|
It gives me immense pleasure in presenting the Annual Report along with the Balance Sheet and the Profit & Loss Account for the year ended 31st March, 2008 on behalf of the Board of Directors.
The year under review has witnessed a landmark in the history of bank to prove our excellency. Last AGM had passed the resolution of merging Sangli based Shri Parshwanath Co-op. Bank Ltd. and I am pleased to inform you that, our bank has succeeded in merger of Shri Parshwanath Co-op. Bank Ltd; Sangli. Merging function was held at Sangli on 29 Nov. 2007 with auspicious presence of Hon. Rajendra Chavan, Collector, Sangli & Hon. Manohar Tribhuvan, Addl. Registrar, Co-op. Dept. Pune. Accordingly with effect from 3rd Dec. 2007,the date of acquisition, Shri Parshwanath Co-op. Bank with its 10 branches are functioning under our brand. Thus Bank's network is increased to 48 branches, also staff strength is increased by 124. This opportunity has given us rare distinction of being the first bank at Taluka level to effect merging of other bank. It is this important event that deserves a very special mention in the history of our Bank.
Many factors actively contributed to the success of pre & post merging stages like Due deligenece report, Immediate approval from Regulators, Software change, data migration implemented by our I.T. team etc. It is worth mentioning that, from very first day, merged branches are working in our software. Needless to mention, the best Co-operation offered by Board of Directors, clients & staff of Parshvanath Bank led to an ideal merging, and as a resultant effect, not a single complaint has
been received during the post- merging period.
In addition to the business growth, one indirect benefit, gained out of merging process, lies in the fact that, now we would be in a position to relocate the existing branches of erstwhile Pashwanath Bank, as per our business expansion plan. This would be as good as opening of new branches at strategic locations. These achievements is the outcome of dedicated hard work of top management, proper planning, skillful execution, loyalty of customers and of course the blessings & support of shareholders.
The performance of acquired bank in very short span of four months ended on March 31, 2008 is much better and impressive to contribute the profit of Rs.36.81 lakh. Eight out of ten branches are in profit with deposit increase of Rs.6.02 Crs. and outstanding recovery performance of Rs.4.34 Crs. Three branches viz.Vita, Islampur & Miraj of acquired bank have bagged prestigious account of LIC, which not only helped us in increasing the business, but also added value to it.
It is a matter of pride to all of us that the bank is awarded with, “Padmbhushan Vasantdada Patil Award 2006-07" for Best Urban Co-op. Bank in Western Maharashtra by The Maharashtra State Co-op. Bank Association, Mumbai. This is the best achievement and memorable event in the year under review which, I deem the grand success of our top management team and their extraordinary efforts. This prestigious honour was awarded on April 27, 2008 in a graceful function at Mumbai.
The worldwide rise in crude oil prices, coupled with demand and supply gap, has resulted into inflation rise. In order to avert further serious implications, Reserve Bank of India has taken precautionary measure and increased C.R.R. in current year from time to time. Obviously, rates of interest both on Deposits and Loans are bound to witness steep rising trend, making Loans and Advances costlier to borrowers. Naturally, this will have a direct impact on the overall profitability of Banks. Of course, management is keeping constant & vigilant watch on situation and has kept the rates of interest in line with the market trend and banking industry.
At the end of the year under review, recovery of overdues was a major task for banking in general. To add a fuel, announcement of Agricultural Debt Waiver & Relief Scheme 2008 has made it a herculean task. No specific guidelines were received by the banks and confusions amongst performing borrowers aggravated the recovery problem. In this critical & complex situation, our management and recovery unit encouraged the spirit of borrowers and counseled them, which has resulted in sustaining the tempo of good recovery and to achieve the net NPA 2.37%.
G-Secs tradings, Repo transactions are routed through Treasury Department in our Fort Mumbai branch. Bank has invested
sizeable amount and NDS, the advanced system is introduced from August 22, 2007 to foster the trading transactions and make our treasury operations more efficient. Moreover, we also make it available to other co-op. banks.
To develop financial discipline amongst borrowers and thereby allowing rebate in interest rate, a Credit Rating System was introduced since last year. The concept was emphasized on high scale and Customer Meets were organized at Karad, Kolhapur, Sangli & Pune. We have received good response and inputs to fine tune our policies and practices, ultimately it helps to retain the best clients and improve the asset quality.
Camp Pune branch is shifted to new and adjacent premises on September 22, 2007 to effect savings in costs. The new location is strategic and premises is well furnished, precious. The shifting ceremony was performed at the auspicious hands of Shri. Subhashrao Joshi, the Family Chief of our bank.
I am proud to mention here that, our Family Chief, Hon. Subhashrao Joshi, has been nominated as member of the “Think Tank” constituted by Co-operative Department, to sort out the problems and difficulties being faced by Co-operative Societies. It is his profound knowledge, prolonged experience in banking and studious aptitude, because of which, such honour has been awarded to him. Further one of our Directors Adv. Prakashrao Chavan, a practicing lawyer has been appointed as “Notary” by Central Govt., while another Director Shri. Vitthalrao Jadhav, has been elected as Member of Z.P., Satara. This has no doubt, elevated the image of our Bank.
Co-operative Department has organized various programmes to celebrate the Centenary of Co-operative Movement. Respected Subhashrao Joshi & CEO Dilip Gurav have actively participated in the seminar held at Satara & Karad. Family Chief was
felicitated as best & eminent Co-operator.
A group of Srilankan delegates including Co-operative leaders and Govt. officials visited the bank on 28th Feb. 2008.
In order to ensure timely and efficient loan disbursement, similarly with an intention to adopt legitimate professional approach, Loan sanctioning powers were delegated to officers at various levels. The Board has appraised the said working and was liberal to enhance the delegation powers. Since the policy was found to be effective and useful, it is decided that the same will be continued.
