Untitled-1 [] 2018-19...Net worth increased to Rs. 2380.85 Cr from Rs. 2255.93 Cr @ 5.68%. Reserves...

2 8-191

We are diversifying

Housing Loans

773.1

4 C

r

1185.2

5 C

r

1891.8

7 C

r

53.3 %

59.5 %

2017-1

8

2018-1

9

2016-1

7

Growth in

28.19%Cost to Income

Rs 958.17 Cr.Operating Profit

Rs 112.04 Cr.Net Profit

1.14%Gross NPAs reduced from 1.36%

15.50%CRAR

Rs 2380.85 CrNet Worth

Award for Best Performancein Housing Loan

we are with you!

14th Annual Report 2018-19

Empowering Rural Lives

Chairman

With Best Compliments from

K. Praveen Kumar

Andhra Pradesh Grameena Vikas Bank

Head Office, Warangal - 506 001

01

we are with you!Annual Report 2018-19

What's inside

1. Vision, Mission & Values 03

2. Letter of Transmittal 04

3. Geographical Area & Regional Offices 05

4. Board of Directors 06

5. Executives Team 07

6. Heads of Departments & Regional Mangers 08

7. Our Mentors 09

8. Our Regulators & Supervisors 10

9. Highlights 2018-19 11

10. Chairman's Message 12

11. Key Performance Indicators 14

12. Awards 18

13. Board of Directors Report 21

14. Auditor's Report 75

15. Balance Sheet, Profit & Loss 80 Account and Schedules

S.No. Particulars Page No.


02

Vision, Mission and Values

Respect to Systems and Procedures /

Good Governance / Transparency /

Service with compassion / Ethics /

Team work and People Focus.

VIsIOnBe the preferred Bank of Rural India for

development and transformation.

we are with you!

MIssIOnBe a f inancial heart, providing

Susta inable l ive l ihood to rura l

populat ion through Innovat ive

Financial and Technology solutions.

VALuEs


03

Andhra Pradesh Grameena Vikas BankHead Office : Warangal

Date : 30.06.2019

The Secretary,

Ministry of Finance, Dept. of Financial Services

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 stApril 2018 to 31 March 2019

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

March 2019.

stA copy of the Auditor's report in relation to the Bank's accounts for the period 1 April 2018 to st31 March 2019.

Letter of Transmittal

Yours faithfully,

(K. Praveen Kumar)Chairman


04

SrikakulamSaraswathi Complex, Baker sahed petaSrikakulam 532001, Tel 08942-221041, Fax 08942-221040

[email protected]

Vizianagaram8-12-64/1, Beside Himagiri Theatre,Vizianagaram 535002, Tel 08922-273956, Fax 08922-274221

[email protected]

Visakhapatnam52-14-77/1, APHSC Building,Near Eenadu office, SeethammadharaVisakhapatnam Tel 0891-2713942, Fax 0891-2746341

[email protected]

ParvathipuramVizianagaram Dist. 1435-27-112, Ist Floor, By Pass Road, Opp. Sai Ram CollegeTel : [email protected]

Regions in Telangana State

KhammamWyra Road, Khammam 507001Tel 08742-226816, Fax 08742-228972

[email protected]

NalgondaRamgiri, Nalgonda 508001Tel 08682-229943, Fax 08682-229945

[email protected]

WarangalABK Mall,Ramnagar, HanamkondaWarangal 506001Tel 0870-2577884Fax 0870-2568010

[email protected]

Mahabubnagar8-3-3/5/F, MettugaddaMahabubnagar 509001Tel 08542-242861Fax 08542-242862

[email protected]

SangareddyOpp. Inspection Bunglow, Sangareddy 502001Tel 08455-276263Fax 08455-276603

[email protected]

AshoknagarRamachandrapuram MandalDist. Sangareddy 502032Tel 040-20040773Fax 040-23020238

[email protected]

BhadrachalamTemple Road, Bhadrachalam 507111 Dist. Kothagudum.Tel 08743-231492Fax 08743-231020

[email protected]

Regions in Andhra Pradesh

Geographical Area & Regional Offices


05

Board of Directors

Shri K. Praveen KumarChairman

(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 Y. Rambabu Asst. General Manager,

, Reserve Bank of India, HyderabadHRMD

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

Shri CSR Murthy, General ManagerNABARD, TSRO, Hyderabad

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

Shri Kasi SrinivasDeputy General Manager (FI&MF) State Bank of India, LHO, Hyderabad

Shri S. GanesanGeneral Manager (RRBs), State Bank of India, Corporate Centre, Mumbai

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

Shri Patil Prashant Jeevan, IASCollector & Dist. Magistrate,

Warangal(urban)

Vacant

Sri KVV Satyanarayana, IRASSpecial Secretary to Govt. (B&IF)

Finance Department, GOAP, Amaravathi.

Vacant


06

Executive Team

Shri K. Praveen KumarChairman

Shri T.V. Krishna ReddyGeneral Manager -II

Shri M. SatyanarayanaGeneral Manager-I

Shri G. NagarajuGeneral Manager - III

Shri N.V. RamanaGeneral Manager - V


07

Shri K. RavikiranGeneral Manager - IV

Sri P. Suryanarayana

AGM&RM, Visakhapatnam

Sri M.B.T. ReddyAGM (FIC)

Sri T.V.V. PrabhakarAGM (Accts)

Heads of Departments

Regional Managers

Sri A.S. SarmaChief Manager (P&D)

Sri K. Vinod ReddyChief Manager (Per&HR)

Sri S.L.N. PrasadAGM (Rasmecc & NPAM)

Sri G. JaggaiahRM, Vizianagaram

Sri P. RajuAGM & RM, Warangal

Sri B.R.V. Manoj KumarAGM&RM, Mahbubnagar

Sri D. Vishwa PrasadAGM&RM, Ashoknagar

Sri K. Ravi KumarRM, Srikakulam

Sri Riyaz MohammadRM, Parvathipuram

Sri G. Sreedhar ReddyChief Manager (IT)

Sri M. Manohar ReddyRM, Bhadrachalam

Sri V. Raghunath ReddyAGM & RM, Nalgonda

Sri D. Rama RaoChief Manager (SLC)

Sri Mallempati RaviAGM&RM, Sangareddy


08

Sri P. Rajan BabuChief Manager (A&I)

Sri A. AshaiahChief Manager (Credit & RRM)

Sri B. Srinivasa MurthyRM, Khammam

Our Mentors

Shri Dinesh KharaManaging DirectorState Bank of India

Corporate Centre, Mumbai

Shri SP SinghChief General Manager (A &S),

State Bank of IndiaCorporate Centre, Mumbai

Shri Rajnish KumarChairman

State Bank of India Corporate Centre, Mumbai


09

Our Regulators & Supervisors

Shri Subrata DasRegional Director

RBI, RO, Hyderabad

Shri Vijay KumarChief General Manager,

NABARD, TSRO, Hyderabad

Shri K. Suresh KumarChief General Manager,

NABARD, RO, HyderabadAP


10

Total Business of the Bank has reached a level of Rs 32714.36 Crores with a growth of Rs 4064.03 Cr @ 14.18% (Rs

3463.22 Cr @ 13.75%)

Deposits at Rs. 16055.97 Cr increased by Rs 1722.32 Cr at 12.02% from Rs 14333.63 Cr (Rs.1515.05 Crore @ 11.82%)

Advances at Rs. 16658.41 Crore increased by Rs 2341.71 Crore at 16.36% from Rs. 14316.70 Crore. (Rs.1948.16 Crore

@ 15.75%)

Net profit at Rs 112.04 Cr after a provision of Rs. 837 Cr towards Pension (Rs 503.01 Cr 42.90 %)

Gross NPAs reduced to Rs. 189.10 Crore (1.14%) from Rs 195.64 Crore (1.36%).

Cost of deposits decreased to 5.88% from 6.30%.

Business per Branch Rs.42.21 Cr (Rs. 37.30 Cr)

Business per Employee Rs 10.28 Cr (Rs.9.06 Cr)

Net worth increased to Rs. 2380.85 Cr from Rs. 2255.93 Cr @ 5.68%.

Reserves increased to Rs. 2286.76 Cr from Rs. 2161.84 Cr @ 5.78%.

Yield on advances marginally declined to 11.35 % from 11.44%.

Cost to Income Ratio (Expenses Ratio) at 28.19 % moderately increased from 27.75%.

NII was up by 23.37%. It increased to Rs.1046.45 Cr from Rs 848.19 Crore.

NIM improved to 4.36% from 4.15% .

Capital Adequacy Ratio at 15.50% as on 31.3.2019 vis-à-vis 15.59% as on 31.3.2018.

Income from Commission and Brokerage increased to Rs.237.39 Cr from Rs. 220.07 Cr

Credit to Agriculture at Rs. 11259.36 Cr (Rs 9666.29 Cr) at 16.48% (Rs. 1593.07 Cr)

No. of Agriculture borrowers increased to 1102918 from previous FY's level of 1027206

SHGs increased to 194871 from previous FY's number of 194776.

SHG Loans outstanding rose by 4.90 % to reach Rs 5857.85 crore from previous FY's level of Rs 5584.02 Cr

Implemented:

RTGS/NEFT direct Membership o

NACH Direct membershipo

Mobile ATM for AP Regionso

121 branches migrated to 2 Mbps from 32 Kbps VSAT connectivity (taking the total to 529 Branches out of 786)o

Micro ATMs at all Branches for banking operations like cash deposits, cash withdrawals, funds transfer, mini o

statements, balance enquiry etc., through aadhar & rupay PIN based authentication modes.

C-KYCo

RuPay Platinum cardso

Achieved 90,444 Mobile Banking registrations, taking the total to 1,87,526, which is the highest among all RRBs o

under this category.

During the year, Bank Mitra turnover increased from Rs.843.16 Crore Rs. 1820.65 Crore with a growth rate of 115%.

Average balance in Bank Mitra accounts has increased from Rs.1250.79 to Rs.1529.19.

The share of the Bank Mitra transactions out of total transactions is 26%.

CASA deposits in Bank Mitra a/cs grew from Rs.118.98 Cr to Rs.139 Cr at 15% growth.

Awards:

Received National Award for Best performance in SHG linkage for 2017-18 among all RRBs from GOI on 11.5.18. o

Received MSME Banking Excellence award from CIMSME presented by Sri Giriraj Singh, Minister of State for o

Commerce in New Delhi on 20.7.18.

Atal Pension Yojana –o

§ PFRDA felicitated the Chairman under Recognition and Reward Scheme on 25.1.2019.

§ Received APY excellence award for Best General Manager & Best Regional Manager on 03.08.2018

Highlights 2018-19

Note : (Figures in brackets pertain to previous FY)


11

Chairman’s Message

K. Praveen KumarChairman


12

It gives me immense pleasure that I took over the

reins of Andhra Pradesh Grameena Vikas Bank as

Chairman. I thank my parent Bank State Bank of

India for giving me this opportunity of leading an RRB

which has carved out a special place not only

among SBI Sponsored RRBs but among all others in

the Country.

I feel a sense of proud in giving this message about

the Bank, its performance, important milestones

reached during the Financial Year 2018-19.

Performance highlights

The Bank has achieved a business growth of Rs

4064.03 Cr at a growth rate of 14.18%, with total

business crossing Rs.30,000 crore mark and reaching

a new height of Rs. 32714.36 Crores, consisting of

deposits of Rs. 16055.95 Cr and advances of Rs.

16658.41 Crore. Of the total business five RRBs in

Telangana and AP, our Bank constitutes 34%.

Similarly, of the total business of 16 RRBs sponsored

by SBI, we have a share of 20%. Low cost deposits

(CASA) increased by Rs. 601.09 Crore (9.95%), thus

reducing the cost of deposits to 5.88% from 6.30%.

Gross NPAs reduced from 1.36% to 1.14%. In

absolute terms, Gross NPAs reduced to Rs. 189.10

Crore from Rs. 195.46 Crore.

Net Profit stood at Rs 112.04 Cr for the Year ended

Mar 19, compared to the previous year's Net Profit

of Rs.503.01 Crore. This year's Net Profit is much

lesser since we had to make a provision of Rs.837

Crore towards Pension liability as per Government

of India guidelines.

Marketing and specialisation

Credit portfolio continues to be our area of priority.

Specialisation in the areas we function, is the order

of the day to accelerate growth in any industry

including banking. Asset Management Hubs, the

number of which spurted during the Financial Year,

has been a classic example of deploying

specialisation and expertise, as a business model to

weightlift the credit portfolio. The AMHs will

continue its north bound journey and help diversify

the credit portfolio. The necessity of increasing the

investment credit is there like never before to sustain

our credit portfolio. To support the AMHs in their

quest for quality and high value business, I am going

to deploy agriculture specialists and marketing

officers at all Regional Offices and in focal points.

Technology

Information Technology has been the backbone of

the Bank supporting seamless operations, customer

outreach, better products and services and

business growth. The Bank has witnessed enormous

amount of technology transforming the Bank,

keeping pace with the rest of the industry and

enabling the Bank to achieve the business volumes

that it has today. However, there are various areas

of administration and processes, some of which are

at administrative offices to be brought under

technology platform. Every conceivable process

has to embrace technology - be it suit-filing, branch

lease agreements, compilation of all statutory

returns to be submitted to apex agencies,

digitalisation of records etc., to name a few.

Innovation, finding a better solution to the

processes or problems, is the key to the growth. My

focus to make this Bank a truly tech-driven is on.

For a traditional banking unit like our Bank, direct

interaction with the customers is of paramount

importance, particularly for a segment of the

population that we serve in rural areas. The

stand out with a high pitch slogan that my Bank is

doing what is expected of it in letter and spirit.

From the day one I reported in the Bank, this is what I

have been telling my people to feel responsible for

what their seat in the Bank in any position demands

to do. An Organisation achieves its quality and

maturity where its workforce operates with their

o p t i m u m p o t e n t i a l a n d w h e r e t h e t o p

management keeps its focus on policy arena giving

directions to drive the growth.

One sensitive area in the context of high ratio of

youngsters in the workforce is the need to create

awareness among workforce about preventive

vigilance. This year, the theme of the annual report

is to uphold the values of clean banking and

transparent working environment and take an oath

as to maintain a safe distance from corruption.

I thank each and every member of staff for their

support and cooperation in continuing the best

performance of the Bank. I also thank the

customers of our Bank for reposing confidence in

our Bank and giving us the opportunity of serving

them.

With best wishes,

Yours sincerely,

(K. Praveen Kumar)

Chairman


13

attention that we give them is what gives us back

the business. However, the routine transactions

have to have the route of Alternative Delivery

Channels, which drastically cuts down the myriad

stages / steps that a transaction has to pass through

to its logical conclusion. The time thus saved has to

go the customer interaction to make us relevant to

them. Keeping this in view, our Bank has been

propagating the banking through Alternative

Delivery Channels to the maximum extent possible,

to reduce the footfalls at the branch.

Pension

This year has been a phenomenal in respect of Staff

welfare, benefitting around 1500 retired staff as well

as existing staff. Pension has been implemented by

undertaking one of the biggest exercises after

implementation of NIT Award. The Bank has also

made a full provision of Rs.837 crore towards Pension

at one go, fulfilling the Bank's commitment. In spite

of this massive provision, the biggest ever, the Bank

could post a Net Profit of Rs.112.04 Crore, reinforcing

the Bank's inherent capabilities.

Our Bank is very young in terms of manpower. 75%

of the existing workforce constitutes those recruited

in the Bank from 2009 onwards. The Bank stands

firmly on the base of their collective dynamism. This

is also a cause of concern from the perspective of

dynamism versus experience. The above 75% (i.e.,

2376 members) has an average experience of five

years, as on 31.3.2019. The Bank has great

responsibility of converting the young, dynamic

workforce into a matured bankers valuing systems

and procedures, by continuous training and

handholding.

The Bank has grown in size and complexity and

needs leadership at all levels. The paramount thing

is to make everyone leading a position either in

branches, RO or a department in Head Office or a

Field Officer conversing with a borrower, a cashier

interacting with an elite or illiterate customer, realise

their leadership potential to accelerate the growth

in business, improve in quality, adhere to the systems

and procedures with ever improving compliances

to the regulatory aspects and at the end of the day,

Key Performance Indicators Rs. in 000's

Indicators 2016-17 2017-18 2018-19

A KEY PERFORMANCE INDICATORS

1 No. of Districts covered 22 22 22

2 No. of branches 768 768 775

a) Rural 494 494 499

b) Semi urban 181 181 183

c) Urban 52 52 52

d) Metropolitan 41 41 41

Ultra-Small Branches 488 488 488

3 Total Staff (excluding Sponsor Bank Staff) 3012 3160 3181

of which, Officers 1821 1925 1976

4 Deposits 128185762 143336293 160559557

Growth % 25.65 11.82 12.02

5 Borrowings outstanding 56208413 80412059 64710050

6 Gross Loans & Advances outstanding 123685318 143166957 166584100

Growth % 16.67 15.75 16.36

of 6 above, loans to Priority Sector 110580800 131227119 149713863

of 6 above, loans to Non Target Groups 13104500 11939837 13469285

of 6 above, loans to SC/ST 25973900 32116955 36109816

of 6 above, loans to SF/MF/AL 67230826 87126238 100301277

of 6 above, loans to Minorities 5187400 8420724 9921516

7 CD Ratio 96.49 99.88 103.75

8 Investments Outstanding 84864493 114273690 98796639

SLR Investments Outstanding 43432477 57638582 53170560

Non-SLR Investment Outstanding 41432016 56635108 45626079

B AVERAGE

9 Average Deposits 115515029 13347790 144685619

Growth % 26.78 15.55 8.40

10 Average Borrowings 45458048 5764651 77150828

Growth % 9.10 26.81 33.83

11 Average Gross Loans And Advances 110060777 129871031 152339085

Growth 16.00 18.00 17.30

12 Average Investments 58850454 74664481 87720536

Growth % 19.19 26.87 17.49

Average SLR investments 30843910 48841624 54429941

as % to average deposits 26.70 58.35 11.44

Average Non-SLR Investments 28006544 25822857 33290595

as % to Average deposits 24.24 -7.80 28.92

13 Average working funds 192895148 223950016 255718080


14

Indicators 2016-17 2017-18 2018-19

Rs. in 000's

C LOANS ISSUED DURING THE YEAR

14 Loans issued during the year 99600988 106919716 102508485

Growth % 26.59 7.34 -4.12

of 14 above, loans to Priority Sector 83310200 92757898 84016632

of 14 above, loans to Non-target Groups 16290788 14161818 18491853

of 14 above, SC/ST 16076269 21244947 27904191

D PRODUCTIVITY (based on total Business)

15 Per Branch 327957 373051 422666

Per Staff 84520 90666 102843

E RECOVERY PERFORMANCE

16 TOTAL

Demand 102622694 115545127 96136986

Recovery 87597449 100949732 84997743

Over dues 15025245 14595395 11139243

Recovery % 85.36 87.37 88.41 (June position)

17 FARM SECTOR

Demand 40200604 49736937 40870154

Recovery 37943901 46449980 36544683

Over dues 2256703 3286957 4325471

Recovery % 94.39 93.39 89.42

(June position)

18 NON-FARM SECTOR

Demand 62422090 65808190 55266832

Recovery 49653548 54499751 48453060

Over dues 12768542 11308439 6813772

Recovery % 79.54 82.82 87.67 (June position)

