MANAGEMENT DISCUSSION AND ANALYSIS

Macro Economic and Industry developments Economic Scenario

In 2015, global economic activity remained subdued. Global outlook was influenced by gradual slowdown and re-balancing of economic activity in China, lower prices for energy and other commodities and gradual tightening in monetary policy in the United States.

Subdued economic activity and disinflationary conditions forced many key central banks to resort to easing of monetary policy through a combination of conventional and unconventional measures. Some other Central Banks extended their quantitative and credit easing measures. European Central Bank and the Bank of Japan pushed their monetary policy rate into negative territory.

As per the estimates provided by the International Monetary Fund (IMF) in April 2016, World GDP growth was estimated at 3.1% in 2015 and is projected at 3.4% in 2016 and 3.6% in 2017. Global activity is expected to pick up gradually especially in emerging market and developing economies. In advanced economies, a modest and uneven recovery is expected to continue with a gradual further narrowing of output gaps.

The developments witnessed in global economies together with market concern about the future performance of the Chinese economy may have spillover effects on global economies through trade channels. These coupled with weaker commodity prices as well as diminishing confidence may result in volatility in financial markets.

Manufacturing activity and trade remained weak worldwide, reflecting a subdued global demand and investment. Additionally the decrease in imports in many emerging markets and developing economies in economic distress is also weighing heavily on the global trade. Growth in emerging markets and developing economies is expected to rise from 4% in 2015 to 4.3% in 2016 and 4.7% in 2017. However the growth in advanced economies is projected to rise to 2.1% and hold steadily in 2017.

Indian Economic Scenario

GDP growth of the Indian economy, as per the Central Statistical Organisation's advance estimates, is expected to increase to 7.6% as against 7.2% recorded in 2014-15. Forecasts from the World Bank showed that India will be a bright spot amid a gloomy outlook brdicted for the developing economies in the next couple of years. It also brdicted that the growth will be at 7.9% by 2018. The country would benefit from the backdrop of a reduction in external vulnerabilities, a strengthening domestic business cycle and supportive policy environment.

The GDP growth projection is expected to be primarily driven by private consumption demand and gross fixed capital formation (brdominantly through public capital expenditure). Growth drivers, on the sectoral front are expected to be from manufacturing and agriculture & allied activities.

On the inflation front, WPI stayed in the negative for fifteen straight months till January 2016. It is showing an upward movement since then. Combined CPI also, after witnessing an all time low of 3.69% in July 2015 increased to 5.69% in January 2016. This is on account of persistent services inflation, but was still comfortably below RBI's CPI inflation target of 6%. Despite monsoon deficiency for the second consequtive year, food inflation declined, aided by limited support prices for food grains, subdued rural wage growth and the timely offloading of surplus good stocks. Fuel inflation was moderated thanks to the sharp drop in oil prices. RBI's anti-inflationary stance and the Government's fiscal consolidation approach helped contain core inflation, which remained less than 5% through the course of the year.

As per the Economic survey brsented by the Government in February 2016, current account deficit will be within 1 to 1.5% of GDP. Indian currency witnessed weakness due to global economic slowdown, weak commodity prices, falling of crude oil prices, contraction in India's exports and large amount of selling by FIIs in the Indian Stock Market. The year 2015 saw FIIs being the net sellers with total pull out amounting to Rs.32985 cr till Feb'16 from the equity bringing down the sensex to 17 month low of 22495 from its record of 30000. As at the end of March 2016, India's forex reserves were USD 356 Billion.

Indian rupee traded in the range of 62.19 to 68.71 during FY 16.

The fiscal deficit in 2015-16 was under control and was only marginally higher at 3.92% of the GDP against the targeted 3.9%. This shows the Government's commitment to fiscal consolidation.

Developments in the Banking Sector

On the Monetary policy front, the Reserve Bank of India has been able to reduce repo rate by 100 basis points since January 2015 upto March 2016. To ensure faster transmission of policy rates to lower interest rates to borrowers, RBI has directed Banks to move away from the Base Rates to Marginal Cost based Lending Rate effective from 1st April 2016. RBI, in its recent bi-monthly policy has reduced repo rate by further 25 basis points and has taken several other measures to address the liquidity shortage. These measures are expected to help in reducing the interest rates in the economy with expectation of stable CP-based inflation at 5%. As a result credit growth is expected to improve.

