest income and 23.99%. of interest expenses.

Management’s Responsibility for the Financial Statements

3. The Bank’s Board of Directors is responsible for prepara�on of these financial statements that give a true and fair view of

the financial posi�on, financial performance and cash flows of Bank in accordance with the applicable provisions of

Regional Rural Bank Act, 1976, Banking Regula�ons Act, 1949, applicable guidelines of Reserve Bank of India (RBI) /

NABARD accoun�ng principles generally accepted in India, including the Accoun�ng Standards issued by Ins�tute of

Chartered Accountants of India (ICAI). This responsibility of management includes the design, implementa�on and

maintenance of internal controls and risk management systems relevant to the prepara�on of the financial statements

that are free from material misstatement, whether due to fraud or error. In making those risk assessments, the

management has implemented such internal controls that are relevant to the prepara�on of the financial statements

and designed procedures that are appropriate in the circumstances so that the internal control with regard to all the

ac�vi�es of the Bank is effec�ve.

Auditor’s Responsibility

4. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in

accordance with Standards on Audi�ng issued by the ins�tute of Chartered Accountants of India. Those Standards

require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about

whether the financial statements are free from material misstatement.

5. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial

statements. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of

material misstatement of the financial statements, whether due to fraud or error. In making those risks assessments,

the auditor considers internal control relevant to the bank’s prepara�on and fair presenta�on of the financial

statements in order to design audit procedures that are appropriate in the circumstances but not for the purpose of

expressing an opinion on the effec�veness of the en�ty’s internal control. An audit also includes evalua�ng the

appropriateness of accoun�ng policies used and the reasonableness of the accoun�ng es�mates made by

management, as well as evalua�ng the overall presenta�on of the financial statements.

6. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit


54

opinion.

Opinion:

7. In our opinion as shown by books of the Bank and to the best of our informa�on and according to the explana�ons given

to us:

i. The Balance Sheet, read with the significant accoun�ng policies and the notes thereon is a full and fair Balance

Sheet containing all the necessary par�culars, is properly drawn up so as to exhibit a true and fair view of state of affairs

of the Bank as at 31st March 2017 in conformity with accoun�ng principles generally accepted in India;

ii. The Profit and Loss Account, read with the significant accoun�ng policies and the notes thereon shows a true

balance of profit in conformity with accoun�ng principles generally accepted in India, for the year covered by the

account; and

iii. The Cash Flow Statement gives a true and fair view of the cash flows for the year ended on that date

8. We draw a�en�on to the following Notes to the Financial Statements :

Schedule 18(II) (9) regarding disputes with income tax departments over the tax demands raised by the income tax

department. For the reasons stated there in the impact, if any, on the financial statements will be recognised in the year

of se�lement of such disputes

Report on Other Legal and Regulatory Requirements

9. The Balance Sheet and the Profit and Loss Account have been drawn up in Forms “A” and “B” respec�vely of the Third

Schedule to the Banking Regula�on Act, 1949.

10. Subject to the limita�ons of the audit indicated in paragraph 1 to 5 above and subject to the limita�ons of disclosure

required therein, we report that:

a. We have obtained all the informa�on and explana�ons which to the best of our knowledge and belief, were

necessary for the purposes of our audit and have found them to be sa�sfactory.

b. The transac�ons of the Bank, which have come to our no�ce, have been within the powers of the Bank.

c. The returns received from the offices and branches of the Bank have been found adequate for the purposes of our

audit.

d. The Balance Sheet and the Profit and Loss Account dealt with by this Report are in agreement with the books of

account and the Returns.

e. In our opinion, proper books of account as required by Law have been kept by the Bank, so far as appears from our

examina�on of those books

f. The Reports on the financial statement of the Branches audited by the Branch Auditors have been dealt with in

preparing our Report in the manner considered necessary by us.

11. In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement comply with the applicable

accoun�ng standards.

For M Bhaskara Rao & Co.Chartered Accountants

Firm Registration Number: 000 459 s

V K MuralidharMembership Number: 201570

Hyderabad, April 27, 2017


55

Place: Ramachandrapuram, Medak DistDate: 27th April 2017

As per our report of even dateFor M.Bhaskara Rao & Co.,Chartered Accountants

For Andhra Pradesh Grameena Vikas Bank

(Rs in '000s)stBalance Sheet As At 31 March 2017

Andhra Pradesh Grameena Vikas BankHead Office: Warangal

(V.K.Muralidhar) (S. Prakash Kumar) (V.Narasi Reddy)Partner General Manager‐III ChairmanMembership No : 201570Firm Registration No : 000459s

(M.S. Hari Shankar) (T. Venkata Reddy) (K.V. Maruthi Rao)Director Director Director

(V.S. Gupta) (Ms. K. Amrapali, IAS) (Smt. K. Sunitha IAS)Director Director Director


Particulars Sch. As on 31.03.2017 As on 31.03.2016

CAPITAL AND LIABILITIES

Capital 1 94 08 50 94 08 50

Reserves & Surplus 2 1655 72 37 1303 73 25

Deposits 3 12818 57 62 10202 11 53

Borrowings 4 5620 84 13 3733 79 81

Other Liabilites & Provisions 5 857 92 53 839 60 79

Total 21047 15 15 16173 33 88

ASSETS

Cash and balances with RBI 6 730 55 43 514 84 18

Balances with Banks and Money at Call & Short Notice 7 4057 12 69 2850 65 79

Investments 8 4433 07 29 2358 46 79

Advances 9 10926 36 75 9862 43 63

Fixed Assets 10 57 17 70 55 61 20

Other Assets 11 842 85 29 531 32 29

Total 21047 15 15 16173 33 88

Contingent Liabilities 12 33 37 92 35 99 36

56

st Profit & Loss for the year ended 31 March 2017 (Rs in '000)



Particulars Sch. 2016‐17 2015‐16

1 Interest Earned 13 1760 87 26 1484 69 50

a Interest/Discount on Advances/bills 1309 92 51 1104 72 89

b Interest on Investments 250 49 50 171 42 99

c Interest on Balances with RBI And Other Inter Bank Funds Nill Nill

d Interest Otheres 200 45 25 208 53 62

2 Other Income 14 197 19 14 161 47 41

a Commission, Exchange and Brokerage 141 14 99 125 63 65

b Miscellaneous Income 56 04 15 35 83 76

3 TOTAL 1958 06 40 1646 16 91

4 Interest Expended 15 1108 93 87 968 51 82

5 Operating Expenses (a+b) 16 297 46 64 336 76 55

a Employees Costs 199 66 43 229 17 86

b Other Operating Expenses 97 80 21 107 58 69

6 "Total Expenditure (excluding provisions and Contingencies) ( 4+5)" 1406 40 51 1305 28 37