F ASSETS CLASSIFICATION

19 (a) Standard 121587921 141210532 164693106

(b) Sub-Standard 366930 262674 495393

(c) Doubtful 1716141 1520235 1216164

(d) Loss 14326 173516 179437

Total 123685318 143166957 166584100

Standard Assets as % to Gross Loans & Advances out standings 98.31 98.64 98.86

G PROFITABILITY ANALYSIS

20 Interest paid on

a) Deposits 7963182 8414939 8512819


15

b) Borrowings 3126205 3372854 4716476

21 Salary 2013540 2170109 2353771

22 Other Operating Expenses 961124 1008736 1408528

23 Provisions made during the year

(a) Against NPA's 244916 594063 -3143366

(b) Other Provisions 44690 178863 8390073

(c) Amortization - 0 0

24 Interest received on

(a) Loans & Advances 13099251 14850970 17287981

(b) Investments 4488826 5418718 6405778

(c) Others 20649 - -

25 Other Income 1971914 2974895 2879522

26 Loss / Profit 3519912 5030146 1120384

H Other information

27 Share Capital Deposit Received Nil Nil Nil

28 DI & CGC - - -

(a) Claims settled cumulative - - -

(b) Claims received but pending adjustment - - -

(c) Claims pending with Corporation - - -

29 Cumulative Provision - - -

(a) Against NPAs 1221643 1676144 1334832

(b) Against Standard Assets 342625 406021 490293

(c) Against Intangible Assets, Frauds etc. 115864 200276 616

30 Interest Derecognized

(a) During the year Nil Nil Nil

(b) Cumulative Nil Nil Nil

31 Loans Written off during the year

(a) No. of Accounts 3795 7448 47

(b) Amount 59029 122662 5541

32 Accumulated loss Nil Nil Nil

33 Reserves 16557237 21587384 22867634

Net NPAs 875754 404383 556161

% Provisions to gross NPAs 58.25 79.31 70.57

% Gross NPAs to advances 1.69 1.37 1.14

% Net NPAs advances 0.72 0.29 0.34

CRAR 14.05 15.59 15.50

Rs. in 000's

Indicators 2016-17 2017-18 2018-19


16

Deposits (Rs. in Crores) Advances (Rs. in Crores)

5153

5869

6791

8280

10202

12819

16056

14334

5533

6590

7895

12369

16658

14317

10602

9066

Total Business (Rs. in Crores)

10686

12459

14687

17346

20804

25187

28650

32714

Net Profit (Rs. in Crores)

120

159

180

202

223

352

112

503

Reserves (Rs. in Crores)

698

879

1080

1304

2162

1656

2287

539

Per Employee Business (Rs. in Crores)

4.54

5.03

5.35

6.10

7.05

9.07

8.45

10.28

2011-12

2012-13

2013-14

2014-15

2015-16

2016-17

2018-19

2017-18

2011-12

2012-13

2013-14

2014-15

2015-16

2016-17

2018-19

2017-18

2011-12

2012-13

2013-14

2014-15

2015-16

2016-17

2018-19

2017-18

2011-12

2012-13

2013-14

2014-15

2015-16

2016-17

2018-19

2017-18

2011-12

2012-13

2013-14

2014-15

2015-16

2016-17

2018-19

2017-18

Business Growth (Rs. in Crores)

997.00

1772.77

2227.87

2658.98

3458.31

4383.18

3463.22

4064.03

Per Branch Business (Rs. in Crores)

37.30

42.21

32.80

27.70

23.83

20.86

19.53

18.622011-12

2012-13

2013-14

2014-15

2015-16

2016-17

2018-19

2017-18

2011-12

2012-13

2013-14

2014-15

2015-16

2016-17

2018-19

2017-18

2011-12

2012-13

2013-14

2014-15

2015-16

2016-17

2018-19

2017-18


17

Awards received during 2018-19we are with you!

Annual Report 2018-19

18

Award from SBI, Corporate Centre, Mumbai for achieving highest

growth in Housing Loans

Excellence in APY- Recognition, from PFRDA. Shri B Srinivasa Murthy,RM Khammam receiving the Award

Excellence in APY- Recognition from PFRDA. Shri Narasi Reddy,

Chairman, Shri K Ravi Kiran, GM-IV, Shri Venkatesh Kumar, FIC Nodal

Officer, Srikakulam receiving the Award

Board of Directors Report

2018-19

Lighting up the lives of rural people


19


20

Board of Director's Report 2018-19Profit Analysis

The Bank registered a Net Profit of Rs. 112.04 Crore

for the year 2018-19 as against Rs 503.01 Crore for

the previous FY 2017-18. Compared to the previous

year's Net Profit, this year's Net Profit is much lesser

since the Bank had to make a provision of Rs.837

Crore towards Pension liability as per Government of

India guidelines.

Increase in interest income by Rs. 342.41 Crore as

against the previous year's increase of Rs.266.10 Cr,

has taken the Operating Profit (Before Provisions

and Contingencies) to Rs.958.17 Crore vis-à-vis

previous year's Rs.827.79 Crore. However, the

Operating profit before tax stood at Rs 150.60 Crore

as on 31.3.19 vis-à-vis previous FY's figure of Rs 750.50

Crore. The decrease of Rs 599.90 Crore (79.93%) in

operating profit before tax during this year is due to

a massive Provis ions (other than tax) and

Contingencies of Rs.807.57 Crore made during the

current year vis-à-vis Rs.77.29 Crore made during

2017-18. Inspite of huge provisions and although

there was decrease in non-interest income by

Rs.9.54 Crore and increase in non-interest

expenditure by Rs.58.35 Crore, during the year, the

Bank was able to post a moderate Net Profit of

Rs.112.04 Crore due to the reduction of tax liability

from Rs.252.04 Crore to Rs.45 Crore. The other

factors that impacted the Net Profit figure are:

We have pleasure in presenting the 14th 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

year ended on 31st March 2019.

Business Review

The Bank's business has registered a growth of Rs

4064.03 Crore at 14.19% to reach Rs. 32714.40 Crore

as on 31st March 2019 as against Rs 28650.33 Crore

as on 31.3.18.

57.62% of the business growth of Rs 4064.03 Crore

was contributed by Loans and Advances and the

remaining 42.38% by deposits with an absolute

growth of Rs 2341.66 Cr and Rs 1722.41 Cr

respectively. The distribution of growth between

deposits and advances in FY 2017-18 was in the ratio

of 56% and 44%.

a) A sum of Rs 4.21 crore was recovered from

written off/AUCA accounts.

b) Booked a Profit of Rs 14.50 Crore from Treasury

operations.

c) Reduction of Gross NPAs by Rs.6.54 Crore to Rs.

189.10 crore from Rs. 195.64 Crore.

d) Income from Commission and Brokerage

increased to Rs.237.39 Cr from Rs. 220.07 Cr.

e) Earned an income of Rs. 31.85 Crore from PSLC

during the year.

f) Expenses Ratio contained at 28.19% (although

marginally increased from 27.75% last year)

g) Low cost deposits (CASA) increased by 9.95%

(Rs. 601.09 Crore), thus reducing the cost of

deposits to 5.88% from 6.30%.

2011

-12

2012

-13

2013

-14

2014

-15

2015

-16

2016

-17

2017

-18

2018

-19

1068

6

1245

9

1468

7

1734

6

2080

4 2518

7

2865

0 3271

4Total Business (Rs. in Crores)


21

Net Interest Income

Total interest income earned during the year is Rs

2369.37 Crores whereas total interest expenditure is

at Rs 1322.93 Crores. The net interest income has

increased by Rs. 198.26 Crore to Rs 1046.45 crore

during the year vis-à-vis Rs 848.19 Crores in 2017-18

with a growth rate of 23.37%.

Income and Expenditure

Interest Expenditure

· Interest paid on deposits has increased to Rs

851.29 Crore from the last FY's figure of Rs 841.49

Crore by Rs 9.79 Crore (1.16%).

· The Bank has paid Rs.471.65 Crore towards

interest on borrowings (refinance from NABARD,

NHB and MUDRA) during the year as against Rs

337.29 Crore of FY 2017-18 with an increase of Rs

134.36 Crore.

Operating expenditure

Operating expenditure has increased by Rs 58.35

Crore (18.36%) to Rs 376.23 Crore in 2018-19 from Rs

317.88 Crore in previous FY 2017-18. The growth in

operating expenditure has been impacted by

Contribution to the Pension Fund, Gratuity Fund and

normal salary payments to a tune of Rs.42.69 Crore.

Interest Income

· Interest income increased from Rs 2026.97

Crore to Rs. 2369.38 Crore during the FY with an

absolute growth of Rs 342.41 Crore (at 16.89%)

(Rs in Crores)

2011

-12

2012

-13

2013

-14

2014

-15

2015

-16

2016

-17

2017

-18

2018

-19

12

0 15

9

18

0 20

2

22

3

35

2

50

3

11

2

Net Profit

2014-15 2015-16 2016-17 2017-18 2018-19

1243.86

782.33

1484.7

968.52

1760.87

1108.94

2026.97

1178.78

2369.37

1322.93

Interest Income Interest Expenditure

2014-15 2015-16 2016-17 2017-18 2018-19

Interest paid on deposits Interest paid on borowings

578.77

203.

55

694.61

273.

91

796.3231

2.62

841.49

337.

29

851.29

471.

65

Particulars 2017-18 2018-19 Growth %

Interest Income 2026.97 2369.38 16.89

Interest Expenditure 1178.78 1322.93 12.23

Non-Interest Income 297.49 287.95 -3.21

Non-Interest Expenditure 317.88 376.23 18.36

Gross Profit/Operating profit 827.8 958.17 15.75

Taxes 252.04 45.00 -82.15

Deferred Tax Asset & 4.55 6.44 41.54Earlier year adjustments (excess)

Provisions and Contingencies 77.29 807.57 944.86

Prior Period depreciation - - - & rent

Net Profit 503.01 112.04 -77.73


22

Provision for NPAs:The Bank has written back a provision of Rs. 31.44 Cr

on NPAs during the year, taking the total Provisions

available on Advances to Rs. 182.51 Cr (including

cumulative provision of Rs.49.03 Cr on Standard

Assets).

(Rs in Crore)

AssetsO/s

Provision

O/sProvision

2017-18 2018-19

Ratio Analysis

S.

No.Ratios

2018-

19(%)%

Change2017-

18(%)

1 Cost of Deposits 5.88 6.30 -6.73

2 Cost of Borrowings 6.11 5.85 4.44

3 Yield on Advances 11.35 11.44 -0.79

· The Bank has earned an interest income of Rs

1728.80 Crore from loans and advances in

current fiscal as against Rs 1485.10 Crore in 2017-

18 with an increase of Rs 243.70 Crore (@

16.41%).

· The interest income received from investments

has increased by Rs 98.71 Crore at 18.22% to

reach Rs 640.58 Crore as against Rs 541.87 Crore

in the previous FY. (Rs in Crores)

S.

No.

Ratios 2018-

19 (%)

% Change

2017-

18 (%)

S.

No.

2014-15 2015-16 2016-17 2017-18 2018-19

249.8

9

993.981104.73

379.9

7

1309.93

450.9

5

1485.1

541.8

7

1728.8

640.5

8

Interest Income on AdvancesInterest Income on Investments

Standard 14316.70 40.60 16469.31 49.03

Sub Standard 35.92 4.12 49.54 7.60

Bad & Doubtful 142.20 146.14 121.62 107.94

Loss 17.35 17.35 17.94 17.94

Total 14316.69 208.21 16658.41 182.51

13 Total Business Per Branch ( Rs in 000's) 422121 373051 13.15

14 Average Business Per Employee ( Rs in 000's) 93375 83338 12.04

15 Net Profit Per Employee ( Rs in 000's) 352 1592 -77.87

16 Net Profit Per Branch (Rs in 000's) 1446 6550 -77.93

17 Provision Coverage Ratio 70.59 85.67 -17.60

18 Average Return on Funds (Financial Return) 9.32 9.37 -0.53

19 Average Cost of Funds (Financial Cost) 5.17 5.26 -1.71

20 Financial Margin (1-2) 4.15 4.11 0.97

21 Cost of Management (Transaction Cost) 1.47 1.42 3.52

22 Miscellaneous Income 1.07 1.01 5.94

23 Risk Cost 0.08 0.35 -76.19

24 Net Margin 3.67 3.35 9.45

25 Net Interest Income in Cr. 1046.45 848.19 23.37

26 (NIM) Net Interest Margin 4.36 4.15 5.06

27 Gross Rate of Return (GRR) 0.38 1.91 -80.10

4 Yield on Investments 7.47 8.21 -9.06

5 Expenses Ratio (Cost to Income Ratio) 28.19 27.75 1.60

6 C D Ratio 103.75 99.88 3.87

7 Interest Income as % to Working Funds 9.27 9.05 2.43

8 % of Non Interest Income (Other Income) to Working Funds 1.13 1.33 -15.049 Operating Profit (Before provisions) to Working Funds 3.75 3.70 1.35

10 Return on Assets(Net profit as % to working Funds) 0.44 2.25 -80.44

11 Return on Equity 4.71 22.30 -78.88

12 Total Business Per Employee ( Rs in 000's) 102843 90666 13.43


23

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

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

Ratios 2018-

19(%)

% Change

2017

-18(%)

Balance Sheet Size

The balance sheet size amounted to Rs. 26637.44

Crores (including IBPC gap of Rs. 1690 Crore) with an

increase of Rs. 972.22 Crores over March 2018 level of

Rs. 25665.22 Crores

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 112.04 Crore at 5.19% from Rs

2158.74 Cr as on 31.03.18 to Rs 2270.78 Cr as on

31.03.19.

Net worth

Net worth of the Bank stood at Rs 2380.85 Crore with

a growth of Rs 128.04 Crore (5.68%) over previous

FY's figure of Rs 2255.93 Crore

The Capital Adequacy Ratio has remained at

15.50% at the end of the year vis-a-vis 15.59% as on

31.03.18 well above the level of minimum 9%

stipulated by Dr. K.C Chakravarthi Committee.

2011

-12

2012

-13

2013

-14

2014

-15

2015

-16

2016

-17

2017

-18

2018

-19

539698

8791080

1304

1656

21622287

Reserves

28 Other Income Ratio (Non Interest Income) as a % to Total Income 10.84 12.80 -15.31

29 Growth In Business 14.18 13.75 3.13

30 Investment to Deposit Ratio 51.01 67.17 -24.06

31 Borrowings to Advances Ratio 38.85 56.17 -30.83

32 CASA Deposits to Total Deposits 41.46 42.15 -1.64

33 Cash to Deposits Ratio 0.93 1.18 -21.19 Capital 2017-18 2018-19

1 Tier-I

a. Paid up Capital 94.08 94.08

b. Share Capital Deposit 0 0

c. Statutory Reserves &

Surplus 433.08 455.49

d. Capital Reserves 0.01 0.01

e. Other Reserves 14.31 14.31

f. Spl.Reserve u/s 36(1)(Viii)

of Income Tax Act 1961 10.39 14.47

g. Surplus in P&L 1700.95 1786.50

Total reserves (b+c+d+e+

f+g) 2158.74 2270.78

Total Tier-I Capital 2252.82 2364.86

2 Tier-II

a. Undisclosed Reserves

b. Revaluation Reserves

c. General Provisions &

Reserves 52.08 49.09

d. Investment fluctuations

Reserves / Fund 15.99

Total Tier-II Capital 52.08 65.08

Grand Total (Tier I + Tier II) 2304.90 2429.94

3. a. Adjusted value of funded

risk assets i.e., balance

sheet items 14764.48 15653.69

b. Adjusted value of non-

funded risk assets i.e.,

balance sheet items 21.62 21.47

c. a+b 14786.40 15675.16

d. Percentage of Capital

(Tier-I + Tier II) to Risk

Weighted Assets 15.59 15.50


24

S.

No.

(Rs in Crore)

(Rs. in Crores)

Deposit Mix

CASA deposits grew by Rs 614.17 Crore at 10.17% to

reach Rs 6656.11 Crore as against Rs 6041.94 Cr as on

31.3.18. Term Deposits grew by Rs 1108.24 Crore to

reach a level of Rs 9399.83 Crore at 13.37% as

against Rs 8291.69 Crore. The share of CASA stood

at 41.46% as on 31.03.2019 with a moderate

decrease from 42.15% (31.03.2018).

Borrowings

The aggregate borrowings of the Bank as on 31st

March 2019 stood at Rs. 6471.01 Crore whereas it

was Rs. 8041.21 Crore as on 31st March 2018.

(Rs. in Crores)

Institution 2017-18 2018-19 �VarianceS.No

* Overdraft facility against TDRs kept with SBI, has

reduced. The Bank had inflows of Rs.1577 Crore

during the year by way of sale of investments (Rs.501

Crores) and refinance from NABARD (Rs.1076

Crore). As such there was no need for availing

Overdraft facility from State Bank of India.

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%.

Assets

Investments

Total investments portfolio– both SLR and Non-SLR -

of the Bank has decreased from Rs 11427.37 Crore

as on 31.3.18 to Rs 9887.11 Crore by Rs 1540.26 Crore

@ -13.48%.

(Rs. in Crores)Investments 2017-18 2018-19

SLR 5763.86 5317.06

Growth 1420.61 -446.80

Growth %age 32.71 -7.75

Non SLR 5663.51 4562.61

Growth 1520.31 -1100.90

Growth %age 36.69 -19.44

Total Investments 11427.37 9879.69

Growth 2940.92 -1547.70

Growth %age 34.65 -13.54

Investment Policy

The Investment Policy of the Bank was formulated in

2006 and the same was reviewed/revised and

Deposits

Deposits registered a growth of Rs 1722.32 Crore

over March 2018 level at a growth rate of 12.02%.

Total deposits as on 31.3.2019 stands at Rs 1655.95

Crore as against Rs 14333.63 Crore as on 31.3.2018.

2011-1

2

2012-1

3

2013-1

4

2014-1

5

2015-1

6

2016-1

7

2017-1

8

2018-1

9

51

53

58

69

67

91

82

80

10

20

2

12

81

9

14

33

4

16

05

6Deposits

Deposit mix 2017-18 2018-19

Current A/c 121.80 186.14

Growth -5.07 64.34

Growth % age -4.00 52.82

Savings Bank A/c 5920.14 6469.97

Growth 781.51 549.83

Growth %age 15.30 9.29

Total CASA 6041.94 6656.11

Growth 780.43 614.17

Growth %age 14.83 10.17

CASA Ratio 42.15 41.46

Term Deposits 8291.69 9399.84

Growth 734.62 1108.15

Growth %age 9.72 13.36

Total deposits 14333.63 16055.95

Growth 1515.05 1722.41

Growth % Age 11.82 12.02

1 NABARD 5299.46 6376.08 1076.62

2 SBI 2604.41 2.13 -2602.28

3 NHB 97.33 72.80 -24.53

4 MUDRA 40.00 20.00 -20.00

Total 8041.21 6471.01 -1570.19


25

* The average investments have actually grown by

Rs.1305.60 Crore from Rs.7466.45 Crore to Rs.8772.05

Crore.

approved by the Board from time to time,

conforming to the RBI guidelines.

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

Securit ies are undertaken by the Portfol io

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

661.01 crore in CRR and Rs 5494.04 crores in SLR as

on 31.03.2019.

Inauguration of Bhadrachalam Regional Office in Kothagudem on 25.7.2018

Shri P. Jagath Kumar Reddy, PD, DRDA, Kothagudem inaugurating the

main premises of Regional Office.

Shri A.K. Chatterjee, Deputy General Manager, NABARD, TSRO, Hyderabad,who was Principal Inspecting Official for NABARD Inspection that was inprogress, inaugurated the RM’s Chamber.

Financing SHGs by Kothagudem branch on the occasion – Disbursement of Rs.1 Crore.


26

We swear that we will maintain a distance from corruption

27

Credit Portfolio

The credit portfolio of the Bank rose by 16.36% to reach Rs. 16658.36 Crore during the financial year ended

31.03.2019 from the previous year level of Rs. 14316.69 Crore, thus showing an absolute growth of Rs. 2341.36

Crore.