Despite global financial markets' improving volatility, the 10 year g-sec yield fell to 7.47% (decrease of 27 bps) as at the end of March 2016 on account of RBI's monetary easing measures during the course of the year and the fiscal consolidation resorted to by the Government.

The fiscal goneby was the second continuous year witnessing low credit off take and increasing stressed assets in the banking sector. One of the main reasons for the muted loan growth was steep decline in domestic demand and subdued global demand for exports resulting in lower consumption and lower capacity utilisation.

Aggregate deposits of all Scheduled Commercial Banks showed a growth of 11.3% in the fiscal 2016 as against growth of 10.7% in the brvious year, while advances growth stood at 11.5% against 9.6% in the brvious fiscal.

The year has been very challenging for banking industry on the asset quality front with huge surge in bad loans and provisions against the bad loans after the regulator RBI's Asset Quality Review directing many banks to reclassify the loans and set aside provisions against stressed assets.

The year under report also witnessed RBI issuing licences to Payment Banks and Small Banks to further deepen the Banking services across the country.

With the enactment of Insolvency and Bankruptcy Bill by the Parliament, it is expected that it would accelerate the winding up process for defaulting companies and provide a quicker exit route for lenders who are already grappling with the bad loans in their books.

Business Segment Overview

During the year, your Bank continued to focus on rebalancing of its business mix, through increased accent on the retail business both under liability products and asset products.

Personal banking segment continued to be the thrust area. The bank’s retail operations recorded robust growth during the year 2015-16.

Growth in deposits have been quite imbrssive, with aggregate deposits reaching a level of Rs.50079 cr, a growth of Rs.5389 cr (12.06%) over the brvious year growth rate of 2.13%. The aggregate deposits of All Scheduled Commercial Banks showed a growth of 11.3% in the fiscal 2015-16.

The share of CASA deposits to the aggregate deposits increased from 22.02% in March 2015 to 23.31% in March 2016. Savings bank deposits recorded a growth of 21.13% from Rs.6314 cr as on 31.03.2015 to Rs.7648 cr as on 31.03.2016. Demand deposits grew 14.14% in the year under report from Rs. 3528 cr as at the end of FY 15 to Rs. 4027cr at the end of FY 16. CASA deposits grew at 18.6%.

Retail Term deposits viz: Term Deposits of Less than Rs. 1 cr, constitute 78.19% and Term Deposits less than Rs. 5 cr constitute 84.4% of the total term deposits as at 31.03.2016. Your Bank has continued its conscious policy of shedding high cost/bulk deposits during the year.

Corporate and Institutional Group (CIG)

Your Bank's Corporate and Institutional Banking Group provides combrhensive client focussed services comprising working capital finance, term loans, specialised corporate finance products, trade and transaction banking services and liquidity management solutions.The Bank's customers under this segment are mostly mid corporates. Your bank prioritised credit quality and all offerings made following a tight credit appraisal of the clients risk profile as well as pro-active monitoring of credit risk. For this purpose the Bank has a Centralised Loan Processing Cell (CLPC) at various Divisions.

As on 31st March 2016, your Bank's CIG advances were at Rs.13763 cr accounted for 34.86% of the Advances portfolio. Due to your bank's highly selective approach in taking further exposure in the Corporate segment, resulted in a decline of 1.67% in FY 16.

Commercial Banking Group (CBG)

Your Bank provides credit to all customers under SME segment, traders and others whose credit needs are upto Rs.25 cr. Your Bank offers industry specific products by understanding customer businesses, market conditions and industry developments. This distinctive approach translated into mutually beneficial relationships with customers in these segments. Your bank offers customised products like Timber plus, Pharma plus, Transport Plus, Textile Plus, Rice Plus, Steel Plus, Commodity Plus etc., tailored to suit the specific requirements of each of these trades.

Your Bank conducted CBG SMX Program, a specialised marketing initiative, with the objective of strengthening sourcing engine, reducing TAT, providing mentoring and support as well as training to the branch heads and credit officers. SMX App was provided to track proposals sourcing as well as processing. The App provided interface on web and mobile for sales teams at Central Office, Divisional Offices and Branches to track the proposals in real time. The programme yielded desired results with the sourcing of more than 900 proposals worth Rs. 2500 cr during the year under report.

CBG digitisation has been taken up which resulted in reduction of TAT considerably. Lead Management System was also introduced to ensure efficient lead capture, timely customer meetings and effective capture of customer responses.

The Bank's CBG advances were at Rs.12763 cr constituting 32.33% of the total advances as on 31st March 2016.