7 Operating Profit before provisions and Contingencies (3‐6) 551 65 89 340 88 54

8 Provisions (other than tax) and Contingencies 28 96 06 ‐34 70

9 Profit/Loss from Ordinary Activities before Tax (7‐8) 522 69 83 341 23 24

10 Tax Expense

a Provision for Taxation–Current Year ‐169 06 00 ‐107 61 57

b Deferred Tax ‐1 45 78 ‐1 32 77

c Earlier Years Adjustments ‐18 93 ‐8 81 83

11 Net profit/Loss for the period from Ordinary Activities after Tax 351 99 12 223 47 07

12. Extraordinary Items Nil Nil

13. Net profit/Loss for the period 351 99 12 223 47 07

57

(Rs in '000s)








APPROPRIATIONS

Net Profit/Loss for the period 351 99 12 223 47 07

Brought forward Profit 1027 32 54 848 54 88

Transfer to the Statutory Reserves 70 39 82 44 69 41

Special Reserve U/s 36(1)(viii) of IT Act, 1961 3 84 66 0

Profit(+)/Loss(‐) Carried Over to Balance Sheet 1305 07 18 1027 32 54

Summary of Significant Accounting Policies 17

Disclosures and Notes to Accounts 18

Particulars Sch. 2016‐17 2015‐16

58

SCHEDULE – 1 CAPITAL

st Schedules forming Part of Balance Sheet As on 31 March 2017

(Rs in '000)


Head Office: Warangal


Particulars As at 31.03.2017 As at 31.03.2016

Authorised Capital 2000,00,00 2000,00,00

(200,00,00,000 Equity Shares of Rs.10/‐each)

Issued Capital 94,08,50 94,08,50


Subscribed Capital 94,08,50 94,08,50


Called up Capital 94,08,50 94,08,50


Less: Calls Un Paid NIL NIL

Add: Forfeited Shares NIL Nil

TOTAl 94,08,50 94,08,50

59


st Schedules forming Part of Balance Sheet As on 31 March 2017


SCHEDULE – 2 - RESERVES AND SURPLUS(Rs in '000s)

Particulars As on 31.03.2017 As on 31.03.2016

I. Statutory Reserve

i. Opening Balance 262,08,02 217,38,61

ii. Additions during the Year 70,39,82 44,69,41

iii. Deductions During the year Nil Nil

TOTAL 332,47,84 262,08,02

II. Capital Reserve

i. Opening Balance 1,20 1,20

ii. Additions during the Year Nil Nil


TOTAL 1,20 1,20

III. Share Premium

i. Opening Balance NIL NIL

ii. Additions during the Year NIL NIL


TOTAL 0 0

IV. Special Reserve U/s 36(1)(Viii) of Income Tax Act.1961

i. Opening Balance Nil Nil

ii. Additions during the Year 3,84,66 Nil


TOTAL 3,84,66 Nil

V. Revenue and Other Reserves

i. Opening Balance 14,31,49 14,31,49

ii. Additions during the Year Nil Nil


TOTAL 14,31,49 14,31,49

VI Balance in Profit and Loss Account

I Opening Balance 10273254 8485488

II Additional during the Year 2777464 1787766

Total 13050718 1027 32 54

Grand Total 1655 72 37 1303 73 25

60

SCHEDULE – 3 ‐ DEPOSITS

SCHEDULE – 4 ‐ BORROWINGS

(Rs in '000s)

(Rs in '000s)


Head Office: Warangalst

Schedules forming Part of Balance Sheet As on 31 March 2017



A. I. Demand Deposits

i) From Banks NIL NIL

ii) From Others 126 87 53 59 34 38

II. Savings Bank Deposits 5134 62 68 3674 42 36

III. Term Deposits

i) From Banks NIL NIL

ii) From Others 7557 07 41 6468 34 79

TOTAL 12818 57 62 10202 11 53

B. i) Deposits of Branches In India 12818 57 62 10202 11 53

ii) Deposits of Branches Out Side India NIL NIL

TOTAL 12818 57 62 10202 11 53


I. Borrowings In India

I) Reserve Bank of India NIL NIL

Ii) Other Banks (SBI) 1894 60 79 1004 60 92

Iii) Other Institutions and Agencies (NABARD & NHB)

a) NABARD 3684 71 42 2648 52 93

b) National Housing Bank (NHB) 41 51 92 80 65 96

II. Borrowings Out Side India NIL NIL

TOTAL 5620 84 13 3733 79 81

61

SCHEDULE – 6 ‐ CASH AND BALANCE WITH RESERVE BANK OF INDIA (Rs in '000s)

SCHEDULE – 5 OTHER LIABILITIES AND PROVISIONS

(Rs in '000s)





I) Bills payable/Bankers Cheque 86 85 97 78 47 78

II) Inter Office Adjustments (Net) 3 90 01 7 33 14

III) Interest Accrued on Deposits 480 10 46 522 73 89

IV) Interest payables 42 45 11 52 05 10

V) General Provisions:

i. Provision on Standard Assets 34 26 25 29 26 11

ii. Provision on Rural Advances 10 67 36 10 67 36

iii. Provision on Frauds 91 28 144 52

vi. Audit Fee Provisions 40 00 76 00

v. Income Tax Provision 169 06 00 107 61 57

vi. Bonus Provision 38 50 66 00

VI) TDS on Bank Term Deposits 8 43 50 11 24 87

VII) Deferred Tax 2 68 67 1 22 88

VIII) Other Liabilities 17 79 42 16 11 57

TOTAL 857 92 53 839 60 79

TOTAL 839,60,79 936,39,38


I. Cash in Hand

(Including Foreign Currency Notes) 185 07 22 84 37 56

II. Balances With Reserve Bank of India

i) In Current Accounts 545 48 21 430 46 62

ii) In Other Accounts NIL NIL

TOTAL 730 55 43 514 84 18

62

SCHEDULE – 7 - BALANCES WITH BANKS AND MONEY AT CALL & SHORT NOTICE(Rs in '000s)





I In India

i Balance with Banks

a) In Current Accounts 3 75 05 13 04 79

b) In Other Deposit Accounts (TDRs) 4053 37 64 2837 61 00

ii Money at Call & Short Notice

a) With Banks Nil Nil

b) With Other Institutions Nil Nil

TOTAL 4057 12 69 2850 65 79

II Outside India

i) In Current Accounts Nil Nil

ii) In Other Deposit Accounts Nil Nil

iii) Money at Call & Short notice Nil Nil

TOTAL Nil Nil

GRAND TOTAL (I&II) 4057 12 69 2850 65 79

63

SCHEDULE – 8 - INVESTMENTS(Rs in '000s)