Function Hall financed by our Tirupavaram Branch

Rice mill financed by our Tipparthy Branch

Power loom unit financed by our Cherlapalli Branch

Cement Bricks manufacturing unit financed by our Kattangur branch.

Credit to Agriculture

Total credit to agriculture and allied activities

including agriculture-portion of SHG lending, stood

at Rs 11259.36 Crore as on 31.3.2019 as against Rs

9666.29 Crore with a growth of Rs 1593.07 Crore (@

16.48%). Total number of Bank's borrowers in

Agriculture sector has increased to 1102918 vis-a-vis

1027206 in FY 2017-18. More than 75 % of the credit

to SHG finance is also towards agricultural

operations.


28

The Bank has disbursed Rs 6316.74 Crore to

agriculture during the year as against the previous

year's disbursal of Rs 7234.04 Crore.

Total credit to agriculture and allied activities

constitutes 61.62% of the total credit portfolio as on

31.3.2019 vis-à-vis 66.67% as at the end of previous FY

2017-18.

Crop loan borrowers of our Pasunur Branch

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 920115 KCCs as on 31.3.2019 with an

outstanding credit of Rs 6759.51 Crore as against

previous FY level of 850638 KCCs for Rs 5509.40

crores.

During the year 2018-19, we have disbursed an

amount of Rs 3302.53 Crore to 590262 KCC card

holders as against Rs 4513.97 Crores to 650780 card

holders during the year 2017-18. 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.17,65,50,006.27

and Rs.19,68,86,526.49 to the State Governments of

Telangana and Andhra Pradesh respectively during

the year 2018-19.

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 60,92,73,842/- towards 2%

interest subvention from the GOI during the year

2018-19. As per the directives of Government of

India, we had passed on the benefit relating to

interest subvention incentive to the extent of Rs

28,86,19,581.41 to the prompt repayers and claim

submitted accordingly.

Conducting of Grama Sabhas

All branches have conducted Grama Sabhas for

the customers, mainly for the purpose of educating

the farmers in timely renewal of the crop loans to

avail the benefit of interest subvention from

Government of India. To ensure maximum

renewals/ recovery , Grama Sabhas were

conducted in the evenings and mornings and

sensitized farmers to renew their crop loans. 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 successful renewal of

crop loan accounts and recovery of NPAs.


29

Grama Sabha by Chilukapalem Branch

Tenant Farmers – Loan Eligibility Card Holders

We have financed 4885 tenant farmers under the

Loan Eligibility Cards Scheme with a credit

outstanding of Rs.11.68 Crore during the year 2018-

19. 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 82.87 Crores

to the JLGs as on 31.03.2019, taking the total JLGs

financed to 6503. During the year 3172 groups were

financed amounting Rs. 26.28 crores.

Self Help Groups

Our Bank has financed 194871 Self Help Groups

(Covering about 26.80 Lakh rural women) with an

outstanding portfolio of Rs 5857.85 Crore as on

31.3.2019 as against previous year's level of 194776

Groups with outstanding credit of Rs 5584.02 Cr. The

total loans outstanding under SHG segment has

increased by Rs 273.83 Crore at a growth rate of

4.90% during the year 2018-19 against previous year

growth of Rs 628.31 Crore (@ 12.68%).

The Bank has disbursed Rs 4029.11 Crore to 182800

Groups during the year as against Rs 3640.62 Crore

disbursed to 147737 SHGs during the previous year.

The Bank has the highest number of Self Help Groups

linked to Bank and loan amount outstanding,

among all RRBs in the country.

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 loan documents will be

obtained for the limit of terminal year duly preparing

the appraisal for 5 years and year-wise limits will be

fixed basing on present corpus and proposed thrift

(subject to a maximum of Rs.7.50 lakhs). The limit will

be fixed at 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.

Mahila Chethana Sadassu organised for our SHG customers in Suryapet

Mahila Chethana Sadassu for our SHG members in Visakhapatnam


30

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

Shri Yerrabelli Dayakar Rao, Panchayat Raj Minister, Government of

Telangana presenting an appreciation memento to Shri E. Satyanarayana,

Branch Manager of Bibinagar Branch for maintaining the lowest NPAs in

SHGs at State level during the year 2018-19.

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 Our Bank's officer interacting with SHG members


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

s t a t e ) a n d S r i k a k u l a m , V i z i a n a g a r a m ,

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 prompt repayers

reducing 'ZERO” interest burden to the groups.

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.

31

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.

Borrowers of our Temburu Branch

The Bank's priority sector lending constitutes 89.87% of

total advances. In absolute terms, total priority sector

lending stood at Rs 14971.39 Crore as on 31.03.2019 as

against Rs 12499.57 Crore as on 31.03.2018. There is a

growth of Rs 2471.82 Crore @ 19.77%. Lending to

weaker sections constitutes 71.95%. In absolute terms

weaker sections loans stood at Rs 12109.51 Cr as

against previous FY's level of Rs 9402.58 Cr with an

increase of 28.79% (Rs 2706.93 Cr).

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


32

National Urban Livelihood Mission (NULM)

Government of India restructured Swarna Jayanti

Shahari Rozgar Yojana (SJSRY) as National Urban

L ivel ihood Miss ion (NULM). The SEP (Sel f

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.We have claimed an

interest subvention @5.50% i.e Rs.131,52,84,760/- and

3% interest incentive subvention Rs.621979034 during

the year 2018-19.

Priority Sector Lending

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

2/04.09.01/2016-17 dated 07.07.2016, 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)

M i c r o , S m a l l a n d M e d i u m E n t e r p r i s e s

(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.

(Rupees in Crore)

S.

NoNo.of

A/cs

2017-18 2018-19

1 Weaker Sections 988016 9402.58 1091638 12109.51

2 Women borrowers 489568 4567.63 509624 6610.10

3 Minorities 63571 609.72 87142 992.15

4 SCs/STs 257984 3037.49 306290 3610.98

Inter Bank Participation Certificates

In accordance with the RBI guidelines, the bank has

entered into Risk sharing participation Contract with

HDFC Bank under Inter Bank Participation

Certificate (IBPC) and issued priority sector

advances to the extent of Rs.800.00 Crore on

26.09.2018 for a period of 180 days as cash pay-out

and maturity period expired on 25.03.2019. Issued

priority sector advances to the extent of Rs.590.00

No.of

A/cs O/s O/s

Priority Sector Lending Certificates ( PSLC )

As per RBI master circular No. FIDD.CO. Plan. BC

23/04.09.01 /2015-16 dated 07.04.2016 of PSLC,

trading on e-Kuber portal is an ongoing process. All

traded PSLCs will expire by March 31st and will not

be valid beyond the reporting date (March 31st),

irrespective of the date it was first sold.

According to our sponsor bank, the SBI instructions

on trading in "Priority Sector Lending Certificates"

through CBS e-Kuber portal, we have started

trading on e Kuber portal for the financial year 2018-

19 from 21.06.2018. Our Bank has achieved

substantial profit of Rs. 3185.56 Lakhs in this Financial

Year 2018-19.

Government Sponsored Schemes

The Bank has participated in Govt Sponsored

Schemes actively during the year and as on

31.3.2019, the total finance extended under various

Schemes and loan out standings in various schemes

are as under

Srikakulam RM presenting Car key to our Branch Customer

financed by Kanchili Branch

Target Achievement

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

SCAP 6803 7766.85 6037 6891.31

BCAP 4438 3419.07 4036 3109.72

STAP 1881 819.99 1568 679.83

Minorities 1034 645.31 946 605.03

Weavers 786 381.26 620 282.21

MEPMA 473 1195.01 296 488.64

PHC 604 452.57 471 347.16

Others 2713 2806.09 2507 2183.02

Total 18732 17486.15 16481 14586.92


33

Crore on 27.12.2018 for the period of 180 days as

cash pay-out and maturity period expired on

25.06.2019. Further, again during the year the bank

issued priority sector advances to the extent of

Rs.1100.00 Crore on 27.03.2019 for the period of 180

days as cash pay-out and maturity period expires on

23.09.2019. In Aggregate a total issue under IBPC

during the year was Rs. 2490 Crores with an

outstanding of Rs.1690 Cores as on 31.03.2019.

(Rs. in Lakhs)

Scheme

Position of Government Sponsored Schemes as

on 31.03.2019. (Rs in Lakhs)

Scheme Outstandingas on 31.3.2019

Disbursement from01.04.18 to 31.03.2019

No. ofUnits

Amt. No. ofUnits

Amt.

SGSY 1327 1413.89 0 0

RYS 697 1546.02 0 0

SCAP 35122 11083.51 6035 6889.02

BCAP 28800 8423.1 3919 3019.05

STAP 31219 6622.83 1551 672.16

Minorities 6305 5684.46 903 577.1

Weavers 2303 1880.88 625 284.25

VAMBAY/

INDIRAMMA 1332 799.04 0 0

KVIC 16 80.98 0 0

Pasukranthi /PPK 5447 4516.37 0 0

PMEGP 221 129.24 0 0

MEPMA 1724 521.32 296 488.33

PHC 935 524.52 466 343.73

Others 316 277.95 2424 2110.79

Total 115764 43504.11 16219 14384.43

Participation in State Credit Plans

The Bank's participation in State Credit Plans is

as under:

S.No Target Achiev

ementTarget Achiev

ement

2017-18 2018-19

(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 so as to increase our profitability. The

performance is as under.

(Rupees in Crore)

S.

No Amt

O/s Mar 2017-18

Segments

O/s Mar 2018-19

No.of

A/csAmt

No.of

A/cs

Asset Management Hubs and RASMECCCs

For centralised processing of credit proposals and

delivery as a tool for creation of quality assets and

thereby improving the performance of the Bank, by

using cost effective methods and business oriented

approach, an Asset Management Hub was

created as per the instructions of the State Bank Of

India, Corporate Centre. The Asset Management

Hub Branch is functioning under control of Regional

Offices.

The Asset Management Hub, for the present shall

process the Housing loans, General Purpose Asset

Backed Loans, CRE-RH Loans & MSME loans

(backed by collateral security) loan proposals

sourced from spoke branches and directly received

from the customers.

As on 31.03.2019 there are19 Asset Management

Hubs and 2 RASMECCC performing in the Bank and

Business from the AMHs and RASMECCC as on

31.03.2019 are 3767 loan accounts to the tune of

Rs.629.36 crores

2835 loan accounts to the tune of Rs. 485.04 crores

were sanctioned through Hubs during the year

2018-19 whereas 932 loan accounts tune of

Rs.144.32 crore sanctioned during 2017-18.

1 Housing Loans 10634 1185.25 14741 1891.87

2 Mortgage Loans 3072 167.46 3579 223.01

3 Education Loans 2499 72.56 1936 60.62

4 Demand Loans 16711 202.52 15783 216.50

5 NFS - Term Loan /MSME 106782 1134.28 116010 1357.48

6 Personal Loans 10282 274.23 8412 251.39

7 Personal Gold Loans 105065 503.91 95040 485.27

Total 255045 3540.21 255501 4486.14


34

1 Crop Loans 3800.00 4513.97 4965.35 3602.53

2 Tot Agr & allied activities 220.00 214.94 675.77 359.83

3 NFS 580.00 678.02 1351.81 853.65

4 OPS 2375.00 3437.62 5267.55 4607.95

5 Tot Priority Sector 6975.00 8844.55 12260.48 9423.96

Achievement % 126.80 76.86%

PMAY : Pradhana Manthri Awas Yojana

With an aim to provide homes to home less

individuals depending on their income levels, Govt

of India has introduced the PMAY scheme under

which subsidy is being provided to borrowers who

have availed housing loans in banks and financial

institutions.

Our bank has actively participated in the scheme

and financed 1793 loans (Rs.237.92Lakhs) in all

categories and an amount of Rs.363.86 Lakhs

Claimed for release of subsidy to NHB during the

year 2018-19.

Units financed by our AMHs

Precision Industires financed by Ashoknagar Branch Digital Printing Unit financed by Bollaram Branch

Ajax Fiori (Construction equipment) financed by our Chityala branch


35

CSIS & ACSISOBCEBC 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 2016-17 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-2017-18.

We received abroad education loan subsidy under

ACSISOBCEBC amounting to Rs.73,79,218/- during

the year 2018-19.

C e n t r a l R e g i s t r y o f S e c u r i t i s a t i o n A s s e t

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 Hypothe -

cation 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 31.03.2019 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.

Deccan Haat 2019

Our Bank has participated in the Deccan Haat 2019

organised by National Bank for Agriculture and

Rural Development, TSRO, Hyderabad for 10 days stfrom 1 March 2019. The stalls set up by the Bank

showcased the various products manufactured by

the SHGs financed by our Bank.

Shri Singireddy Niranjan Reddy, the Minister for Agriculture, Co-operation, Marketing, Food & Civil Supplies & Consumer Affairs, Government of Telangana interacting with the SHG member of our Bank about the products put on sale. Shri Vijay

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.


36

Kumar, Chief General Manager, NABARD, TSRO, Hyderabad and our Bank's Chairman Shri K. Praveen Kumar are seen in the picture. During the visit the Minister appreciated the services of NABARD and our Bank in rural development and helping the farmers become self sufficient.

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

(Rs in lakhs)

Financed sports wear, night wear manufacturing unit covered

under CGTMSE for purchase of digital machine for printing on

clothes. An MBA graduate giving employment to about 15 SHG

members in Khammam town.

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 Credi t Informat ion

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.

6.54Crores from Rs. 195.64 Crores as on 31st March

2018 to Rs.189.10 Crores as on 31st March 2019.

Gross NPAs as a percentage to total advances has

increased from 1.36% as on 31.3.2018 to 1.14% as on

31.3.2019. Net NPAs (as a %age to Net advances)

has come down from 0.20% to 0.34%. In absolute

terms, Net NPAs increased from Rs 28.42 Crore to

Rs.55.62 Crore. The NPAs have come down in all

segments except KCC and recalled debts.

SARFAESI Act and Suit filing

Not ices under SARFAESI Act were i s sued

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.

During the year 2018-19 Cumulative

No.of A/cs Amount No.of A/cs Amount

3519 3516.49 14685 10841.56


37

Performance under SARFAESI is as under:(Rs.in Lakhs)

Performance under Suit-filed cases is as under:

(Rs. in Lakhs)

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.

· The Lokadalats shall have jurisdiction to

determine and to arrive at a compromise or

settlement between the parties to a dispute in

respect of any case pending before any court or

any matter which is falling within the jurisdiction

of any court and any matter not brought before

such court pre-litigation.

· Every award of Lokadalat shall be final and

deemed to be a decree of Civil Court binding on

all the parties to the dispute. Such civil court

having jurisdiction shall execute the order as if it

were a decree made by that court.

· No appeal shall lie to any court against the

award of the Lokadalat not even under Article

226 of the Constitution because it is a judgement

by consent.

· 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 in

Lokadalats.

During the year, 84 cases for an amount of Rs.54.75

Lakhs were referred to Lokadalats of which 84 cases

were settled for an amount of Rs.54.75 Lakhs. Of

which an amount of Rs. 54.75 Lakhs was recovered.

Bank Adalat

We have introduced Bank Adalat scheme also inline

with Lok adalat for easy disposal of over due cases at

RO level.Dates of conducting of bank Adalats have

advised by Head Office. During the Year 2018-19 we

have settled 3656 cases for an amount of

Rs.1964.27Lakhs.

Compromise settlements

Bank has recovered huge amounts of NPAs during

the year 2018-19 under compromise settlement

which are overdue for several years and where

sufficient provisions are available. (Rs. in Lakhs)

The following strategies were adopted to reduce /

contain the NPAs:

1. The Recovery & Risk Management department

has been continuously drawing various

strategies for reduction of NPAs and guiding the

branches/Regional Offices under the guidance

of top Management.

2. All General Managers are regularly visiting the

branches in their allotted regions and reviewing

the NPA position and guiding for resolution.

3. More than Rs.20.00 lakhs outstanding NPA

accounts are being monitored by Chairman

personally.

4. As NPAs under SHG have registered increase,

we have advised the branches to ensure

renewal of accounts where the limits were

expired on war footing basis and recover the

installment amount duly utilizing the services of

VO leaders and VO wise lists.

Compromise 2017-18 2018-19

No of A/Cs 3006 2099

Amount in Lakhs 2255.11 1259.37

A/cs Amt

Demand Notices issued 231 2322.65

Possession Notices issued 157 1369.27

Possession taken 30 387.18

Auctioned 7 99.78

Regularized 201 786.33

Particulars Cases Amt

Suit filed 2137 4980.89

Decreed 934 1738.73

EP Filed 418 976.86

Recovery after filing suits 373 1033.79


38

5. Top 50 NPA accounts of each region are being

reviewed by respective GMs at frequent

intervals.

6. Top management has been conducting audio

conferences at frequent intervals with Regional

Managers, Manager (Adv.), Desk Officers

(NPAM) and high NPA branches and reviewing

NPA position.

7. In the light of recent promises by political parties

to waive crop loans upto Rs.2.00 lacs, renewal of

crop loans has taken back seat. As such all our

branches are conducting Gramasabhas in their

area of operation. We have advised to conduct

atleast four such Gramasabhas by each branch

in this month for renewal of crop loans and SHGs.

8. Chronic NPA branches were allotted to HO

officials for monitoring and reduction of NPAs up

to March 2019.

9. We have announced incentive schemes to

branches for NPA reduction and to Bank Mitras

for KCC renewals and AUCA recovery upto

March 2019.

10. Conducted auction for Gold ornaments

pertaining to Personal Gold Loans which

became overdue, at common date at quarterly

intervals.

Asset Classification

Asset

(Rs. in Crores)

O/s % O/s %

2017-18 2018-19

Training Programme on Housing Finance and Pradhan Manthri Awas Yojana – Credit Linked Subsidy Scheme (PMAY CLSS) organised by National Housing Bank on 11th May 2018 for 50 of our BMs in Hyderabad.

Standard 14121.05 98.63 16469.31 98.86

Sub Standard 26.27 0.18 49.54 0.30

Bad & Doubtful 152.02 1.06 121.62 0.73

Loss 17.35 0.12 17.94 0.11

Total NPAs 195.64 1.36 189.10 1.14

Total Advances 14316.69 100 16658.41 100


39

Recovery drive by our Kuda Kuda Road branch


40

Internal Control System – Inspection & Audit

All activities of the Bank are subjected to internal

audit function, which comprises four different types

of audits namely (a) Risk Focused Internal Audit

(RFIA) (b) Snap Audit (c) Concurrent Audit and (d)

Bank Mitra Audit (e) Compliance Audit and (f) IS

Audit.

Risk Focused Internal Audit (RFIA)

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,

with the following rating system parameter-wise

marks.

The marks allotted under each parameter have also

been revised as under:

Branches with 'Wel l Control led – A+' and

'Adequately Controlled - A' ratings are audited

within 18 months from the previous audit date while

the Branches with 'Moderately Controlled - B' and

'Unsatisfactorily Controlled - C' rated branches are

audited within a year.

During the year 535 branches have fallen due for

Audit and all 535 branches have been audited.

Rating acquired by 535 branches is as under:

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 s t rengthening the systems and

procedures.

Out of 491 Audit Reports which have fallen due for

closure during the year, 491 have been dealt with.

Snap Audit

The Snap Audits are conducted with a periodicity of

six months from the date of RFIA or Snap Audit. The

schedule is prepared at monthly intervals and

advised to Regional Offices. The officers of

neighbouring Regions would undertake Snap Audits

as per the schedule specified by Head Office. The

reports will be closed within one month by the

respective Regional Office. As on 31.03.2019

branches scheduled for Snap Audit are 1175 and all

the 1175 have been audited and no Snap audit is in

arrears. 1131 Snap audit reports are due for closure

by 31.03.2019 and all the 1131 are closed.

