Annual Report SIB 2019-20

Experience Next Generation Banking
DIRECTORS’ REPORT to the shareholders
To the Members, The Bank during the year focused on Retail advances and CASA.
The Board of Directors is pleased to place before you, the 92nd CASA has grown from `19,467.15 crore as on March 31, 2019
Annual Report of the Bank along with the Audited Balance to `20,759.61 crore as on March 31, 2020, with a growth of
Sheet as at March 31, 2020, the Profit and Loss Account and 6.64%. The Savings bank deposits grew by 8.78% on a year
the Cash Flow Statement for the year ended March 31, 2020. on year basis.
PERFORMANCE OF THE BANK The Bank has accorded priority to meaningful financial inclusion
The performance highlights of the Bank for the financial year during the period under reporting while opening new banking
ended March 31, 2020 are as follows: relationships.
(` in crore) Advances
Key Parameters 2019-20 2018-19 During the year, the gross advance of the Bank registered a
Deposits 83,033.89 80,420.12 growth of 2.97%, to touch `65,524.02 crore. The subdued
growth was on account of a conscious decision to reduce the
Gross Advances 65,524.02 63,635.92
corporate loan book and to concentrate on agriculture, SME
Total Gross Business 148,557.91 144,056.04 and retail banking. The same is well evident from the y-o-y
Operating Profit 1,645.64 1,238.98 growth of 15% registered in these segments.
Net Profit 104.59 247.53 The increased thrust on the retail lending segment has resulted
Capital & Reserves 5,474.80 5,335.33 in good off take of various products like MSME loans, Housing
Loans, Vehicle Loans, Gold Loans etc. which renders a wider
Capital Adequacy (%) - Basel-III 13.41 12.61 spectrum of deserving customers.
Earnings Per Share (EPS) :
During the year, which can largely be seen as a year of
(a) Basic EPS (in `) consolidation, the Bank enforced higher standards for credit
0.58 1.37
[face value ` 1/-] underwriting and has put in place enhanced administration
(b) Diluted EPS (in `) standards. The balanced growth has resulted in achievement of
0.58 1.37 the regulatory prescriptions with respect to major priority sector
[face value ` 1/-]
categorization and agricultural lending.
Book Value per Share (in `)
30.25 29.48
[face value ` 1/-]
% of Target % of Achievement
Gross NPA as % of Gross Advances 4.98 4.92
Overall PSL 40.00% 41.86%
Net NPA as % of Net Advances 3.34 3.45 Agriculture 18.00% 18.49%
Return on Average Assets (%) 0.11 0.29 Small & Marginal Farmers 8.00% 9.47%
BUSINESS ACHIEVEMENTS Non-Corporate Farmers 12.1% 12.31%
Micro Enterprises 7.50% 7.62%
The Bank has achieved a Total Business of `1,48,557.91 crore,
consisting of Deposits of `83,033.89 crore and Gross Advances Weaker Sections 10.00% 12.01%
of `65,524.02 crore as on March 31, 2020. Break-up of exposure under Priority Sector as on March 31,
Deposits 2020 is furnished below:
The Total Deposits of the Bank increased from `80,420.12 crore Amount
to `83,033.89 crore as on March 31, 2020, registering a growth (` in crore)
of 3.25%. Agriculture & Allied activities (Net of PSLC) 11412.20
The break-up of the deposits as on March 31, 2020 is as under: MSME 18742.69
Other Priority Sector 2420.04
Amount % to total Total Priority Sector 32574.93
(` in crore) Deposits PSLC (General PS) 6737.50
Current Deposits 3,207.93 3.86 TOTAL PS (Net PSLC) 25837.43
Savings Deposits 17,551.68 21.14
The excess lending presented an opportunity in generating
Term Deposits 62,274.28 75.00
additional source of revenue of `45.43 crore during the year, by
Total 83,033.89 100.00 selling off the excess priority sector advances.
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DIRECTORS’ REPORT
FINANCIAL PERFORMANCE payouts from profits pertaining to the financial year ended March
Profit 31, 2020 until further instructions, this is with a view that the
banks must conserve capital in an environment of heightened
The Net Operating Income (Net Interest Income and other
uncertainty caused by COVID-19 pandemic. Accordingly, the
income) of the Bank increased by `617.34 crore (22.48%)
Board of Directors of the Bank have not recommended any
from `2,745.91 crore to `3,363.25 crore. The increase in Non-
dividend for the year 2019-20 (Previous Year, the Bank had
Interest Income was `319.54 crore (44.00%) during the year.
declared dividend @ 25% i.e. `0.25/- per Equity Share).
The increase was on account of improved performance from
Treasury operations. CAPITAL & RESERVES
The Operating Profit for the year under review was `1,645.64 The Bank’s issued and paid-up capital stood at `180.97 crore as
crore (before taxes and provisions) as against `1,238.98 crore on March 31, 2020.
for the year 2018-19. The Net Profit for the year was `104.59
crore as compared to a net profit of `247.53 crore during During the Financial Year 2019-20, 40,000 employee stock
the previous year and the profit available for appropriation is options were exercised under the Employee Stock Option
`381.32 crore as per details given below: Scheme.
The Bank has successfully issued Non-convertible, Fully Paid-
(` in crore) Up, Unsecured, Perpetual, Basel III compliant Tier 1 Bonds
Profit before depreciation, taxes and worth `500.00 crore during Q4 of FY 2019-20. At the time of
1,645.64
provisions
issue, India Ratings & Research had assigned a rating of ‘IND A’
Less: Provision for NPI 34.91 (Outlook: Negative).
Provisions for Non-Performing Assets 995.97
The capital plus reserves of the Bank has moved up from
Provision for FITL 36.95 `5,335.33 crore to `5,474.80 crore on account of exercise of
Provision for Depreciation on Investments 283.19 options and plough back of profits during the current financial
Provision for Income Tax 44.96 year.
Provision for Standard Assets 114.36 THE CAPITAL TO RISK WEIGHTED ASSETS RATIO (CRAR)-
Provision for Restructured Assets 0.02 Basel III
Provision for Other Impaired Assets (1.32) The Capital to Risk Weighted Assets Ratio (CRAR) of the Bank
Provision for Unhedged Forex Exposure (0.11) according to Basel III guidelines is 13.41 as on March 31, 2020 as
Provision for Non-Banking Assets 32.12 1,541.05 against the statutory requirement of 10.875 (including Capital
Conservation Buffer). Tier I CRAR constitutes 10.79 while Tier II
Net profit 104.59
CRAR works out to 2.62.
Brought forward from previous year 276.73
The Bank follows Standardized Approach, Standardized Duration
Profit available for appropriation 381.32
Approach and Basic Indicator Approach for measurement
Appropriations: of capital charge in respect of credit risk, market risk and
Transfer to Statutory Reserves 26.15 operational risk, respectively.
Transfer to Capital Reserves 174.68
LISTING AGREEMENT WITH STOCK EXCHANGES
Transfer to Investment Fluctuation Reserve -
The Bank’s shares continue to be listed on BSE Ltd. and The
Transfer to Special Reserve - National Stock Exchange of India Ltd. The Bank confirms that it
Transfer to Special Reserve u/s 36(1)(viii) of has paid the listing fees to all the Stock Exchanges for the year
Income Tax Act pertaining to earlier years - 2020-21.
including corresponding DTL
Dividend Paid for FY 18-19 45.24 EXPANSION PROGRAMME
Tax on Dividend Paid for FY 18-19 9.30 The Bank has been successful in widening its network across
Balance carried over to Balance Sheet 125.95 India with 935 banking outlets (875 Branches, 54 Extension
Total Appropriation 381.32 Counters, 3 satellite branches and 3 Ultra small branches) and
1,424 ATMs/CRMs. The Bank opened 7 new outlets (5 Branches
Dividend and 2 Extension counters) and 37 ATMs/CRMs across the
The Reserve Bank of India, vide its circular dated April 17, 2020, country during the financial year 2019-20. The branch network
has directed that banks shall not make any further dividend now covers 27 States and 3 Union Territories.
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DIRECTORS’ REPORT
The Bank plans to open 10 more banking outlets and 25 ATMs/ Going ahead, Indian financial markets would take cues from
CRMs during the financial year 2020-21. COVID-19 impact, vaccine discovery, Governments measures to
support the economy, economic recovery in India and across the
The Bank has also initiated steps to open currency chests at
globe and the RBI’s monetary and prudential policies.
Ernakulam, Kannur and Kolkata.
PRODUCTS NON-PERFORMING ASSETS (NPA)

During the FY 2019-20, the Bank introduced a bouquet of During the FY 2019-20, as a result of focused and sustained
new loan products to provide focused thrust on MSME and efforts, through prompt and effective measures under the
Agricultural Sectors. Funding against Electronic Negotiable SARFAESI Act, follow up of recovery cases pending before DRTs
Warehouse Receipt (e-NWR), SIB Store Plus etc. are classic and Civil Courts, one time compromise settlements of accounts,
examples. asset sale to ARC, etc., the Bank could recover `529.66 crore
(Including ARC sale of `74.71 crore) in NPA accounts. Special
In addition to the above, the Bank has initiated the process thrust was given to selection and underwriting of credit,
of digitisation of MSME loans and has introduced a platform effective due diligence and improvement in credit administration
for online verification of documents submitted by the loan to ensure improvement in the quality of assets.
applicants. The Bank has also initiated COVID-19 relief packages
to the existing borrowers. During the financial year, the Gross NPA of the Bank has
increased from `3,131.67 crore to `3,261.77 crore as on March
INVESTMENT 31, 2020 and Net NPA decreased from `2,163.62 crore as on
The Bank continued to be a significant participant in the March 31, 2019 to `2,150.78 crore as on March 31, 2020.
domestic exchanges and interest rate markets. It also capitalised In terms of percentages, the GNPA increased from 4.92% as
on the movement of bond yields to book profits and is now on March 31, 2019 to 4.98% as on March 31, 2020 and Net
looking at tapping opportunities arising out of relaxation in the NPA decreased from 3.45% as on March 31, 2019 to 3.34%
foreign exchange market, advanced interest rate products and as on March 31, 2020. In spite of prompt and effective credit
treasury solutions for customers. risk management and recovery measures, the fresh slippages
of accounts from the corporate sector, resulted in the increase
The Bank’s gross investment portfolio stood at `21,386.98 crore of gross NPAs. As a result of Bank’s strong focus on recovery as
as on March 31, 2020 compared to `19,524.98 crore as on well as the initiatives taken in underwriting credit and tracking
March 31, 2019, showing an increase of 9.54%. Investment early warning signals, the NPA level is expected to be moderate.
Deposit ratio moved from 24.28 as on March 31, 2019 to 25.80
as on March 31, 2020. DIGITAL AND INFORMATION TECHNOLOGY ENABLED
Profit on sale of investment for FY 2019-20 stood at `390.15 SERVICES
crore. Total interest income from investment for the year was Digital and Technological innovations in the banking sector
`1,391.06 crore. Yield on Investment (Profit + interest earned to have changed the way business needs to be conducted. It has
average investments) during FY 19-20 was 8.50%. introduced new business paradigms and is increasingly playing
a significant role in improving the services in the banking
The financial markets were highly volatile during the
industry. With the use of technology there is an increased
FY 2019-20, with USD/INR and crude oil prices being stable
penetration, productivity and efficiency. Digitalization and
initially and falling in Q4 due to the outbreak of COVID-19
innovative technologies are creating unprecedented disruption
pandemic. COVID-19 spread across the globe post its outbreak,
in the banking sector, and the rate of change is accelerating.
stalling major economies. The impact of COVID-19 outbreak
The digitization has been driven primarily by the growing use
on the economy and financial markets has been dramatic
of smart phones and emerging technologies like Artificial
and severe. Commodities’ prices deflated sharply with oil
Intelligence (AI) and Machine Learning (ML). Moreover, the
dropping over 70%. Equity markets also corrected sharply
increased comfort of accessing services online in other areas
across emerging market economies, along with India. The G sec
has paved the way for banking solutions to offer digital-only
yields and money market rates experienced wide fluctuations
propositions not burdened by traditional methods of providing
due to stressed economic scenarios, mounting fiscal stress,
financial services. The role of banking is redefined from a mere
sudden drop in crude prices, prevailing liquidity conditions and
intermediary to service provider of various financial services
depreciating exchange rate.
under one roof acting like a financial supermarket.
Slowing global economy has prompted all central banks to
be ready to support their economies at all costs with the US The Bank has grown with the effective use of the technology
Federal Reserve reducing interest rates to nearly zero. The by realigning technology and business to ensure better growth
Reserve Bank of India has also held surprise MPC meetings and in present competitive environment. A great deal of emphasis is
cut policy rates to support the economy and financial markets. being placed by the Bank on digitizing core business processes,
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DIRECTORS’ REPORT
reassessing organizational structures and harnessing internal  Portfolio Investment Scheme for NRIs, allowing them to
talent for digital journey. invest in Indian equity market.
 IMPS Facility to Exchange Houses for Foreign Remittance -
The Bank has streamlined its Information Technology
For our international client exchange houses/banks, the
organization structure by setting up Digital Banking Department
Bank has introduced IMPS based fund transfer on a 24*7
and IT Operations Department. Digital Banking Department
basis in addition to NEFT.
has been focusing on the innovation, improvement and
 Fraud Risk Management (FRM) Solution for channel
implementation of major customer facing/business oriented
transactions.
projects on the digital platforms viz., ATM, Net Banking, Mobile
 Fraud Risk Management (FRM) Solution for Branch
Banking and other emerging technologies such as Block chain,
transactions.
AI etc. IT Operations Department ensures highest level of
 Kiosk based Financial Inclusion Solution to enable the Bank
service & integrity of internal applications and infrastructural
reach nook and corner of the country, even in remote
support for a seamless growth of business operations. There is
villages using technology enabled tools.
significant growth in the share of digital transaction undertaken
 Payment options such as Automated Clearing House (NACH)
by customers to 84.35% during FY 2019-20. Adoption of
Payment Service, Cheque Truncation System (CTS), RTGS/
new technologies and embracing innovations has been one
NEFT, etc.
of the forefront policies of the Bank and its technology teams.
 Account Opening for NRI/MSME directly through Bank’s
Today, the Bank has a robust technology framework which
website.
caters to all customer requirements and provides a quick
 Instant QR code payments at merchant locations using
turnaround time.
Bharat QR, where Customers can use debit card (VISA/
The Bank is enriching its digital channels with lot of innovative Mastercard/Rupay) as virtual card inside Mirror +.
and value-added services for better customer experience.  Introduction of Interoperable Cash Deposit (ICD) Machines
to facilitate remittance through the recyclers to other bank
Retail Customers: accounts and vice versa.
The Bank offers the best in class technology services to cater  Enhancement in Security Operation Centre Operations.
the diverse requirements of retail clientele. The technology stack  Data Centre and DR Enhancement/initiatives [DR
includes well designed customer touch points, and robust back Management, Disk based Backup solution at DC, Net
end systems. backup Migration at DC and DR, Solaris OS Migration at DC
& DR and Data Center certification].
 Full-Fledged enterprise level systems  Automation of procurement and payments.
 Internet Banking – Sibernet  Robotic Process Automation.
 Mobile Banking – Mirror +  Application Program Interface (API) banking.
 All variants of VISA, Mastercard and Rupay Debit Cards.  Artificial Intelligence based banking services, such as
 ATM, Cash Recyclers (CRM) and other Value-added chatbots.
services  Central Plan Scheme Monitoring System (CPSMS), which
 Self-service Kiosk for Cheque deposit and passbook links to the DBT (direct beneficiary transfer) for instant
printing. receipt of Govt. subsidies to the beneficiaries of various
 Call Centre Solution catering to customers 24/7 Govt. schemes.
 Tab based Aadhaar e-KYC instant account opening for
 CRM solution providing 360-degree view of customers
individual Savings Accounts.
 Business Process Management (BPM) to enable
 Quick account opening facility at branch level through e-KYC
centralization
acceptance with reduced paper involvement, processing
 Technology backed Branch Infrastructure
time and interdepartmental dependency.
 Latest version of Core Banking Solution (CBS) from  Self on-boarding by opening SIB-Insta account through
Infosys, viz. Finacle 10 mobile devices using Aadhaar and PAN card.
 Enterprise Risk Management Solution
Corporate Customers:
 ATM network that spread across the country, which supports
MasterCard, VISA and Rupaycards, allowing customers  The Bank has Internet Banking facility from Infosys,
quick access to money. All ATMs are interoperable. which provides all the workflow capabilities required for
 Mobile Banking (with support for other bank money transfer each corporate. Moreover, it offers the security of Digital
through IMPS, P2A, P2M (issuer), USSD, UPI and Bharat QR.) certificate integration thereby balancing convenience with
 Missed call services for retrieving balance through SMS, etc. security.
 Online investment in primary and secondary markets  The Bank also offers Host to Host Integration facility (“Hi-Hi
through ASBA, e-trade and e-mutual fund modes. banking”) which handles fund transfer in a seamless fashion
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DIRECTORS’ REPORT
by real time interface with ERP solutions of corporate. This  Enhanced the unique feature in Mobile Banking application,
facility is available for 365*24*7 and the clients can securely e-Lock, to facilitate customers to set a threshold limit
access the system from anywhere. for cumulative debit transaction in a day through all
 Supply Chain Management Solution caters to the dealer/ channels. E-Lock enables customers to block/unblock debit
vendor financing requirement of corporate. transactions through all channels in a single click.
 The Bank has started offering business debit cards to the  Enhanced the digital channels to provide various service
business customers. requests like cheque book issuance, debit card issuance and
 On the business acquiring capabilities, the Bank has full others.
suite of payment acquiring including POS terminals, Bharat  Enabled KSFE KIIFB Pravasi Chit enrolment of NRI customers
QR, UPI QR etc. which gives the merchants a whole host through Mobile Banking.
of options for accepting payments instantly from their
 Ensured real time activation of Instant Cards using Robotic
customers.
Process Automation.
 Integration through APIs for full-fledged automation done
 Implemented Robotic Process Automation in various back
with several corporate and Govt. agencies.
office processes in centralized centres of Bank.
Digital/Technology initiatives/solutions embarked during  Jio recharge facility has been added in Mobile banking.
the year  DIYA has been launched by which customers can open
Services/solutions that the Bank has launched during the year, accounts from branches without the intervention of CPC
cell using Aadhaar based authentication.
 Enhanced to UPI 2.0 with ASBA facility, UPI mandate, linking
 The Bank has implemented Terminal Security Solution to
of UPI with OD and others.
boost ATM security.
 Facilitated FD/RD opening and closure through digital
channels.  Dynamic Currency conversion facility at POS machines.
 Vendor migration to ensure that all payment related  Enhanced the limit of cash deposits in CRM.
customer data is stored within India.  Alert has been enabled for decline transactions in ATMs.
 Facility to link Fast Tags issued by ICHML with South Indian  Process flow has been changed to maximise the debit
Bank account and to set standing instruction to recharge card issuance and mobile banking registration in order to
the same. promote the digital channels.
 Upgrade of ATMs to accept only EMV chip-based cards  Implementation of Work from Home facility for HO staff on
to ensure enhanced security of transactions. Chip-based the outbreak of COVID-19.
cards prevent card skimming or cloning and are effective in
 Implementation of Early Warning System to detect the
mitigating fraudulent POS transactions.
slippage of Accounts into NPA well in time.
 Launched remittance-only cards for enhanced deposit limits,
 Litigation Management System implemented to track the
especially for CD/OD account holders.
 Launched Rupay PMJDY debit cards for saral account as part
full cycle of suit filed accounts.
of financial inclusion.  Implementation of the new IFRS accounting system (Ind AS)
 Upgraded ATM switch to the latest version with major is progressing in a full-fledged manner so that the Bank is
enhancements to suit latest trends in Electronic Fund well prepared to meet the regulatory timelines.
Transfer industry, covering both new business functionality  EMM (Enterprise Mobility Management) implemented which
and technical scalability is a complete package of services which offers complete
 SIBerNet integration with multiple payment aggregators to data security on Corporate Owned Devices (COD) and Bring
facilitate online payment using Internet banking at many Your Own Devices (BYOD) devices for enterprises.
more e-commerce portals.  IT service management software which can track the IT
 Redesigned the Internet banking page to offer better assets and IT services implementation is in progress.
customer experience  Virtual Machine stack including Servers and Storage
 Facilitated creation and reset of debit card PIN using Mobile upgraded to accommodate new applications.
Banking or Internet banking channel as well.  Implementation of Aadhaar Vault for secure storage of
 Enabled KSFE Pravasi Chit enrolment of NRI customers Aadhaar Numbers.
through Internet banking.  Pre-approved personal loans through digital modes launched
 Implemented the facility to enable or disable international for Small ticket loans by applying analytics.
transaction facility of debit cards using Mobile Banking or  Spot Credit through digital modes for Current A/c customers
Internet Banking channel. based on transactions in their accounts.
 Launched Aadhaar e-KYC paperless instant account facility  Implementation of NEFT 24x7 facility through digital
with reduced processing time. channels.
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DIRECTORS’ REPORT
 Integration of School/College ERP systems for Fee collection. exposed to technology risks. It is therefore imperative for each
 Software module for internal customer satisfaction survey Bank to work out appropriate IT risk management strategies to
from the departments. secure its most vital information assets and to ensure that related
 Various Tax related regulatory changes are implemented. risk management systems and processes are strengthened for
 Email/SMS alerts launched for various transactions/financial smooth and continuous banking operations.
events.  IT Departments including Data Centre, DR Site and BCP
 Deposit Interest certificates to the customers through site are ISO 27001 certified for the implementation of
registered e-mail. Information Security Management System (ISMS). As a part
 Facility to provide instant credit to Loan Accounts launched. of ISMS implementation, the Bank has prepared IS Security
Policy and related IT risk management procedures.
Awards and Certifications received on Technology front
 The Bank also ensures that all cyber security requirements
The Bank has won various awards and accolades in the as per statutory/regulatory guidelines and best industrial
Financial Year 2019-20 also. These awards are a testimony of practices are implemented on priority basis.
Bank’s strategy, commitment and execution of various digital
 The IT organization structure is revamped with setting up
initiatives and has brought in an acclaim from both Customers
of a separate full time CISO Office for surveillance of the
and stakeholders.
security architecture/infrastructure and for coordinating
 IBA Banking Technology Awards, 2020 for the below security incident-response activities. Information Security
categories: Committee, IT Strategy Committee and the Board of
1. The Best Technology Bank of the Year - Winner Directors periodically review the cyber security posture of
2. The Best use of Data & Analytics for business outcome - the Bank. The Bank has formulated Cyber Security Policy
Winner and Cyber Crisis Management Plan to provide guidance
3. The Best IT Risk Management and Cyber security in addressing various cyber threat scenarios. The Bank has
initiatives - Joint Winner. also identified various types of IT risks and the required
4. The Best Payments Initiatives - Joint Runner Up preventive, detective and corrective cyber security controls
5. The Most Customer-centric Bank using Technology - are being implemented/updated.
Winner  The Bank has also ensured that Security Operation Centre
6. Best CIO - Runner Up (Across all Banks) (SOC) does 24*7 surveillance and keeps itself regularly
updated on the latest nature of cyber threats. The Bank is
 Infosys Finacle Client Innovation Awards for Customer
using Security Information and Event Management (SIEM)
Journey Reimagination & Ecosystem led Innovations.
monitoring tool, for identifying, monitoring, recording and
IT Training analysing security events or incidents within the real-time IT
During the year, many training programmes had been attended environment.
by the Bank’s officers in premier institutions such as IDRBT, NIBM,  The Bank has put in place advanced security solutions to
IBA, UIDAI to keep themselves abreast with the advancements manage any type of cyber-attacks. As part of advanced
in IT, Information Security, CRM, Databases, Operating Systems, security solutions, the Bank has implemented Anti-Advanced
Virtualization, Network, Mobile banking etc. Persistent Threat (APT) Solution, Server Protection Solution,
Network Protection Solution, other solution/services etc. to
Business Continuity planning handle a variety of threats and malicious attacks.
As per BCP Policy, the Bank has already setup a full-fledged  Employees are updated with the latest security threats and
BCP location and DR site at Bangalore. Planned BCP drills the best security practices.
are conducted on regular basis to ensure connectivity and  The Bank provides cyber security awareness to its customers
functionality test of critical applications. BCP location is manned on a continuous basis through various channels like SMS/
with adequate staff members who can handle the IT operations Email/Website/Social media, etc.
during disasters, with the support of the primary IT team. A
testimony of Bank’s robust BCP program and preparation is that Gopalakrishna Committee recommendations, management
all the critical systems were switched to DR within no time during philosophy & measures for the effective implementation
the flood that happened in Kerala during 2019. Systems of the of Cyber Security Framework
Bank worked at full potential capability without any disturbance  Effective measures have been taken to address the identified
to the customers during the period. Learnings from the Kerala gaps in each area such as IT Governance, Information
Floods happened in 2018 are incorporated to the BCP policy. Security, IT Service outsourcing, IS Audit, IT Operations, Cyber
Frauds, Business Continuity Plan (BCP), Customer Education
Information Security and IT Risk Management
and Legal issues. The IT Organization has been redrawn to
As banks adopt sophisticated technology to roll-out the most suit the functions/roles specified in the recommendations
effective banking solutions to customers, they are increasingly with segregation of duties. Information Security policy is
14
DIRECTORS’ REPORT
revamped incorporating various guidelines and stipulations Digital Channel Reconciliation – Debit Card (ATM/POS)
mentioned in regulatory framework/guidelines/other best Support Operations Reconciliation – Internet Banking &
practices. In addition, other IT Policies such as IT Operation
E Commerce
Policy, IT Governance Policy and IT Outsourcing Policy are
Reconciliation – Mobile Banking (IMPS)
also enforced.
Reconciliation – UPI
 IT Strategy Committee of the Board, IT Steering Committee
Reconciliation – BBPS
and Information Security Committee are in place. Cyber
Reconciliation – NETC
security preparedness of the Bank is reviewed by Information
Security Committee, IT Strategy Committee of Board and Reconciliation – Prepaid Card
Board of Directors on a quarterly basis. Reconciliation – ICD
Customer Dispute Management Function
Transaction Banking Department [TBD] Harmonization of TAT (Failed Transaction)
Transaction Banking Department, which manages various Managing Unauthorized Electronic
centralized back office operations has been functional since Transactions
August 2015. The department undertakes the following Internal Ombudsman Compliance function
functional operations in a centralized environment with a view
Other Support Managed Service – ATM Cash
to bring standardization of processes and procedures, scalability
in line with business expansion, compliance with regulatory Operations Aadhar Enrolment Operations
and statutory requirements, enforcement of internal controls, Remote Cheque Printing (RCP) Operations
besides expeditious service to the customers, releasing branches Tax Cell Operations
from the hassles of back office operations. The above centralized operations are driven through approved
SOP (Standard Operating Procedure), governed by allotted Job
Functional Division Functional Operations Covered
Card/task/functions through respective KRA (Key Responsibility
CPC – Centralized SB – Individual and Legal Entity Area) function, adhering to specified TAT (Turn Around Time)
CASA Opening CD – Individual and Legal Entity leading to increased operational efficiency so as to make this
NRI – NRO (SB, CD) centralized department as a Centre of Excellence. For TBD
NRI – NRE (SB, CD) functions, Kochi is the primary operation centre with Coimbatore
PIS (Portfolio Investment Service) Accounts and Bangalore as the BCP centres. CTS have been consolidated
Customer Modifications at Chennai as the primary and Bangalore and Kochi as BCP
Account Modifications centres. New initiatives such as digital instant account opening,
Periodic KYC Updation customer driven limit enhancement for debit cards/net banking,
Central KYC (C-KYC) robotic automation of certain processes have helped to improve
CDMC - Centralized Loan Accounts (Fund Based) the efficacy of this centralized operations department.
Loan Opening Renewals and Enhancements
TOD/ADHOC Compliance Department
Modifications The Bank has institutionalized a strong compliance culture and
NPA Upgrading mechanism across the organization, in pursuit of its strategic
Capturing Risk Rate/Score goals of transparency and trust, among all its stakeholders. The
Ensuring Collateral entries (SGMS) Bank has a dedicated independent Compliance Department
Income Leakage Identification & Recovery headed by a Deputy General Manager which operates as per
a well-documented compliance policy for ensuring regulatory
PSD - Payment RTGS/NEFT compliance, across all businesses and operations. The key
& Settlement PFMS - Aadhar Mapping functions of the department include tracking of regulatory
Operations PFMS - DBT updates affecting various business verticals of the Bank,
PFMS - WPS (Wage Protection System) dissemination of regulatory updates to functional units,
CTS Operations monitoring of timely implementation of regulatory instructions,
NACH Operations review of processes from a regulatory compliance perspective,
providing guidance on compliance-related matters, imparting
Digital Service Debit Card – Individual and Business
training to employees on compliance aspects, among others.
Operations Internet Banking – Retail and Corporate
The Bank has well defined and structured mechanism to
Internet Banking – Limit Enhancement
assess the compliance risk and monitor its mitigation measures
(Corporate)
thereby ensuring the effectiveness of the compliance function in
Mobile Banking (IMPS)
managing the compliance risk. Compliance officials have been
Post Open Welcome Kit (POWK)
appointed in all business units and departments for overseeing
15
DIRECTORS’ REPORT
the compliance function at various levels. Any new product/ purchase are already live. Similarly, several decision-making
process introduced in the Bank are reviewed by the Compliance reports, dashboards and models are implemented for enabling
function to ensure adherence to regulatory guidelines. targeted marketing, Customer identification, Cash optimization,
Credit Monitoring, etc., to make the Bank a technology front
Business Development Department runner.
Business Development Department is acting as a connect
between Regional Offices/Branches and Head Office for business RISK MANAGEMENT
development activities and handholding with Regional offices Risk is an integral part of banking business. Risk Management
for overall business growth. Business Development Department underscores the fact that the survival of an organization
compiles Business Strategy Plan of the Bank, conducts depends heavily on its capabilities to anticipate and prepare for
conferences and meetings to promote business growth, the change rather than just waiting for the change and react to
provides potential customer leads to the Branches/Regional it. The objective of risk management is not to prohibit or prevent
Offices, mentors Green channel branches for advances growth risk taking activity, but to ensure that the risks are consciously
and Purple branches for CASA and Deposit growth, follows up taken with full knowledge, purpose and clear understanding so
with potential branches for gold loan growth and guides loss that it can be measured and mitigated. The essential functions of
making branches with strategies for speedy turnaround. The risk management are to identify, measure and more importantly
Department also reviews daily & weekly business positions of monitor the profile of the Bank. Managing risk is fundamental
Regions and submits review reports to the top management to banking and is the key to sustained profitability and stability.
Management of risk aims to achieve best trade-off between
and senior executives for review.
risk and return and to ensure optimum Risk Adjusted Return on
In the light of COVID-19 pandemic, the Bank has constituted Capital (RAROC). Sound risk management is critical to a bank’s
various Committees of executives for ensuring normal operations, success. Business and revenue growth have therefore to be
growth and effective operational expense management. Based aligned with Risk appetite in the context of the risks embedded
on the suggestions of the Committees, various action points are in the Bank’s business strategy and balance sheet. Of the various
formulated and reviewed periodically. types of risks the Bank is exposed to, the most important are
credit risk, market risk and operational risk. The identification,
Salient strategies of the Bank: measurement, monitoring and mitigation of risks continue to
• Focus on CASA and Retail Term Deposits. Within CASA, be key focus areas for the Bank. The risk management function
the focus will be more on improving the current account attempts to anticipate vulnerabilities at the transaction level
balances and low cost Savings Bank account balances. or at the portfolio level through qualitative and quantitative
• Thrust on fee-based income from Third party, Digital & Para examinations of the embedded risks. The risk management
banking products. strategy of the Bank is based on a clear understanding of various
• Priority to Food processing, Agri., FMCG, Pharma and health risks, disciplined risk assessment, risk measurement procedures
sectors, as these sectors have better scope for growth in the and continuous monitoring for mitigation. The policies and
COVID period. procedures established for this purpose are continuously
• Increased focus on gold loans. Introduction of door-step evaluated and benchmarked against the best practices followed
gold loan product through Fintech companies. in the industry. Through continuous refinement/improvement
• Thrust on Retail, Agri. and MSME advances will continue. of the risk measurement/management systems, including
• Extending loans to all the eligible borrowers under ECLGS automation of feasible processes, the Bank aims to ensure
(Emergency Credit Line Guarantee scheme). regulatory compliance as well as better return on and utilization
• Focus on digital operations and services. Thrust on digital of capital in line with the business objectives.
on-boarding of new customers. On-boarding of customers Risk Appetite
through V-CIP (Video based Customer Identification Process)
Risk appetite of the Bank refers to the level of risk that the banking
and Digital KYC.
organization is prepared to accept in pursuit of its financial and
strategic objectives before action is deemed necessary to reduce
BUSINESS INTELLIGENCE AND ANALYTICS
the risk. It is determined through the assessment of risk taking
The Bank has a full-fledged Business Intelligence and Analytics capabilities of the Bank in the form of sound risk mitigation
department, with the primary objective of accelerating and techniques and capital base. Risk Appetite forms a key input to
improving decision making, optimizing internal business the business and capital planning process by linking business
processes, enhancing operational efficiencies, driving new strategy to risk appetite. Risk appetite of the Bank is defined
revenues and gaining competitive advantage over business by the Board of Directors through the Risk Appetite Framework
rivals and thereby achieving the pre-determined corporate goals which encompasses the general risk appetite of the Bank as
in an engineered manner. Analytical models for identifying the well as risk appetite with respect to specific categories of risks.
right customers to extend various asset products like Digital Qualitative and quantitative measures, risk tolerances as well as
Pre-approved Personal loan, Digital EMI loan against debit card targeted limits for various categories of risks are included within
16
DIRECTORS’ REPORT
the risk appetite framework and are monitored on a quarterly of family, salary, job security etc. Bank initiated customer
basis. The framework ensures that aggregate risk exposure of communication though all modes – mails, SMS and social
the Bank is always within the desired risk bearing capacity. media handles - about continuity of services in the face of
an unprecedented situation. Customers were educated/
Risk Management Policy Framework
encouraged to utilize digital modes like Internet banking
The Bank has a comprehensive policy framework which and Mobile banking thus reducing branch visits by availing
contains separate policies for identification, measurement and seamlessly the banking services from their homes.
management of all material risks including but not limited to
credit, market, operational, liquidity and other Pillar-II risks. The Considering what the existing and prospective customers expect
Bank has put in place an integrated risk management policy from us during this unusual period, Bank’s technical team came
which ensures independence of the risk governance structure. up with a slew of ideas to provide uninterrupted banking services
The details of risk management practices are provided in and methods to onboard new customers without having them
Management Discussion and Analysis Report annexed to the visiting the branches. The major steps are:
Director’s Report. • SIB INSTA - An online e-KYC account which virtually on-
boards New to Bank customers. SIB INSTA offers customers
COVID-19 Pandemic – Business Impact Report all digital platforms for banking operation. Account opening
COVID-19 pandemic has created significant disruptions to the procedure is instant and paperless: customer need not wait
economy, businesses and the banking industry. While various in long queues or fill any forms.
measures are taken by regulators and government agencies in • TAB Account - TAB based solution. The Bank official can
dealing with this emergency, we as a Bank stand committed carry the device to the customer’s location and complete the
to the customers and the larger community in this hour of account opening procedure instantaneously.
need without compromising the health and well-being of the • Quick Account- Walk-in branch customer can instantaneously
Staff. The Bank has formed a Quick Response Team (QRT) to open and activate account within 20 minutes and take home
take proactive steps to protect the health of the employees and an active card, passbook, and Mirror+ facility.
provide uninterrupted services to valued customers and the • Loan repayment through channels.
society. More than 98% of the branches were functional with • Enhancement of fund transfer limits of retail customers
reduced working hours and 96% of ATMs were fully operational based on their requirement through Internet Banking.
amidst the pandemic disruptions. • ATM card/cheque book request through Mirror+/Internet
Business continuity plan was invoked as a measure to ensure Banking.
uninterrupted service without any compromise to the safety • FD/RD opening/closure through digital channels.
of the staff. The Bank has put in place all requisite preventive • Enabling/disabling international transactions through
measures, such as providing sanitizers and masks, disinfecting channels.
and fumigating all the locations periodically. The Bank has set • Debit card PIN set/reset through Mirror+/Internet Banking.
up a special employee communication team to ensure that all
During the lockdown, the whole business community was
relevant information reaches employees through a credible
source and in a timely manner. Employees were provided with under stress on business side and financial condition. Being a
work from home facility as a safety measure, with adequate bank which stood with customers during their need without
IT infrastructure and enhanced cyber security measures which diluting compliance, the Bank is a front runner in implementing
enabled safe and uninterrupted availability of service to the schemes announced by Govt. of India and various State
customers. Alternate locations for major Departments were Governments. The Bank is among the first few banks to
made live to ensure continuity of operations. As the lockdown reschedule the repayment of term loans and to modify the
was eased, new work norms were circulated to ensure that working capital limits in accordance with the moratorium
the employees were aware of the safety rules such as social announced by the RBI. The Bank has also implemented various
distancing, regular temperature checks among others. All schemes for different sectors - Emergency Credit Line Guarantee
the Committee/Board meetings were held through video Scheme to support MSME and other business community, SIB
conferencing. Helping Hand for Self Help Groups (SHGs), SVANidhi to help
Employees were allowed special allowance to reward their street vendors and PMMY Shishu scheme.
extra efforts. Annual general transfers were limited to the Loan on-boarding norms have been re-looked, and steps are
bare minimum on absolute need basis. Special Leave has been taken to ensure credit quality. Scenario-based stress testing of
allowed to staff members who have tested COVID-19 positive the portfolio is undertaken and mitigation measures are put in
and to those staff members who had to go into quarantine place to improve the resilience of the portfolio.
either on account of them coming into contact with COVID-19 Due to postponement of repayment of principal and interest
positive person during the course of discharging their official from 1st March, 2020 to 31st August, 2020, our recoveries
duty or on account of them required to undertake journey for may get affected in a few cases. Due to this, revenue and
official purpose. provisioning of the Bank may get affected for later quarters.
Due to the sudden announcement of lockdown, whole country Further, as a matter of prudence, the bank is carrying an
was in panic for various reasons like personal safety, safety additional provision (over and above the 10% mandated by
17
DIRECTORS’ REPORT
RBI) amounting to `2,908 lakhs as at the quarter ended June risk, reputation risk, pension obligation risk, etc. The Bank has
30, 2020 (`5,570 lakhs as at the quarter ended March 31, adopted a common framework for additional disclosures under
2020) to meet any future impact of the pandemic. However, Pillar III for adhering to market discipline norms of Basel III
with the measures being taken by Government of India and guidelines. This requires the Bank to disclose its risk exposures,
various state Governments, position is expected to improve. In risk assessment processes and its capital adequacy to the market
the light of COVID-19 outbreak, based on the discussions in in a consistent and comprehensive manner.
various forums including Strategic Planning Committee (SPC),
INTERNATIONAL BANKING
various committees of executives were constituted to ensure
smooth running of business, asset quality and cost control. The total forex business turnover for the year ended March 31,
Based on the suggestions from the committees, various action 2020 was `3,48,550.75 crore (comprising Merchant Turnover
points were formulated and conveyed to departments of the `16,708.80 crore and Interbank Turnover `3,31,841.95 crore).
Bank for necessary implementation. As part of cost reduction The Bank earned an exchange profit of `41.99 crore for the FY
necessitated by changed economic scenario due to Covid-19 2019-20, recording an increase of 3.35% as compared to the
pandemic, all the Board members suo-moto decided to reduce previous financial year.
the sitting fees for attending Board / committee meetings by At present the Bank is having rupee inward remittance
20%, until further review. The Chairman of the Bank has given arrangement with 3 banks and 35 Exchange Houses and the
up 100% of his sitting fees, since lock down from March, 2020 turnover for the year ended March 31, 2020 was `9,615.77
to July 2020 and 100% of honorarium from August 2020. crore. The Bank has concluded speed remittance arrangement
In accordance with the RBI Circulars on prudential guidelines on during the FY 2019-20 with the following Exchange Houses:
capital adequacy and liquidity standards, Banks are required to • Kuwait Asian International Exchange Co., Kuwait
make Pillar III disclosures including leverage ratio and liquidity • Muthoot Exchange, Dubai
coverage ratio under Basel III framework. As on 30th June,
2020 the capital adequacy ratio of the Bank is 13.49% as The Bank has continued providing managerial support to M/s
calculated under BASEL III norms, which is above the level fixed Hadi Express Exchange, UAE. The Bank has presently deputed 11
by RBI. Hence Bank does not foresee any capital and liquidity officers of the Bank to manage the operations of Hadi Express
constraints on account of impact of COVID-19. Exchange. Considering the scope in improving the remittance
business through arrangements with exchange houses, the
During the Financial Year 2020-21 profitability may get
Bank has deputed nine officers to UAE with UAE Exchange
impacted due to the measures aimed at preventing the spread
Centre, Al Ansari Exchange, Al Ahalia Money Exchange Bureau,
of Covid 19 pandemic. Despite the economic scenario and
Hadi Express Exchange and Al Fardan Exchange, three officers
additional provisional requirement Net profit of the Bank has
to Qatar with City Exchange, Doha, Qatar, Al Dar for Exchange
increased by `8.40 Crore (11.46%) from `73.26 Crore during
Works and M/s AlFardan Exchange LLC, Doha Qatar.
Q1 of 2019-20 to `81.65 Crore during Q1 of 2020-21. Bank
has a fully functional Treasury Dept to handle liquidity/fund The Bank has entered into MTSS arrangement with M/s Ahalia
management of the Bank, which is overseen from a risk angle Exchange Financial Services Pvt. Ltd., Thrissur for facilitating Fast
by Integrated Risk Management Dept. of the Bank as per RBI EnCash Money Transfer during the FY 2019-20.
guidelines. With the present financial position and liquidity, The Bank has entered into tie-up with 3 more FFMCs during FY
Bank is not foreseeing any liquidity crisis. Profitability is expected 2019-20 for purchase and sale of foreign currency notes.
to improve in coming quarters of the current financial year
The Bank has rolled out the CCIL FX Retail platform for its
subject to restoration of normal economic activity and recovery
customers enabling them to access the market directly and
from Covid-19 Pandemic.
book the Forex Deals thereof.
Prudent measures and timely implementation of various
schemes and digital initiatives during this pandemic has taken NRI PORTFOLIO
us one step closer to the vision of being the most preferred NRI segment plays a pivotal role in the total business of the
bank. Bank. NRI deposits of the Bank constitute 29% of the total
Compliance with Basel III and Basel II Framework deposits. In the current competitive banking scenario, it is
particularly important to give individual attention towards the
In compliance with regulatory guidelines on Pillar I of Basel II/III
banking and investment needs of NRI customers by considering
norms, the Bank has computed capital charge for credit risk
their geographical limitations.
as per the Standardized Approach, for market risk as per the
Standardized Duration Method and for operational risk as per The Bank is offering a host of banking products and services
the Basic Indicator Approach. To address the risks under Pillar II, for its NRI clientele. The Bank offers exclusive Priority Banking
the Bank has implemented ICAAP (Internal Capital Adequacy Services with benefits and offerings- Prime Platinum and Prime -
Assessment Process), to integrate capital planning with to our Priority Banking customers who make their relationship,
budgetary planning and to capture residual risks which are not mutually rewarding. In addition to Savings Accounts, under NRE,
addressed in Pillar I, like credit concentration risk, interest rate NRO category, the Bank also offers high return deposit schemes,
risk in the banking book, liquidity risk, earnings risk, strategic in Indian Rupees (NRE/NRO) and Foreign Currency (FCNR/RFC).
18
DIRECTORS’ REPORT
Bank’s Representative office in Dubai is operational since personnel while imbibing the SIBIAN’s spirit and culture through
April 25, 2018 which is serving as a single point of contact an effective learning process. The success of these programmes
for customers based at UAE. There are 13 NR Relationship reflects on the enhanced organizational productivity. SIBSTC
Managers deputed in three different countries supporting our and the RTCs identify skill gaps in the personnel and provide
NRI clientele in UAE, Qatar and Kuwait. support for qualitative improvement. Staff members are also
nominated to external training centers for being trained in
The Bank also provides Portfolio Investment Scheme for its NRI specialized areas as well as to have higher exposure. During
customers. The Bank is authorized by the RBI to administer the the financial year 2019-20, the Bank has imparted training to
Portfolio Investment Scheme for NRIs for which the Bank has an 3,725 officers, 2,060 clerks and 162 sub staff in various aspects
exclusive PIS Cell under Retail Banking Department. The Bank of banking operations. A total of 5,947 staff members were
has tie-up with M/s Geojit BNP Paribas Financial Services Ltd. for trained during the FY 19-20, which is about 70% of total staff
enabling NRIs to invest in shares and bonds of companies listed strength of 8,570 as on March 31, 2020. This is in consonance
on the stock exchanges. with the Bank’s priority of continuous up-gradation of skills to
The Bank provides a wide array of Third-party products like ensure that the staff members meet the rising expectations of
Mutual Fund, Life insurance, Health Insurance, National Pension customers and discharge services professionally covering the
Scheme and Demat facility to the NRI Clientele. Customers can entire gamut of banking operations. In addition to this, trainings
avail the online banking facility, e-invest to open/invest/redeem have also been imparted to 14 Financial Literacy Centres/
in Mutual Funds. PFRDA, a statutory body established by Govt. Business Correspondents for better rural banking services and
of India, has designated the Bank as POP agent, authorised to as a measure of expanding financial inclusion initiatives of the
collect and invest in National Pension Scheme. Bank.
Technology enabled hand held devices are the future of RETAIL BANKING DEPARTMENT
banking. In this age of digital banking, the Bank has a great The Retail Banking Department focuses primarily on increasing
focus in pushing technology products such as mobile banking retail business for the Bank through customer acquisition and
application ‘SIB Mirror +’ to the NRI customers. This Mobile retention. The Retail Banking Department has two verticals -
App offers the most convenient and secure options for banking Retail Liabilities and Retail Assets. The Liability vertical constitutes
and non-banking needs. The e-lock facility keeps the account the entire retail liability portfolio of the Bank including Core
locked from fraudulent online transactions. This Mobile app Deposits, CASA, NRI Business, Marketing of Third Party and
brings banking to the finger tips and allows to transfer funds, Digital Products. Apart from the above, the department also
invest, make bill payments, do online payments and apply for plays a vital role in ensuring continuous product development
additional services like opening of Fixed Deposit and Recurring and promotion by creating awareness on products through
Deposit through online. Loans against Fixed Deposit can be customer-centric campaigns.
availed online through this platform.
Technology Products of the Bank
The Bank has 12 Dedicated Relationship Managers at different
With more customers on boarding to digital channels every
Regional Offices under the role RMs - NR and Priority Banking.
day, Digital technology is revolutionizing traditional banking.
These officers render support and assistance to NRI and Priority
Introduction of UPI has boosted the payment ecosystem by
customers at the branch as well as at the regional levels. The
simplifying contact less and real time payments. The Bank
Branch level NRI Desk is managed by specific NR Relationship
is a frontrunner in adapting the changes in technology,
Officers who give special care and attention to NRI clientele in
by strengthening the digital banking space. The Bank has
major NRI Business Branches.
effectively leveraged technology and introduced several variants
The Bank provides exclusive transit stay facility to its HNI NRI of traditional products and new e-based services, tailor-made
Customers, in major cities. NRI Meets are being conducted by to suit the diversified needs of customers. Technology services
the Bank at various centres in Kerala and selected Overseas like Contactless Debit cards, Internet banking, Mobile banking
Centres. The NRI Meets provides a great opportunity for the with UPI, QR based payment acceptance and API Banking have
top executives to interact with the HNI NRI customers, thereby transformed the customers’ digital banking experience from
deepening their existing relationship with the Bank. branch banking to anytime, anywhere banking. The Bank has
a separate Digital Marketing Division under Retail Banking
TRAINING Department to enhance the Digital outreach and a separate
The Bank accords utmost importance to enhancement of skills of Digital Banking Department that facilitates Technological
staff members. Training Programmes are conducted at SIB Staff Innovations and Product Development.
Training College (SIBSTC), Thrissur and at 7 Regional Training • SIB ATM cum Debit Cards: The Bank offers Visa, Mastercard
Centres (RTCs) for development of professional skills. Training and RuPay debit cards of different variants to cater to
programmes are designed to develop competency of operating the varying needs of its different segments of customers.
19
DIRECTORS’ REPORT
Contactless Cards (NFC Cards) are also offered which • Mobile Banking: An array of self-service features are added
enables Tap & Pay feature. The Bank also offers Business to Mobile banking application ‘SIB Mirror+’ to provide a
Debit Cards exclusively for SME customers with tailor-made next generation digital banking experience. SIB Mirror+,
offers for the business segment. Rupay’s flagship NCMC which is available to both Domestic and NRI customers,
(One Nation One Card) is also lined up for issuance which is loaded with features such as Self Registration facility,
gives the facility of having prepaid and debit in a single card. E-statement, Bill Payment module, fund transfer within
• The Bank has prepaid cards on RuPay platform and these bank, NEFT, IMPS & UPI 24X7 fund transfer, e-lock, Mobile/
cards can be used similar to Debit cards for Online/POS DTH Recharge, Scan & Pay option using BHARAT QR and
transactions. These cards can be preloaded and are being UPI, Cheque book request, Debit card management option
used by customers as a preferred gifting option. This product in which debit cards can be applied online, International
has also gained its position in the corporate segment ON-OFF switch, debit card Pinset/reset etc. Mobile Banking
wherein this is used for employee / client gratification. app is also further enhanced with Virtual account transfer,
Online deposit opening, Bill payments and recharge, KSFE
• The Co-Branded Credit Card launched in association with
Pravasi chit enrolment for NRI customers, submission of
one of the major players in Indian Credit Card industry - M/s
15G/H form & Pre approved personal loan feature rolled out
SBI cards has gained popularity across the country. Under
for eligible customers.
this arrangement, the Bank offers two of the most sought-
after variants - Simply SAVE Credit Card and Platinum Credit • E-Lock: Mobile Banking has the most innovative feature,
Card. e-Lock, which secures the customer account from any kind
of fraudulent or unauthorized transactions. We are the first
• The Travel Card launched in association with Thomas Cook bank in the country to introduce such a product and many
is specifically designed for customers who travel abroad. in the industry have been bringing out similar products since
This Travel Card is available in two variants – (1) Borderless then. E-lock feature is enhanced by giving the customer an
prepaid card that can be loaded in 9 currencies (USD, EUR, option to set a limit to digital channel transactions.
GBP, SGD, AUD, CAD, JPY, CHF, AED) and (2) One currency
card that can be loaded in USD, that enables dynamic • Unified Payment Interface (UPI), “Future of payments”
conversion without cross conversion fee to make payments is transforming the digital payment space. The Bank has
while travelling to multiple countries. introduced UPI features in the mobile banking application
SIB Mirror+ (BHIM UPI Pay). We are the first Bank to upload
• Internet Banking: The internet banking service under the UPI app in Google Play store. The UPI module has features
brand name “SIBerNet” has helped to position the Bank as a such as send money to virtual address, collect money,
technology-driven Bank, offering superior banking services Aadhaar fund transfer, scan and pay etc. The Bank has also
to both retail and corporate customers. User Interface of launched a Mobile application for merchants, UPI-POS for
SIBerNet was revamped during last financial year for retail accepting payments through UPI channel. UPI has gained
and corporate customer giving a better user experience. wide acceptance among Bank’s customers. The Bank is
Features were added for service requests like Cheque books, updated with the latest UPI 2.0 version.
Debit cards, International ON-OFF for debit cards, Pin set/
• Point of Sale (POS): The Bank is offering POS terminals -
reset for debit cards online etc. Instant Net banking activation
PSTN (wired terminal) and GPRS (wireless) in association
enables the customers to activate SIBerNet instantaneously
with M/s Atos Worldline India Pvt. Ltd., the market leader
with a User ID of customer’s choice. In addition to NEFT/
in India in this segment. The Bank has also introduced
RTGS and within bank fund transfer facility, IMPS
paperless GPRS POS terminal.
(Immediate Payment Service) facility is implemented which
offers 24 x 7 fund transfer facility to all customers including • FASTag: The Bank implemented NETC FASTag (in association
NRI customers. The Bank has also facilitated various online with National Highways Authority of India (NHAI) and
investment options such as opening and closure of Recurring National Payments Corporation of India (NPCI) in the month
Deposits (RD), Fixed Deposits (FD) & facility to avail Online of February 2018, offering hassle-free movement of vehicles
Loan against Deposits (FSLD), Loan credit, online OD facility through toll plazas. Any vehicle with a FASTag (RFID) tag
for salary accounts. More investment options such as online can cruise through the Toll gates wherein the toll payment
Mutual Fund, ASBA and KSFE Pravasi Chit enrolment for is made digitally. SIB NETC FASTags are available for both SIB
NRI Customers is also incorporated which provides added Customers and Non-customers.
benefits to the customers. Bill Pay & Recharge service is also • SiberMart: The Bank has introduced an online shopping
available to help the customers to make payment towards portal that enables the customer to compare prices between
their various bill payments/recharges from a single platform. different market places like Amazon, Flipkart, Tatacliq etc.
SIBerNet is enabled with Tax payments including GST This gives an added advantage to the customer in ensuring
Payment and e-Filing of income tax and thereby enables the Best Buy. Flight booking was also added to SiberMart
customers to conduct their tax payments and filing of which compares the prices of flight tickets in travel portals
returns at the comfort of their homes/offices. like clear trip and yatra.
20
DIRECTORS’ REPORT
• Payment Gateway: Internet Payment gateway service The Bank has generated an income of `20.68 crore through
provides a platform for the online e-payment transaction insurance business during FY 19-20 vs `17.62 crore in the
between a shopper/client and merchant. Payment Gateway previous FY, which translates to a year on year growth of
can be integrated with the website of the merchant and 17.36%. The total premium sourced has also grown by 17.19%
the customer/client can directly pay the amount using Debit (`96.45 crore vs `86.70 crore).
Card, Credit Card, Internet Banking, E-Wallets, UPI etc.
Mutual Funds: Mutual Fund is a popular form of investment
• Feebook: FeeBook is an event-based fee management/
collection portal, which can be customized by the since it provides the advantages of professional portfolio
organization/merchant themselves. FeeBook comes with management and dividend reinvestment. The Bank has tied-up
a tagline -‘YOU DECIDE, YOU COLLECT’. In FeeBook, the with 17 leading Mutual Fund companies, thereby offering a
organization has the flexibility of deciding & customizing variety of mutual fund products to the customers. Asset Under
the entire collection cycle. This can be integrated with Management (AUM) of the bank is `105 crore as on March 31,
the existing Website of the Client or can be provided as a 2020. With the aim of increasing the mutual fund business and
separate Portal. Feebook backed by payment gateway was thereby increasing third party income, the Bank has launched
successfully integrated for CMDRF fund collection during a new online mutual fund platform ‘SIB E-Invest’ to facilitate
Kerala Floods and tent booking for Kumbhmela 2019. online purchase and sale of mutual funds. The Customers
• Hi – Hi Banking: This is a Host to Host fund transfer approaching branches can create investment account and
application facilitating seemless transfer of funds between perform purchase/sales of mutual funds through this platform.
accounts that can be initiated by the client from his host After the successful launch of ‘SIB e-Invest’ in branches, the
system without Bank’s intervention. This can be integrated Bank has extended the facility for all single/individually operated
with the customers ERP system. retail SiberNet users also.
• Remote Cheque Printing: This facility enables the Bonds: The Bank has enrolled as a Channel Partner for the
corporates to process the bulk issuance of cheques/dividend distribution of bonds issued by different companies, through the
warrants etc. through a system driven model, affixing the Bank’s tie-up with IFIN - a subsidiary of IFCI (Industrial Financial
facsimile signature of the authorised signatory.
Corporation of India) Financial Services Limited. Through this
• API Banking: Apart from the above innovative digital tie-up, the Bank has been enrolled as a channel partner of IFCI
services, the bank has API banking facility which enables for the distribution of capital gain bonds and tax free bonds.
customer application to directly get integrated with the
Bank’s core systems. Depository services: The Bank offers depository services for the
• Social Media & Digital Marketing: The Bank has made benefit of the customers. Through this facility, the customers
its presence felt in all major social media platforms like can hold their securities in electronic form in demat account
Facebook, Twitter, Instagram, Linked In, YouTube etc. The with M/s Central Depository Services (India) Ltd. (CDSL). For
Bank has been instrumental in utilizing these channels in e-trading, the Bank offers SIBerTrade – the online trading
creating better engagement and awareness among the facility to buy/sell stocks for its domestic customers from stock
customers about the Bank’s innovative products and services. exchanges in India through tie-up with M/s Geojit Financial
The latest digital marketing models are being adopted to Services Ltd. and M/s Religare Securities Ltd. The Customers
reach out to the customers across the globe in the most cost also have the option of trading through mobile application from
effective and sought after means. the comfort of their home/offices, where the demat account
and Bank account will be with us and the trading account will
Third Party Products be with either M/s Geojit Financial Services Ltd. or M/s Religare
Insurance: The Bank has tied-up with the following partners for Securities Ltd.
soliciting insurance under the corporate agency model.
SEBI has also registered the Bank as Self Certified Syndicate Bank
Life Insurance (SCSB) for accepting application under Application Supported
• LIC of India by Blocked Amount (ASBA) through all the branches of the
• SBI Life Insurance Co. Ltd. Bank. ASBA enables the Bank’s customers to apply for IPO/FPO,
• Kotak Mahindra Life Insurance Co. Ltd. Rights issue etc. by marking a lien on the account instead of
Health Insurance actual debit at the time of applying, which is more beneficial for
• Max Bupa Health Insurance Co. Ltd. the customers. The Bank has participated in 76 issues (including
• Manipal Cigna Health Insurance Co. Ltd. IPO/FPO/NCD/Rights Issue) in FY 2019-2020.
General Insurance (PIS) – An extensive share trading facility for the NRI customers
• Bajaj Allianz General Insurance Co. Ltd. through tie-up with M/s Geojit. Under PIS, NRI customers can
• New India Assurance Co. Ltd. directly invest in the Indian securities market through recognized
• Bharti AXA General Insurance Co. Ltd. stock exchanges under repatriable/non-repatriable basis.
21
DIRECTORS’ REPORT
The National Pension System (NPS): The Government of count of leads for business requirement generated from various
India has introduced the National Pension System (NPS) on sources and also on the conversion side while comparing YOY
01.01.2004 (except for armed forces). NPS was made available basis. Subsequent to the set up of Customer Experience Group
to all citizens of India from 01.05.2009. The Bank is appointed in the Bank, all leads generated from various sources provided
as a Point of Presence (POP) since then and all the branches were being engaged and followed up by CEG team till the end
are authorized to extend the product and services of NPS. of lead life cycle. Mirror+ activation conversion of new accounts
Recently, Government of India has announced the increase of and debit card usage activation and lead generation are the
tax exemption limit for NPS to 60%. This has effectively made major activities undertaken by the CEG team.
NPS tax free at maturity and an effective ‘EEE’ status is attained,
i.e. Tax Exempt at Entry, Earning and Exit stages. NPS is a very Customer Experience Group handles inbound and outbound
appealing product for NRIs and in fact, the Bank is the topper call centre. Further during FY 19-20 a new section was created
among the peer-banks and Kerala based banks for both resident to CEG as DQST (Digital Quick Support Team) working on
and NRI NPS. Only NPS offers the additional tax benefits up to customer mails and Branch support on digital products.
`50,000/- under I.T act 80 CCD (1B) and it is over and above CEG inbound team is the touch point for customers for all
`1.50 lakh of 80C investments. banking needs via call. Inbound call centre provides 24x7
customer service on calls whereby customers calls us and state
Cumulative Achievement as on March 31, 2020
the nature of their problem. The front line analyst uses call
(in numbers) centre software to identify the customer and after collecting the
NPS – All Citizen Model 9264 required details responds to the problem. The goal of the CEG
NPS Corporate (Including Staff) 7133 is to solve the problem to customer’s satisfaction. CEG inbound
APY 16187 team is required to follow procedures to facilitate moving
problems to more advanced and experienced back office teams
Total 32584
when initial help levels cannot resolve them. DQST team is the
SIB E-Pay: In association with BSNL, the Bank is facilitating the touch point for customers via mail, Chat and Social Media.
payment of BSNL landline bill of its customers through their There is dedicated resource to handle Ibanking and Mirror Plus
accounts maintained with the branches. A customer can avail service and complaints. DQST team manages CEG’s Complaint
this facility by submitting a mandate form at the branch where handling processes through various channels like Customer
the account is being maintained. Once registered, the BSNL care mails, Ibanking Mails, Mobile Banking Emails, IVR cases,
landline bill of the customer is automatically debited from the Ibanking grievances lodged through Mirror Plus app and Mobile
customer’s account every month. The key feature of this facility banking grievances lodged through Mirror Plus app.
is that it is totally hassle free and is offered free of cost to the Further, outbound teams major responsibility is to onboard the
customers. customers with first point of service and sales of the bank’s
Cash Management Service (Premium Collection): The Bank products and TPP products after the branch. Leads are created
offers Cash Management Service (Premium Collection) to the and managed in CRM for the interested customers and further
customers in association with Exide Life Insurance Co. Ltd. Bank’s team follows up with branches or TPP vendors for the
(formerly known as ING Vysya) and ICICI Prudential Life conversion of the same. The ultimate vision of the team is
Insurance Co. Ltd. Under this arrangement, the Bank’s customers to become a sales powerhouse of the Bank and develop the
as well as walk-in customers can remit life insurance premium channel as a cost neutral unit in the coming years.
through branch counters. This facility is offered free of cost to Highlights
customers.
• Mirror+ activation conversion of new accounts is at 53% for
Centralized Direct Debit Service: Centralized direct debit FY 19-20.
facility is a service offered by the Bank to the customers, through • Debit card usage activation of new accounts 67% for FY
which monthly/quarterly/half yearly payments of Mutual Fund 19-20.
SIP investments/Loan EMIs (Vehicle/Equipment Loans)/insurance • 21,290 Leads generated through CEG in FY 19-20 and
premium can be made directly by debiting their account and converted 62.39 crore, Retail loans and `40.07 lacs
thereby making payments to various billers/institutions. At Insurance business.
present the Bank has tie up with 5 vendors for the Centralized
Direct Debit facility which includes M/s India Ideas.com Ltd., Liability
M/s TVS Credit Services Ltd., M/s Sundaram Finance Ltd., CASA Initiatives
M/s Shriram City Union Finance Ltd. and M/s Bajaj Finance Ltd.
• The Bank has launched SIB Insta Paperless digital account
Customer Experience Group (CEG) opening platform for savings account customers. The
Financial year 2019-20 witnessed a significant growth in the account is opened using PAN and Aadhaar and the account
22
DIRECTORS’ REPORT
number is delivered to the customers within five minutes. 5. Launched a new Retail Term Deposit product called “FD
On remittance of `1,000/-, debit cards are issued without VANTAGE”. FD Vantage is a Term Deposit product in three
issuance fee. variants like FD Vantage – Alpha, Beta & Gama clubbed with
• To cater to the business segment, the Bank has Trader Smart free insurance coverage.
and CA Premium Smart current accounts with a lot of free 6. Launched SIB CRITIC CARE PLUS, a product attached to
facilities and exemptions in cash handling charges to greater loan portfolio of retail borrowers, in association with health
extent. The account is embedded with features like sweep insurance partner M/s Max Bupa Health Insurance Co. Ltd.
in, sweep out, Doorstep banking, POS facilities etc. The All New Retail Loan Customers (Home Loan, Vehicle Loan,
account is designed keeping in mind the requirements of Mortgage Loan, Education Loan, Personal Loan, SME
traders in general and the performance is encouraging with (Individual Only)) are eligible for this facility. The coverage
respect to the average balances in the account. shall be for the loan period (Maximum 5 years) and the
• SIB FIZA, an exclusive current account variant for resident premium to be remitted as Single Premium (Upfront up to
individuals, has been introduced to cater to the needs of 5 Years Maximum).
customer segment who do not want interest to be accrued 7. “SIB SWARNA SURAKSHA” – An insurance plan from
in the account. M/s Bajaj Allianz General Insurance Co. Ltd. for gold loan
• Government Business Division customers. SIB-SWARNA SURAKSHA an insurance solution
that can be offered to all the Gold loan borrowers (Individual)
Government Business Division (GBD) was institutionalized with accidental death coverage of `5.00 lac Sum Assured at
in the FY 2018-19, headed by a DGM, to cater to a premium of `101/- (Inclusive of GST).
the banking requirements of Central Government/State
8. Launched SIB UPP (Universal Protection Plan), a loan
Governments/PSUs/Boards/other Govt. affiliates, with a
attachment product to retail loan borrowers of the Bank,
focus on canvassing and liasoning with various Government
in association with the general insurance partner M/s Bharti
institutions pan India. GBD aims at driving the Government
AXA General Insurance Co. Ltd. Universal Protection Plan
Business portfolio of the Bank, with special emphasis to
provides coverage against
boost CASA. Branches, ROs, RSMs and BDOs are the major
acquisition channels to augment Government Business a) Critical Illness - covers up to 25 critical illness
segment. b) Personal Accident
• Priority Banking Service - South Indian Bank Prime c) Home Insurance
Platinum and Prime are exclusive Priority Banking Services d) Involuntary Loss of Job
offered to the customers who make their relationship with 9. Launched Pre-qualified Credit Card program in tie-up with
the bank mutually rewarding with benefits and offerings SBI Card & Payments Services Ltd.
that enhance the privileges enjoyed by them. As a Priority • Pre-qualified Credit card program in tie-up with SBI Card
Banking Customer, they have the advantage of enjoying is an opportunity to issue Credit cards to the privileged
customized benefits that recognize their total relationship customers of the Bank who are Pre-qualified to avail a
with the Bank and have been tailored to suit their individual Credit card as per the SBI Card policies.
needs. • Program ensures highest approval rates for the sourced
As a Priority Banking client, the customer has access to Red applications as they are already validated against various
Carpet treatment at SIB Branches across the country. Also, parameters specified by SBI Cards.
with the launch of Priority Banking, it is envisaged to create • The card is issued to the customer once the application
a comprehensive Personal Economy Management Solution to is sourced and submitted to SBI card.
maintain and diversify the customers’ wealth. • The limit assigned to the applicant in his Credit card is
decided by SBI Card once the card is final approved after
Achievements and milestones: successful validations and verifications.
1. Insurance business achieved a YoY growth of 17% in Visibility Enhancement Initiatives during FY 2019-20
income.
The Bank had undertaken many brand promotion initiatives in
2. Tied-up with Mirae Asset Mutual Fund and Motilal Oswal various medias like Newspaper, Television, Radio, Outdoor and
Mutual Funds, thereby giving more options for the customers Online media.
to invest.
• Through effective PR strategy, major events and financial
3. Launched new GPRS POS Terminals (e-charge slip based results pertaining to the Bank were promoted globally
Paytivo 6210). across all the media platforms. The Bank held major press
4. Introduced digitalized Term Deposit Advices in lieu of Term conferences, in connection with quarterly results and also
Deposit Receipts as part of extending digital services with during the launch of SIB SCHOLAR Edition-IV, a prestigious
the ‘Go Green’ concept in mind. CSR initiative by the Bank. Regular press releases were
23
DIRECTORS’ REPORT
made in connection with the various CSR initiatives, product MANPOWER