Personal Banking Group (PBG)

In tune with the objectives of building quality, granularity and profitability in the assets portfolio, your bank has many Retail Banking Products such as Car loans, Personal Loans, Home loans etc.

As on 31st March 2016, your bank’s retail advances were at Rs.5918 cr constituting 14.99% of the total advances.

Debit Cards

Your Bank had issued 8.93 lakh debit cards during the year taking the total number of cards issued viz: ATM card, VISA Master, Master EMV, RuPay Debit, RuPay Kisan etc to 62.56 lakh.

POS

Your Bank added 923 POS terminals across various merchant locations throughout the geography, taking the total to 10157 as at 31.03.2016. During the year under report over 96 lakh transactions were made through the KVBPOS and the gross value of the transactions routed through the terminals were at Rs. 2847.62 cr for FY 16.

Agricultural Banking Group (ABG)

For boosting its agricultural lending portfolio constituting direct lending to the farmers/group of farmers, the Bank has extended assistance to individuals/groups/entities engaged in farming, agricultural processing units, entities supporting agricultural sectors, Jewel loans and Warehouse Receipt loans to farmers etc.,

The Bank has in place dedicated agriculture officers in Divisions and Branches. In respect of Jewel loans the Bank has improved the product with added features and its service delivery at the branches.

In order to improve the Jewel loan portfolio which witnessed a decline in the last fiscal 2014-15, the Bank adopted a combrhensive marketing initiative to reverse the portfolio decline. Bank conducted Jewel Loan Utsav. Under the program the activities undertaken were: marketing through SMS and radio campaigns driven at the Central Office, Division and Branch driven on the ground marketing through jewel loan officers, appraisers etc which saw branches launch a number of initiatives. These activities resulted in positive increase of Rs.100 cr in the portfolio and agriculture jewel loan portfolio improved by Rs. 273 cr.

The Bank's ABG advances were at Rs. 7032 cr, constituting 17.81% of the gross advances as on 31.03.2016.

Transaction Banking Group (TBG)

The Bank's TBG group has a stabilised Cash Management Product (CMP) offering with payment and collection services for corporate clients and also Supply Chain Finance Solutions since FY 16. The solution supports the working capital function of any organisation through a robust integrated electronic transaction banking platform using a latest technology. The Bank offers a suite of Transaction Banking Solutions through its nation wide network of branches and correspondent banks. The products offered under Cash Management Services are: Collections & Payments. Under Supply Chain Finance, the products are: Vendor finance and Dealer Finance. Your Bank is positioning Transaction Banking as a niche product and expects to play a vital role in improving its Current Account (CA) Portfolio and advances portfolio in the years to come.

Outlook for the fiscal 2016-17

Indian economy is on the verge of a major transformation, with several initiatives set to be implemented shortly. Positive sentiments, improved consumer confidence and more controlled inflation are likely to prop-up the economic growth. Enhanced spending in infrastructure, speedy implementation of projects and continuation of reforms are expected to fuel the growth. The India Metrological Department (IMD) has reiterated its initial brdiction of "above normal" monsoon in this year's south west monsoon season. The projected plentiful rainfall is expected to bring an end to two consecutive years of drought. The GDP is expected to grow more than the last year's growth rate, driven by pick up in rural demand.

The Government is yet to announce the implementation of the Seventh Pay Commission recommendations and it is expected to be implemented in second half of the current fiscal. The implementation is expected to fuel inflation as also the growth.

These factors suggest that India's banking sector is also poised for growth as the rapidly growing business would turn to banks for their credit needs.

SWOT Analysis

Your Bank has displayed strong financial health across macroeconomic cycles in the Indian economy especially in a very challenging year for banks. The performance is borne out of the fact that your bank has requisite competency and execution skills built over the century. Your Bank continued to deliver good profitability while at the same time maintaining its asset quality. The asset quality of the bank has been the result of reduction of adverse selection, strong credit appraisal processes, high level of due diligence, robust risk management processes in place. The Bank has been maintaining a PCR of above 75% over many years now.

Century old bank has its young and talented staff with higher productivity which has reflected in increasing per employee business and the per employee profits recorded year after year.

The Bank which started itself as a SME bank will continue to position itself as a more combrhensive player to cater to the needs of SME customers in the retail segment.

Your Bank has expanded its footprints with 667 branches across the country and it has shown commendable performance over the years. The Bank continues to maintain significant brsence in the south with more number of branches and a strong franchise.