Concurrent Audit

At present, the Bank has 29 Concurrent Auditors and

they are covering 168 branches in 29 clusters. The

Bank has initiated the process of empanelment of

more Concurrent Auditors.stBased on the Bank's business levels as on 31 March,

2019, 275 Branches under 53 clusters would be

subjected to Concurrent Audit, including 2

RASMECCCs and 19 Asset Management Hubs

(AMHs), and Head office units, aggregating to 297.

Bank Mitras Audit

At present, the Bank has 1867 Bank Mithras and all

the Bank Mithras are to be audited once in two

years. Accordingly, we have scheduled for audit of

S. Parameter Revised N Format -Marks

1 Business Development 100

2 Credit Risk Management 450

3 Operational Risk Management 410

4 External Compliance 30

5 Self-Audit 10

Rating Out of 535 Branches

audited during 2018-19

Well Controlled - A+ 228

Adequately Controlled - A 307

Moderately Controlled - B -

Unsatisfactorily Controlled - C -

Total 535

Revised Rating Range of Marks

Well Controlled - A+ >=850

Adequately Controlled - A >700 and <=850

Moderately Controlled - B >600 and <=699

Unsatisfactorily Controlled - C <600


41

50% of Bank Mithras (934) for the FY 2017-18 and all

the 934 Bank Mithras were audited in FY 2017-18.

The remaining 50% i.e. 933 Bank Mithras are

scheduled for audit during the FY 2018-19. The Bank

Mithra audit is carried out by the officers of

neighbouring Regional Offices and the reports are

being closed within two months by the respective

Region. As at the end of 31.03.2019, 915 Bank Mithra

Audits were completed out of 933 Bank Mithras and

the remaining 18 will be completed by June 19. As ston 31 March 2019, 898 Bank Mithra audit reports are

due for closure, of which 869 are since closed and

19 are under process.

Apart from this, the following audits have also been

carried out to enhance the efficiency levels:

Income Leakage Audit

Income leakage Audits were conducted at 279

Branches in March 2019. During the course of Audit

an amount of Rs.1,32,28,210/- has been identified as

income leakage and the entire amount was

recovered and accounted for in the books of

accounts in FY 2018-19.

Compliance Audit

As per the Audit policy, to ensure efficacy of Audit

system, 10% of the RFIA reports that were closed in

the previous financial year are subjected to

Compliance Audit. Accordingly, 53 branches are

subject to Compliance Audit during this Financial

Year 2019-20.

Wherever discrepancies observed in Compliance

Audit, the Regional Managers would call for

explanation from the Branch Manager and the

Officer responsible for the discrepancies.

IS Audit

The CBS platform in our bank is on Application

Service Provider Model (ASP). The ASP of the bank is

M/s C-Edge Technologies Ltd, Mumbai. The Data

Center and Disaster Recovery Center are

maintained by the ASP.

The Regional Offices and Head Offices have been

subjected to an external IS Audit. The IS Audit was

carried out by an external auditor and the

vulnerabilities reported have been complied with

and audit report closed.

The branch IS audit is a part of the RFIA. There by

Branches are subject to the IS audit in the regular

inspection and audit (RFIA) of branches.

Audit of Administrative Offices (Regional Offices,

SLC, CSD):

All the Regional Offices, Staff Learning Centre,

Central Stationery Department have been audited

during the year.

Management Audit

The Management Audit of our Bank has been

conducted by our Sponsor Bank, SBI and the

Compliance to the Management Audit Report

dated 06.02.2018 along with the final Action Taken

Report to State Bank of India, Mumbai. Rating

awarded 'A'.

NABARD Inspection under Section 35(6) of the

Banking Regulation Act 1949

The NABARD Audit has been conducted as on

31.03.2018 during the period from 23.07.2018 to

10.08.2018. The Overall Composite Supervisory

Rating awarded is – A. Final Compliance for the

Report Dated 05.10.2018 was submitted in time


42

Deposits Mobilisation Campaign by Mahbubnagar RO Team

Deposits Mobilisation Campaign by Hanamkonda Branch Team


43

As at the end of the FY 2018-19, no. of SB Accounts

opened and maintained by Bank Mitras is 911418

with a CASA balance of Rs. 148.68 Crore compared

to 950922 and balance of Rs. 118.98 Crore as on

31.3.2018). No. of RD Accounts opened and

maintained by Bank Mitras is 12369 (with a balance

of Rs. 4.74 Crore).

Growth of 25% has been achieved in CASA Bank

Mitra deposits.

The average balance in Bank Mitra Accounts has

also increased from Rs.1250.79 per account to

Rs.1529.19 as on 31.3.2019.

Financial Inclusion Accounts – Aadhar Seeding

87.10% of 911417 Bank Mithra accounts as on

31.03.2019 are seeded with Aadhar.

Financial Inclusion – Social Security Schemes (JJBY,

SBY & APY)

Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY)

PMJJBY is a one-year life insurance scheme,

backed by Government of India, renewable from

year to year, offering coverage for death. People

in the age group of 18 to 50 years having a bank

account who give their consent to join / enable

auto-debit, are eligible. Aadhar would be the


44

Financial Inclusion

The Bank has taken up Financial Inclusion activities

extensively during the year, stepping up the efforts

to increase the volumes and outreach.

As part of financial inclusion, the bank has 1867

Bank Mitras equipped with micro ATMs, operating in

4444 villages in the erstwhile districts of Khammam,

Mahabubnagar, Nalgonda, Medak and Warangal

in Telangana State and Vishakhapatnam,

Vizianagaram and Srikakulam districts in Andhra

Pradesh State, 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. Apart from

the above, our Bank has put in place Bank Mitras in

83 Branch headquarters with a specific purpose of

decongesting the branches and also for providing

good customer service. These Bank Mithras have

become an extended arm for implementation of

our Banks Financial Inclusion policy in tune with

Government of India guidelines. These Bank Mitras

provide banking facilities to the people at their door

steps, leveraging technology.

The Bank Mitras use the hand held Micro ATM

devices to carry out the banking transactions in real

time on our CBS platform. The following banking

transactions are enabled at Bank Mitra Points:

a. Account opening both SB & RD

b. Cash withdrawal and deposit

c. Receipt of loan instalments

d. AEPS transactions both Onus and Off us

e. RuPay Debit card transactions both On us and

Off us

f. Aadhar Seeding facility.

g. Facility of mobile number seeding to bank

account.

The entire Financial Inclusion (FI) operations at BCAs

work on the principle of Biometric verification of the

beneficiaries through micro ATMs and are online,

hitting our CBS server instantly through Third Party

Integration, which faci l i tates updation of

transactions carried out by BCAs on real time basis,

in CBS Server, via TSPs' Servers.

Sl.No

Channel at Bank Mitra2017-18 2018-19

% of Total Transaction

The following is the share of transactions (%)performed by Bank Mitras when compared withthe total bank transactions

No. of Bank Mitra transactions have increased from

5166545 (involving an amount of Rs. 843.16 Crore) to

59.47 Lakhs (involving Rs.1820.65 Crore) as on

31.3.2019 at a growth rate of 115%. The share of

Bank Mitra transactions out of total transactions

done at all Branches of the Bank is around 26%.

1 Cash Withdrawal & Deposit transactions 7.67 17.27

2 AEPS-On us 8.23 18.26

3 AEPS-Acquirer Offus 1.03 11.81

4 Rupay Card transactions 0.13 0.34

5 Total overall percentage. 20.01 47.68

6 Cost of transaction at Bank Mitra (Rs) 14.47 8.20

Tholapi Branch, Srikakulam RO - Branch manager handing over cheque of Rs 2.00 lakhs under PMJJBY

scheme to the Nominee of Deceased (Battina Bangaramma).

Kassibugga Branch, Warangal RO - Branch manager handing over cheque of Rs 2.00 lakhs under

PMJJBY scheme to the Nominee of Deceased (Mohammed Khadeer).


45

primary KYC for the bank account. The life cover of Rs. 2 lakhs shall be for the one year period stretching from

1st June to 31st May and will be renewable. Risk coverage under this scheme is for Rs. 2 Lakh in case of death of

the insured, due to any reason. The premium is Rs. 330 per annum which is to be auto-debited in one instalment

from the subscriber's bank account as per the option given by him on or before 31st May of each annual

coverage period under the scheme.

We have enrolled new 104588 customers under Pradhan Mantri Jeevan Jyothi Bima Yojana during FY 2018-19,

taking the total accounts to 333911. Total 811 claims worth Rs 16.22 Cr amount was settled under PMJJBY

during FY 2018-19.

Pradhan Mantri Suraksha Bima Yojana (PMSBY)

PMSBY is an accident insurance scheme and offers

a one-year accidental death and disability cover,

which can be renewed annually. The Scheme is

available to people in the age group 18 to 70 years

with a bank account who give their consent to join /

enable auto-debit on or before 31st May for the

coverage period 1st June to 31st May on an annual

renewal basis. Aadhar would be the primary KYC for

the bank account. The risk coverage under the

scheme is Rs.2 lakh for accidental death and full

disability and Rs. 1 lakh for partial disability. The

premium of Rs. 12 per annum is to be deducted from

the account holder's bank account through 'auto-

debit' facility in one instalment.

We have enrolled new 149745 customers under

Pradhan Mantri Suraksha Bima Yojana during FY

2018-19, taking the total to 733538 accounts. Total

39 claims worth Rs 77 Lakhs amount was settled

under PMSBY during FY 2018-19.

Atal Pension Yojana (APY)

APY is a pension scheme for unorganised sector

workers such as personal maids, drivers, gardeners

etc., launched in June 2015 by the GoI. APY aims to

help these workers save money for their old age

while they are working and guarantees returns post

retirement. Under the APY, there is guaranteed

minimum monthly pension for the subscribers

ranging between Rs. 1000 and Rs. 5000 per month,

depending on the entry age and monthly

contribution.

Aadhar will be the primary KYC and all Bank

Account holders aged between 18-40 years are

eligible for enrolment.

Total of 81026 enrolments were mobilised under Atal

Pension Yojana (APY) for FY 2018-19 as against 25149

mobilised up to FY 2017-18, surpassing a landmark

figure of 100000 enrolments, with the active

participation of the 775 branches. Average number

of enrolments per branch under APY scheme went

up to 105.50 during FY 2018-19 as against 32.74 as on

31.03.2018.

With 81026 new enrolments, our Bank stood No. 1

among SBI sponsored RRBs.

Gram Swaraj Abhiyaan

As per instructions from Department of Financial

Services, Bank has actively participated in Gram

Swaraj Abhiyan and ensured saturation of villages

under PMJDY, PMJJBY and PMSBY schemes.

Staff of Patancheru branch receiving applications fromvillagers for account opening and enrolment undersocial security schemes.

Mobile ATM Demonstration Van for Andhra Pradesh

Bank procured Mobile ATM- Demonstration Van for

Andhra Pradesh state and got it inaugurated by Sri

Ghanta Srinivasa Rao, Ex-Minister of Human

Resources Development and Education (Primary

Education, Secondary Education, Higher and

Technical Education) for Andhra Pradesh state and

in the August presence of Sri. K. Suresh Kumar, CGM,

NABARD and Sri. V Narasi Reddy, the then chairman

of our Bank.

Sri. Ghanta Srinivasa Rao, Ex-Minister of Human ResourcesDevelopment and Education inaugurating the Mobile ATM Demonstration Van for Andhra Pradesh.


46

Digital Financial Literacy Awareness Camps

(dFLAPs)

Following the need of the hour and taking cues from

RBI's policies and initiatives, our Bank launched

Digital Financial Literacy Awareness Camps to

create awareness among rural people and

encourage them to use Card technology, ATMs,

micro ATMs, PoS transactions, use Mobile Banking,

Mobile Wallets and to highlight the role of Bank

Mitras engaged by the Bank. Street shows have

been performed in the villages with the above

contents so as to attract the rural customers to

upgrade their financial and technical skills. 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. While we have

conducted these programmes in 918 villages,

NABARD sanctioned a grant assistance for 918

programmes.

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 Centre (FLC)

each in the operating districts of the Bank. The Bank

has opened 8 such Financial Literacy Centres in 8

d i s t r ic t s v i z . , S r i kaku lam, V i z ianagaram,

Visakhapatnam, Khammam, Warangal, Nalgonda,

Mahabubnagar and Medak in tune with the

guidelines issued by the NABARD. The Bank has

posted retired Bank staff to look after the affairs of

FLCs as counsellors. These FLCs are located at the

district centres and housed in the Regional Offices.

The Financial Literacy Counsellors have conducted

1096 Financial Literacy Awareness Camps during

the year.

Our Rural Branches have conducted a total of 7674

Financial Literacy camps during the year.

Officials along with VSP Region conducted FLC in Paderu village and also visited Paderu BC Point and reviewed the performance.

Under the aegis of Reserve Bank of India,

Hyderabad, our Patancheru Branch has organised

a mega Financial Literacy Programme on

14.12.2018 in Indresham village. Mrs. M. Usha,

Deputy General Manager, RBI, Hyderabad and Shri

K. Sridhar, LDO, RBI, Hyderabad, Shri Cecil Timothy,

DDM, NABARD, Sangareddy, alongwith the

Sangareddy Regional Manager Shri Mallempati

Ravi have participated in the Programme. Around

250 members viz., SHG members, Farmers, Business

people ,students have attended and been

explained about bank products, social security

schemes. Qu iz programmes have been

conducted for students and SHG members to

create awareness on financial literacy.


47

Aadhar Enrolment and Updation Centres

Following the mandate from Government of India

for all the Banks to open Aadhar Enrolment and

Updation Centres in at least 10% of their Branch

network, our Bank has initiated the task of opening

Aadhar Enrolment Centres at 76 locations to extend

the services of Aadhar enrolment and updation to

the public including our customers. Bank officials

will assist in enrolment process.148 officials have

been identif ied to supervise these Aadhar

Enrolment Centres.

During the year, the Bank has opened 33 Aadhar

Enrolment and updation Centres taking the total to

76. Customers can do new enrolments at this centre

in addition to getting modifications to the existing

cards. For new enrolment, the Bank does not

charge any amount, while for demographic

modifications such as address, name, gender, date

of birth etc., they need to pay Rs.30/- (incl GST) in the

Branch.

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 mobilized a New Business Premium (NBP)

of Rs. 32.09 Crore against the target of Rs. 31.74

Crore and earned a commission of Rs. 5.50 Crore

during the FY 2018-19 vis-à-vis the NBP of Rs. 22.68

Crores and commission of Rs.3.02 Crore during the

previous FY 2017-18.

SBI General Insurance

We have commenced SBI General Insurance

Business during the year 2015-16 as a Corporate

Agent to market 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. The Bank mobilized a

business premium of Rs 19.47 Crore during the year

2018-19 against the target of Rs.14.14 Crore vis-à-vis

Rs.12.86 Crore business premium during the

previous FY 2017-18. The Bank earned a commission

of Rs. 91 Lakhs for the year 2018-19. vis-a-vis the

commission of Rs. 77.44 Lakhs for the year 2017-18.

SBI Cards

The Bank mobilised 1074 Card applications during

the year.

Sri Manish Gupta ,Director RRBs, DFS, Ministry of Finance, GOI, New Delhi visited our Dabagardens Branch in Visakhapatnam and

interacted with SHG members and also with branch staff on 22.01.2019.


48


49

Our Bank has been a pioneer in introduction of

technology driven banking services. Apart from

CBS to facilitate online banking operations across all

Branches and Offices of the Bank, the Bank has

been extending the following IT services:

· RTGS / NEFT

· RuPay Cards, ATMs, PoS machines

· Mobile Banking

· Internet Banking

· IMPS

· Unified Payment Interface (UPI) Services

· AEPS-Aadhaar Pay

· Missed Call Banking

· Live on BHIM Application

· *99# Services for feature phones

· Desktop ATMs at branch premises

· POS machines to merchants

· Aadhar & Mobile seeding facility at

Bankmitra points

· AEPS Aadhar Pay

· E-KYC account opening

· Demographic Authentication

· Aadhar enrollment centers

· Online Voucher Verification System

During the year, the following IT initiatives have been

taken up:

Rupay Platinum cards – Launched Platinum variant

in RuPay cards in April 2018 and ours is the first Bank

to do so.

Information Technology To increase the pace of PIN mailers delivery, a

campaign named “ATM PINS – Instant deliver” is

launched.

Controllers Tool - An MIS tool has been deployed on

our intranet portal for generation of various MIS at

branches & Regional offices in the month of July

2018. Data is automated to refresh on daily basis.

Centralized Issue of Notices to Loan Accounts - In

order to improve the health of loan accounts,

centralized generation and issue of notices to

defaulting accounts at pre-defined periodicity is

introduced in the month of July 2018.

RTGS/NEFT Direct Membership- Our Bank has

obtained approval from RBI for participating in the

Centralized Payment System of RBI as Direct

Member . We have a l so obta ined RTGS

Membership and INFINET membership and opened

RTGS settlement account and SGL/IDL-SGL

account. Accordingly, our Bank migrated from sub

member of SBI to direct member under NEFT & RTGS

platforms.

NACH Direct membership - Migrated from being

sub member of SBI to direct member in NACH which

provides immediate settlement of funds &

interchange commission as destination bank.

Launch of Mobile ATM for AP Region - As part of

financial inclusion activity, a new mobile ATM

service is provided to AP region on 27.10.2018

supported by NABARD.

Centralized Monitoring System - A monitoring

system through CCTV & BA is started as part of

statutory compliance & for enhanced security at

branches in the month of January 2019.

Generation of online Gold loan document - A new

module has been developed and provided to

branches in the month of December 2018 for

generation of gold loan documents with minimum

input of data. Staff upon entering the CIF number &

gold details, the module fetches all necessary

customer details and generates pdf file after

calculating necessary details for gold loan.

Mobile Banking Registrations - During the year,

90,444 new registrations are achieved, taking the

total registrations to 1,87,526 which is highest

among all RRBs under this category.


50

Computer Security Day

Computer Security Day was observed on 30.11.2018 at our Head Office, at all our Regional Offices and

Branches. Hand-outs and broachers were distributed among staff to create awareness on computer security

and safe working in computerized environment.

A gist of DOs & Don'ts is prepared and shared among our bank customers which enlightens their awareness on

various risks involved in using of digital banking & imparts knowledge on best practices to be followed for

carrying safe digital banking.

Release of computer security hand-outs in our IT Cell - Shri G. Sreedhar Reddy, Chief Manager (IT), Shri V. Narasi Reddy, Chairman Shri Putul Chandra Das, AGM, SBI, LHO, Hyderabad, Ms. Savita VCRS, AGM, NABARD, TSRO, Hyderabad and Ashoknagar RM Shri D. Viswa Prasad are seen in the picture.

Nalgonda Regional Office team led by RM Shri V. Raghunath Reddy observing computer Security Day.

Bhadrachalam Regional Office team led by General Manager-IVShri K. Ravi Kiran and RM Shri M. Manohar Reddy observingcomputer Security Day.

Srikakulam Regional Office team led by RM Shri K. Ravi Kumar

observing computer Security Day

C-KYC – Our Bank implemented C-KYC, first among

all RRBs. The main objective of setting up CKYCR is

to overcome issues related to repeated submission

of KYC documents across financial institutions. Every

Financial Institution is required to file the electronic

copy of the customer's KYC records with the CKYCR,

within three days after the commencement of an

account-based relationship with a customer.


51

Micro ATMs at Branches - Portable micro ATMs are

provided to all branches carrying banking

operations like cash deposits, cash withdrawals,

funds transfer, mini statements, balance enquiry

etc., through Aadhar & RuPay PIN based

authentication modes. The devices also serve as

BCP in case of connectivity failures & Server

breakdown etc.

Micro ATM – Customers transacting in Micro ATM in Bibinagar Branch, Nalgonda RO.