I Investment in India

i Government Securities 4343 24 77 2288 64 27

ii Other Approved Securities Nil Nil

iii Shares Nil Nil

iv Debentures and Bonds Nil Nil

v Subsidaries and /or joint Ventures Nil Nil

vi Investment in Equity shares of National

Payment Corporation of India (Long Term) 24 99 24 99

vii Others 89 57 53 69 57 53

TOTAL 4433 07 29 2358 46 79

II Investments Out Side India

I Government Securities Nil Nil

(Including Local Authorities) Nil Nil

ii Subsidiaries and/or Joint Ventures Nil Nil

iii Other Investments (To Be Specified) Nil Nil

TOTAL Nil Nil

GRAND TOTAL (I&II) 4433 07 29 2358 46 79

64

SCHEDULE – 9 - ADVANCES (Rs in '000s)





A 1 Bills Purchased and Discounted Nil Nil

2 Cash Credits, Overdrafts and Loans

Repayable on Demand" 8304 24 21 7512 98 01

3 Term Loans 2622 12 54 2349 45 62

TOTAL (A) 10926 36 75 9862 43 63

B 1 Secured by Tangible Assets 10891 4977 9830 09 30

2 Covered by Bank/Government Guarantees Nil Nil

3 Unsecured 34 86 98 32 34 33

TOTAL (B) 10926 36 75 9862 43 63

C I Advances in India

1 Priority Sector 9573 4361 8498 44 96

2 Public Sector Nil Nil

3 Banks Nil Nil

4 Others 1352 93 14 1363 98 67

TOTAL (CI) 10926 36 75 9862 43 63

C II Advances Out Side India

1 Due from banks Nil Nil

2 Due from Others Nil Nil

TOTAL (CII) Nil Nil

GRAND TOTAL(CI+CII) 10926 36 75 9862 43 63

65

SCHEDULE – 10 - FIXED ASSETS (Rs in '000)





I. Land

At cost as on the 31st March of the Preceeding Year 9 57 9 57

Additions During the Year Nil Nil

Deductions During the Year Nil Nil

TOTAL 9 57 9 57

II Buildings

At cost as on the 31st March of the Preceeding Year 14 00 14 00

Additions During the Year Nil Nil


TOTAL 14 00 14 00

III Other Fixed Assets

(including Furniture and Fixtures)

At cost as on the 31st March of the Preceeding Year 103 00 38 90 37 32

Additions During the Year 9 51 00 12 79 54

Deductions During the Year 2 38 16 47

Depreciation to date 61 05 64 51 48 79

TOTAL 51 43 36 51 51 60

IV Capital Work in Progress

At cost as on the 31st March of the Preceeding Year 3 86 03 2 30 03

Additions During the Year 1 64 74 1 56 00


TOTAL 5 50 77 3 86 03

GRAND TOTAL (I+II+III+IV) 57 17 70 55 61 20

66

SCHEDULE – 11 - OTHER ASSETS

(Rs in '000s)





1. Inter Office Adjustments (Net) Nil Nil

2. Interest Acrued 186 53 11 139 86 12

3. Advance Tax Paid 145 00 00 89 00 00

4. Tax Deducted at Source 5 28 95 5 36 92

5. Stationery 36 83 29 73

6. Telephone deposit 3 85 3 97

7. Suspense Nil Nil

8. Subvention receivable from NABARD 289 71 00 262 12 22

9. Interest Incentive receivable from NABARD 162 66 08 Nil

10. Prepaid Expenses 94 59 76 12

11. Income Tax paid under protest against Disputed Demand 34 74 65 23 27 78

12. Others 17 56 23 10 59 43

TOTAL 842 85 29 531 32 29

67

SCHEDULE – 13 - INTEREST EARNED

SCHEDULE – 12 - CONTINGENT LIABILITIES(Rs in '000s)

(Rs in '000s)



ParticularsYear Ended31.03.2017

(Current Year)

Year Ended31.03.2016

(Previous Year)



Claims against the Banks not acknowledged as debts 18 14 00 18 14 00

Liabilities for partly paid Investments Nil Nil

Liabilities on account of outstanding forward exchange contracts Nil Nil

Guarantees Given on behalf of Constituents

a) In India 10 58 91 10 13 42

b) Out Side India Nil Nil

Acceptances, Endorsements and other Obligations Nil Nil

"Other items for which the Bank is contingetly liable

(DEAF Account)" 1 33 66 1 34 75

Unclaimed Bankers Cheques treated as income 3 31 35 6 37 19

TOTAL 33 37 92 35 99 36

Interest/ Discount on Advances/Bills 13099251 11047289

Interset on Investments 250 49 50 171 42 99

Interest on Balances with RBI and Other Inter Bank Funds Nil Nil

Others 200 45 25 208 53 62

TOTAL 1760 87 26 1484 69 50

68

SCHEDULE – 14 - OTHER INCOME

SCHEDULE – 15 - INTEREST EXPENDED


(Rs in '000s)


(Current Year)


(Previous Year)

(Rs in '000s)


(Current Year)


(Previous Year)


Commission,Eexchange and Brokerage 141 14 99 125 63 65

Profit on Sale of Investment 49 60 43 29 16 88

Profit on Revaluation of Investments Nil Nil

Profit on Sale of Lands, Buildings and Other Assets Nil Nil

Profit on Exchange Transactions Nil Nil

Income Earned by way of Dividend Etc, From Subsidiaries/

Companies and /Or Joint Ventures Abroad /In India Nil Nil

Miscellaneous Income 6 43 72 6 66 88

TOTAL 197 19 14 161 47 41

Interest on Deposits 796 31 82 694 60 94

Interest on Reserve bank of India/Inter Bank Borrowings 312 62 05 273 90 88

Others Nil Nil

TOTAL 1108 93 87 968 51 82

69

SCHEDULE – 16 - OPERATING EXPENSES(Rs in '000s)




(Current Year)


(Previous Year)


Salary Payments and Provisions to Employees 199 66 43 229 17 86

Gratuity Contribution 4 39 06 18 99 31

Leave Encashment 1 68 97 6 54 18

Medical Expenses 6 53 71 2 11 13

Leave Fare Concession 7 49 18 57

Rent, Taxes,Lighting and Fuel 17 55 53 15 52 81

Printing and Stationery 2 82 24 3 35 21

Advertisement and Publicity 8 47 6 30

Director's Fee,Allowanes and Expenses 12 14

Depreciation on Banks Property 9 56 85 9 25 25

Auditors Fee and Expenses 39 74 70 39

Legal Charges 15 24 15 52

Telephones Charges 1 39 02 1 23 48

Repairs and Maintenance 21 19 23 92

Insurance 11 86 88 10 14 75

Travelling and Halting expenses 4 97 59 5 19 38

AMC for Software and Hardware 12 61 76 12 85 77

Books and Periodicals 84 78 83 40

Computerization 58 65 45 14

Vehicle and Fuel 3 43 50 2 94 16

Entertainment 75 83 77 85

Other Expenses 17 83 59 16 02 03

TOTAL 297 46 64 336 76 55

70

SCHEDULE – 17 - SIGNIFICANT ACCOUNTING POLICIES

1. Basis of Preparation:

The Bank's financial statements are prepared under the historical cost convention, on the accrual basis of accounting

ongoing concern basis, unless otherwise stated and conform in all material aspects to Generally Accepted Accounting

Principles (GAAP) in India, which comprise applicable statutory provisions, regulatory norms / guidelines prescribed by

the National Bank for Agriculture and Rural Development (NABARD) / Reserve Bank Of India (RBI), Banking Regulation

Act 1949, Regional Rural Bank Act, 1976 and amendments thereto and Accounting Standards issued by the Institute of

Chartered Accountants of India (ICAI), and the practices prevalent in the banking industry in India.