launch and social associations. As on March 31, 2020, the Bank had 8,570 personnel on its
• The Bank had undertaken outdoor advertisement campaign rolls. Cadre-wise break-up is as under:
at One Day International Cricket series (ODI) between India
Cadre Men Women Total
Vs Australia at Mumbai, Rajkot, Bengaluru which was also
Officers 3162 1685 4847
aired in TV channels.
Clerk 1414 1737 3151
• In television channels across the country, the Bank Peon 324 22 346
had promoted the brand name through corporate Part-time employees 56 170 226
advertisements, as well as products like SIB Mirror+. Total 4956 3614 8570
• As part of Radio promotions, the Bank had aired
advertisements on Gold Loan and Deposit products like FD With the infusion of young personnel, the Bank was able to
Vantage in the main business centers across the country. maintain the average age of employees as 32 years as on March
31, 2020.
• Promotions of brand and products like Gold Loan, FD
vantage, Digital Banking, NRI Service and SIB Mirror+ were Staff Members having professional Qualification as on
done in print media and online portals during this period. March 31, 2020 are as under:
• The Bank had also associated with major social/economic EDUCATIONAL STREAM NUMBER OF STAFF
events organized by Federation of Indian Export MANAGEMENT 1409
Organisations (FIEO), The Indus Entrepreneurs (TIE) Kerala - POST GRADUATION 1293
TIECON Kerala, Thrissur Management Association (TMA), CA 52
Indian Medical Association (IMA), District Police Office CS 4
Commemoration and Rashtra Deepika. The Bank’s ENGINEERING 1899
association with the Thrissur Round Table for the ‘Run PHD 2
Thrissur Run’ half marathon was a success in Thrissur LEGAL 61
delivering the social message of ‘Stay Fit’. The Bank had ICWA/CMA 36
also associated with Dhanam Magazine’s ‘Dhanam Banking,
TOTAL 4756
Finance, Insurance and Investment Summit and Award Nite’
TOTAL STAFF AS ON March 31, 2020 8570
that had attracted a lot of entrepreneurs.
• With a view to make the Bank’s presence felt in foreign MAINTENANCE OF PERSONNEL DATA
countries, the Bank had associated with numerous expatriate Maintenance of staff records was streamlined under “HRMS”
associations like Union of German Malayalee Associations (Human Resources Management System). The data can be
(UGMA-Web portal), Keli Switzerland (Onam 2019), Khaleej accessed by all controlling offices and various reports based on
Times (Tabloid Advertisement on Independence day), UAE the data can be generated for the quick disposal of staff related
Exchange (Summer Fiesta), Thrissur Association of Kuwait matters. To make HRMS more comprehensive and contemporary,
(TRASSK Maholsavam), Manorama Mega Expo (Banking the User Interface of HRMS was revamped and more modules
partner at Sharjah) and Gulf Madhayamam (Come on Kerala such as Deputation, Staff Compliance, Staff Welfare, etc.
International Expo at Sharjah). were added and facility for availing Transfer Discomfort loan,
pension application collection, new HR Assistant “MITHRA”,
HUMAN RESOURCE FAQ section etc. were introduced. In addition, the revamping
In a dynamic world where an individual defines the organization, of the Performance Appraisal System, SIB Recruitment portal
Human Resource (HR) is the most valuable asset. Achievement was also completed. These enhancements were in addition to
of an organization’s objectives depends on the individual and the modules already available in the system such as Transfers,
the collective efforts of its workforce. Every employee is a vital Promotion Maintenance, HRA, Leave & LFC, Training, Service
factor for the smooth functioning by bridging the gap between Record, Pension Maintenance, Marketing Excellence, Staff
the customers and the organization. The Bank has team of Medical Insurance, TA, Staff Allowances, Provident Fund, Staff
highly motivated, skilled, committed, loyal and empathetic Attendance, Audit Compliance, Staff Advances, Increment
staff members, who strive to meet customer aspirations and Maintenance, NPS, etc.
organizational goals. A strategic approach towards effective
Motivation Initiatives
development and management of human resources is of
paramount importance. In order to augment the workforce in Some of the initiatives undertaken by the Bank in order to boost
tune with the Bank’s sustained growth and expanding network, the morale of the Bank employees are as under:
major initiatives towards talent acquisition and retention have a) Promotions: The Bank offers ample opportunities to its
been continued in the FY 2019-20 also. employees for their growth and progression. During this
24
DIRECTORS’ REPORT
financial year, 225 clerical staff were promoted to Scale I, shares of `1/- each have been allotted to the concerned
266 Scale I officers to Scale II and 168 Scale II & above employees/legal heirs.
Officers to various senior cadres.
A Certificate of Auditors pursuant to Regulation 13 of SEBI
b) The Staff Welfare Study Support Scheme which was (Share Based Employee Benefits) Regulations, 2014 will be
introduced in the FY 2016-17 for children of staff members, placed to the AGM for the scrutiny of Shareholders. The total
have been successfully continued with enhancement in options granted under nine phases of SIB ESOS 2008 works out
quantum of amount in the current financial year also. The to 3.39% of the paid-up share capital of the Bank as at March
scheme has proved to be effective in its implementation 31, 2020. The scheme has generated intended motivation
with the aim of encouraging the children of staff members amongst the staff.
to soar greater heights.
There is no material change in the scheme during the
c) This year 109 staff members availed the benefit of ‘The South
FY 2019-20 and the scheme is in compliance with the applicable
Indian Bank Staff Welfare Scheme’ introduced in December
regulations.
2008 for availing long leave with reason of child care after
maternity. The scheme ensures the Bank’s employee friendly Statutory disclosures regarding details of the stock options
approach towards its employees and the concern for their granted, vested, exercised and forfeited and expired during the
family members. year under review is hosted on the website of the Bank and
d) PLIS – Performance Linked Incentive Scheme is continued can be viewed at https://www.southindianbank.com/content/
in this financial year also to ensure enhanced productivity annual-report-financial-year-2019-to-2020/3793.
and efficiency in all areas of operations and instill motivation
SIB-Executive Brief
among all SIBians to achieve long term growth and
profitability. “SIB-Executive Brief” - a daily news update on Banking, Finance,
Economy, Industry, Sports, Market Rates etc. is compiled by
e) Introduction of Buddy Program: As an initiative to help
SIBSTC. It is mailed on a daily basis to members of the Board,
newly recruited Probationary Officers & Clerks to integrate
Executives and is also made available at SIB-Insight for access
into the SIB work culture and make them feel welcome.
by the staff members. The Bank has recently included more
f) New Onboarding Experience: In order to create a better information like yields on 10 year G-Sec., AAA Corporate bond
employer Brand and sense of belongings to the newly of 5 years, 3 months CD & CP, 3 months forward premium, US
recruited Officers & Clerks, customized SIB merchandise was 10 year yield and Forex reserves.
handed over during the onboarding program.
Industrial Relations Daily Quiz
SIBSTC continuously endeavors to ensure that the learning and
Industrial relations in the Bank has been cordial and harmonious.
development curve of the staff members continues to grow all
The representatives of Workmen Union, Officers Association
the time. So during the COVID lockdown period, to inculcate
and Management have been working collectively with a sense
a habit in staff members to refresh/learn/enhance awareness
of ownership for all-round growth and prosperity of the Bank
on current/banking topics, the Bank has initiated a Daily Quiz
and its employees. On account of the cordial industrial relations
through HRMS. The Quiz consists of 5 questions on content
with both the associations, Bank has achieved considerable
from Executive Brief and general topics like credit, forex, NRI
growth over the years.
business etc. To encourage participation, 3 Lucky winners are
A jovial and employee friendly approach by the Bank is the selected at random from the top scorers of the week. It was
only reason to have a very minimal attrition rate of 3.00% as encouraging to note an average daily participation of 2,200
compared to the industry attrition rate of 13.1% [data taken staff members during the lockdown period.
from KPMG’s report on Average Voluntary Attrition (2018-19)].
E-Learning Tests
EMPLOYEE STOCK OPTION SCHEME (ESOS)
The Bank has completed 46 e-learning tests through GIEOM
During the financial year 2008-09, the Bank instituted an platform during the FY 2019-20. The Bank has conducted
Employee Stock Option Scheme to enable its employees to be a 12 tests each for Clerks, Scale I and Scale II Officers, 4 tests
partner in the future growth and financial success of the Bank. each for the Scale III and Scale IV Officers and 2 online tests
The Bank’s shareholders approved the plan on August 18, 2008 for the Scale V Officers during the last FY. There is active
for the issuance of stock options to the employees. participation from the branches and offices for the tests. Names
Till March 2020, 5,52,06,237 stock options were vested, out of the monthly toppers and Photographs of consistent toppers
of which 2,89,49,199 stock options were exercised by eligible (3 e-learning tests) are published in Insight. The marks scored in
employees. The money realized due to exercise of the said these e-learning tests are considered for the annual promotion
options was `42,74,54,572.64 and consequently 2,89,49,199 process and for the calculation of incentives.
25
DIRECTORS’ REPORT
Continuous Assessment Test for Prob. Officers ISO 270001:2013 certification

To facilitate updation and continuous learning by the The Bank has been awarded ISO 270001:2013 certification for
probationary officers, SIBSTC conducts E learning tests on 20 its Information Security Management System (ISMS).
modules for each batch of POs, BDOs and PGDBF. SIBSTC also
Foreign Exchange Advisory Cell
shoulders the responsibility to ensure that all the POs take efforts
to clear the test on time and get confirmed without any delay. The Bank has launched Foreign Exchange Advisory Cell to
provide advisory services by subject experts on FEMA rules
E-Circular and trade finance related issues to the general public. The
The Bank has since migrated to issuance of e-circulars in place complimentary service is available to all Foreign Exchange Trade
of manual circulars. All the circulars of the Bank are uploaded Fraternity.
using the ‘e-circular software’. In e-circular, Bank’s policies,
Guidelines and Forms are also uploaded so as to empower the PARTICULARS REGARDING CONSERVATION OF ENERGY,
branches with readily accessible pool of information/guidelines. TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNINGS AND OUTGO PURSUANT TO SUB SECTION(3)
STUDENTS’ ECONOMIC FORUM (SEF) (M) OF SECTION 134 OF THE COMPANIES ACT, 2013 READ
This is a monthly publication which discusses, and analyses WITH RULE (8) (3) OF THE COMPANIES (ACCOUNTS) RULES,
relevant themes related to the recent economic, financial and 2014
banking topics. As on March 31, 2020, 340 themes have been The Bank ensures strict compliance with all statutory requirements
published since the first publication in December 1991. The and voluntarily undertakes several sustainable steps in order
objective of this venture is to kindle interest in economic affairs to contribute towards a better environment. The Bank has
among the younger generation and also to provide a learning undertaken various initiatives for energy conservation at its
platform for the student community. The themes discussed premises. Further, the Bank has used information technology
during FY 2019-20 (Apr 2019 – March 2020) include RBI’s extensively in its operation and is consistently pursuing its goal
Forex Swap Auction, Supply Chain Finance, Trade War, RBI’s of technological up-gradation in a cost-effective manner for
Prudential Framework for Resolution of Stressed Assets, FDI delivering quality customer service. As a next generation Bank,
vs FPI, The NBFC Crisis, Corporate tax cut - Igniting Economic the Bank has deployed ‘Technology’ as a Strategic Business
Growth, RCEP, EBLR, Co-operative Banks - Structure, Functions enabler – to build a distinct competitive advantage and to
Importance and the Recent Amendments, Union Budget 2020, achieve superior standards of Customer Service. The Bank,
DICGC. The publication is dispatched to offices of RBI, Banks, being a banking company and an authorized dealer in Foreign
other Corporates and various educational institutions and is also Exchange, has taken all possible steps to encourage export
made available in the Bank’s Website under the link - Student’s credit.
Corner. It is a well-accepted & appreciated publication among
Number of cases filed, if any, and their disposal under
the students, professionals and the academic community. The
section 22 of the Sexual Harassment of Women at
expense of the Publication is now accounted under CSR activity Workplace (Prevention, Prohibition and Redressal)
of the Bank. Act, 2013
Awards & Accolades The Bank has zero tolerance approach towards any action on the
The Bank has received the following awards during the Financial part of any executive/employees which may fall under the ambit
Year 2019-20: of ‘Sexual Harassment’ at workplace, and is fully committed to
• Best MSME Bank (Private Sector) Award by ASSOCHAM in uphold and maintain the dignity of every women staff working
connection with 7th MSME National Excellence Awards-2019. in the Bank. The Bank has complied with provisions relating
• Corporate Social Responsibility (CSR) Excellence Award, to the constitution of internal Complaints Committee under
2019 instituted by Rotary District 3201 for carrying out CSR the Sexual Harassment of Women at Workplace (Prevention,
project in the area of Education for Underprivileged. Prohibition and Redressal) Act, 2013 [14 of 2013]. The Policy
• IBA Awards in 6 categories provides for protection against sexual harassment of women at
1) Best Technology Bank of the Year (Winner – Small Banks) workplace and for prevention and redressal of such complaints.
2) Best Use of Data & Analytics for Business Outcome All the employees (permanent, contractual, temporary, trainees)
(Winner – Small Banks) are covered under this policy.
3) Best IT Risk Management & Cyber Security Initiatives Number of complaints pending as at the beginning of the
(Joint Winner – Small Banks) financial year - Nil
4) Best Payment Initiative (Joint Runner Up – Private Sector Number of complaints filed during the financial year – One *
Banks) Number of complaints pending as at the end of the financial
5) Most Customer Centric Bank using Technology (Small year – Nil
Banks) *The complaint has been resolved through the conciliation
6) Best CIO – Runner Up proceedings, as per the provision of the Act.
26
DIRECTORS’ REPORT
Particulars of Employees • Protection of national heritage, art and culture including

The Bank had 8,570 employees as on March 31, 2020. Only restoration of buildings and sites of historical importance
MD & CEO (employed throughout the year) was in receipt and works of art.
of aggregate remuneration of more than `1.02 crore per • Training to promote nationally recognized sports.
annum and no other employees was employed for a part of • Rural development projects.
the year was in receipt of remuneration of `8.5 lakhs and • Contribution to Prime Minister’s Citizen Assistance and
above per month. The details of top 10 employees in terms of Relief in Emergency Situations Fund (PMCARES Fund).
remuneration drawn pursuant to provisions of Section 197(12) • Promoting Financial Literacy.
of the Companies Act, 2013 read with Rule 5(2) and 5(3) of
CSR Expenditure
the Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014 is annexed to this report (Annexure A). South Indian Bank has always given top priority to fulfilling its
obligations under Corporate Social Responsibility. Diversified
The ratio of the remuneration of each director to the median Projects in the areas of healthcare, sanitation, education and
employee’s remuneration and other details in terms of sub- sports that would benefit the society as a whole were identified
section 12 of Section 197 of the Companies Act, 2013 read with and the Bank wholeheartedly supported such initiatives. In the
Rule 5(1) of the Companies (Appointment and Remuneration of Financial Year 2019-20, the Bank spent 12.01 crore (96.08%
Managerial Personnel) Rules, 2014, is annexed to this report
of the budget) towards CSR activities against 12.22 crore in the
(Annexure B).
Year 2018-19.
THE ANNUAL REPORT ON CORPORATE SOCIAL The amount to be spent by the Bank towards CSR for FY 2019-20
RESPONSIBILITY (CSR) ACTIVITIES as per Section 135 of the Companies Act, 2013, comes to
A brief outline of the Bank’s CSR Policy, including overview of 12.50 crore. Amount spent by the Bank this year towards CSR
projects or programs to be undertaken. was 12.01 crore. The unspent CSR amount of 0.49 crore was
transferred to ‘Unspent CSR Account’ on April 30, 2020, in
South Indian Bank’s CSR Policy
compliance with Companies (Amendment) Act, 2019. The Bank
South Indian Bank is grateful to the society that has supported had also embarked on some major projects last year in the field
and encouraged the Bank during its long journey of growth and of education, healthcare etc. By choosing long term sustainable
development. The Bank believes that no organization can make projects, the Bank has taken an approach which brings steady
sustainable development without the patronage of the society. and long lasting impact on the society. The details of the CSR
The Bank is committed to integrate social and environmental activities of FY 2019-20 are mentioned in Annexure C to this
concerns in its business operations. The Bank shall continue to report.
have among its objectives, promotion and growth of national
economy and shall continue to be mindful of its social and Web-Link to the CSR Policy
moral responsibilities to customers, shareholders and the https://www.southindianbank.com/UserFiles/file/CSR_Policy.pdf
society. The Bank is committed to financing the economic and FINANCIAL INCLUSION
developmental activities of the nation with concern for human
Financial inclusion aims to ensure the availability of formal and
rights and environment.
basic banking services to all Indian households, including those
In line with the CSR Policy and in accordance with Schedule VII, in the unbanked and under-banked areas. South Indian Bank
section 135 of Companies Act, the Bank undertook various has adopted several financial inclusion initiatives, including
activities during FY 2019-20, which had significant impact on Kiosk banking. The Bank has successfully migrated to Aadhaar
the society. These activities include: Enabled Payment System (AePS) in the existing KIOSK Model of
• Eradicating hunger, poverty and malnutrition, promoting Banking, from the earlier mode of customer ID payment service.
Now AePS is the only mode by which transactions are taking
health care including preventive healthcare and sanitation
place in Kiosk Banking solution.
and making available safe drinking water.
• Promoting Education, including special education and Aadhaar Enabled Payment System (AePS)
employment enhancing vocation skills and livelihood Aadhaar Enabled Payment System (AePS) is a payment service,
enhancement projects. empowering a Bank customer to use Aadhaar as his/her identity
• Empowering women, setting up homes and hostels for to access his/her respective Aadhaar enabled bank account
women and orphans, setting up old age homes, measures and perform basic banking transactions through a Business
for reducing inequalities faced by socially and economically Correspondent/POS machine. National Payment Corporation of
backward groups. India (NPCI), an umbrella organisation for all retail payments are
• Ensuring environmental sustainability, maintaining quality of controlling AePS operations. AePS offers basic banking services
soil, air and water. such as Cash Withdrawal, Cash Deposit, Balance Enquiry,
27
DIRECTORS’ REPORT
Aadhaar to Aadhaar Fund Transfer, Mini Statement, and Best Company. Due to the outbreak of Covid-19 and in compliance
Finger Detection. The Bank has implemented Kiosk Banking with MCA guidelines, the notice of 92nd Annual general Meeting
Model in the state of Kerala through 8 Individual Business and the Annual Report 2019-20 will be sent via email to all the
Correspondents and in Tamil Nadu through 60 Individual shareholders and no physical copies will be sent via post.
Business Correspondents.
Further, in terms of Regulation 36 of the Listing Regulations,
Financial Literacy Centres the listed entity is required to send soft copies of its Annual
Financial Literacy is the ability to understand how the money Report to all those shareholder(s), who have registered their
works in the day to day life and how someone manages it, how email address for this purpose. Accordingly, the documents
he/she invests it and how a person offers it to others. More including the notice and explanatory statement of 92nd
specifically, it refers to the set of skills and knowledge that Annual General Meeting, Annual Report of the Bank for the
allows an individual to make informed and effective decisions financial year 2019-20 including Audited Financial Statements,
relating to their financial resources. The Bank has engaged Directors’ Report, Auditors’ Report etc., for the year ended
13 FLCs in different Blocks of Kerala to disseminate financial March 31, 2020, sent to the e-mail address registered with
literacy to the people and it is functional through retired bank their Depository Participant(DP)/Registrar/Company. The e-mail
employees and educated youth. In addition to this the Bank addresses indicated in respective DP accounts which will be
has voluntarily appointed 7 FLCs in seven different districts in periodically downloaded from NSDL/CDSL will be deemed to
Tamil Nadu to emphasize the objectives of Financial Literacy. The be their registered e-mail address for serving notices/documents
FLCs are now branded under the name “SIB JYOTHIS”. Efforts including those covered under Section 136 of the Companies
are on to make them more efficient, responsive to the needs Act, 2013. In case a Member, whose e-mail address has changed,
of the people. A Board approved policy covering all aspects fails to update this new e-mail address, the said documents will
of Financial Literacy Centres has been formulated, giving due be sent to the existing e-mail address and the said documents
consideration to the revised guidelines on FLCs circulated by will be deemed to have been delivered, in compliance with the
RBI. During the FY 2019-20, FLCs have conducted 1,581 camps relevant provisions of the Companies Act, 2013, the relevant
covering 90,156 participants. Rules made thereunder and the Listing Regulations. Member
who have not yet registered their e-mail address are requested
Government of India Scheme - PMJDY to do so, at the earliest. In case of shares held in electronic form
Pradhan Mantri Jan Dhan Yojana (PMJDY), is conceived as a and in case of any change in the e-mail address, Members are
national mission on financial inclusion initiated by Honorable requested to update the same with their DP and in case of
Prime Minister on August 15, 2014. The scheme envisages shares held in Physical form, Members are requested to update
universal access to banking facilities, with at least one basic the same with the RTA/Company.
banking account for every household. In line with the directives Please note that the said documents will also be uploaded on the
given by Ministry of Finance and SLBC, PMJDY scheme was Bank’s website www.southindianbank.com and copies thereof
implemented in the Bank since August 18, 2014. will be made available for inspection at the Registered Office of
The Bank has opened 1,98,856 PMJDY accounts as on March the Bank during 10.00 a.m. to 3.00 p.m. on all working days
31, 2020 with an outstanding balance of `56.17 crore. Social except Saturdays, Sundays, Bank Holidays and Public Holidays
Security schemes in insurance (PMJJBY and PMSBY), were also up to the date of ensuing AGM.
given high priority by the Bank. Shareholders have been requested on several occasions to
AADHAAR ENROLMENT STATION update their e-mail IDs in their folio/demat a/c to help accelerate
the Bank’s migration to paperless compliances. The Bank seeks
Department of Financial Services (DFS) under Ministry of your support to the said green initiatives, as it is designed to
Finance, had directed banks to become Enrolment Registrars protect the fragile environment.
with UIDAI so as to set up AADHAAR enrolment stations at
branch premises. As on March 31, 2020, 86 Aadhaar Enrolment Further, as a part of green initiative by the Bank, all relevant
Stations across various states are functional. agenda papers pertaining to the Board/Committee are being
circulated well in advance to the Board of Directors through
GREEN INITIATIVES IN CORPORATE GOVERNANCE electronic mode to facilitate easy access of agenda on IPad
Dispatch of documents in Electronic Form: As a responsible which would provide sufficient time to the Board for reading
corporate citizen, the Bank supports and pursues the ‘Green and understanding the proposals placed in a meeting.
Initiative’ of the Ministry of Corporate Affairs (“MCA”). In
conformance with such initiatives and in terms of Rule 18 of the ANTI-MONEY LAUNDERING (AML)
Companies (Management and Administration) Rules, 2014, the Transactions processed through the Core Banking Solution are
Bank may give notice through electronic mode including e-mail monitored for detecting suspicious transactions, using TCS
to those Members who have provided their e-mail address Bancs Compliance, an AML application to comply with the
either to their Depository Participants (DPs) or to the Registrar/ provisions under Prevention of Money Laundering Act (PMLA).
28
DIRECTORS’ REPORT
The Bank has set up a Centralized Processing Centre (CPC) for • Reappointment of Sri Salim Gangadharan (DIN: 06796232)
liability side customer creation with the objective of full KYC as a director liable to retire by rotation who retires by rotation
compliance and to use KYC as a fraud prevention tool. The under section 152 of Companies Act, 2013.
Bank has brought all branches under the CPC model during the
Financial Year 2015-16. Sri Achal Kumar Gupta (DIN:02192183), reappointed as Director
liable to retire by rotation in the 90th Annual General Meeting
The Bank has implemented UIDAI’s e-KYC services for Aadhaar
held on 11th July 2018, did not offer himself for re-appointment
authentication, in all the branches. The Bank has attached great
hence not proposed to reappoint as a Director of the Bank.
importance for compliance of KYC/AML/CFT norms by the
customers as per the Reserve Bank of India directive. The Board of Directors has recommended to members for
FATCA-CRS appointment of Mr. Paul Antony (DIN 02239492) as Director
of the Bank, liable to retire by rotation at the 92nd AGM, in
The Bank has been registered as a reporting entity under
place of Mr. Achal Kumar Gupta (DIN: 02192183) who retires
FATCA, under GIIN No. IIK7HU.99999.SL.356, to comply with
by rotation at the 92nd AGM and does not offer himself for
the reporting requirement under the inter-Governmental
agreement entered between Indian and US Government and re-appointment.
the CRS Multilateral Competent Authority Agreement. The Board of Directors of the Bank at their meeting held on
DIRECTORS 16th January 2014 had appointed Sri Salim Gangadharan (DIN:
The composition of the Board of Directors is governed by the 06796232), residing at C-26, RNP Lane, Sasthamangalam P.O.,
Banking Regulation Act, 1949, the Companies Act, 2013, SEBI Vellayambalam, Trivandrum – 695 010 as a director of the Bank
(Listing Obligations and Disclosure Requirements) Regulations w.e.f. 16.01.2014. Further, he was appointed as Non-Executive –
2015 and the Code of Conduct on Corporate Governance Part time Chairman for a period of three years w.e.f. 02nd
adopted by the Bank. The Board comprises of 10 Directors as November, 2016. The same was approved by RBI vide Letter
on the date of this report, with rich experience and specialized No DBR. Appt. No. 4811/08.51.001./2016-17 dt. 27th October,
knowledge in various areas of relevance to the Bank, including 2016. Based on the scrutiny and recommendation of the
banking, accountancy, small scale industry, agriculture, and Nomination & Remuneration Committee and considering the
information technology. outstanding performance and contribution to the Bank, the
Excluding the MD & CEO, all other members of the Board are Board of Directors at their meeting held on 17th July, 2019 vide
Non-Executive Directors and six Directors out of the total ten resolution No. DBR/SEC/S-100/2019-20 resolved to re-appoint
Directors are Independent Directors. Declaration has been Sri Salim Gangadharan as Non-Executive/Part-time Chairman
obtained from the Independent Directors as required under of the Bank w.e.f. 2nd November, 2019 for a further period
the RBI Regulations, SEBI (Listing Obligations and Disclosure of 3 years subject to the approval of Reserve Bank of India.
Requirements) Regulations 2015 and Companies Act, 2013. The RBI has approved the same vide Letter No. DBR. Appt. No.
remuneration and other benefits paid to MD & CEO of the Bank 2880/08.51.001./2019-20 dt. 09th October, 2019.
and other Non-Executive and Independent Directors during the
financial year 2019-20 are disclosed in Corporate Governance Accordingly, Directors recommend the passing of the Ordinary
Report. Vide Companies (Appointment and Qualification of Resolution for the Ratification and recording the reappointment
Directors) Fifth Amendment Rules, 2019 an online data bank of Sri Salim Gangadharan (DIN: 06796232) as Non-Executive –
for the independent directors (“Data Bank”) has been rolled out Part-time Chairman, for a period of three (3) years from
by the Indian Institute of Corporate Affairs, all the independent November 2, 2019.”
directors of the Bank had registered themselves in the Data
Pursuant to the applicable provision of the Companies Act,
Bank in compliance with the same.
2013, Banking Regulation Act, 1949, the provisions of the
During the 91st Annual General Meeting held on July 17, 2019 Articles of Association of the Bank and approval of Reserve Bank
as recommended by the Bank the shareholders accorded their of India vide its letter DOR Appt. No. 401/08.51.001/2020-21
approval for : dtd. 02-09-2020 Mr. Murali Ramakrishnan (DIN: 01028298),
• Appointment of Sri M George Korah (DIN: 08207827) as an has been appointed as Managing Director and Chief Executive
Independent Director. Officer and he shall also be a Whole-time Key Managerial
• Appointment of Sri Pradeep M Godbole (DIN: 08259944), Person of the Bank for a period of three years from 1st October,
as a Director, liable to retire by rotation. 2020 till 30th September, 2023.
• Reappointment of Ms. Ranjana S Salgaocar (DIN: 00120120)
as an Independent Director. CHANGE IN KEY MANAGERIAL PERSONNEL
• Reappointment of Mr. Parayil George John Tharakan (DIN: There was no change in Key Managerial Personnel during the
07018289) as an Independent Director. financial year ended March 31, 2020.
29
DIRECTORS’ REPORT
Composition of Audit Committee b) Special knowledge or practical experience in Banking,

The Audit Committee of the Board is chaired by Sri M George accountancy, agriculture and rural economy, co-operation,
Korah, who is a Chartered Accountant. The other members economics, finance, law, small-scale industry, Information
of the committee are, Sri Achal Kumar Gupta (Non-Executive Technology, Payment & Settlement Systems, Human
Director), Sri V J Kurian (Non-Executive Independent Director), Resources, Risk Management, Business Management or any
Sri Francis Alapatt (Non-Executive Independent Director) and other matter useful to the Banking Company in the opinion
Dr. John Joseph Alapatt (Non-Executive Independent Director). of Reserve Bank of India.
The constitution of the Committee is in compliance with c) Ability to provide insights and practical wisdom based on
the regulatory requirements. The terms of reference of their experience and expertise relevant to the Bank’s line of
the Audit Committee, incorporated in the Bank’s Code of business.
Corporate Governance, are in accordance with the SEBI d) Details of his/her association with other Companies/LLPs/
(LODR) Regulations,2015 entered into by the Bank with Stock Firms (including NBFC).
Exchanges where the Bank’s shares are listed under Companies e) Details of substantial interest in other Companies/LLPs/Firms
Act, 2013 and RBI guidelines. (including NBFC).
Independent Directors f) Details of financial facilities, if any, availed from the Bank.
In terms of the definition of Independence of Director as g) Details of default in the re-payment of loans, availed from
prescribed under Regulation 16(1) (b) of the SEBI (LODR) the Bank or any other Bank, if any.
Regulations, 2015 and Section 149(6) of Companies Act, 2013 h) Commitment to enhancing stockholder value.
and based on the confirmation/disclosures received from the i) Ability to develop a good working relationship with members
Directors, the following Directors are Independent Directors of with the Board and contribute to the working relationship
the Bank as on the date of this report with Senior Management of the Bank.
1. Dr. John Joseph Alapatt (DIN: 00021735) j) Whether he/she suffers from any of the disqualifications
2. Sri Francis Alapatt (DIN: 01419486) envisaged under the provisions of Banking Regulation
3. Smt. Ranjana S Salgaocar (DIN: 00120120) Act,1949, Companies Act, 2013 and SEBI (LODR)
4. Sri Parayil George John Tharakan (DIN: 07018289) Regulations, 2015.
5. Sri V J Kurian (DIN: 01806859) k) Any other factors as the Committee may deem fit and in the
6. Sri M George Korah (DIN: 08207827) best interests of the Bank and its stockholders.
Woman Director Criteria for determining Independence of a director