Branches Connectivity migration to 2 Mbps - During

the year 121 branches have migrated to 2 Mbps

from 32 Kbps VSAT connectivity, taking the total

branches to 529 migrated to 2 Mbps bandwidth out

of 786 branches which is highest among all RRBs

under this category.

e-Circular Mobile appl icat ion - A mobi le

application is provided to all staff through Google

Playstore which enables staff access all our bank

circulars on their mobile.

Web portal for E-Mandates – A web page is

introduced to provide branches the information on

mandates status anytime.

SBI Mutual Fund - A new module is introduced in CBS

for felicitating cross selling mutual fund investment

services.

Rupay BigBazar Campaign - NPCI entered into a

corporate agreement with BigBazar a reputed multi

chain retailer in India. The agreement envisages

providing a discount of 10% on the purchases made

using RuPay Debit cards. The maximum discount

has been pegged at Rs 750 per customer/card. The

campaign was conducted for a period of 07 days

from 21.01.2019 to 27.01.2019. As the ATM debit

cards issued are on the RuPay platform, our Bank

participated in the campaign. This promoted the

usage of cash less transactions amongst our

customers, increased ATM Debit card transactions

benefitting our customers with the discount offered

by the corporate.

Alternate Deliver Channels (ADCs):

Banking transactions through Alternate Delivery

Channels has been on the rise vis-à-vis transactions

through brick and mortar branches, reducing the

footfalls considerably in the Branches, thereby

resulting in more focus on marketing and business

development. Various alternative delivery

channels introduced by the Bank has enabled the

customers to avail banking services 24 x7 at their

convenience.


52

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.

Inauguration of RRB Times - Shri V. Arvind, Chairman, TGB is seen in the picture along with our Chairman


53

Liability Central Processing Centre (LCPC)thLCPC has been functioning in our Bank since 28

October 2013. This is a centralized system of

maintaining accounts opening forms of Savings

Bank Account, Current Accounts opened in the

branches. The system ensures that all the key

parameters of the accounts opened are

accurately keyed into CBS after, thorough

verification of the KYC compliance obtained by the

branches for opening of the said accounts. The

images attached to the account like photographs

and signature are scanned and uploaded into CBS.

The account opening forms are stored centrally at

Document Archival Centre (DAC) for future use.

The account opening at the branches is the key for

the LCPC process. On receipt of account opening

forms with KYC testimonials from the customers, the

Branch verifies the authenticity of the testimonials by

affixing his signature, putting his ID No and branch

seal on the testimonials. The photograph and

specimen signature of the customer on the account

opening form are attested by the Branch

Manager/Accountant of the branch and scan the

signature and photograph and upload the same at

the branch itself.

A report is generated in CBS on daily basis with the

details of the accounts so opened and pushed to

branches which the Branches have to return with

the documents viz., account opening forms, KYC

documents pertaining to all accounts listed to

LCPC. The account opening forms so received at

the LCPC are recorded day wise and scrutinized for

KYC compliance meticulously. Any deviations

observed are listed out on a e-return note and the

account opening forms along with the enclosures

are returned to branches for rectification of

deficiencies and resubmission to LCPC.

The Bank has taken up massive expansion of LCPC

by augmenting the operating staff during the year

and by adding 77 Branches to LCPC, taking the

total to 340 Branches as on 31.3.2019. A total of

6,70,802 accounts have been processed and

logically concluded during the year, taking the

total number of accounts to 12,08,832. More than

50% of the total account opening forms processed

so far, have been processed during this year.

Personalized Cheque Books :

Further LCPC is also issuing of personlaized cheque

books directly to the customers through speed posts

as per the indent of branches since 15/03/2017. The

Bank has issued 56907 personalised cheque books

to the customers taking the total to 90015.


54

Inauguration of new Premises for expansion of LCPC. The Board of Directors Shri S Ganesan, GM (RRBs) SBI, Mumbai, Shri Y. Rambabu, AGM (HRMD),

RBI, Hyderabad and Shri CSR Murthy, GM, NABARD, Hyderabad are seen in the pictures along with our Chairman and other officials

Customer Service & Complaints handling

While complaints cannot be avoided, some of the

complaints provide useful feedback to review our

performance and systems and procedures. A

genuine complaint from a customer means an

opportunity to the Bank to upgrade our skills and

efficiency. The Bank has put in place complaint-

handling-policy to redress the grievances of the

customers and improve the quality of customer

service. The Bank has placed enormous emphasis

on timely disposal of complains and follow up

system has been strengthened to dispose off the

complaints within timelines set. All Branches are

conducting customer meets every quarter and

important customers are invited.

Their views and opinion were solicited in order to

take corrective steps, wherever necessary.

Regional Managers concerned are attending the

customer meetings whenever feasible. The

following system of monitoring of complaints for

their redressal and submission of compliance is in

vogue:

Branch Manager (At Br level)

Regional Manager (at RO level)

-

-

Chief Manager (Board)

General Manager-IV

General Complaints

(Vigilance nature)

Chief Manager (Vig&DP)

General Manager-V

Complaints from Banking

Ombudsman

Regional Manager / Branch

Manager

Chief Manager (Board)

General Manager - IV

Nature of complaintOfficer in charge at Regional Office/ Branch level

At Head Office level

General Complaints (Other

than vigilance nature)


55

The status of complaints both received directly and

through Banking Ombudsman, is being put upto the

Board of Directors in every meeting for their review

and information.

Customer Support Centre (Tollfree) - A toll free setup

is started to assist our customer base on any kind of

issues

Customer Complaints: Status as on 31.03.2019

SNo Particulars No.

1 No. of Complaints pending at the Beginning of the year 0

2 No. of Complaints received during the year 2018-19 422@

3 Total Complaints 422

4 No. of Complaints Redressed / Disposed-off during the year 415

5 No. of Complaints pending at the end of the year 7*

* Out of 7, 6 complaints were closed during the firstweek of April 2019.

For complaints received through Banking

Ombudsman, General Manager-IV is designated as

“Principal Nodal Officer” of our Bank at Head Office.

The position of complaints received through / from

Banking Ombudsman during the year.

SNo Particulars No.

1 No. of Complaints pending at the Beginning of the year 01

2 No. of Complaints received during the year 2018-19. 56

3 Total Complaints 57

4 No. of Complaints Redressed / Disposed-off during the year 52

5 No. of Complaints pending at the end of the year 05*

** Out of 5, 3 complaints were received duringnd th2 and 4 week of March 2019.

@ The surge in number of complaints was because

o f i m p l e m e n t a t i o n o f t h e e - C o m p l a i n t s

Management system introduced during the year,

which has enabled the customers to have easy

login mechanism of complaints which included

mostly enquiries and digital transactions.

The e-Complaints Management System introduced

during the year seeks to redress the grievances /

complaints from customers on a quickest possible

time. This system centralizes all complaints,

received through our Website's complaints box,

email, Toll Free Number, or post at any level, either

at Branch or RO or Head Office and raise a ticket.

Admin identified at Head Office, will direct the

complaints to the concerned Department and / or

concerned Regional Office for redressal. Access to

the e-complaints system is given to the identified

Officials in Regional Offices and Head Office to

ensure that each and every complaint received at

all levels are captured in the System so as to monitor

the complaints for timely disposal. Formal

launching will be done in the coming financial year.

Effective handling of complaints is fundamental to

retain the existing customers and attract the new

customer base through word of mouth. We seek to

achieve prompt and effective redressal of

customer complaints through the e-Complaints

Management System.

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 2018-19, the Bank has received 184

applications and 16 appeals and disposed off all

applications and appeals within the stipulated time

frame.


56


57

Human Resource Management

As at the end of FY 2018-19, the staff strength

(excluding those who exited the Bank's service in the

month of March 2019 on account of retirements /

resignations) and its composition is as under:

Officers S-V 10

Officers S-IV 61

Officers S-III 212

Officers S-II 487

Officers S-I 1207

Office Assistants 1127

Office Attendants 77

Total 3181

Office Attendants77

Officers1976Office

Assistants1128

The details of the staff who exited the Bank's service during the year on various grounds are furnished below.

Reasons N o. of Staff

1 Retirement 104

2 Resignations 75

3 Dismissed 5

4 Removed 6

5 VRS 2

6 Deceased 10

Total 202

65% of the 2277 Staff members with the Bank as on

31.3.2006 i.e., the date of formation of APGVB by

amalgamation of five erstwhile RRBs, has retired / stresigned as on 31 March 2019. The ratio of staff

recruited from 2009 onwards to the staff recruited in

the erstwhile RRBs has increased gradually and

steadily as under:

Recruitments

The Bank has been recruiting the Staff in various

cadres through IBPS since 2009-10, as per

manpower as ses sment and requ i rement

undertaken as on 31st March of every year in terms

of Thorat Committee recommendations, presently

as per Mitra committee recommendations

approved by GOI.

Accordingly, based on the business volumes as on

31.3.2018, 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.

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.

No. of Candidates recruited during the year

1 Office Assistants 138

2 Officers Scale-I 91

3 Officers Scale-II 73

4 Officers Scale-III 10

2011

-12

2012

-13

2013

-14

2014

-15

2015

-16

2016

-17

2017

-18

2018

-19

0

500

1000

1500

2000

2500

3000

3500

18

13

16

59

15

02

14

29

12

44

94

0

80

52

37

6

22

20

19

97

17

07

14

14

12

41

81

8

54

1

10

15

New Staff Old Staff


PromotionsAs many as 235 staff members have beenpromoted to next higher grade as under:

S.No GradeS.No

58

S.No Promoted to No. of Posts

1 Officer Scale-I 67

2 Officer Scale-II 78

3 Officer Scale-III 61

4 Officer Scale-IV 25

5 Officer Scale-V 4

6 Office Asst. 0

235

Based on the manpower assessment as on

31.3.2018, the vacancies to be filled by way of

promotions have been arrived at and promotions

effected in terms of the RRBs (Appointment of

Officers and Employees) Rules 2017. The Written Test

required to be conducted for promotion to Office

Assistant, Officer Scale-I, Scale-II and Scale-III was

conducted by IBPS.

The Bank has fulfilled the statutory requirement of

giving pre-promotion training to al l 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

Training and capacity building to employees has

been a significant area in the Bank which receives

constant attention from the top management.

75% (i.e., 2376 members) of the existing workforce

constitutes youngsters (recruited from 2009-10

onwards) with an average experience of five years,

as on 31.3.2019. 1070 members recruited between

2009-10 and 2013-14, have an average experience

of 7.34 years in our Bank. The remaining 1306

members recruited from 2014-15 onwards have an

average experience of 2.99 years in our Bank, of

which 239 members are heading Branches as

Branch Managers.

Keeping the above statistics in view, our training

system has been strengthened to give them

constant training to upgrade their banking skills and

managerial capabil i t ies. The SLC has also

conducted Off-site programmes on MSME, Housing

Loans & GPAB for selected HUB-spoke Branches and

Regional Office staff in all regions to improve the

high value and secured advances for diversification

of advances, covering around 240 staff members

during the year.

A leadership /behavioural programme was

conducted for promotees from OA to OS-I to

improve the leadership qualities for better

management of Branches as well as customers. A

special work shop was also conducted for visually

impaired staff who attend help desk/complaints.

Staff Learning Centre has adequate infrastructure

and faculty support in Warangal to train 30

members for a batch. The Bank had laid down a

A trainee explaining the Housing Loan product during a training programme to the rest of the class. And all attentive trainees listening to the colleague.


59

Our staff members have donoted one day salary to the Kerala Chief Minister's Distress Relief Fund when the

State faced one of its worst natural calamitiesand suffered huge damage to the people and property. The

DD for Rupees 55,05,850/- Handed over to the Chief Seceratary of Telangana State Shri S.K. Joshi for sending it

to the Kerala Government. This was a magnanimous gesture exhibited by our staff towards the needy. A Big

Salute to the Big Hearted colleagues.


Training Policy which envisages training to all staff

members, at least once in three years. The SLC

conducted 48 training programmes and provided

training to 1523 staff members. The participants

include all cadres of staff (Officers-1023 and Office

Assistants-500).

The Bank has also deputed 52 Officers, essentially in

the higher cadres, to external training institutions like

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

MANAGE, Hyderabad, IIBF, Hyderabad, ni-msme,

Hyderabad, State Bank Learning Centres on

important subjects like high value financing, Term

Lending, SME finance, AML, ALM, KYC, RTI Act,

Treasury Management, Business Development etc.

Internal Complaints Committee –

The Bank has implemented the provisions of The

Sexual Harassment of Women at Workplace

(Prevention, Prohibition & Redressal) Act, 2013 and

constituted Internal Complaints Committees at 11

Regional Offices and Head Office to deal with the

complaints of sexual harassment to ensure safe

working environment for women employees in the

Bank. We have been sensitizing the employees of

both the genders to be fostering a healthy and

conducive work environment. A few instances of

sexual harassment cases have been addressed

and appropr iate steps in i t iated to avoid

recurrence.

60

International Womens Day Celebrations on 08-03-2019

Chairman Shri K. Praveen Kumar addressing the participants from 11 Regions and Head Office.

Chairman with the Best Bank Mitras, each from 11 Regions


61

International Women's Day 2019 on 08.03.2019 -

Conferring of the title “Women Leader under BM /

Acct / FO / OA categories”

We have been celebrating International Women's thDay on 8 March every year. This year also we

organised the events to highlight the achievements

of our Women staff members on 08.03.2019.

Our Bank has women staff members at all levels from

Branch Manager to Office Attendant and in a

couple of years, the Chief Manager grade will also

have women members by way of promotions. As

we all know, all positions in the Bank call for

leadership qualities, to be successful. As we

observe there are women staff members with

abundant leadership qualities and capable of

achieving success against odds. However, while

some people exhibit leadership qualities naturally,

sometimes the work ing envi ronment with

competitive spirit, will offer enough stimuli to bring

out inherent / hidden leadership qualities.

Recognition of one's abilities always plays a big role

in encouraging the members to take on higher roles

and responsibilities and succeed.

On the occasion of IWD, we celebrated the

achievements of our women members with titles

“Woman Leader of the Bank under BM's category”

and for other positions viz., Accountant, Field

Officer and Office Assistant by taking into account

their Profess ional achievements, Personal

achievements and Social achievements.

We have also felicitated the Best Bank Mitra per RO

on the occasion.

Smt. Kathyayani Vidmahe, a noted litterateur and Kakatiya University. Retired Professor and the recipient of the Kendra Sahitya Akademi Award for Telugu-2013 delivering a fiery and inspiring speech on women empowerment


62

st1 Best BM

Mrs P Divya

nd2 Best BMMrs P. Sangeetha

st1 Best Accountant

Mrs J. Vijaya Lakshmi

st1 Best FO

Mrs V. Ramadevi

st2 Best FOMrs G.Sravanthi

st1 Best OA

Ms I. Meera

nd2 Best OA

Mrs J. Himabindu

nd2 Best Accountant

Ms A. Rajitha

Women Leaders

Women leaders selected on the occasion of International Womens Day from all categories


63

Staff welfare Measures

Mediclaim policy

In terms of Government of India letter No:

F.8/1/2015-R RB dated 20.10.2016, our Bank has

implemented Medical Insurance Scheme as per Xth

Bipartite Settlement to employees and officers

along with their dependent family members as

detailed in Schedule IV. The Scheme covers

Employee + Spouse + Dependent Children + 2

dependent Parents / parents-in-law with a Sum

Insured of Rs.4,00,000 and Rs.3,00,000 for Officers

and employees respectively. We have also taken a

Corporate Buffer to cover additional expenditure

up to Rs.4.00 Lakhs and Rs.3.00 Lakhs for officers and

employees respectively, if the hospitalization

expenditure exceeds the sum insured. The Scheme,

apart from facilitating hassle free admission into the

hospital immediately and payment of cash, makes

the settlement of hospitalization expenses become

much eas ie r , sav ing admin i s t ra t ive t ime

considerably. The scheme also covers domiciliary

treatment expenses up to 10% of sum insured.

Around 11000 members including family members

of Staff have been covered under the Scheme.

Group Personal Accident Insurance Policy

Most of our staff members are youngsters and travel

by road, frequently for various official works viz.,

Cash remittance, field visits for recovery and

inspection of units, review meetings etc., and are

exposed to the risk of road accidents and face a life

threat also.

We have taken the Group Personal Accident

Insurance Policy with the following sum insured to

create a sense of security among the staff members

and build loyalty to the organization

SN Cadre Sum Insured

1 Officer Scale-III & above Rs 10.00 Lakhs

2 Officer Scale-I & II Rs 7.50 Lakhs

3 Office Assistants Rs 5.00 Lakhs

4 Office Attendants Rs 3.00 Lakhs

Our Bank has been facing severe attrition causingacute staff shortage and these measures will boost the morale of the staff members.

Gratuity and Leave Encashment Fund

The Bank has taken care of provision requirements

in respect of Gratuity. The total corpus as on

31.3.2019 is to the tune of Rs 149,79,30,419/- (Rupees

One Forty Nine Crore Seventy Nine Lakhs Thirty

Thousand Four Hundred and Nineteen Only)

towards Gratuity and Rs 100,70,49,687.57 (Rupees

One Hundred Crore Seventy Lakh Forty Nine

Thousand Six Hundred Eighty Seven and Paise Fifty

Seven Only) towards Leave Encashment.

During the year, the total Gratuity paid to the

retiring Staff stood at Rs. 18,16,02,562/- (Rupees

Eighteen Crore Sixteen Lakh Two Thousand Five

Hundred and S ixty Two Only) and Leave

Encashment at Rs. 7,04,72,445/- (Rupees Seven

Crore Four Lakh Seventy Two Thousand Four

Hundred and Forty Five Only).

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.

Implementation of Pension Scheme

The Bank has implemented the Pension Scheme,

which is designed in line with the Scheme for

Nationalised Commercial Banks, consequent to the

Orders of the Honourable Supreme Court of India.

Accordingly, the Andhra Pradesh Grameena Vikas

Bank (Employees') Pension Regulations, 2018 &

Andhra Pradesh Grameena Vikas Bank (Officers' &

Employees') Service (Amendment) Regulations,

2018 have been published in Gazette of India,

Extraordinary, part-III, section-4 on 13th December th2018, after obtaining Board's approval in their 78

Board Meeting on 02.11.2018, paving way for

payment of Pension. After NIT Award, this is the

measure that has the maximum impact on the lives

of RRB staff, both retired and in service. The

effective date for implementation of the scheme is

01.04.2018.

The Scheme is in lieu of the Employees' Pension

Scheme, 1995.


64

The eligible employees and family members of the deceased employees have an option to choose between

the two schemes viz., Pension Scheme and Employees' Pension Scheme, 1995.

The first Pension Payment Order being presented to Shri PVN Bhaskar Rao. The Incoming Chairman Shri K. Praveen Kumar, out-going Chairman Shri V. Narasi Reddy, Shri S. Venkateswar Reddy, Secretary General AIRRBEA are seen in the picture.

Shri Y. Yadagiri Reddy is the first RRB Official having retired from the South Indian RRBs, incidentally belonging to erstwhile Nagarajuna Grameena Bank, now a part of APGVB. Felicitation of the retiree by Chairman Shri K. Praveen Kumar and presenting of PPO on 26-03-2019

Pension Fund Trust has been constituted by the Bank

as per the Pension Regulations of the Bank. A

provision to a tune of Rs.831.87 Crores as on

31.03.2019 was made as per the Actuarial Valuation

for payment of pensions and Rs.5.80 Crore towards

NPS arrears, taking the total provisions to Rs. 837.70

Crores.