2. Use of estimates:

The preparation of financial statements requires the management to make estimates and assumptions considered in

the reported amount of assets and liabilities (including contingent liabilities) as on the date of financial statements and

the reported income and expenses during the reporting period. Management believes that the estimates used in the

preparation of the financial statements are prudent and reasonable and are based upon management's evaluation of

the relevant facts and circumstances as of the date of financial statements. Future results could differ from to these

estimates and the differences between the actual results and the estimates are recognised in the period in which the

result are known / materialised.

3. Revenue Recognition:

a) Income and Expenditure are accounted on accrual basis, except otherwise stated.

b) Interest income is recognised in the Profit and Loss Account as it accrues except, income from Non Performing

Assets (NPAs), comprising of advances and investments which is recognised upon realisation, as per the

prudential norms prescribed by the RBI or other regulatory authorities.

c) Profit / loss on sale of investments is recognised in the Profit and Loss Account.

d) Income (other than interest) on interest bearing investments in "Held to Maturity (HTM)" category acquired at a

discount to the face value, is recognised only at the time of sale / redemption.

e) Commission & Exchange and Locker rent have been recognized on realization basis.

f) Interest on overdue term deposits is accounted for on renewal.

g) In case of suit filed accounts, legal and other expenses incurred are charged to Profit and Loss Account and at

the time of recovery of such expenses is accounted as income.

4. Investments:

The transactions in Government Securities are recorded on “Settlement Date”. Investments other than Government

Securities are recorded on “Trade Date”.

a) Investments are classified into three categories viz., Held to Maturity (HTM), Available for Sale (AFS) and Held

for Trading (HFT) as per RBI guidelines.

∙ Investments that the Bank intends to hold till maturity are classified as Held to Maturity (HTM).

∙ Investments that are held principally for resale within 90days from the date of purchase are classified as Held for

Trading (HFT)

∙ Investments, which are not classified in the above two categories, are classified as Available for Sale (AFS).

An investment is classified as HTM / HFT / AFS at the time of its purchase and subsequent shifting amongst categories is



71

done in conformity with regulatory guidelines.

However, for disclosure in Balance Sheet these are classified as under ‐ Government Securities, Other Approved

Securities and Others.

b) The Securities in each classification are valued in accordance with RBI guidelines as detailed hereunder:

∙ In determining the acquisition cost of an investment:

∙ Brokerage or Commission received on subscriptions is reduced from the cost.

∙ Broking period interest paid / received on debt instruments is treated as interest expense / income and is

excluded from cost or sale consideration.

∙ Cost is determined on the weighted average cost method for investments under AFS and HFT category and FIFO

basis (First in First out) for investments under HTM category

∙ Transfer of securities from HFT / AFS category to HTM category is carried out at the lower of acquisition cost /

book value / market value on the date of transfer. The depreciation, if any, on such transfer is fully provided for.

However, transfer of securities from HTM category to AFS category is carried out on at acquisition price / book

value. After transfer, these securities are immediately re‐valued and resultant depreciation, if any, is provided

∙ Investments under Held to Maturity category are carried at acquisition cost unless it is more than the face

value, in which case the premium is amortised over the period of remaining maturity on constant yield basis.

Such amortisation of premium is adjusted against income under the head “Interest on Investments”.

∙ Investments in equity shares of other companies are valued at historical cost. A provision is made for

diminution, other than temporary, for each investment individually.

∙ Investments under AFS and HFT category are individually re‐valued at market price or fair value determined as

per regulatory guidelines, and only the net depreciation of each group for each category (viz., (i) Government

securities (ii) Other Approved Securities) is provided for and net appreciation is ignored. On provision for

depreciation, the book value of individual security remains unchanged after marking to market.

∙ Investments are classified as Performing and Non Peforming, based on the guidelines issued by the RBI.

Investments of domestic offices become non performing where:

∙ Interest or instalment (including maturity proceeds) is due and remains unpaid for more than 90 days.

∙ In the case of equity shares, in the event the investment in the shares of any company is valued at Rs. 1/‐ per

company on account of the non availability of the latest balance sheet, those equity shares will be reckoned as

NPI.

5. Loans or Advances and Provisions thereon:

Loans and advances are classified as performing and non‐performing, based on the guidelines/ directives issued by

the RBI. Loan assets become Non Performing Asset (NPA) where:

∙ In respect of agriculture advances:

i. For short duration crops, where the instalment of principal or interest remains overdue for two crop seasons

and

ii. For long duration crops, where the principal or interest remains overdue for one crop season.

∙ In respect of Non Agriculture advances:

i. In respect of term loans, interest and / or instalment of principal remains overdue for a period of more

than 90 days.

ii. In respect of Overdraft or Cash Credit Advances, the account remains “out of order”, i.e. if the outstanding


72

III Doubtful Assets:

A loan asset that has remained in the substandard category for of 12 months is Doubtful Asset

IV Loss Assets:

A loan asset where Loss has been identified but the amount has not been fully written of is a Loss Asset.

100% Provision on outstanding Advances.

∙ Advances are net of specific loan loss provisions, unrealised interest, ECGC claims received and Inter Bank Participation Certificates.

∙ For Restructured / Rescheduled assets, provisions are made in accordance with the extant guidelines issued by the RBI.

∙ In the case of loan accounts classified as NPAs, an account may be reclassified as a performing asset if it confirms to the guidelines prescribed by the regulators.

∙ Amounts recovered against debts written off in earlier years are recognised as revenue in the year of recovery.

∙ In addition to the specific provision on NPAs, general provisions are also made for Standard Assets as per extant RBI guidelines. These provisions are reflected in Schedule 5 of the Balance Sheet under the head “Other Liabilities and Provisions – Other Provisions” and are not considered for arriving at the net NPAs.

∙ Interest realized on NPAs are taken in to income account provided the credits in the accounts towards interest are not out of fresh/additional credit facilities sanctioned to the borrower concerned.

∙ Appropriation of recoveries in NPAs i.e. towards principal or interest due as per the Bank's extant instructions is done in accordance with the following priority.

balance exceeds the sanctioned limit or drawing power continuously for a period 90 days, or if there are no

credits continuously for 90 days as on the date of balance sheet, or if the credits are not adequate to cover

the interest debited during the same period.