In terms of the provisions of Section 149 of the Companies The Criteria of Independence of a director is determined based
Act, 2013 and Regulation 17 of the SEBI (LODR) Regulations on conditions as laid down in the Companies Act, 2013 and
2015, the Bank has appointed Smt. Ranjana S Salgaocar (DIN: SEBI (LODR) Regulations, 2015. The independent director shall
00120120) as Woman Director on the Board of the Bank. at the first meeting of the Board in which he/she participates
as a director and thereafter at the first meeting of the Board
Bank’s policy on directors’ appointment and remuneration in every financial year or whenever there is any change in the
including criteria for determining qualifications, positive circumstances which may affect his/her status as an independent
attributes, independence of a director and other matters director, give a declaration that he/she meets the criteria of
provided under sub-section (3) of section 178 Independence.
Criteria for appointment as Director of the Bank REMUNERATION POLICY:
Nomination and Remuneration Committee of the Board shall Remuneration Policy for Employees of the Bank:
identify and ascertain the integrity, qualification, expertise
The Bank has a Board approved Compensation Policy which
and experience of the person who is considered for being
deals with the Compensation & Benefits of the Employees of
appointed/reappointed as Director of the Bank and apply due
the Bank and Whole-time Directors.
diligence in compliance with the Banking Regulation Act, 1949,
Reserve Bank of India directives on Fit & Proper Criteria, all other The objectives of the Compensation Policy of the Bank inter-alia
applicable provision of the Companies Act, 2013, SEBI (LODR) includes, to provide a fair and persistent basis for motivating,
Regulations, 2015 including any amendments from time to time inspiring and rewarding the employees appropriately, according
and Nomination Policy of the Bank. to their jobs/role size, performance, accomplishments,
contribution, skill, aptitude and competence to implement
Criteria for Determining Qualifications, Positive Attributes standards on sound compensation practices and incentives
a) The professional and personal ethics, integrity and track and to provide effective governance of compensation payable
record. to the WTDs/CEO and other staff, alignment of compensation
30
DIRECTORS’ REPORT
with prudent risk taking and effective supervisory oversight. sitting fees considers various factors like size and complexity of
The disclosure requirement of the remuneration is separately organization, Comparison with the peer Banks and Regulatory
provided in “Disclosure under Basel III norms.” guidelines as applicable etc. while recommending the change in
the sitting fees to the Board.
REMUNERATION POLICY OF DIRECTORS:
Remuneration of MD & CEO and Other Employees (including Policy on Board Diversity:
Key Managerial Personnel): Pursuant to SEBI (Listing Obligations and Disclosure
The Board approved Compensation Policy deals with the Requirements), Regulations, 2015 to ensure compliance
Compensation & Benefits of the Whole-time Directors/MD with the applicable provisions, the Bank has devised a policy
& CEO. The remuneration of the Whole-time Directors/MD on Board diversity to ensure adequate diversity in its Board
& CEO is recommended by the Nomination & Remuneration of Directors. The Bank believes that diversity underpins the
Committee (NRC) to the Board for approval after considering successful operation on an effective Board and embraces
the factors prescribed under the Compensation Policy. diversity as a means of enhancing the business. With a view to
achieve sustainable and balanced development, the Bank sees
The Board considers the recommendations of NRC and approves
increasing diversity at the Board level as an essential element in
the remuneration, with or without modifications, subject to
supporting the attainment of its strategic objectives. A diverse
shareholders’ and regulatory approvals. The remuneration
Board includes and makes good use of differences in the skills,
payable to Whole-time Directors/MD & CEO is subject to prior
regional and industry experience, background, race, gender and
approval of the Reserve Bank of India (RBI). Therefore, the
other qualities of Directors.
remuneration or any revision in remuneration to Whole-time
Directors/MD & CEO is payable only after receipt of the approval Policy on Board Diversity of the Bank mainly depends on the
from RBI. qualifications for appointment of Directors of the Bank as
For the other employees (including Key Managerial Personnel contained in the Banking Regulation Act,1949 and satisfying
and Compliance staff), the Board, based on the recommendation the Fit and Proper Criteria for directors as per the regulatory
of the NRC may devise appropriate compensation structure. requirement of RBI.
The compensation paid to other employees that include Award The Bank continuously seeks to enhance the effectiveness of
Staff, Officers coming under Scale I to IV and executives coming its Board and to maintain the highest standards of corporate
under Scale V to VII is fixed based on the periodic industry governance and recognizes and embraces the benefits of
level settlements with Indian Banks Association. The variable diversity in the boardroom. Diversity is ensured through
compensation paid to functionaries is based on the Performance consideration of a number of factors, including but not limited
Linked Incentive Scheme, which has been formulated on to skills, regional and industry experience, background and
the basis of performance parameters set in Performance
other qualities. In informing its perspective on diversity, the
Management System.
Bank also takes into account factors based on its own business
Remuneration of Chairman: model and specific needs from time to time.
The NRC recommends the remuneration of the non-executive The NRC has the responsibility to lead the process for Board
Chairman to the Board which is considered and approved by appointments and for identifying and nominating, candidates
the Board in the same manner subject to Shareholders’ and for appointment to the Board. The benefits of diversity continue
regulatory approvals. The NRC, while recommending the to influence succession planning and continue to be the key
remuneration of the part-time Chairman considers the Function, criteria for the search and nomination of directors to the Board.
Role and Responsibilities of the Chairman and Regulatory
guidelines as applicable etc. Board appointments are based on merit and candidates will be
considered against objective criteria, having due regard for the
The remuneration payable to the Chairman is subject to prior
benefits of diversity on the Board, including gender. The policy
approval of the Reserve Bank of India (RBI). Therefore, the
of Board Diversity is displayed in bank’s website.(https://www.
remuneration or any revision in remuneration of the Chairman
southindianbank.com/UserFiles/file/Rupay/DISCLOSURE/Policy_
is payable only after receipt of the approval from RBI.
on_Board_diversity.pdf).
Remuneration of Non-Executive Directors (NEDs):
The NEDs are paid sitting fees for attending each meeting of Board Level Performance Evaluation
the Board of Directors or any committee thereof as approved The Companies Act, 2013 and SEBI (LODR) Regulations, 2015
by the Board, within the permissible limit prescribed under stipulates the performance evaluation of the Directors including
the Companies Act, 2013, SEBI (LODR) Listing Regulations, Chairman, Board and its Committees. Considering the said
2015 and other regulatory guidelines, as amended from time provisions, the Bank has devised the process and the criteria for
to time. The Board while recommending the change in the the performance evaluation which has been recommended by
31
DIRECTORS’ REPORT
the Nomination & Remuneration committee and approved by Outcome of Performance Evaluation
the Board. An annual performance evaluation of the Board, Committees
of the Board and the individual members of the Board was last
The process for formal annual performance evaluation is
as under: conducted in May 2019 as per the aforesaid process and the
report on the evaluation was presented at the meeting of the
• Committee of Independent Directors at their separate Nomination and Remuneration Committee and the Board of
meeting evaluates the performance of Non-Independent Directors. The Directors expressed their satisfaction with the
Directors including Chairman of the Bank and the Board as evaluation process.
a whole.
Due to the outbreak of pandemic, COVID-19, MCA vide
• The Board evaluates the performance of the Independent General Circular No. 11/2020 dt. 24.03.2020 has clarified that
Directors, Non-Executive Directors, Chairman and MD & for the financial year 2019-20, if the lndependent Directors of a
CEO (excluding the director being evaluated) and submit its Company have not been able to hold such a meeting, the same
report to the Nomination & Remuneration committee. shall not be viewed as a violation. The lndependent Directors,
• The Board and Nomination & Remuneration Committee however, may share their views amongst themselves through
evaluates the fulfillment of the independence criteria as telephone or e-mail or any other mode of communication, if
specified in the regulations and their independence from they deem it to be necessary. Though the Bank had scheduled a
the management. meeting of Independent Directors in the month of March, 2020,
• The Board evaluate the performance of Board level due to the outbreak of Covid-19, the Bank could not conduct
committees. the formal meeting under provisions of Para Vll (1) of Schedule
• Nomination & Remuneration Committee evaluates/ lV to the Companies Act, 2013, as scheduled. However, it is
reviews the performance of each Director recommends the confirmed that the Independent Directors of Bank has shared
appointment/reappointment/continuation of Directors to their views amongst themselves in this regard.
the Board. Based on the recommendation of Nomination &
Remuneration Committee, Board will take the appropriate Auditors:
action. a) Statutory Auditors:
The criteria for performance evaluation are as under: The shareholders at its 91st Annual General Meeting held
on July 17, 2019, appointed M/s Varma & Varma, Chartered
Performance Evaluation of Non-Executive Directors, MD & Accountants , Kochi (Firm Registration Number 004532S), as
CEO and Chairman
Statutory Central Auditors of the Bank to hold office for a period
Participation at Board/Committee Meetings, Managing of 2 years until conclusion of 93rd Annual General Meeting.
Relationship, Knowledge and skill, Personal attributes,
Compliance and Corporate Governance; Leadership; For the year ended March 31, 2020, fees paid/payable to the
Strategy Formulation, Strategy Execution, Financial Planning/ Statutory Auditor M/s Varma & Varma, Chartered Accountants,
Performance, Relationships with the Board, Human Resource is as follows:
Management and Succession Planning, Personal Qualities; Amount
Fee paid#
Resources; Conduct of Meetings. (in lakhs)
Statutory audit/Limited review 35.00
Performance Evaluation of Board
Certification and other attestation charges 10.00
Composition and Diversity; Strategic Foresight, Value Creation,
Non-Audit services 0.00
Process and Procedures, Oversight of the Financial Reporting
Total 45.00
Process and Internal Controls, Oversight of Audit Functions,
Corporate Governance, Corporate Culture, Monitoring of # Excluding the branch audit fee and out of pocket expenses
business activities, Understanding of the business of the Bank RBI vide its letter DOS.ARG.No. PS-29/08.21.005/2020-21 dated
and Regulatory environment; Contribution to effective corporate August 26, 2020 had granted approval for appointment of
governance and transparency in the Company’s Operations; M/s Varma & Varma, Chartered Accountants as Statutory
Deliberations/decisions on the Company’s strategies, policies, Central Auditors of the Bank for FY 2020-21 for their second
plans and guidance to the Executive Management. year. There is no qualification or adverse remark in Auditors’
Report. There is no incident of fraud requiring reporting by the
Performance Evaluation of the Board Level Committees Auditors under Section 143(12) of the Act.
The performance and effectiveness of the Committee; Frequency
and duration; Spread of talent and diversity in the Committee; b) Secretarial Auditors and Secretarial Audit Report:
Understanding of regulatory environment and developments; Pursuant to Section 204 of the Companies Act, 2013, the Bank
Interaction with the board. had appointed M/s SVJS & Associates, Company Secretaries,
32
DIRECTORS’ REPORT
Practicing Company Secretaries, Kochi as its Secretarial Auditors internal audit, Management Audits, Information Systems Audit,
to conduct the secretarial audit of the Bank for the FY 2019-20. and Special audits including Investigations. All the internal
The Bank provided all assistance and facilities to the Secretarial audits are conducted based on the RBI direction in relation to
Auditor for conducting their audit. The Report of Secretarial conducting risk based internal audit, and concurrent audit of
Auditor for the FY 2019-20 is annexed to this report as Annexure branches and identified critical processes of the branches.
D. There are no reservations, adverse remark or disclaimer in the
Reporting structure of Head of Vigilance is directly reporting to
Secretarial Audit Report. No offence of fraud was reported by
MD & CEO.
the Secretarial Auditor of the Bank.
Internal inspectors conduct inspection at regular intervals and the
Pursuant to circular no. CIR/CFD/CMD1/27/2019 dated February
inspection reports are placed to Audit Committee at Executive
09, 2019, issued by SEBI, the Bank has obtained Secretarial
level (Audit Committee of Executives - ACE) for review,which
Compliance Report, from Practicing Company Secretaries on
is overseen and controlled by Board Level committee (Audit
compliance of all applicable SEBI Regulations and circulars/
Committee of Board - ACB).
guidelines issued thereunder and the copy of the same was
submitted with the Stock Exchanges. Audit of Branches
INTERNAL CONTROL AND AUDIT/INSPECTION All the branches are subjected to Risk Based Internal Audit
Internal Control and their Adequacy (RBIA). This audit is conducted at periodic intervals based on the
risk perception. All the audits are conducted based on check
The Bank has put in place extensive internal controls and
points and all the operational area are covered under this audit.
processes to mitigate operational risks, which includes maker-
Credit audit is also conducted as part of Risk Based internal
checker authentication of CBS transactions, centralized
audit where aggregate credit exposure of a borrower is `5 crore
processing of opening and modifications of CASA accounts,
and above.
centralized sanctioning of loan facilities, day end checks to
monitor critical issues involving timely renewal of credit reports, In addition to RBIA of branches, the Bank has concurrent
closure of the Bank Guarantees, timely obtaining of loan audit system, which covers select Branches, conducted by
documents, EM creation and CERSAI registration, etc. qualified Chartered Accountants/retired officers. The selection
Various Preventive controls viz., Dual custody for cash, gold and of branches for concurrent audit is done in such a way that it
other security items, maintenance of daily control registers for covers branches having substantial advance, entire specialized
security items, introduction of finger-scan-authentication for Branches such as ‘B’ Category Branches, Corporate Branches
processing of transactions in CBS in addition to login passwords, etc., and almost all isolated / remote branches irrespective of its
stringent guidelines on password usage, STP processes between business volume.
CBS and payment interface systems for transmission of
messages are in place. The Bank has introduced a conservative selection of branches
which has resulted in a higher frequency of audit.
As per the requirement of Companies Act, 2013, the Bank
has formulated Internal Financial Controls framework. Risk The Bank has also introduced special audit from April 2019
and Controls associated with each process in the Bank are (a limited Concurrent Audit), where audit is conducted by
documented under the Internal Financial Controls Framework. qualified Chartered Accountants/retired officers, in branches
Inspection and Vigilance Department plays a significant role where concurrent audit does not exist, covering critical areas of
in testing the control effectiveness for each process under the Branch business.
framework.
In addition to the concurrent and risk based internal audits,
The Internal Audit function provides independent assurance the branches are subjected to surprise inspection, Revenue
to the Board of Directors and Senior Management on the inspection, self-audit, Gold Loan asset verification and
quality and effectiveness of the Bank’s internal control, risk compliance inspection during the financial year.
management and governance systems and processes, thereby
helping the Board and Senior Management protect the Bank Separate monitoring team - Inspection Monitoring Group (IMG)
and its reputation. closely monitors various inspections/audits at the Branches.
There are four IMGs who are reporting to Head of IMG.
Audit/Inspection These Monitoring groups are assigned the task of ensuring
The Bank has an Inspection & Vigilance department which is the compliance and closure of the inspection report of the
responsible for independently evaluating the adequacy and branches. During the course of inspections, serious issues if
effectiveness of all internal controls, risk management systems, any concerning regulatory guidelines, legal requirements and
governance systems and processes. The Department is manned operational processes are found, these are escalated to the
by appropriately qualified personnel to handle the Risk based Management for timely action.
33
DIRECTORS’ REPORT
All the branch related audits are presently automated through Business Responsibility Report
system where reporting, risk rating, compliance and closure As stipulated in Listing Regulations, the Business Responsibility
of the reports are done through software application which Report describing the initiatives taken by the Bank from
provides the Bank with an overall control on various audits environmental, social and governance perspective is attached
conducts in the branches. Continuous improvements are made as part of the Annual Report as annexure-E.
to the application to automate several activities at HO and
digitize the records in single application. Dividend Distribution Policy
In accordance with the Regulation 43A of Securities and
Audit of Departments and critical process
Exchange Board of India (Listing Obligations and Disclosure
Management Audit of Regional Offices (RO) and Departments Requirements) Regulations, 2015, the Bank has formulated
are conducted at periodical intervals based on the risk a Dividend Distribution Policy and the Policy is hosted on
perception. the website of the Bank and can be viewed. (https://www.
In addition to the management audit conducted by inspection southindianbank.com/content/viewContentLv11.aspx?linkIdLv2
department all the critical operations such as International =215&LinkIdLv13=2672&linkId=2672)
Banking Division, Treasury Department, and Credit Department
Subsidiary Companies/Joint Ventures or Associate
and Centralized Processing Centers, etc., are subjected to Companies
concurrent audit by independent Chartered Accountant firms.
All these reports are reviewed by Audit committee of Executives There are no companies which have become or ceased to be its
subsidiaries, joint ventures or associate companies during the
and corrective steps are taken to rectify the lapses/irregularities
year.
if any pointed out in such inspections.
The Board of Directors has formulated a policy for determining
Information System Audit of CBS and major applications are ‘material’ subsidiaries pursuant to the provisions of the Listing
conducted by internal audit and external audit firm. Regulations. The same is displayed on the website of the Bank
New product/process whenever introduced in the Bank is (https://www.southindianbank.com/content/viewContentLvl1.
reviewed by Inspection Department and recommendations are aspx?linkIdLvl2=215&LinkIdLvl3=781&linkId=781).
made for necessary controls/improvements for deficiencies /
gaps in existing internal controls. Related Party Transactions
The Board of Directors has formulated a policy on materiality of
Inspection Division also carries out independent evaluation of Related Party Transactions and also on dealing with Related Party
Bank’s internal financial controls in terms of Companies Act, Transactions pursuant to the provisions of the Companies Act,
2013 and adequacy of internal financial controls with reference 2013 and SEBI (LODR) Regulations, 2015. The same is displayed
to the Financial Statements. on the website of the Bank (https://www.southindianbank.com/
content/viewContentLvl1.aspx?linkIdLvl2=215&LinkIdLvl3=78
EXPLANATION FOR AUDITORS’ COMMENTS IN THE REPORT 2&linkId=782). Since the related party transactions are in the
The Statutory Auditors Report for the year 2019-20 does not ordinary course of business and on an arm’s length basis and
contain any qualification. not material hence AOC2 is not applicable.
CORPORATE GOVERNANCE Material Changes and Commitment Affecting Financial

A separate report profiling Corporate Governance as required Position of the Bank
under applicable regulations of the SEBI (LODR) Regulations There are no material changes and commitments, affecting the
2015 and a certificate from M/s SVJS & Associates Company financial position of the Bank which has occurred between the
Secretaries, Secretarial Auditors of the Bank, are annexed to this end of the financial year of the Bank i.e. March 31, 2020 and
Report. the date of the Directors’ report i.e. 4th September, 2020.
Annual Return/Extracts of Annual Return Significant and material orders passed by Regulators
Pursuant to sub-section 3(a) of Section 134 and sub-section (3) During the year under review, there are no significant and
of Section 92 of the Companies Act, 2013, read with Rule 11 material orders passed by the regulators or courts or tribunals
and 12 of the Companies (Management and Administration) impacting the going concern status and Bank’s operations in
Rules, 2014, copy of Annual Return as at March 31,2020 in future.
Form No. MGT-7 and the extracts of the Annual Return as at Maintenance of Cost Records
March 31, 2020 in form no. MGT-9 is hosted on the website Being a Banking Company, the Bank is not required to maintain
of the Bank and can be viewed https://www.southindianbank. cost records as per sub-section (1) of Section 148 of the
com/content/annualreport-financial-year-2019-to-2020/3793. Companies Act, 2013.
34
DIRECTORS’ REPORT
Details in respect of frauds reported by auditors c) the Directors had taken proper and sufficient care for the
There is no fraud reported by auditors under sub-section (12) maintenance of adequate accounting records in accordance
of section 143 of the Companies Act, 2013 other than those with the provisions of the Companies Act, 2013 for
which are reportable to the Central Government. safeguarding the assets of the Bank and for preventing and
detecting fraud and other irregularities;
Compliance to Secretarial Standards d) the Directors had prepared the annual accounts for the
The relevant Secretarial Standards issued by the Institute financial year ended on March 31, 2020, on a going concern
of Company Secretaries of India (ICSI) related to the Board basis;
Meetings and General Meeting have been complied with by the e) the Directors had laid down internal financial controls to
Bank. be followed by the Bank and that such internal financial
controls are adequate and were operating effectively; and
Strictures and Penalties
f) the Directors had devised proper systems to ensure
During the last three financial years, there were no penalties or
compliance with the provisions of all applicable laws and
strictures imposed on the Bank by the SEBI and any of the stock
exchanges and/or any other statutory authorities on matters that such systems were adequate and operating effectively.
relating to capital market.
ACKNOWLEDGEMENTS
Management Discussion and Analysis Report The Board of Directors places on record its gratitude to the
This has been dealt with in a separate section in the Annual Reserve Bank of India, Securities and Exchange Board of India,
Report. Government of India, Government of Kerala and all other state
Governments where the Bank operates, other Government and
Particulars of Loans, Guarantees or Investments Regulatory Authorities, including stock exchanges, where the
Pursuant to Section 186 (11) of the Companies Act, 2013, the Bank’s shares are listed and correspondent Banks for their strong
provisions of Section 186 of Companies Act, 2013, except sub- support and guidance, during the year. The Board also places on
section (1), do not apply to a loan made, guarantee given or record its gratitude to the Bank’s shareholders and customers
security provided or investment made by a banking company in for their continued support, patronage and goodwill. The
the ordinary course of business. single most important pillar of any Institution is its personnel,
more so in the case of a service entity like a Bank. The Bank
Directors’ Responsibility statement acknowledges this fact and thanks all of them for their diligence
Pursuant to the requirement under Section 134(5) of and loyalty towards the Bank. The Board expresses its sincere
the Companies Act, 2013, with respect to the Director’s appreciation for the dedicated services rendered by officers and
Responsibility Statement, it is hereby confirmed that: employees of the Bank at all levels.
a) in the preparation of the annual accounts for the financial

year ended March 31, 2020, the applicable accounting
standards had been followed along with proper explanation By Order of the Board
relating to material departures;
b) the Directors had selected such accounting policies and (SALIM GANGADHARAN) (V G MATHEW)
applied them consistently and made judgments and CHAIRMAN MANAGING DIRECTOR & CEO
estimates that are reasonable and prudent so as to give a DIN : 06796232 DIN : 05332797
true and fair view of the state of affairs of the Bank at the
end of the financial year 2019-20 and of the profit of the Place : Thrissur
Bank for that period; Date : September 4, 2020
35
DIRECTORS’ REPORT
Annexure A
PARTICULARS OF EMPLOYEES PURSUANT TO SECTION 197 OF THE COMPANIES ACT, 2013
Information as required by the provisions of Section 197 of the Companies Act, 2013, read with Rule 5 of Companies (Appointment
and Remuneration of Managerial Personnel) Rules, 2014, is given under: (Top 10 employees based on Annual Salary)
Remuneration Nature of
Name,
Experience Date of employment Last
Qualification Designation
Gross (`)# Net (`)## (in years) Employment (Contractual/ Employment
and Age (in years)
otherwise)
V. G. Mathew, MD & CEO 1,54,72,260.00 94,89,434 41 02.01.2014 Whole-Time Chief General
M.Sc. CAIIB Manager,
(66 years) SBI
Reghunathan K. N., Executive 57,84,794 37,00,174 41 14.12.2015 Contractual GM, Union Bank of Inda
B.Com., CAIIB (62 years) Vice President
(Treasury)
Sanchay Kumar Sinha Country Head 50,69,916 38,25,651 27 02.09.2017 Contractual SVP- Head Liabilities and
PG Diploma in Management - Retail Banking Client Engagement for
(52 years) –SGM Consumer Banking -
Indusind Bank
Chandrasekhar Mukherjee Chief General 47,39,446 35,79,681 35 10.04.2019 Contractual Chief People’s Officer,
B.Com., PG Diploma in Personnel Manager SREI Infrastructure
Mgt & Industrial Relation Finance Ltd.
(56 years)
Abhishek Nalwaya Asst. General 45,64,393 33,92,339 14 07.05.2019 Contractual Head- Investor
CA, BA Strategy & Finance Manager Relations, Reliance
(36 years) Capital
Sivakumar G, Executive Vice 42,24,949 31,71,295 40 14.12.2015 Contractual GM, State Bank of Inda
MBA (Finance), M.Sc., CAIIB, G President (Credit)
(64 years)
Thomas Joseph K, Executive 40,03,681@ 26,84,815 36 01.06.2019 Contractual EVP, SIB (Retired on
B.Sc., (Mechanical Engg.), Vice President 31.05.2019)
Diploma in Management, CAIIB (Operations)
(61 years)
Vinayak Jayawant Sawant Deputy General 37,82,746 30,24,508 31 06.08.2018 Contractual Deputy Vice President,
(Master of Human Resources Manager Axis Bank
Development Management)
(55 Years)
Vinod Francis Tharail (Master of Joint General 32,96,694 24,79,990 24 01.08.2018 Contractual VP-IndusInd Bank
Financial Management) (46 years) Manager
Ravi C R (MA Economics) Asst. General 31,53,680 25,53,211 27 25.07.2018 Contractual SVP-Sales-Cogencis
(50 Years) Manager Information Services Ltd.
#Gross salary means total salary as per the Form 16 issued for the FY 2019-20.
##Net salary means Gross Salary less TDS.
@ Superannuation benefits are excluded
• None of the above employees holds together with his relatives two percent or more of the total voting power of the Company.
• The above mentioned personnel are not related to any Director of the Bank.
(SALIM GANGADHARAN) (V G MATHEW)

CHAIRMAN MANAGING DIRECTOR & CEO
DIN : 06796232 DIN : 05332797
Place : Thrissur
Date : September 4, 2020
36
DIRECTORS’ REPORT
Annexure - B
PARTICULARS PURSUANT TO SECTION 197(12) OF THE COMPANIES ACT, 2013
The ratio of the remuneration of each director to the median employee’s remuneration and other details in terms of sub-section 12
of Section 197 of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014:
Sr.
Requirements Disclosure
No.
I The ratio of the remuneration of each director to Chairman
the median remuneration1 of the employees for the Mr. Salim Gangadharan 1.91x
financial year
MD & CEO
Mr. V G Mathew 7.85x
For this purpose, sitting fees paid to the Directors (except

Sitting fee paid to Chairman as approved by RBI) have not been
considered as remuneration.
II The percentage increase in remuneration of each Chairman
director, CFO, CEO, CS in the financial year Mr. Salim Gangadharan 0%
MD & CEO
Mr. V G Mathew* 31.02%
Mr. Chithra H (CFO) 17.56%
Mr. Jimmy Mathew (Company Secretary) 15.12%
III The percentage increase in the median remuneration of NIL
employees in the financial year
IV The number of permanent employees on the rolls of There were 8570 employees as on March 31, 2020
the Bank
V Average percentile increase already made in the salaries The average percentage increase made in the median salaries
of employees other than the managerial personnel of employees other than the managerial personnel is 21.89%
in the last financial year and its comparison with the
percentile increase in the managerial remuneration Increase in the median remuneration of managerial personnel
and justification thereof and point out if there are any is 11.33%
exceptional circumstances for increase in the managerial
remuneration;
VI Affirmation that the remuneration is as per the Yes, it is confirmed
remuneration policy of the Bank
Notes:
x denotes the median remuneration of the employees in the financial year.
1. The median salary of the staff members is arrived by taking 12 months’ actual salary paid during the FY 2019-20.
2. Remuneration of Chairman and MD & CEO is regulated by RBI guidelines.
* The increase in salary was due to approval of yearly increment and variable pay by the RBI during the FY 2019-20.
(SALIM GANGADHARAN) (V G MATHEW)

CHAIRMAN MANAGING DIRECTOR & CEO
DIN : 06796232 DIN : 05332797
Place : Thrissur
Date : September 4, 2020
37
DIRECTORS’ REPORT
Annexure C
Composition of CSR Committee
The Bank understands its responsibility towards the society and environment in which it operates. The Bank has constituted Corporate
Social Responsibility Committee at the Board level to monitor the CSR activities. The CSR policy of the Bank can be viewed at https://
www.southindianbank.com/UserFiles/file/CSR_Policy.pdf
Members of the Committee are
1. Sri Parayil George John Tharakan (Chairman of the Committee)
2. Sri V G Mathew (MD & CEO)
3. Sri V J Kurian (Member)
4. Dr. John Joseph Alapatt (Member)
The composition is as per Companies Act, 2013 and Companies (Corporate Social Responsibility Policy) Rules, 2014.
Average net profit before tax of the Company for the last three financial years: `624.95 crore. Prescribed CSR expenditure (two
percent of the amount as above): `12.50 crore.
Details of CSR spent during the Financial Year

a) Total amount to be spent for the Financial Year 2019-20: `12,50,00,000.00
b) Amount not spent, if any: `49,00,000.00
c) Manner in which the amount spent during the financial year is detailed below:
Sector-wise utilization of CSR funds for FY 2019-20 (Amount in `)

Amount
Projects or Programs
Amount spent on the
(1) Local area or Cumulative Amount
outlay projects or
Other (2) Specify the Expenditure Spent Direct
Sl. CSR Project or Activity Sector in which the (Budget) programmes(1)
State and District up to or through
No Identified project is covered project or Direct
where projects or Reporting Implementing
programme- Expenditure
Programmes was Period Agency
wise on projects (2)
undertaken
overheads
1 Providing Ambulances/ Promoting healthcare Andhra Pradesh, 89,817,947.00 76,065,073.13 76,065,073.13 Direct
dialysis machines to including preventive Assam, Chhattisgarh,
hospitals, conducting healthcare and Kerala, Karnataka,
medical camps, providing sanitation, making Madhya Pradesh,
water purifiers to various available safe drinking Maharashtra,
institutions, sanitary water, eradicating Meghalaya,
facilities to individual hunger, poverty and Tamil Nadu, Telangana,
households/instituitions, malnutrition
Flood Relief Activities,
COVID-19 relief measures
2 Bank's scholarship project- Promoting Education, Goa, Kerala, 129,368,076.00 33,385,008.43 33,385,008.43 Direct
SIB Scholar, enhancing including special Karnataka,
the learning experience education and Maharashtra, New
through smart class rooms employment enhancing Delhi, Tamil Nadu,
and other facilities in vocation skills and Telangana,
educational institutions, livelihood enhancement
livelihood enhancement projects.
projects for women
3 Setting up hostel for Empowering women, Kerala 2,950,000.00 700,000.00 700,000.00 Direct
women and orphans, setting up homes and
empowering women hostels for women and
orphans, setting up old
age homes, measures
for reducing inequalities
faced by socially and
economically backward
groups.
38
DIRECTORS’ REPORT
Amount
Projects or Programs
Amount spent on the
(1) Local area or Cumulative Amount
outlay projects or
Other (2) Specify the Expenditure Spent Direct
Sl. CSR Project or Activity Sector in which the (Budget) programmes(1)
State and District up to or through
No Identified project is covered project or Direct
where projects or Reporting Implementing
programme- Expenditure
Programmes was Period Agency
wise on projects (2)
undertaken
overheads
4 Installation of solar plants, Ensuring environmental Goa, Kerala, 6,428,335.00 3,898,675.00 3,898,675.00 Direct
waste management sustainability, Karnataka, Tamil Nadu,
measures , procurement maintaining quality of
and supply of eco-friendly soil, air and water.
cloth bags
5 Art and Culture Protection of national Kerala 409,723.20 409,723.20 409,723.20 Direct
heritage, art and culture
including restoration of
buildings and sites of
historical importance and
works of art.
6 Activities to promote Training to promote Kerala 31,810,000.00 5,617,720.24 5,617,720.24 Direct
nationally recognized nationally recognized
sports sports
7 Expenses pertaining to CSR Trust Kerala 23,800.00 23,800.00 23,800.00 Direct
CSR Trust
Total 260,807,881.20 120,100,000.00 120,100,000.00
The Bank’s CSR mission is to contribute to the social and was transferred to ‘Unspent CSR Account’ on 30.04.2020, in
economic development of the community. Through a series compliance with Companies (Amendment) Act, 2019, which
of interventions, the Bank seeks to mainstream economically, will be positively spent within the FY 2020-21.
physically and socially challenged groups and to draw them into
cycle of growth, development and empowerment. Responsibility Statement
The CSR Committee confirms that the implementation and
Reason for not spending the prescribed CSR Expenditure monitoring of CSR Policy is in compliance with CSR objectives
South Indian bank has always given top priority to fulfilling its and Policy of the Bank.
obligations under Corporate Social Responsibility. Diversified
Projects in the areas of healthcare, education, sports and
sanitation that would benefit the society as a whole are identified Sd/- Sd/-
and the bank whole-heartedly supports such initiatives. In the V G Mathew Parayil George John Tharakan
Financial Year 2019-20, the Bank spent `12.01 crore (96.08% MD & CEO Chairman-CSR Committee
of the budget) towards CSR activities against `12.22 crore in the DIN: 05332797 DIN: 07018289
Year 2018-19. Apart from the above, an outlay of `9.41 crore
has been sanctioned in various projects, pending disbursements Place : Thrissur,
as on 31.03.2020. The unspent CSR amount of 0.49 crore Date : September 4, 2020
39
DIRECTORS’ REPORT
Annexure D
Form No. MR-3
SECRETARIAL AUDIT REPORT
FOR THE FINANCIAL YEAR ENDED 31.03.2020
[Pursuant to Section 204(1) of the Companies Act, 2013 and Rule No.9 of the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014]
To (a) The Securities and Exchange Board of India

The Members (Substantial Acquisition of Shares and Takeovers)
THE SOUTH INDIAN BANK LIMITED Regulations, 2011.
S I B House, Mission Quarters (b) The Securities and Exchange Board of India
T B Road, Thrissur – 680 001 (Prohibition of Insider Trading) Regulations, 2015.
(c) The Securities and Exchange Board of India (Issue of
We, SVJS & Associates, Company Secretaries, have conducted Capital and Disclosure Requirements) Regulations,
the Secretarial Audit of the compliance of applicable statutory 2018.
provisions and the adherence to good corporate practices by The (d) The Securities and Exchange Board of India (Share
South Indian Bank Limited [CIN: L65191KL1929PLC001017] Based Employee Benefits) Regulations, 2014.
(hereinafter called the company). Secretarial Audit was (e) The Securities and Exchange Board of India (Issue and
conducted in a manner that provided us a reasonable basis for Listing of Debt Securities) Regulations, 2008.
evaluating the corporate conducts/statutory compliances and
(f) The Securities and Exchange Board of India (Registrars
expressing our opinion thereon.
to an Issue and Share Transfer Agents) Regulations,
1993 regarding the Companies Act and dealing with
Based on our verification of the books, papers, minute books,
client.
forms and returns filed and other records maintained by the
Company and also the information provided by the Company, (g) The Securities and Exchange Board of India
its officers, agents and authorized representatives during the (Listing Obligations and Disclosure Requirements)
conduct of Secretarial Audit, the explanations and clarifications Regulations, 2015.
given to us and the representations made by the Management (h) The Securities and Exchange Board of India
and considering the relaxations granted by the Ministry of (Depositories and Participants) Regulations, 2018 to
Corporate Affairs and Securities and Exchange Board of India the extent applicable.
warranted due to the spread of the COVID-19 pandemic, we (vi) As informed to us, the following other laws are specifically
hereby report that in our opinion, the Company has, during the applicable to the Company.
audit period covering the financial year ended on 31.03.2020 1. The Banking Regulation Act, 1949 and Banking
complied with the statutory provisions listed hereunder and also Regulation (Companies) Rules, 1949
that the Company has proper Board processes and compliance 2. Reserve Bank of India Act, 1934
mechanism in place to the extent, in the manner and subject to 3. Banking Ombudsman Scheme, 2006
the reporting made hereinafter: 4. The Bankers’ Books Evidence Act, 1891
5. The Banking Companies (Period of Preservation of
We have examined the books, papers, minute books, forms Records) Rules, 1985
and returns filed and other records maintained by The South 6. The Securitisation and Reconstruction of Financial
Indian Bank Limited (“the Company”) for the financial year Assets and Enforcement of Security Interest
ended on 31.03.2020 according to the provisions of: (SARFAESI) Act, 2002 and The Security Interest
(i) The Companies Act, 2013 (the Act) and the Rules made (Enforcement) Rules, 2002
thereunder; 7. The Prevention of Money-Laundering Act, 2002 and
(ii) The Securities Contracts (Regulation) Act, 1956 (‘SCRA’) The Prevention of Money-Laundering (Maintenance
and the Rules made thereunder to the extent applicable; of Records) Rules, 2005
(iii) The Depositories Act, 1996 and the Regulations and Bye- 8. The Industrial Disputes (Banking and Insurance
laws framed thereunder; Companies) Act, 1949
(iv) Foreign Exchange Management Act, 1999 and the 9. The Deposit Insurance and Credit Guarantee
Rules and Regulations made thereunder to the extent of Corporation Act, 1961 and The Deposit Insurance and
Foreign Direct Investment, Overseas Direct Investment Credit Guarantee Corporation General Regulations,
and External Commercial Borrowings, to the extent 1961
applicable; 10. The Recovery of Debts Due to Banks and Financial
(v) The following Regulations and Guidelines prescribed Institutions Act, 1993 and
under the Securities and Exchange Board of India Act, 11. Credit Information Companies (Regulation) Act,
1992 (‘SEBI Act’):- 2005.
40
DIRECTORS’ REPORT
We have also examined compliance with the applicable clauses took place during the period under review were carried out in
of the following: compliance with the provisions of the Act.
(i) Secretarial Standards 1 and 2 issued by The Institute of Adequate notice was given to all directors to schedule the Board
Company Secretaries of India; Meetings, agenda and detailed notes on agenda were sent at
(ii) The Listing Agreements entered into by the Company least seven days in advance, and a system exists for seeking and
with Bombay Stock Exchange Limited and National Stock obtaining further information and clarifications on the agenda
Exchange of India Limited. items before the meeting and for meaningful participation at
the meeting.
As informed, the Company has responded appropriately to
notices received from various statutory/regulatory authorities All decisions of the board were unanimous and the same was
including initiating actions for corrective measures, payment of captured and recorded as part of the minutes.
penalties etc., wherever necessary.
We further report that there are adequate systems and
During the period under review the Company has complied processes in the Company commensurate with its size and
with the provisions of the Act, Rules, Regulations, Guidelines, operations to monitor and ensure compliance with applicable
Standards, etc. mentioned above. laws, rules, regulations and guidelines.
We further report that the Board of Directors of the We further report that during the audit period there were
Company is duly constituted with proper balance of Executive no instances of public issue/right issue/issue of sweat equity,
Directors, Non-Executive Directors and Independent Directors. redemption or buy back of securities, Merger/amalgamation/
The changes in the composition of the Board of Directors that reconstruction or foreign technical collaborations.
During the period, the following issues have taken place:
Sl. Method of Mode of Approval Date of Number of shares issued/Amount

No. Issue Approval
1. Private Shareholders’ approval by 17.07.2019 Pursuant to Sections 42, 71, 179 and other applicable
Placement way of special resolution provisions, if any, of the Companies Act, 2013 and other
in the Annual General relevant statutory provisions, Shareholders’ approval
Meeting obtained for borrowing/raising of funds by issue of debt
securities including but not limited to non-convertible
debentures, bonds, on a private placement basis for an
amount not exceeding `500 crore, within the overall
borrowing limits;
Non-Convertible, unsecured, Basel III Compliant Tier I bonds

aggregating to `500 crores were allotted on 24.01.2020.
The Bank has taken Shareholders’ approval at the Annual General Meeting held on 17.07.2019 for the following:
• Pursuant to Sections 23, 41, 42, 62 (1) (c) and other applicable provisions of the Companies Act, 2013, and other relevant
statutory provisions, to augment the Paid-up Capital of the Bank by further issue of securities for an amount not exceeding `30
crores.
• Pursuant to Section 13 and other applicable provisions of the Companies Act, 2013, to amend the Object Clause of the
Memorandum of Association of the Bank.
Further, the Bank has allotted 40000 Equity Shares of `1/- each at a premium of `23.05/- per share under SIB ESOS-2008
(Tranche VII) on 05.08.2019.
This report is to be read with Annexure A of even date and the same forms an integral part of this report.
For SVJS & Associates

Company Secretaries
CS Vincent P.D.
Kochi Managing Partner
03.09.2020 CP No.: 7940, FCS: 3067
UDIN : F003067B000656896
41
DIRECTORS’ REPORT
Annexure A
ANNEXURE TO THE SECRETARIAL AUDIT REPORT OF EVEN DATE
To
The Members
THE SOUTH INDIAN BANK LIMITED
S I B House, Mission Quarters
T B Road, Thrissur – 680 001
Our Secretarial Audit Report of even date is to be read along with this letter.
1. Maintenance of the secretarial records is the responsibility of the management of the Company. Our responsibility as Secretarial
Auditors is to express an opinion on these records, based on our audit.
2. During the audit, we have followed the practices and processes as were appropriate, to obtain reasonable assurance about
the correctness of the contents of the secretarial records. We believe that the process and practices we followed provide a
reasonable basis for our report.
3. The correctness and appropriateness of financial records and Books of Accounts of the Company have not been verified.
4. We have obtained the Management Representation about the compliance of laws, rules and regulations and happening of
events etc., wherever required.
5. The compliance of the provisions of corporate and other applicable laws, rules, regulations, standards etc. is the responsibility
of management. Our examination was limited to the verification of the procedures and compliances on test basis.
6. While forming an opinion on compliance and issuing the Secretarial Audit Report, we have also taken into consideration the
compliance related actions taken by the Company after 31st March 2020 but before issue of the Report.
7. We have considered actions carried out by the Company based on independent legal/professional opinion as being in compliance
with law, wherever there was scope for multiple interpretations.

Company Secretaries
Sd/-
CS Vincent P D
Managing Partner
CP No.: 7940, FCS: 3067
UDIN : F003067B000656896
Kochi
03.09.2020
42
DIRECTORS’ REPORT
Annexure - E
Business Responsibility Report
SECTION A: GENERAL INFORMATION ABOUT THE COMPANY
1. Corporate Identity Number (CIN) of the Company L65191KL1929PLC001017
2. Name of the Company The South Indian Bank Limited
3. Registered address SIB House, TB Road, Mission Quarters, Thrissur - 680 001, Kerala,India.
4. Website: www.southindianbank.com
5. E-mail id: [email protected]
6. Financial Year reported: 2019-2020
7. Sector(s) that the Company is engaged in (industrial activity Banking Services
code-wise): NIC Code of the Service 64191
8. List three key products/services that the Company South Indian Bank is a publicly held banking company engaged in
manufactures/provides: providing a wide range of banking and financial services including
retail banking, corporate banking and treasury operations.
9. Total number of locations where business activity is
undertaken by the Company
Number of International Locations: As on March 31, 2020, the bank has one representative office in Dubai
Number of National Locations: As on March 31st 2020, The Bank had a network of 935 banking
outlets (875 Branches, 54 Extension Counters, 3 satellite branches &
3 Ultra small branches), 1424 ATM/CRM (1325 ATMs and 99 CRMs)
spanning in 27 states and 3 union territories
10. Markets served by the Company Local/State/National/ National / International
International
SECTION B: FINANCIAL DETAILS OF THE COMPANY

1. Paid-up Capital (INR): `180.97 crores
2. Total Turnover (INR): `8,809.55 crores
Total turnover represents the sum of “Interest earned” (Schedule 13
of the financial statements) and “Other income” (Schedule 14 of the
financial statements).
3. Total profit after taxes (INR): `104.59 crores
4. Total Spending on Corporate Social Responsibility (CSR) as 1.92%
percentage of profit after tax (%)
5. List of activities in which expenditure in 4 above has been • Eradicating hunger, poverty and malnutrition, promoting health-
incurred: care including preventive healthcare and sanitation and making
available safe drinking water.
• Promoting Education, including special education and employment
enhancing vocation skills and livelihood enhancement projects.
• Empowering women, setting up homes and hostels for women
and orphans, setting up old age homes, measures for reducing
inequalities faced by socially and economically backward groups.
• Ensuring environmental sustainability, maintaining quality of soil,
air and water.
• Protection of national heritage, art and culture including restoration
of buildings and sites of historical importance and works of art.
• Training to promote nationally recognized sports.
• Rural development projects.
• Promoting Financial Literacy.
SECTION C: OTHER DETAILS

1. Does the Company have any Subsidiary Company/Companies? NO
2. Do the Subsidiary Company/Companies participate in the BR Initiatives of the parent company? If yes, then indicate the number of NA
such subsidiary company(s)
3. Do any other entity/entities (e.g. suppliers, distributors etc.) that the Company does business with, participate in the BR initiatives NO
of the Company? If yes, then indicate the percentage of such entity/ entities? [Less than 30%, 30-60%, More than 60%]
43
DIRECTORS’ REPORT
SECTION D: BR INFORMATION
1. Details of Director/Directors responsible for BR