With the rise in the infrastructure projects and clearance of stalled projects, growth is expected. The licences issued for the new entrants viz: Payment banks and Small banks, competition is expected to increase among the existing players.

Information Technology in banking is a survival and growth strategy and is fundamental to the effective functioning in the Banking Industry. While your Bank has always been ahead in employing technology in bringing about innovative products and efficient customer service, considering the developments including disruptive technology in the financial industry, the Bank is in the process of developing several digital initiative to provide combrhensive digital solutions to retail and SME customers.

Indian economy which has slowed down in the past couple of years, has tremendous potential demand which remains latent. With Government initiatives to stimulate growth especially through activating stalled projects, structural reforms and expanding public spending, the release of this latent demand is expected to be strong growth drivers of the economy. The credit demand and growth opportunities are expected to be of substantial magnitude in the times to come, when Government efforts materialise. Your Bank is well positioned and well poised to capture these opportunities and realise its growth targets rapidly.

Risk Management Function

A robust risk management system will ensure long term financial security and success of the Bank. The Bank has put in place a robust and integrated Risk Management system to ensure that risks assumed by it are within the defined risk appetites and monitored. The overall responsibility of setting the Bank's risk appetite and effective risk management rests with the Board and apex level management of the Bank. The risk is managed through following Committees viz: Risk Management and Asset Liability Management Committee of the Board (RMALM), Credit Risk Management Committee (CRMC), Asset and Liability Management Committee (ALCO), Operational Risk Management Committee (ORMC) and Market Risk Management Committee (MRMC). These Committees work within the overall guidelines and policies approved by the Board.

The Bank has Policies for identification, measurement and management of major risks- liquidity risk, market risk, credit risk and operational risk. These policies are reviewed and updated from time to time, keeping in view the dynamic business environment, Risk Management Department acts as a nodal centre for co-ordination with other Departments/operating units engaged in managing risk in their respective business areas.

A combrhensive Asset Liability Management (ALM) System is in place for effective management of Liquidity Risk and Interest Rate Risk, which are identified, measured and monitored by the ALCO through the brscribed Statements viz: Statement of Structural Liquidity, Statement of Short Term Dynamic Liquidity, Liquidity Coverage Ratio statement, Statement of Interest Rate Risk Sensitivity (Traditional and Duration Gap methods), Stress Testing on Liquidity and Earnings etc. ALCO discusses these Statements in detail and takes corrective action where necessary.

As per the Bank's ALM Policy, a Contingency Funding Plan is brpared & reviewed on quarterly basis. Benchmark Prime Lending Rate (BPLR)/Base Rate (Lending Rate) and Card Rates for Deposits are discussed and decided by ALCO.

Credit Risk: The Bank has a structured and standardised credit approval process which includes combrhensive credit rating of proposals. For Retail Loans, the Bank uses a risk scoring model. In order to control the magnitude of credit risk, internal and prudential norms on benchmark, financing ratios, single borrower and group borrower exposure, industry specific and sectorspecific exposure, exposure to sensitive sectors, hurdle rate for taking a fresh exposure etc have been set up. Credit appraisal systems and a clearly defined delegation of powers form an integral part of the Bank's Credit Policy.

Market Risk is largely managed through adherence to various policies, in the conduct of the investment and trading activities along with adherence to various risk limits like position limits, stop loss limits, Management Action Trigger (MAT) through constant monitoring of the risk positions. Scenario Analysis on market risk covering events such as decline in stock markets, rise in bond yields and foreign exchange rate movements are conducted regularly as per the Stress Testing Policy of the Bank to assess resilience of investment portfolio.

One of the major tools for managing Operational Risk is to put in place a well established internal control system, which includes segregation of duties, clear management reporting lines and adequate operating procedures. Most of the operational risk events are associated with weak links in internal control systems or laxity in complying with the existing internal control systems and procedures. The Bank has suitable systems and procedures for managing and control of operational risks.

The Bank has in place BASEL III capital frame work implemented. Accordingly Bank is computing Capital to Risk weighted Assets Ratio as per Pillar I of Basel III frame work. To improve transparency of capital base, Bank plans to move over to advanced approaches of Basel II guidelines for credit, market and operational risks in a phased manner.