Provisions are made for NPAs as per the extant guidelines/directives prescribed by the RBI:

a) All advances have been classified under four categories i.e., Standard Assets, Sub‐standard Assets, Doubtful

Assets and Loss Assets.

b) Provisions on Advances are made as under:

I Standard Assets: General Provision for Standard Assets at the following rates:

Direct Advances to Agriculture and SME sectors at 0.25%

Commercial Real Estate sector at 1%

All other advances not included in (1) & (2) above at 0.40%

II Sub‐Standard Assets:

A loan asset that has remained non performing for a period less than or equal to 12 months is a Sub Standard

Asset

General Provision of 15% on the total outstanding

Additional Provision of 10% for exposures which are unsecured ab‐intio (i.e. where realisable value of security

is not more than 10% ab‐initio).


Secured Portion Up to One year 25%

One to three years 40%

More than three years 100%

Unsecured Portion 100%

73

8. Impairment of Assets:

Fixed assets are reviewed for impairment whenever events or changes in circumstances warrant that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future Net Discounted Cash Flows expected to be generated the asset. If such assets are impaired, the impairment to be recognised is measured by the amount which the carrying amount of the asset exceeds the fair value of the asset.

9. Employee Benefits:

a. Short Term Employee Benefits:

The undiscounted amount of short – term employee benefits, such as medical benefits etc., which are expected to be paid for the services rendered by employees, are recognized during the period when the employee renders the service.

b. Long Term Employee Benefits

i. Defined Benefit Plans:

a. Charges

b. Unrealized Interest/Interest

c. Principal

6. Floating Provisions:

The bank has a policy for creation and utilisation of floating provisions separately for advances, investments and general purpose. The quantum of floating provisions to be created is assessed at the end of each financial year.

7. Fixed Assets, Depreciation and Amortisation:

Fixed Assets are carried at historical cost less accumulated depreciation/amortisation.

Cost includes cost of purchase and all expenditure directly attributable to or incur in connection with acquiring the said asset before it is put to use. Subsequent expenditure incurred on the assets put to use are capitalised only when it increases the future benefits from such assets or their functioning capability.

Depreciation / amortisation is provided on straight line method as per the rates stated below.

∙ In respect of assets acquired during the year (for domestic operations), depreciation is charged on proportionate

basis for the number of days the assets have been put to use during the year.

∙ Assets costing less than Rs. 5,000 each are charged off in the year of purchase.


Description of Fixed Asset Depreciation / amortization rates

Furniture & Fixtures other than Electrical Fittings and Fixtures 10%

Electrical Fittings with 3 years life 33.33%

Electrical Fittings with 5 years life 20%

Safe Deposit Lockers, Fire proof data safe 5%

Computer systems & ATMs 33.33%

Computer software which does not form an integral part of computer hard ware and cost of software development 100%

Motor vehicles 10%

74

a. Gratuity: For all the eligible employees, the Bank provides for Gratuity liability based on actuarial valuation. The Bank makes periodic contributions to a fund administered by Trustees based on an independent external actuarial valuation carried out annually.

b. Leave Encashment: For all the employees who have completed five years of service, the Bank provides for Leave Encashment liability based on actuarial valuation and contributes to SBI Life Insurance Company Limited on annual basis.

The cost of providing defined benefits is determined using the projected unit credit method, with actuarial valuations being carried out at each balance sheet date. Actuarial gains/losses are immediately recognised in the Profit and Loss Account and are not deferred.

ii. Defined Contribution Plans such as Provident Fund are recognized as an expense and charged to the Profit & Loss Account on accrual basis.

10. Income Tax Expense:

Income Tax expense is the aggregate amount of current tax and deferred tax expense incurred by the Bank. Current taxes expense and deferred tax expense are determined in accordance with the provisions of the Income Tax Act, 1961 and as per the Accounting standard 22 – Accounting for Taxes on Income respectively and tax laws prevailing in India. Deferred tax adjustments comprise of changes in the deferred tax assets or liabilities during the period.

Deferred tax assets and liabilities are recognised by considering the impact of the timing differences between taxable income and accounting income for the current year, and carry forward losses. Deferred tax assets and liabilities are measured using tax rates and tax laws that have been enacted or substantively enacted at the Balance Sheet date. The impact of changes in Deferred tax assets and liabilities is recognised in the Profit and Loss Account. Deferred tax assets are recognised and reassessed at each reporting date, based on management's judgement as to whether their realisation is considered as reasonably / virtually certain.

11. Contingent Liabilities & provisions:

In conformity with AS – 29 “Provisions, Contingent Liabilities and Contingent Assets”, issued by ICAI, the bank recognises the provisions only when it has a present obligation as a result of a past event and would result in a probable outflow of resources embodying economic benefits will be required to settle the obligation, and when a reliable estimate of the amount of the obligation can be made.

No provision is recognised for:

I. Any possible obligation that arises from past events and existence of which will be confirmed only by the occurrence or non‐occurrence of one or more uncertain future events not wholly within the control of the bank.

II. Any present obligation that arises from past events but is not recognised because

a. It is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation or

b. A reliable estimate of the amount of obligation cannot be made.

Such obligation are recorded as Contingent Liabilities. These are assessed at regular intervals and only that part of the obligation for which an outflow of resources embodying economic benefits is probable, is provided for, except in the extremely rare circumstances where no reliable estimate can be made.

III. Contingent Assets are not recognised in the financial statements.

12. Special Reserves:

Revenue and other Reserve include Special Reserve created under Section 36(i)(viii) of the Income Tax Act, 1961. The Board of Directors of the Bank have passed a resolution approving creation of the reserve and confirming that it has no intention to make withdrawal from the Special Reserve.


75

SCHEDULE – 18

DISCLOSURES & NOTES TO ACCOUNTS

I. Disclosures as per norms for RRBs

1. CAPITAL

2.�INVESTMENTSS.No Particulars Current year Previous year

1 Value of Investments

i) Gross value of Investments 44330729 23584679

ii) Provisions for Diminution 0 0

iii) Net value of Investments 44330729 23584679

2 Movement of provisions held towards depreciation on investments

i) Opening Balance Nil Nil

ii) Add: Provisions made during the year Nil Nil

iii) Less: Write off / Write back of excess provisions during the year Nil Nil

iv) Closing Balance Nil NIL

3. REPO TRANSACTIONS

Minimum Maximum Daily Average As onst outstanding outstanding outstanding 31

during the during the during the March, year year year 2017

Securities Sold under Repos Nil Nil Nil Nil

Securities purchased under Nil Nil Nil Nil Reverse Repos

Item

(Rs in '000s)

(Rs in '000s)

The Bank has invested a sum of Rs.24,99,200/- in National Payments Corporation of India (NPCI), a company

promoted by ten banks under the guidance of Indian Bank's Association.