a) Details of the Director/Directors responsible for
implementation of the BR policy/policies
DIN Number 05332797
Name Mr. V G Mathew
Designation Managing Director & CEO
b) Details of the BR head
DIN Number (if applicable) -
Name Mr. Thomas Joseph K
Designation Executive Vice President (Operations)
Telephone number +91-487-2420020
E-mail id [email protected]
2. Principle-wise (as per NVGs) BR Policy/policies (Reply in 4. Has the policy been Y Y Y Y Y - - Y Y
Y/N) approved by the
NVGs on social, environmental and economic responsibilities Board?*
of business prescribed by the Ministry of Corporate Affairs If yes, has it been Y Y Y Y Y - - Y Y
advocates the nine principles (detailed below) as P1-P9 to be signed by MD/owner/
followed: CEO/appropriate Board
P1 – Businesses should conduct and govern themselves Director?
with Ethics, Transparency and Accountability 5. Does the Company Y Y Y Y Y - - Y Y
P2 – Businesses should provide goods and services that have a specified
are safe and contribute to sustainability throughout committee of the
their life cycle Board/ Director/
P3 – Businesses should promote the wellbeing of all Official to oversee the
employees implementation of the
P4 – Businesses should respect the interests of, and be policy
responsive towards all stakeholders, especially those 6. Indicate the link for Y Y Y Y Y - - Y Y
who are disadvantaged, vulnerable and marginalized the policy to be viewed
P5 – Businesses should respect and promote human rights online?
P6 – Business should respect, protect, and make efforts to
7. Has the policy Y Y Y Y Y - - Y Y
restore the environment
been formally
P7 – Businesses, when engaged in influencing public
communicated to all
and regulatory policy, should do so in a responsible relevant internal and
manner external stakeholders?
P8 – Businesses should support inclusive growth and
8. Does the company Y Y Y Y Y - - Y Y
equitable development
have in-house
P9 – Businesses should engage with and provide value
structure to implement
to their customers and consumers in a responsible
the policy/policies.
manner
9. Does the Company Y Y Y Y Y - - Y Y
The principle-wise responses are mentioned below. have a grievance
No. Question P1 P2 P3 P4 P5 P6 P7 P8 P9 redressal mechanism
related to the policy/
1. Do you have a policy/ Y Y Y Y Y N N Y Y
policies to address
policies for....
stakeholders’
2. Has the policy Y Y Y Y Y - - Y Y grievances related to
been formulated in the policy/policies?
consultation with the
10. Has the company Y Y Y Y Y - - Y Y
relevant stakeholders?
carried out
3. Does the policy Y Y Y Y Y - - Y Y independent audit/
conform to any evaluation of the
national /international working of this policy
standards? If yes, by an internal or
specify? (50 words) external agency?
44
DIRECTORS’ REPORT
2a. If answer to S. No. 1 against any principle, is ‘No’, the reasons please refer “CSR report” section of the Annual Report. The Bank has a
for the same have also been mentioned therein. Corporate Social Responsibility Policy which can be viewed on the web
P1 Sr. No. 3 - The Bank is committed to acting professionally, fairly link: https://www.southindianbank.com/UserFiles/file/CSR_Policy.pdf
and with integrity in all its dealings. The Bank, has adopted a Code of P5 Sr. No. 3 - The Code of Conduct which has been adopted by the
Conduct for its Board and Senior Managerial Personnel and adheres to Bank addresses the requirements of this principle. The Code emphasizes
the highest standards of honest and ethical conduct, including proper fair employment practices & diversity, fair competition, prohibition of
and ethical procedures in dealing with actual or apparent conflicts of harassment & intimidation and safety at the workplace. The Bank
interest between personal and professional relationship. The code follows the Code of Commitment based on the standards issued by The
of conduct conforms to the Corporate Governance requirements Banking Codes and Standards Board of India which covers aspects like
prescribes under SEBI (Listing Obligations and Disclosure Requirements) good and fair banking practices, transparency in services and products,
Regulations 2015. The Bank has put in place Whistle Blower Policy high operating standards and cordial relationship with customers. The
which sets forth obligations on part of every employee for prevention, Bank is an equal opportunity employer and believes in providing a safe
detection and reporting of any act of bribery or corruption. The HRM workplace and an enabling work environment to its employees. Sr. No.
policy of the Bank mandates not to accept any gifts by the officers or 6 – The Code of Conduct and Code of Commitment is available on
permit any family member or any other person acting on his behalf. the website of the Bank at https://www.southindianbank.com/content/
The Whistle Blower Policy broadly conforms to the standards set by viewContentLvl1.aspx?linkIdLvl2=215&Link&linkId=422.
the Protected Disclosure Scheme of Reserve Bank of India. The Whistle
Blower Policy also confirms to the requirements as stipulated by the P6 The aspects outlined under this principle are not substantially
Companies Act, 2013 and its rules. Sr. No. 6 - Code of Conduct for its relevant to the Bank given the nature of its business. The Bank complies
Board and Senior Managerial Personnel is available on the website of with applicable environmental regulations in respect of its premises
the Bank (www.southindianbank.com). The other policies are internal and operations.
documents and accessible only to employees of the organization. P7 While there is no specific policy outlined for this principle, the
P2 The Bank complies with regulations governing its products and Bank, through associations and other bodies had put forward a number
services and has taken initiatives to promote inclusive growth and of suggestions with respect to overall Indian economy and specifically
environmental sustainability. Sr. No. 3 - The Bank offers wide range of about reforms in banking sector. The Bank, directly, through its CSR cell
banking products and services to cater needs of different segments of involved in promoting education, conservation of natural resources,
customers through an nationwide Branch and ATM network, mobile, training to promote sports, setting up old age homes, protection of art
phone, internet and doorstep banking. The products include personal and culture, promoting health care etc.
loans, home loans, loans for asset purchases / loans for business P8 Sr. No. 3 – The Bank has charted out elaborate action plans for
purpose and a wide range of savings/business deposit products. The the effective economic development of disadvantaged, vulnerable
Bank also provides a selection of cards and technology products for and marginalised stakeholders, through its CSR activities and Financial
convenient usage and to facilitate the distinct needs of customers. Bank Inclusion activities.Sl No 6 – Bank’s CSR Policy is available in the website
also promotes conservation of environment by reducing usage of paper of the Bank at https://www.southindianbank.com/UserFiles/file/CSR_
by promoting green pin for debit cards and digitalising documents. The Policy.pdf
list of Products and services offered by the Bank are available at https://
www.southindianbank.com/Default.aspx P9 Sr. No. 3 - The Bank has a Customer Grievance Redressal Policy
and a Customer Compensation Policy which conform to the guidelines
P3 Sr. No. 3 - In line with the general laws and regulations and issued by Reserve Bank of India. Further, In compliance with RBI
sound ethical practices followed nationally, the Bank has adopted directives, the Bank has adopted CitizenCharter for customers which
a policy against sexual harassment and a formal process for dealing explains our commitments and responsibilities along with the redressal
with complaints of harassment or discrimination. The Bank is an methods and also specifies the obligation on the part of customers for
equal opportunity employer and treats all employees at par. In order healthy practices in customer-banker relationships. Sr. No. 6 – This
to ensure wellbeing of the employees, the Bank has South Indian policy can be viewed online at https://www.southindianbank.com/
Bank Employees Association & South Indian Bank Officers Association UserFiles/file/Greivance_Redressal_Policy.pdf
recognized by the Management. The Whistle Blower Policy broadly
conforms to the standards set by the Protected Disclosure Scheme of 3. Governance related to BR
Reserve Bank of India and provide an option to the employees to report
any malpractices. Sr. No. 6 - These policies can be viewed online at  Indicate the frequency with which the Board of Directors,
https://www.southindianbank.com/content/viewContentLvl1.aspx?link Committee of the Board or CEO to assess the BR performance
IdLvl2=215&LinkIdLvl3=789&linkId=789 of the Company. Within 3 months, 3-6 months, Annually,
More than 1 year
P4 Sr. No. 3 - As per the extant directions of Reserve Bank of India on Annually
Financial Inclusion, lending to weaker section and priority sector lending
etc. the Bank is identifying disadvantaged, vulnerable and marginalised  Does the Company publish a BR or a Sustainability Report?
stakeholders. The Bank’s CSR Cell initiates number of programmes What is the hyperlink for viewing this report? How frequently
aiming at the improved living condition of the under-privileged and it is published?
marginalized sections of the society. Sr. No. 6 - Bank has charted out The Bank publishes the BR Report annually. The hyperlink
elaborate action plans for the effective economic development of for viewing the report is http://www.southindianbank.
disadvantaged, vulnerable and marginalized stakeholders. For details com>investorsdesk>annualreport
45
DIRECTORS’ REPORT
SECTION E: PRINCIPLE-WISE PERFORMANCE 3. Does the company have procedures in place for sustainable
Principle 1 sourcing (including transportation)?
1. Does the policy relating to ethics, bribery and corruption NA
cover only the company? Yes/No. Does it extend to the 4. Has the company taken any steps to procure goods and
Group/Joint Ventures/Suppliers/Contractors/NGOs/Others? services from local & small producers, including communities
The Bank is committed to acting professionally, fairly and with surrounding their place of work?
integrity in all its dealings. The Bank, has adopted a Code of If yes, what steps have been taken to improve their capacity
Conduct for its Board and Senior Managerial Personnel and and capability of local and small vendors?
adhere to the highest standards of honest and ethical conduct, NA
including proper and ethical procedures in dealing with actual or 5. Does the company have a mechanism to recycle products
apparent conflicts of interest between personal and professional and waste? If yes what is the percentage of recycling of
relationship. The Bank has put in place Whistle Blower Policy which products and waste (separately as <5%, 5-10%, >10%). Also,
sets forth obligations on part of every employee for prevention, provide details thereof, in about 50 words or so.
detection and reporting of any act of bribery or corruption. The NA
HRM policy of the Bank mandates not to accept any gifts by the
officers or permit any family member or any other person acting Principle 3
on his behalf. 1. Please indicate the total number of employees:
The Bank had 8,570 employees as on March 31, 2020.
2. How many stakeholder complaints have been received in the 2. Please indicate the total number of employees hired on
past financial year and what percentage was satisfactorily temporary/contractual/casual basis:
resolved by the management? The Bank had 3,121 employees as on March 31, 2020 on fixed
The number of complaints received from shareholders in term contract.
FY2019-20 was 261 and all complaints have been resolved. One 3. Please indicate the number of permanent women
case is pending since FY 2018-19. employees:
With respect to employees, the Bank has a mechanism as provided The Bank had 3,614 women employees as on March 31, 2020,
under the Whistle Blower Policy whereby employees can raise which constitutes 42% of the total employees.
their concerns. A report on the concerns received and the manner 4. Please indicate the number of permanent employees with
in which they are dealt with is periodically reported to the Audit disabilities:
Committee. The Bank does not specifically track the number of disabled
Principle 2 employees. The Bank is an equal opportunity employer and treats
1. List up to 3 of your products or services whose design has all employees at par. Based on the income tax declarations which
incorporated social or environmental concerns, risks and/or enable claiming income tax deduction for self-disability, the Bank
opportunities: has 12 such employees.
The Bank offers wide range of banking products and services 5. Do you have an employee association that is recognized by
to cater needs of different segments of customers through a management:
nationwide Branch and ATM network, mobile, phone, internet Yes – South Indian Bank Employees Association for Clerical staff &
and doorstep banking. The products include personal loans, South Indian Bank Officers Association for Officers.
home loans, loans for asset purchases/loans for business purpose 6. What percentage of your permanent employees are
and a wide range of savings/business deposit products. The Bank members of this recognised employee association?
also provides a selection of cards and technology products for South Indian Bank Employees Association for Clerical staff – 90%
convenient usage and to facilitate the distinct needs of customers. South Indian Bank Officers Association for Officers – 93%
The Bank also promotes conservation of environment by reducing 7. Please indicate the number of complaints relating to child
usage of paper by promoting green pin for debit cards and labour, forced labour, involuntary labour, sexual harassment
digitalizing documents. in the last financial year and pending, as on the end of the
2. For each such product, provide the following details in financial year.
respect of resource use (energy, water, raw material etc.) per No complaints relating to child labour, forced labour, involuntary
unit of product (optional): labour, received during the FY 2019-20. The Bank does not
engage in any form of child labour/forced labour/involuntary
Considering the nature of the business and other initiatives, the
labour and does not adopt any discriminatory employment
below details are not applicable to us
practices. The Bank has a policy against sexual harassment and
i. Reduction during sourcing/production/distribution a formal process for dealing with complaints of harassment or
achieved since the previous year throughout the value discrimination. The said policy is in line with relevant Act passed by
chain? the Parliament in 2013. During the FY 2019-20, 1 (one) complaint
NA has been received for the consideration of the Committee and
ii. Reduction during usage by consumers (energy, water) same has been resolved through conciliation proceedings, as per
has been achieved since the previous year? the provisions of the Act. The Bank, through the policy ensures
NA that all such complaints are resolved within defined timelines.
46
DIRECTORS’ REPORT
8. What percentage of your under mentioned employees were the financial year and 57,687 net complaints have been resolved.
given safety and skill up-gradation training in the last year? 98.41% of complaints were satisfactorily resolved.
• Permanent employees
Principle 6:
• Permanent women employees 1. Does the policy related to Principle 6 cover only the
• Casual/temporary/contractual employees company or extends to the Group/Joint Ventures/ Suppliers/
• Employees with disabilities Contractors/ NGOs/others?
Employee health and safety is of prime importance to the Bank. The The Bank complies with applicable environmental regulations in
Bank conducts robust and periodic trainings like advanced & basic respect of its premises and operations.
fire safety training and evacuation related training for floor marshals 2. Does the company have strategies/initiatives to address
and all, irrespective of casual/temporary/contractual employees across global environmental issues such as climate change, global
offices. Periodic fire evacuation drills are conducted at various office warming, etc ? Y/N. If yes, please give hyperlink for webpage
locations, to sensitize employees and casual/temporary/contractual etc.
laborers about fire safety norms and regulations. The Bank continues its efforts to make awareness among
During the financial year 2019-20, the Bank has imparted training employees on concepts of “Reduce, Reuse and Recycle” to
to 3,725 officers, 2,060 clerks and 162 sub staff in various aspects eliminate waste and protect our environment. Since the banking
of banking operations. A total of 5,947 staff members were trained outlets / offices are the major targets for saving energy, bank
during the FY 19-20, which is about 70% of total staff strength of gives priority for the installation of energy-efficient products that
8,570 as on March 31, 2020. reduces the consumption of energy. The new branches/offices
have been designed so that they are equipped with energy
Principle 4 efficient air conditioners, LED lights, timers. Additionally, paper
1. Has the company mapped its internal and external conservation measures such as e-statements to customers by
stakeholders? Yes/No email / mobile application, Green PIN facility for ATM card holders
Yes etc. are other environment friendly initiatives taken by the Bank.
2. Out of the above, has the company identified the 3. Does the company identify and assess potential
disadvantaged, vulnerable & marginalized stakeholders environmental risks? Y/N
As per the extant directions of Reserve Bank of India on Financial The Bank complies with applicable environmental regulations
Inclusion and lending to weaker sections and priority sector, the in respect of its premises and operations. The Bank is aware of
Bank is identifying its disadvantaged, vulnerable and marginalized the potential environmental risks and participates in initiatives to
stakeholders. address the environmental concerns.
3. Are there any special initiatives taken by the company 4. Does the company have any project related to Clean
to engage with the disadvantaged, vulnerable and Development Mechanism? If so, provide details thereof, in
marginalized stakeholders. If so, provide details thereof, in about 50 words or so. Also, if Yes, whether any environmental
about 50 words or so compliance report is filed?
The Bank’s CSR Cell initiates number of programmes with the No. (it is not applicable as it is not a manufacturing company,
intention to improve the living conditions of the under-privileged however, the Bank assists to the extent possible the projects that
and marginalized sections of the society. Our financial inclusion promotes such activities).
initiatives include KIOSK Banking facilities in unbanked rural areas 5. Has the company undertaken any other initiatives on – clean
of Kerala and Tamil Nadu and Financial Literacy Centres in 13 technology, energy efficiency, renewable energy, etc. Y/N. If
Blocks in Kerala and 7 centres in Tamil Nadu. The Bank has charted yes, please give hyperlink for web page etc.
out elaborate action plans for the effective economic development During the year 2019-20, the Bank installed a solar power plant
of disadvantaged, vulnerable and marginalized stakeholders. For at its administrative building at Kakkanad, which is capable of
details please refer “CSR Report” section of the Annual Report. producing 100 KW capacity. Further, the Bank has provided
assistance for Installation/purchase of solar plants, waste
Principle 5 management measures, procurement and supply of eco-friendly
1. Does the policy of the company on human rights cover cloth bags to various beneficiaries as a part of Bank’s CSR
only the company or extend to the Group/Joint Ventures/ initiatives.
Suppliers/Contractors/NGOs/Others? 6. Are the Emissions/Waste generated by the company within
The Bank ensures that there is no discrimination in selection of the permissible limits given by CPCB/SPCB for the financial
staff, suppliers and vendors. year being reported?
2. How many customer complaints have been received in Yes, The Bank complies with applicable environmental regulations
the past financial year and what percent was satisfactorily in respect of its premises and operations.
resolved by the management?
7. Number of show cause/ legal notices received from CPCB/
The number of complaints outstanding at the beginning of the FY SPCB which are pending (i.e. not resolved to satisfaction) as
2019-20 was 1,842. on end of Financial Year
In addition to this, 56,773 net complaints were received during NIL
47
DIRECTORS’ REPORT
Principle 7 activities during the FY 2019-20. The above expenditure has been
1. Is your company a member of any trade and chamber or undertaken primarily on promoting healthcare including preventive
association? If Yes, name only those major ones that your healthcare, sanitation and making available safe drinking water,
business deals with: promoting education, training to promote nationally recognized
The Bank is a member of various governing bodies and associations sports, ensuring environmental sustainability.
such as the Indian Banks’ Association and Confederation of Indian 5. Have you taken steps to ensure that this community
Industry in India, Federation of Indian chambers of commerce and development initiative is successfully adopted by the
industry, Banking codes and standards board of India. Senior community? Please explain in 50 words, or so
management of the Bank are members of various committees The bank through effective monitoring of its CSR and Financial
constituted by regulators and industry bodies. Inclusion activities ensures that community development initiatives
2. Have you advocated/lobbied through above associations for are reaching the target groups and it is being adopted and utilised
the advancement or improvement of public good? Yes/No; by the beneficiaries. Periodic visits to Financial Literacy Centres
if yes specify the broad areas (drop box: Governance and and BC points, project sites of CSR assistance are measures taken
Administration, Economic Reforms, Inclusive Development to ensure the above objectives.
Policies, Energy Security, Water, Food Security, Sustainable Principle 9
Business Principles, Others)
The Bank, through associations and other bodies had put forward 1. What percentage of customer complaints/consumer cases
a number of suggestions with respect to overall Indian economy are pending as on the end of financial year
and specifically about reforms in banking sector. The Bank, Only 1.58% of customer care complaints are pending as on the
directly through its CSR cell is involved in promoting education, end of the FY 2019-20.
conservation of natural resources, training to promote sports, 2. Does the company display product information on the
setting up oldage homes, protection of art and culture, preventing product label, over and above what is mandated as per local
healthcare etc. laws? Yes/No/N.A./Remarks (additional information)
This aspect is not applicable as the Bank is not a manufacturing
Principle 8 company. The Bank complies with disclosure requirements relating
1. Does the company have specified programmes/initiatives/ to its products and services.
projects in pursuit of the policy related to Principle 8? If yes
3. Is there any case filed by any stakeholder against the
details thereof.
company regarding unfair trade practices, irresponsible
Bank’s Financial Inclusion activities and plan are detailed in the
advertising and/or anti-competitive behaviour during the
Financial Literacy Centre (Individual Counselor) Policy and Business
last five years and pending as on end of financial year. If so,
Correspondents Policy (Financial Inclusion), which covers the
provide details thereof, in about 50 words or so
following aspects.
In the ordinary course of banking business, several customers and
 Quantitative and qualitative plans for delivery of relevant borrowers have disputes with the Bank which could result in their
suite of products and services filing complaints, alleging deficiency of services. The Bank always
 Coverage of Sub Service Areas (SSA) through Business
strives to have a cordial relationship with its customers/ borrowers
Correspondents (BC)
and tries to reach an amicable settlement of the dispute, but in
 Leveraging technology and identity solutions of UIDAI and
some cases may have to pursue legal recourse to resolve the same.
NPCI.
 Monitoring and review mechanisms for implementation of 4. Did your Company carry out any consumer survey/consumer
FIP. satisfaction trends?
 To take up any other such activities that promotes financial The bank conducts online customer satisfaction survey and the
literacy, awareness about banking services, financial planning result of the survey is being continuously monitored. The Bank
and amelioration of debt related distress of an individual. also conducts Branch Level Customer Service Committee meetings
2. Are the programmes/projects undertaken through in-house at all branches on 15th of every month. During these meetings,
team/own foundation/external NGO/government structures/ customer feedback, suggestions etc about various products are
any other organization? directly collected and consolidated. Feasible suggestions for
improvements on service/products are implemented and are
Programmes/projects are undertaken through in- house teams.
monitored at various forums including Standing Committee on
3. Have you done any impact assessment of your initiative? Customer Service headed by MD&CEO and Customer Service
The Bank, through its financial inclusion initiatives for serving Committee of the Board, headed by the Chairman of Board of
the rural, unbanked and below poverty line customers is directors.
providing access to banking and financial services to a significant
number of customers, providing them access to savings and credit
products. The results of these initiatives are reviewed periodically. (SALIM GANGADHARAN ) (V G MATHEW)
4. What is your company’s direct contribution to community CHAIRMAN MANAGING DIRECTOR & CEO
development projects-Amount in INR and the details of the DIN : 06796232 DIN : 05332797
projects undertaken Place : Thrissur,
The Bank has spent `12.01 crore on Corporate Social Responsibility Date : September 4, 2020
48
DIRECTORS’ REPORT
MANAGEMENT DISCUSSION AND ANALYSIS Report are deeply integrated in global value chains; that are heavily
Economic Scenario dependent on foreign financing; and that rely extensively on
international trade, commodity exports, and tourism will suffer
Global disproportionately. Commodity-exporting EMDEs will be hard
The COVID-19 pandemic has spread with an alarming speed, hit by adverse spillovers from sharply weaker growth in China,
infecting millions and bringing the economic activity to a near- and by the collapse in global commodity demand, especially
standstill as countries imposed tight restrictions on physical for oil. With more than 90 per cent of EMDEs expected to
movement to halt the spread of the virus. As the health concerns experience contractions in per capita incomes this year, many
and human toll grows, the economic damage is already evident millions are likely to fall back into poverty.
and represents the largest economic shock the world has Global economic activity has remained fragile and in
experienced in decades. retrenchment in the first half of 2020. A renewed surge in
Against the backdrop of a raging and devastating pandemic, COVID-19 infections in major economies in July has subdued
the world economic activity remained fragile and is projected to some early signs of revival that had appeared in May and June,
shrink by 3.2 per cent in 2020. The projected cumulative output 2020. Global financial markets, however, have been buoyant,
losses during 2020 and 2021 of nearly $8.5 trillion will wipe with the return of risk-off sentiment inserting a disconnect from
out nearly all output gains of the past four years. The pandemic the underlying state of the real economy. It is valid to note that
has unleashed a health and economic crisis unprecedented in the portfolio flows to emerging markets have resumed and their
scope and magnitude. Lockdowns and the closing of national currencies have appreciated.
borders enforced by the Governments have paralyzed economic India
activities across the board, laying off millions of workers
worldwide. The Governments across the world are rolling out Prior to the outbreak of COVID-19, the outlook for growth
fiscal stimulus measures equivalent to roughly 10 per cent of the for 2020-21 was looking up. First, the bumper rabi harvest
world GDP, besides liberal monetary and prudential measures and higher food prices during 2019-20 provided conducive
by the central banks to fight the pandemic and minimize the conditions for the strengthening of rural demand. Second,
impact of a catastrophic economic downturn. the transmission of past reductions in the policy rate to bank
lending rates was improving, with favourable implications for
According to the World Bank, the June 2020 the Global both consumption and investment demand. Third, reductions in
Economic Prospects describes both the immediate and near- the goods and services tax (GST) rates, corporate tax rate cuts in
term outlook for the impact of the pandemic and the long September 2019 and measures to boost rural and infrastructure
term damage it has dealt to prospects for growth. The baseline spending were directed at boosting domestic demand more
forecast envisions a 5.2 per cent contraction in global GDP in generally.
2020, using market exchange rate weights and forecasts the
deepest global recession in decades, despite the extraordinary India has emerged as the fastest growing major economy in
efforts of the governments to counter the downturn with the world and is expected to be one of the top three economic
fiscal and monetary and prudential policies support. Over the powers in the world over the next 10-15 years, backed by
longer horizon, the deep recessions triggered by the pandemic its robust democracy and strong partnerships. India's gross
are expected to leave lasting scars through lower investment, domestic product (GDP) (at constant 2011-12 prices) was
an erosion of human capital through lost work and schooling estimated to be `145.65 lakh crore (US$ 2.06 trillion) for 2019-
and fragmentation of global trade and supply linkages. 20, growing at 4.2 per cent over the previous year.
The pandemic is expected to plunge most countries into India retained its position as the third largest start-up base in the
recession in 2020, with per capita income contracting in the world with over 8,900-9,300 start-ups as 1,300 new start-ups
largest fraction of countries globally since 1870. Advanced got incorporated in 2019 according to a report by NASSCOM.
economies are projected to shrink by 7 per cent. That weakness India also witnessed the addition of 7 unicorns in 2019 (till
will spill over to the outlook for emerging market and August 2019), taking the total tally to 24. India's labour force is
developing economies, which are forecast to contract by 2.5 expected to touch 160-170 million by 2020 based on the rate
per cent as they cope with their own domestic outbreaks of the of population growth, increased labour force participation and
virus. This would represent the weakest showing by this group higher education enrolment among other factors according to a
of economies in at least sixty years. study by ASSOCHAM and Thought Arbitrage Research Institute.
In many Emerging Markets and Developing Economies (EMDEs), India's foreign exchange reserves reached `37.31 lakh crore
the central banks have also eased monetary and prudential (US$ 493.48 billion) in the week up to May 29, 2020 according
policies. The fiscal policy support that has been announced to the data from RBI.
already far exceeds that enacted during the 2008-09 global The deterioration in aggregate demand conditions in 2019-20,
financial crisis. Due to the negative spillovers from weakness was exacerbated by contraction in investment, and moderation
in major economies, alongside the disruptions associated with in Government expenditure in the second half of the financial
their own domestic outbreaks. EMDEs with large domestic year 2019-20. On the supply side, agriculture and allied activities
COVID-19 outbreaks and limited healthcare capacity; that accelerated, buoyed by the late surge in south-west monsoon
49
DIRECTORS’ REPORT
rainfall and bountiful north-east monsoon precipitation. except when accompanied by a change in ownership, subject
However, industrial growth decelerated, led by a slowdown in to prescribed conditions.
manufacturing activity. Services sector activity moderated, pulled With COVID-19 infections rising unabated under fragile
down by a slowdown in construction, trade, hotels, transport macroeconomic and financial conditions, RBI has proposed
and communication, and public administration, defence and to undertake additional developmental and regulatory policy
other services. measures to (i) enhance liquidity support for financial markets
Consumer price inflation surged between October 2019 and and other stakeholders; (ii) further ease financial stress caused
January 2020 propelled by a vegetable price spike, particularly by COVID-19 disruptions while strengthening credit discipline;
of onions and breached the upper tolerance threshold in (iii) improve the flow of credit; (iv) deepen digital payment
December before moderating in February. Fuel prices emerged systems; (v) augment customer safety in cheque payments; and
out of deflation in December. After touching a historic low (vi) facilitate innovations across the financial sector by leveraging
in October, inflation in CPI excluding food and fuel edged up on technology.
due to idiosyncratic cost-push factors. Costs of farm inputs, According to RBI, the disruptions caused by COVID-19 have led
industrial raw materials, agricultural and non-agricultural to heightened financial stress for borrowers across the board.
labourers’ nominal wages and organised sector staff costs A large number of firms that otherwise maintain a good track
remained muted. record under existing promoters face the challenge of their debt
The COVID-19 pandemic has drastically altered the economic burden becoming disproportionate, relative to their cash flows.
outlook of the nation. The global economy is expected to slump This can potentially impact their long term viability and pose
into recession in 2020, as post-COVID projections indicate. The significant financial stability risks if it becomes wide-spread. The
sharp reduction in international crude oil prices, if sustained, Reserve Bank has constituted an Expert Committee (Chairman:
could improve the country’s balance of trade, but the gain Shri K V Kamath) which shall make recommendations to the
from this channel is not expected to offset the drag from the RBI on the required financial parameters, along with the sector
shutdown in economic activity and loss of external demand. specific benchmark ranges for such parameters, to be factored
Indian Banking Industry into resolution plans. The Expert Committee shall also undertake
a process validation of resolution plans for borrowal accounts
The last year of the decade is ending with dramatic changes in above a specified threshold.
the banking sector - from the amalgamation of banks to the
liquidity crisis, and low credit demand to the gigantic defaults. It A restructuring framework for MSMEs that were in default but
has been a year of many changes and challenges. ‘standard’ as on January 1, 2020 is already in place. The scheme
has provided relief to a large number of MSMEs. With COVID-19
During FY16-FY20, credit off-take grew at a CAGR of 13.93 per continuing to disrupt normal functioning and cash flows, the
cent. As of FY20, total credit extended surged to US$ 1,936.29 stress in the MSME sector has got accentuated, warranting
billion. During FY16–FY20, deposits grew at a CAGR of 6.81 per further support. Accordingly, it has been decided that stressed
cent and reached US$ 1.90 trillion by FY20. Credit to non-food MSME borrowers will be made eligible for restructuring their
industries increased 3.3 per cent y-o-y, reaching `89.1 billion debt under the existing framework, provided their accounts
(US$ 1.26 trillion) on February 28, 2020 and `100.80 lakh crore with the lender concerned were classified as standard as on
(US$ 1.42 trillion) on March 13, 2020. March 1, 2020. This restructuring will have to be implemented
The NPAs (Non-Performing Assets) of commercial banks has by March 31, 2021.
recorded a recovery of `400,000 crore (US$ 57.23 billion) in As per extant guidelines, loans sanctioned by banks against
FY19, which is highest in the last four years. Decline in credit pledge of gold ornaments and jewellery for non-agricultural
growth is mainly imputed to the risk aversion of banks by purposes should not exceed 75 per cent of the value of gold
virtue of continued build-up of NPAs. The IBC mechanism has ornaments and jewellery. With a view to mitigating the impact
contributed to reduction in NPA from 11.2 per cent in March of COVID-19 on households, it has been decided to increase
2018 to 9.3 per cent in March 2019, but NPA ratio continued to the permissible loan to value ratio (LTV) for such loans to 90 per
remain at an elevated level of 9.3% in H1 of FY20. cent. This relaxation shall be available till March 31, 2021.
As per Union Budget 2019-20, investment-driven growth
As per RBI’s extant Basel III guidelines, if a bank holds a debt
requires access to low cost capital, and this would require
instrument directly, it would have to allocate lower capital,
investment of `20 lakh crore (US$ 286.16 billion) every year.
as compared to holding the same debt instrument through a
This offers an opportunity for credit growth.
Mutual Fund (MF)/Exchange Traded Fund (ETF). RBI has decided
MEASURES ADOPTED BY RESERVE BANK OF INDIA to harmonise the differential treatment existing currently. This
The “Prudential Framework on Resolution of Stressed Assets” will result in substantial capital savings for banks and is expected
dated June 7, 2019 provides a principle-based resolution to give a boost to the corporate bond market.
framework for addressing borrower defaults. Any resolution plan With a view to align the guidelines with emerging national
implemented under the Prudential Framework, which involves priorities and bring sharper focus on inclusive development,
granting of any concessions on account of financial difficulty the Priority Sector Lending (PSL) guidelines have been reviewed.
of the borrower, entails an asset classification downgrade An incentive framework is now being put in place for banks
50
DIRECTORS’ REPORT
to address the regional disparities in the flow of priority sector competition within banking industry and from fintechs, modern
credit. banking has embraced technology. Digital platforms, mobile,
internet banking, and payments bank have revolutionized the
Other measures that are being announced includes: sector in a substantial way. In the field of technology-based
a) Introduction of an automated mechanism in e-Kuber system banking, information technology and electronic funds transfer
to provide banks more flexibility/discretion in managing their system have emerged as the twin pillars of modern banking
liquidity and maintenance of cash reserve requirements. development. Products offered by banks have moved way
b) In order to further promote and facilitate an environment beyond conventional banking and access to these services
that can accelerate innovation across the financial sector, have become round the clock. This, indeed, is a revolution in
Reserve Bank will set up an Innovation Hub in India. Further Indian banking industry. However, sophistication in technology
details about the Innovation Hub would be announced in also poses significant threats especially information security &
due course. cyber risk. India’s financial regulators have helped build one of
c) To enhance safety of cheque payments, it has been decided the world’s strongest banking and financial systems that has
to introduce a mechanism of Positive Pay for all cheques of sailed past international crises. They are now injecting more
value `50,000 and above. This will cover approximately 20 competition by allowing different classes of banks and financial
per cent and 80 per cent of total cheques by volume and service providers.
value, respectively. Operational guidelines in this regard will
be issued separately. Some of the key challenges that the banks have to face in
the coming years to maintain the momentum of growth
d) A scheme of retail payments in offline mode using cards
are as follows:
and mobile devices, and a system of online dispute
l COVID-19: Banks certainly have their hands full in the
resolution (ODR) mechanism for digital payments will also
be introduced. light of novel coronavirus outbreak (COVID-19). Due to
Government restrictions on physical movement, borrowers
Economic and Banking Outlook and businesses have faced job losses, slower sales, and
The growth in bank credit decelerated in FY20 across all major declining profits. As the signs of recovery is getting delayed,
segments including Industry, Non-Food Credit, Agricultural and the situation is expected to accentuate further. The credit
Allied Activities, Services Sector, Textiles and bigger Corporate off-take will be lower and Banks will be faced with higher
players as well. Micro & Small Enterprises and Personal Loans NPAs going forward. This will have significant pressure on
were the exceptional segments, which continued to grow at a the bottom line. Banks will have to carefully evaluate their
steady pace compared to FY19. credit portfolio, strengthen credit monitoring, improve
collection & recovery effort and most importantly, manage
The Indian Banks’ Association (IBA) has taken various steps the balance sheet and capital efficiently. Going forward,
including announcement to undertake only essential services like the prime focus of banks will be on risk adjusted credit
cash deposit and withdrawal, cheque clearances, remittances expansion and on recovery.
and government transactions during the COVID-induced lock-
l As per RBI Annual report for FY 2019-20, banking frauds
down period. The new arrangement is put in place in the wake
have increased more than twofold during the year ended
of Covid-19 outbreak. Reserve Bank of India also requested
30th June 2020 to `1.85 lakh crore. Frauds are taking place
customers to use digital banking to minimise impact of
more in the advance portfolio, both in terms of number and
Covid-19. And urged public to use digital payment modes such
value. Attempts to defraud banks are likely to increase in the
as NEFT, IMPS, UPI, etc., from home and avoid cash transactions
near future as credit flow is squeezed prompting borrowers
for minimising gathering at banks or ATMs.
to resort to fraudulent practices. The Bank are having
At this juncture, the war against COVID-19 is most intense, and a standard system of Internal Control System properly
the world is bracing up for a second wave as it is cautiously reviewed and monitored by a pro-active Inspection and
opens up. The pandemic poses a challenge of epic proportions, Vigilance team, a high skilled credit processing team and a
but the collective efforts, intrepid choices, innovations and strong IT Dept. for equipping Bank to prevent the challenges
true grit will eventually take to victory. The challenges of today and vulnerabilities, which could occur from internal or
will only strengthen the resilience and self-belief. The country external frauds (both IT and others).
shall remain alert and watchful and collectively do whatever is l Recovery from Bad Loans: IBC & NCLT – Bankers will carry
necessary to revive the economy and preserve financial stability. the baggage of bad loans in 2020 as well. IBC has made
Courage and conviction will conquer Covid-19. debtor responsible and bankers are feeling strong like never
before. Despite being a special law and deadline to close the
Opportunities and threats
cases, resolution is not that easy. Currently, as per NCLT data,
During the Financial Year 2020-21 economic activity and more than 10 thousand cases under IBC are pending before
normal movement of fund in all sectors may get impacted NCLT. Moreover, fresh insolvency proceedings pertaining
due to lockdown of economic activities on account of to defaults arising on or after March 25, 2020 has been
Covid 19 pandemic, which can give rise to stresses in the suspended for a period of at least 6 months.
asset portfolio of banks. Banking has witnessed a significant l PSB: Merger execution and stake reduction – Amalgamation
change in recent times. Owing to the increasing consumer of PSBs was one of the bold decisions that the Government
expectations, regulatory & economic changes, constant took in 2019. The government has recapitalised banks but
51
DIRECTORS’ REPORT
the change in management, infrastructural issues, transfer initiate an uninterrupted and fairly tamper-proof information
of senior officers, governance reforms etc. are still in exchange between the involved parties in real-time. Through
process. a distributed network of computers, a common pool of
l Private banks: Private banks, too, went through challenging information is maintained. However, transactions are
times especially on NPA front. In 2020, it is crucial to unassailable and inviolable due to cryptographic algorithms.
see how they deal with the NPAs, raise equity funds and l Cyber Security: Proliferation of internet and mobile banking
generate credit demand. The major challenge for the new is posing new security challenges to financial services firms
management in the banks is to make a sustainable and across the globe. Security measures are present in the
profitable business. form of KYC, 2 step authentication and EMV chip cards.
l Improving Customer Service – For banks, asset story is However, the game needs to be upped with looming threats
painful, hence banks are focusing more on deposits. In like phishing fraud, app misuse, cyber intrusion, magnetic
2020, bankers will have to find innovative ways to attract strip duplicating of cards and so on.
customers and more importantly improve their customer l Increasing use-cases of RPA: Robotic Process Automation
service. will see more use cases in 2020 due to its benefits as
l Innovations in 2020 – Banking and the financial sector is the compared to the traditional automation technologies. There
flag bearer of tech innovation. From payment transfer to are a number of use cases that are already prevalent in the
obtaining loans is quite easy on mobile apps today. In 2020, financial services sector, including global investment banks
tech innovation in banking will significantly focus on voice and insurance firms. The challenges in adoption are primarily
and video banking. around change in mind-sets, and building the right business
l Collaborations and partnerships – FinTechs made a big use case and operating model for RPA.
difference in banking and finance space. Initially, there was Financial Performance Vs Operational Performance
a fear that FinTechs will compete with banks. But gradually
During the FY 2019-20, the total gross business of the Bank
FinTechs have begun partnering with banks. Almost all the
grew from `1,44,056.04 crores to `1,48,557.91 crore. While
banks have partnered with FinTechs. FinTechs are bringing
the deposits grew from `80,420.12 crore to `83,033.89 crore,
in the innovation that banks couldn’t. In 2020, banks will
gross advances grew from `63,635.92 crore to `65,524.02
collaborate and partner with market forces starting from
crore. Food credit decreased from `139.89 crores to `135.35
FinTechs to E-commerce players for different segments of
crore. Operating profit of the Bank had increased by `406.66
their businesses.
crore during the year, i.e. increased from `1,238.98 crore to
l Regulations – RBI has already issued guidelines for regulatory
`1,645.64 crore. However, the Net Profit decreased to `104.59
Sandbox and ‘on tap license’ and payments. In 2020, new
crore as against `247.53 crore reported in last year due to
companies will enter payment, small finance bank, and
higher NPA provisioning. The Provision Coverage Ratio (PCR)
FinTech space. Regulators' agenda is last-mile connectivity
has significantly improved to 54.22% from previous level of
and financial inclusion.
42.46%.
l Cybersecurity – One of the major worries for any bank is
cybersecurity especially since the cyber attacks can be carried The Reserve Bank of India, vide its circular dated April 17, 2020,
out remotely and the damage inflicted could be devastating. has decided that banks shall not make any further dividend pay-
So the banks will have to fortify their IT systems from such outs from profits pertaining to the financial year ended March
attacks. 31, 2020 until further instructions, with a view that banks must
conserve capital in an environment of heightened uncertainty
Technology Improvements caused by COVID-19 pandemic. Accordingly, the Board of
Some of the major trends affecting the banking industry that Directors of the Bank has not recommended any dividend for
drive the future of banking are detailed below: the year 2019-20 (Previous Year 25% i.e. `0.25/- per Equity
l Payment banks (PBs) to pave the way: The importance
Share).
of payment banks is growing in the ecosystem. In India’s
cash-based economy, digital payment instruments will drive The percentage of Gross NPA to Gross Advances stood at 4.98
growth in non-cash payments. and the Net NPA to Net Advances at 3.34 as on March 31,
l Artificial Intelligence (AI): Artificial intelligence will be an
2020. The Capital Adequacy Ratio of the Bank was 13.41 under
integral part of smart banking. Banks can expand their Basel III norms as on March 31, 2020 as against the RBI
consumer base by learning what clicks with their users. mandated level of 10.875. Book value per share increased from
Cognitive technology with AI can offer features like cognitive `29.48 to `30.25 during the year 2019-20.
engagement, cognitive automation, cognitive perceptions, The gross revenue from Treasury Operations segment increased
and cognitive strategy formation. Through AI, a support from `1484.82 crore to `1846.00 crore, Corporate/Wholesale
system can be developed that targets the user’s personal Banking segment increased from `3302.28 crore to `3380.69
preferences, reduces human intervention, catches data crore, Retail Banking segment increased from `2564.70 crore
patterns and devises strategies based on market suitability. to `3273.14 crore and Other Banking Operations segment
l Blockchain and Distributed Ledger Technology: The concept increased from `250.93 crore to `309.72 crore.
of the banking system with Distributed Ledgers supported Segment results net of allocated/apportioned cost and
by Blockchain will no longer be far-fetched. This step can provisions from Treasury segment decreased from (`41.97) crore
52
DIRECTORS’ REPORT
to (`81.66) crore, Corporate/wholesale Banking segment structure which proactively identifies the risks faced by the
decreased from (`126.64) crore to (`427.51) crore whereas Bank and helps in mitigating the same, while maintaining
Other Banking Operations increased from `201.19 crore to proper trade-off between risk and return, thereby maximizing
`249.33 crore and Retail Banking segment increased from shareholder value.
`347.92 crore to `409.39 crore. The Bank has put in place independent & integrated risk
KEY BUSINESS RATIOS management architecture and practices that is overseen by the
The operating profit as a per centage to the Working Funds Risk Management Committee of the Board (RMCB). Appropriate
for the FY 2019-20 was increased by 19.58% from 1.43% to policies to manage various types of risks are approved by the
1.71% mainly on account of the higher contribution from the Board of Directors after review by RMCB, which provides strategic
Non-Interest Income especially due to higher Trading Profit from guidance. The senior level executive committees like Credit Risk
Treasury activities and opportunity to earn income from sale of Management Committee (CRMC), Market Risk Management
Priority Sector Lending Certificates. The Employee cost for the FY Committee (MRMC), Operational Risk Management Committee
2019-20 was higher compared to the previous year considering (ORMC) and Asset Liability Management Committee (ALCO)
the higher superannuation provisions and the provisions for DA develop the risk management policies and scrutinize the risk
increase. The return on Assets (based on working fund) for the limits to ensure better control.
FY 2019-20 was down from 0.29% to 0.11% and Return on a) Credit Risk Management:
Equity for the FY 2019-20 was down from 4.64% to 1.91%
due to substantially higher NPA provisions and higher staff cost. Credit risk management policy defines credit risk as the
Further GNPA during the FY 2019-20 has remained largely with possibility of losses associated with the diminution in the credit
marginal increase from 4.92% to 4.98%. worthiness of the borrower or the counterparty or the failure on
the part of the borrower to meet its obligations in accordance
UPDATE ON IND-AS IMPLEMENTATION with the agreed terms. The Bank has a comprehensive credit
The Institute of Chartered Accountants of India has issued Ind-AS risk management framework, which deals with identification,
(a revised set of accounting standards) which largely converges assessment, measurement and mitigation of credit risk. The
the Indian accounting standards with International Financial Bank has devised two-dimensional rating system and retail
Reporting Standards (IFRS). The Ministry of Corporate Affairs scoring system in line with RBI’s guideline on Internal Rating
(MCA) has notified these accounting standards (Ind-AS) for Based (IRB) approach. Further, the Bank's Board has approved
adoption. The Reserve Bank of India (RBI) vide notification DBR. the methodology for estimation of risk components namely
BP.BC.No.29/21.07.001/2018-19 dated March 22, 2019, has Probability of default (PD), Loss given Default (LGD) and Exposure
deferred the implementation of Indian Accounting Standards at Default (EAD) for its Corporate and Retail exposures.
(Ind-AS) till further notice.
The Credit risk of the Bank is overseen by RMCB at Board level
The Bank has a well-planned strategy for the implementation of and Credit Risk Management Committee (CRMC) at executive
Ind-AS and has made good progress in this financial year. As per level. Of the strategic measures employed in managing
RBI directions, the Bank has taken following steps so far: credit risk, risk rating occupies a position of prominence, as
o In line with the guidance issued by the Reserve Bank of India it involves the rating of borrowers from a risk perspective for
in August 2016, the Bank has set up a Steering Committee the purpose of credit decision, pricing and supervision. RMCB/
headed by the Executive Vice President (Operations) that CRMC approves the launch/modification of new rating models/
monitors the progress of implementation. scorecards, exposure ceilings, oversees the monitoring of size,
o Submitted Proforma Ind-AS financial statements to the rating distribution and concentration of credit exposures,
RBI for all quarters of FY 2019-20 as per extant regulatory and timely amendments/review of Credit Risk Management
guidelines. Framework. Credit Risk Management cell, which functions
o Bank has selected a vendor for implementing the Ind-AS under their guidance executes the directions of RMCB/CRMC
Solution. Currently UAT of the platform is going on. and it ensures that appropriate system level changes (including
Even though the regulator has extended the effective date IT) are also implemented.
of implementation, the Bank will continue its preparedness For the purpose of credit risk assessment, the Bank’s exposure is
towards migration seamlessly to Ind-AS. broadly classified into retail and non-retail. All corporate loans
Accounting Policy are rated using dual rating models/specialized lending rating
The significant accounting policy of the Bank is mentioned in models and retail exposures are scored using scorecards. Ratings
Schedule 17 of the financial statements. There is no change and scorings are performed in proprietary automated platforms
in the accounting policy having financial impact during the which ensure integrity, objectivity and consistency of ratings.
FY 2019-20. Further, rating/scoring data is captured in core IT systems of
the Bank to facilitate seamless reporting and timely validation
RISK MANAGEMENT PRACTICES: of rating models/scorecards. The Bank has deployed system
It is imperative to have robust and effective risk management level validations/checks to ensure timely review of borrower
practices not only to manage risks inherent in the banking ratings and capture of scoring information of all retail loans at
business but also the risks emanating from financial markets granular level. Bank has eight non-default rating grades and
as a whole. The Bank has in place a robust risk management one default rating grade. The customers are assessed based on
53
DIRECTORS’ REPORT
their financial performance, industry characteristics, business The market risk at an overall level is measured by applying
positioning, project risks, operating performance and other techniques, such as VaR and Modified Duration. The stop loss
non-financial parameters, such as quality of management and levels for individual securities and limit framework for different
conduct of account. The Bank validates its rating models and categories of investments play a pivotal role in controlling
scorecards on an annual basis. market risk associated with different securities at micro level.
Corporate/Retail loan applications sourced at different Business c) Operational Risk Management
units are processed at Centralized Processing Centers. The The Bank has developed and implemented an operational
corporate loan proposals are independently reviewed by Risk risk management framework that is fully integrated into the
Management Department during the risk rating process. Bank’s overall risk management system. The Bank has put in
Committee system of loan approvals have been implemented place processes, systems and procedures to actively manage &
in the Bank for exposures that fall beyond the powers of mitigate operational risks and to optimize resources not only
individual functionaries. A well-defined approval matrix is in to protect the interests of the Bank but also to ensure return
place for approving exceptions. Two separate verticals operate commensurate with the risk profile adopted. With respect to
within the Credit Department to oversee Collections and Credit operational risk management, identification and assessment of
Monitoring. Early Warning System has been put in place to risk together with assessment of control effectiveness are key
enable the Bank to take proactive measures for addressing the to the risk management process and towards this end the Bank
possibility of credit quality deterioration of specific borrowers. has put in place risk management tools like Risk and Control
The pricing system is suitably aligned to the cost of funds and to Self Assessment (RCSA) and Key Risk Indicator (KRI) frameworks
the perceived risk that a borrower poses. to ensure continuous monitoring, evaluation and trend analysis
of various risk elements.
Appropriate credit underwriting & approval processes, risk
mitigation, post-disbursement monitoring and timely remedial All new products and processes are examined by Risk
actions are part of the credit risk management. Segment-wise Management Department and thus, it is ensured that all risks
and borrower category-wise exposure limits are fixed and involved in new products and processes are clearly documented
monitored by the Bank to address the risk of concentration. and adequate procedures and controls are implemented before
the product/process is launched.
Rating migration studies and default rate analysis, based on the
credit risk rating of the borrowers, are undertaken on a periodic In order to ensure adequate and timely identification,
basis to analyze the changes in credit risk profile of the borrowers measurement, monitoring, control and mitigation of reputation
and to provide input for policy and strategic decisions. Portfolio risk posed by banking operations at the business line and firm-
analysis of various products/industries, covering various credit wide levels, a board approved reputation risk management policy
quality indicators are being carried out on a periodic basis for is put in place. With a view to monitor reputation risk emanating
identifying portfolio trends, and generating portfolio level MIS. from various forms of media, a Media monitoring mechanism
Extensive analysis has been conducted, and will to be continued is put in place to ensure timely and proactive identification and
out on an ongoing basis, to estimate the impact of COVID-19 mitigation of risk. Risk drivers for reputation risk is identified
pandemic and the associated lockdown on different industry and monitored on a quarterly basis. Quantification of reputation
sectors to which the Bank has exposure. Suitable changes that risk is accomplished through Reputation risk scorecard and is
undertaken on a quarterly basis along with the ICAAP process.
reflect the findings of the aforementioned analysis have been
Further, a reputation risk matrix is prepared to identify the
made to Bank’s rating models. The Bank has commenced to
magnitude and direction of various risk drivers.
calculate the risk components (PD, LGD and EAD) in line with
the Board approved methods, which also serves as an input d) Liquidity Risk
for prudent pricing of its advances. PD Term structure and LGD Liquidity risk refers to the risk that the Bank is unable to meet
estimates are used as inputs for ECL computation under Ind-AS, its obligations as and when they fall due. The Asset Liability
for proforma reporting purpose. Management Policy of the Bank stipulates broad framework for
liquidity risk management to ensure that the Bank is in a position
b) Market Risk Management:
to manage its daily liquidity requirements and to withstand stress
The Bank has laid down comprehensive policies, framework situations stemming from, bank-specific factors, market-specific
and procedures to manage market risk in a holistic manner. The factors or a combination of both. Asset Liability Management
Investment Management Policy lays down broad guidelines to Committee (ALCO) of the Bank, comprising of senior executives
proactively manage market risk. The Board, supported by the of the Bank oversees Asset Liability Management (ALM)
Market Risk Management Committee (MRMC), frames the functions within the framework prescribed under ALM Policy
Market risk management policy, which details the methods to and other relevant policies and guidelines. The core objective
identify, measure, monitor and control market risks. The Bank of the ALM policy adopted by ALCO is to ensure planned and
has dedicated independent mid-offices for forex and domestic profitable growth in business through appropriate management
treasury at Treasury Department, reporting directly to the head of the liquidity risk and interest rate risk. The ALCO is responsible
of the Risk Management Department. The mid-offices closely for (i) recommending pricing of deposits and advances,
monitor market risk inherent in treasury dealings. (ii) preparing forecasts showing the effects of various possible
54
DIRECTORS’ REPORT
changes in market conditions, (iii) recommending appropriate incorporating the heads of all major departments, to exercise,
actions in anticipation of such forecasts, (iv) deciding on the maintain and invoke business continuity plan as needed. A core
desired maturity profile and mix of assets and liabilities, and team called Emergency Operation Team is also in place to act
(v) conducting funding, capital planning, profit planning and immediately upon a crisis and for supervision of recovery under
growth projection. alternative operations arrangements during a disaster. The team
ensures that the business functions are back to normalcy with
The liquidity profile of the Bank is analyzed on a static as well
minimum delay. Disaster Recovery drill for the core banking
as on a dynamic basis by using the gap analysis technique,
system (CBS) and critical IT systems of the Bank is conducted at
supplemented by monitoring of key liquidity ratios and periodic
regular intervals to ensure the continuance of the same during
liquidity stress tests. The Bank has put in place a liquidity risk
emergency situations. The Bank undertakes periodical testing of
management framework adhering to the guidelines issued by
recovery speed of critical applications from alternate location.
RBI on liquidity risk management and the best practices. These
With respect to the outbreak of Covid -19 pandemic, a Quick
include the intraday liquidity management and monitoring
Response Team (QRT) is formed at HO to take immediate
of the Liquidity Coverage Ratio (LCR). After the outbreak
counter action and to regularly update the top management
of Covid-19 pandemic, the Bank has also taken additional
on significant developments and act as a single point of contact
measures to ensure that sufficient liquidity is maintained even
with regulators/outside institutions/agencies. The minutes of
after factoring moratorium to eligible borrowers.
QRT meetings are reviewed by BCP Apex Committee periodically.
e) Cyber Risk Management The Bank has taken multiple steps including enabling alternate
In order to manage cyber security risk, a Board approved Cyber locations, work from home facilities etc. to ensure Business
Security policy is in place. Also, Cyber Crisis Management Plan continuity.
(CCMP) is in place, to provide the requisite strategy, direction The BCP of the Bank was tested in live situations like Kerala
and roadmap towards cyber threat mitigation. The Cyber floods and COVID-19 pandemic situations. Bank continued its
Security governance is a part of banks Information Security operations through its branches, ATMs and Digital products
framework. In order to consider cyber security from the bank- even during current scenario of COVID -19. Most of the
wide perspective, Information Security Committee of Executives Branches of the Bank are functioning and providing the essential
is formed with formal terms of reference. The Chief Information services to customers. As per Govt. Guidelines with relaxation
Security Officer (CISO) is the member secretary of the committee. of lockdown rules by several state governments, most of the
The committee serves as an effective communication channel branches resumed full fledged banking operations adhering to
for management’s cyber security policies and directions. The safety norms prescribed by Government of India. In addition
Committee also guides and monitors development, facilitation to above customers are using Bank’s Digital products like ATM,
and implementation of Cyber security policies, standards and Online transactions through SIBER net, Mirror plus Mobile App
procedures to ensure that all identified risks are managed within for continuity of their operations with an added advantage of
the Bank’s risk appetite. Also, the Bank has a comprehensive safety and social distancing.
Incident Management procedure which outlines the procedures
to be followed for threats/risks arising out of cyber security INTERNAL FINANCIAL CONTROLS AND ITS ADEQUACY
incidents. The incident management procedure specifies the Internal Financial Controls:
requirements for establishing, implementing, maintaining The Bank has put in place adequate internal control measures
and continually improving incident management process as and processes with respect to its financial record keeping
applicable to IT in the bank. Key Risk Indicators are used to track procedure to provide reasonable assurance regarding the
various security parameters and their progress/changes. Regular accuracy, reliability & transparency of the preparation,
IS audits and VA/PT is carried out to assess the vulnerabilities, if presentation and reporting of financial statements. These
any, in the IT systems. controls and processes are driven through various policies,
Bank has a fully operational Security Operation Centre (SOC) procedures and certifications. The processes and controls are
and network & end point security devices to monitor any security reviewed periodically and strengthened wherever considered
incident and to take appropriate actions. SOC is operational on necessary. The Bank also ensures that internal controls are
a 24 X 7 basis. operating effectively, through the robust internal inspection and
vigilance system.
f) Business Continuity Plan The Bank has a full-fledged Inspection and Vigilance Department,
The Bank has a comprehensive Business Continuity Plan (BCP) which ensures adherence to the set rules and regulations by the
to ensure continuity of critical business operations of the Bank Branches/Regional Offices/Departments at the Administrative
(identified through criticality assessment using Business impact Office. Internal inspectors conduct inspection at regular
analysis (BIA), at times of disruptions. In line with the Business intervals to ensure that the internal control systems put in place
Continuity Plan, the Bank has constituted a BCP Committee is working effectively. The reports of internal inspections are
55
DIRECTORS’ REPORT
placed to Sub/Audit Committee of Executives (SACE/ACE)/Audit mobile banking activities, by generating rule-based alerts. FRM
Committee of Board (ACB) as the case may be. SACE/ACE/ACB cell is effectively monitoring transaction alerts 24 X 7 X 365 in a
reviews the reports and ensures that corrective steps are taken year. A dedicated call centre management solution is also in use
to rectify the shortcomings in the report and recommends for in FRM cell for managing out bound calls.
strengthening the internal control over various processes.
HUMAN RESOURCE DEVELOPMENT/INDUSTRIAL
VIGILANCE MECHANISM / WHISTLE BLOWER POLICY IN RELATIONS
THE BANK As on March 31, 2020, the Bank had 8,570 personnel on its
Vigilance Mechanism of the Bank is functioning as a separate rolls. Human Resources policies and practices of the Bank focus
vertical - Vigilance Division who reports directly to the MD & on attracting, motivating and retaining qualified and skilled
CEO of the Bank. Vigilance Division is headed by Chief of manpower. Concurrent with these objectives, steps are taken
Internal Vigilance in Senior Management Cadre and has twin to improve manpower efficiency. Given the market challenges,
roles to play namely, investigation of frauds and putting in place there has been considerable focus on optimising the existing
a dynamic mechanism for detection of fraud & recommending resources - through internal job postings, transfers and skill
risk mitigation measures against recurrences of incidence of development initiatives. Our Human Resources Department has
frauds. been awarded with the ISO 9001:2008 Certification in the year
2015 and this certification has been upgraded to ISO 9001:2015
The Bank has in place a vibrant Whistle Blower Policy (WBP) on 27.03.2018. Training has assumed significant importance in
and a Protected Disclosure Scheme (PDS), which are part of our the present banking scenario. The Bank's Staff Training College
Vigilance & Fraud Risk Management policy and are reviewed identifies the gaps in capability of the personnel and trains them
from time to time. Whistle Blower Policy and the Protected for qualitative improvement. The development of employees
Disclosure Scheme of the Bank are published on the website is essential for the future strength of our business. We have
of the Bank. The policy is communicated to every employee at implemented a systematic approach for identifying, developing
the time of joining the Bank and the importance of the policy and deploying talented employees through a new initiative
is emphasized in all training programmes to create awareness ‘Talent pool’ in HRMS System. This will further motivate our
employees by providing opportunities according to their skills
about the same among staff members and also educating them
and area of interest. To motivate the employees further and
to inform any frauds, unethical or improper practices prevailing
to inculcate in them a sense of ownership, Employees’ Stock
in branches/offices to the authorities concerned. Option Scheme (ESOS) was approved by the shareholders at the
As a part of the preventive mechanism to reduce the instances Annual General Meeting held on August 18, 2008. The Bank
of frauds, especially on cyber front, various customer awareness introduced Tranche 1 of the scheme in 2009-10, Tranche 2 of
measures are undertaken by the Bank on a continuous basis the scheme in 2010-11, Tranche 3 of the scheme in 2011-12,
Tranche 4 and Tranche 5 during 2012-13, Tranche 6 during
through advertisements in the media, publications on Bank’s
2013-14, Tranche 7 during 2014-15 and Tranche 8 & Tranche 9
website and through SMS messages to customers. Our Bank’s
during 2017-18. An aggregate of 40,000 options were exercised
exclusive digital application “SIB Mirror Plus” with e-Lock by the employees during the current financial year and equal
facility, is popularized among the public through branches and number of shares have been allotted against those exercised
through periodic advertisements. Staff at branches are regularly options. In order to ensure enhanced productivity and efficiency
updated through internal circulars with the modus operandi in all areas of operations and cultivate motivation among
adopted by fraudsters at various banks so as to be more vigilant employees in all cadres, the Bank implemented the Performance
and cautious, while dealing with similar situations. The various Linked Incentive Scheme (PLIS) from the Financial year 2007-08
mitigation steps suggested to prevent the recurrences of fraud onwards. PLIS calculation is based on the score obtained by
incidents are intimated to the departments concerned for each employee in respective scorecard. We have implemented
implementation. scorecard based performance evaluation system in our Bank
from FY 18-19. Scorecards are used for performance appraisal,
The Bank has a separate centralized Transaction Monitoring incentive, promotion etc.
Team to monitor transaction alerts generated from software,
based on pre-set rules. Transaction monitoring software is
capable of generating near real time alerts and other features
which assists effective monitoring of transactions. Based on By Order of the Board
the alerts, clarifications are called for from the business units
wherever necessary and the alerts are closed on a daily basis.
During the year, the Bank has centralized Transaction monitoring (SALIM GANGADHARAN ) (V G MATHEW)
activities at HO with adequate staff. CHAIRMAN MANAGING DIRECTOR & CEO
DIN : 06796232 DIN : 05332797
Fraud Risk Monitoring Cell (FRM Cell) is established to prevent
fraudulent activity in the customer accounts through all the Place : Thrissur
channel transaction such as debit cards, Internet banking and Date : September 04, 2020
56
ANNEXURE TO THE DIRECTORS’ REPORT
REPORT ON CORPORATE GOVERNANCE

In terms of Regulation 34(3) read with Part C of Schedule V to SEBI (Listing Obligations and Disclosure Requirements) Regulations,
2015 (Listing Regulations), a Report on Corporate Governance for the year ended March 31, 2020 is presented below:
Bank’s Philosophy on Code of Governance:

Corporate Governance ensures high standards of transparency, accountability, ethical operating practices, professional management
thereby enhancing shareholders’ value and protecting the interest of the stakeholders such as depositors, creditors, customers,
suppliers and employees. The Bank is committed to uphold highest standards of Corporate Governance by ensuring integrity in
financial reporting, disclosure of material information, continuous improvement of internal controls and sound investor relations.
The Bank’s Corporate Governance framework ensures that it makes timely disclosures and share accurate information regarding our
financials and performance as well as the leadership and governance of the Bank.
The required details on Corporate Governance are given hereunder:-
1. BOARD OF DIRECTORS
The Board of Directors of the Bank is broad based and varied in terms of experience of the members of the Board. The Board
has been constituted in compliance with the Banking Regulation Act, 1949, the Companies Act, 2013, the relevant rules made
thereunder, Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (the ‘Listing
Regulations’), the guidelines issued by the Reserve Bank of India (RBI) in this regard, the Articles of Association of the Bank and
in accordance with best practices in Corporate Governance. The Board of Directors of the Bank has an optimum combination of
Executive and Non-Executive Directors with one Woman Director and more than fifty per cent of the Board of Directors comprises of
Non-Executive Independent Directors. The Chairperson of the Board is a Non-Executive Director. The Board functions either as a full
Board or through various Committees constituted to oversee specific areas. Policy formulation, setting up of goals and risk appetite/
limits, evaluation of performance and control functions vest with the Board. The Committees have oversight of operational issues
assigned to them by the Board. The Board of Directors/Committees of Board periodically reviews compliance reports pertaining to
major laws applicable to the Bank. All statutory and other matters of significance including information as mentioned in Part A of
Schedule II to the Listing Regulations are informed to the Board to enable it to discharge its responsibility of strategic supervision
of the Bank.
Composition of Board
The Board comprises of 10 Directors as on March 31, 2020, with rich experience and specialized knowledge in various areas. None
of the Directors of the Bank are related inter-se, in terms of Section 2(77) of the Companies Act, 2013, including Rules thereunder.
The Board has confirmed the veracity of declaration of Independence provided by the Independent Directors and has taken the
same on record. In the opinion of the Board, all the Independent Directors fulfill the conditions as specified in the Listing Regulations
and are independent of the Management. Pursuant to the notification of the Ministry of Corporate Affairs dated October 22, 2019,
an online data bank for the independent directors (“Data Bank”) has been rolled out by the Indian Institute of Corporate Affairs
and all the Independent Directors of the Bank had registered themselves in the Data Bank.
The composition and category of the Directors along with their attendance at Board Meetings, Annual General Meeting and
shareholdings in the Bank as on March 31, 2020 are given below:
No. of Board Meetings Attendance of
Sl. No. of Shares
Name of Director Category of Director Held during Last AGM held on % of holding
No. Attended of held
the tenure 17-07-2019
1 Sri Salim Gangadharan NE (Chairman) 9 9 Present 20,000 0.001%
2 Sri V G Mathew Managing Director 9 9 Present 1,00,000 0.003%
(Executive)
3 Dr. John Joseph Alapatt INE 9 9 Present 2,80,292 0.015%
4 Sri Francis Alapatt INE 9 6 Absent 2,20,000 0.012%
5 Smt. Ranjana S Salgaocar INE 9 6 Present 83,666 0.005%
6 Sri Parayil George John Tharakan INE 9 9 Present 21,874 0.001%
7 Sri Achal Kumar Gupta NE 9 9 Present Nil Nil
8 Sri V J Kurian INE 9 9 Present Nil Nil
9 Sri M George Korah INE 9 9 Present Nil Nil
10 Sri Pradeep M Godbole NE 9 9 Present Nil Nil
NE – Non-Executive Director
INE – Independent Non-Executive Director
@ Leave of absence was granted to the Members concerned who had expressed their inability to attend the respective meetings.
57
During the year under review, the Board and its committees PROFILE OF BOARD OF DIRECTORS
were re-constituted three times on 08.04.2019, 26.07.2019 The profile of the Directors of the Bank as on March 31, 2020
and 18.10.2019. is as under:
List of core Skills/Experience/Competencies identified by Sri Salim Gangadharan, aged 66 years is the Chairman
the Board and Non-Executive Director of the Board of the Bank.
Sri Gangadharan holds a master’s degree in economics from
The Bank considers the principles relating to fit and proper norms
the University of Kerala. He is also a Certified Associate of the
as prescribed by the RBI and confirms that each Director is also
Indian Institute of Bankers. He has several years of experience
in compliance with the norms as prescribed by the Ministry of
in the Reserve Bank of India, Central Bank of Oman, IMF etc.
Corporate Affairs and the Securities and Exchange Board of India He retired in October, 2013 as principal chief general manager
(SEBI) under applicable laws, whilst determining the composition and regional director, RBI, Trivandrum. He has been on Bank
of its Board. Section 10A (2) of the Banking Regulation Act, 1949 Board since January, 2014. He is also a Director in NSE Clearing
read with RBI notification no. DBR. Appt. BC. No.38/29.39.001/ Limited. He is not a director in any other public limited company.
2016-17 dated November 24, 2016, requires that not less than
51% of the total number of members of the Board of Directors Sri Salim Gangadharan holds 20,000 shares of the Bank as on
of a banking company shall comprise of persons who shall March 31, 2020.
have special knowledge or practical experience, in respect of Sri V G Mathew, aged 66 years is the Managing Director and
one or more of the matters, namely: Accountancy, Agriculture Chief Executive Officer of the Bank w.e.f. October 1, 2014. Sri
and rural economy, Banking, Co-operation/Small Scale Industry, Mathew holds bachelor’s degree and a master’s in science from
Information Technology, Infrastructure sector, Human resources, the University of Kerala. Additionally, he is a Certified Associate
Economics, Finance, Law, Payment and settlement systems, of the Indian Institute of Bankers. Sri Mathew was the Executive
Risk management, Business Management. The Bank is in full Vice President of the Bank from January 2, 2014 to September
30, 2014. Prior to joining the Bank, Sri Mathew was employed
compliance with the above requirements as the Directors of the
at State Bank of India for more than 30 years. He retired from
Bank has rich experience and specialized knowledge in the said
State Bank of India as Chief General Manager on November 30,
areas of relevance to the Bank. 2013. He is not a Director in any company.
The Bank has identified above Skills/Expertise/Competencies Sri V G Mathew holds 1,00,000 shares of the Bank as on March
as required to be possessed by its Board, in the context of its 31, 2020.
businesses and the sectors, for it to function effectively. The
Dr. John Joseph Alapatt, aged 66 years is a Non-Executive
details of the names of the Directors possessing the required
Independent Director of the Bank. He holds a Bachelor
Skills/Expertise/Competencies are detailed as under:
of Medicine and Bachelor of Surgery degree as well as a
Sl. Name Special Knowledge / Post-Graduate diploma from Bangalore University. He is an
no. Practical Experience industrialist having several years of experience in managing a
small scale industry unit and has been the Director of the Bank
1 Sri Salim Gangadharan Banking
for 23 years. He is not a Director in any Public Limited Company.
2 Sri V G Mathew Banking
Dr. John Joseph Alapatt holds 2,80,292 shares of the Bank as
3 Dr. John Joseph Alapatt Small scale industry
on March 31, 2020.
4 Sri Francis Alapatt Business Management
Sri Francis Alapatt, aged 68 years is a Non-Executive
5 Smt. Ranjana S Salgaocar Human Recourses and
Independent Director of the Bank. He holds a Bachelor’s degree
Business Management
in Science. He is a Director of M/s CII Guardian International
6 Sri Parayil George John Agriculture & Rural Ltd. and an established businessman. He is not a Director in any
Tharakan Economy and Law other Public Limited Company.
7 Sri Achal Kumar Gupta Banking and Risk Sri Francis Alapatt holds 2,20,000 shares of the Bank as on
Management March 31, 2020.
8 Sri V J Kurian Economics and Business
Management Smt. Ranjana S Salgaocar aged 66 years is a Non-Executive
Independent Director of the Bank. Ms. Salgaocar holds a
9 Sri M George Korah Accountancy
Bachelor’s degree in Social Work from University of Bombay
10 Sri Pradeep M Godbole IT and Payment & and MBA from the prestigious Jamnalal Bajaj Institute of
Settlement systems Management. Smt. Salgaocar has been on the Board of the
58
Bank since October 1, 2014. She is not a Director in any Public several business organizations including Information Technology
Limited Company. Companies. He is not a Director in any Public Limited Company.
Smt. Ranjana S Salgaocar holds 83,666 shares of the Bank as Sri M George Korah holds no shares of the Bank as on March
on March 31, 2020. 31, 2020.
Sri Parayil George John Tharakan, aged 59 years is a Non- Sri Pradeep M Godbole, aged 55 years is a Non-Executive
Executive Independent Director of the Bank. Sri Tharakan holds Director of the Bank. He is a Chartered Accountant having
a bachelor’s degree in commerce from the University of Kerala over 30 years of Banking, Technology, Consulting, Auditing,
and LLB degree from Bangalore University. Sri Tharakan has over Accounting and Management experience. He has held Senior
30 years of experience in the field of agriculture. He is not a Consulting positions in firms like Ernst & Young; IT organizations
Director in any Public Limited Company. like Oracle Financial Services Software (OFSS) & Wipro and
Banks like Deutsche Bank. Sri Godbole is currently working
Sri Parayil George John Tharakan holds 21,874 shares of the
on capability building initiatives and is a guest faculty at The
Bank as on March 31, 2020.
Institute of Chartered Accountants of India (ICAI). Sri Godbole
Sri Achal Kumar Gupta, aged 66 years is a Non-Executive is also a speaker at professional events and seminars. He is not
Director of the Bank. Sri Gupta holds a bachelor’s and a master’s a Director in any Public Limited Company.
degree in arts from Punjab University in English. Further, he is a
Sri Pradeep M Godbole holds no shares of the Bank as on March
certified associate of the Indian Institute of Bankers. Sri Gupta
31, 2020.
retired on November 30, 2013 as the Managing Director of the
State Bank of Patiala. He has previously worked in IFCI Limited Familiarization Programme
as Deputy Managing Director from December 12, 2013 to
The Bank had conducted various sessions during the financial
December 11, 2016. He is the chairman of Risk Management
year to familiarize the Independent Directors of the Bank,
Committee of Board (Independent Expert) of Capital India
including various topics on Banking Industry, business model,
Finance Ltd. (not a board member). He is not a Director in any
risk management system and Cyber Security. Further, the
Public Limited Company.
Directors are encouraged to attend the training programmes
Sri Achal Kumar Gupta holds no shares of the Bank as on March being organized by various regulators/bodies/institutions
31, 2020. on above matters. The details of such familiarization
programmes are displayed on the weblink of the Bank.
Sri V J Kurian, aged 63 years is a Non-Executive Independent (https://www.southindianbank.com/content/directors-training-
Director of the Bank. He retired from Indian Administrative register/875)
Services (IAS) of 1983 batch in Kerala cadre as Additional Chief
Secretary, Water Resources. During the tenure of services, Information supplied to the Board
Sri Kurian held positions of Managing director in various The Board is regularly presented with all information under the
companies for a total period of 22 years. Presently, Sri Kurian following heads whenever applicable and materially significant.
is the Managing director of Cochin International Airport Ltd. These are submitted either as a part of the agenda papers well
and Director of CIAL Infrastructure Limited, CIAL Duty free in advance of the Board/Committee meetings or are tabled in
and Retail Services Limited, Air Kerala International Services course of the Board/Committee meetings. Video conferencing
Limited, Cochin International Aviation Services Limited, Kerala facility is provided to facilitate Directors to participate in the
Waterways Infrastructures Limited and Kerala Infrastructure meetings. The members of the Board exercise due diligence
Fund Management Limited. He is not a director in any other in performance of their functions as Directors of the Bank and
Public Limited Company. follow highest degree of business ethics, transparent practices
and code of good governance amidst cordial environment.
Sri V J Kurian holds no shares of the Bank as on March 31, 2020.
The approval required/information provided to the Board shall
Sri M George Korah, aged 60 years, is a Non-Executive
include but not be limited to the following:
Independent Director of the Bank. He is a fellow member
of the Institute of Chartered Accountants of India. He is a 1. Approval of Bank’s strategic and business plans and
qualified Information System Auditor and was a rank holder in forecasts; periodical review of achievement of business
the I.S. Examination conducted by the Institute of Chartered targets, implementation of strategic initiatives and plans.
Accountants of India. He is a partner of M/s Korah & Korah, 2. Approval of Annual operating plans and budgets including
Chartered Accountants and has been in practice for over 30 capital budgets and updates.
years. Sri Korah is a trustee of Green storm Foundation, Cochin 3. Detailed scrutiny and approval of quarterly and annual
(Not for Profit Public Registered Trust) and financial consultant to financial results;
59
4. Status of NPA management and reported NPA and 22. Review/Approval of new tie up with exchange houses/
provisioning integrity MTSS arrangements.
5. Preparation, modification, deviation and review of Policies of 23. Significant labour problems and their proposed solutions.
the Bank including policies concerning credit, operational, Any significant development in Human Resources/
market and liquidity risks. Industrial Relations front like signing of wage agreement,
6. Assessing the independence of the risk management implementation of Voluntary Retirement Scheme etc.
function in the Bank. Consider the effectiveness of overall 24. Any material default in financial obligations to by the listed
risk management framework in meeting sound corporate entity and non-compliance of any regulatory, statutory or
risk governance principles and identifying, managing and listing requirements.
monitoring the key risks of the Bank.
25. Review of Employee grievance redressal systems/disciplinary
7. Periodical assessment of Capital Adequacy.
proceedings against Officers/employees.
8. Appointment or Removal of Board of Directors, Key
26. Staff accountability review in NPA accounts with GNPA of
Managerial Personnel, other senior managerial personnel
`25.00 crores and above (Quarterly).
one level below Board of Directors and Chief Information
Officer, Chief Security Officer, Chief Risk Officer, Chief 27. Review of report on annual compliance risk assessment.
Compliance Officer. 28. Review on quarterly certificate on compliance for RBI
9. Approval of remuneration, perks and perquisites for directions.
Directors including Managing Director, Chairman and other 29. Show cause, demand, prosecution notices and penalty
Directors, employees, incentive schemes for employees, notices which are materially important. Any issue, which
promotion policies for employees, training and skill involves possible public or product liability claims of
development of employees. substantial nature, including any judgment or order which,
10. Review of priority sector lending; support to microfinance may have passed strictures on the conduct of the Bank or
institutions, deposit mobilization from weaker sections; taken an adverse view regarding another enterprise that
Financial Inclusion initiatives of the Bank etc. can have negative implications on the Bank.
11. Review of observations from the Risk Based Supervision by 30. All agenda items required to be placed to the Board in
RBI and from the Long Form Audit Report. compliance with Policies of the Bank and as directed by the
12. Review of action taken report on Board Directions. Board from time to time.
13. Sale of investments, assets, Purchase and Sale of subsidiaries 31. Any other agenda items which are not specifically delegated
which are material nature and not in the normal course by the Board to any other Committees/sub-Committees.
of business and other key decisions pertaining to the
Subsidiaries. 32. Review of all reports as per the Calendar of Reviews
stipulated by the RBI from time to time.
14. Constitution/re-constitution of Board Committees and
review of minutes of meetings of audit committee and 31. Delegation/modification of authority/power entrusted to
other committees of the board. the Board and change in Organisational structure of the
15. Information and updates as appropriate on Bank’s products; Bank.
development of new products and review of status of 32. All relevant information for taking informed decisions in
customer complaints/grievances. respect of matters brought before the Board.
16. Recruitment/Manpower assessment/succession planning 33. Any other items/information as may be prescribed SEBI
aligning with business strategy of the Bank. (LODR) Regulations, 2015, the Companies Act, 2013 and
17. According sanction for related party transactions which are by Reserve Bank of India.
not in the ordinary course of business or which are not on
arm’s length basis. Board Meetings
18. Recommendation of Dividend A total of 9 Board Meetings were held during the period April 1,
19. Issue of Securities/Bonds/Debentures. 2019 to March 31, 2020 and the dates are as under:
20. Review corporate and management controls and systems 24.04.2019 09.05.2019 15.06.2019
including procedures;
17.07.2019 25.07.2019 21.09.2019
21. Items arising out of separate meeting of the Independent
Directors if so decided by the Independent Directors. 17.10.2019 20.12.2019 16.01.2020
60
Committee position of Directors in the Bank as on March a) No other Director holds Directorship in any other Public
31, 2020: Limited Company.
The name of each Committee with the name of its respective b) For the purpose of considering the limit of the directorships,
Chairman as on 31.03.2020 is furnished below: all Public Limited Companies, whether listed or not, are
1. Management Committee - Sri Salim Gangadharan included. Private Limited Companies, Foreign Companies
2. Audit Committee - Sri M George Korah and Companies under Section 8 of the Companies Act,
3. N P A Review Committee - Sri Achal Kumar Gupta 2013 are excluded.
4. Nomination & Remuneration - Sri V J Kurian
Committee Directors and Officers Insurance:
5. Customer Service Committee - Smt. Ranjana S Salgaocar
6. Stakeholders Relationship - Smt. Ranjana S Salgaocar The Bank had undertaken Directors and Officers insurance
Committee (‘D and O Insurance’) for all its Directors, including Independent
7. Special Committee of Board for - Sri V G Mathew Directors, for a quantum and risks as determined by the Board
Monitoring and follow-up of Frauds of Directors of the Bank.
8. Premises Committee - Dr. John Joseph Alapatt
9. Risk Management Committee - Sri Achal Kumar Gupta 2. BOARD COMMITTEES AND ITS TERMS OF REFERENCE
10. Information Technology Strategy - Sri Pradeep M Godbole The Board has constituted various Committees of Directors to
Committee
take informed decisions in the best interest of the Bank. These
11. Corporate Social Responsibility - Sri Parayil George John
Committee Tharakan
Committees monitor the activities falling within their terms
12. Capital Planning & Infusion - Sri Salim Gangadharan of reference. Details on the role and composition of Board
Committee Committees, including the number of meeting held during the
13. Committee of Independent Directors financial year and the related attendance are provided below.
As required under SEBI (Listing Obligations and Disclosure (A) MANAGEMENT COMMITTEE
Requirements) Regulation, 2015:
a. None of the Directors of the Bank were members in more Management Committee of Board has been constituted
than ten committees or act as chairperson of more than five based on RBI guidelines vide its circular No. DBOD. No.
committees across all listed entities in which he is a director. BP. BC.96/21.03.038/2004-05 dated 10th June, 2005 essentially
b. None of the Independent Directors of the Bank held to sanction credit proposals beyond the powers of MD & CEO
directorship in more than seven Listed Companies. and all other operational matters permitted by the Board from
c. Whole Time Director of the Bank is not serving as an time to time. The members of the Committee as on March 31,
Independent Director in any other Listed Companies. 2020 are Sri Salim Gangadharan - Chairman, Sri V G Mathew,
d. None of the Directors of the Bank is related to any Director Sri Achal Kumar Gupta, Sri Pradeep M Godbole, Sri Parayil
of the Bank. George John Tharakan.
e. The independent directors fulfill the conditions specified in
these regulations and are independent of the management. The terms of reference of the Management Committee
1. Consider all credit proposals, beyond the powers of
Directorship of Directors in other Public Limited Companies Managing Director and Credit Committees constituted by
and Listed entities as on March 31, 2020
the Board.
Name of the Name of the Name of Committees Chairman/ 2. OTS proposals within the powers of the Board.
Director Company in other Indian Public Member in
3. Ratification proposals of sanction made by Credit
(Directorship in Limited Companies* other Indian
other Indian Public Public Limited Committees and MD beyond its powers.
Limited Companies) Companies 4. Review of Sanctions made by Credit Committees.
Sri Salim NSE Clearing 1. Risk Management Chairman 5. Review of MD’s sanctions.
Gangadharan Corporation Ltd. Committee
2. Special Committee on Chairman
6. Review of Food Credit – Monthly disbursement (Monthly).
Technology 7. NPA recovery (Monthly).
3. Audit Committee Member 8. Compromise proposals sanctioned by MD (Quarterly).
4. Regulatory Oversight Member
9. Review of the order of Committee for identification of
Committee
5. Public Interest Member Wilful Defaulters.
Directors Committee 10. Review of the order of Committee for identification of non-
6. Independent Directors Member cooperative borrowers of the Bank.
Committee
11. Review of Top 100 NPA accounts below 5 crores (SS/
Sri Francis Alapatt CII Guardian CSR committee Chairman
International Limited Doubtful/Loss) (25 in each quarter) – Quarterly.
Sri V J Kurian Cochin International CSR committee Member 12. Write off/remission allowed by the Bank for the previous
Airport Limited Quarter (Quarterly).
61
13. Status report on OTS sanctioned by MCB during last one 41. Report on Country Risk (Monthly).
year (Quarterly). 42. Report of VaR of Central Government Securities in AFS &
14. Review of Quick Mortality account of `1.00 crore and HFT category (Trading Book) & of Currencies (Monthly).
above and Staff accountability review in NPA accounts with 43. Exposure Monitoring (Monthly).
GNPA of `5.00 crores to less than 25.00 crores (Quarterly). 44. Monitoring of excess CRR (Quarterly).
15. Documents time barred/getting time barred (Quarterly). 45. Review of Debit/Credit/Travel Cards (Half yearly).
16. Concessions given by MD & CEO in MC Sanctions and 46. Review of performance of MasterCard debit card operations
review of MD & CEO sanctions by MC (Quarterly). (Quarterly).
17. Overdue Credit Proposal over 3 months, falling within the 47. Fresh purchases, AMC (Annual Maintenance Contract) and
power of MC (Quarterly). other IT related expenses – beyond the delegated powers
18. Review of Performance under Annual Credit Plan (ACP) of HO Executives.
(Half yearly). 48. Opening and operation of Bank Accounts.
19. Review of Advances granted to SC/ST under Priority Sector
49. Region-wise fund Position (Fortnigthly).
(Half yearly).
50. Issue of duplicate share certificates in Lieu of original Share
20. Legal action waiver allowed by MD (Quarterly).
Certificates Lost/Misplaced.
21. Sanction to bid the property in court auction above the
51. Miscellaneous items not requiring the approval of the
decreetal dues.
Board.
22. Enhancement of the prudential individual exposure limit.
52. Review of all reports as per the calendar of reviews
23. Miscellaneous items not requiring the approval of the
stipulated by the RBI from time to time;
Board.
53. Any other items which may be required to be placed as
24. Periodically review the large corporate loans and advances
per the Policy of the Bank and as may be permitted by the
appearing in SMA lists.
Board/Committee from time to time.
25. Review of all reports as per the calendar of reviews
stipulated by the RBI from time to time. A total of 13 meetings were held during the period. The dates
26. Any other items which may be permitted by the Board from of meetings were
time to time.
24.04.2019 08.05.2019 25.05.2019 27.06.2019
27. Payment of compensation in consumer cases (above
25.07.2019 22.08.2019 09.09.2019 16.10.2019
`1,00,000/-).
28. Review of all reports as per the calendar of reviews 15.11.2019 19.12.2019 30.12.2019 15.01.2020
stipulated by the RBI from time to time; 11.02.2020
29. Any other items which may be permitted by the Board from
The details of the meetings of the Management Committee
time to time.
of Directors attended by the Members during the year
30. Acquisition of Fixed Assets. (Non-IT related)
2019-20, are given below:
31. Awarding of Contracts/Appointment of Architects and
Engineers for building construction/renovation etc. where No. of Meetings
the expenditure exceeds the delegated powers. Name of Director Held during
Attended
32. For incurring any Revenue or Capital Expenditure pertaining the tenure
to the dept. in excess of the delegated powers. Sri Salim Gangadharan 13 13
33. Ratification Note for exceeding of various limits fixed as per
Sri V G Mathew 13 13
Forex Policy.
Dr. John Joseph Alapatt* 8 8
34. Bidding for Equity shares through Book building process
and subscription to Equity shares in primary market. Sri Achal Kumar Gupta 13 13
35. Subscription, purchase and sale/offer for repurchase of Sri Pradeep M Godbole 13 13
units of debt oriented mutual funds as well as increasing Sri Parayil George John Tharakan # 5 5
the exposure to the debt oriented mutual funds including * Ceased to be a member w.e.f. 18th October, 2019.
liquid and floating rate funds. # Inducted into the committee w.e.f. 18th October, 2019.
36. Equity Trading (Monthly).
37. Investment in Equity shares in the secondary market. (B) AUDIT COMMITTEE
38. Statement of Structural Liquidity (Fortnightly). The Audit Committee of the Board is chaired by Sri M George
39. Statement of Interest Rate Sensitivity (Monthly). korah, who is a Chartered Accountant. The other members
40. Prob. Impact of rise in yields on market value of Central of the committee as on March 31, 2020 are Sri Achal Kumar
Government Securities & Trading Book Investments Gupta, Sri V J Kurian, Sri Francis Alapatt and Dr. John Joseph
(Monthly). Alapatt.
62
The terms of reference of Audit Committee, harmonized 14. Review with the management, the financial statement,
with the provisions of Securities and Exchange Board of India review and monitor the performance of statutory and
(Listing Obligations and Disclosure Requirements) Regulations, internal auditors, adequacy of the internal control systems.
2015 (“Listing Regulations”), Companies Act, 2013, and the 15. Review the adequacy of internal audit function, if any,
responsibilities enjoined upon by the RBI, inter-alia includes the including the structure of the internal audit department,
following: staffing and seniority of the official heading the
1. Oversight of the Bank’s financial reporting process and the department, reporting structure coverage and frequency of
disclosure of its financial information to ensure that the internal audit and discussion with internal auditors of any
financial statement is correct, adequate and credible. significant findings and follow up there on.
2. Recommending to the Board, the appointment, re- 16. Reviewing the findings of any internal investigations by
appointment and terms of appointment of auditors or, if the internal auditors into matters where there is suspected
required, the replacement of the statutory auditor together fraud or irregularity or a failure of internal control systems
with the fixation of audit fees and approval of payment for of a material nature and reporting the matter to the board.
any other services rendered by the statutory auditors. 17. Management discussion and analysis of financial condition
3. Review and monitor the auditor’s independence and and results of operations.
performance, and effectiveness of audit process. 18. Internal audit reports relating to internal control weaknesses;

4. Reviewing with management the annual financial and the appointment, removal and terms of remuneration
statements and auditor’s report thereon before submission of the chief internal auditor shall be subject to review by
to the Board with special emphasis on accounting policies the audit committee.
and practices, compliance with accounting standards and 19. To review the functioning of the whistle blower mechanism;
other legal requirements concerning financial statements.
20. Approval or any subsequent modification of transactions of
5. Valuation of undertakings or assets of the company, the company with related parties.
wherever it is necessary.
21. Look into the reasons for substantial defaults in the payment
6. Review with the management, the financial statement, to the depositors, debenture holders, shareholders (in case
review and monitor the performance of statutory and of non-payment of declared dividends) and creditors.
internal auditors, adequacy of the internal control systems.
22. Management discussion and analysis of financial condition
7. Review, with the management, the quarterly financial and results of operations.
statements before submission to the board for approval.
23. Scrutiny of inter-corporate loans and investments.
8. Discussion with statutory auditors before the audit
commences, about the nature and scope of audit as well as 24. Appointment of Chief Financial Officer, Chief Risk Officer
post-audit discussion to ascertain any area of concern. and Chief Internal and Vigilance Officer, after assessing
9. Management letters/letters of internal control weaknesses the qualifications, experience and background etc. of the
issued by the statutory auditors. candidate.
10. Review of quarterly statement of deviation(s) including 25. Review of report on annual compliance risk assessment.
report of monitoring agency, if applicable, submitted to 26. Review of all reports as per the calendar of reviews
stock exchange(s) in terms of Regulation 32(1) & Annual stipulated by the RBI from time to time.
statement of funds utilized for purposes other than those 27. Any show cause, demand and prosecution notice and
stated in the offer document/prospectus/notice in terms of penalty notices issued by any Govt./Quasi Govt./regulatory
Regulation 32(7). authority with its implication and action taken.
11. Evaluation of Internal Financial Controls and Risk
28. Any other terms of reference as may be included from time
Management System including reviewing the adequacy
to time in SEBI (LODR) Regulations, 2015, the Companies
of the Audit and Compliance functions, including their
Act, 2013 and by Reserve Bank of India.
policies, procedures, techniques and other regulatory
requirements. 29. Any other items which may be required to be placed to the
12. Review, as far as the situation necessitates all other finding Audit Committee as per the Policy of the Bank and as may
in the audit reports (along with brief details of special be permitted by the Board/Committee from time to time.
reports) including Risk based internal Audit Reports, Credit 30. Monitoring the Concurrent Audit function and internal
audit reports, management audit reports of head office audit of all outsourced activities.
departments and regional offices, concurrent audit reports, 31. Recommending to the Board, the appointment, re-
surprise inspection reports and gold asset verification appointment and terms of appointment of secretarial
reports. auditors or, if required, the replacement of the secretarial
13. Monitoring the end use of funds raised through public auditor together with the fixation of audit fees and yearly
offers and related matters. review of secretarial audit report.
63
The Committee met 7 times during the period. The dates of 4. To identify persons who are qualified to become Directors/
meetings were KMPs and who may be appointed in senior management
08.05.2019 27.06.2019 25.07.2019 20.09.2019 as defined in the Succession Policy in accordance with the
criteria laid down and to recommend to the Board their
16.10.2019 19.12.2019 15.01.2020
appointment and/or removal.
The details of the meetings of the Audit Committee of Directors 5. To formulate the criteria for evaluation of Independent
attended by the Members during the year 2019-20, are given Directors and the Board/Committees.
below: 6. To devise a policy on Board diversity.
7. To carry out any other function as is mandated by the
No. of Meetings
Board from time to time and/or enforced by any statutory
Name of Director Held during
Attended notification, amendment or modification, as may be
the tenure
applicable.
Sri M George Korah 7 7 8. To perform such other functions as may be necessary or
Sri Achal Kumar Gupta 7 7 appropriate for the performance of its duties.
Sri V J Kurian 7 7 9. To oversee the framing, review and implementation of
Sri Francis Alapatt 7 5 Bank’s overall compensation structure and related polices
Dr. John Joseph Alapatt* 2 2 on remuneration packages payable to the WTDs/MD & CEO
and other staff including performance linked incentives,
*Inducted into the committee w.e.f. 18th October, 2019.
perquisites, Stock option scheme etc. with a view to
@Leave of absence was granted to the Member concerned who had
expressed his inability to attend the respective meetings. attracting, motivating and retaining employees and review
compensation levels vis-a-vis other Banks and the industry
(C) NOMINATION & REMUNERATION COMMITTEE in general.
Vide Board Resolution SEC/S-104/15-16 on July 15, 2015 the 10. The Committee shall work in close coordination with the
Nomination Committee and Compensation & Remuneration Risk Management Committee of the Bank, in order to
Committee of the Board were merged and constituted achieve effective alignment between remuneration and
Nomination & Remuneration Committee with comprehensive risks. The Committee will also ensure that the cost/income
terms of reference of both the Committees to take care of the ratio of the Bank supports the remuneration package
nomination of Directors, KMP, performance evaluation criteria consistent with maintenance of sound capital adequacy
for independent directors etc., to oversee the framing, review ratio.
and implementation of compensation policy of the Bank on 11. With respect to the Performance Linked Incentive Schemes,
behalf of the board and remuneration related matters of the the Committee is empowered to:
Directors, KMPs and Employees, etc. The Committee is chaired a. Draw up terms and conditions and approve the changes,
by Sri V J Kurian. Other Members of the Committee as on March if any, to the Performance Linked Incentive schemes;
31, 2020 are Sri Salim Gangadharan, Smt. Ranjana S Salgaocar, b. Moderate the scheme on an ongoing basis depending
Sri Achal Kumar Gupta and Sri Parayil George John Tharakan. upon the circumstances and link the same with the
recommendations of Audit Committee;
The Terms of reference of the Committee are harmonized with
c. Coordinate the progress of growth of business vis-a-vis
the provisions of Companies Act, 2013/AS-15, SEBI (LODR)
Regulations, 2015/Banking Regulation Act and other RBI the business parameters laid down by the Board and
Guidelines, which inter-alia, includes the following: Audit Committee and effect such improvements in the
scheme as considered necessary;
1. Scrutinizing the declarations received from persons to be
appointed as Directors as well as from the existing Directors d. On completion of the year, finalize the criteria of
seeking re-appointment and to decide whether to extend allotment of marks to ensure objectivity/equity.
or continue the term of appointment of the independent 12. The Committee shall also function as the Compensation
director, on the basis of the report of performance Committee as prescribed under the SEBI (Share Based
evaluation of independent directors. and make references Employee Benefits) Regulations, 2014 and is empowered
to the appropriate authority/persons to ensure compliance to formulate detailed terms and conditions of the Scheme,
with the requirements indicated by Reserve Bank of India administer, supervise the same and to allot shares in
vide their directive dated May 23, 2011 on Fit & Proper compliance with the guidelines and other applicable laws.
Criteria of the Banks. 13. To obtain necessary clearances and approvals from
2. To devise a Succession Planning Policy for the Board and regulatory authorities, appoint Merchant Bankers and do
Senior Management. such other things as may be necessary in respect of the
3. To formulate a Nomination policy of the Board to guide the Employees Stock Option Scheme.
Board in relation to appointment/re-appointment/removal 14. To oversee the administration of Employee benefits, such
of Directors. as Provident Fund, Pension Fund, Gratuity, Compensation
64
for absence on Privilege/Sick/Casual Leave etc., which are • Review report on the recovery in technically written off
recognized in accordance with Accounting Standard-15 accounts with balance outstanding of `5.00 crore and
(revised) specified in the Companies (Accounting Standards) above.
Rules, 2006.
15. The Committee may suggest amendments to any The details of the meetings of NPA Review Committee of
stock option plans or incentive plans, provided that all Directors attended by the Members during the year 2019-20,
amendments to such plans shall be subject to consideration are given below:
and approval of the Board. No. of Meetings
16. Any other matters regarding remuneration to WTDs/MD & Name of Director Held during
CEO and other staffs of the Bank as and when permitted by Attended
the tenure
the Board.
17. To conduct the annual review of the Compensation Policy. Sri Achal Kumar Gupta 4 4
18. To fulfill such other powers and duties as may be delegated Sri V G Mathew 4 4
to it by the Board. Dr. John Joseph Alapatt 4 4
19. To review HR Strategy aligning with business strategy of the Sri M George Korah 4 4
Bank.
20. To review the skill gaps and talent pool creation. (E) CUSTOMER SERVICE COMMITTEE
The Nomination and Remuneration Committee met 6 times The Committee is entrusted with the responsibility of monitoring
during the period. The dates of meetings were: the quality of services rendered to the customers and also
09.05.2019 28.06.2019 21.09.2019 20.12.2019 ensuring implementation of directives received from RBI in this
regard. The terms of reference of the Committee inter-alia, are
16.01.2020 10.02.2020
to formulate comprehensive deposit policy incorporating the
The details of the meetings of Nomination & Remuneration issues arising out of death of a depositor for operations of his
Committee of Directors attended by the Members during the account, the product approval process and any other issues
year 2019-20, are given below: having a bearing on the quality of customer services rendered.
No. of Meetings The Committee is chaired by Smt. Ranjana S Salgaocar and
Name of Director consists of Sri V G Mathew, Dr. John Joseph Alapatt and
Held during Attended
the tenure Sri Pradeep M Godbole as members as on March 31, 2020.
Sri V J Kurian 6 6 Besides, in accordance with RBI guidelines, the Bank has been
Sri Salim Gangadharan 6 6 inviting special invitees, representing the customers of the Bank
Smt. Ranjana S Salgaocar 6 6 and/or expert in customer services, with a view to strengthen
Sri Achal Kumar Gupta 6 6 the corporate governance structure in the banking system and
Sri Parayil George John Tharakan* 3 3 also to bring about ongoing improvements in the quality of
* Inducted into the committee w.e.f. 18.10.2019. customer services provided by the Bank.
(D) N P A REVIEW COMMITTEE Terms of reference of Customer Service Committee:

This Committee has been constituted to review all NPA Accounts a) Approving the various policies that relate to customer
above `500.00 lakhs. The Committee meets once in a quarter. services, which inter-alia includes:
The members of the Committee as on March 31, 2020 are
i)
to formulate comprehensive deposit policy
Sri Achal Kumar Gupta - Chairman, Sri V G Mathew, Dr. John incorporating the issues arising out of death of a
Joseph Alapatt and Sri M George korah. depositor for operations of his account,
The Committee met 4 times during the period. The dates of ii) Grievance handling process
meetings were: iii) Customer Compensation Policy
24.05.2019 22.08.2019 15.11.2019 11.02.2020 iv) Collection of cheques
This Committee has been constituted to review: b) Approve the product approval process and any other
issues having a bearing on the quality of customer services
• All NPA Accounts above `500.00 lakhs. The Committee
rendered.
meets once in a quarter.
• Status report on recovery Position/details of structured c) To review performance of Branch Level Customer Service
meeting held with ARC’s in NPAs sold to Asset Reconstruction Committee (BLCSC).
Company’s (ARCs), where Bank had invested in Security d) Reviewing the metrics and indicators that provide
Receipts (SRs) backed by the stressed assets sold. information on the state of customer services in the Bank;
65
e) Reviewing the action taken/being taken by the Bank to (F) STAKEHOLDERS RELATIONSHIP COMMITTEE
standardise the delivery of customer experience across all The Committee looks into redressal the complaints from
branches. shareholders and investors like transfer of Shares, non-receipt
f) Providing inputs on the products introduced by the Bank of Annual Reports, non-receipt of declared dividends etc. The
with a view to ensure suitability and appropriateness. Committee also ratifies share transfers/transmission/name
g) Monitoring the implementation of the Banking Ombudsman deletion cases etc. from time to time. Mr. Jimmy Mathew,
Scheme with particular reference to: Company Secretary is designated as the Compliance Officer. The
a. Reviewing all the awards against the Bank with a focus members of the Committee consist of Smt. Ranjana S Salgaocar
on identifying issues of systemic deficiencies and the as Chairperson, Dr. John Joseph Alapatt, Sri V J Kurian and
Bank’s plan to address these deficiencies. Sri V G Mathew as members as on March 31, 2020.
b. Reviewing all awards that remain unimplemented
after 3 months from the date of the award with the The Committee looks into the mechanism of redressal of
reasons thereof; to report to the Board such delays in grievances/complaints from shareholders, debenture holders
implementation without valid reasons and for initiating and other security holders. The terms of reference of the
remedial action. Committee are:
h) review, on an overall basis, the customer service aspects 1. Review, the complaints received from shareholders or others
in the Bank on the basis of the detailed memorandum regarding transfer/transmission of shares, non-receipt
submitted in this regard and report to the Board of Directors of declared dividends, non-receipt of annual accounts or
thereafter; this is done once every six months and based on reports, or other matters relating to shareholding in the Bank,
the review, the Committee will direct the Bank to initiate and the action taken by the Bank on such complaints, issue
prompt corrective action wherever service quality/skills gaps of new/duplicate share certificates and general meetings.
have been noticed. 2. To ratify the Transfer/Transmission, Name Change/
i) Monitoring the activities of the Standing Committee on Correction, Status change, Residential status change,
Customer Service (executive level committee) on a quarterly Rematerialisation, Issue of Duplicate Share certificates,
basis.
Nominations Registered, Splitting/Consolidation of Folios
j) To review the business transacted through E-commerce/M-
etc. from time to time.
commerce aggregators.
3. To oversee and review all matters connected with transfers,
k) To review of ATM down time for the quarter.
transmissions, dematerialization, rematerialisation, splitting
l) To ensure implementation of the directives issued by the
RBI, from time to time, with respect to rendering services to and consolidation of securities issued by the Bank and issue
customers of the Bank. of duplicate share certificates.
m) Status/action taken report on the observations of the earlier 4. To review the changes in Top 100 shareholders of the Bank.
Committee meetings. 5. To review the report on reconciliation of Share Capital and
The Committee met 3 times during the period. The dates of Compliance certificate issued under Regulation 40 of SEBI
meetings were: Regulations, 2015 by Practising Company Secretary.
6. Review of measures taken for effective exercise of voting
27.06.2019 20.09.2019 20.12.2019 rights by the shareholders.
The details of the meetings of Customer Service Committee of 7. Review of adherence to the service standards adopted by
Directors attended by the Members during the year 2019-20, the listed entity in respect of various services being rendered
are given below: by the Registrar & Share Transfer Agent.
No. of Meetings 8. Review of the various measures and initiatives taken by
Name of Director Held during Attended the listed entity for reducing the quantum of unclaimed
the tenure dividends and ensuring timely receipt of dividend warrants/
Smt. Ranjana S Salgaocar* 1 1 Annual Reports/statutory notices by the shareholders of the
Sri V G Mathew 3 3 company.
Dr. John Joseph Alapatt 3 3 9. Review of measures taken for effective exercise of voting
Sri Pradeep M Godbole** 1 1 rights by the shareholders.
Sri Francis Alapatt # 2 1
10. Any other agenda items as may be included from time to
Sri Parayil George John Tharakan## 2 2
time in compliance with SEBI (LODR) Regulations, 2015/
*
Inducted in to the Committee w.e.f. 18.10.2019.
**Inducted in to the Committee w.e.f. 18.10.2019 Companies Act, 2013.
# Ceased to be a member w.e.f. 18.10.2019
##Ceased to be a member w.e.f. 18.10.2019 The Committee met 3 times during the period on:
@Leave of absence was granted to the Member concerned who had
expressed his inability to attend the respective meetings. 28.06.2019 21.09.2019 20.12.2019
66
Status of Shareholder Complaints as on March 31, 2020 The Committee is chaired by Sri V G Mathew and consists of
No. of complaints Sri Salim Gangadharan, Sri M George Korah, Sri Francis Alapatt
Pending and Sri Parayil George John Tharakan as members of the
Sl. at the Received Redressed Pending at Committee as on March 31, 2020.
Items
No. beginning during the during the the end of
of the period period the period In terms of Reserve Bank of India guidelines, this committee has
period been constituted by the Bank with a view to provide focused
1 Non-receipt of 0 0 0 0 attention on preventing and monitoring of frauds involving
Refund Order/ amounts of Rupees One crore and above so as to:
Allotment credit i) Identify the systemic lacunae if any that facilitated
2 Non-receipt of 0 103 103 0 perpetration of the fraud and put in place measures to
Dividend Warrants plug the same.
3 Request for issue 0 139 139 0 ii) Identify the reasons for delay in detection, if any, reporting
of duplicate share to the top management of the Bank and RBI.
certificates
iii) Monitor the progress of Investigation and recovery
4 Complaints received 0 1 1 0
position.
from BSE/NSE/SEBI/
ROC iv) Ensure that the staff accountability is examined at all
5 Other miscellaneous 1 18 18 1 levels in all the cases of frauds and staff side action, if
complaints required, is completed quickly and without loss of time.
(Including non- v) Review the efficacy of remedial action taken to prevent
receipt of split share recurrence of frauds, such as strengthening of internal
certificate) controls and preventive measures.
6 Non-receipt of share 0 0 0 0 vi) Put in place other measures as may be considered relevant
certificate after
to strengthen preventive measures against frauds.
transfer
TOTAL 1 261 261 1 vii) Status/action taken report on the observations of the
earlier Committee meeting.
The details of the meetings of Stakeholders Relationship
The Committee met 7 times during the period. The dates of
Committee of Directors attended by the Members during the
meetings were:
year 2019-20, are given below:
08.05.2019 27.06.2019 22.08.2019 20.09.2019
No. of Meetings
Name of Director 16.10.2019 15.11.2019 19.12.2019
Held during
Attended
the tenure
The details of the meetings of Committee to Prevent and Review
Smt. Ranjana S Salgaocar 3 3 Frauds in the Bank attended by the Members during the year
Sri Parayil George John Tharakan* 2 2 2019-20, are given below:
Dr. John Joseph Alapatt 3 3
No. of Meetings
Sri V J kurian 3 3 Name of Director Held during
Sri V G Mathew# 1 1 Attended
the tenure
#
Inducted in to the Committee w.e.f. 18.10.2019 Sri V G Mathew 7 7
* Ceased to be a member w.e.f. 18.10.2019
Sri Salim Gangadharan 7 7
(G) SPECIAL COMMITTEE FOR MONITORING AND FOLLOW Sri M George Korah 7 7
UP OF FRAUDS Dr. John Joseph Alapatt## 5 5
In terms of Reserve Bank of India guidelines, this committee has Sri Francis Alapatt* 5 4
been constituted by the Bank with a view to provide focused Sri Parayil George John Tharakan** 2 2
attention on preventing and monitoring of frauds involving
Sri Pradeep M Godbole# 2 2
amounts of Rupees One crore and above. in order to be in line
with the RBI master directions, the Board of Directors of the
*
Inducted into the Committee w.e.f. 26.07.2019
Bank at their meeting held on July 17, 2019 has changed the ** Inducted into the Committee w.e.f. 18.10.2019
name of the special committee of Board for monitoring frauds # Ceased to be a member w.e.f. 26.07.2019
from ‘Committee to Prevent and Review frauds in the Bank’ to ## Ceased to be a member w.e.f. 18.10.2019
‘Special Committee of Board for monitoring and follow up of @ Leave of absence was granted to the Member concerned who had
expressed his inability to attend the respective meetings
Frauds’.
67
(H) PREMISES COMMITTEE members of the committee as on March 31, 2020 are Sri Achal
A Premises Committee was constituted by the Board of Kumar Gupta - Chairman, Sri Salim Gangadharan, Sri V G
Directors at its meeting held on December 28, 2007 to oversee Mathew, Sri M George Korah and Sri Pradeep M Godbole.
and monitor the improvements to the Head Office building
The Risk Management Committee shall approve the policy,
and a new Data Centre Building at Rajagiri Valley, Kakkanad,
strategy and methods for risk management, by evaluating the
Kochi and thereafter the scope of the committee has been
overall risks faced by the Bank in determining the acceptable
revised from time to time. The Committee consists of Dr. John
level of risks. The committee inter-alia looks into the following
Joseph Alapatt as Chairman, Sri V G Mathew, Sri V J Kurian and
aspects:
Sri Pradeep M Godbole as members as on March 31, 2020.
1. Review and approve on a regular basis the risk management
The terms for reference of Premises Committee are: policies recommended by RMCs, ALCO, including policies
• Status/action take report on the observations of the earlier concerning credit risk, market risk, and operational risk and
Premises Committee. also the Business Continuity policy.
• Oversee and monitor the improvements to the Head Office 2. Approve risk management governance structure of the
building and a new Building at Rajagiri Valley, Kakkanad, Bank and deciding the allocation of resources.
Kochi. 3. Define the risk appetite of the Bank.
• Approving Budgets for acquisition/modification of new 4. Approve the vendors for risk data warehouse and other risk
premises, calling tenders from reputed architects and management software requirements.
contractors, scrutinizing, short-listing and negotiating their
5. Approve revisions in existing systems and policies to address
site plans, estimates, finalizing their appointment, fees &
risk management requirements and good practices.
other terms and conditions and monitoring the progress of
6. Consider the effectiveness of overall risk management
the project.
framework in meeting sound corporate governance
• Acquiring/Purchase of properties for the Bank.
principles and identifying, managing and monitoring the
The Committee met 4 times during the year. The dates of key risks of the Bank.
meetings were: 7. Oversee and monitor the Bank’s compliance with regulatory
requirements.
28.06.2019 21.09.2019 19.12.2019 10.02.2020 8. Approve delegation of risk limits to management and
approve any transactions exceeding those delegated
The details of the meetings of Premises Committee of Directors
authorities.
attended by the Members during the year 2019-20, are given
9. Review risk mitigation plans on significant risks, which
below:
affects policy or procedure level changes for effective
No. of Meetings implementation.
Name of Director Held during Attended 10. To review the direction of various risks attributable to the
the tenure
Bank based on an analytical model articulated by RBI.
Dr. John Joseph Alapatt* 2 2 11. Oversee functions of Credit Risk Management Committee
Sri Francis Alapatt# 2 1 (CRMC), Market Risk Management Committee (MRMC),
Sri V G Mathew 4 4 Asset Liability Management Committee (ALCO) and
Smt. Ranjana S Salgaocar## 2 2 Operational Risk Management Committee (ORMC).
Sri Parayil George John Tharakan### 2 2 12. Reviewing and approving the Internal Capital Adequacy
Sri V J Kurian 4 4 Assessment Process.
13. Reinforce the culture and awareness of risk management
Sri Pradeep M Godbole** 2 2
throughout the organization that would attach high
* Inducted into the committee w.e.f. 18.10.2019 priority on effective risk management and adherence to
** Inducted into the committee w.e.f. 18.10.2019
sound internal controls.
# Ceased to be a member w.e.f. 18.10.2019
## Ceased to be a member w.e.f. 18.10.2019
14. Status/action taken report on the observations of the earlier
### Ceased to be a member w.e.f. 18.10.2019 Committee meeting.
@ Leave of absence was granted to the Member concerned who had 15. All other agenda items required to be placed to RMCB in
expressed his inability to attend the respective meeting. compliance with the policies of the Bank and as directed by
the Board/RMC from time to time
(I) RISK MANAGEMENT COMMITTEE 16. Risk associated with outsourced activities of the Bank.
In terms of the guidelines of Reserve Bank of India on the 17. Review of Cyber Risk
Asset Liability Management/Risk Management Systems, a Risk 18. Monitoring of Liquidity Risk Parameters
Management Committee of Board has been constituted. The 19. Review of Stress Testing
68
The Committee met 5 times during the period. The dates of 10. Make aware about exposure towards IT risks and controls,
meetings were: and evaluating effectiveness of management’s monitoring
25.05.2019 17.07.2019 20.09.2019 16.11.2019 11.02.2020 of IT risks;
11. Assessing Senior Management’s performance in
The details of the meetings of Risk Management Committee of implementing IT strategies;
Directors attended by the Members during the year 2019-20, 12. Issuing high-level policy guidance (e.g.: related to risk,
are given below: funding, or sourcing tasks);
13. Confirming whether IT or business architecture is to be
No. of Meetings designed, so as to derive the maximum business value from
Name of Director Held during IT;
Attended
the tenure 14. Overseeing the aggregate funding of IT at a bank-level, and
Sri Achal Kumar Gupta 5 5 ascertaining if the management has resources to ensure the
Sri Salim Gangadharan 5 5 proper management of IT risks;
Sri V G Mathew 5 5 15. Reviewing IT performance measurement and contribution
of IT to businesses (i.e. delivering the promised value);
Sri M George Korah 5 5
16. Any other terms of reference as may be included from time
Sri Pradeep M Godbole 5 5
to time by the Board or in compliance with RBI Guidelines.
(J) INFORMATION TECHNOLOGY STRATEGY COMMITTEE The Committee met 4 times during the year. The dates of
This committee has been constituted w.e.f. March 2, 2010 meetings are :
to suggest improvement and monitor the implementation
25.05.2019 22.08.2019 15.11.2019 10.02.2020
of modern technology in the Bank. In compliance with
Gopalakrishna Committee report contained in RBI circular The details of the meetings of Information Technology Strategy
RBI/2010-11/494 DBS:CO:ITC:BC.No.6/31.02.008/2010-11 Committee of Directors attended by the Members during the
dated 29.04.2011 the name of the Information Technology year 2019-20, are given below:
Committee has been changed as “Information Technology
No. of Meetings
Strategy Committee” and the scope, terms of reference of
Name of Director Held during Attended
the Committee has been amended w.e.f. 28.11.2012. The
the tenure
Committee is chaired by Sri Pradeep M Godbole and consist of,
Sri Salim Gangadharan, Sri V G Mathew, Sri M George Korah Sri Pradeep M Godbole 4 4
and Sri Francis Alapatt as members as on March 31, 2020. Sri Salim Gangadharan 4 4
Sri V G Mathew 4 4
The revised terms of reference of the IT Strategy Committee,
inter-alia, include the following: Sri M George Korah 4 4
Sri Francis Alapatt* 2 2
1. Suggest improvement and monitor the implementation of
modern technology in the Bank; * Inducted in to the Committee w.e.f. 18.10.2019
2. Approving IT strategy and policy documents;
(K) CORPORATE SOCIAL RESPONSIBILITY COMMITTEE
3. Ensuring that the management has put an effective
strategic planning process in place; Pursuant to Section 135 of the Companies Act, 2013 and
the rules and admissible activities notified therein by Ministry
4. Ensuring that the IT strategy is indeed aligned with business
of Corporate Affairs in February 2014, the Bank is required
strategy;
to constitute a Corporate Social Responsibility Committee of
5. Ensuring that the IT organizational structure complements
Board to formulate Corporate Social responsibility Policy and
the business model and its direction;
to oversee the implementation of CSR activities undertaken by
6. Ascertaining that management has implemented processes the Bank. As provided in the Act and pursuant to the same,
and practices that ensure that the IT delivers value to the the Board of Directors has constituted a Corporate Social
business; Responsibility (CSR) Committee of the Board, with Sri Parayil
7. Ensuring IT investments represent a balance of risks and George John Tharakan as Chairman of the Committee, Sri V G
benefits and that budgets are acceptable; Mathew, Sri V J Kurian and Dr. John Joseph Alapatt as its co-
8. Monitoring the method that management uses to members as at March 31, 2020.
determine the IT resources needed to achieve strategic
goals and provide high-level direction for sourcing and use The terms of reference of the Committee, inter-alia, includes
of IT resources; the following:
9. Ensuring proper balance of IT investments for sustaining 1) Articulate and recommend to the Board, a Corporate Social
Bank’s growth; Responsibility Policy which should stipulate the scope of
69
activities to be undertaken by the Bank as specified in The Committee met 4 times during the year. The dates of
Schedule VII to the Companies Act, 2013. meetings were:
Schedule VII includes the following items: 28.06.2019 21.09.2019 19.12.2019 10.02.2020
i. eradicating hunger, poverty and malnutrition,
The details of the meetings of Corporate Social Responsibility
promoting preventive healthcare and sanitation,
Committee of Directors attended by the Members during the
including contribution to ‘Swachh Bharat Khosh’ set
year 2019-20, are given below:
up by Central Govt. and making available safe drinking
water; No. of Meetings
ii. promoting of education, including special education Name of Director Held during Attended
and employment, enhancing vocation skills especially the tenure
among children, women, elderly, and the differently Sri Parayil George John Tharakan 4 4
abled and livelihood enhancement projects; Sri V G Mathew 4 4
iii. promoting gender equality, empowering women, Sri V J Kurian* 3 3
setting up homes and hostels for women and orphans; Dr. John Joseph Alapatt** 2 2
setting up old age homes, day care centers and such Sri Francis Alapatt # 1 0
other facilities for senior citizens and measures for Smt. Ranjana Salgaocar## 2 2
reducing inequalities faced by socially and economically # Ceased to be a member w.e.f. 26.07.2019
backward groups; ## Ceased to be a member w.e.f. 18.10.2019
* Inducted in to the Committee w.e.f. 26.07.2019
iv. ensuring environmental sustainability, ecological ** Inducted in to the Committee w.e.f. 18.10.2019
balance, protection of flora and fauna, animal welfare, @ Leave of absence was granted to the Member concerned who had
agro forestry, conservation of natural resources and expressed his inability to attend the respective meeting.
maintaining quality soil, air and water including
contribution to the Clean Ganga Fund set-up by the (L) CAPITAL PLANNING AND INFUSION COMMITTEE
Central Government for rejuvenation of river Ganga; The Bank had constituted one special purpose committee viz.
v. protection of national heritage, art and culture Capital Planning & Infusion Committee. The Capital Planning &
including restoration of buildings and sites of historical infusion Committee was formed on May 28, 2014 to analyze
importance and works of art; setting up public libraries; various options for infusion of Capital and to do all acts and
promotion and development of traditional arts and things and to take all decisions pertaining to the issue and
handicrafts; which are ancillary and incidental to such decisions including
vi. measures for the benefit of armed forces veterans, war the short-listing/appointment of Merchant Bankers to the issue.
widows and their dependents; The members of the Committee as on March 31, 2020 are
vii. training to promote rural sports, nationally recognised Sri Salim Gangadharan - Chairman, Sri V G Mathew, Sri Francis
sports, Paraolympics sports and Olympic sports; Alapatt, Smt. Ranjana S Salgaocar and Sri M George Korah.
viii. contribution to: The Prime Minister’s National Relief The Committee met 2 times during the period. The dates of
Fund or Prime Minister’s Citizen Assistance and Relief meetings were:
in Emergency Situations Fund (PMCARES Fund) or any
other fund setup by the Central Government for socio- 15.06.2019 15.01.2020
economic development, relief and welfare of SC/ST/ The details of the meetings of Capital Planning & Infusion
OBC, minorities and women; Committee of Directors attended by the Members during the
ix. contributions or funds provided to technology year 2019-20, are given below:
incubators located within academic institutions which
No. of Meetings
approved by the Central Government;
Name of Director Held during Attended
x. rural development projects;
the tenure
xi. slum area development.
2) To stipulate and recommend the amount of expenditure to
Sri V G Mathew 2 2
be incurred on the activities referred to in clause (1); and
Dr. John Joseph Alapatt* 1 1
3) Monitor and update, as and when warranted, the
Sri V J Kurian** 1 1
Corporate Social Responsibility Policy of the company from
time to time. Sri Francis Alapatt# 1 1
Smt. Ranjana S Salgaocar## 1 1
4) To recommend to the Board any other activities/
programmes/projects, which may be recommended by the Sri M George Korah ### 1 1
regulatory authorities from time to time. *Ceased to be a member w.e.f. 18.10.2019
70
** Ceased to be a member w.e.f. 18.10.2019 (N) INTERVIEW COMMITTEE

