BEST PRACTICES IN MANAGEMENT AND

CORPORATE GOVERNANCE

IN

TELANGANA STATE COOPERATIVE APEX

BANK LTD.,

- Dr.Nethi Muralidhar,

MANAGING DIRECTOR

11

Formation of TSCAB:

1925 - Hyderabad Cooperative Dominion Bank.

July 1963 - Hyderabad Cooperative Dominion Bank and

Andhra State Cooperative Bank were merged

and formed into A.P. State Cooperative Bank.

1994 - APCCADB merged with APCOB under

Single window Credit Delivery System.

2nd April 2015 - APCOB Bifurcated into TSCAB and Residual

APCOB.

TSCAB is registered under State Cooperative Societies Act on

26.03.2015 and commenced its business from 2nd April, 2015 onwards.

RBI granted licence to TSCAB on 18th April 2016.

Scheduled status granted by RBI on 29th March 2017.

2

To be the “Best State Co-operative Bank” in the

country, providing effective leadership, guidance,

training and refinance support to the Co-operative

Credit Structure (CCS) for sustainable growth and all

round development of CCS and also the State of

Telangana.

3

VISION:

FINANCIAL PARTICULARS of TSCAB(Rs. in Crores)

Sl

No

Particulars Position

as on

02.04.2015

Position

as on

31.03.16

Position

as on

31.03.17

Latest as on

30-11-17

1 Paid-up Share Capital 101.98 109.27 120.48 124.08

2 Reserves & Surplus 454.04 417.50 432.47 470.58

3 Owned Funds (1+2) 556.02 526.77 552.95 594.66

4 Deposits 2871.57 3252.41 3424.38 3639.27

5 Borrowings 2909.10 3055.37 3202.04 3128.16

6 Investments including Call &

Short Term deposits

3006. 05 2865.34 2813.50 2889.65

7 Loans & Advances 3435.43 4080.28 4457.90 4549.14

8 Gross NPAs % 6.18% 0.39% 0.36% ---

9 Gross Profit --- 27.81 59.07 47.03

10 Business Turnover 6307.00 7332.69 7882.28 8188.41

4

NETWORK OF CCS IN TELANGANA

APEX LEVEL

[TSCAB]

DISTRICT LEVEL

[9-DCCBs]

VILLAGE LEVEL [PACS]

41

BRANCHES

323

BRANCHES

798 PACS

36.72 Lakhs

Membership

12.50 lakh

Borrowing

members

5

6

COMPOSITION OF BOARD

• All the Presidents of DCCBs are members on the Board . They elect

President and Vice President.

• Co-opted Professional Directors - 2

• CC & RCS

• CGM of NABARD RO-Special Invitee

• MD/CEO of the Bank - Ex officio member.

Size - 09 Elected Members + 05 Others = 14members.

• Term – Five years

• Periodicity of the Board Meetings – At least once in a quarter.

Year wise details of the Board Meetings conducted.

6

Year No. of Meetings % of Avg.

Attendance

2015-16 11 94

2016-17 11 96

2017-18 (up to 15-12-2017) 5 84

Presidents of 9 DCCBs

CC&RCS as State Govt. Nominee.

Periodicity : At least Two meetings per Annum.

Year wise details of the General Body Meetings conducted

Year No. of Meetings % of Avg.

Attendance

2015-16 4 95

2016-17 3 90

2017-18 (as on 15.12.2017) 1 90

7

GENERAL BODY MEETINGS:

Functioning of Board of Management:

o Greater freedom to the SCB and DCCBs in the business matters.

o Minimum intervention of State Government in Financial and Internal

Administrative Matters.

o All the members of the Board are aware of the Role and Responsibilities of

the Board of Directors. (Communicated by the NABARD vide circular

dated: 21.09.2010)

o Agenda/Reviews being placed before the Board of Directors of SCB

regularly as per the guide lines of the NABARD.

o Role of Board of Directors is primarily limited to the formulation of policies

keeping in view the guidelines issued by RBI/NABARD and State/Central

Government.

o The Board is exercising overall supervision and control over the

functioning of the Bank, leaving the day to day Administration to the CEO

of the Bank.