With a view to encourage the talent of top management and have interaction with regulators, we have arranged a training program targeted at board members, executives & managers at Head Office. Shri. L.M. Kamble, General Manager, RBI was the faculty. He expressed utmost satisfaction towards working of our bank, indicating better prospects in days to come. Also Bank has hosted a training programme of RBI on Offsite Surveillance System for co-op. banks across the district. Faculty from RBI, Shri. D.G. Kale, Dy.General Manager and his colleagues appreciated the activities of Staff Training & Research Centre. I am happy to mention that, RBI has selected our bank as ‘Nodal Bank’ for Satara district, considering the infrastructural facilities of our Bank.
Innovative concept of ‘Business Partner’ was the main theme of conference held on January 24, 2008. A conference exclusively for Co-Op. Banks, Credit Societies and other high value customers was arranged to address various business related issues, customer needs and expectations. Nearly 118 representatives participated in the conference and we had a fruitful interaction with them. Since the group business is mantra of rapid growth, the theme ‘Business Partner’ was well appreciated and conference achieved good success in terms of sustaining healthy competition and to be customer centric.
During the year under report, CA. Uday Kulkarni, CISA Auditor, was appointed to conduct EDP (Process) audit of present software. Rectification of bugs & deficiencies and compliance
with the audit report is under progress.
It is very important to maintain the profitability in highly
competitive spread and thinned business margin. For other income various avenues
were worked out and bank has made tie-up arrangement with Max New York Life
Insurance on April 6, 2008 and expanded the scope of customer service. This is
referral insurance business which helps to increase non-interest income. We are
expecting very good results in near future.
Competition and changing market forces led us to set up
independent Marketing Department. We aim to expand the customer base with utmost
priority of retaining old ones. This department also cares to design business
products as per customer needs, referral insurance business, providing franking
facility and potential for forex business. We have also set up Large Advances
Monitoring Cell for effective supervision and control over large advances and
thereby to improve the asset quality.
Karad Urban Samajik Kritdnyta Nyas offers its helping hand to
the members suffering from physical disability, heart disease, diabetes etc.
Such financial assistance to the tune of Rs.2.00 lac was made available to needy
members during the year under reveiw.
The said trust had decided to honour by offering “Dr.D.S.
Erram Kritdnyata Purskar” to such persons, who have contributed to the
progress of the Urban Family and whose contribution to the social benefit is
commendable. The first such Award is given to respected Vasantrao Varadkar,
alias Appa, Ex-Chairman of the Bank.
Let me summarize the financial results for the year
2007-2008:-
The balance sheet of the bank grew by 27.18% compared to the
last financial year. During the year under review, bank recorded a growth of
27.10% in deposits to reach Rs.719.37 Crs., while advances demonstrated a growth
of 16.78% to reach Rs.455.11 Crs. Bank deserves its Strong Status through
compliance and achievements of prudential norms. The gross NPA of the bank is
5.63% and Net NPA is 2.37%. The slight increase in NPA is due to higher NPA of
merged bank, however we have succeded in arresting fresh NPAs with effective
recovery management. Paid up Share capital of the bank increased by 21%. This is
consecutive second year witnessing such a remarkable growth to form total
capital funds of Rs.41.58 Crs. As compared to last year, productivity is not
increased in relation to business growth, it is due to addition of 124 staff of
merged bank.
Bank has succeeded in strengthening the capital base and
ultimately achieved the CRAR 10.34% well above the benchmark. I do agree that,
as compared to last year, the CRAR percentage has been slightly declined, which
is obvious due to merger effect.
I am happy to inform that, the Bank’s first merger is
successful. NPA of SPCB as on date of acquisition was Rs.876.86 lakh which is
reduced by Rs.410.77 lakh as on 31.03.2008. There is also significant
achievement in reducing the cost of acquisition.
The gross profit of the year under review is Rs.8,41,64,732.70 lakh recording a growth of 11.08% After making all the statutory and income tax provisions bank has earned net profit of Rs.205.01 lakh.
Commitments & Goals:
Management has set following self imposed targets for the ensuing financial year.
-
Business to Cross Rs.1500 Crs.
-
Restrict Net NPAs below 1%
-
Implementation of Core Banking Solution
-
Deserve Strong Scheduled Status
-
Branch expansion through relocation of branches of the acquired bank.
-
Initiating foreign exchange business
-
To provide RTGS facility for fund transfer
These achievements and progress to me is the outcome of unstinting support of members, customers and well wishers and I believe the same will strengthen the pillars of Trust and Confidence.
As a matter of fact, Annual General Meeting is required to be held after Statutory Audit, however on account of delayed appointments of statutory auditors since last year, the Commissioner for Co-operation has allowed Grade I banks to conduct Annual General Meeting with reference to the Report of Internal Auditors. I am pleased to mention here that our bank has received the same and the Annual General Meeting of the bank is convened in advance to have ample time for planning and execution of policies.
I would also like to share a joyous event with you, I am about to give final touches to this Annual Report, Kolhapur Dist. Co-op. Banks’ Asso., has crowned the bank with five prestigious awards viz.
These prestigious honours were awarded on 17-06-2008 in graceful function at Kolhapur.
I take this opportunity to express sincere gratitude on behalf of the Board to shareholders and valuable customers for their support & continuing patronage. The Board is very thankful to all of you and various individuals and institutions including Co-operative Department, Reserve Bank of India, journalists, auditors and all those known and unknown supporters. Board trusts that the bank will continue to receive their valuable and vital support in the coming days.
For and on behalf of the board
Dr. Subhash S. Erram
Chairman
|