The details of the Pensions sanctioned to Retired

Staff/Family members of the deceased staff

members up to 31.03.2019, are as under:

ParticularsStaffRetired

FamilyPensioners

Total

Optionsreceived 1285 350 1635

107 30 137

618* - 618

245535782 245535782

Of which noteligible

PensionsSanctioned

Amount in Rs. -

* Employer Contribution towards PF refund received

from the members is Rs.33,44,87,220/-.

Pensions will be sanctioned to all the eligible

members by the end of June, 2019.

Implementation of Scheme for Appointment on

Compassionate Grounds

In terms of Government of India letter F. No.

7/38/2014-RRB dated 31.12.2018 received through

NABARD letter No: NB.IDD.RRB /1216 /316

(Compassionate Appint.)/2018-19 dated 09

January 2019, rev ised Model scheme for

appointment on compassionate grounds as per the

scheme in Public Sector Banks circulated by IBA to

CEOs of PSBs vide letter No. CIR.HR&IR/2014-

15/532/476 dated 11 August 2014, has been

approved by the Board and implemented in the

Bank.

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 amicable 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

Associat ion and compl ied with s tatutory

requirements in all aspects of recruitments,

promotions etc. The Bank has held regular


65

meetings with the representatives of Welfare

Associations and Liaison Officers to redress their

grievances.

The Bank has taken all steps to keep up the morale

and motivation of the employees.

Vigilance Administration:

As the Bank is growing in size and with the infusion of

new and young work force, which now constitute

over 75% of the total staff, vigilance together with

sensitization to be vigilant has been thrust area of the

Bank.

Chief Vigilance Officer of State Bank of India is

overseeing the Vigilance administration of Bank,

through Deputy General Manager (Vigilance), State

Bank of India, LHO, Hyderabad. Chief Vigilance

Officer of an SMGS-V grade has been posted to our

Bank, on deputation from SBI, to look after the

Vigilance administration in the Bank.

Deputy General Manager (Vigilance), on a monthly

periodicity, reviews pendency of vigilance cases,

implementation of complaint handling policy and

whistle blower policy, pending complaints, PVC

meetings, Regular Preventive visits of branches by

Vigilance Department Officials, job rotation,

submission of assets and liability statements by all

officials and will communicate his/her observations,

if any.

All branches conduct Preventive Vigilance meetings

once in a quarter and Officials from Vigilance

Department, State Bank of India, LHO, Hyderabad

are visiting one branch in a quarter. Preventive

Vigilance meetings were conducted on 27.06.2018

at Khammam main branch, on 29.12.2018 at Head

Office and on 26.03.2019 at SLC, Warangal wherein

Officials from Vigilance Department, SBI, LHO,

Hyderabad have participated.

Deputy General Manager (Vigilance), State Bank of

India, LHO, Hyderabad has organised a training

programme on 21.06.2018 and 22.06.2018 for RRB

officials at SBILD, Secunderabad for Enquiry Officers,

Presenting Officers and Investigating Officers and

we have deputed 6 Officials from our Bank.

A workshop for Enquiry Officers, Presenting Officers

and Investigating Officers conducted by the Bank

on 07.03.2019 and 08.03.2019 at Staff Learning

Centre, Hanamkonda to impart skills in handling the

v ig i lance cases . 30 s taf f members have

participated in the programme.

Vigilance Awareness week:

The Bank has organised Vigilance Awareness week

from 29.10.2018 to 03.11.2018 in Head Office,

Regional Offices and Branches by displaying

banners. All the staff members have undertaken e-

pledge during the week. 776 Grama Sabhas were

conducted by the branches to create awareness

among the public on anticorruption and Preventive

Vigilance.

Pledge taken by the Chairman, General Managers and other Staff atHead Office on the occasion of Vigilance Awareness week.

Creation of Awareness among public and students

The Bank has taken up an extensive campaign

creating awareness on ethics, corrupt free society

involving students and public. Essay writing and

elocution competitions were conducted by the

branches at various schools and colleges for

students and distributed prizes to the winners on this

occasion. 3925 students have participated in the

competition.

A corrupt free society in the making – Pledge taken by the Studentsorganised by our Haripuram Branch, Visakhapatnam RO.


66

Winner of the Elocution competition conducted by VT Nagar Branch – Chief Vigilance Officer of the Bank Shri N.V. Ramana and Nalgonda RM Shri V. Raghunath Reddy with the winner

In all training programmes, workshops and review

meetings an exclusive session on preventive

vigilance is being taken by the Bank's CVO to

sensitize all the staff members in day to day

operations.

Board

The Board of the Bank is constituted by

(a) Chairman of the Bank (Chairman of the Board)

(b) Two non-official directors appointed by

Government 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 A.P./Telangana.

Board Meeting Rules stipulate that the Board meets

minimum six times a year, at least once in a quarter.

As against the stipulated minimum number of six

meetings, Board met 8 times during the calendar

year.

Minimum quorum for the Board Meeting to transact

business is four directors and no meeting was

adjourned for want of quorum

Attendance of Directors at Board Meetingsduring the calendar year 2018

SNo

Name of theDirector

WEFNo. of

Meetingsheld

No. ofMeetingsattended

1 Shri V. Narasi Reddy 21.07.2014 8 8

2 Non Official Director - Vacant* - - -

3 Non Official Director - Vacant* - - -4 Reserve bank of India Shri Y. Rambabu 01.04.2018 8 7 Shri M.S.Harishankar 24.06.2016

SNo

Name of theDirector

WEFNo. of

Meetingsheld

No. ofMeetingsattended

5 NABARD 8 8 Shri CSR Murthy 21.05.2018 Shri VS Gupta 03.08.2015

6 Sponsor bank (SBI) 8 8 Shri Kasi Srinivas 16.09.2017

7. Sponsor Bank (SBI) Shri s. Ganesan 07.09.2017 8 7

8. Govt. of A.P Shri KVV Satyanarayana 06.11.2017 8 Nil

9. Govt of Telangana Shri Patil Prashant Jeevan, IAS 28.08.2018 8 Nil Ms. K. Amrapali 11.10.2016

*The term of Govt of India nominee directors have

completed during September 2016 and proposals

were sent to Govt of India through NABARD/SBI for

fresh appointment of directors. New appointments

are yet to be made by Govt of India and 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

11 agenda notes during the year, 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 Y. Rambabu, Assistant General Manager,

HRMD, Reserve Bank of India, Hyderabad was

nominated as Director in place of Shri M.S.

Harishankar, Assistant General Manager, FIDD,

Reserve Bank of India, Hyderabad.

· Shri CSR Murthy, General Manager, NABARD,

TSRO, Hyderabad was nominated as Director in

place of Shri V.S. Gupta, Deputy General

Manager, NABARD, TSRO, Hyderabad.

· Shri Patil Prashant Jeevan, IAS, took charge as

Magistrate and District Collector, Warangal in

place of Ms. K. Amrapali, IAS and so on our Bank's

Board, as ex-officio director.

· Shri V. Narasi Reddy who assumed charge as

Chairman of the Bank on 21.7.2014, has been

repatriated to his parent Bank i.e., State Bank of

India and handed over charge on 02.02.2019 to

Shri K. Praveen Kumar.


67

The Bank places on record the invaluable services

rendered by the Directors Shri M.S. Harishankar,

Assistant General Manager, FIDD, Reserve Bank of

India, Hyderabad, Shri V.S. Gupta, Deputy General

Manager, NABARD, TSRO, Hyderabad, Ms. K.

Amrapali, IAS, Magistrate and District Collector,

Warangal as Director on Bank's Board.

The Bank also places on record the commendable

services of Shri V. Narasi Reddy as Chairman of the

Bank from 21.7.2014 to 02.02.2019. Under his

Chairmanship, the Bank reached new heights and

milestones and stood on top of the RRBs in the entire

country under many parameters.

Sub-Committees of the Board

Audit Committee of the Board (ACB)

ACB has met four times during the year and

reviewing the position of the Bank obtaining in the

following areas:

· Position of conducting of different Audits

periodically;

· Submission of Compliance for the irregularities

observed by the Auditors in different types of

audits;

· Review and follow-up action on the Internal

Audit Reports, particularly branches rated as

“Unsatisfactory” and large branches and also on

Concurrent Audit observations;

· Compliance with the inspection reports of

NABARD, Management Audit and Statutory

Audit;

· F ix ing accountabi l i ty for unsat i s factory

compl iance of Audi t repor t s , de lay in

c o m p l i a n c e a n d n o n - r e c t i f i c a t i o n o f

deficiencies;

· Review on omissions on the part of Internal

Inspecting Officials/ Concurrent Auditors to

detect serious irregularities which come to light

later;

· Concurrent Audit as per NABARD guidelines;

· The position of High value advances (Rs. 50.00

Lakhs and above) periodically;

· The particulars of NPA accounts having

outstanding of Rs. 20 lakhs and above

periodically;

· Particulars of Loss Assets valued for more than Rs.

10.00 lakhs periodically;

· Periodical review of the accounting policies /

systems controls in the bank with a view to

ensuring greater transparency in the bank

accounts and adequacy of accounting controls

to address the risk faced or likely to be faced by

the bank;

· Balance Sheet and Profit & Loss Account

Statements half yearly;

· Inter Off ice Reconcil iat ion (BCGA) and

outstanding entries periodically;

· Un-reconciled long outstanding entries in Inter

Branch and Inter Bank accounts;

· Position of House Keeping (Balancing of Books);

· Bank's Participation in treasury transactions

reported to the RBI & NABARD quarterly and

statement of holding;

· External Compliance Certificate;

· Status of frauds surfaced;

Fraud Monitoring Committee

Fraud Monitoring Committee, a sub-committee of

the Board, constituted in terms of NABARD

guidelines, met four times during the financial year

and reviewed the fraud cases and suggested

expediting the closure of the cases.

Special Review Committee

Special Review Committee has met three times and

took up review of the performance of the officers

who completed 55 years of age or 30 years of

service and took a view for extension of service up

to superannuation or to decide further review in a

future date before superannuation.

Customer Service Committee Meeting and

Financial Literacy Awareness Camp

Customer Service Committee of the Board has had

a meeting with Customers in Araku during the year

and interacted with the customers mostly tribal

population. Apart from the Customer Service

Committee members, the Chief General Manager,

Nat iona l Bank fo r Agr icu l tu re and Rura l

Development, TSRO, Hyderabad has participated

in the Meeting. A mega Financial Literacy Camp

was also conducted involving Magic shows, live


68

operation of Micro ATMs using any Bank ATM Cards, for the benefit of the customers.

The CSP practically showing the financial transaction through handhelddevice using biometric authentication.

Shri Kasi Srinivas, Deputy General Manager (ABU), SBI, LHO, Hyderabad, who is a nominee director on our Bank's Board, instantly exhibiting the withdrawal of money from the Bank Mitra Point swiping his ATM Card.

Shri Vijay Kumar, Chief General Manager, NABARD, TSRO, Hyderabad, addressing the customers of our Bank during Financial Literacy

Awareness Camp.


69

Magic show in progress creating awareness about savings

habit in traditional Banks.

Shri Y. Rambabu, Asst. General Manager (HRMD), RBI, Hyderabad,(nominee director on our Bank's Board) addressing the customers.

Shr i Y. C SR Mur thy, Genera l Manager, NABARD, TSRO,Hyderabad, (nominee director on our Bank's Board) addressing the customers.

Shri V. Narasi Reddy, Chairman interacting with the customers

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 Dinesh Khara, MD, State Bank of India,

Corporate Centre, Mumbai, Shri S.P. Singh, Chief

General Manager, SBI, Corporate Centre, Shri S.

Ganesan, General Manager (RRBs), SBI, Corporate

Centre and all the team members in A&S

Department, SBI, CC, Mumbai. The new initiatives

introduced by the Corporate Centre to enhance

the capacity building of the Staff and to increase

the bus iness deve lopment and bus iness

reengineering by way of setting up of AMHs have


70

proved to be extremely useful in taking this Bank

forward. The Bank is indebted to these executives

for their constant hand holding.

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 Subrata Das,

Regional Director, Reserve Bank of India,

H y d e r a b a d ; S m t . R e e n y A j i t h , B a n k i n g

Ombudsman, RBI, Hyderabad for their support.

The Board also acknowledges the great support

and affectionate guidance from Shri Vijay Kumar,

Chief General Manager, NABARD TSRO and his

team of General Managers Shri C. Udaya Bhaskar,

Shri B.K. Mishra, Shri K.I. Shariff and Shri CSR Murthy

and Shri K. Suresh Kumar, Chief General Manager,

NABARD, APRO and his General Manager K.S.

Raghupathi and Shri Prabhakar Behera.

The Board also expresses sincere thanks to all the

District Collectors, Project Directors of DRDA, IKP,

DWMA, SC/ST/BC Minor i t ies and Hous ing

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 National Payments Corporation of India, M/s

Irix Technologies and Accordingly Gram Tarang

Inclusive Development Services Pvt Ltd (GTIDS).

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.

The Board extends its heartfelt gratitude to M/s Rao

& Kumar, 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 2018-19 in time.

The Board also expresses its gratitude to all Public

Relations Officers, Print and Electronic 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.

The Bank places on record the commitment shown

by each and every staff of the Bank in taking the

Bank's business upward and Bank's image forward.

The total dedication exhibited by the employees

has put the Bank on top and they deserve all

appreciations and accolades from all stake holders

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

(K. Praveen Kumar)Chairman


71

we are with you!


72

Balance Sheet

Profit & Loss A/c

Schedules

Notes to Accounts

Performance in Figures


73

INDEPENDENT AUDITORS' REPORTRao & Kumar

Chartered AccountantsTo

The Shareholders


Report on the Financial Statements

Opinion

We have audited the accompanying financial statements of Andhra Pradesh Grameena Vikas Bank ("the

Bank") as at March 31, 2019, which comprises the Balance Sheet as at March 31, 2019, and Profit and Loss

Account and the cash flow statement for the year then ended, and a summary of significant accounting

policies and other explanatory information, Incorporated in these financial statements are the returns of:

i. The Head Office, 43 Branches audited by us;

ii. 352 Branches audited by Other Auditors.

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 National Bank for Agriculture and Rural

Development (NABARD). Also incorporated in the Balance Sheet and the Profit and Loss Account are the

returns from 379 branches (including other accounting units) which have not been subjected to audit. These

unaudited branches account for 25.91% percent of advances, 30.35% percent of deposits, and 24.36%

percent of interest income and 3l.54% percent of interest expenses.

02. In our opinion as shown by books of the Bank and to the best of our information and according to the

explanations given to us:

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

Balance Sheet containing all the necessary particulars, is properly drawn up so as to exhibit a true and

fair view of state of affairs of the Bank as at 31st March 2019 in conformity with accounting principles

generally accepted in India;

ii. The profit and Loss Account, read with the significant accounting policies and the notes thereon shows

a true balance of profit in conformity with accounting 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.

Basis for opinion

03. We conducted our audit in accordance with the standards on Auditing (SAs) issued by ICAI. Our

responsibilities under those Standards are further described in the Auditor's Responsibilities for the Audit of the

Financial Statements section of our report. We are independent of the Bank in accordance with the code of

ethics issued by the Institute of Chartered Accountants of India together with ethical requirements that are

relevant to our audit of the financial statements, and we have fulfilled our other ethical responsibilities in

accordance with these requirements and the code of ethics. We believe that the audit evidence we have

obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

04. Key audit matters are those matters that, in our professional judgment, were of most significance in our

audit of the financial statements for the year ended March 31,2019. These matters were addressed in the

context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not

provide a separate opinion on these matters.


75

Key Audit matter How it has been addressed

Verification of Advances:

Advances constitute 55.69 % of the Bank's total

assets. The carrying value of these advances (net

of provisions) may be materially misstated if

individual or collective income recognition,

classification and provisions are not appropriately

identified and estimated as per RBI guidelines.

Identification of performing and non_ performing

assets, involves establishment of proper

mechanism. The Bank accounts for all the

transactions related to advances in its Information

Technology System called Core Banking Solution

(CBS). Further, NPA stamping and provisioning is

done in the CBS and C-Edge respectively.

Considering the nature of the transactions,

regulatory requirements, existing business

environment, and the materiality, audit of

advances require significant efforts in verification

of the income recognition, asset classification and

provisioning. Further, it is a matter of high

importance for the intended users of the financial

statement. Considering these aspects, we have

considered this as a Key Audit Matter.

Our procedure

We have tested the design and operation of CBS to

ensure that IT system is designed in line with the

Master Circular on IRAC norms and other related

circulars issued by RBI/ NABARD and internal

policies developed by the Bank in accordance with

such Norms, including: The accuracy of the data

input in the system used for income recognition,

asset classification and provisioning in accordance

with RBI regulations Business Logics/parameters are

in-built in CBS for Tracking, identification and

Stamping of NPA and Provisioning in C-Edge.

Existence and effectiveness of monitoring

mechanisms like Internal Audit, Systems Audit, Snap

audit and daily Concurrent Audit.

We have examined :

The Reports, MOCs and certificates issued by the

Branch Auditors have been considered including

observations made in the LFAR. Observations, if

any, by various audits conducted as per the

monitoring mechanism of the bank including

NABARD Inspection and how they have been dealt

with. Our audit procedures included considering

the appropriateness of the Bank's accounting

policies and assessing compliance with the policies

in terms of the applicable accounting standards.

We have examined the efficacy of various internal

controls over advances to determine the nature,

timing and extent of the substantive procedures.

We performed test of controls over asset

classification with specific focus on whether IRAC

norms are followed adequately along with the

provisioning requirements.

In carrying out substantive procedures, we have

examined all large advances while other advances

have been examined on a sampling basis. All the

stressed accounts of significant amount have been

examined in detail.

Large number of Branches are being audited by

the Statutory Branch Auditors who are firms of

Chartered Accountants included in the panel of

NABARD and appointed by the Bank. We have

made, among others, specific communication to

the Branch Auditors to examine the advances. We


76

Key Audit matter How it has been addressed

have relied on the various returns relating to

advances audited by these Statutory Branch

Auditors and there report in respect thereof.

Provision for Pension:

During the year, the bank has provided under a

Defined Benefit Plan for pension to all the eligible

employees. The pension liability is reckoned based

on an independent actuarial valuation carried out

and bank makes such initial contributions,

periodically to the fund as may be required to

secure payment of the benefits under the pension

regulations. 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.

The measurement of provision being complex,

requiring significant professional judgement and

estimation in the selection of requisite long-term

assumptions and any deficiency / error in such

assumptions may result in inaccurate valuation as

per AS 15 and consequent significant impact on

the Financial Assertions, in view of the same we

consider this to be a key audit matter.

Our Procedure:

The bank has a HRMS package in place where

details of employees such as Name, Date of Birth,

Date of Joining, Basic Pay and other relevant

information are being maintained. Details of all the

eligible employees have been considered from

such package and are forwarded to registered

actuarial valuer along with assumptions for

actuarial valuations.

We have verified the mechanism in place to

ensure completeness of the employee data

shared for valuation, Further, we have reviewed

the experts' assessment of the appropriateness

and reasonableness of the assumptions submitted

by the bank in relation to such valuation and for

matters involving signif icant professional

judgement , we have re l ied upon the

methodologies adopted by the Actuarial Expert as

suggested in "SA 620 - Using the Work of an Expert".

Responsibility of the Management and those charged with Governance for the Financial Statements

05. The Bank's Board of Directors is responsible for preparation of these financial statements that give a true

and fair view of the financial position, financial performance and cash flows of Bank in accordance with

the applicable provisions of Regional Rural Bank Act, l976, Banking Regulations Act,1949, applicable

guidelines of Reserve Bank of India (RBI) / NABARD accounting principles generally accepted in India,

including the Accounting Standards issued by Institute of Chartered Accountants of India (ICAI). This

responsibility also includes maintenance of adequate accounting records in accordance with the

provisions of the Act for safeguarding of the assets of the Bank and for preventing and detecting frauds

and other irregularities; selection and application of appropriate accounting policies; making judgments

and estimates that are reasonable and prudent; and design, implementation and maintenance of

adequate internal financial controls, that were operating effectively for ensuring the accuracy and

completeness of the accounting records, relevant to the preparation and presentation of the financial

statements that give a true and fair view and are free from material misstatement, whether due to fraud or

error.