Internal Control, Inspection and Audit

The Bank has in place a well established independent audit system and structure to ensure adequate internal control for safe and sound operations. Your Bank's Internal Audit Department (IAD) performs independent and objective assessment to monitor adequacy, effectiveness and adherence to internal control systems and procedures laid down by the management and extant regulations. This function supports the Bank's role in safeguarding its assets. The macro level guidance and direction on the control aspects is provided by the Audit Committee of the Board (ACB). The Committee takes an overall view on the internal control aspects and formulates the related policy guidelines.

An efficient and sound internal audit provide high quality counsel to the Management on the effectiveness of risk management practices and internal control mechanisms as also the regulatory compliance by the Bank.

Internal Audit is carried out under Risk Based Internal Audit (RBIA) as envisaged under Risk Based Supervision of RBI with focus on assessment of risks on the basis of inherent business risk and internal control mechanism. RBIA lays greater emphasis on the internal auditor's role in mitigating various risks while at the same time continuing the traditional risk management and control methods involving transaction testing etc. RBIA not only offer suggestions to the management for mitigating current risks but also on potential future risks, thus playing a vital role in the risk management process of the bank.

Under RBIA branches have been categorised into three groups as per risk perception and are subject to varying degrees of audit. The Internal Audit Department reports to the MD & CEO for day to day activities and to the Audit Committee for Audit Planning and Reporting. As against the plan to conduct RBIA during the year your bank has conducted RBIA in respect of all branches except 5 branches which are under low risk category.

Your bank also subjects its operations to Concurrent Audit by various experienced audit firms to complement its Internal Audit function.

Concurrent Audit also covers core activities such as Treasury operations, International Division, Regional Processing Centres, ATM Cell, Demat cell, other Operations and branches.

Concurrent Audit of select branches are done by external audit firms taking into account risk perception and business turnover. During the year 2015-16, 298 branches covering 83% of the total business of the Bank were subjected to concurrent audit.

In addition to the regular inspection and concurrent audit, the Bank also conducted surprise inspection at identified Large Branches and High risk rated branches as and when the need arose for such audits.

Apart from the RBIA and concurrent audits, your bank also conducts revenue audit of identified branches once in a year. During the year 2015-16, 396 branches were subjected to revenue audit.

Information Security Audit is conducted once in a year covering all branches and back offices viz: Central Office, Divisional Offices, Regional Processing Centres etc. During the year under report the bank conducted IS Audit across 658 branches/offices.

Management Audit of all the Central Office departments were conducted during the year 2015-16.

Your Bank has a system of re-appraisal of jewels under Jewel loan portfolio once in a year covering all branches which have the Jewel Loan portfolio. During 2015-16, in 575 branches, reappraisals were carried out.

Currency chests of the Bank are subjected to inspection at periodical intervals as per extant guidelines of RBI. Inspection of all the five currency chests of the Bank were covered during the year under report. In order to maintain a healthy credit portfolio especially in the case of advances with a fund based limit of Rs. 5 cr and above or the total exposure of Rs.10 cr and above, your Bank has introduced onsite credit audit of borrowal accounts from the fiscal 2017 onwards. The main objective of credit Audit is to ensure that the Bank's laid down policies in the area of credit appraisal, sanction and loan administration are complied with and improvement brought about in the quality of credit portfolio with resultant favourable impact on the profitability and reduce stressed assets.

Compliance Function

Your Bank has put in place a combrhensive Compliance Policy, the same was also reviewed during the year under report. The Bank has followed various guidelines issued by RBI regarding compliance functions in the bank. The Bank has also ensured that Statutory/Regulatory and any other mandatory information required to be sent to RBI and other regulators.

The Bank is focusing employee education through circulars, frequent contact sessions etc to sensitize them of the need for a strong compliance culture and also striving to develop a robust compliance culture in the Bank. The Department is functioning as a focal point for regulators like RBI, SEBI etc for all compliance related matters.

Your Bank has also conducted Snap audit in 275 branches to ensure that the compliance aspects are followed at the branch level.

Your Bank has put in place KYC/AML Policy approved by the Board of Directors and transaction monitoring procedures as per RBI guidelines. The Bank has an AML cell at Central Office which uses AMLOCK software for examining and identifying suspicious transactions. The customer accounts have been divided into different risk categories and alerts are generated based on brdefined parameters.These alerts help in identification of suspicious transactions which are further reported to FIU-INDIA.

Financial Performance with respect to Operational Performance

In 2015-16, the Bank strove to improve its performance on fronts despite significant challenges emanating from the macroeconomic environment. Your Bank has delivered a steady financial and operating performance for the financial year 2015- 16.