Sl.No Particulars Current year (%) Mar 2017 Previous year (%) Mar 2016

I) CRAR(%) 14.05 13.48

ii) CRAR – Tier I Capital (%) 13.70 13.11

iii) CRAR – Tier II Capital (%) 0.35 0.37

iv) Percentage of Shareholding of the :

A Government of India 50 50.00

B Government of Andhra Pradesh 15 15.00

C State Bank of India (Sponsor Bank) 35 35.00

76

4. Non-SLR Investment Portfolio

i) Issuer composition of Non SLR Investments

(ii) Non-Performing Non-SLR Investments

Particulars Amount

Opening balance NIL

Additions during the year since 1st April NIL

Reductions during the above period NIL

Closing Balance NIL

Total provisions held NIL

(Rs in '000s)

(Rs in '000s)

5. Asset Quality

No. Particulars Current year (2016-17) Previous year (2015-16)

I Net NPAs to Net Advances (%) 0.72 1.40ii Movement of NPAs (Gross) a) Opening balance 2519983 2990302b) Additions during the year 1235898 794833c) Reductions during the year 1658485 1265152(d) Closing balance 2097396 2519983iii Movement of Net NPAs a) Opening balance 1476671 2224258b) Additions during the year 0 58053c) Reductions during the year 600917 805640d) Closing balance 875754 1476671iv Movement of provisions for NPAs (Excluding provisions on standard assets) a) Opening balance 1043312 766044b) Provisions made during the year 244915 303445c) Write‐off / Write‐back of excess provisions 66585 26177d) Closing balance 1221642 1043312

I. Non-Performing Assets (Rs in '000s)

S. No Issuer Amount Extent of Extent of Extent of Extent of Private below investment unrated unlisted placement grade securities securities securities 1 2 3 4 5 6 7

i) PSUs NIL NIL NIL NIL NIL

ii) FIs NIL NIL NIL NIL NIL

iii) Banks NIL NIL NIL NIL NIL

iv) Private NIL NIL NIL NIL NIL Corporates

v) Others (MF)

& Equity shares of

NPCI 898252 NIL NIL NIL NIL

vi) Provisions held towards NIL NIL NIL NIL NIL depreciation

Total 898252 NIL NIL NIL NIL


77

ii. Details of Loan Assets subject to Restructuring

II. Details of financial assets sold to Securitization (SC) / Reconstruction Company (RC) for Assets Reconstruction

S.No Particulars Current year Previous year

i No. of accounts NIL NIL

ii Aggregate value (net of provisions) of accounts sold to SC/RC NIL NIL

iii Aggregate consideration NIL NIL

iv Additional consideration realized in respect of accounts transferred in earlier years NIL NIL

v Aggregate gain / loss over net book value NIL NIL

III. Details on non‐performing financial assets purchased / sold

A. Details of non‐performing financial assets purchased:

S.No Particulars Current year Previous Year

1 (a) No. of accounts / purchased during the year NIL NIL

(b) Aggregate outstanding NIL NIL

2 (a) Of these, number of account restructured during the year NIL NIL

(b) Aggregate outstanding NIL NIL

B. Details of non-performing financial assets sold :

S.No. Particulars Current year Previous year

1 No. of accounts sold NIL NIL

2 Aggregate outstanding NIL NIL

3 Aggregate consideration received NIL NIL

(Rs in '000s)

(Rs in '000s)

(Rs in '000s)

(Rs in '000s)


i Total amount of loan assets subject to restructuring,

rescheduling, renegotiation NIL NIL

ii The amount of Standard assets subjected to restructuring,


iii The amount of Sub‐Standard assets subjected to restructuring,


iv The amount of Doubtful assets subjected to restructuring,


(i) = (ii) + (iii) + (iv) NIL NIL


78

IV. Provisions on Standard Assets

S.No. Particulars Current year Previous year

1 Provisions towards Standard Assets 342625 292611

6. Business Ratios


I Interest income as a percentage to Working Funds 9.11 9.35

ii Non‐Interest income as a percentage to Working Funds 1.02 1.02

iii Operating profit as a percentage to Working Funds (Before provisions) 2.85 2.15iv Returns on Assets (%) 1.82 1.41

v Business per Employee (Dep + Adv)(Rs'000) 84520 70498

vi Net profit per Employee (Rs'000) 1181 757

7. Asset Liability Management – Maturity pattern of certain terms of Assets and Liabilities

Particulars1 to 14

days15 to 28

days

29 days to 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 year and

upto 5 years

Over 5 years

Total

Deposits 10491458 3366304 11445365 14740523 21272506 61614654 3750464 1504488 128185762

Advances 7749797 49056 501063 767596 7344322 77174008 3534008 12143825 109263675

Investments &

STDRs 300000 5663728 12680584 33780497 20553505 5929108 4226434 1730637 84864493

Borrowings 2011129 1436521 2298433 20068555 6464607 17032813 6896355 56208413

Foreign

Currency AssetsNIL NIL NIL NIL NIL NIL NIL NIL NIL

Foreign

Currency

Liabilities

NIL NIL NIL NIL NIL NIL NIL NIL NIL

(Rs in '000s)

(Rs in '000s)


NIL

79

8.��Exposures��Exposure�to�Real�Estate�Sector


A Direct exposure

I Residential Mortgages above Rs. 20.00 lakhs lending fully secured 1316032 1271188 by mortgages on residential property that is or will be occupied by the borrower or that is rented (individual housing loan upto Rs. 20 lakh may be shown separately)

Up to Rs. 20.00 lakhs 6415337 4238282

ii Commercial Real Estate Lending secured by mortgages on commercial real estates (office buildings, retail space, multi‐purpose commercial premises, multi‐family residential buildings, multi‐tenanted commercial premise, NIL NIL industrial or warehouse space, hotels, land acquisition, development and construction, etc.) Exposure would also include non‐fund based (NFB) limits.

iii Investments in Mortgage Backed Securities (MBS) and other securitized exposures NIL NIL

a. Residential NIL NIL

b. Commercial Real Estate NIL NIL

B Indirect Exposure NIL NIL

Fund‐based and non‐fund based exposures on National Housing Bank (NHB) and Housing Finance Companies (HFCs) NIL NIL

9. Details of Single Borrower (SGL), Group Borrower Limit (GBL) exceeded by the bank:

The bank had not exceeded the single borrower limit, group borrower limit fixed by the Board

10. Miscellaneous – Amount of provisions made for Income tax during the year.

Particulars Current Year Previous year

Provision for Income Tax 1690600 1076157

11. Disclosure of Penalties imposed by RBI

The Bank has maintained CRR and SLR as per RBI Act 1934 and Banking Regulation Act 1949 and not defaulted

during the financial year under report.

12. Additional Disclosures as per Accounting Standards applicable to the Bank

I Related party disclosure

a) Related parties where control / significant influence exists or with whom transaction have taken place during

the year.