# Inducted in to the Committee w.e.f. 18.10.2019
## Inducted in to the Committee w.e.f. 18.10.2019 The Interview Committee met 5 times during the period for the
### Inducted in to the Committee w.e.f. 18.10.2019 purpose of external recruitment and internal promotions. The
members of the Committee are nominated by the Board from
(M) COMMITTEE OF INDEPENDENT DIRECTORS
time to time. The dates of meetings were:
Pursuant to the provisions of the Companies Act, 2013 and
SEBI (LODR) Regulations, 2015, the performance of non- 07.08.2019 19.09.2019 03.02.2020 10.02.2020 03.03.2020
independent directors and the Board as a whole to be evaluated The details of the meetings of Interview Committee of Directors
by a Committee comprising of all the Independent Directors of attended by the Members during the year 2019-20, are given
the Bank as on the date of the meeting of the said committee. below:
The members of the Committee as on the date of meeting
No. of Meetings
are Dr. John Joseph Alapatt, Sri Francis Alapatt, Smt. Ranjana
Name of Director Held during
S Salgaocar, Sri Parayil George John Tharakan, Sri V J Kurian, Attended
the tenure
Sri M George Korah.
The terms of reference of the Committee inter-alia, includes:
Sri V G Mathew 5 5
1. To review the performance of non-independent directors
Sri Achal Kumar Gupta 5 4
and the Board as a whole;
2. To review the performance of the Chairman of the Bank Sri V J Kurian 5 5
taking into account the views of executive directors and @ Leave of absence was granted to the Member concerned who had
non-executive directors; expressed his inability to attend the respective meeting.
3. To assess the quality, quantity and timeliness of flow of
COMPENSATION POLICY
information between the Bank management and the Board
that is necessary for the Board to effectively and reasonably The Bank has a Board approved Compensation Policy which
perform their duties; deals with the Compensation & Benefits of the Employees of
4. To perform such other roles as may be prescribed by the the Bank and Whole-time Directors/CEO, Part-time Chairman
Companies Act, 2013, SEBI (LODR) Regulations, 2015, and other Non-Executive Directors of the Bank.
Banking Regulation Act, 1949 and the Circulars/Regulations The objectives of the Compensation Policy of the Bank inter-alia
issued by the Regulatory Authorities from time to time. includes, to provide a fair and persistent basis for motivating,
The recommendations of Committee of Independent Directors inspiring and rewarding the employees appropriately, according
are placed to the Nomination and Remuneration Committee for to their jobs/role size, performance, accomplishments,
timely follow-up and necessary actions. contribution, skill, aptitude and competence to implement
standards on sound compensation practices and incentives and
As per Para Vll (1) of Schedule lV to the Companies Act, 2013, to provide effective governance of compensation payable to the
Independent Directors (lDs) are required to hold at least one WTDs/CEO and other staff, alignment of compensation with
meeting without the attendance of Non-independent directors prudent risk taking and effective supervisory oversight.
and members of management. Due to the outbreak of
pandemic, COVID-19, it was clarified vide MCA General Circular The disclosure requirement of the remuneration is separately
No. 11/2020 dt. 24.03.2020 that for the financial year 2019-20, provided in “Disclosure under Basel III norms.”
if the lDs of a Company have not been able to hold such a
REMUNERATION PAID TO DIRECTORS DURING THE PERIOD
meeting, the same shall not be viewed as a violation. The lDs,
APRIL 1, 2019 TO MARCH 31, 2020
however, may share their views amongst themselves through
telephone or e-mail or any other mode of communication, if The Bank paid a gross remuneration of `1,54,72,260.00 during
they deem it to be necessary. Though the Bank had scheduled a the period to Sri V G Mathew, the Managing Director and Chief
meeting of Independent Directors in the month of March, 2020, Executive Officer of the Bank in accordance with the terms
and conditions approved by Reserve Bank of India and the
due to the outbreak of Covid-19, the Bank could not conduct
Shareholders.
the formal meeting under provisions of Para Vll (1) of Schedule lV
to the Companies Act, 2013, as scheduled. However it is a) No pecuniary relationship or transactions exists for
confirmed that the IDs of Bank has shared their views amongst Independent Directors/Non-Executive Directors vis-à-vis
themselves in this regard. the Bank, other than payment of sitting fees for Board/
71
Committee meetings/monthly honorarium during the year 3. BRIEF RESUME OF DIRECTORS SEEKING
as per law. The Independent Directors of the Bank also had REAPPOINTMENT/ RATIFICATION
no pecuniary relationship with the Bank, or their promoters Resume of Directors seeking Appointment at the 92nd
or directors. Annual General Meeting is given below:
1. Sri Paul Antony
b) The criteria of making payments to Independent Directors/
Name of the Director Sri Paul Antony (DIN 02239492)
Non-executive Directors of the Bank are disclosed on the
Date of Birth and age 27.06.1958 ; (62 years)
Bank’s website, the web link to which is https://www.
Date of first appointment NA
southindianbank.com/content/remuneration-criteria-for- on Board
directors/877. Qualifications MA (Economis), Masters in Public Eco Management, IAS
Brief Resume including Retired as Chief Secretary, Kerala on 30th June 2018.
A) Details of Remuneration to MD & CEO experience He was a member of the Indian Administrative Service,
The details of remuneration paid to Sri V G Mathew, MD & 1983 Batch, Kerala cadre. Empanelled as Secretary to
Government of India by DoPT vide OM No.35/1/2016-
CEO from April 1, 2019 to March 31, 2020 are as follows: EO(SM-I) dated 18/07/2016. In addition to the above
PARTICULARS AMOUNT (`) he has worked as Additional Chief Secretary, Industries
Dept, Government of Kerala Additional charge of Power
Basic Pay 1,14,04,800.00 Dept., Chairman & MD, KSEB Ltd, Chairman, Cochin Port
Trust, Principal Secretary, SC/ST Development Department,
Variable Pay 25,92,000.00 Government of Kerala, Commissioner, Commercial Taxes,
Other Perquisites (Accommodation, 3,34,980.00 Government of Kerala, Secretary (Expenditure), Government
of Kerala Finance Dept, Development Commissioner,
Hard and Soft Furnishings, Car) Cochin, SEZ, Ministry of Commerce, MD, Kerala State Civil
PF Bank Contribution 11,40,480.00 Supplies Corpn Ltd ( SUPPLYCO), Director of Industries &
Commerce, Kerala.
Gross Income upto (March 2020) 1,54,72,260.00 He also worked as Managing Director in Pookode Dairy Project
No. of Employee Stock options NIL (Cooperative Sector), Kerala State Civil Supplies Corporation
and Kerala State Power and Infrastructure Finance Corporation
granted during the year (2019-20) Limited and also as director in Kerala Financial Corporation
Limited, Kerala State Industrial Corporation Limited, Kerala
B) Details of honorarium/sitting fee paid to Part-time non- State Beverages (Manufacturing and Marketing) Corporation
executive Chairman: Limited, Kerala State Industrial Corporation Limited, Kerala
State Electricity Board Limited, Vizhinjam International Seaport
The Bank has paid `6,00,000/- to Sri Salim Gangadharan, Limited, IREL (India) Limited, Nitta Gelatin Limited.
Part-time Chairman, as honorarium from April 01, 2019 to He has pushed to make services and delivery systems online
March 31, 2020 and `22,20,000/- as sitting fees during the in the Departments where he has worked. The eGrantz
system for disbursing education aid to students of the weaker
period 01.04.2019 to 31.03.2020. sections won a National award while the KVATIS system for
efiling VAT returns of 100% dealers in the State won a State
C) Details of Remuneration paid to other non-executive level award. Led Kerala’s attempt to simplify the ecosystem
Directors: for enterprises under the EoDB initiative of Government of
India by undertaking extensive BPR and making processes go
As provided under Article 95A of the Articles of Association online for 35 clearances of 14 Departments in the K-SWIFT
of the Bank, the sitting fees payable to a non-executive platform. Has developed 2.5 lakh sft built up space for the IT
Director for attending a Meeting of the Board or Committee sector using PPP in the Cochin SEZ, the first such venture in
SEZs. Accomplished the turnaround of the Cochin Port Trust
thereof are decided by the Board of Directors from time by stabilizing the Vallarpadam Terminal and optimizing other
to time subject to the ceilings if any, prescribed under the operations.
Companies Act, 2013 and the rules there under. The Board Nature of his expertise in He had exposure to diverse sectors in the State and
specific functional area Central Governments, such as industries promotion, export
of Directors have approved the payment of `60,000 as promotion, infrastructure development including in the ports
sitting fee for each Meeting of the Board and `40,000 as and power sector, taxation, public distribution system, and
sitting fee for each Meeting of the Committee attended. development of the weaker sections. Has worked in large
Accordingly the Bank paid sitting fees during the period organisations like SUPPLYCO, Cochin Port Trust and KSEB
Ltd apart from heading major Government Departments
01.04.2019 to 31.03.2020 as under: like the Industries Department and the Commercial Taxes
Dr. John Joseph Alapatt – `17,40,000/-, Sri Francis Alapatt – Department.
Co-ordinating all the activities of various DICs in the State
`9,20,000/-, Smt. Ranjana S Salgaocar – `9,60,000/-, of Kerala. Acted as a facilitator for industrial promotion
Sri Parayil George John Tharakan – `13,40,000/-, and sustainability of MSMEs and traditional industrial
Sri Achal Kumar Gupta – `21,00,000/-, Sri V J Kurian – sector in the State. Encouraged private investment in all
sectors particularly in Agro Processing, Services and new
`17,00,000/-, Sri M George Korah – `16,60,000/-, emerging Sectors. Introduced globally accepted standards
Sri Pradeep M Godbole – `17,40,000/-. in Technology, Quality and Management to rejuvenate
the Public Sector Enterprises in the State. Encouraged
Total amount paid `1,43,80,000/-. environment friendly practices in enterprise development.
72
As General Manager at District Industries Centre provided May 09 he was Head Risk, Policy and BIU, during Apr 04 - Apr
all the services and support facilities to the entrepreneur 06 he was Group Business Head and during Aug 99 - From
for setting up Micro, Small and Medium Enterprises in the April 02 to Mar 04 he was conceived, started Commercial
District. The job included identification of suitable schemes, Vehicle finance business, Construction Equipment (CE)
preparation of feasibility reports, arrangements for credit Finance business for ICICI Bank Ltd., heading CE Business.
facilities, machinery and equipment, provision of raw Mr. Murali Ramakrishnan (DIN: 01028298) has handled the
materials and development of industrial clusters etc. Led entire banking operations, managing over USD 20 Billion
a team for Promotion of MSMEs as also Registration and
Development of Industrial Co-operatives. in a complex International geography spreading across
continents - akin to heading a large sized bank in India.
Directorship in other Nil He has varied experience in the entire banking industry –
Companies almost all facets of banking businesses both in domestic and
Membership of Nil international markets viz. Retail, SME, Corporate, Project
Committees in Public Finance, International Business, Risk, Policy, BIU etc apart
Limited Companies from handling 8 regulators across various markets in Asia,
Shareholding in the bank 10,470 shares MENA. He had represented the bank in the board of CIBIL,
as on September 4, 2020 in the Risk advisory board of VISA for Asia Pacific. Before
Relationship with other Nil joining the ICICI Bank Ltd., he has also worked for GE
Directors, Manager and Capital TFS Ltd., SRF Finance Ltd., Spartek Emerging Fund
other Key Managerial and Canbank Venture Capital fund and Spic Ltd.
Personnel of the company He has taken part as Moderator, Speaker and Panel
Details of the remuneration NA member in several International forums and domestic
last drawn seminars and taken special sessions in Credit risk in reputed
Number of Meetings of NA Management institutes. He has attended various national
the Board attended during and international level Leadership, Management and Risk
the year Management programme.
Chairman/member of the Nil Nature of his expertise in Mr. Murali Ramakrishnan (DIN: 01028298) has handled the
Committee of the Board of specific functional area entire banking operations, managing over USD 20 Billion
Directors of this Company in a complex International geography spreading across
Terms and conditions As detailed under explanatory statement of Item No. continents - akin to heading a large sized bank in India.
of appointment/ 2 of the notice. Appointment of Mr Paul Antony (DIN. He has varied experience in the entire banking industry –
reappointment including 02239492), as Non-Executive Director liable to retire by almost all facets of banking businesses both in domestic and
remuneration rotation. international markets viz. Retail, SME, Corporate, Project
Finance, International Business, Risk, Policy, BIU etc. apart
2. Sri Murali Ramakrishnan: from handling 8 regulators across various markets in Asia,
MENA. He had represented the bank in the board of CIBIL,
Name of the Director Sri Murali Ramakrishnan (DIN: 01028298) in the Risk advisory board of VISA for Asia Pacific. Before
Date of Birth and age 19-05-1962 joining the ICICI Bank Ltd., he has also worked for GE
58 Years Capital TFS Ltd., SRF Finance Ltd, Spartek Emerging Fund
Date of first appointment NA and Canbank Venture Capital fund and Spic Ltd.
on Board Directorship in other Nil
Qualifications B. TECH (CHEMICAL ENGINEERING): PGDM (IIM Companies
BANGALORE) - FINANCE & MARKETING Membership of NA
Brief Resume including Mr. Murali Ramakrishnan (DIN: 01028298), aged 58 years, is Committees in Public
experience a Engineering Graduate (B.Tech - Chemical Engineering) and Limited Companies
holds Post Graduate Diploma in Finance and Marketing from Shareholding in the Bank Nil
IIM – Bangalore. He is having a work experience of over 32 as on 31st March, 2020
years. He retired from ICICI Bank as Senior General Manager Relationship with other Nil
at Strategic Project Group on May 30, 2020 and joined the Directors, Manager and
Bank as an Advisor on July 1, 2020. other Key Managerial
During his tenure at ICICI Bank, he was heading a business Personnel of the company
transformation project of SME business. Mr. Murali Details of the NA
Ramakrishnan, was the Chief Executive Hong Kong and remuneration last drawn
Regional Head - North Asia, Srilanka, Middle East and Africa.
(Mar 2012 to Aug 2016) (Senior General Manager grade). Number of Meetings NA
of the Board attended
As Head of the region, he was responsible for the entire during the year
operations of the bank in these locations, managing a large
balance sheet of around US 20 Billion contributing to more Chairman/member of Nil
than 60% of profits of International Business group of ICICI the Committee of the
Bank. Apart from being the Chief Executive of Hong Kong Board of Directors of this
branch, he was also responsible for strategizing businesses Company
and ensuring that the deliverables are met for the region, Terms and conditions Detailed under explanatory statement of Item
which included branches in China, Sri Lanka, Dubai, Bahrain, of appointment/ No. 6 Appointment of Mr. Murali Ramakrishnan
Qatar and South Africa. During May 09 to Mar 12 he was reappointment including (DIN : 01028298), as Managing Director and Chief Executive
Head Credit Risk (General Manager), during May 06 to remuneration Officer of this notice.
73
Resume of Directors seeking ratification at the 92nd Annual

Directorship in other NSE Clearing Limited - Public Interest Director
General Meeting is given below: Companies Kerala Infrastructure Investment Fund Board -
1. Sri Salim Gangadharan: Independent Director
Membership of NSE Clearing Limited
Name of the Director Sri Salim Gangadharan (DIN: 06796232) Committees in other a) Standing Committee on Technology - Chairman
Date of Birth and age 13.10.1953 (66 years) Companies b) Regulatory oversight Committee - Member
Date of first appointment 16th January, 2014 c) Risk Management Committee - Chairman
on Board d) Public Interest Director Committee - Member
e) Audit Committee - Member
Qualifications M.A. Economics, CAIIB f) Independent Directors’ Committee - Member
Brief Resume including Sri Salim Gangadharan is an exemplary scholar Shareholding in the bank 20,000 shares
experience having substantial exposure in Banking Sector. as on 31st March, 2020
He has over 36 years varied experience in Reserve Relationship with other Nil
Bank of India. He retired as Principal Chief General Directors, Manager and
Manager and Regional Director, Reserve Bank of other Key Managerial
India, Trivandrum in October, 2013. During his career Personnel of the company
in the Reserve Bank of India, he worked in various Details of the Honorarium - `6,00,000.00
operational departments, particularly in the areas of remuneration last drawn Sitting fees - `22,20,000 for attending Board and
Bank Supervision, Currency Management, HR and
Financial markets. He was the Regional Director for Committee Meetings
West Bengal, Sikkim and A&N Islands and had also Number of Meetings of 9
headed the Foreign Exchange Department, Mumbai. the Board attended during
He was a member of faculty in the Banker’s Training the year
College of the Reserve Bank of India, for Five years. Chairman/member of Management Committee - Chairman
He was on secondment to the Central Bank of Oman the Committee of the Capital Planning & Infusion Committee - Chairman
for five years. He is also a consultant of the IMF and Board of Directors of this Nomination & Remuneration Committee - Member
UNDP. He was part of several internal working group Company Risk Management Committee - Member
in Reserve Bank of India/Government of India. In the Special Committee of Board for monitoring
past, he was representing the Reserve Bank of India and follow up of Frauds - Member
and Government of India on the Boards of Catholic IT Strategy Committee - Member
Syrian Bank, Syndicate Bank and Central Bank of Terms and conditions Appointed as Non-Executive Director liable to retire by
India. He has been on the Board of the Bank since of appointment/ rotation. He is eligible for a honorarium of `50,000/-
January 16, 2014. reappointment including per month and sitting fees for attending the Board
Nature of his expertise in Sri Gangadharan, has substantial exposure in the fields remuneration and its Committee Meetings as approved by the Board
specific functional area of Banking, Currency Management, HR, Payment subject to the provisions of the applicable laws
System, treasury Management and Financial markets.
4. DETAILS OF GENERAL BODY MEETINGS HELD IN THE LAST 3 YEARS

Name of Meeting Day, Date and Time Venue Whether any Special Resolution(s) Passed
89th Annual General Tuesday, July 11, 2017 Casino Cultural Yes.
Meeting at 10.00 a.m. Auditorium Ltd., 1. To Re-appoint Sri V G Mathew as Managing Director & CEO and
T.B. Road, Thrissur approve the payment of remuneration and other terms and
conditions of appointment for a period of 3 years w.e.f. 01.10.2017
to 30.09.2020.
2. To pass a special resolution for exercising the borrowing powers of
the Bank pursuant to Section 180(1)(c) of the Companies Act, 2013.
3. To Augment the Paid-up Capital of the Bank by further issue of
shares.
4. To Approve the borrowing/raising funds in Indian/foreign currency by
issue of debt securities upto `500 crore on private placement basis
74
90th Annual General Wednesday, July 11, Casino Cultural Yes.

Meeting 2018 at 10.00 a.m. Auditorium Ltd., 1. To appoint Dr. John Joseph Alapatt (DIN: 00021735) as an
T.B. Road, Thrissur Independent Director
2. To appoint Mr. Francis Alapatt (DIN: 01419486) as an Independent
Director
3. To pass a special resolution for exercising the borrowing powers of
the Bank pursuant to Section 180(1)(c) of the Companies Act, 2013
4. To Augment the Paid-up Capital of the Bank by further issue of shares
91 Annual General
st
Wednesday, July 17, Casino Cultural Yes.
Meeting 2019 at 10.00 a.m. Auditorium Ltd., 1. To appoint Ms. Ranjana S Salgaocar (DIN: 00120120) as an
T.B. Road, Thrissur Independent Director
2. To appoint Mr. Parayil George John Tharakan (DIN: 07018289) as an
Independent Director
3. To Augment the Paid-up Capital of the Bank by further issue of Shares
5. Amendments in the Object Clause of the Memorandum of
Association of the Bank
During the year, all recommendations of the Board of Directors time. The Board of Directors at its Meeting held on October 30,
were accepted by the Shareholders of the Bank in respect 2014 has formulated a policy on materiality of Related Party
of special businesses mentioned in the 91st Annual General Transactions and also on dealing with Related Party Transactions
Meeting notice. pursuant to the provisions of the Companies Act, 2013 and
Postal Ballot Listing Regulations. The same is displayed on the website of
During the year under review, no resolution was passed through the Bank. (https://www.southindianbank.com/UserFiles/file/
postal ballot. Currently, no resolution is proposed to be passed Rupay/DISCLOSURE/POLICY%20ON%20MATERIALITY%20
through postal ballot. However, if required, the same shall be OF%20AND%20DEALING%20WITH%20RELATEDPARTY%20
passed in compliance of provisions of Companies Act, 2013, TRANSACTIONS.pdf)
Listing Regulations or any other applicable laws. C) Code of Conduct
5. POLICIES, AFFIRMATION AND DISCLOSURES The Board of Directors has framed the Code of Conduct for the
A) MD & CEO/CFO Certification Board of Directors and Core Management Personnel of the Bank,
as required under SEBI (LODR) Regulations, 2015 “on Corporate
The MD & CEO and the CFO have issued certificate pursuant
Governance.” The confirmation from the Managing Director &
to the provisions of Regulation 17 of the Listing Regulations
CEO regarding compliance with the code by all the Directors
certifying that the financial statements do not contain any
Senior Management Personnel forms part of the Report.
untrue statement and these statements represent a true and fair
The Code of Conduct and Ethics is displayed on the website
view of the Company’s affairs. The said certificate is annexed
of the Bank (https://www.southindianbank. com/content/
and forms part of the Annual Report.
viewContentLvl1.aspx?LinkIdLvl2=215 & LinkIdLvl3=250 &
B) Related Party Transactions linkId=250).
All transactions entered into with Related Parties as defined
D) Code of Conduct for Prevention of Insider Trading
under the Companies Act, 2013 and SEBI (LODR) Regulations,
2015 during the financial year were in the ordinary course of The Bank has adopted a Code of Conduct for Prevention of
business and on an arms length pricing basis and do not attract Insider Trading in accordance with the requirements of SEBI
the provisions of Section 188 of the Companies Act, 2013. There (Prohibition of Insider Trading) Regulations, 2015 and Companies
were no materially significant transactions with related parties Act, 2013 with a view to regulate trading in securities by the
during the financial year which were in conflict with the interest Directors and designated employees of the Bank. The Code
of the Bank. Suitable disclosure as required by the Accounting requires pre-clearance for dealing in the Bank’s shares beyond
Standards (AS18) has been made in the notes to the Financial threshold limits. Further, it prohibits the purchase or sale of
Statements. The details of the transactions with related parties, Bank’s shares by the Directors and the designated employees
if any, are placed before the Audit Committee from time to while in possession of unpublished price sensitive information
75
in relation to the Bank and during the period when the Trading been made in this Corporate Governance report, to the extent
Window is closed. The code of conduct for prevention of insider applicable.
trading are available on the website of the Bank. https://www. I) Commodity Price Risk or Foreign Exchange Risk and
southindianbank.com/content/viewContentLvl1.aspx?linkIdLvl2 Hedging Activities
=215&LinkIdLvl3=784&linkId=784 To monitor Foreign Exchange risk, the Bank has envisaged Forex
E) Internal Controls VaR and AGL which are being monitored on daily basis by Risk
Management department. Bank also has Investment, Forex
The Bank has a system of internal control which examines both and Derivative Policies to define and regulate forex operations
the financial effectiveness and operational effectiveness to taken up by the Bank and different levels of limits are given in
ensure reliability of financial and operational information and all it. Treasury also monitors Foreign assets liabilities gap to hedge
statutory/regulatory compliances. it in the market.
F) Whistle Blower Policy The Bank hedges its foreign currency position using derivatives
The Bank has formulated a Whistle Blower Policy with a view to including SWAPs and outright Forwards. Bank is not involved in
commodity trading and its hedging activities.
provide a mechanism for employees of the Bank to approach the
Chairman of the Audit Committee of the Bank/Ethics Counsellor J) Dividend Distribution Policy
(Chief of Internal Vigilance) in case they observe any unethical To bring transparency in the matter of declaration of dividend
and improper practices or any other alleged wrongful conduct and to protect the interests of investors, the Bank has in
in the Bank and to prohibit Managerial functionaries from place a Dividend Policy. The Dividend Distribution Policy
taking any adverse personal action against those employees. of the Bank is in line with Regulation 43A of the Listing
The vigil mechanism shall provide for adequate safeguards Regulations and the Companies Act, 2013 which has been
against victimisation of employees and directors who avail of displayed on the Bank’s website, www.southindianbank.com,
the vigil mechanism and also provide for direct access to the and is also available in the Directors Report which forms part of
Chairperson of the Audit Committee and no personnel has been the Annual Report.
denied access to the Audit Committee. All protected disclosures K) Utilization of funds raised through Preferential
reported under this policy will be thoroughly investigated by Allotment or Qualified Institutions Placement
the Ethics Counsellor/Chairman of the Audit Committee of the
During the year under review, no funds were raised through
Bank. The investigation is to be normally completed within 45
preferential allotment or qualified institutions placement as
days of receipt of the protected disclosure. The identity of the specified under Regulation 32 (7A) of Listing Regulations.
whistle blower shall be kept confidential to the extent possible
and permitted under law. The functioning of the Whistle L) Certificate from Company Secretary in Practice
Blower Policy mechanism is reviewed half yearly by the Audit regarding disqualification of Directors
Committee and the Policy is reviewed annually by the Board and In terms of Clause 10(i) of Para C of Schedule V of Securities
no personnel was denied access to Audit Committee. The Details and Exchange Board of India (Listing Obligations and Disclosure
of whistle Blower Policy are available on the website of the Requirements) Regulations, 2015, the Secretarial Auditors
Bank: www.southindianbank.com/content/viewContentLvl1.as of the Bank, M/s SVJS & Associates, Practicing Company
px?linkIdLvl2=215&LinkIdLvl3=789&linkId=789 Secretaries have issued a certificate that none of the Directors
on the Board of the Bank have been debarred or disqualified
G) Details of non-compliance by the Bank from being appointed or continuing as Directors of Companies
The Bank has complied with all the requirements of regulatory by the Board/Ministry of Corporate Affairs or any such statutory
authorities. No penalties/strictures were imposed on the Bank authority. The same is placed at the end of this report.
by Stock Exchanges or SEBI or any statutory authority on any M) Recommendations of Committee(s) of the Board of
matter related to capital markets during the last three years. Directors
H) Disclosure on compliance with Corporate Governance During the year, all recommendations of Committee(s) of
Requirements specified in Listing Regulations the Board of Directors, which are mandatorily required, were
accepted by the Board.
The Bank has complied with the requirements of Part C (Corporate
Governance Report) of Sub-Paras (2) to (10) of Schedule V of N) Disclosures in relation to the Sexual Harassment of
the Listing Regulations. The Bank has complied with Corporate Women at Workplace (Prevention, Prohibition and
Governance requirements specified in Regulation 17 to 27 Redressal) Act, 2013
and Clauses (b) to (i) of Sub-Regulation (2) of Regulation 46 of Kindly refer to relevant disclosures in the Directors’ Report which
the Listing Regulations and necessary disclosures thereof have forms part of the Annual Report 2019-20.
76
O) Credit Ratings and Change/Revisions in Credit Ratings for Debt Instruments

Rating of various debt instruments and Deposits:
Instrument Type Amount outstanding CARE Ratings India Ratings & Research (A Fitch
(` in crores) group company) Ratings/Outlook
Lower Tier II Bonds* 200 CARE A+ (Single A Plus; Outlook: Withdrawn
Negative)
Tier II Bonds (Basel III Compliant) 300 CARE A+ (Single A Plus; Outlook: IND A / Negative
Negative)
Negative)
Negative)
Tier I Bonds (Basel III Compliant) 500 - IND A– / Negative
*Redeemed on April 20, 2020
Short Term Ratings
Instrument Type Ratings
Certificate of Deposits CARE A1+ (A One Plus)
Short Term Fixed Deposits CRISIL A1+ (A One Plus)
During the financial year 2019-20, CARE Ratings Ltd. has revised Corporate Governance Report) was sent to all shareholders who
the rating from CARE A+ ; Stable (Single A plus, Outlook: Stable) had not registered their email ids for the purpose of receiving
to CARE A+; Negative (Single A plus, Outlook: Negative) and documents/communication from the Bank in electronic mode
India Ratings and Research Pvt. Ltd. revised the rating from IND and is also available at the Bank’s website.
A+/Stable to IND A+/Negative. C. Website
Further on August 21, 2020, India ratings and Research Pvt. Ltd. The Bank’s website, www.southindianbank.com contains
has revised the long term issuer rating of the Bank from IND A+/ a separate section ‘Investor Desk’ for use of investors. The
Negative to IND A/Negative. The rating of Basel III Tier 2 debt quarterly, half yearly and annual financial results, official news
has been revised from IND A+/Negative to IND A/Negative and releases and presentations made to institutional Investors and to
Basel III AT1 perpectual bonds from IND A / Negative to IND A– / analysts are promptly and prominently displayed on the website.
Negative. Annual Reports, Quarterly Corporate Governance Report,
Shareholding Pattern and other Corporate Communications
P. Fees paid to Statutory Auditors made to the Stock Exchanges are also available on the website.
The total fees incurred by the Bank on services rendered by the The ‘Investor Desk’ section provides the details of unclaimed
Statutory Auditor M/s Varma and Varma, is given below dividends warrants for dividends declared upto the financial
year ended 31.03.2019, to help shareholders to claim the same.
Amount In addition various downloadable forms required to be executed
Fee paid#
(in lakhs) by the shareholders have also been provided on the website.
Statutory audit/Limited review 35.00
D. Communication to Shareholders on e-mail
Certification and other attestation charges 10.00
Documents like Notices, Annual Report etc. are sent to the
Non-Audit services 0.00
shareholders at their email address, as registered with their
Total 45.00
Depository Participants/ Company/ Registrar and Transfer Agents
#Excluding the branch audit fee and out of pocket expenses (RTA). This helps in prompt delivery of document, reduce paper
6. MEANS OF COMMUNICATION consumption and avoid loss of documents in transit. Members
who have not yet registered their email id (including those who
A. Financial Results wish to change their already registered email id) may get the
The quarterly, unaudited and annual audited financial results same registered/updated either with their depositories or by
were published in any of the nationally circulated newspaper writing to the Bank/RTA.
in English, viz. Business Line/Business Standard/Financial Express
E. Reminders to Shareholders
and in the regionally circulated Malayalam daily Deepika. Official
press releases, presentations made to the media, analysts, Reminders for claiming unclaimed shares lying with the Bank
institutional Investors, the financial results, etc. are displayed on which are liable to be transferred to the Investor Education and
Protection Fund Authority are sent to the Shareholders as per
the Bank’s website, www.southindianbank.com.
Bank records.
B. Annual Report F. NEAPS (NSE Electronic Application Processing System)
Physical copy of the Annual Report for FY 2018-19, containing and BSE Listing centre
interalia, details of the Audited Financial Statements, Director’s NSE and BSE have developed web based applications for
Report (including Management Discussion and Analysis and Corporates. All compliances like financial results, Shareholding
77
Pattern and Corporate Governance Report, etc. are filed Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai - 400 001
electronically on NEAPS/BSE Listing centre. Phones : (022) 22721233/4, Fax : (022) 22721919.
G. SCORES (SEBI complaints redressal system) Bank’s Stock Exchange Code
SEBI processes investor complaints in a centralized web based BSE Scrip Code : 532218
complaints redressal system i.e., SCORES. Through this system NSE Symbol : SOUTHBANK
a shareholder can lodge complaint against a Company for ISIN Code : INE683A01023
his grievance. The Company uploads the action taken on The listing fees payable to the Stock Exchanges for the
the complaint which can be viewed by the shareholder. The financial year 2020-21 have already been remitted.
Company and shareholder can seek and provide clarifications The Bank has paid the custodial fees to the NSDL and CDSL
online through SCORES. as per the SEBI Circular CIR/MRD/DP/05 2011 dated April
6. GENERAL SHAREHOLDER INFORMATION 27, 2011 for the year 2020-21.
92nd Annual General Date 29th September, 2020 LISTING OF OTHER SECURITIES
Meeting Day Tuesday The Bank had listed the following Bonds in BSE Ltd. and their
Time 11.00 a.m. Stock Code are as under:
Venue Via VC/OAVM 1. Unsecured Redeemable Non-Convertible Subordinated
Financial year 2019-20 Tier II Lower Bonds issued on 20.08.2009 (Stock Code:
Book closure date Wednesday, the 23rd day of September, 2020 to 946254) – Redeemed on 20.04.2020.
Tuesday, the 29th day of September, 2020 (both
days inclusive) 2. Unsecured Redeemable Non-Convertible Basel III Compliant
Dividend Payment Nil Tier 2 Bonds in the nature of Debentures issued on
Reserve Bank of India vide its circular dated April 17, 30.09.2015 (Stock Code: 952810).
2020, has directed that banks shall not make any 3. Unsecured Redeemable Non-Convertible Basel III Compliant
further dividend payouts from profits pertaining Tier 2 Bonds in the nature of Debentures issued on
to the financial year ended March 31, 2020 until 28.11.2017 (Stock Code: 957189).
further instructions, with a view that banks must 4. Unsecured Redeemable Non-Convertible Basel III Compliant
conserve capital in an environment of heightened Tier 2 Bonds in the nature of Debentures issued on
uncertainty caused by Covid-19 pandemic. 26.03.2019 (Stock Code: 958670).
Name & designation of JIMMY MATHEW 5. Non-convertible, Fully Paid-Up, Unsecured, Perpetual,
Compliance officer Company Secretary Basel III compliant Tier 1 Bonds in the nature of debentures
Share Transfer Agents BTS Consultancy Services Pvt. Ltd. (Stock Code: 959209)
M S Complex, 1st Floor, No. 8, Sastri Nagar,
Near 200 Feet Road/RTO Kolathur, Debenture Trustee Details
Kolathur, CHENNAI – 600 099 IDBI Trusteeship Services Ltd.
Tel. : 044-25565121 Asian Building, Ground Floor, 17, R. Kamani Marg,
Fax : 044-25565131 Ballard Estate, Mumbai - 400 001.
E-mail : [email protected] Tel.No.: 022-40807000, E-mail: [email protected]
Contact Person-
Mr. C T Gopalakrishnan, Director & Equity Evolution during the year
Compliance Officer As at March 31, 2020, the paid-up share capital of the Bank was
Bank’s address for The South Indian Bank Ltd., `180,97,22,151/- consisting of 180,97,22,151 equity shares of
Correspondence “SIB House”, `1/- each. During the year under review, the Bank has issued
Secretarial Department, 40,000 shares pursuant to exercise of ESOS.
P.B.No.28, T.B.Road, Mission Quarters
Thrissur - 680 001, Kerala. The Market Price Data of Bank’s Shares
Phone: 0487-2429333 The monthly high and low prices of the Bank’s shares traded on
Fax : 0487-2424760 the National Stock Exchange of India Ltd. (NSE), Mumbai and
Corporate Identity L65191KL1929PLC001017 BSE Ltd. (BSE), Mumbai during the period April 2019 to March
Number (CIN) 2020 are as under:
E-mail address [email protected] BSE NSE
MONTH
Bank’s Website http://www.southindianbank.com HIGH LOW HIGH LOW
April 17.55 15.55 17.60 15.55
LISTING OF THE BANK’S EQUITY SHARES May 16.15 13.20 16.15 13.20
The Bank’s shares are listed on the following Stock Exchanges in June 14.30 12.95 14.25 12.95
India and their Stock Codes are as under: July 13.31 12.28 13.30 12.25
August 12.05 10.49 12.00 10.50
1. The National Stock Exchange of India Ltd. September 12.13 10.61 12.15 10.60
(Stock Code: SOUTHBANK) October 11.16 9.95 11.15 9.95
Exchange Plaza, Plot no. C/1, G Block, November 11.65 10.65 11.65 10.65
Bandra-Kurla Complex, Bandra (E), Mumbai - 400 051 December 11.02 10.09 11.00 10.05
Tel. No.: (022) 26598100 - 8114, Fax No.: (022) 26598120 January 11.19 10.16 10.15 11.20
February 10.33 9.31 10.30 9.25
2. The BSE Ltd. (Stock Code: 532218) March 9.00 4.97 9.00 4.95
78
Performance of the South Indian Bank Equity Shares Performance of the South Indian Bank Equity Shares
relative to S&P BSE SENSEX during FY 2019-20 relative to NSE Nifty during FY 2019-20.
45000 18
14000 18
40000 16 16
12000
35000 14 14
10000
30000 12 12
8000 10
25000 10
6000 8 NIFTY
20000 8 Sensex
6
15000 6 SIB share price 4000 SIB share price
4
10000 4 2000 2
5000 2 0 0
0 0
May/19
Aug/19
Apr/19
Jul/19
Sep/19
Nov/19
Dec/19
Feb/20
Oct/19
Jan/20
Jun/19
Mar/20
Jun/19
Oct/19
Jan/20
Mar/20
May/19
Apr/19
Aug/19
Nov/19
Jul/19
Sep/19
Dec/19
Feb/20
DISTRIBUTION OF SHAREHOLDING AS ON MARCH 31, 2020

PHYSICAL DEMAT
CATEGORY
NO. OF % OF SHARE- NO. OF % OF SHARE-
(NO. OF SHARES) SHARES SHARES
HOLDERS HOLDING HOLDERS HOLDING
UP TO – 100 2862 43848 0.00 130645 5704689 0.32
101 – 200 1948 252685 0.01 43038 7414755 0.41
201 – 500 2330 836172 0.05 68411 26333540 1.46
501 – 1000 2563 1777496 0.10 54501 46239673 2.56
1001 – 5000 20088 37905305 2.09 80642 193547949 10.69
5001 – 10000 1227 9000652 0.50 15749 118141047 6.53
10001 – 50000 753 14065046 0.78 13371 280651090 15.51
50001 & ABOVE 85 11230483 0.62 2433 1056577721 58.38
TOTAL 31856 75111687 4.15 408790 1734610464 95.85
Total number of shareholders both physical and electronic put together is 440646
MEMBERS’ PROFILE AS ON MARCH 31, 2020 IS AS UNDER
Sl. SHARES TOTAL % OF SHARE-
CATEGORY
No. PHYSICAL DEMAT SHARES HOLDING
1 RESIDENT INDIVIDUALS 62564977 941538808 1004103785 55.48
2 INDIAN FINANCIAL INSTITUTIONS 0 63698890 63698890 3.52
3 FOREIGN INSTITUTIONAL INVESTOR
4 NON-RESIDENT INDIANS 9273033 163222487 172495520 9.53
5 BODIES CORPORATES 2792515 99091438 101883953 5.63
6 DIRECTORS & RELATIVES 480696 1717654 2198350 0.12
7 MUTUAL FUNDS 0 64062568 64062568 3.54
8 TRUSTS 0 47792 47792 0.00
9 BANKS 0 3149334 3149334 0.17
10 CLEARING MEMBERS 0 9772254 9772254 0.54
11 HUF 466 29491389 29491855 1.63
12 FOREIGN PORTFOLIO INVESTOR (CORP) 0 345673973 345673973 19.10
13 FOREIGN PORTFOLIO INVESTOR (INDV) 0 136548 136548 0.01
14 FOREIGN NATIONALS 0 262100 262100 0.01
15 ALTERNATIVE INVEST FUND 0 1128700 1128700 0.06
16 IEPF AUTHORITY MCA 0 7603649 7603649 0.42
17 QIB 0 4012880 4012880 0.22
GRAND TOTAL 75111687 1734610464 1809722151 100.00
79
Shareholders holding more than 1% as on March 31, 2020

SL. SHARES AS ON
DP.CL.ID NAME OF THE SHAREHOLDER/S %
NO. 31-03-2020
1 1203280000374484 YUSUFFALI MUSALIAM VEETTIL ABDUL KADER 90059249 4.98
2 IN30005410064063 LAVENDER INVESTMENTS LIMITED 88836000 4.91
3 IN30016710081475 PEAR TREE POLARIS FOREIGN VALUE SMALL CAP FUND 65356800 3.61
4 IN30081210000012 LIFE INSURANCE CORPORATION OF INDIA 58319232 3.22
5 IN30012611220752 ICICI PRUDENTIAL BANKING AND FINANCIAL SERVICES FUND 44160076 2.44
6 IN30005410024287 ACACIA BANYAN PARTNERS 31210267 1.72
7 IN30154916191396 ASHISH DHAWAN 28000000 1.55
8 IN30005410013042 ACACIA PARTNERS~LP 24985520 1.38
9 IN30005410013034 ACACIA INSTITUTIONAL PARTNERS~LP 20700000 1.14
SHARE TRANSFER SYSTEM the Company exceeds one lakh, the Company shall register with
The Bank has appointed M/s BTS Consultancy Services Private SEBI as a Category II Share Transfer Agent for all work related
Limited, Chennai as its Share Transfer Agents and the share to share registry or appoint a Registrar to an Issue and Share
transfer/transmission; dividend payments and all other investor Transfer Agent registered with SEBI. The Bank had appointed
related matters are attended to and processed at the office of M/s BTS consultancy Services Private Limited as its RTA for
Share Transfer Agents of the Bank. The Share Transfer Agents, both segments, physical and electronic, much before this was
after processing the requests of investors, put up the same mandated by SEBI.
to the Bank’s officers in the cadre of GM or above who is in
As required under Regulation 7(3) of the Listing Regulations,
charge of administration, wherever necessary, for his approval
the Bank files, on half yearly basis, certificate issued by RTA and
and thereafter all such cases are put up to the Stakeholders
Relationship Committee of the Board of the Bank for its compliance officer of the company certifying that all activities in
information. Pursuant to the SEBI (Listing Obligations and relation to both physical and electronic share transfer facility are
Disclosure Requirements) Regulations, 2015, with effect from maintained by RTA registered with SEBI i.e., M/s BTS consultancy
April 1, 2019, except in case of transmission or transposition Services Private Limited.
of securities, requests for effecting transfer of securities shall
Address of the Share Transfer Agent:
not be processed unless the securities are held in dematerialized
form with a depository. BTS Consultancy Services Pvt. Ltd.
M S Complex, 1st Floor,
All share transfers are completed within statutory time limit
No.8, Sastri Nagar,
from the date of receipt, provided the documents meet the
Near 200 Feet Road/RTO Kolathur,
stipulated requirement of statutory provisions in all respects. The
Kolathur, CHENNAI – 600 099
Bank obtains, from a company secretary in practice, half yearly
certificate of compliance with the share transfer/transmission Tel. : 044-25565121
or transposition of securities formalities as required under Fax : 044-25565131
Regulation 40(9) of the Listing Regulations, and the Bank files a E-mail : [email protected]
copy of the same with the Stock Exchanges. [email protected]
An independent firm of practicing Company Secretaries carries DEMATERIALISATION OF SHARES AND LIQUIDITY
out the Reconciliation of Share Capital Audit as mandated The Equity shares of the Bank have been allotted International
by SEBI, and reports on the reconciliation of total issued and
Securities Identification Number (ISIN) INE683A01023. As
listed Capital with that of total share capital admitted/held in
at the end of March 2020, 1734610464 (95.85%) shares of
dematerialized form with NSDL and CDSL and those held in
the Bank have been converted into dematerialized form and
physical form. This audit is carried out on quarterly basis and
75111687(4.15%) shares were being held in physical form.
the report thereof is submitted to the Stock Exchanges, where
the Bank’s shares are listed.
The Shareholders of the Bank who have not dematerialized their
REGISTRARS AND SHARE TRANSFER AGENT shares so far may approach any of the Depository Participants
SEBI vide Regulation 7 of the SEBI (Listing Obligations & Disclosure of National Securities Depository Ltd. (NSDL) and Central
Requirements) Regulations, 2015 (Listing Regulations), has Depository Services (India) Ltd. (CDSL) for dematerializing their
mandated that where the total number of security holders of shareholding.
80
UNCLAIMED/UNPAID DIVIDEND Investors Education and Protection Fund (IEPF) of the Central
All dividends remaining unclaimed or unpaid including the Government on 29.07.2019 and 29.07.2020 respectively.
balance in Dividend Account upto and including financial year
The dividend for following years (see table below), which
1993-94 have been transferred to the General Revenue Account
remains unclaimed for seven years from the date it is lying in the
of the Central Government. Any claim in respect of transferred
unpaid dividend account of the Bank, will be transferred to the
amounts shall be made to the Registrar of Companies, Kerala,
IEPF in accordance with the schedule given below. Shareholders
Company Law Bhavan, Bharath Matha College, Thrikkakara
who have not encashed their dividend warrants relating to
P.O., Kochi - 682 021.
the dividends specified below are requested to immediately
In terms of the provisions of Section 124(5) of the Companies send their request for issue of duplicate warrants/for credit to
Act, 2013 read with the Investor Education and Protection Fund their bank account with requisite documents. The details of
Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, dividends specified below are available on the website of the
as amended from time to time, the Bank is statutorily required Bank, www.southindianbank.com. Once unclaimed dividends
to transfer to the Investor Education & Protection Fund (‘IEPF’), are transferred to IEPF, no claim shall lie in respect thereof with
established by the Central Government, all dividends remaining the Bank. However, shareholders may claim their unclaimed
unpaid/unclaimed for a period of 7 (Seven) years, thereon, from amount as per the procedures/guidelines issued by the Ministry
the date of transfer of such Dividend to the Unpaid Dividend of Corporate Affairs (MCA). For details, Investors can visit the
Account. In compliance with above, the unpaid dividend of website of IEPF Authority viz., www.iepf.gov.in.
`1,19,43,809.00 for the financial year 2011-12 has already
transferred to the fund on 29.07.2019 and dividend for the Due date
Sl. Financial Type of Divi- Date of
financial year ended March 31, 2013 was also transferred to for transfer
no. Year Dividend dend % declaration
IEPF after the due date i.e. July 28, 2020. Once such amounts to IEPF
are transferred to IEPF, no claim of the shareholder shall lie 1 2013-14 Final 80 16.07.2014 15.08.2021
against the Bank. However, shareholders may claim their 2 2014-15 Final 60 15.07.2015 15.08.2022
unclaimed amount as per the procedures/guidelines issued by 3 2015-16 Final 50 08.07.2016 07.08.2023
the Ministry of Corporate Affairs (MCA). Dividends for and upto
4 2016-17 Final 40 11.07.2017 10.08.2024
the financial year ended March 31, 2013 have already been
transferred to the IEPF. 5 2017-18 Final 40 11.07.2018 11.08.2025
6 2018-19 Final 25 17.07.2019 15.08.2026
The Ministry of Corporate Affairs on May 10, 2012 has
notified Investor Education and Protection Fund (Uploading of Mandatory Transfer of Shares to Demat Account of
information regarding unpaid and unclaimed amounts lying Investors Education and Protection Fund Authority (IEPFA)
with companies) Rules, 2012, whereby companies are required in case of unpaid/unclaimed dividend on shares for a
to identify and upload information regarding unclaimed consecutive period of seven years
amounts due to be transferred to IEPF on the Ministry’s website
and also on Bank’s website in the following link: https://www. In terms of Section 124 (6) of the Companies Act, 2013 read with
southindianbank.com/divident/Divident.aspx?id=1&linkId=672 Investor Education and Protection Fund Authority (Accounting,
Accordingly, the details of such unpaid/unclaimed amounts Audit, Transfer and Refund) Rules, 2016, as amended from
alongwith their respective due dates for transfer to IEPF are time to time, members are requested to note that the shares
provided for the benefit of investors. The Shareholders may in respect of which dividends have been unpaid or unclaimed
please claim their unclaimed/unpaid amount due to them by for seven consecutive years or more shall be credited to the IEPF
making a request to the Company giving their particulars before Demat Account maintained with depositories. Upon transfer of
the same are transferred to the IEPF. such shares, all benefits (e.g. bonus, spilt etc.), if any, accruing
on such shares shall also be credited to the IEPF Demat Account
Dates for Transfer of Unclaimed Dividend to Investors and the voting rights on such shares shall remain frozen till
Education and Protection Fund (IEPF) the rightful owner claims the shares. Accordingly, shares in
Pursuant to Section 124 of the Companies Act, 2013, respect of which dividend has not been paid or claimed for
final dividend for the financial year 2011-12 amounting to seven consecutive years for the financial year 2011-12 has been
`1,19,43,809.00 and `1,33,25,362.00 pertaining to the transferred by the Bank to the DEMAT Account of the authority
financial year 2012-13, which remained unpaid/unclaimed for on 19th August 2019. Further, all shares in respect of which
a period of seven years from the date it was lying in the unpaid dividend has not been paid or claimed for seven consecutive
dividend account, has been transferred by the Bank to the years from the financial year 2012-13 has been transferred by
81
the Bank to the DEMAT Account of the authority on 29th July Schedule V Para C clause (10)(i) of the SEBI (Listing Obligations
2020. and Disclosure Requirements) Regulations, 2015 (“SEBI Listing
Regulations”) to the effect that none of the Directors, who are
In this connection, the Bank had sent intimation letters to on the Board of the Bank as on 31st March 2020 have been
members in respect of the shares on which dividend had debarred or disqualified from being appointed or continuing as
remained unpaid or unclaimed for seven consecutive years or Directors of the Bank is annexed.
more, requesting them to claim such dividend so as to avoid
the corresponding shares being transferred to the IEPF authority. COMPLIANCE WITH DISCRETIONARY REQUIREMENTS AS
Simultaneously, an advertisement to this effect was published in STIPULATED UNDER PART E OF SCHEDULE II OF THE SEBI
leading English and vernacular newspapers. (LISTING OBLIGATIONS AND DISCLOSURE REQUIREMENTS)
REGULATIONS, 2015
The aforesaid Rules also prescribe the procedure to be followed
by an investor to claim the Shares/Dividend amount transferred A. The Board
to IEPF. Shares which are transferred to the IEPF Demat Account An office of the Non-Executive Chairman is maintained at the
can be claimed back by the shareholder from IEPF Authority by Bank’s expense and reimbursement of expenses incurred by the
following the procedure prescribed under the aforesaid rules. Chairman in performance of his duties is allowed.
There are no shares in Equity shares suspense account as the B. Modified Opinion(s) in Audit Report
shares lying in the Suspense Account had been transferred to The auditors have expressed an unmodified opinion on the
IEPF Demat Account during the Financial Year 2017-18. The financial statements of the Bank.
voting rights on these shares in IEPF account shall remain frozen
till the rightful owner of such shares claims the shares. C. Shareholder’s Rights
The Bank publishes its results on its website at www.
Compliance with Secretarial Standards southindianbank.com which is accessible to the public at
The Bank is in compliance with the applicable Secretarial large. The same are also available on the websites of the Stock
Standards issued by The Institute of Company Secretaries of Exchanges on which the Bank’s shares are listed. The Bank’s
India and approved by the Central Government under Section results for each quarter are published in an English newspaper
118(10) of the Companies Act, 2013 for FY 2019-20. having a wide circulation and in a Malayalam newspaper having
a wide circulation in Kerala.
7. COMPLIANCE STATUS OF LISTING AGREEMENT/SEBI 8. AFFIRMATION OF COMPLIANCE WITH CODE OF
(LODR) REGULATIONS, 2015 CONDUCT
The Bank has complied with all applicable mandatory
I, V G Mathew, MD & CEO hereby declare that the Bank’s Code
requirements of the Listing Regulations during the financial year
of Conduct has been accepted and the members of board of
2019-20. Quarterly compliance report on Corporate Governance,
directors and senior management personnel have affirmed
in the prescribed format, duly signed by the compliance officer
compliance with the code of conduct of board of directors and
is submitted regularly with the Stock Exchanges where the
senior management as required under SEBI (LODR) Regulations,
shares of the Bank are listed. The required disclosures under SEBI
2015 “on Corporate Governance.”
(LODR) Regulations, 2015 are detailed under various portions
of Directors Report and Corporate Governance Report and
compliance has been ensured. A certificate to this effect issued By Order of the Board
by M/s SVJS & Associates, Practicing Company Secretaries is
annexed.
(V G MATHEW)
Further, a certificate issued by M/s SVJS & Associates, Practicing Place : Thrissur MANAGING DIRECTOR & CEO
Company Secretaries, Pursuant to regulation 34(3) and Date : September 4, 2020 DIN : 05332797
82
CEO/CFO Certification
We, V G Mathew, Managing Director & CEO and Chithra H, Chief Financial Officer, of THE SOUTH INDIAN BANK LIMITED hereby
certify that:
A) We have reviewed financial statements and the cash flow statement for the year ended March 31, 2020 and that to the best
of our knowledge and belief:
i. statements do not contain any materially untrue statement or omit any material fact or contain any statements that might
be misleading;
ii. these statements together present a true and fair view of the Bank’s affairs and are in compliance with existing accounting
standards, applicable laws and regulations.
B) There are, to the best of our knowledge and belief, no transactions entered into by the Bank during the year which are
fraudulent, illegal or violative of the Bank’s Code of Conduct.
C) We accept responsibility for establishing and maintaining internal controls for financial reporting and that we have evaluated
the effectiveness of internal control systems of the Bank pertaining to financial reporting and have disclosed to the Auditors
and Audit Committee, deficiencies in the design or operation of such internal controls, if any, of which we are aware and the
steps we have taken or proposed to take to rectify these deficiencies.
D) We have indicated, to the Auditors and the Audit Committee:
i. significant changes in internal control over financial reporting during the year;
ii. significant changes in accounting policies during the year and that the same have been disclosed in the notes to the
financial statements; and
iii. instances of significant fraud of which we have become aware and the involvement therein, if any, of the management or
an employee having significant role in the Bank’s internal control system over financial reporting.
Yours faithfully
V G MATHEW CHITHRA H
Managing Director & CEO Chief Financial Officer
(DIN: 05332797)
Place : Thrissur
Date : June 26, 2020
83
Certificate on compliance with the conditions of Corporate Governance under the Securities and Exchange
Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015
To The Members Committee, Stakeholder Relationship Committee,

Risk Management Committee and Corporate Social
The South Indian Bank Limited
Responsibility Committee.
1. The accompanying Corporate Governance Report prepared vi. Obtained necessary representations and declarations
by The South Indian Bank Limited (hereinafter the “Bank”), from directors of the Bank including the independent
contains details as required by the provisions of Securities directors; and
and Exchange Board of India (Listing Obligations and
vii. Performed necessary inquiries with the management
Disclosure Requirements) Regulations, 2015, as amended
and also obtained necessary specific representations
(“the Listing Regulations”) (‘Applicable criteria’) with
from management.
respect to Corporate Governance for the year ended March
31, 2020. The above-mentioned procedures include examining evidence
supporting the particulars in the Corporate Governance Report
Managements’ Responsibility on a test basis. Further, our scope of work under this certificate
2. The preparation of the Corporate Governance Report is the did not involve us performing audit tests for the purposes of
responsibility of the Management of the Bank including expressing an opinion on the fairness or accuracy of any of the
the preparation and maintenance of all relevant supporting financial information or the financial statements of the Bank
records and documents. This responsibility also includes taken as a whole.
the design, implementation and maintenance of internal
Opinion
control relevant to the preparation and presentation of the
Corporate Governance Report. 5. Based on the procedures performed by us, and according
to the information and explanations given to us, we are of
3. The Management along with the Board of Directors are also
the opinion that the Bank has complied with the conditions
responsible for ensuring that the Bank complies with the
of Corporate Governance as stipulated in the Listing
conditions of Corporate Governance as stipulated in the
Regulations, as applicable for the year ended March 31,
Listing Regulations, issued by the Securities and Exchange
2020.
Board of India.
Other matters and Restriction on Use
Our Responsibility
6. This certificate is neither an assurance as to the future
4. The procedures for verification that have been selected
viability of the Bank nor the efficiency or effectiveness with
depend on judgement, including the assessment of the
which the management has conducted the affairs of the
risks associated in compliance of the Corporate Governance
Bank.
Report with the applicable criteria. The key procedures
performed include: 7. This certificate is addressed to and provided to the
i. Reading and understanding of the information members of the Bank solely for the purpose of enabling it
prepared by the Bank and included in its Corporate to comply with its obligations under the Listing Regulations
Governance Report; with reference to compliance with the relevant regulations
of Corporate Governance and should not be used by any
ii. Obtained and verified that the composition of the
other person or for any other purpose.
Board of Directors w.r.t. executive and non-executive
directors has been met throughout the reporting We have no responsibility to update this certificate for events
period; and circumstances occurring after the date of this certificate.
iii. Obtained and read the Directors’ Register as on
March 31, 2020 and verified that at least one woman For SVJS & Associates
director was on the Board during the year; Company Secretaries
iv. Obtained and read the minutes of the annual general
meeting held on July 17, 2019; Sd/-
v. Obtained and read the minutes of the Board of CS Vincent P D
Directors and the committees of the Board of Managing Partner
Directors, held on April 1, 2019 to March 31, 2020 Kochi FCS: 3067, CP No.: 7940
viz., Audit Committee, Nomination and Remuneration 04.09.2020 UDIN : F003067B000660405
84
CERTIFICATE OF NON-DISQUALIFICATION OF DIRECTORS
(Pursuant to Regulation 34(3) and Schedule V Para C Clause (10)(i) of the Securities and Exchange Board of India (Listing Obligations
and Disclosure Requirements) Regulations, 2015)
To
The Members
SIB House, Mission Quarters
T B Road, Thrissur – 680 001
Kerala
We have examined the relevant registers, records, forms, returns and disclosures received from the Directors of The South Indian
Bank Limited having CIN:L65191KL1929PLC001017 and having registered office at SIB House, Mission Quarters, T B Road,
Thrissur – 680 001, Kerala (hereinafter referred to as ‘the Company’), produced before us by the Company for the purpose of
issuing this Certificate, in accordance with Regulation 34(3) read with Schedule V Para C Clause 10(i) of the Securities and Exchange
Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.
In our opinion and to the best of our information and according to the verifications (including Directors Identification Number (DIN)
status at the portal www.mca.gov.in) as considered necessary and explanations furnished to us by the Company and its officers,
We hereby certify that none of the Directors on the Board of the Company as stated below for the Financial Year ending on
31st March, 2020 have been debarred or disqualified from being appointed or continuing as Directors of companies by the
Securities and Exchange Board of India, Ministry of Corporate Affairs, or any such Statutory Authority.
Sl. Date of appointment

Name of Director DIN
No. in Company
1 Sri Salim Gangadharan 06796232 16.01.2014
2 Sri V G Mathew 05332797 01.10.2014
3 Dr. John Joseph Alapatt 00021735 24.09.2012
4 Sri Francis Alapatt 01419486 01.11.2013
5 Smt. Ranjana S Salgaocar 00120120 01.10.2014
6 Sri Parayil George John Tharakan 07018289 25.11.2014
7 Sri Achal Kumar Gupta 02192183 11.01.2017
8 Sri V J Kurian 01806859 23.03.2018
9 Sri M Georg Korah 08207827 31.08.2018
10 Sri Pradeep M Godbole 08259944 26.03.2019
Ensuring the eligibility for the appointment/continuity of every Director on the Board is the responsibility of the management of
the Company. Our responsibility is to express an opinion based on our verification. This certificate is neither an assurance as to the
future viability of the Company nor of the efficiency or effectiveness with which the management has conducted the affairs of the
Company.