In preparing the financial statements, management is responsible for assessing the Bank's ability to

continue as a going concern, disclosing, as applicable, matters related to going concern and using the

going concern basis of accounting unless management either intends to liquidate the Bank or to cease

operations, or has no realistic alternative but to do so.


77

Auditor's Responsibility for audit of financial statements

06. Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are

free from material misstatement, whether due to fraud or error, and to issue an auditor's report that

includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an

audit conducted in accordance with SAs will always detect a material misstatement when it exists.

Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate,

they could reasonably be expected to influence the economic decisions of users taken on the basis of

these financial statements.

As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional

scepticism throughout the audit. We also:

· Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or

error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is

sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material

misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion,

forgery, intentional omissions, misrepresentations, or the override of internal control.

· Evaluate the appropriateness of accounting policies used and the reasonableness of accounting

estimates and related disclosures made by management.

· Conclude on the appropriateness of management's use of the going concern basis of accounting and,

based on the audit evidence obtained, whether a material uncertainty exists related to events or

conditions that may cast significant doubt on the bank's ability to continue as a going concern. lf we

conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the

related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion,

Our conclusions are based on the audit evidence obtained up to the date of our auditor's report.

However, future events or conditions may cause the bank to cease to continue as a going concern.

· Evaluate the overall presentation, structure and content of the financial statements, including the

disclosures, and whether the financial statements represent the underlying transactions and events in a

manner that achieves fair presentation.

We communicate with those charged with governance regarding, among other matters, the planned

scope and timing of the audit and significant audit findings, including any significant deficiencies in

internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant

ethical requirements regarding independence, and to communicate with them all relationships and other

matters that may reasonably be thought to bear on our independence, and where applicable, related

safeguards.

From the matters communicated with those charged with governance, we determine those matters that

were of most significance in the audit of the financial statements of the current period and are therefore

the key audit matters. We describe these matters in our auditor's report unless law or regulation precludes

public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter

should not be communicated in our report because the adverse consequences of doing so would

reasonably be expected to outweigh the public interest benefits of such communication.

Other matter

07. We did not audit the financial statements / information of 352 branches included in the standalone

financial statements of the Bank whose financial statements / financial information reflect total advances


78

of Rs. 10,586.11 Crores as at 31st March 2019 and total revenue of Rs. 1,234.96 Crores (Interest on advances

and Commission income) for the year ended on that date, as considered in the standalone financial

statements. The financial statements / information of these branches have been audited by the branch

auditors whose reports have been furnished to us, and in our opinion in so far as it relates to the amounts

and disclosures included in respect of branches, is based solely on the report of such branch auditors.

Our opinion is not modified in respect of this matter.

Report on Other Legal and Regulatory Requirements

08. The Balance Sheet and the Profit and Loss Account have been drawn up in Forms "A" and "B" respectively

of the Third Schedule to the Banking Regulation Act, 1949. Subject to the limitations of the audit indicated

in paragraph 5 to 7 above and subject to the limitations of disclosure required therein, we report that:

a. We have obtained all the information and explanations which to the best of our knowledge and belief,

were necessary for the purposes of our audit and have found them to be satisfactory.

b. The transactions of the Bank, which have come to our notice, 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 examination of those books.

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

with in preparing our Report in the manner considered necessary by us.

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

applicable accounting standards, to the extent they are not inconsistent with the accounting policies

prescribed by RBI.

Place: Hyderabad

Date: 03.05.2019

For RAO & KUMARChartered Accountants

FRN: 003089S

CA CM Ravi PrasadPartner MNO: 211322

UDIN - 19211322AAAABW2358


79

As per our report of even dateFor Rao & Kumar Chartered AccountantsFR No: 003089S

For Andhra Pradesh Grameena Vikas Bank

(Rs in '000s)st

Balance Sheet As At 31 March 2019

Andhra Pradesh Grameena Vikas BankHead Office: Warangal

(CA CM Ravi Prasad ) (T.V.V Prabhakar) T.V. Krishna Reddy (K. Praveen Kumar)Partner Asst General Manager General Manager-II ChairmanM No : 211322

Place: Ramachandrapuram, Medak Dist.rd

Date: 3 May 2019

(Shri Y.Rambabu) (Shri C.S.R Murthy) (Shri S.Ganesan)Director Director Director

(Shri Kasi Srinivas) (Shri K.V.V. Satyanarayana, IRAS) (Shri. Patil Prashant Jeevan IAS)

Director Director Director

Particulars Sch. As on 31.03.2019 As on 31.03.2018

CAPITAL AND LIABILITIES

Capital 1 94 08 50 94 08 50

Reserves & Surplus 2 2286 76 34 2161 8439

Deposits 3 16055 95 57 14333 62 93

Borrowings 4 6471 00 50 8041 20 59

Other Liabilities & Provisions 5 1729 63 51 1034 45 47

Total 26637 44 42 25665 21 88

ASSETS

Cash and balances with RBI 6 810 94 53 735 95 73

Balances with Banks and Money at Call

& Short Notice 7 4494 80 13 5540 64 14

Investments 8 5392 30 59 5894 10 81

Advances 9 14834 92 68 12349 08 13

Fixed Assets 10 59 86 67 57 28 44

Other Assets 11 1044 59 82 1088 14 63

Total 26637 44 42 25665 21 88

Contingent Liabilities 12 31 54 37 32 06 98


80

st Profit & Loss for the year ended 31 March 2019 (Rs in '000)


Particulars Sch. Year Ended 31.03.19 Year Ended 31.03.18

1 Interest Earned 13 2369 37 59 2026 96 88

a. Interest/Discount on Advances/bills 1728 79 81 1485 09 70

b. Interest on Investments 398 81 15 365 86 05

c. Interest on Balances with RBI and Other

Inter Bank Funds Nil Nil

d. Interest on TDRs with Banks 241 76 63 176 01 13

II Other Income 14 287 95 22 297 48 95

a. Commission, Exchange and Brokerage 237 39 44 220 06 99

b. Miscellaneous Income 50 55 78 77 41 96

III TOTAL 2657 32 81 2324 45 83

IV Interest Expended 15 1322 92 94 1178 77 93

V Operating Expenses (a + b) 16 376 22 99 317 88 45

a. Employees Costs 221 75 58 207 14 06

b. Other Operating Expenses 154 47 41 110 74 39

VI Total Expenditure

(excluding provisions and Contingencies) ( 4+5) 1699 15 93 1496 66 38

VII Operating Profit before provisions and

Contingencies (3-6) 958 16 88 827 79 45

VIII Provisions (other than tax) and Contingencies 807 57 07 77 29 26

IX Profit from Ordinary Activities before Tax (7-8) 150 59 81 750 50 19

X Tax Expense

a. Provision for Taxation-Current Year (45 00 00) (252 03 80)

b. Deferred Tax Asset (43 71) 3 88 02

c. Earlier Years Adjustments (Excess) 6 87 74 67 05

XI Net profit for the period from Ordinary

Activities after Tax 112 03 84 503 01 46


81

(Rs in '000s)

Particulars Sch. Yr Ended 31.03.2019 Yr Ended 31.03.2018

As per our report of even dateFor Rao & Kumar Chartered AccountantsFirm Registration No: 003089S



Place: Ramachandrapuram, Medak Dist.rdDate: 3 May 2019




APPROPRIATIONS

Net Profit for the period 112 03 84 503 01 46

Brought forward Profit 1700 95 29 1305 07 18

Transfer to the Statutory Reserves 22 40 77 100 60 29

Special Reserve u/s 36(1)(viii) of IT Act, 1961 4 08 80 6 53 06

Profit Carried Over to Balance Sheet 1786 49 56 1700 95 29

Summary of Significant Accounting Policies 17

Disclosures and Notes to Accounts 18


82

SCHEDULE – 1 CAPITAL

st Schedules forming Part of Balance Sheet As on 31 March 2019

(Rs in '000’s)


Head Office: Warangal

Particulars As on 31.03.2019 As on 31.03.2018

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 Unpaid NIL NIL

Add: Forfeited Shares NIL Nil

TOTAL 94,08,50 94,08,50


83



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


I. Statutory Reserve

Opening Balance 433 08 14 332 47 85

Additions during the Year 22 40 77 100 60 29

Deductions during the Year Nil Nil

TOTAL 455 48 91 433 08 14

II. Capital Reserve

Opening Balance 1 20 1 20

Additions during the Year Nil Nil


TOTAL 1 20 1 20

III. Share Premium

Opening Balance Nil Nil



TOTAL Nil Nil

IV. Revenue and other Reserve




TOTAL 14 31 49 14 31 49

V. Special Reserve u/s 36(1)(viii) of Income Tax Act,1961


Additions during the Year 4 08 80 6 53 06


TOTAL 14 46 52 1037 72

VI. Investment Fluctuation Reserve

Opening Balance 3 10 55 Nil

Additions during the year 12 88 11 3 10 55

Deduction during the year Nil Nil

Total 15 98 66 3 10 55

Balance in Profit and Loss Account 1786 49 56 1700 95 29

TOTAL 2286 76 34 2161 84 39


84

SCHEDULE – 3 - DEPOSITS

SCHEDULE – 4 - BORROWINGS

(Rs in '000s)

(Rs in '000s)




A. I. Demand Deposits

i) From Banks Nil Nil

ii) From Others 186 14 30 121 79 73

II. Savings Bank Deposits 6469 96 96 5920 14 04

III Term Deposits

i) From Banks 745 57 92 475 70 71

ii) From Others 8654 26 39 7815 98 45

TOTAL 16055 95 57 14333 62 93

B. i) Deposits of Branches in India 16055 95 57 14333 62 93

ii) Deposits of Branches Out Side India Nil Nil

TOTAL 16055 95 57 14333 62 93


I. Borrowings in India

i) Reserve Bank of India Nil Nil

ii) Other Banks 2 12 83 2604 41 11

iii) Other Institutions (NABARD,NHB & MUDRA)

a) NABARD 6376 07 97 5299 46 23

b) NHB 72 79 70 97 33 25

c) MUDRA 20 00 00 40 00 00

II. Borrowings Outside India Nil Nil

TOTAL 6471 00 50 8041 20 59


85

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 116 07 55 112 92 85

II Inter Office Adjustments (Net) 1 83 85 15 85 19

III Interest Accrued on Deposits 544 44 31 481 47 64

IV General Provisions:

a) Provision on Standard Assets 49 02 93 40 60 21

b) Provision on Rural Advances Nil 10 67 36

c) Provision on Frauds 6 15 80 40

d) Audit Fee Provisions 80 00 1 00 00

e) Income Tax Provision 45 00 00 252 03 80

f) Bonus Provision Nil 39 34

g) Wage Revision provision Nil 8 55 00

h) Pension Contribution fund provision 831 87 07 Nil

i) NPS Provision 5 79 45 Nil

V Interest payables 74 41 86 57 57 61

VI TDS on Bank Term Deposits 9 13 48 8 53 09

VIII Other Liabilities 51 16 86 44 02 98

TOTAL 1729 63 51 1034 45 47


I. Cash in Hand 149 93 45 168 46 82

II. Balances with Reserve Bank of India

i) In Current Account 661 01 08 567 48 91

ii) In Other Account NIL NIL

TOTAL 810 94 53 735 95 73


86

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




I. In India

i. Balance with Banks

a) In Current Accounts 7 44 33 7 38 05

b) In Other Deposit Accounts (TDRs) 4487 35 80 5533 26 09

ii. Money at Call & Short Notice

a) With Banks Nil Nil

b) With Other Institutions Nil Nil

TOTAL 4494 80 13 5540 64 14

II. Outside India

a) In Current Accounts Nil Nil

b) In Other Deposit Accounts Nil Nil

c) Money at Call & Short notice Nil Nil

TOTAL Nil Nil

TOTAL (I&II) 4494 80 13 5540 64 14


87

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




I Investment in India

i) Government Securities 5317 05 60 5763 85 82

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 75 00 00 130 00 00

TOTAL 5392 30 59 5894 10 81

II Investments Outside India

i) Government Securities Nil Nil

(Including Local Authorities)

ii) Subsidiaries and/or Joint Ventures Nil Nil

iii) Other Investments (To Be Specified) Nil Nil

TOTAL Nil Nil

TOTAL (I&II) 5392 30 59 5894 10 81


88

SCHEDULE – 9 - ADVANCES(Rs in '000s)




A. 1. Bills Purchased and Discounted Nil Nil

2. Cash Credits, Overdrafts and Loans

Repayable on Demand 11222 27 26 9538 01 01

3. Term Loans 3612 65 42 2811 07 12

TOTAL (A) 14834 92 68 12349 08 13

B.1. Secured by Tangible Assets 14780 12 50 12244 39 54

2. Covered by Bank / Government Guarantees Nil Nil

3. Unsecured 54 80 18 104 68 59

TOTAL (B) 14834 92 68 12349 08 13

C.I. Advances in India

1. Priority Sector 12714 73 40 10680 69 31

2. Public Sector Nil Nil

3. Banks Nil Nil

4. Others 2120 19 28 1668 38 82

TOTAL (C.I) 14834 92 68 12349 08 13

C.II. Advances Outside India

1. Due from banks Nil Nil

2. Due from Others Nil Nil

TOTAL (C.II) Nil Nil

GRAND TOTAL (C.I+C.II) 14834 92 68 12349 08 13


89

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




I. Land

At cost as on the 31st March of the Preceding 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 Preceding Year 1 57 28 14 00

Additions During the Year 4 32 143 28

Deductions During the Year Nil Nil

Depreciation upto the preceding year 2 24 Nil

Depreciation during the year 2 77 2 24

TOTAL 156 59 1 55 04

III. Other Fixed Assets (including Furniture and Fixtures)

At cost as on the 31st March of the Preceding Year 120 39 77 112 46 63

Additions During the Year 10 13 34 8 02 47

Deletions During the Year 2 06 57 9 33

Depreciation upto the preceding year 70 28 19 61 03 27

Depreciation during the year 9 67 77 9 28 23

Depreciation on deletions 1 12 31 3 31

TOTAL 49 62 89 50 11 58

IV. Capital Work in Progress

At cost as on the 31st March of the Preceding Year 5 52 25 5 50 77

Additions During the Year 3 05 37 1 48

Deletions During the Year Nil Nil

TOTAL 8 57 62 5 52 25

TOTAL (I+II+III+IV) 59 86 67 57 28 44


90

SCHEDULE – 11 - OTHER ASSETS(Rs in '000s)



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


I. Inter Office Adjustments (Net) Nil Nil

II. Interest Accrued on investment 187 02 10 144 83 68

III. Advance Tax 170 00 00 230 00 00

IV. Tax Deducted at Source 30 96 14 98 66

V. Stationery 50 93 50 10

VI. Subvention/Interest Incentive receivable 620 16 75 621 62 00

VII. Prepaid Expenses - Insurance 3 33 18 2 91 50

VIII. Income Tax paid against Disputed Demand 44 07 73 37 22 31

IX. Deferred Tax 75 65 1 19 35

X. Others 18 42 52 34 87 03

TOTAL 1044 59 82 1088 14 63

Particulars As at 31.03.2019 As at 31.03.2018

Claims against the Banks not acknowledged as debts 18 45 00 18 45 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 11 38 84 11 16 55

b) Out Side India Nil Nil

Acceptances, Endorsements and other Obligations Nil Nil

Other items for which the Bank is contingetly liable

(DEA Fund) 1 43 08 1 34 98

Unclaimed Bankers Cheques (treated as income in

earlier years) 27 45 1 10 45

TOTAL 31 54 37 32 06 98


91

Interest/ Discount on Advances/Bills 1728 79 81 1485 09 70

Interset on Investments 398 81 15 365 86 05

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

Others 241 76 63 176 01 13

TOTAL 2369 37 59 2026 96 88

SCHEDULE – 13 - INTEREST EARNED(Rs in '000s)


Particulars Year Ended 31.03.19


Year Ended 31.03.18

SCHEDULE – 14 - OTHER INCOME (Rs in '000s)

Commission, Exchange and Brokerage 237 39 44 220 06 99

Profit on Sale of Investment 14 49 56 71 41 12

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 36 06 22 6 00 84

TOTAL 287 95 22 297 48 95

Particulars Year Ended 31.03.19

SCHEDULE – 15 - INTEREST EXPENDED(Rs in '000s)

Year Ended31.03.2017

(Previous Year)Interest on Deposits 851 28 19 841 49 39

Interest on Reserve bank of India / Inter Bank Borrowings 471 64 75 337 28 54

Others Nil Nil

TOTAL 1322 92 94 1178 77 93

Particulars

Year Ended 31.03.18

Year Ended 31.03.19 Year Ended 31.03.18


92

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


Head Office: Warangal


Particulars Year Ended 31.03.19 Year Ended 31.03.18

Salary Payments and Provisions to Employees 221 75 58 207 14 06

Gratuity Contribution Fund 4 78 49 Nil

Leave Encashment Fund 8 83 64 9 87 03

Pension Contribution Fund 23 30 00 Nil

Director's Fee, Allowances and Expenses Nil Nil

Medical Expenses 7 43 28 542 68

Leave Fare Concession 18 19 12 67

Rent, Taxes, Lighting and Fuel 16 88 74 15 77 93

Advertisement and Publicity 16 12 6 57

Printing and Stationery 5 22 56 5 78 92

Depreciation on Banks Property 9 70 54 9 30 46

Auditors Fee and Expenses 72 70 1 22 33

Legal Charges 1815 25 60

Telephone Charges 1 16 34 1 44 68

Repairs and Maintenance 23 09 20 25

Insurance 15 40 65 13 75 39

Travelling and Halting expenses 7 44 32 6 41 74

AMC for Software and Hardware 15 31 07 15 79 42

Books and Periodicals 89 70 80 31

Computerization 53 50 51 49

Vehicle and Fuel 1 76 22 1 90 47

Entertainment 78 59 79 94

Other Expenses (Sundries) 33 61 52 21 26 51

TOTAL 376 22 99 317 88 45


93

SCHEDULE – 17 - SIGNIFICANT ACCOUNTING POLICIES


A. Basis of Preparation:

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

accounting on going 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.

B. 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 preparation of the financial statements are prudent

and reasonable. Future results could differ from to these estimates.

C. Significant Accounting Policies:

1. Revenue Recognition:

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

1.2. Interest income is recognised in the Profit and Loss Account as it accrues except, (i) 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. (ii) overdue interest on

investments and bills discounted, (iii) Income on Rupee Derivatives designated as "Trading", which are

accounted on realisation.

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

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

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

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

1.6. Interest on overdue term deposits is accounted for on renewal basis.

1.7. 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.

2. Investments:

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

Government Securities are recorded on “Trade Date”.

2.1. Classification: Investments are classified into three categories viz., Held to Maturity (HTM), Available for

Sale (AFS) and Held for Trading (HFT) as per RBI guidelines.

2.2. Basis of classification:

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

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

Held for Trading (HFT).


94

III. Investments, which are not classified in the above two categories, are classified as Available for Sale

(AFS).

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

categories is done in conformity with regulatory guidelines.

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

Approved Securities and Others.