Interest income increased from Rs.5395.88 cr to Rs.5443.40 cr, a year ago, showing a growth rate of 0.88%. Interest expended decreased from Rs. 3929.97 cr to Rs. 3662.03 cr. The Net Interest Income grew at 21.52% from Rs.1465.91 cr to Rs.1781.37 cr.

Non-Interest Income rose to Rs.706.81 cr from Rs.580.84 cr, registering a growth of 21.69%.

Your Bank's operating revenue recorded an increase of 21.57% from Rs.2046.75 cr to Rs.2488.18 cr.

The operating expenses increased from Rs.1103.45 cr to Rs.1252.76 cr, recording a growth of 13.53%. In the operating expenses, Establishment expenditure registered a margin rise of 0.06% from Rs. 547.05 cr in FY 15 to Rs. 547.38 cr in FY16. Other operating expenses increased by 26.77% from Rs. 556.41 cr to Rs.705.38 cr.

Your Bank posted an Operating Profit of Rs.1235.42 cr for the fiscal 2015-16, against Rs.943.29 cr recorded in the corresponding period a year ago, an increase of 30.97%. Your Bank has crossed the milestone figure of Rs.1200 cr for the first time.

The Net profit for the year ended 2015-16 posted an increase of 22.26% from Rs.464.28 cr in FY 15 to Rs. 567.63 cr in FY 16.

For the year ended the Net Interest Margin of the Bank rose by 52 basis points from 2.91% to 3.43%, compared to the brvious fiscal 2014-15.

The Return on Average assets was at 1.03% at the end of the fiscal under report as against 0.88% in the brvious fiscal 2014- 15.

The Earnings per Share (EPS) increased from Rs. 39.86 as at 31.03.2015 to Rs. 46.59 as at 31.03.2016. Book value of share was at Rs. 375.25 as against Rs.348.42 as at the end of 31.03.2015.

The Bank's Return on Equity was at 12.41%, up from 10.93% delivered in FY 15 and the Return on Assets was at 1.03%, an increase of 15 basis points from the brvious year ratio of 0.88%.

Net owned funds of your bank were Rs.4572.95 cr as on 31.03.2016, showing an absolute increase of Rs.326.92 cr over the brvious fiscal.

Human Resource Management

Your Bank recognizes human capital as the most prized asset and has developed a HR strategy with the objective of encouraging employees to excel in their performance to achieve business targets.

To meet the requirements of Business Growth, Branch Network Expansion and attrition/retirements, the Bank recruited 463 employees during the year. The total staff strength of the Bank as on 31st March 2016 was at 7211 as compared to 7197 on the last day of the brvious fiscal ended on 31st March 2015. Due to effective manpower planning and judicious recruitment, your bank has an excellent team of young staff whose average age is 33. The Bank provides optimum opportunities to its employees to rise up in their career and shoulder higher responsibilities.

Business per employee of the Bank has been consistently increasing over the years and during the period it stood at Rs.12.41 cr up from Rs. 11.30 cr during the FY 15. Profit per employee increased from Rs. 6.45 lakh as at 31.03.2015 to Rs. 7.87 lakh as at 31.03.2016.

Your Bank has conducted 178 in house programme for 3929 participants. The bank has also nominated 454 participants for external training programmes at NIBM-Pune, IIM - Bangalore and Lucknow, IDRBT, Hyderabad, IIBF, Mumbai etc.,

The Bank has an e-learning platform for assessments and tests on various topics.

Your Bank has also undertaken several initiatives to incentivise your employees for ensuring excellent performance as well as for employee well being. The Bank has put in place a performance linked cash incentive scheme wherein the qualifying employees were provided with cash incentives based on their performance.

The Bank made improvements in the existing Career Development System to reduce subjectivity and expanding its implementation to all roles. CDS now covers all officers of the Bank and the same was used as input for promotion considerations.

The Bank has in place an Anti Sexual Harassment Policy in line with the requirements of the Sexual Harassment of Women at Work Place (Prevention, Prohibition and Redressal) Act, 2013. An internal compliance committee has been set up to redress the complaints received regarding sexual harassment. All employees working in the Bank are covered under this policy. There has been no complaint during the year under report.

The Industrial relations climate in the Bank stayed amicable throughout the year. The rebrsentatives from workers and officer unions participated in various discussions on developmental and other issues with the Management and efforts were made to resolve the same.