Sponsor Bank their Subsidiaries and Associates:State Bank of India

(Rs in '000s)

(Rs in '000s)


80

For the year For the year st st ended 31 ended 31

March 2017 March 2016

Refinance received from State Bank of India Nil Nil

Interest paid to SBI 81,65,40 43,43,63

Investments made with:

SBI ‐ in the form of STDRs 34,83,95,00 21,88,95,00

SBI Fund Management Private Limited 49,57,53 69,57,53

Interest received from SBI 1,98,36,68 2,08,53,62

Profit on sale of Investments on SBI 10,98,93 19,03,09

Contributions to Gratuity Fund with SBI Life Insurance Company Limited 7,32,69 18,99,31

Contributions to Group Leave Encashment Policy with SBI Life Insurance Company Limited 3,06,29 6,54,18

Current Account Balance with SBI 9,66 65,43

(iii) Particulars of Managerial Remuneration:

Key Management Personnel

Shri. V. Narasi Reddy, Chairman

Shri Y.N. Sukumar, General Manager ‐I (upto:23.09.2016)

Shri.M. Satyanarayana, General Manager ‐I (from:23.09.2016)

Shri T.V. Krishna Reddy General Manager‐II

Shri.S.Prakash Kumar General Manager ‐ III

Shri K. Ravi Kiran, General Manager ‐ IV (from:21.09.2016)

(ii) Particulars of related party accounts transactions:

The following is the summary of significant related party transactions:

For the year For the year st st ended 31 ended 31

March 2017 March 2016

Shri.V.Narasi Reddy, Chairman 21,68,711/‐ 18,36,505/‐

Shri.Y.N.Sukumar, General Manager ‐ I 8,27,392/‐ 13,47,516/‐

Shri.M. Satyanaryana, General Manager ‐ I 9,01,288/‐ Nil

Shri.T.V.Krishna Reddy, General Manager ‐ II 16,40,771/‐ 3,42,758/‐

Shri.S. Prakash Kumar, General Manager ‐ III 18,01,154/‐ 13,44,034/‐

Shri K. Ravi Kiran, General Manager ‐ IV 8,71,441/‐ Nil

(Rs in '000s)

(Rs)


81

13. Provisions on Rural Advances

14. Disposal of Complaints:

A) Customer Complaints:

S.No Particulars Nos

a No. of complaints pending at the beginning of the year NIl

b No. of complaints received during the year 2016‐17 40

c Total Complaints 40

d No. of complaints redressed during the year 39

e No. of complaints pending at the end of the year 01

B) Award passed by the Banking Ombudsman:

S.No Particulars Nos

a No. of complaints pending at the beginning of the year 01

b No. of complaints received during the year 2016‐17 35

c Total Complaints 36

d No. of complaints redressed during the year 35

e No. of complaints pending at the end of the year 01

f No. of awards passed by Banking Ombudsman Nil

g No of awards implemented Not applicable

h No. of awards pending implementation Not applicable

15. Concentration of Deposits, Advances, Exposures and NPAs

(Rs in '000s)

1. Concentration of Deposits

(Rs in Cr)

Total Deposits of Twenty largest depositors 476.09

Percentage of Deposits of twenty largest depositors to Total Deposits of the Bank 3.71%


S.No. Particulars Current Year Previous Year

a Opening balance in the Rural Advances Provision Account 106736 456736

b The quantum of Rural Advances Provision made in the accounting year Nil Nil

c i. Amount of Draw down made during the accounting year Nil Nil

ii. Provision written back to profit and Loss account Nil 350000

Total of Draw down Nil 350000

d Closing balance in the Rural Advances Provision Account 106736 106736

82

Sub-Total (B)

Total (A+B)

1228.02 10.06 0.82 1410.56 9.64 0.68

12368.53 209.74

1.69 10601.76

251.99 2.38

16. Sector Wise NPAs (Rs. in Cr)

Sl. No Sector*

Current Year Previous Year

Outstanding

Total

Advances

Gross NPAsPercentage of

Gross NPAs to

Total Advances

in that Sector

Percentage of

Gross NPAs to

Total Advances

in that Sector

A Priority Sector

1 Agriculture and

allied activities8431.78 116.43 1.38 7093.06 144.59 2.03

2. Advances to

industries sector

eligible as

priority sector

lending

300.01 48.02 16.00 214.24 59.54 27.79

3 Services 68.69 11.74 17.09 50.27 12.58 25.02

4 Personal Loans 2340.03 23.49 1.00 1833.63 25.64 1.39

Sub-Total (A) 11140.51 199.68 1.79 9191.20 242.35 2.63

B Non-Priority

Sector

1 Agriculture and

allied activities -

-

-2 Industry

3 Services

4 Personal loans 1228.02 10.06 0.82 1410.56 9.64 0.68

Outstanding

Total

Advances

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

Gross NPAs


2. Concentration of Advances

(Rs in Cr)

Total Advances of Twenty largest Borrowers 15.21

Percentage of Advances of twenty largest borrowers to Total Advances of the Bank 0.12%

3. Concentration of Exposures

(Rs in Cr)

Total Exposure of Twenty largest Borrowers/Customers 476.09

Percentage of Exposures to twenty largest Borrowers/Customers to Total Exposure of the 1.89%

4.Concentration of NPAs

(Rs in Cr)

Total Exposure to top four NPA accounts 1.16

83

17. Movement of NPAs

II. NOTES TO ACCOUNTS

1. Reorganization of Area of Operations of the Bank:

The Bank has been formed vide Notification dated 31st March 2007 issued by Department of Economic Affairs (Banking

Division), Ministry of Finance, Government of India. As per the said notification, the area of the operation of the Bank is in

eight districts of erstwhile State of Andhra Pradesh (Warangal, Medak, Khammam, Nalgonda, Mahabubnagar, Srikakulam,

Vizianagaram and Visakhapatnam districts).

Vide notification dated 20th October 2014 issued by the Department of Financial Services, Ministry of Finance, Government of

India the districts of Warangal, Medak, Khammam, Nalgonda, Mahabubnagar are omitted. Pending finalization of the

modalities for this notification and approvals from the competent authority, the operations of the bank are being carried out in

all the five districts. Financial statements as at the end of the reporting date include assets and liabilities, income and expenses

relating to the Bank in all the eight districts.

st2. Classification of Assets (Advances) as on 31 March, 2017:(Rs in 000s)

3. Inter Bank Participation Certificate (IBPC):

During the year the bank has entered into Risk sharing participation Contract with State Bank of India (Sponsor

Bank) under Inter Bank Participation Certificate (IBPC) and issued priority sector advances to the extent of

Rs.1036,00,00 (thousands) on 13.07.2016 for the period of 180 days as cash pay‐out and maturity period expired

on 09.01.2017. Again during the year issued priority sector advances to the extent of Rs.1320,00,00 (thousands) on

13.02.2017 for the period of 180 days as cash pay‐out. The said cash pay‐out is grouped in Balances with Banks in

other deposit Accounts (Sch‐7)