2.3. Valuation:

i). In determining the acquisition cost of an investment:

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

b) Brokerage, Commission, Securities Transaction Tax (STT) etc., paid in connection with acquisition of

investments are expensed upfront and excluded from cost.

c) Broking period interest paid / received on debt instruments is treated as interest expense / income

and is excluded from cost or sale consideration.

d) 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.

ii) 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

acquisition price / book value.

iii) Treasury Bills and Commercial Papers are valued at carrying cost.

iv) Held to Maturity category:

a) 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”.

b) 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.

v) Investments under AFS and HFT category: 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, (iii) Shares, (iv) Bonds and debentures, and (v) others) is provided for and net appreciation, is

ignored. On provision for depreciation, the book value of individual security remains unchanged after

marking to market.

vi) Investments are classified as Performing and Non Performing investments, based on the guidelines

issued by the RBI. Investments of domestic offices become non performing where:

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

days.

b) 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 would be reckoned as NPI.

3. Loans or Advances and Provisions thereon:


95

3.1. 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:

I) In respect of agriculture advances:

a) For short duration crops, where the instalment of principal or interest remains overdue for two

crop seasons, and

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

ii) In respect of Non Agriculture advances:

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

more than 90 days.

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

outstanding 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.

3.2. All advances have been classified under four categories i.e., Standard Assets, Sub-standard Assets,

Doubtful Assets and Loss Assets. Provisions are made as per the extant guidelines/directives prescribed by

the RBI.

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%

Housing Loans >20.00 lacs @ 0.75%

All other advances not included in (1), (2) & (3) 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).

III Doubtful Assets:

A loan asset that has remained in the sub-standard category for a period 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.

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


Secured Portion Up to One year 25%

One to three years 40%

More than three years 100%

Unsecured Portion 100%

96

Participation Certificates.

3.4. For Restructured / Rescheduled assets, provisions are made in accordance with the extant guidelines

issued by the RBI.

3.5. 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.

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

recovery.

3.7. 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.

3.8. 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.

3.9. Appropriation of recoveries in NPAs (not out of fresh/additional credit facilities sanctioned to the borrower

concerned) towards principal or interest due as per the Bank's extant instructions is done in accordance

with the following priority:

a. Charges

b. Unrealized Interest/Interest

c. Principal

4. Floating Provisions:

The bank has a policy for creation and utilisation of floating provisions separately for advances,

investments and general purposes. The quantum of floating provisions to be created is assessed at the end

of the financial Year.

5. Fixed Assets- Depreciation:

5.1. Fixed Assets are carried at historical cost less accumulated depreciation.

5.2. Cost includes cost of purchase and all expenditure such as site preparation, installation costs and

professional fees incurred on the 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.

5.3. Depreciation is provided on straight line method as per the following rates:

Description of Fixed Asset Depreciation rates

Buildings 1.6667%

Furniture & Fixtures other than Electrical Fittings and

Fixtures 10%

Furniture and fittings with other than Electrical Fittings &

Fixtures with 3 years life 33.33%

Electrical Fittings with 3 years life 33.33%

Electrical Fittings with 5 years life 20%

Electrical Fittings with 10 years life 10%

Safe Deposit Lockers, Fire proof data safe 5%


97

5.4. 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.

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

6. 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 by 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.

7. Employee Benefits:

7.1. Short Term Employee Benefits:

The undiscounted amount of short – term employee benefits, such as medical benefits etc., which are

expected to be paid in exchange for the services rendered by employees, are recognized during the

period when the employee renders the service.

7.2. Long Term Employee Benefits

i). Defined Benefit Plans:

a. Gratuity:

The Bank provides for Gratuity liability based on actuarial valuation for all the eligible employees. The

benefit is in the form of lump sum payments to vested employees on retirement, or on death while in

employment, or on termination of employment, for an amount equivalent to 15 days basic salary

payable for each completed year of service, subject to the cap prescribed by the Statutory Authorities.

Vesting occurs upon completion of five years of service. The Bank makes periodic contributions to a fund

administered by Trustees based on an independent external actuarial valuation carried out annually,

and contributes to SBI Life Insurance Company Limited.

b. Leave Encashment:

The Bank provides for Leave Encashment liability. The benefit is in the form of lump sum payments to vested

employees on retirement, or on death while in employment and vesting occurs at different stages as per

rules. The Bank makes periodic contributions based on an independent external actuarial valuation

carried out annually, and contributes to SBI Life Insurance Company Limited.

c. Pension:

The Bank provides for pension to all eligible employees. The benefit is in the form of monthly payments as


Description of Fixed Asset Depreciation rates

Computer systems & ATMs 33.33%

Computer software which does not form an integral part of

computer hard ware and cost of software development 100%

Vehicles 20%

Server 25%

Plant & Machinery 12.50%

98

per the rules to vested employees on retirement or on death while in employment, or on termination of

employment. Vesting occurs at different stages as per rules. The pension liability is reckoned based on

an independent actuarial valuation carried out and Bank makes such initial contributions periodically to

the Fund as may be required to secure payment of the benefits under the pension regulations.

d. 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.

ii) Defined Contribution Plans such as Provident Fund are recognized as an expense and charged to the

Profit & Loss Account on accrual basis.stiii) The Bank operates New Pension System (NPS) for all staff joined on or after 1 April 2018 and

st ststaff joined be between 1 April 2010 and 31 March 2018 and opted for NPS, which is a defined

Contribution Plan. As per the scheme employees contributes 10% of their basic pay and DA together

with matching contribution from the Bank.

iv) Other Long Term Employee benefits:

All eligible employees of the Bank are eligible for leave fare concession, home travel concession. The

costs of such long term employee benefits are debited to Profit & Loss account of the Bank, in the year of

expense incurred.

8. Taxes on Income:

Income Tax expense is the aggregate amount of current tax and deferred tax expense incurred by the

Bank. Current tax 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 which are based on the tax laws prevailing in India. Deferred tax adjustments comprise

of changes in the deferred tax assets or liabilities during the year.

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 certain. Deferred Tax Assets are recognised on carry forward of unabsorbed depreciation

and tax losses only if there is virtual certainty supported by convincing evidence that such deferred tax

assets can be realised against future profits.

9. Contingent Liabilities & provisions:

9.1 In conformity with AS – 29, “Provisions, Contingent Liabilities and Contingent Assets”, issued by the ICAI, the

bank recognises 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.

9.2. 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; or

ii). Any present obligation that arises from past events but is not recognised because:


99

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 obligations 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,

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.

10. Special Reserves:

Revenue and other Reserve include Special Reserve created under Section 36(i)(viii) of the Income Tax

Act, 1961.


100

SCHEDULE – 18 DISCLOSURES & NOTES TO ACCOUNTS

I. Disclosures as per norms for RRBs

1. Capital

2. Investments

S.No Particulars March 2019 March 2018

1 Value of Investments

i) Gross value of Investments 5392 30 59 5894 10 81

ii) Provisions for Diminution 15 98 66 3 10 55

iii) Net value of Investments 5376 31 93 5891 00 26

2 Movement of provisions held towards depreciation on investments

i) Opening Balance 3 10 55 Nil

ii) Add: Provisions made during the year 12 88 11 3 10 55

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

iv) Closing Balance 15 98 66 3 10 55

3. Repo Transactions

Minimum Maximum Daily Average As onst outstanding outstanding outstanding 31

during the during the during the March, year year year 2019

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 March 2019 (%) March 2018 (%)

i) CRAR(%) 15.50 15.59

ii) CRAR – Tier I Capital 15.09 15.24

iii) CRAR – Tier II Capital 0.41 0.35

iv) Percentage of Shareholding of the :

A Government of India 50 50

B Government of Andhra Pradesh 15 15

C State Bank of India (Sponsor Bank) 35 35


101

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 2018 NIL

Reductions during the above period NIL

Closing Balance NIL

Total provisions held NIL

(Rs in '000s)

(Rs in '000s)

5. Asset Quality

S.No. Particulars March 2019 March 2018

i) Net NPAs to Net Advances (%) 0.34 0.20

ii Movement of NPAs (Gross)

(a) Opening balance 195 64 24 209 73 96

(b) Additions during the year 293 46 36 305 26 38

(c) Reductions during the year 300 00 67 319 36 10

(d) Closing balance 189 09 93 195 64 24

iii Movement of Net NPAs


(b) Additions during the year 75 53 99 23 37 23

(c) Reductions during the year 47 95 29 82 91 96


iv Movement of provisions for NPAs (Excluding provisions on standard assets)


(b) Provisions made during the year 11 63 07 59 40 63

(c) Write-off / Write-back of excess provisions 45 76 19 13 95 61


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) 75 24 99 NIL NIL NIL NIL

vi) Provisions held towards NIL NIL NIL NIL NIL depreciation

Total 75 24 99 NIL NIL NIL NIL


102

ii. Details of Loan Assets subject to Restructuring

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


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

Total (i) = (ii) + (iii) + (iv) Nil Nil

IV) Details on non-performing financial assets purchased / sold

A. Details of non-performing financial assets purchased:


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 March 2019 Marh 2018

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,


Total (i) = (ii) + (iii) + (iv) Nil Nil


103

IV. Provisions on Standard Assets


1 Provisions on Standard Assets 49 02 99 40 60 21

6. Business Ratios


i Interest income as a percentage to Working Funds (%) 9.32 9.01

ii Non-Interest income as a percentage to Working Funds (%) 1.13 1.32

iii Operating profit as a percentage to Working Funds (%) 3.75 3.68 iv Returns on Assets (%) 0.44 2.24

v Business per Employee (Rs. 000) 10 28 43 9 06 66

vi Net profit per Employee (Rs'000) 3 52 15 92

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

Particulars1 to 14 days

15 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 986 01 33 400 27 89 1343 97 03 1761 47 933899 47 89 7395 82 85 168 76 25 100 14 40 16055 95 57

Advances 2 70 84 256 53 80 1035 62 36 2578 07 589029 48 63 756 57 65 473 39 04 2526 01 10 16658 41 00

Investments & STDRs

113 15 84 Nil 1425 00 00 1294 73 00 80 38 19 106 35 26 5120 04 10 8189 66 39

Borrowings Nil Nil 5 00 00 1059 02 711518 32 62 2727 93 54 1149 60 57 6471 00 50

Foreign Currency Assets

Nil 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)

11 1106

50 00 00


104

8. Exposures – Exposure to Real Estate Sector


a Direct exposure

i Residential Mortgages above Rs. 20.00 lakhs lending fully secured 884 87 99 468 96 21 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 1006 99 08 716 29 27

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, il N 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 March 2019 March 2018

Provision for Income Tax 45 00 00 252 03 80

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)


105


Refinance received from State Bank of India Nil Nil

Interest paid to SBI 68 81 42 58 82 80

Investments made with:

SBI - in the form of STDRs 260 80 96 2219 21 00

SBI Fund Management Private Limited Nil Nil

Interest received from SBI 27 36 43 1 68 15 15

Profit on sale of Investments on SBI 70 05 7 79 96

Contributions to Gratuity Fund with SBI Life Insurance Co. Ltd 4 78 49 Nil

Contributions to Group Leave Encashment Policy withSBI Life Insurance Company Limited 8 83 64 9 87 03

Current Account Balance with SBI 3 48 98 1 48 37

(iii) Particulars of Managerial Remuneration:

Key Management Personnel

Shri K. Praveen Kumar, Chairman (From: 02.02.2019)

Shri V. Narasi Reddy, Chairman (Upto: 02.02.2019)

Shri M. Satyanarayana, General Manager –I

Shri T.V. Krishna Reddy General Manager-II

Shri G.Nagaraju General Manager – III

Shri K. Ravi Kiran, General Manager – IV

Shri N. Venkata Ramana, General Manager – V (From:20.09.2018)

(ii) Particulars of related party accounts transactions:

The following is the summary of significant related party transactions:

Particulars For the year March 2019 For the year March 2018

Shri K. Praveen Kumar Chairman 3 95 359/- Nil

Shri V. Narasi Reddy, Chairman 26 22 045/- 21 80 811/-

Shri M. Satyanarayana, General Manager - I 20 65 660/- 16 32 996/-

Shri T.V.Krishna Reddy, General Manager - II 21 59 052/- 16 67 124/-

Shri G.Nagaraju, General Manager - III 22 53 732/- 5 54 257/-

Shri K. Ravi Kiran, General Manager - IV 20 82 712/- 16 83 829/-

Shri N. Venkata Ramana, General Manager - V 3 78 438/- Nil

Shri S Prakash Kumar, General Manager Nil 3 56 424/-

(Rs in '000s)

(in Rupees)


106

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 0

b No. of complaints received during the year 2018-19 422

c Total Complaints 422

d No. of complaints redressed during the year 415

e No. of complaints pending at the end of the year 7*

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 2018-19 56

c Total Complaints 57

d No. of complaints redressed during the year 52

e No. of complaints pending at the end of the year 5*

f No. of awards passed by Banking Ombudsman Nil

g No of awards implemented Not applicable

h No. of awards pending implementation Not applicable

16. Concentration of Deposits, Advances, Exposures and NPAs

(Rs in '000s)

1. Concentration of Deposits (Rs in Crores)

Total Deposits of Twenty largest depositors 1407.56

Percentage of Deposits of twenty largest depositors to Total Deposits of the Bank 8.77%


a Opening balance in the Rural Advances Provision Account 10 67 36 10 67 36

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 10 67 36 Nil

iii. Total of Draw down Nil Nil

d Closing balance in the Rural Advances Provision Account Nil 10 67 36

nd th* Out of 5, 3 complaints were received in 2 & 4 week of March 19.

* Out of 7, 6 complaints were closed during the 1st week of April 2019

15. Pension and NPS contributions

Particulars (Rs in 000's)

Pension Contribution fund 831 87 06

NPS Constribution fund 5 79 45


107

Sub-Total (B)

Total (A+B)1444.90 7.71 0.53 1356.81 9.77 0.72

16658.41 189.10

1.14 14316.70

195.64 1.36

17. Sector Wise NPAs (Rs. in Cr)

Sl. No Sector*

March 2019 March 2018

OutstandingTotal Advances

Gross NPAsPercentage of Gross NPAs to Total Advancesin that Sector

Percentage of Gross NPAs to Total Advancesin that Sector

A Priority Sector

1 Agriculture and allied activities

11169.16 109.54 0.98 9691.58 103.81 1.07

2. Advances to industries sector eligible as priority sectorlending

2012.68 37.94 1.89 1932.51 46.54 2.41

3 Services 60.18 6.83 11.35 60.66 8.27 13.63

4 Personal Loans 1971.49 27.08 1.37 1275.14 27.25 2.14

Sub-Total (A) 15213.51 181.39 1.19 12959.89 185.87 1.43

B Non-PrioritySector

1 Agriculture and allied activities -

-

-2 Industry

3 Services

4 Personal loans 1444.90 7.71 0.53 1356.81 9.77 0.72

OutstandingTotal Advances

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

Gross NPAs

2. Concentration of Advances (Rs in Crores)

Total Advances of Twenty largest Borrowers 17.13

Percentage of Advances of twenty largest borrowers to Total Advances of the Bank 0.11%

3. Concentration of Exposures (Rs in Crores)

Total Exposure of Twenty largest Borrowers/Customers 1407.56

Percentage of Exposures to twenty largest Borrowers/Customers to Total Exposure of the Bank on borrowers / customers 4.30%

4. Concentration of NPAs (Rs in Crores)

Total Exposure to top four NPA accounts 2.00%


108

17. Movement of NPAs

II. NOTES TO ACCOUNTS

1. Reorganization of Area of Operations of the Bank:st The Bank has been formed vide Notification dated 31 March 2006 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).th Vide notification dated 20 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, 2019: (Rs in 000s)

3. Inter Bank Participation Certificate (IBPC):

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.1800 crores on

20.03.2018 for the period of 180 days as cash pay-out and matured on 24.09.2018. During this financial year,

the Bank issued priority sector advances to an extent of Rs.800 crores on 27.09.2018 for the period of 180 days as

cash pay-out to the HDFC Bank and matured on 26.03.2019. Further, again during the year, the Bank issued

priority sector advances to an extent of Rs.590 crores on 27.12.2018 for the period of 180 days as cash pay-out

and also issued priority sector advances of Rs.1100 crores on 27.03.2019 for the period of 180 days as cash

pay–out to HDFC Bank.

Classification Gross Advances Net Advances

Standard Assets 16469 31 07 16469 31 07

Sub Standard Assets 49 53 92 41 93 98

Bad & Doubtful Assets 139 56 01 13 67 63

Total 16658 41 00 16524 92 68

Add: Provision on Sub-Standard And Doubtful Assets etc 133 48 32

Total Gross Advances 16658 41 00


Particulars Rs. in CroresstGross NPAs as on 1 April 2018 195.64

Additions (Fresh NPAs) during the year 293.46

Sub-Total (A) 489.10

Less:

(I) Upgradations 260.95

(ii) Recoveries (excluding recoveries made from upgraded accounts) 36.36

(iii) Write-Offs 2.69

Sub-Total (B) 300.00stGross NPAs as on 31 March 2019 (A-B) 189.10

109

4. Priority Sector Lending Certificate (PSLC):

During the Financial year, the Bank has sold and purchased following priority sector advances on various dates

and earned profit of Rs.31.85 crores. The PSLC is valid upto 31.03.2019.(Rs in 000s)

PSLC Sold PSLC Purchased Net Profit earned

during the YearTotal Sold

3850.00 3150.00

Premium Received

38.15

Premium Paid

6.30 31.85

5. Bankers' Cheques:

The Unpaid Banker Cheques which were credited earlier years to P&L account aggregating to Rs.27,45 (in

thousands) furnished as contingent liability in Schedule 12.

6. 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:

(Rs in 000s)

Sl No Particulars March 2019 March 2018

1 Opening Balance of Amount transferred to DEAF 1 34 98 1 33 66

2 Add: Amount transferred to DEAF during the Year 2018-19 8 33 16 89

3 Less: Amounts reimbursed by DEAF towards Claim 23 15,57

4 Closing balance of amounts transferred to DEAF 1 43 08 1 34 98

7. Fixed Assets:

The Bank is in possession of Land at various places to an extent of 9,432.26 square yards, which was gifted

by certain donors / assigned by Government of Andhra Pradesh for construction of Bank 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

Bank Buildings at various locations and amounts paid to BSNL for construction / initial advance

aggregating to Rs.8,57,62 (thousands) which was disclosed under Capital Work in progress in Fixed Assets

Schedule and pertaining to the constructions completed buildings Rs.1,43,28 (thousands) was capitalized

during 2017-18. During the year 2018-19, an amount of Rs.4,32 (thousands) was paid to BSNL. Thus, an

amount of Rs.1,47,60 (thousands) was capitalized.

8. 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. 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 consultant, the Bank recognized an amount aggregate to Rs.18,45,00 (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.44,07,73

(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.

Total Purchased


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10. Fraud Cases:

Details of Fraud cases are as under: (Rs in 000s)

11. The figures mentioned in Balance Sheet, Profit & Loss Account and Schedules 1 to 16 have been

rounded off to the nearest thousand rupees.

12. Previous Year's figures have been regrouped /reclassified/recast wherever necessary to confirm

the current year classification.


Provision at the beginning of the year 80 40 91 28

Less: Written off during the year 15 89 28 09

Add: Additional provision created during the year Nil 17 21

Less : Provision reversed (written back) during the year 58 36 Nil

Provision as at the year end 6 15 80 40

Number of fraud cases at the year end 23 17

9. 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.

As per our report of even dateFor Rao & Kumar Chartered AccountantsFR No: 003089S



Place: Ramachandrapuram, Medak Dist.rd

Date: 3 May 2019





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Head office : 2-5-8/1 Near Ambedkar Statue, Ramanagar, Hanamkonda - 506 001 Warangal [Telangana]

Ph: 0870-2577256 Tollfree: 18004257900 I Ie-mail: [email protected] www.apgvbank.in I

Promoting Green Banking

Untitled-1 [] 2018-19...Net worth increased to Rs. 2380.85 Cr from Rs. 2255.93 Cr @ 5.68%. Reserves...

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