Company Secretaries
Sd/-
CS Vincent P D
Kochi Managing Partner
04.09.2020 FCS: 3067, CP No.: 7940
UDIN : F003067B000660383

85
INDEPENDENT AUDITOR’S REPORT
To the Members of The South Indian Bank Limited India together with the ethical requirements that are relevant to
our audit of the financial statements under the provisions of the
Report on the Audit of the Financial Statements Act and the Rules thereunder, and we have fulfilled our other
ethical responsibilities in accordance with these requirements
Opinion
and the Code of Ethics. We believe that the audit evidence we
We have audited the financial statements of The South Indian have obtained is sufficient and appropriate to provide a basis
Bank Limited (‘the Bank’), which comprise the Balance Sheet as for our audit opinion on the financial statements.
at March 31, 2020, the Profit and Loss Account, the Cash Flow
Statement for the year then ended, and notes to the financial Emphasis of Matter
statements, including a summary of significant accounting We draw attention to Note No. A.12.1 of Schedule 18 of
policies and other explanatory information in which are the accompanying Financial Results, regarding the impact of
included the Returns for the year ended on that date audited by COVID-19 pandemic and the adjustments made in the accounts
the branch auditors of the Bank’s branches located across India. for the year ended March 31, 2020 on account of the same.
In our opinion and to the best of our information and according Such estimates are based on current facts and circumstances
to the explanations given to us, the aforesaid financial and may not necessarily reflect the future uncertainties and
statements give the information required by the Banking events arising from the full impact of the COVID-19 pandemic
Regulation Act, 1949 as well as the Companies Act, 2013 which would depend on several factors including the steps
(‘the Act’) in the manner so required for banking Companies taken by the Governments, Reserve Bank of India (RBI) and the
and give a true and fair view in conformity with accounting bank to mitigate the same.
principles generally accepted in India, of the state of affairs of
the Bank as at March 31, 2020, and its profit and its cash flows Our opinion is not modified in respect of this matter.
for the year ended on that date.
Key Audit Matters
Basis for Opinion Key Audit Matters are those matters that, in our professional
We conducted our audit of the financial statements in judgment, were of most significance in our audit of the financial
accordance with the Standards on Auditing (SAs) specified under statements for the financial year ended March 31, 2020. These
Section 143 (10) of the Act. Our responsibilities under those matters were addressed in the context of our audit of the
Standards are further described in the ‘Auditor’s Responsibilities financial statements as a whole, and in forming our opinion
for the Audit of the Financial Statements’ section of our report. thereon, and we do not provide a separate opinion on these
We are independent of the Bank in accordance with the “Code matters. For each matter below, our description of how our
of Ethics” issued by the Institute of Chartered Accountants of audit addressed the matter is provided in that context.
Description of Key Audit Matters
Key Audit Matters How our audit addressed the Key Audit Matters
(i) Classification of Advances, Income Recognition, Identification and provisioning for non-performing Advances
(Refer Note 3 of Schedule 17 and Note A 9 of Schedule 18 to the financial statements)
Advances include Bills purchased and discounted, Cash Our audit approach/procedures towards advances with reference
Credits, Overdrafts, Loans repayable on demand and to the prudential norms for income recognition, asset classification
Term loans. These are further categorised as secured and provisioning of Non-performing assets (IRACP norms) and
by Tangible assets (including advances against Book other related circulars/directives issued by the Reserve Bank of
Debts), covered by Bank/Government Guarantees and India (RBI) and also internal policies and procedures of the Bank
Unsecured advances. includes the following:
- Understanding and considering the Bank’s accounting
The Reserve Bank of India (‘RBI’) prescribes the
policies for NPA identification and provisioning and assessing
prudential norms for income recognition, asset
compliance with the prudential norms prescribed by the
classification and provisioning of Non-performing assets
RBI (IRACP Norms) including the additional provisions made
(including circulars in relation to COVID-19 Regulatory
on advances considering the current uncertain economic
Package – Asset Classification and Provisioning) (IRACP
environment arising out of COVID-19 pandemic.
Norms) and prescribes the minimum provision required
for such assets including the additional provisions on
advances considering the current uncertain economic
environment arising out of COVID-19 pandemic.
86
The identification of performing and non-performing - Understanding, evaluation and testing the design and
advances involves establishment of proper mechanism operating effectiveness of key controls (including application
and the bank is required to apply significant degree of controls) for identification and provisioning of impaired
judgement to identify and determine the amount of accounts based on the extant guidelines on IRACP laid down
provision required against each non-performing asset by the RBI.
(‘NPA’) applying both quantitative as well as qualitative - Performing other procedures including substantive audit
factors prescribed by the regulations. procedures covering the identification of NPAs by the Bank.
These procedures included:
At year end the Bank reported total gross non-
(a) Considering testing of the exception reports generated
performing advances of `3261.77 crores (2019:
from the application systems where the advances have
`3131.67 crores) and non-performing asset provision
been recorded.
of `1080.18 crores (2019: `937.82 crores).
(b) Considering the accounts reported by the Bank and other
banks as Special Mention Accounts (“SMA”) in RBI’s
Significant judgements and estimates for NPA
central repository of information on large credits (CRILC)
identification and provisioning could give rise to
to identify stress.
material misstatements on:
(c) Reviewing account statements and other related
- Completeness and timing of recognition of non-
information of the borrowers selected based on
performing assets in accordance with criteria as per
quantitative and qualitative risk factors.
IRACP norms;
(d) Reading of minutes of management committee and
- Measurement of the provision for non-performing
credit committee meetings and performing inquiries with
assets based on loan exposure, ageing and
the credit and risk departments to ascertain if there were
classification of the loan, realizable value of security;
indicators of stress or an occurrence of an event of default
in a loan account or any product.
Since the identification of NPAs and provisioning of
(e) Considering audit reports and memorandum of changes
advances (including additional provisions considering
issued by statutory branch auditors.
the current situation arising out of COVID-19 pandemic)
(f) Considering Internal Audit, Systems Audit, Credit Audit
requires proper mechanism and significant level of
and Concurrent Audit as per the policies and procedures
estimation and given its significance to the overall
of the Bank.
audit, we have ascertained identification of NPAs and
(g) Considering the RBI Annual Financial Inspection report on
provisioning of advances as a key audit matter.
the Bank, the bank’s response to the observations and
other communication with RBI during the year.
(h) Examination of advances including stressed advances on
a sample basis with respect to compliance with the RBI
Master Circulars/Guidelines.
For non-performing advances identified, we, based on our sample
on factors including stressed sectors and account materiality,
tested the asset classification dates, value of available security and
provisioning as per IRACP norms. We recomputed the provision
for NPA after considering the key input factors and compared our
measurement outcome to that prepared by management.
(ii) Classification and Valuation of Investments, Identification of and provisioning for Non-Performing Investments
(Schedule 8 read with Note 2 of Schedule 17 to the financial statements)
Investments include investments made by the Bank in Our audit approach/procedures towards Investments with
various Government Securities, Bonds, Debentures, reference to the RBI Circulars/directives included the understanding
Shares, Security receipts and other approved securities. of internal controls and substantive audit procedures in relation
These are governed by the circulars and directives to valuation, classification, identification of non-performing
of the RBI. These directions of RBI, inter-alia, cover investments (NPIs) and provisioning/depreciation related to
valuation of investments, classification of investments, Investments. In particular,
identification of non-performing investments,
non-recognition of income and provisioning against
non-performing investments.
87
Investments are classified into ‘Held for Trading’ (‘HFT’), a. We evaluated and understood the Bank’s internal control
‘Available for Sale’ (‘AFS’) and ‘Held to Maturity’ (‘HTM’) system to comply with relevant RBI guidelines regarding
categories at the time of purchase. Investments, which valuation, classification, identification of NPIs and provisioning/
the Bank intends to hold till maturity are classified as depreciation related to investments;
HTM investments. b. We assessed and evaluated the process adopted for collection
Investments classified as HTM are carried at amortised of information from various sources for determining market
cost. Where in the opinion of management, a value of these investments;
diminution, other than temporary, in the value of c. For the selected sample of investments in hand, we tested
investments has taken place, appropriate provisions are accuracy and compliance with the RBI Master Circulars and
made. directions by re-performing valuation for each category of
the security. Samples were selected after ensuring that all the
Investments classified as AFS and HFT are marked- categories of investments (based on nature of security) were
to-market on a periodic basis as per the relevant RBI covered in the sample;
guidelines.
d. We assessed and evaluated the process of identification of
The valuation of each category (type) of the aforesaid NPIs and corresponding reversal of income and creation of
securities is to be done as per the method prescribed in provision;
circulars and directives issued by the RBI which involves e. We carried out substantive audit procedures to recompute
collection of data/information from various sources independently the provision to be maintained in accordance
such as FIMMDA rates, rates quoted on BSE/NSE, with the circulars and directives of the RBI. Accordingly, we
financial statements of unlisted companies etc. selected samples from the investments of each category and
tested for NPIs as per the RBI guidelines and recomputed
Considering the complexities and extent of judgement
the provision to be maintained in accordance with the RBI
involved in the valuation, volume of transactions,
Circular for those selected sample of NPIs;
investments on hand and degree of regulatory focus,
this has been determined as a Key Audit Matter. f. We tested the mapping of investments between the
Accordingly, our audit was focused on valuation of Investment application software and the financial statement
investments, classification, identification of non- preparation software to ensure compliance with the
performing investments and provisioning related to presentation and disclosure requirements as per the aforesaid
investments. RBI Circular/directions.
(iii) Pension valuation, retirement benefit obligations and provision for wage revisions
The Bank operates defined benefit schemes like gratuity, - We tested the design and operating effectiveness of key
pension and leave benefits for its employees which in controls over the completeness and accuracy of data
total are significant in the context of the overall balance extracted and supplied to the Bank’s actuaries, which is used
sheet. At year end the Bank reported a pension liability to calculate the defined benefit schemes’ surplus or deficit.
of `801.56 crores (2019: `700.22 crores), and gratuity - We also tested the controls associated with the actuarial
provision of `232.65 crores (2019: `216.44 crores). assumptions setting process and the measurement of the fair
Further, it has also provided for provision towards wage value of the schemes’ assets.
revision in anticipation towards negotiation between - We understood the judgements made in determining the
Banks and its employees in the current financial year. assumptions used by management to value the retirement
The valuations of the employee benefit liabilities benefit liabilities and we examined whether these assumptions
are calculated with reference to multiple actuarial met the requirements of the applicable accounting standards,
assumptions and inputs including discount rate, rate the specific circumstances of the schemes and their
of inflation and mortality rates. The net defined benefit participants, and were in line with market practice.
asset is sensitive to changes in the assumptions.
- Our audit procedures included an assessment of the
Further, regarding wage revision the management assumptions used by the actuary by comparing life expectancy
has made provisions based on previous experience, assumptions with relevant mortality tables, benchmarking
progress of ongoing negotiations with trade unions inflation and discount rates against external market data.
and other market factors, involving significant level of We have also evaluated the independence, qualifications
judgements and estimates. and results of work performed by management’s actuaries
involved in the valuation process.
88
Considering the significant level of judgements and - We verified the value of plan assets to the statements provided
estimates and the materiality involved, we have by asset management companies managing the plan assets.
included this as a Key Audit Matter. - Verified the disclosures provided by the Bank in accordance
with AS 15(R) Employee Benefits.
- Regarding the estimate on wage revision, we discussed and
understood the wage negotiation process and understood
the key assumptions used for estimating the provision and
compared the same for consistency and reasonability based
on past experience.
(iv) Information Technology (‘IT’) Systems and Controls for financial reporting
Our audit procedures have a focus on those IT systems - We tested the design and operating effectiveness of the
and controls which are material from a financial Bank’s IT access controls over the information systems
reporting perspective, due to the pervasive nature and that are critical to financial reporting. We tested IT general
complexity of the IT environment, the large volume of controls (logical access, changes management and aspects of
transactions processed in numerous locations daily and IT operational controls). This included testing that requests for
the reliance on automated and IT dependent manual access to systems were reviewed and authorised. We tested
controls. Our areas of audit focus included user access the Bank’s periodic review of access rights. We inspected
management, developer access to the production requests of changes to systems for approval and authorisation.
environment and changes to the IT environment. These We considered the control environment relating to various
are key to ensure that IT dependent and application- interfaces, configuration and other application layer controls
based controls are operating effectively. Due to the identified as key to our audit.
pervasive nature and complexity of the IT environment - In addition to the above, we tested the design and operating
we have ascertained IT systems and controls as a Key effectiveness of certain automated controls that were
Audit Matter. considered as key internal controls over financial reporting.
- Where deficiencies were identified, we tested compensating
controls or performed alternate procedures. In addition, we
understood where relevant, changes were made to the IT
landscape during the audit period and tested those changes
that had a significant impact on financial reporting.
(v) Provisions and Contingent Liabilities (Refer Note 14 of Schedule 17 to the financial statements)
Assessment of Provisions and Contingent liabilities Our audit approach/procedures involved:
in respect of certain litigations including Direct and - Obtaining an understanding of internal controls relevant to
Indirect Taxes, various claims filed by other parties not the audit in order to design our audit procedures that are
acknowledged as debt (Schedule 12 to the financial appropriate in the circumstances;
statements). - Understanding the current status of the litigations/tax
There is high level of judgement required in estimating assessments;
the level of provisioning. The Bank’s assessment - Examining recent orders and/or communication received from
is supported by the facts of matter, their own various tax authorities/judicial forums and follow up action
judgment, past experience, and advice from legal and thereon;
independent tax consultants wherever considered - Evaluating the merit of the subject matter under consideration
necessary. Accordingly, unexpected adverse outcomes with reference to the grounds presented therein and available
may significantly impact the Bank’s reported profit and independent legal/tax advice including opinion of our internal
state of affairs presented in the Balance Sheet. tax experts;
We determined the above area as a Key Audit Matter in - Review and analysis of evaluation of the contentions of
view of associated uncertainty relating to the outcome the Bank through discussions, collection of details of the
of these matters which requires application of judgment subject matter under consideration, the likely outcome and
in interpretation of law. Accordingly, our audit was consequent potential outflows on those issues; and
focused on analysing the facts of subject matter under - Verification of disclosures related to significant litigations and
consideration and judgments/interpretation of law taxation matters.
involved.
89
(vi) Modified Audit Procedures carried out in light of COVID-19 outbreak:
Due to COVID-19 pandemic, Nation-wide lockdown Due to the outbreak of COVID-19 pandemic that caused nation-
and travel restrictions imposed by Central/State wide lockdown and other travel restrictions imposed by the
Government/Local Authorities during the period of Central and State Governments/local administration during the
our audit and the RBI directions to Bank to facilitate period of our audit, we could not travel to certain Branches of the
carrying out audit remotely wherever physical access bank to carry out the audit processes physically at the respective
was not possible, audit could not be conducted by offices.
visiting the premises of certain Branches of the bank. Wherever physical access was not possible, necessary records/
Accordingly, our audit procedures were modified to reports/documents/certificates were made available to us by the
carry out the audit remotely. Bank through digital medium, emails and remote access to CBS
As we could not fully gather audit evidence in person/ and other relevant application software. To this extent, the audit
physically/through discussions and personal interactions process was carried out on the basis of such documents, reports
with the officials at the Branches, we have identified and records made available to us which were relied upon as audit
such modified audit procedures as a Key Audit Matter. evidence for conducting the audit and reporting for the current
period.
Accordingly, we modified our audit procedures as follows:
- Conducted verification of necessary records/documents/CBS
and other Application software electronically through remote
access/emails in respect of some of the Branches of the Bank
wherever physical access was not possible.
- Carried out verification of scanned copies of the documents,
deeds, certificates and the related records made available to
us through emails and remote access over secure network of
the Bank.
- Making enquiries and gathering necessary audit evidence
through Video Conferencing and discussions over phone calls/
conference calls, emails and similar communication channels.
Information other than the Financial Statements and Responsibilities of Management and Those Charged with
Auditor’s Report Thereon Governance for the Financial Statements
The Bank’s Board of Directors is responsible for the other The Bank’s Board of Directors is responsible for the matters
information. The other information comprises the information stated in Section 134(5) of the Act, with respect to the
included in the Annual Report, but does not include the preparation of these financial statements that give a true and
financial statements and our auditor’s report thereon. fair view of the financial position, financial performance and
Our opinion on the financial statements does not cover the cash flows of the Bank in accordance with the accounting
other information and we do not express any form of assurance principles generally accepted in India, including the Accounting
conclusion thereon. Standards specified under Section 133 of the Act, read with
Rule 7 of the Companies (Accounts) Rules, 2014 in so far as
In connection with our audit of the financial statements, our they apply to the Bank and provisions of Section 29 of the
responsibility is to read the other information and, in doing so, Banking Regulation Act, 1949 and circulars and guidelines
consider whether the other information is materially inconsistent issued by the Reserve Bank of India (‘RBI’) from time to time.
with the financial statements or our knowledge obtained in This responsibility also includes maintenance of adequate
the audit or otherwise appears to be materially misstated. If, accounting records in accordance with the provisions of the Act
based on the work we have performed, we conclude that there
for safeguarding of the assets of the Bank and for preventing
is a material misstatement of this other information, we are
and detecting frauds and other irregularities; selection and
required to report that fact. We have nothing to report in this
application of appropriate accounting policies; making
regard.
90
judgments and estimates that are reasonable and prudent; and and the reasonableness of accounting estimates and related
design, implementation and maintenance of adequate internal disclosures made by management.
financial controls, that were operating effectively for ensuring • Conclude on the appropriateness of management’s use of
the accuracy and completeness of the accounting records, the going concern basis of accounting and, based on the
relevant to the preparation and presentation of the financial audit evidence obtained, whether a material uncertainty
statements that give a true and fair view and are free from exists related to events or conditions that may cast
material misstatement, whether due to fraud or error. significant doubt on the Bank’s ability to continue as a going
concern. If we conclude that a material uncertainty exists,
In preparing the financial statements, Management and Board we are required to draw attention in our auditor’s report
of Directors are responsible for assessing the Bank’s ability to to the related disclosures in the financial statements or, if
continue as a going concern, disclosing, as applicable, matters such disclosures are inadequate, to modify our opinion. Our
related to going concern and using the going concern basis of conclusions are based on the audit evidence obtained up
accounting unless management either intends to liquidate the to the date of our auditor’s report. However, future events
Bank or to cease operations, or has no realistic alternative but or conditions may cause the Bank to cease to continue as a
to do so. going concern.
Those Board of Directors are also responsible for overseeing the • Evaluate the overall presentation, structure and content
Bank’s financial reporting process. of the financial statements, including the disclosures, and
whether the financial statements represent the underlying
Auditor’s Responsibilities for the audit of the Financial transactions and events in a manner that achieves fair
Statements presentation.
Our objectives are to obtain reasonable assurance about
whether the financial statements as a whole are free from We communicate with those charged with governance
material misstatement, whether due to fraud or error, and to regarding, among other matters, the planned scope and
issue an auditor’s report that includes our opinion. Reasonable timing of the audit and significant audit findings, including
assurance is a high level of assurance, but is not a guarantee any significant deficiencies in internal control that we identify
that an audit conducted in accordance with SAs will always during our audit.
detect a material misstatement when it exists. Misstatements We also provide those charged with governance with a statement
can arise from fraud or error and are considered material if, that we have complied with relevant ethical requirements
individually or in the aggregate, they could reasonably be regarding independence, and to communicate with them all
expected to influence the economic decisions of users taken on relationships and other matters that may reasonably be thought
the basis of these financial statements to bear on our independence, and where applicable, related
As part of an audit in accordance with SAs, we exercise safeguards.
professional judgment and maintain professional skepticism
throughout the audit. We also: From the matters communicated with those charged with
governance, we determine those matters that were of most
• Identify and assess the risks of material misstatement of the significance in the audit of the financial statements for the
financial statements, whether due to fraud or error, design financial year ended March 31, 2020 and are therefore the
and perform audit procedures responsive to those risks, and key audit matters. We describe these matters in our auditor’s
obtain audit evidence that is sufficient and appropriate to report unless law or regulation precludes public disclosure
provide a basis for our opinion. The risk of not detecting a about the matter or when, in extremely rare circumstances, we
material misstatement resulting from fraud is higher than determine that a matter should not be communicated in our
for one resulting from error, as fraud may involve collusion, report because the adverse consequences of doing so would
forgery, intentional omissions, misrepresentations, or the reasonably be expected to outweigh the public interest benefits
override of internal control. of such communication.
• Obtain an understanding of internal control relevant to the
audit in order to design audit procedures that are appropriate Other Matters
in the circumstances. Under Section 143(3)(i) of the Act, we (i) We did not audit the financial statements of 855 branches
are also responsible for expressing our opinion on whether included in the financial statements of the Bank whose
the Bank has adequate internal financial controls system in financial statements reflect total assets of `84796.67 crores
place and the operating effectiveness of such controls. as at March 31, 2020 and total revenue of `4804.42
• Evaluate the appropriateness of accounting policies used crores for the year ended on that date, as considered in
91
the financial statements. The financial statements of these e) In our opinion, the aforesaid financial statements comply
branches have been audited by the branch auditors whose with the Accounting Standards specified under Section 133
reports have been furnished to us, and in our opinion in so of the Act, read with Rule 7 of the Companies (Accounts)
far as it relates to the amounts and disclosures included in Rules, 2014, to the extent they are not inconsistent with
respect of branches, is based solely on the report of such the accounting policies prescribed by RBI;
branch auditors.
f) On the basis of written representations received from the
(ii) The financial statements of the Bank for the year ended
directors as on March 31, 2020 and taken on record by the
March 31, 2019 was audited by another auditor whose
Board of Directors, none of the directors is disqualified as
report dated May 9, 2019 expressed an unmodified opinion
on March 31, 2020 from being appointed as a director in
on those financial statements.
terms of Section 164(2) of the Act;
Our opinion is not modified in respect of the above matters.
g) With respect to the adequacy of the internal financial
Report on Other Legal and Regulatory Requirements
controls over financial reporting of the Bank with
The Balance Sheet and the Profit and Loss Account have reference to these financial statements and the operating
been drawn up in accordance with the provisions of Section effectiveness of such controls, refer to our separate Report
29 of the Banking Regulation Act, 1949 and Section 133 of in “Annexure A” to this report;
the Companies Act, 2013 read with Rule 7 of the Companies
(Accounts) Rules, 2014. h) In our opinion, the entity being a banking company,
the remuneration to its directors during the year ended
As required by sub-section (3) of Section 30 of the Banking
March 31, 2020 has been paid/provided by the Bank in
Regulation Act, 1949, we report that:
accordance with the provisions of Section 35B (1) of the
(a) we have obtained all the information and explanations Banking Regulation Act, 1949, and;
which, to the best of our knowledge and belief, were
necessary for the purpose of our audit and have found i) With respect to the other matters to be included in the
them to be satisfactory; Auditor’s Report in accordance with Rule 11 of the
(b) the transactions of the Bank, which have come to our Companies (Audit and Auditors) Rules, 2014, as amended,
notice, have been within the powers of the Bank; and in our opinion and to the best of our information and
according to the explanations given to us:
(c) the returns received from the offices and branches of the
Bank have been found adequate for the purposes of our i. The Bank has disclosed the impact of pending
audit. litigations on its financial position in its financial
statements - Refer Schedule 12.I and Sl. No. 1 of Note
Further, as required by Section 143(3) of the Act, we report 9 under Schedule 18.B to the financial statements;
that: ii. The Bank has made provision, as required under the
a) We have sought and obtained all the information and applicable law or accounting standards, for material
explanations which to the best of our knowledge and foreseeable losses, if any, on long term contracts
belief were necessary for the purpose of our audit; including derivative contracts - Refer Note 10 under
b) In our opinion, proper books of account as required by law Schedule 18.B to the financial statements; and
have been kept by the Bank so far as it appears from our
iii. There has been no delay in transferring amounts,
examination of those books and proper returns adequate
for the purposes of our audit have been received from required to be transferred, to the Investor Education
branches not visited by us; and Protection Fund by the Bank.
c) The reports on the accounts of the branch offices of the

bank audited under Section 143(8) of the Act by branch For Varma & Varma
auditors of the Bank have been sent to us and have been Chartered Accountants
properly dealt with by us in preparing this report; ICAI Firm Registration No.004532S
d) The Balance Sheet, the Profit and Loss Account, the Cash V Sathyanarayanan
Flow Statement dealt with by this report are in agreement Partner
with the books of account and with the returns received Kochi Membership No.021941
from the branches not visited by us; June 26, 2020 ICAI UDIN : 20021941AAAAFF9918
92
ANNEXURE A TO THE INDEPENDENT AUDITOR’S REPORT OF EVEN DATE ON THE

FINANCIAL STATEMENTS OF THE SOUTH INDIAN BANK LIMITED
Report on the Internal Financial Controls Over Financial Reporting with reference to financial statements
under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (“the Act”)
We have audited the internal financial controls over financial opinion on the Bank’s internal financial controls system over
reporting with reference to financial statements of The South financial reporting.
Indian Bank Limited (‘the Bank’) as at March 31, 2020 in
Meaning of Internal Financial Controls Over Financial
conjunction with our audit of the financial statements of the
Reporting
Bank for the year ended on that date.
A bank’s internal financial control over financial reporting is a
Management’s Responsibility for Internal Financial process designed to provide reasonable assurance regarding
Controls over Financial Reporting the reliability of financial reporting and the preparation of
The Bank’s Management is responsible for establishing and financial statements for external purposes in accordance with
maintaining internal financial controls based on the internal generally accepted accounting principles. A bank’s internal
control over financial reporting criteria established by the Bank financial control over financial reporting includes those policies
considering the essential components of internal control stated and procedures that (1) pertain to the maintenance of records
in the Guidance Note on Audit of Internal Financial Controls that, in reasonable detail, accurately and fairly reflect the
transactions and dispositions of the assets of the bank; (2)
Over Financial Reporting issued by the Institute of Chartered
provide reasonable assurance that transactions are recorded
Accountants of India. These responsibilities include the design,
as necessary to permit preparation of financial statements in
implementation and maintenance of adequate internal
accordance with generally accepted accounting principles, and
financial controls that were operating effectively for ensuring
that receipts and expenditures of the bank are being made only
the orderly and efficient conduct of its business, including
in accordance with authorizations of management and directors
adherence to Bank’s policies, the safeguarding of its assets, the
of the bank; and (3) provide reasonable assurance regarding
prevention and detection of frauds and errors, the accuracy
prevention or timely detection of unauthorized acquisition, use,
and completeness of the accounting records, and the timely or disposition of the bank’s assets that could have a material
preparation of reliable financial information, as required under effect on the financial statements.
the Companies Act, 2013.
Inherent Limitations of Internal Financial Controls Over
Auditor’s Responsibility Financial Reporting
Our responsibility is to express an opinion on the Bank’s internal Because of the inherent limitations of internal financial controls
financial controls over financial reporting based on our audit. over financial reporting with reference to financial statements,
We conducted our audit in accordance with the Guidance Note including the possibility of collusion or improper management
on Audit of Internal Financial Controls Over Financial Reporting override of controls, material misstatements due to error or
(‘the Guidance Note’) and the Standards on Auditing as fraud may occur and not be detected. Also, projections of
specified under Section 143(10 ) of the Companies Act, 2013 to any evaluation of the internal financial controls over financial
the extent applicable to an audit of internal financial controls, reporting to future periods are subject to the risk that the
both applicable to an audit of internal financial controls and internal financial control over financial reporting may become
both issued by the Institute of Chartered Accountants of India. inadequate because of changes in conditions, or that the degree
Those Standards and the Guidance Note require that we comply of compliance with the policies or procedures may deteriorate.
with ethical requirements and plan and perform the audit to Opinion
obtain reasonable assurance about whether adequate internal In our opinion, the Bank has, in all material respects, an adequate
financial controls over financial reporting was established and internal financial controls system over financial reporting with
maintained and if such controls operated effectively in all reference to financial statements and such internal financial
material respects. controls over financial reporting were operating effectively as
Our audit involves performing procedures to obtain audit at March 31, 2020, based on the internal control over financial
evidence about the adequacy of the internal financial reporting criteria established by the Bank considering the
essential components of internal control stated in the Guidance
controls system over financial reporting and their operating
Note on Audit of Internal Financial Controls over Financial
effectiveness. Our audit of internal financial controls over
Reporting issued by the Institute of Chartered Accountants of
financial reporting included obtaining an understanding of
India.
internal financial controls over financial reporting, assessing the
risk that a material weakness exists, and testing and evaluating For Varma & Varma
the design and operating effectiveness of internal control based Chartered Accountants
on the assessed risk. The procedures selected depend on the ICAI Firm Registration No.004532S
auditor’s judgement, including the assessment of the risks of
material misstatement of the financial statements, whether due V Sathyanarayanan
to fraud or error. Partner
We believe that the audit evidence we have obtained is Kochi Membership No.021941
sufficient and appropriate to provide a basis for our audit June 26, 2020 ICAI UDIN : 20021941AAAAFF9918
93
BALANCE SHEET AS AT MARCH 31, 2020
Schedule As at As at
No. March 31, 2020 March 31, 2019
`(‘000) `(‘000)
ny±Or Am¡a Xo`VmE§ CAPITAL AND LIABILITIES
ny±Or Capital 1 1,809,722 1,809,682
H$_©Mmar ñQ>moH$ {dH$ën (AZwXmZ) Employees’ Stock Options
25,472 17,486
~H$m`m Outstanding
Ama{jV {Z{Y`m± Am¡a A{Yeof Reserves and Surplus 2 52,938,283 51,543,570
{Zjon Deposits 3 830,338,881 804,201,181
CYma Borrowings 4 68,932,347 49,032,033
AÝ` G U VWm àmdYmZ Other liabilities and Provisions 5 16,284,301 16,188,226
Omo‹S> TOTAL 970,329,006 922,792,178
g§n{Îm`m± ASSETS
Cash and Balances with Reserve
^maVr` [aµOd© ~¢H$ _| ZH$Xr A{Yeof 6 28,059,835 36,618,179
Bank of India
~¢H$mo _| A{Yeof Am¡a _m§J na VWm Balances with banks and money
7 13,837,782 11,609,369
Aën gyMZm na àmß` YZ at call & short notice
{d{ZYmZ Investments 8 206,252,745 190,813,789
A{J«_ Advances 9 644,394,729 626,937,446
pñWa AmpñV`m± Fixed Assets 10 8,000,419 7,086,629
AÝ` AmpñV`m± Other Assets 11 69,783,496 49,726,766
Omo‹S> TOTAL 970,329,006 922,792,178
AmH$pñ_H$ G U Contingent Liabilities 12 107,527,644 96,693,723
g§J«hU Ho$ {bE {~b Bills for collection 17,800,924 14,360,852
_hËdnyU© boIm§H$Z Zr{V`m± Significant Accounting Policies 17
boIm g§~§Yr {Q>ßn{U`m± Notes on Accounts 18
AZwgy{M`m± D$na VwbZ nÌ H$m EH$ A{^Þ A§J Ho$ ê$n _|
schedules referred to above form an integral part of the Balance Sheet
In terms of our report attached For and on behalf of Board of Directors

Thomas Joseph K Salim Gangadharan V G Mathew
For Varma & Varma
Executive Vice President Chairman MD & CEO
(DIN : 06796232) (DIN : 05332797)
Chartered Accountants Sivakumar G
ICAI Firm Registration No. 004532 S Dr. John Joseph Francis Alapatt
Executive
Vice President
Director Director
Reghunathan K N (DIN : 00021735) (DIN : 01419486)
V Sathyanarayanan Executive
Vice President
Ranjana S. Salgaocar Parayil George John Tharakan
Partner Chithra H Director Director
(DIN : 00120120) (DIN : 07018289)
Chief Financial Officer
Membership No. 021941
Achal Kumar Gupta V J Kurian
Jimmy Mathew Director Director
Company Secretary (DIN : 02192183) (DIN : 01806859)
Vijith S M George Korah Pradeep M Godbole
Kochi Dy. General Manager
Director Director
June 26, 2020
Thrissur (DIN : 08207827) (DIN : 08259944)
June 26, 2020
94
PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED MARCH 31, 2020
Schedule Year ended Year ended

No. March 31, 2020 March 31, 2019
`(‘000) `(‘000)
I. Am` I. INCOME
A{O©V ã`mO Interest Earned 13 77,637,981 68,765,237
AÝ` Am` Other Income 14 10,457,503 7,262,130
Omo‹S> TOTAL 88,095,484 76,027,367
II. ì`` II. EXPENDITURE
ì`` {H$`m J`m ã`mO Interest Expended 15 54,462,991 48,568,176
n[aMmbZ ì`` Operating Expenses 16 17,176,138 15,069,322
Cn~§Y Am¡a AmH$pñ_H$ ì`` Provisions & Contingencies 18.A.31 15,410,459 9,914,524
Omo‹S> TOTAL 87,049,588 73,552,022
I II. bm^/hm{Z III. PROFIT/LOSS
df© Ho$ ewÕ bm^ Net Profit for the year 1,045,896 2,475,345
{nN>bo df© Ho$ AJ«ZrV bm^ Profit brought forward from previous year 2,767,313 3,540,313
{d{Z`moJ Ho$ {b`o CnbãY bm^ Profit available for Appropriation 3,813,209 6,015,658
I V. {d{Z`moJ IV. APPROPRIATIONS
H$mZyZr Ama{j{V`m| H$mo A§VaU Transfer to Statutory Reserve 261,500 618,900
ny±OrJV Ama{j{V`m| H$mo A§VaU Transfer to Capital Reserve 1,746,756 363,712
Am`H$a A{Y{Z`_ Ymam 36(1)(viii) Transfer to Special Reserve u/s 36(1)(viii) of Income Tax Act - 700,000
Ho$ A§VJ©V {deof Ama{j{V`m| H$mo A§VaU
Am`H$a A{Y{Z`_ Ymam 36(1)(viii) Ho$ A§VJ©V {deof Transfer to Special Reserve u/s 36(1)(viii) of Income Tax Act FY 15-16 - 323,700
Ama{j{V`m| H$mo A§VaU {nN>bo dfm] g{hV g§~{YV AñW{JV H$a pertaining to earlier years including corresponding FY 16-17 - 148,000
Xo`VmE± (ZmQo > Z§ E 29 (gr) AZwgMy r 18 H$mo C„oI H$s{OE) Deferred Tax Liability (Refer Note no. A.29 (c) of Schedule 18)
{ZYr CVma-M‹T>md Ama{j{V`m| H$mo A§VaU> Transfer to Investment Fluctuation Reserve - 221,454
àñVm{dV bm^m§e Dividend Paid for FY 18-19 452,421 723,800
àñVm{dV bm^m§e na H$a Tax on Dividend Paid for FY 18-19 92,996 148,779
A{Veof Omo AmJo VwbZ nÌ _| bo 1,259,535 2,767,313
Balance carried over to Balance Sheet
Om`m J`m h¡&
Omo‹S> TOTAL 3,813,208 6,015,658
à{V eo`a AO©Z (`) Earnings per share (Face value of `1 per share)
AmYma B©nrEg (`) Basic (in `) 18.B.2 0.58 1.37
VZwH¥$V B©nrEg (`) Diluted (in `) 18.B.2 0.58 1.37
_hËdnyU© boIm§H$Z Zr{V`m± Significant Accounting Policies 17
boIm g§~§Yr {Q>ßn{U`m± Notes on Accounts 18
AZwgy{M`m± D$na bm^ Am¡a hm{Z ImVm H$m EH$ A{^Þ A§J Ho$ ê$n _|
Schedules referred to above form an integral part of the Profit and Loss Account
For Varma & Varma
(DIN : 06796232) (DIN : 05332797)
Chartered Accountants Sivakumar G
ICAI Firm Registration No. 004532 S Dr. John Joseph Francis Alapatt
Executive
Vice President
Director Director
Reghunathan K N (DIN : 00021735) (DIN : 01419486)
V Sathyanarayanan Executive
Vice President
Ranjana S Salgaocar Parayil George John Tharakan
Partner Chithra H Director Director
(DIN : 00120120) (DIN : 07018289)
Chief Financial Officer
Membership No. 021941
Company Secretary (DIN : 02192183) (DIN : 01806859)
Kochi Dy. General Manager
Director Director
June 26, 2020
Thrissur (DIN : 08207827) (DIN : 08259944)
June 26, 2020
95
CASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 31, 2020
Year Ended Year Ended

March 31, 2020 March 31, 2019
`(‘000) `(‘000)
Cash flow from operating activities
Net Profit as per Profit and Loss Account 1,045,896 2,475,345
Adjustments for:
Provision for taxes (Net) 449,650 1,329,700
Depreciation 777,015 696,404
Amortisation of Premium on HTM Investments 590,381 464,422
Provision for Depreciation/Non-Performing Investments 3,181,052 1,436,529
General Provisions against Standard Assets 1,143,600 273,600
Provision/write off for Non-Performing Assets 9,959,663 6,842,962
Other Provisions 676,494 31,733
Employee stock options expense 9,783 9,851
Interest on Subordinated bonds 1,392,079 972,829
(Profit)/Loss on sale of land, buildings and other assets (4,160) (168)
Deferred Employee Benefits - 204,500
Operating profit before working capital changes (A) 19,221,453 14,737,707
Changes in working capital:
Increase/(Decrease) in Deposits 26,137,700 83,905,244
Increase/(Decrease) in Borrowings 14,900,314 6,098,233
Increase/(Decrease) in Other liabilities (1,198,796) 1,642,325
(Increase)/Decrease in Investments (4,245,300) 2,030,056
(Increase)/Decrease in Advances (27,721,626) (88,139,386)
(Increase)/Decrease in Other Assets (19,248,754) (2,123,597)
(B) (11,376,462) 3,412,875
Cash flow from operating activities before taxes (A+B) 7,844,991 18,150,582
Direct Taxes Paid (1,285,039) (1,371,335)
Net cash flow from operating activities (C) 6,559,952 16,779,247
Cash flow from investing activities:
Purchase of Fixed Assets/Capital Work-in-Progress (836,126) (978,262)
Sale of Fixed/Non-Banking Assets 26,301 3,210
(Purchase)/Sale of Investments (Held to Maturity) (14,965,089) (10,770,249)
Net cash flow from/(used in) investing activities (D) (15,774,914) (11,745,301)
96
CASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 31, 2020
Year Ended Year Ended

March 31, 2020 March 31, 2019
`(‘000) `(‘000)
Cash flow from financing activities:
Proceeds from issue of share capital (including share premium) 866 16,183
Dividend paid including Corporate Dividend Tax (545,417) (872,579)
Interest on Subordinated bonds (1,570,418) (660,500)
Issue/(Repayment) of Subordinated bonds 5,000,000 2,500,000
Net cash flow from financing activities (E) 2,885,031 983,104
Net increase/(decrease) in cash and cash equivalents (C+D+E) (6,329,931) 6,017,050
Cash and cash equivalents as at beginning of the year 48,227,548 42,210,498
(Refer note below)
Cash and cash equivalents as at the end of the year 41,897,617 48,227,548
(Refer note below)
Note:
Cash and cash equivalents comprise of cash on hand (including foreign currency notes), Balances with Reserve Bank
of India, Balance with Banks and money at call and short notice. (Refer schedules 6 and 7 of the Balance Sheet)

For Varma & Varma
Chartered Accountants (DIN : 06796232) (DIN : 05332797)
ICAI Firm Registration No. 004532 S Sivakumar G

Executive
Vice President Dr. John Joseph Francis Alapatt
Director Director
V Sathyanarayanan Reghunathan K N (DIN : 00021735) (DIN : 01419486)
Partner Executive

Vice President
Membership No. 021941 Chithra H Director Director

Chief Financial Officer (DIN : 00120120) (DIN : 07018289)
Kochi Company Secretary
(DIN : 02192183) (DIN : 01806859)
June 26, 2020
Dy. General Manager
Director Director
(DIN : 08207827) (DIN : 08259944)
Thrissur
June 26, 2020
97
SCHEDULES TO BALANCE SHEET AS AT MARCH 31, 2020
As at As at
March 31, 2020 March 31, 2019
`(‘000) `(‘000)
SCHEDULE 1 - CAPITAL
Authorised Capital 2,500,000 2,500,000
250,00,00,000 Equity shares of `1/- each
(Previous year 250,00,00,000 equity shares of `1/- each)
Issued, Subscribed and Paid up Capital 1,809,722 1,809,682
180,97,22,151 Equity shares of `1/- each
(Previous year 180,96,82,151 equity shares of `1/- each)
(Refer Note No. A.2 of Schedule 18)
TOTAL 1,809,722 1,809,682
Employees’ Stock Options Outstanding
Employees’ Stock Options Outstanding 33,314 35,747
Less: Deferred Employee Compensation Expense (unamortised) (7,842) (18,261)
TOTAL 25,472 17,486
SCHEDULE 2 - RESERVES AND SURPLUS
I. Statutory Reserve
Opening Balance 11,151,639 10,532,739
Additions during the year 261,500 618,900
Sub total 11,413,139 11,151,639
II. Capital Reserve
Opening Balance 1,782,805 1,419,093
Additions during the year* 1,746,756 363,712
Sub total 3,529,561 1,782,805
III. Asset Revaluation Reserve
Additions - Due to Revaluation of premises 866,108 -
3,251,961 2,403,212
Deductions during the year:
Deduction from revaluation reserve to the (41,027) (17,359)
extent of depreciation on revalued amount
Sub total 3,210,934 2,385,853
IV. Share Premium
Opening Balance 15,551,063 15,533,933
Additions during the year 922 17,130
Sub total 15,551,985 15,551,063
98
As at As at
March 31, 2020 March 31, 2019
`(‘000) `(‘000)
V. Revenue and Other Reserves
Opening Balance 13,689,543 14,919,894
Additions during the year :
a) lapse of vested options 1,701 10,090
b) transfer of depreciation on revaluation 41,027 17,359
c) reversal/(debit) deferred provision for Non-Banking Assets
330,000 -
(Refer Note No. A 29 (d) of Schedule 18)
Deduction during the year:
a) deferred provision for Non-Banking Assets
- (330,000)
(Refer Note No. A 29 (b) of Schedule 18)
b) appropriation towards Special reserve u/s 36 i (viii)
- (927,800)
(Refer Note No. A 29 (c) of Schedule 18)
c) deferred provision for fraud accounts
(304,496) -
(Refer Note No. A 29 (a) of Schedule 18)
Sub total 13,757,775 13,689,543
VI. Investment Fluctuation Reserve (Refer Note No. A 3.1 (d) of Schedule 18)
Opening Balance 221,454 -
Additions during the year - 221,454
Sub total 221,454 221,454
VII. Special Reserve u/s 36(1)(viii) of Income Tax Act
Additions during the year: (Refer Note No. A 29 (c) of Schedule 18)
a) appropriation during the Year - 700,000
b) appropriation from revenue and other reserve - 927,800
c) appropriation from balance in profit and loss account - 111,900
Sub total 3,993,900 3,993,900
VIII. Balance in Profit and Loss Account 1,259,535 2,767,313
TOTAL 52,938,283 51,543,570
[i+ii+iii+iv+v+vi+vii+viii]
* Includes Profit appropriated to Capital Reserve (net of applicable taxes and transfer to statutory reserve) on:
a) Gain on sale of Held to Maturity Investments `174.44 crore (Previous Year `36.36 crore)
b) Profit on sale of Fixed Assets `0.23 crore (Previous Year `0.01 crore)
SCHEDULE 3 - DEPOSITS
A. I. Demand Deposits
(i) From Banks 98,205 172,465
(ii) From Others 31,981,053 33,146,207
II. Savings Bank Deposits 175,516,803 161,352,796
III. Term Deposits
(i) From Banks 33,599,925 25,808,625
(ii) From Others 589,142,895 583,721,088
TOTAL 830,338,881 804,201,181
B. (i) Deposits of branches in India 830,338,881 804,201,181

(ii) Deposits of branches outside India Nil Nil
TOTAL 830,338,881 804,201,181
99
As at As at
March 31, 2020 March 31, 2019
`(‘000) `(‘000)
SCHEDULE 4 - BORROWINGS
I. Borrowings in India
(i) Reserve Bank of India 5,520,000 -
(ii) Other Banks* 2,428,800 1,955,000
(iii) Other Institutions and Agencies# 38,533,790 33,945,000
II. Borrowings outside India - from other banks 22,449,757 13,132,033
TOTAL 68,932,347 49,032,033
Secured borrowings under Collateralised Borrowing and Lending
Obligation, triparty repo, market repurchase transactions with banks and
financial institutions and transactions under Liquidity Adjustment Facility
and Marginal Standing Facility included above. 12,936,090 -
*Borrowings from other banks include Subordinated Debt of `83.36 crore (Previous
year `145.50 crore) in the nature of Non-Convertible Debentures and Perpetual
Debt of `159.52 crore (Previous year Nil) [Refer Note No. 18.A.1]
#Borrowings from other institutions & agencies include Subordinated Debt of
`1,156.64 crores (Previous year `1,094.50 crores) in the nature of Non-Convertible
Debentures and Perpetual Debt of `340.48 crores (Previous year Nil) [Refer Note
No. 18.A.1]
SCHEDULE 5 - OTHER LIABILITIES AND PROVISIONS

I. Bills Payable 933,046 1,719,480
II. Inter-Office adjustments (Net) - -
III. Interest Accrued 2,027,138 2,868,734
IV. Others (including provisions)* 13,324,117 11,600,012
TOTAL 16,284,301 16,188,226
*Includes :
Provision for standard assets `373.97 crore (Previous year `259.72 crore) (Refer Note No. A. 12 of Schedule 18)
SCHEDULE 6 - CASH AND BALANCES WITH

RESERVE BANK OF INDIA
I. Cash in hand 4,621,363 2,740,669

(including foreign currency notes)
II. Balances with Reserve Bank of India
In Current Account 23,438,472 33,877,510
TOTAL 28,059,835 36,618,179
100
As at As at
March 31, 2020 March 31, 2019
`(‘000) `(‘000)
SCHEDULE 7 - BALANCES WITH BANKS AND
MONEY AT CALL AND SHORT NOTICE
I. In India
i) Balances with Banks
(a) In Current Accounts 378,410 122,823
(b) In Other Deposit Accounts 241,967 888,644
ii) Money at call & short notice
(a) With Banks - 3,500,000
(b) With other Institutions - -
(c) Lending under Reverse Repo (RBI and Banks) 9,500,000 2,500,000
Sub total 10,120,377 7,011,467
II. Outside India
(a) In Current Accounts 1,532,956 186,504
(b) In Other Deposit Accounts - 4,183,878
(c) Money at call & short notice - with banks 2,184,449 227,520
Sub total 3,717,405 4,597,902
TOTAL 13,837,782 11,609,369
SCHEDULE 8 - INVESTMENTS (net of provisions)
I. Investments in India in:
(i) Government Securities* 191,835,931 167,619,354
(ii) Other Approved Securities - -
(iii) Shares 820,429 1,675,388
(iv) Debentures and Bonds 5,934,599 9,460,660
(v) Subsidiaries and/or Joint Ventures - -
(vi) Others# 7,659,856 12,056,575
Sub total 206,250,815 190,811,977
II. Investments outside India - Shares 1,930 1,812
TOTAL (I+II) 206,252,745 190,813,789
A. Gross Investments
(i) In India 213,867,869 195,247,860
(ii) Outside India 1,979 1,979
Sub total (A) 213,869,848 195,249,839
B. Depreciation/Provision for investments
(i) In India 7,617,054 4,435,883
(ii) Outside India 49 167
Sub total (B) 7,617,103 4,436,050
C. Net Investments
(i) In India 206,250,815 190,811,977
(ii) Outside India 1,930 1,812
total (A – B) 206,252,745 190,813,789
* Including Non SLR State Government bonds with Book Value
`227.78 crore (Previous Year: `456.39 crore).
# includes
Security Receipts 7,645,912 10,061,890
Mutual Fund 13,944 18,626
Commercial Paper - 1,976,059
TOTAL 7,659,856 12,056,575
101
As at As at
March 31, 2020 March 31, 2019
`(‘000) `(‘000)
SCHEDULE 9 - ADVANCES (net of provisions)
A. (i) Bills Purchased and Discounted 45,874,046 53,842,248
(ii) Cash Credits, Overdrafts and Loans repayable on demand 297,828,474 287,394,029
(iii) Term Loans 300,692,209 285,701,169
TOTAL 644,394,729 626,937,446
B. (i) Secured by tangible assets
596,888,419 573,776,833
(including advances against book debts)
(ii) Covered by Bank/Government Guarantees 21,666,505 20,134,829
(iii) Unsecured 25,839,805 33,025,784
TOTAL 644,394,729 626,937,446
C. I. Advances in India
(i) Priority Sectors 272,984,839 249,665,133
(ii) Public Sector 5,860,881 3,491,634
(iii) Banks - -
(iv) Others 365,549,009 373,780,679
TOTAL 644,394,729 626,937,446
II. Advances outside India Nil Nil
TOTAL 644,394,729 626,937,446
SCHEDULE 10 - FIXED ASSETS

I. Premises (including Land)
Gross Block
At cost as on March 31, of the preceding year 5,080,860 5,037,892
Additions during the year
Due to Revaluation of premises (Net) 866,108 -
Due to purchases/acquisitions - 42,968
5,946,968 5,080,860
Deductions during the year - -
Closing Balance 5,946,968 5,080,860
Depreciation
As at beginning of the year 534,253 494,294
Charge of the year 67,384 39,959
Depreciation to date 601,637 534,253
Net Block Sub total 5,345,331 4,546,607
II. Capital Work in Progress
At cost as on March 31, of the preceding year 318,686 385,630
Additions during the year 809,963 1,672,118
1,128,649 2,057,748
Capitalisations during the year 886,289 1,739,062
242,360 318,686
Depreciation to date - -
Sub total 242,360 318,686
102
As at As at
March 31, 2020 March 31, 2019
`(‘000) `(‘000)
III. Other Fixed Assets (Including furnitures and fixtures and Software)
Gross Block
At cost as on March 31, of the preceding year 6,438,429 5,474,175
Additions during the year 912,452 1,002,239
7,350,881 6,476,414
Deductions/adjustments during the year 111,376 37,985
7,239,505 6,438,429
Depreciation
As at beginning of the year 4,217,093 3,595,591
Charge of the year 709,619 656,482
Deductions during the year 99,935 34,980
Depreciation/adjustments to date 4,826,777 4,217,093
Net Block Sub total 2,412,728 2,221,336
TOTAL (I+II+III) 8,000,419 7,086,629
SCHEDULE 11 - OTHER ASSETS

I. Inter-Office adjustments (Net) 104,186 225,899
II. Interest Accrued 9,053,703 7,030,450
III. Tax Paid in Advance/Tax Deducted at Source (Net) 4,317,815 3,628,548
IV. Deferred tax asset (net) (Refer Note No. B.4 of Schedule 18) 561,254 415,132
V. Deferred provision for fraud accounts (Refer Note No. A.29(a) of Schedule 18) 304,496 -
VI. Deferred provision for Non-Banking Asset ( Refer Note No. A.29(b) of Schedule 18) - 330,000
VII. Stationery and Stamps 38,177 41,441
VIII. Non-Banking Assets acquired in satisfaction of claims 664,171 666,952
IX. Others* 54,739,694 37,388,344
TOTAL 69,783,496 49,726,766
* Includes Priority Sector Shortfall Deposits amounting to `4,827.00 Crore
(Previous year `3,338.76 Crore)
SCHEDULE 12 - CONTINGENT LIABILITIES (Refer Note no. 14 of Schedule 17)

I. Claims against the Bank not acknowledged as debts:
(i) Direct Tax disputes 485,324 305,582
(ii) Indirect Tax disputes 241,740 260,683
(iii) Others 129,793 129,195
II. Liability on account of outstanding Forward
Exchange Contracts1 76,758,016 65,276,689
III. Guarantees given on behalf of constituents in India 18,579,779 17,637,489
IV. Acceptances, endorsements and other obligations 9,848,091 11,441,186
V. Other items for which the bank is contingently liable:
(i) Capital Commitments 243,807 643,714
(ii) Transfers to Depositor Education and Awareness Fund (DEAF) 1,241,094 999,185
TOTAL 107,527,644 96,693,723
1
Represents notional amount
103
SCHEDULES TO PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED MARCH 31, 2020
Year ended Year ended

March 31, 2020 March 31, 2019
`(‘000) `(‘000)
SCHEDULE 13 - INTEREST EARNED
I. Interest/Discount on Advances/Bills 61,591,660 53,964,423
II. Income on Investments 13,910,588 12,861,433
III. Interest on balances with Reserve Bank of India and
Other Inter-Bank funds 399,702 355,154
IV. Others 1,736,031 1,584,227
TOTAL 77,637,981 68,765,237
SCHEDULE 14 - OTHER INCOME