Particulars Rs. in CrstGross NPAs as on 1 April 2016 (Opening Balance) 252.00

Additions (Fresh NPAs) during the year 123.59

Sub-Total (A) 375.59

Less:

(I) Upgradations 16.69

(ii) Recoveries (excluding recoveries made from upgraded accounts) 143.26

(iii) Write-Offs 5.90

Sub-Total (B) 165.85stGross NPAs as on 31 March 2017 (Closing Balance) (A-B) 209.74

Classification Gross Advances Net Advances

Standard Assets 121587921 121587921

Sub Standard Assets 366930 307556

Bad & Doubtful Assets 1730467 568198

Total 123685318 122463675

Add: Provision on Sub‐Standard And Doubtful Assets etc 1221643

Total Gross Advances 123685318 123685318

84

(Rs in 000s)

6. Fixed Assets:

The Bank is in possession of Land at various places to the extent of 11,284.86 square yards, which was gifted by certain donors /

assigned by Government of Andhra Pradesh for construction of Office Buildings. The Bank had incurred site development

expenditure and the said costs were capitalized under Land. During the earlier years the Bank has given Contract to Bharat

Sanchar Nigam Limited (BSNL) for construction of Office Buildings at various locations and amounts paid to BSNL against the

bills submitted for construction / initial advance aggregating to Rs.5,50,77 (thousands) which was disclosed under Capital

Work in progress in Fixed Assets Schedule.

7. Income Tax Matters:

Income Tax department has raised certain demands on the Bank, with regard to assessment of income of the Bank and the tax

payable thereon by the Bank. The Bank is contesting demands raised by the Income Tax Department and pursuing the same.

Against the said tax demands, based on the opinion obtained from the Tax Consultants, and as estimated by the Management,

the Bank recognized an amount aggregate to Rs.18,14,00 (Thousands) as contingent liabilities and are shown in Schedule 12 –

“Contingent Liabilities ‐ Claims against the Banks not acknowledged as debts”. Against the disputed claims, the Bank paid an

amount of Rs. 347465 (Thousands) and the same is being shown in Schedule 11 – “Other Assets ‐ Income Tax paid against

Disputed Demand”. Bank is confident of resolving the dispute in it's favour. Liability, if any, will be charged to Profit and Loss

account in the year of settlement of these disputes / claims.

8 Data Purification and Asset Classification

The Bank is having a seamless system in its Core Banking Solution (CBS) for recognizing and identifying the non performing

assets in accordance with the extant guidelines. Further, the Bank has a system of manual verification for ensuring the

correctness of base data fed. Management intends to continue such manual verification to ensure compliance of the Income

Recognition and Asset Classification norms and other statutory compliances.

4. Bankers’ Cheques:

The Unpaid Banker Cheques which were credited earlier years to P&L account aggregating to Rs.3,31,35

(in thousands) furnished as contingent liability in Schedule 12.

5. Depositor Education and Awareness Fund (DEAF) Scheme:

Disclosure as required under Depositor Education And Awareness Fund Scheme – 2014 notified by the Reserve

Bank of India under DBOD No. DEAF Cell.BC.114/30.01.002/2013‐14 dated 27th May 2014:


Sl No Particulars Current Year Previous Year

1 Opening Balance of Amount transferred to DEAF 1,34,75 1,16,00

2 Add: Amount transferred to DEAF during the Year 2016‐17 5,36 18,75

3 Less: Amounts reimbursed by DEAF towards Claim 6,45 NIL

4 Closing balance of amounts transferred to DEAF 1,33,66 1,34,75

85

9. Fraud Cases:

Details of Fraud cases are as under: (Rs in 000s)

10. The figures mentioned in Balance Sheet, Profit & Loss Account and Schedules 1 to 16 have been rounded off to the

nearest thousand rupees.

11. Previous Year's figures have been regrouped /reclassified/recast wherever necessary to confirm the current year

classification.








Particulars 31.03.2017 31.03.2016

Provision at the beginning of the year 1,44,53 1,58,27

Less: Written off during the year 53,25 Nil

Add: Additional provision created during the year Nil Nil

Less : Provision reversed during the year Nil 13,74

Provision as at the year end 91,28 1,44,53

Number of fraud cases at the year end 8 8

86

CASH FLOW STATEMENT for the Year ended 31st March 2017

Particulars 31-Mar-2107 31-Mar-2106

Cash Flows from Operating Activities:

Net Profit after Tax 3519912 2234707

Add:

Depreciation debited to P&L 95685 92525

Amortisation value of Investments

Provision for Income Tax 1690600 1076157

Provision for IT Earlier year's Adjustment 1893 88183

Deferred Tax Asset Adjustment 14578 13277

Provision for Rural Advances Nil ‐350000

Interest Paid on Amounts received from RBI, SBI, NABARD 3126205 2739088

Less:

Income on Investments ‐2504950 ‐1714299

Operating profit before working capital changes 5943923 4179638

Working Capital Changes:

Increase / (Decrease) in Deposits 26164609 19221138

Increase / (Decrease) in Liabilities and Provisions ‐1523896 ‐1795476

(Increase) / Decrease in Advances ‐10639312 ‐19635858

(Increase) / Decrease in Other Assets ‐1665300 ‐951623

Cash generated from Operations 12336101 ‐3161819

Less: Income Tax Paid ‐1450000 ‐890000

Net cash from Operating Activities A 16830024 127819

Cash Flows from Investing Activites:

Purchase of fixed assets ‐111336 ‐141906

Purchase of Investments ‐20746050 ‐2867797

Income from Investments 2504950 1714299

Net cash from Investing Activities B ‐18352436 ‐1295404

Cash Flows from Financing Activites:

Funds from SBI, NABARD, NHB 18870432 5258019

Interest paid to SBI, NABARD, NHB ‐3126205 ‐2739088

Net cash from Financing Activities C 15744227 2518931


(Rs. 000s )


87

Effect of Foreign Exchange Rate Changes

Net Increase/(Decrease) In Cash And Cash Equivalents (A+B+C) 14221815 1351346

Add: Opening cash and cash equivalents

i) Cash on hand 843756 752015

ii) Balances with Reserve Bank of India & Other banks 4435141 3784936

iii) Deposit Accounts 28376100 27766700

Total 47876812 33654997

Note:

Closing Cash and Cash Equivalents

i) Cash on hand 1850722 843756

ii) Balances with Reserve Bank of India & other banks 5492326 4435141

iii) Deposit Accounts 40533764 28376100

Total 47876812 33654997

Particulars 31-Mar-2107 31-Mar-2106(Rs. 000s omitted)






88

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we are with you! - apgvbank.in Repot 2017.pdf · V. Narasi Reddy Andhra Pradesh Grameena Vikas Bank Head Office, Warangal ‐ 506 001 01. 02 Vision Repositioning the Bank in competitive