8

All the members of the BOM are fulfilling the F&PC and

furnished declarations/information in compliance to the F&PC.

Co-opted 2 Professional Directors on the Board are as per

F&PC.

The CEO/MD of the Bank was selected and appointed as per

F&PC by following the due procedure.

HLC under the chairmanship of the Chief Secretary, has

resolved that the Board feels if there is a case for replacement

of CEO, such replacement should be made only with the prior

approval of HLC, on recommendation by Govt. and NABARD.

9

Fit and Proper Criteria (F&PC):

SUB COMMITTEES :

Board Sub Committees Sub Committees of

officers

HLC Sub

Committees

Audit Committee

Special Committee on

Monitoring and Review of

Big Frauds of Rs.10.00

lakhs and above.

Risk Management

Committee

Committee on Fit &

Proper Criteria for

Directors

Committee for

Compromise/One Time

Settlement of Loans

Credit Policy Committee

Asset-Liability

Committee (ALCO)

Investment Committee

Training Committee

Infrastructure

Committee

Technology Committee

Committee on Retail

Loans

Grievance Redressal

Committee

SOG

CEO selection,

Scrutiny Committee

Sub Committee to

sanction permission

for opening DCCB

Branches

Review of Weak

DCCBs.

Co-option of

Professional

Directors in CCBs.

Reappointment of

retired Officers

(DGM & above

cadre)

10

Important policies approved by

the Board

Loan policies

Investment policy

Risk Management policy

IT security policy

Vigilance policy

HR policies

Training policy

Career progression/promotion policy

Staff Service Regulations

11

Important Milestones achieved by TSCAB

Government of Telangana has extended guarantee for Rs.2500

Crores to NABARD for Two years before attaining Scheduled status.

Initiated special drive for reduction of NPA from 5.94% (as on

01.04.2015) to 0.36% (as on 31.03.2017).

Established 100KW roof top solar power plant in Head Office.

Under Project Young Champions TSCAB stood first among the

SCBs in the country in opening of accounts and TSCAB & DCCBs as

a whole stood first among the cooperative Banks in opening of

accounts.

12

Doubling of Profit during the year 2016-17.

Special Focus on investment credit through the DCCBs – LT Loan O/s

increased by 195% in last 2 ½ Years. Share in total loans increased

from 18.70% to 27.34%.

Taken up PACS Computerization Project with the support of

Government of Telangana and NABARD.

35 Interoperable ATMs in Twin cities of Hyderabad and

Secunderabad.

RuPay Debit cards issued to the Customers (EVM Chip Cards)

Important Milestones achieved by TSCAB Contd…..

13

Personalized RuPay KCC cards issued to loanee members of

DCCB/PACS.

TSCAB and DCCBs included in the e-pass portal of Govt. of

Telangana.

TSCAB started Mobile Banking services and launched IMPS

services also.

Started Mobile ATM services.

Installed ATMs in Metro Railway Stations – First bank to install.

Issuing Rupay Platinum Cards for high value customers.

14

Important Milestones achieved by TSCAB Contd….

Recruitment of Staff in TSCAB through IBPS:

2015: Managers -16, Staff Assistants-73 => 89

2017: Managers-41, Staff Assistants-91 => 132

Recruitment of Staff in DCCBs through IBPS:

2015: Assistant Managers-118 , Staff Assistants-788 => 906

Introduced Mentoring System to the new recruits.

ISO certified Training Institute – TSCAB-CTI.

Written Test for Confirmation of services for new recruits.

Promotion process streamlined :

=> Every Year August / September.

=> Written Test by IBPS

=> Written Test marks being displayed on Notice Board

immediately after receipt from IBPS.

15 15

HRD Initiatives/Best Practices:

Introduced Probation period for promotees also.

Introduced Performance Management System (Half yearly) for the

Employees up to AGM cadre.

The JOB Charts/Job Descriptions prepared and communicated to all

the employees.

Work Manual on the HR Matters is in the final stage of preparation.

Introduced Work Diaries from Staff Assistant to AGM in HO as well as

Branches w.e.f from 01.01.2017 at the end of the Month Summary

statement to be recorded by BMs.

16

HRD Initiatives/Best Practices Contd….

HRD Initiatives/Best Practices Contd….

Bank has designed an Immersion Program to the new recruits to

provide knowledge on the working of DCCBs and PACS.

Introduced Annual Best Performance Awards to employees and

Branches.

Introduced One Time Incentive of Rs.5000/- on completion of CPEC

course and weightage is also given in Promotion.

To have better Employee – Employer relationship introduced Quarterly

Coordination Meeting with employees union/association.

Started implementing some of the recommendations of

Sri Amalorpavanathan Committee.

=> Reorganization of Departments

=> Annual Performance Appraisal Reports.

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Monday Morning Meetings (MMM) with all Senior Officers

of TSCAB.

Standardized meeting Schedules (Every Month):

• TSCAB Head Office Departments Review- 2nd and 3rd

• TSCAB Branch Managers Review meetings- 8th and 9th

• DCCBs CEOs Review Meetings -12th

• ALCO Meetings – Every alternate Monday (Fortnightly).

• Investment Committee meetings.

• DCCBs Designated Officers (DGM/AGM) meeting on 15th.

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Monitoring and Guiding Mechanism

(for DCCBs) – Best Practices

TSCAB DGMs nominated to the Boards of DCCBs as Financing

Bank’s representatives (Special Invitee).

Video Conferencing with DCCBs – Banks Specific/Subject

Specific.

DCCBs functioning being reviewed through DLMRC Meetings -

compulsory participation by TSCAB Nodal Officers.

Annual Inspection of DCCBs.

Conducting of Monitoring Studies on utilization of Long Term/

Investment credit.

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Monitoring and Guiding Mechanism ( for DCCBs) – Best Practices Contd…

Effective System of Internal Controls and Vigilance mechanism with

prime thrust on Internal Audit.

Internal Audit reports are being reviewed by Audit Committee.

Preventive Vigilance Committee meetings regularly every quarter

in all the Branches and H.O. Departments.

DGMs designated as Nodal Officers – Compulsory monthly visit to all

the branches.

AGMs designated as Verification Officers - Surprise verification of

Cash, Gold Ornaments, Re-appraisal of Gold ornaments etc.

Half yearly inspection of Branches of TSCAB by AGMs.

20

Monitoring/ Reviewing and Guiding Mechanism

(for TSCAB Branches) – Best Practices

Weekly review/revision of per Gram Gold rate for Gold Loan.

Gold Ornaments auction on 28th / 29th of every month.

Review of Account - wise and Branch - wise over due cases in Monthly

Branch Managers Conference – Participation by SCDR – OSD and their

team.

Burger Alarms, CC Cameras installed in all branches and linked to

security control room at H.O.

Weekly Updation of Bank’s website

Branch level weekly meetings for all the employees (Including Sub Staff)

being convened by Branch Managers.

Pre Audit (by Budget Control Officer) for the Expenditure.

Expenditure Powers decentralized - Delegation of Powers to SOG.

Knowledge sharing session at the end of Branch Managers review

meeting every Month. 21

Monitoring/ Reviewing and Guiding Mechanism (for TSCAB Branches)- Best Practices Contd…

Monitoring/ Reviewing and Guiding Mechanism (for TSCAB Branches)- Best Practices Contd…

Daily reporting through WhatsApp groups:

Groups Daily Report on

• TSCAB SOG

• TSCAB BMs & SOG

• ITSD (IT Services Dept.)

• DCCBs CEOs and

TSCAB SOG

• Daily deposits (Total and CASA)

• Daily financial particulars - Gold Loans

• Aadhar seeding.

• ATM Hits and Commission earned.

• Cash balance and Retention limit.

• Gold Loans - Daily DCB.

• Retail Loans recovery- Daily DCB.

• Problems faced on IT related and other

important issues.

• Investments and Funds flow.

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Thank you

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