I. Commission, Exchange and Brokerage 527,291 554,282
II. Profit on sale of Investments 4,076,334 1,340,384
Loss on sale of Investments (174,842) 3,901,492 (141,245) 1,199,139
III. Profit on sale of land, buildings and other assets 7,983 1,366
Loss on sale of land, buildings and other assets (3,823) 4,160 (1,198) 168
IV. Profit/(Loss) on Exchange transactions (net) 447,488 434,443
V. Miscellaneous Income* 5,577,072 5,074,098
TOTAL 10,457,503 7,262,130
*Includes Amount written off since Recovered (`18.48 Crore (Previous Year `11.79 Crore)
SCHEDULE 15 - INTEREST EXPENDED

I. Interest on Deposits 50,524,137 45,499,000
II. Interest on Reserve Bank of India/Inter-Bank Borrowings 947,578 387,886
III. Others 2,991,276 2,681,290
TOTAL 54,462,991 48,568,176
SCHEDULE 16 - OPERATING EXPENSES

I. Payments to and Provisions for Employees 9,413,519 8,214,252
II. Rent, Taxes and Lighting 1,242,482 1,192,329
III. Printing and Stationery 133,839 168,950
IV. Advertisement and Publicity 121,089 115,719
V. Depreciation on Bank’s Property 777,015 696,404
VI. Directors fees, allowances and expenses 15,674 16,070
VII. Auditors’ fees and expenses (incl. branch auditors) 39,575 43,761
VIII. Law charges 123,922 75,075
IX. Postage, telegrams, telephones, etc. 408,300 418,345
X. Repairs and Maintenance 522,149 378,723
XI. Insurance 935,208 827,287
XII. Other Expenditure* 3,443,366 2,922,407
TOTAL 17,176,138 15,069,322
* Includes expenditure towards Corporate Social Responsibility `12.01 Crore
(Previous year : `12.22 Crore) [Refer Note No. B.11 of Schedule 18]
104
SCHEDULE – 17 SIGNIFICANT ACCOUNTING POLICIES APPENDED TO AND

FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH, 2020
Background asset under approved restructuring package, where in

The South Indian Bank Limited (‘SIB’ or the ‘Bank’), incorporated accordance with RBI guidelines the income is recognised
on January 29, 1929 at Thrissur, as a private limited company only on realisation.
and was later converted into a public limited company on b) Interest income on loans bought out through the direct
August 11, 1939. SIB has a network of 894 branches/offices in assignment route is recognized at their effective interest
India and provides retail and corporate banking, para banking rate, except in case of such loans classified as non-
activities such as debit card, third party financial product performing advances.
distribution, in addition to Treasury and Foreign Exchange c) The recoveries made from NPA accounts are
Business. SIB is governed by Banking Regulation Act, 1949, The appropriated first towards unrealized interest/income
Companies Act, 2013 and other applicable Acts/Regulations for debited to borrowers accounts, then expenditure/out of
Banks. Its shares are listed in BSE Limited and National Stock pocket expenses incurred and lastly towards principal
Exchange of India Limited. dues.
d) Dividend on investments in shares and units of mutual
Basis of Preparation
funds are accounted when the bank’s right to receive
The financial statements have been prepared in accordance with the dividend is established.
requirements prescribed under the Third Schedule (Form A and
e) Income on discounted instruments is recognised over
Form B) of the Banking Regulation Act, 1949. The accounting
the tenure of the instrument on a straight line basis.
and reporting policies of the bank used in the preparation of
these financial statements conform in all material aspects to f) Insurance claims and locker rent are accounted on
Generally Accepted Accounting Principles in India (“Indian receipt basis.
GAAP”), the circulars and guidelines issued by the Reserve Bank g) Commission income on issuance of bank guarantee/
of India (‘RBI’) from time to time and the Accounting Standards letter of credit is recognised over the period of the
prescribed under Section 133 of the Companies Act, 2013 guarantee/letter of credit.
(as amended) and the relevant provisions of the Companies h) Processing fee/upfront fee, handling charges or income
Act, 2013 (“the Act”) and current practices prevailing within of similar nature collected at the time of sanctioning or
the banking industry in India. The Bank follows the historical renewal of loan/facility is recognised at the inception/
cost convention and accrual method of accounting in the renewal of loan.
preparation of the financial statements, except where otherwise i) Other fees and commission income (including
stated. The accounting policies adopted in the preparation of commission income on third party products) are
financial statements are consistent with those followed in the recognised when due, except in cases where the bank is
previous year. uncertain of ultimate collection.
Use of estimates j) Unpaid funded interest on term loans are recognised on
realisation as per the guidelines of RBI.
The preparation of the financial statements in conformity
with the generally accepted accounting principles requires the k) In accordance with RBI guidelines on sale of non-
Management to make estimates and assumptions that affect performing advances, if the sale is at a price below the
the reported amounts of assets and liabilities, revenues and net book value (i.e. book value less provisions held), the
expenses and disclosure of contingent liabilities at the date of shortfall is charged to the Profit and Loss Account in the
the financial statements. Actual results could differ from those year of sale. If the sale is for a value higher than the net
estimates. The Management believes that the estimates used book value, the excess provision is credited to the Profit
in the preparation of the financial statements are prudent and Loss Account in the year the amounts are received.
and reasonable. Any revisions to the accounting estimates are l) Fees received on sale of Priority Sector Lending
recognised prospectively in the current and future periods. Certificates is considered as Miscellaneous Income, while
fees paid for purchase is expensed as other expenses in
Significant Accounting Policies accordance with the guidelines issued by the RBI.
1. Revenue recognition m) The difference between the sale price and purchase cost
a) Interest/discount/other charges income from loans, of gold coins, received on consignment basis is included
advances and investments and deposits placed with in other income and is recognised at the time of sale to
banks and other institutions are recognised on accrual the customers.
basis, except in respect of income relating to advances/ n) Interest on income tax refund is recognised under
investments classified as non-performing advances/ “Other Income” in the year of passing of Assessment
investments, additional finance treated as standard Orders.
105

2. Investments Deposits being discounted instruments, are valued

A) Classification at carrying cost.
a) In accordance with the RBI guidelines, investments d. Units of Mutual Funds are valued at the latest
are categorized into “Held for Trading”, “Available repurchase price/net asset value declared by Mutual
for Sale” and “Held to Maturity” and further Fund.
classified under five groups, viz. Government e. Market value of investments where current
Securities, Other Approved Securities, Shares, quotations are not available, is determined as per
Debentures & Bonds and Other Investments for the the norms prescribed by the RBI as under:
purposes of disclosure in the Balance Sheet. • in case of unquoted bonds, debentures and
b) Investments which are held for sale within 90 days preference shares where interest/dividend is
from the date of purchase are classified as “Held for received regularly (i.e. not overdue beyond 90
Trading”. days), the market price is derived based on
c) Investments which the bank intends to hold till the Yield to Maturity (YTM) for Government
maturity are classified as “Held to Maturity”. Securities as published by Financial Benchmark
d) Investments which are not classified in either of the India Pvt. Limited (FBIL) and suitably marked up
above two categories are classified as “Available for for credit risk applicable to the credit rating of
Sale”. the instrument. The matrix for credit risk mark-
up for each categories and credit ratings along
B) Acquisition cost with residual maturity issued by FBIL are adopted
The cost of investments is determined on the weighted for this purpose;
average basis. Broken period interest on debt instruments • in case of bonds and debentures where interest
and government securities is treated as a revenue item. is not received regularly (i.e. overdue beyond
The transaction cost including brokerage, commissions 90 days), the valuation is in accordance with
etc. paid at the time of acquisition of investments are prudential norms for provisioning as prescribed
charged to the Profit and Loss Account. by RBI;
C) Valuation • equity shares, for which current quotations are
The valuation of investments is performed in accordance not available or where the shares are not quoted
with the RBI Guidelines: on the stock exchanges, are valued at break-up
a. Investments classified as HFT or AFS – Investments value (without considering revaluation reserves,
classified under the AFS and HFT categories if any) which is ascertained from the company’s
are marked-to-market. The market/fair value of latest Balance Sheet. In case the latest Balance
quoted investments included in the ‘AFS’ and ‘HFT’ Sheet is not available, the shares are valued at
categories is measured with respect to the Market `1/- per company;
Price of the Scrip as available from the trades/quotes • In case of investments in security receipts on or
on the stock exchanges, SGL account transactions, after April 1, 2017 which are backed by more
pricelist of RBI or prices declared by Financial than 50 percent of the stressed assets sold by
Benchmark India Private Limited, periodically. the Bank, provision for depreciation in value is
Net depreciation, if any, within each category of made at the higher of provisioning rate required
investment classification is recognised in Profit and in terms of net asset value declared by the
Loss Account. The net appreciation, if any, under Reconstruction Company (‘RC’)/Securitisation
each category of Investment is ignored. Except in Company (‘SC’) or the provisioning rate as per
cases where provision for diminution other than the extant asset classification and provisioning
temporary is created, the Book value of individual norms as applicable to the underlying loans,
securities is not changed consequent to the periodic assuming that the loan notionally continued in
valuation of Investments. the books of the bank. All other investments
b. Held to Maturity – These are carried at their acquisition in security receipts are valued as per the NAV
cost unless it is more than the face value, in which obtained from the issuing RC/SCs.
case premium on acquisition is amortised over the • Non-Performing Investments are identified and
remaining maturity of the security on straight line valued based on RBI guidelines.
basis. Any diminution, other than temporary, in the f. The Bank follows ‘Settlement Date’ accounting
value of such securities is provided for. for recording purchase and sale transactions in
c. Treasury Bills, commercial paper and Certificate of securities.
106

D) Repo and Reverse Repo transactions in the profit and loss account and included under
In accordance with the RBI guidelines repo and reverse “Other Income”.
repo transactions in government securities including c) For restructured/rescheduled assets, provision is
those conducted under the Liquidity Adjustment Facility made in accordance with the guidelines issued by
(‘LAF’) and Marginal Standby Facility (‘MSF’) with RBI the RBI, which requires the diminution in the fair
are reflected as borrowing and lending transactions value of the assets to be provided at the time of
respectively. Borrowing cost on repo transactions is restructuring. In respect of loans and advances
accounted for as interest expense and revenue on accounts subjected to restructuring, the account is
reverse repo is accounted for as interest income. upgraded to standard only after the specified period
E) Short Sales i.e. a period of one year after the date when first
The Bank undertakes short sale transactions in Central payment of interest or of principal, whichever is
Government dated securities in accordance with RBI later, falls due, subject to satisfactory performance
guidelines. The short position is reflected as the amount of the account during the period.
received on sale and is classified under ‘Other Liabilities’. d) For entities with Unhedged Foreign Currency
The short position is marked to market and resultant Exposure (UFCE), provision is made in accordance
mark-to-market gain/losses are accounted for as per the with the guidelines issued by RBI, which requires to
relevant RBI guidelines for valuation of investments. ascertain the amount of UFCE, estimate the extent
of likely loss and estimate the riskiness of unhedged
F) Transfer of securities between Categories
position. The Provision is classified under Schedule
Transfer of securities between categories is done at the 5 – Other Liabilities in the Balance Sheet.
lower of the acquisition cost/book value/market value
e) The Bank maintains general provision for standard
on the date of the transfer and the depreciation, if any,
assets including credit exposures computed as per
on such transfer is fully provided for in accordance with
the current marked-to-market values of foreign
RBI guidelines.
exchange derivative contracts, in accordance with
G) Disposal of Investments the guidelines and at levels stipulated by RBI from
a. Investments classified as HFT and AFS – Profit or loss time to time.
on sale/redemption is included in the Profit and Loss f) The bank transfers advances through inter-bank
account. participation with and without risk. In accordance
b. Investments classified as HTM – Profit on sale of/ with the RBI guidelines, in the case of participation
redemption of investments is included in the Profit with risk, the aggregate amount of the participation
and Loss Account and is appropriated to Capital issued by the Bank is reduced from advances and
Reserve after adjustments for tax and transfer where bank is participating; the aggregate amount
to Statutory Reserve. Loss on sale/redemption is of participation is classified under advances. In the
charged to the Profit and Loss Account. case of participation without risk, the aggregate
3. Advances amount of participation issued by the Bank is
classified under borrowings and where the bank is
A) Valuation/Measurement
participating, the aggregate amount of participation
a) Advances are classified into performing assets
is shown as due from banks under advances.
(Standard) and non-performing assets (‘NPAs’) as
g) Loss on sale of assets to Asset Reconstruction
per the RBI guidelines and are stated net of specific
Companies
provisions made towards NPAs, sacrifice provisions
on restructured advances and unrealised interest If the sale of non-performing advances is at a price
on NPAs. Interest on Non-Performing advances below the net book value, the shortfall is charged to
is not recognised in profit and loss account and the Profit and Loss Account, spread over a period as
transferred to an unrealised interest account specified in RBI guidelines. If the sale is for a value
until receipt. Further, NPAs are classified into sub- higher than the net book value, the excess provision
standard, doubtful and loss assets based on the is credited to the Profit and Loss Account in the year
criteria stipulated by the RBI. Provisions for NPAs are the amounts are received.
made as per the guidelines and circulars of the RBI 4. Country risk
on matters relating to prudential norms. In addition to the provisions required to be held according
b) Non-performing advances are written-off in to the asset classification status, provisions are held for
accordance with the Bank’s policies. Amounts individual country exposure (other than for home country).
recovered against debts written off are recognised The countries are categorised into seven risk categories
107

namely insignificant, low, moderate, high, very high, reviewed for impairment, if any indication of impairment
restricted and off-credit as per Export Credit Guarantee exists. If the carrying amount of the assets exceeds the
Corporation of India Limited (“ECGC”) guidelines and estimated recoverable amount, an impairment is recognised
provision is made on exposures exceeding 180 days on a for such excess amount. The impairment loss is recognised
graded scale ranging from 0.25% to 100%. For exposures as an expense in the Profit and Loss Account, unless
with contractual maturity of less than 180 days, 25% of the asset is carried at revalued amount, in which case
the normal provision requirement is held. If the country any impairment loss of the revalued asset is treated as a
exposure (net) of the Bank in respect of each country does reduction in revaluation to the extent a revaluation reserve
not exceed 1% of the total funded assets, no provision is is available for that asset.
maintained on such country exposure. When there is indication that an impairment loss recognised
5. Fixed Assets (Property Plant & Equipment and for an asset (other than a revalued asset) in earlier
Intangibles) and depreciation/amortization accounting periods no longer exists or may have decreased,
a) The Property Plant & Equipment and Intangibles such reversal of impairment loss is recognised in the Profit
(other than office premise, which are revalued) are and Loss Account, to the extent the amount was previously
stated at historical cost less accumulated depreciation/ charged to the Profit and Loss Account. In case of revalued
amortisation and impairment losses, if any. Cost assets such reversal is not recognised.
comprises the purchase price and any attributable 7. Non-Banking Assets
cost of bringing the asset to its working condition for
its intended use. Subsequent expenditure incurred on Non-banking assets (NBAs) acquired in satisfaction of claims
asset put to use is capitalised only when it increases is carried at lower of net book value and net realisable value.
the future benefit/functioning capability from/of such Specific provision is made on specific Non-banking assets
assets. Gain or losses arising from the retirement or acquired on debt asset swap arrangements as specified by
disposal of a Property Plant and Equipment/Intangible RBI (Refer to Sch. 18.31 (a)(i)).
asset are determined as the difference between the net 8. Transactions involving foreign exchange
disposal proceeds and the carrying amount of assets and a) Foreign currency income and expenditure items are
recognised as income or expense in the Profit and Loss translated at the exchange rates prevailing on the date
Account. Profit on sale of premises after adjustments of the transaction. Monetary foreign currency assets
for tax and transfer to Statutory, if any, is transferred to and liabilities outstanding at the Balance Sheet date are
Capital Reserve as per the RBI guidelines. revalued at rates notified by Foreign Exchange Dealers
b) Portfolio of immovable properties is revalued periodically Association of India [FEDAI] and resulting profits or
by independent valuers to reflect current market losses are included in the Profit and Loss Account, as
valuation. All land and building owned by the bank per the guidelines issued by RBI.
and used as branches or offices or office quarters are b) Foreign exchange spot and forward Contracts
grouped under “Office Premises” in the Property Plant outstanding as at the Balance Sheet date (except
& Equipment. Appreciation, if any, on revaluation is Forward Contracts taken to hedge FCNR Deposits/
credited to Revaluation Reserve under Capital Reserve. Overseas Borrowings) are revalued at the closing Spot
Additional depreciation on revalued asset is charged and Forward Rates respectively as notified by FEDAI and
to Profit and Loss Account and appropriated from at interpolated rates for contracts of interim maturities.
Revaluation Reserve to Revenue and other Reserves. For valuation of contracts having longer maturities,
c) Depreciation/Amortisation: Depreciation is provided the forward points (for rates/tenures not published by
on a pro-rata basis on a straight-line method over the FEDAI) are obtained from Reuters for valuation of the
estimated useful life of the fixed assets at the rates and in FX Deals. As directed by FEDAI to consider profit or
the manner prescribed in Schedule II of the Companies loss on present value basis, the forward profit or loss
Act, 2013, except for Vehicles which are depreciated on the deals are discounted till the valuation date using
over five years, based on technical estimates. The the discounting yields. The resulting profit or loss on
management believes that depreciation rates currently valuation is recognised in the Profit and Loss Account in
used, fairly reflect its estimate of the useful lives and accordance with RBI/FEDAI Guidelines.
residual values of fixed assets, though these rates in c) Forward Contracts taken to hedge FCNR Deposits/
certain cases are different from lives prescribed under Overseas Borrowings are translated at the prevailing spot
Schedule II of Companies Act, 2013. rate at the time of swap. The Premium/Discount on the
6. Impairment of Assets swap arising out of the difference in the exchange rate
The carrying values of assets at each balance sheet date are of the swap date and maturity date of the underlying
108

forward exchange contract is amortised over the period e) Employees Stock Option Scheme (ESOS):
of the swap and the same is recognized in the Profit and The Bank has formulated Employee Stock Option
Loss Account. Scheme (ESOS) in accordance with Securities and
d) Contingent liabilities on account of foreign exchange Exchange Board of India (Employee Stock Option
contracts, guarantees, letters of credit, acceptances and Scheme) Guidelines, 1999. The Scheme provides for
endorsements are reported at closing rates of exchange grant of options to Employees of the Bank to acquire
notified by FEDAI as at the Balance Sheet date. Equity Shares of the Bank that vest in a graded manner
and are to be exercised within a specified period. The
9. Employee benefits
Bank follows the intrinsic value method to account
a) Provident Fund: for its stock-based employee compensation plans.
The contribution made by the Bank to “The South Indian In accordance with the SEBI (Share Based Employee
Bank Ltd. Employees Provident Fund”, administered by Benefits) Regulations, 2014 and the guidance note on
the trustees is charged to Profit and Loss account. The “Accounting for Employee Share based payments”
fund is a defined contribution fund and the Bank has issued by the ICAI, the excess of the market price of the
no further liability beyond the contribution made to the share preceding the date of grant of the option under
fund. ESOS over the exercise price of the option is amortized
b) Pension Fund: on a straight line basis over the vesting period.
The contribution towards “The South Indian Bank Ltd. f) Other Employee Benefits:
Employees’ Pension Fund Trust”, managed by trustees, The undiscounted amount of short term employee
is determined on actuarial basis on projected unit credit benefits expected to be paid in exchange for the services
method as on the Balance Sheet date and is recognised rendered by employee is recognised during the period
in the profit and loss account. The actuarial gain or loss when the employee renders the service. These benefits
arising during the year is recognised in the Profit and include performance incentives.
Loss Account. 10. Segment Reporting
Employees who had joined the services of the Bank with The disclosure relating to segment information is in
effect from April 1, 2010 are covered under Defined accordance with the guidelines issued by RBI.
Contributory Pension Scheme (DCPS). In respect of such
employees the bank contributes specified percentage 11. Debit Card Reward Points
of the Basic Pay plus Dearness Allowance and the The Bank runs a loyalty program which seeks to recognise
expenditure thereof is charged to Profit and Loss and reward customers based on their relationship with the
account and the Bank has no further liability beyond Bank. Under the program, eligible customers are granted
the contribution to the fund on this account. loyalty points redeemable in future, subject to certain
c) Gratuity: conditions. The Bank estimates the probable redemption
The bank makes contribution to “The South Indian of such loyalty/reward points using an actuarial method at
Bank Ltd. Employees’ Gratuity Trust” administered the Balance Sheet date by employing independent actuary.
and managed by the trustees. The present value of Provision for said reward points is then made based on
the bank’s obligation towards the same is actuarially the actuarial valuation report as furnished by the said
determined based on the projected unit credit method independent Actuary.
as at the balance sheet date. The actuarial gain or loss 12. Earnings Per Share (EPS)
arising during the year is recognised in the Profit and The Bank reports Basic and Diluted Earnings per Equity
Loss Account. Share in accordance with Accounting Standard 20,
d) Compensated absence on Privilege/Sick/Casual Leave: prescribed under Section 133 of the Companies Act, 2013.
The employees of the Bank are entitled to compensated Basic EPS has been computed by dividing Net Profit for the
absence on account of privilege/sick/casual leave as year by the weighted average number of Equity Shares
per the leave rules. The bank measures the long term outstanding for the year.
expected cost of compensated absence as a result of Diluted earnings per share reflect the potential dilution that
the unused entitlement that has accumulated at the could occur if securities or other contracts to issue equity
balance sheet date based on actuarial valuation and shares were exercised or converted during the year. A
such costs are recognised in the profit and loss account. diluted earnings per share is computed using the weighted
The actuarial gain or loss arising during the year is average number of equity shares and dilutive potential
recognised in the Profit and Loss Account. equity shares outstanding at the year end. Potential equity
shares which are anti-dilutive in nature are ignored.
109

13. Taxes on income reflect the current management estimates. In cases where
Income tax expense is the aggregate amount of current tax the available information indicates that the loss on the
and deferred tax charge. contingency is reasonably possible but the amount of loss
Current tax is the amount of tax payable on the taxable cannot be reasonably estimated, a disclosure is made in the
income for the year as determined in accordance with the financial statements.
applicable tax rates and the provisions of the Income Tax 15. Operating Lease
Act, 1961 and other applicable tax laws.
Leases where the lessor effectively retains substantially all
Minimum Alternate Tax (MAT) paid in accordance with the the risks and benefits of ownership over the lease term
tax laws, which gives future economic benefits in the form are classified as operating lease. Lease payments for assets
of adjustment to future income tax liability, is considered as taken on operating lease are recognised as an expense in
an asset if there is convincing evidence that the Company the Profit and Loss Account as per the lease terms.
will pay normal income tax. Accordingly, MAT is recognised
as an asset in the Balance Sheet when it is highly probable 16. Cash and cash equivalents
that future economic benefit associated with it will flow to Cash and cash equivalents include cash in hand, balances
the Bank. with Reserve Bank of India and balances with other banks/
Deferred tax is recognised on timing differences, being institutions and Money at Call and Short Notice (including
the differences between the taxable income and the the effect of changes in exchange rates on cash and cash
accounting income that originate in one period and are equivalents in foreign currency).
capable of reversal in one or more subsequent periods.
17. Share issue expenses
Deferred tax is measured using the tax rates and the tax
Share issue expenses are adjusted from Securities Premium
laws enacted or substantively enacted as at the reporting
date. Deferred tax liabilities are recognised for all timing Account as permitted by Section 52 of the Companies Act,
differences. Deferred tax assets are recognised for timing 2013.
differences of items other than unabsorbed depreciation 18. Accounting of PSLC
and carry forward losses only to the extent that reasonable The Bank vide RBI circular FIDD.CO.Plan.
certainty exists that sufficient future taxable income will be BC.23/04.09.01/2015-16 dated April 7, 2016 trades in
available against which these can be realised. However, if priority sector portfolio by selling or buying PSLC, without
there are unabsorbed depreciation and carry forward of transfer of risks or loan assets in these transactions. The
losses and items relating to capital losses, deferred tax assets fee paid for purchase of the PSLC is treated as an ‘Expense’
are recognised only if there is virtual certainty supported and the fee received from the sale of PSLCs is treated as
by convincing evidence that there will be sufficient future ‘Other Income’.
taxable income available to realise the assets. Deferred
tax assets and liabilities are offset if such items relate to 19. Proposed Dividend
taxes on income levied by the same governing tax laws In terms of revised Accounting Standard (AS) 4
and the Bank has a legally enforceable right for such set “Contingencies and Events occurring after the Balance
off. Deferred tax assets are reviewed at each balance sheet Sheet date” as notified by the Ministry of Corporate
date for their realisability. Affairs through amendments to Companies (Accounting
Standards) Amendment Rules, 2016 dated March 30,
14. Accounting for Provisions, Contingent Liabilities and
2016, Proposed Dividend or Dividend declared after
Contingent Assets
balance sheet date are not shown as liability in current year
In accordance with Accounting Standard 29, Provisions,
balance sheet.
Contingent Liabilities and Contingent Assets prescribed
under Section 133 of the Companies Act, 2013, the Bank 20. Derivative transactions
recognises provisions when it has a present obligation as a The Bank recognizes all derivative contracts at fair value, on
result of a past event and, it is probable that an outflow of the date on which the derivative contracts are entered into
resources embodying economic benefits will be required to and are remeasured at fair value as at the Balance Sheet or
settle the obligation in respect of which a reliable estimate reporting dates. Derivatives are classified as assets when
of the amount of the obligation can be made. the fair value is positive (Positive marked-to-market) or as
Provisions are determined based on management estimate liabilities when the fair value is negative (negative marked-
required to settle the obligation at the balance sheet date, to-market). Changes in the fair value of derivatives other
supplemented by experience of similar transactions. These than those designated as hedges are recognised in the
are reviewed at each balance sheet date and adjusted to Profit and Loss Account.
110
SCHEDULE - 18 NOTES ON ACCOUNTS FORMING PART OF THE

FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2020
A: Disclosures as per RBI’s Master Circular on Disclosure in Financial Statements

Amounts in Notes forming part of the financial statements for the year ended March 31, 2020 are denominated in Rupees
Crore (unless specified otherwise) to conform to extant RBI guidelines.
1. Capital Adequacy Ratio
The Bank computes Capital Adequacy Ratio as per RBI guidelines. As per Basel III guidelines, the Bank is required to maintain
a minimum Capital to Risk Weighted Assets Ratio (CRAR) of 9% {11.50% including Capital Conservation Buffer (CCB)},
with minimum Common Equity Tier I (CET1) of 5.50% (8% including CCB) as on September 30, 2020. These guidelines on
Basel III have been implemented on April 1, 2013 in a phased manner. The minimum capital required to be maintained by the
bank for the year ended March 31, 2020 is 10.875% with minimum common equity Tier I (CET I) of 7.375% (including CCB of
1.875%). The Capital Adequacy Ratio of the Bank calculated as per Basel III Capital Regulations is set out below.
[` in Crore]
Particulars March 31, 2020 March 31, 2019
Common Equity Tier I Capital 5,194.75 5,124.52
Tier I Capital - A 5,694.75 5,124.52
Tier II Capital - B 1,380.76 1,356.50
Total Capital - (A+B) 7,075.51 6,481.02
Total Risk Weighted Assets 52,771.05 51,402.07
Capital Ratios
ICommon Equity Tier I Capital Ratio (%) 9.84 9.97
IITier I Capital Ratio (%) 10.79 9.97
IIITier II Capital Ratio (%) 2.62 2.64
IV Total Capital Ratio (CRAR) (%) 13.41 12.61
V Percentage of the shareholding of the Government of India in public sector NA NA
banks (%)
VI Amount of Equity Capital raised (Including share premium) through:
1. Rights Issue Nil Nil
2. Employees Stock Options Scheme 0.00 1.80
VII Amount of Additional Tier I capital raised; of which
Perpetual Non-Cumulative Preference Shares (PNCPS) Nil Nil
Perpetual Debt Instruments (PDI) 500 Nil
VIII Amount of Tier II capital raised; of which
Debt Capital Instrument Nil 250
Preference Share Capital Instruments Nil Nil
Amount reckoned for Tier II capital as per RBI guidelines is `1040.00 crore (Previous year `1080.00 crore).
In accordance with RBI Guidelines, banks are required to make Pillar 3 disclosures under Basel III Capital Regulations. The Bank
has made these disclosures which are available on its website at the following link:
http://www.southindianbank.com/content/viewContentLv11.aspx?linkIdLv12=854&LinkIdLv13=880&linkId=880
Pillar 3 disclosures have not been subjected to audit.
Additional Tier I Bonds:

Additional Tier I Bonds outstanding and included under borrowings is as follows:
[` in Crore]
Borrowings in India March 31, 2020 March 31, 2019
From Banks 159.52 0.00
From Others 340.48 0.00
Total 500.00 0.00
The Bank had raised `500 Crore of Basel III complied Additional Tier I Bonds during the year.
111

Tier II Bonds:
Subordinated Tier II Bonds outstanding and included under borrowings is as follows:
[` in Crore]
Borrowings in India March 31, 2020 March 31, 2019
From Banks 83.36 145.50
From Others 1156.64 1094.50
Total 1240.00 1240.00
Total Subordinated debt of `1,040 crore (Previous Year: `1,080 crore) is reckoned for Tier II capital as per RBI guidelines.
2. Capital Infusion:
During the year ended March 31, 2020, the Bank allotted 40,000 Equity Shares (Previous Year: 8,51,071 Equity Shares)
aggregating to face value `0.40 lakhs (Previous Year: `8.51 lakhs) in respect of stock options exercised.
Accordingly, share capital increased by `0.40 lakhs (Previous Year: `8.51 lakhs) and share premium increased by `9.22 lakhs
(Previous Year: `171.30 lakhs).
Details of movement in the paid-up equity share capital of the Bank are given below:
[` in Crore]
March 31, 2020 March 31, 2019
Particulars
No. of Shares Amount No. of Shares Amount
Opening Balance 180,96,82,151 180.97 180,88,31,080 180.88
Additions pursuant to Stock Options exercised 40,000 0.00 8,51,071 0.09
Closing Balance 180,97,22,151 180.97 180,96,82,151 180.97
3.
Investments [` in Crore]
a. Value of Investments
(i) Gross Value of Investments
(a) In India 21,386.79 19,524.79
(b) Outside India 0.20 0.20
(ii) Provisions for Depreciation
(a) In India 678.51 395.31
(iii) Provisions for Non-Performing Investments (NPI)
(a) In India 83.20 48.28
(b) Outside India - -
(iv) Net Value of Investments
(a) In India 20,625.08 19,081.20
b. Movement of provisions held towards depreciation on investments
(i) Opening Balance 395.33 342.62
(ii) Provisions made during the year 334.58 104.19
(iii) Less: Write-off/ (write back) of excess provisions during the year 51.40 51.48
(iv) Closing Balance 678.51 395.33
c. Movement of provisions held towards NPIs
(i) Opening Balance 48.28 44.87
(ii) Provisions made during the year 51.56 39.83
(iii) Less: Write-off/ (write back) of excess provisions during the year 16.64 36.42
(iv) Closing Balance 83.20 48.28
Movements in provisions held towards depreciation on investments have been reckoned on a yearly basis.
112

3.1. a) During the FY 2019-20, the bank has debited to profit and loss account ` Nil (previous year `34.38 crore) of unamortized
mark to market loss on investments in AFS and HFT as at March 31, 2018 as per RBI circular DBR.No.BP.BC.102/21.04.048/
2017-18 dated April 2, 2018.
b) In respect of securities held under HTM category premium of `59.04 crore (Previous Year `46.44 crore) has been amortised
during the year and debited under interest received on Government securities.
c) Profit on sale of securities from HTM category amounting to `310.81 crore (Previous Year: `74.53 crore) has been taken
to Profit and Loss Account. During the year, the Bank had appropriated `174.44 crore (Previous Year `36.36 crore), net of
taxes and transfer to statutory reserve, to the Capital Reserve, being the gain on sale of HTM Investments in accordance
with RBI guidelines.
d) During the year, the Bank had appropriated `Nil (Previous Year `22.15 crores), to Investment Fluctuation Reserve, being an
amount of net profit on sale of investments (net of taxes and transfer to Statutory Reserve) to protect against future increase
in yield.
4. Repo Transactions:
a) Transacted during the year ended March 31, 2020: [` in Crore]
Minimum Maximum Daily Average
As on March
Particulars outstanding outstanding outstanding
31, 2020
during the year during the year during the year
A) Securities sold under RBI Repos
i) Government Securities 50.00 552.00 61.04 552.00
ii) Corporate Debt Securities - - - -
Securities purchased under RBI Reverse
Repos
i) Government Securities 10.00 2,450.00 345.37 950.00
B) Securities sold under Market Repos
i) Government Securities 10.15 1501.14 527.01 741.60
Securities purchased under Reverse
Market Repos
i) Government Securities 4.96 327.69 4.52 -
b) Transacted during the previous year ended March 31, 2019: [` in Crore]
Minimum Maximum Daily Average
As on March
Particulars outstanding outstanding outstanding
31, 2019
during the year during the year during the year
A) Securities sold under RBI Repos
Securities purchased under RBI Reverse
Repos
i) Government Securities 20.00 1,725.00 135.84 250.00
B) Securities sold under Market Repos
Securities purchased under Reverse
Market Repos
113

5. Disclosure in respect of Non-SLR investments:

(i) Issuer composition of Non-SLR investments as at March 31, 2020: [` in Crore]
Extent of Extent of ‘Below Extent of Extent of
No. Issuer Amount Private Investment Grade’ ‘Unrated’ ‘Unlisted’
Placement Securities Securities Securities
[1] [2] [3] [4]1
[5]1,2 [6]1,2 [7]1,3
(i) PSUs 234.84 201.13 - - -
(ii) FIs 334.64 156.80 69.35 - -
(iii) Banks 21.59 4.65 4.65 - -
(iv) Private Corporate 282.36 234.80 89.99 20.00 74.99
(v) Subsidiaries/Joint Ventures - - - - -
(vi) Others4 1,557.74 1,555.81 - - -
(vii) Total Book Value of investments 2,431.17
(viii) Less: Provision for NPI (83.20)
(ix) Less: Provision held towards
depreciation (678.51)
Total 1,669.45 2,153.19 163.99 20.00 74.99
1
Amounts reported under Columns 4, 5, 6 and 7 above are not mutually exclusive.
2
Excludes investments in equity shares, units of equity oriented mutual funds, non-SLR State Government securities and
securities acquired by way of conversion of debt in line with extant RBI guidelines.
3
Excludes investments in equity shares, units of equity oriented mutual funds, non-SLR State Government securities,
securities acquired by way of conversion of debt and security receipts in line with extant RBI guidelines.
4
Includes Non SLR State Government special bonds with Book Value ` 227.78 crore.
(ii) Issuer composition of Non-SLR investments as at March 31, 2019: [` in Crore]
Extent of Extent of ‘Below Extent of Extent of
No. Issuer Amount Private Investment ‘Unrated’ ‘Unlisted’
Placement Grade’ Securities Securities Securities
[1] [2] [3] [4] 1 [5] 1, 2 [6] 1, 2 [7] 1, 3
(i) PSUs 318.97 251.13 - - -
(ii) FIs 575.82 343.73 69.35 - -
(iii) Banks 32.24 10.00 10.00 - -
(iv) Private Corporate 531.34 461.26 90.16 - 75.16
(v) Subsidiaries/Joint Ventures - - - - -
(vi) Others4 1,761.07 1,756.28 - - -
(vii) Total Book Value of investments 3,219.44
(viii) Less: Provision for NPI 48.28
(ix) Less: Provision held towards
depreciation 395.33
Total 2,775.83 2,822.40 169.51 - 75.16
1
Amounts reported under Columns 4, 5, 6 and 7 above are not mutually exclusive.
2
Excludes investments in equity shares, units of equity oriented mutual funds, Non-SLR State Government securities and
securities acquired by way of conversion of debt in line with extant RBI guidelines.
3
Excludes investments in equity shares, units of equity oriented mutual funds, Non-SLR State Government securities,
securities acquired by way of conversion of debt and security receipts in line with extant RBI guidelines.
4
Includes Non-SLR State Government special bonds with Book Value `456.39 crore.
114

[` in Crore]
A Shares 82.24 167.72
B Debentures & Bonds 1
821.23 1,402.45
C Subsidiaries/joint ventures - -
D Others 765.99 1,205.66
E Total 1,669.46 2,775.83
1
Including Non SLR State Government special bonds with Book Value `227.78 crore (Previous Year: `456.39 crore).
(iii) Non-Performing Non SLR investments [` in Crore]
Opening Balance 65.41 45.41
Additions during the year 73.30 112.67
Reductions during the year 16.65 92.67
Closing balance 122.06 65.41
Total provisions held 83.20 48.28
6. Investments held under the 3 categories viz. “Held for Trading (HFT)”, “Available for Sale (AFS)” and “Held to
Maturity (HTM)” are as under:
[` in Crore]
March 31, 2020 March 31, 2019
Particulars
HFT AFS HTM Total HFT AFS HTM Total
Govt. Securities#* - 2,293.63 16,889.96 19,183.59 - 1,309.45 15,452.49 16,761.94
Other Approved - - - - - - - -
Shares - 82.24 - 82.24 1.83 165.89 - 167.72
Debentures & Bonds - 593.45 - 593.45 - 946.06 - 946.06
Others - 765.99 - 765.99 197.61 1,008.05 - 1,205.66
Total - 3,735.32 16,889.96 20,625.27 199.44 3,429.45 15,452.49 19,081.38
# Includes Non SLR State Government Special Bonds with Book Value `207.48 crores (Previous Year `414.69 crores) under
HTM and Non SLR State Government Special Bonds with Book Value `20.30 crores (Previous Year: `41.70 crores) under AFS.
*Details of Securities Pledged/Earmarked as Margin: [` in Crore]
March 31, 2020 March 31, 2019
Particulars
(Face Value) (Face Value)
Margin towards RBI LAF Repo Transactions 3875.39 1799.19
Margin towards Intraday liquidity 180.00 180.00
Margin for clearing of securities 267.00 103.00
Margin for Triparty Repo 2400.75 2370.75
Margin for Forex forward segment default fund 9.25 7.25
Margin for Forex settlement segment default fund 3.05 2.05
Margin for Securities segment default fund 5.00 5.00
Margin for Triparty segment default fund 3.00 3.00
Margin towards currency futures 21.60 21.60
Lien against Market Repo Borrowing 700.00 -
Grand Total 7465.04 4491.84
115

7. Sale and transfers to/from HTM Category

During the year ended March 31, 2020, the aggregate book value of sales and transfer of securities to/from HTM category
exceeded 5% of the book value of investments held in HTM category at the beginning of the year.
The 5% threshold limit referred to above is excluding the following:
a. The one time transfers of securities to/from HTM category with the approval of Board of Directors permitted to be undertaken
by banks at the beginning of the accounting year,
b. Additional shifting of securities explicitly permitted by the Reserve Bank of India from time to time and direct sales from
HTM for bringing down SLR holdings in HTM category,
c. Sales to Reserve Bank of India under pre-announced open market auctions and
d. Repurchase of Government Securities by Government of India from banks.
Disclosure in terms of extant RBI guidelines: - [` in Crore]
Book value of Market value of Excess of book value
Sl.
Particulars securities held in HTM securities held in HTM over Market value of
No.
category category securities
1 Central Government Securities 10,670.27 10,943.74 0.00
2 State Government Securities 6,012.21 6,268.15 0.00
3 State Government – Non SLR 207.48 221.45 0.00
4 Sponsored Institutions 0.00 0.00 0.00
Total 16,889.96 17,433.34 0.00
The market value of investments held in HTM category was `17,433.34 crores whereas book value is ` 16,889.96 crores as on
March 31, 2020. The book value of investments being lower than market value, no provision is required to be made.
8. Derivatives:
Forward Rate Agreement/Interest Rate Swap
[` in Crore]
Current Previous
Particulars
year year
i) The notional principal of swap agreements
ii) Losses which would be incurred if counterparties failed to fulfil their obligations under
the agreements
Nil Nil
iii) Collateral required by the bank upon entering into swaps
iv) Concentration of credit risk arising from the swaps
v) The fair value of the swap book
Exchange Traded Interest Rate Derivatives
Sr. Current Previous
Particulars
No. Year Year
Notional principal amount of exchange traded interest rate derivatives undertaken
(i)
during the year (instrument wise)
Notional principal amount of exchange traded interest rate derivatives outstanding
(ii)
as on March 31, 2020 (instrument wise)
Nil Nil
Notional principal amount of exchange traded interest rate derivatives outstanding
(iii)
and not ‘highly effective’ (instrument wise)
Mark to market value of exchange traded interest rate derivatives outstanding
(iv)
and not ‘highly effective’ (instrument wise)
116

Disclosures on Risk Exposure in Derivatives

Qualitative Disclosure:
The Bank undertakes over the counter and exchange traded derivative transactions for Balance Sheet management and also for
proprietary trading/market making. Bank offers derivative products to the customers to enable them to hedge their exposure
within the prevalent regulatory guidelines.
These transactions expose the Bank to various risks primarily credit, market, operational, legal, and reputation. There is
functional separation between the Front Office, risk and Back Office for undertaking derivative transactions. The derivative
transactions are governed by the Investment, forex and derivative policy and market risk management policy of the Bank as
well as by the extant RBI guidelines. Various operational/risk limits are set up and actual exposures are monitored vis-à-vis the
limits allocated. Risk Limits are in place for risk parameters viz. VaR, Stop Loss, Dealer Limit, Deal size limit. Actual positions are
monitored against these limits on a daily basis and breaches, if any, are reported promptly. The MTM position of the derivative
portfolio is monitored on a regular basis. The impact on derivative portfolio on account of the probable market movements are
assessed on regular basis.
Bank deals in derivatives for hedging foreign currency assets/liabilities subject to the prevailing regulatory guidelines. Transactions
for hedging and trading are recorded separately. For hedge transactions, the Bank identifies the hedged item (asset or liability)
at the inception of the transaction itself. The effectiveness is ascertained at the time of inception of the hedge and periodically
thereafter. Transactions related to foreign exchange forwards, Currency futures etc. are marked to market (MTM) on the
reporting dates and the MTM is accounted in the books. Collateral requirements for derivative transactions are determined
based on usual credit appraisal process. For the purpose of credit risk mitigation, most of the deals have been contracted with
Banks/ Major primary dealers and no default risk is anticipated on the deals with them.
Quantitative Disclosures:
Current Year Previous Year
Sl.
Particulars Currency Interest rate Currency Interest rate
No.
Derivatives* derivatives Derivatives* derivatives
1 Derivatives (Notional Principal Amount) - - - -
a) For hedging - - - -
b) For trading - - - -
2 Marked to Market Positions - - - -
a) Asset (+) - - - -
b) Liability (-) - - - -
3 Credit Exposure - - - -
4 Likely impact of one percentage change in - - - -
interest rate (100*PV01)
a) on hedging derivatives - - - -
b) on trading derivatives - - - -
5 Maximum and Minimum of 100*PV01 - - - -
observed during the year
a) on hedging - - - -
b) on trading - - - -
*Only Currency futures are reported in currency derivatives.
The bank uses forward exchange contracts to hedge against its foreign currency exposures relating to the underlying transactions
and firm commitments. Bank does not have any Forward Rate Agreement or Interest Rate Swaps. The notional principal amount
of foreign exchange contracts classified as trading on March 31, 2020 amounted to `3,077.08 crore (Previous Year `1,563.53
crore). For these trading contracts, on March 31, 2020, marked to market position was asset of `67.94 crore (Previous Year
`60.06 crore) and liability of `49.01 crore (Previous Year `78.19 crore). The notional principal amount of foreign exchange
contracts classified as hedging on March 31, 2020 amounted to `2,828.56 crore (Previous Year `806.07 crore).
117

9. Movements in non-performing advances [` in Crore]

(i) Net NPAs to Net Advances [%] 3.34 3.45
(ii) Movement of NPAs (Gross)

a) Gross NPAs as at the beginning of the year 3131.66 1980.30

b) Additions (Fresh NPAs during the Year) 1369.59 1847.86
Sub-total (A) 4501.25 3828.16
c) Less:
i. Upgradations 159.99 273.27
ii. Recoveries (excluding recoveries made from upgraded accounts) 188.27 136.49
iii. Technical/Prudential Write-offs 838.19 216.72
iv. Write-offs other than those under (iii) above 29.32 70.02
v. Reduction by sale of Assets to ARCs 23.71 -

Sub-total (B) 1239.48 696.50

d) Gross NPAs as at the end of the year 1
3261.77 3131.66
(iii) Movement of NPAs (Net)2
a) Opening Balance 2163.62 1415.80
b) Additions during the year 1115.88 1530.06
c) Reductions during the year 1128.72 782.24
d) Closing Balance 2150.78 2163.62
(iv) Movement of provisions for NPAs3 (excluding provisions on Standard Assets)

a) Opening Balance 937.84 541.06
b) Provisions made during the year 1091.37 709.44
c) Write-off / write back of Excess provisions 949.03 312.66
d) Closing Balance 1080.18 937.84
1
After considering technical/Prudential Write-Offs. Closing Gross NPAs before technical/Prudential Write-Offs is `4698.57 crore
(Previous Year `3760.51 crore).
2
Net NPA is after considering ECGC/DICGC/Insurance claim amount pending for adjustment of `30.80 crore (Previous Year
`30.22 crore).
3
Includes sacrifice provision on accounts classified as NPA, amounting to `Nil (Previous Year `Nil).
118
10. Particulars of Accounts Restructured as on March 31, 2020
[` in Crore]
Type of Restructuring Under CDR Mechanism (A) Under SME Debt Restructuring Mechanism (B)
Sl. Asset Classification Sub Sub
Standard Doubtful Loss Total Standard Doubtful Loss Total
No. Details Standard Standard
1 Restructured Accounts as on April 1, 2019
No. of borrowers 1 - 1 1 3 288 4 - 1 293
Amount outstanding 21.45 - 19.57 - 41.02 139.01 0.21 - - 139.22
Provision thereon - - - - - 0.40 - - - 0.40
2 Fresh restructuring during the year 2019-201
No. of borrowers - - - - - 98 4 - - 102
Amount outstanding - - - - - 618.44 41.00 - - 659.44
Provision thereon - - - - - - - - - -
3 Upgradations to restructured standard category during the year 2019-20
No. of borrowers - - - - - - - - - -
Amount outstanding - - - - - - - - - -
119
4 Restructured standard advances which cease to attract higher provisioning and/or additional risk weight at the end of the FY and
hence need not be shown as restructured standard advances at the beginning of the next FY (2020-21)
No. of borrowers 1 1 23 23
Amount outstanding 21.45 21.45 3.93 3.93
Provision thereon - - 0.03 0.03
5 Downgradations of restructured accounts during the year 2019-20
No. of borrowers - - - - - (43) 36 7 - -
Amount outstanding - - - - - (15.09) 11.31 3.78 - -
6 Write-offs of restructured accounts during the year 2019-202
No. of borrowers - - 1 1 2 - - - 1 1
Amount outstanding - - 19.57 - 19.57 9.90 0.01 - - 9.91
Provision written back - - - - - - - - - -
7 Restructured Accounts as on March 31, 20203
No. of borrowers - - - - - 320 44 7 - 371
Amount outstanding - - - - - 728.53 52.52 3.78 - 784.82
(Contd…)
[` in crore]
Type of Restructuring Others (C) Total (D = A+B+C)
No. Standard Doubtful Loss Total Standard Doubtful Loss Total
Details Standard Standard
No. of borrowers 1,316 16 4 3 1,339 1,605 20 5 5 1,635
Amount outstanding 53.31 188.54 15.44 0.01 257.30 213.77 188.75 35.01 0.01 437.54

No. of borrowers 630 12 - - 642 728 16 - - 744
Amount outstanding 72.04 0.06 - - 72.10 690.48 41.06 - - 731.54
No. of borrowers - - - - - - - - - -
4 Restructured standard advances which cease to attract higher provisioning and/or additional risk weight at the end of the FY and hence
need not be shown as restructured standard advances at the beginning of the next FY (2020-21)
No. of borrowers 180 180 204 204
120
Amount outstanding 2.25 2.25 27.63 27.63
Provision thereon - - 0.03 0.03
No. of borrowers (132) 121 10 1 - (175) 157 17 1 -
Amount outstanding (2.41) (160.06) 129.01 33.47 - (17.50) (148.75) 132.79 33 -
6 Write-offs of restructured accounts during the year 2019-202
No. of borrowers 1 2 4 2 9 1 2 5 4 12
Provision written back - - - - - - - - - -
No. of borrowers 1,633 147 10 2 1,792 1,953 191 17 2 2,163
Amount outstanding 119.03 2.49 129.00 33.47 283.96 847.56 55.00 132.78 33.47 1,068.78
Asterisk denotes figure below ` 1,00,000/-
1
Fresh Restructuring includes fresh sanction/increase in existing accounts: Bank has undertaken restructuring during the FY 2019-20 under the natural calamity
restructuring scheme and One Time Restructuring Schemes of RBI for MSMEs and the increase of `731.54 crore is on account of Fresh Restructuring and
increase in advances in those accounts restructured in the past.
2
Write off of restructured accounts includes recoveries/closure/Sale in existing accounts: Bank has written off restructured asset of ` 72.63 crore (Provision `Nil).
3
The bank maintains a provision for diminution in fair value of assets amounting to `4.37 crore (PY `4.35 crore), of which assets holding `4.00 crore
(PY `3.95 crore) of such provision, have shown satisfactory performance as per RBI guidelines are not disclosed above.
Particulars of Accounts Restructured as on March 31, 2019
[` in Crore]
Type of Restructuring Under CDR Mechanism (A) Under SME Debt Restructuring Mechanism (B)
Standard Doubtful Loss Total Standard Doubtful Loss Total
No. Details Standard Standard
No. of borrowers 2 - - 1 3 - - - 1 1
Amount outstanding 41.46 - - 3.52 44.98 - - - - -
Provision thereon 0.59 - - - 0.59 - - - - -
No. of borrowers - - - - - 288 4 - - 292
Amount outstanding 0.07 - - - 0.07 139.01 0.21 - - 139.22
No. of borrowers - - - - - - - - - -
121
No. of borrowers - - - -
Amount outstanding - - - -
Provision thereon - - - -
No. of borrowers (1) - 1 - - - - - - -
Amount outstanding (19.57) - 19.57 - - - - - - -
6 Writ offs of restructured accounts during the year 2018-19 2
No. of borrowers - - - - - - - - - -
Amount outstanding 0.50 - - 3.52 4.02 - - - - -
Provision written back 0.59 0.59 - - - - -
No. of borrowers 1 1 1 3 288 4 1 293
Amount outstanding 21.45 19.57 41.02 139.01 0.21 139.22
Provision thereon 0.40 0.40
(Contd…)
[` in crore]
Type of Restructuring Others (C) Total (D = A+B+C)
No. Standard Doubtful Loss Total Standard Doubtful Loss Total
Details Standard Standard
No. of borrowers 1 2 2 4 9 3 2 2 6 13
Provision thereon 0.51 - 0.47 0.02 1.00 1.10 - 0.47 0.03 1.60

No. of borrowers 1,316 14 - - 1,330 1,604 18 - - 1,622
Amount outstanding 53.31 0.07 53.38 192.39 0.28 192.67
No. of borrowers - - - - - - - - - -
No. of borrowers
122
Amount outstanding
Provision thereon
No. of borrowers (1) 1 (2) 2 -
Amount outstanding (15.44) 15.44 (35.02) 35.02 -
6 Write offs of restructured accounts during the year 2018-192
No. of borrowers
Provision written back 0.51 0.46 0.02 0.99 1.10 0.46 0.02 1.58
No. of borrowers 1316 16 4 3 1339 1605 20 5 5 1635
Provision thereon 0.40 0.40
Asterisk denotes figure below ` 1,00,000/-
1
Fresh restructuring includes fresh sanctions/increase in existing accounts: Bank has undertaken restructuring during the FY 2018-19 under the natural calamity
restructuring scheme and onetime restructuring schemes of RBI and the increase of `192.67 crore is on account of fresh restructuring and increase in advances
in those accounts restructured in the past.
2
Write off of restructured accounts includes recoveries/closure/sale in existing accounts: Bank has written-off restructured asset of `51.77 crore (provision `1.59
crore).
3
The Bank maintains a provision in diminution in fair value of assets amounting to `4.35 crore (previous year `5.56 crore), of which assets holding `3.95 crores
(previous year `3.97 crore) of such provision, have shown satisfactory performance as per RBI guidelines are not disclosed above.

11. A. Details of Financial Assets sold to Securitization / Reconstruction company for asset reconstruction
[` in Crore]
(i)No. of Accounts1 2 -
(ii)Aggregate value (net of provisions) of accounts sold to SC/RC 85.78 -
(iii)Aggregate Consideration 73.40 -
(iv) Additional consideration realised in respect of accounts transferred in earlier - -
years
(v) Aggregate gain/ (loss) over net book value (12.38) -
1
Represents number of customers.
B. Details of Book value of Investments in Security Receipts [` in Crore]
Backed by NPAs sold by
other banks/financial
Backed by NPAs sold by
institutions/non-banking Total
the bank as underlying
Particulars financial companies as
underlying
March 31, March 31, March 31, March 31, March 31, March 31,
2020 2019 2020 2019 2020 2019
Book value of investments in
1296.61 1268.48 - - 1296.61 1268.48
security receipts
Note: In addition to the above, Bank holds security receipt of `16.75 crore (Previous Year `16.75 crore) which are backed
by Standard assets sold by the Bank.
C. Details of ageing of Investments held as Security Receipts:
(i) As at March 31, 2020: [` in Crore]
SRs issued more
SRs issued within than 5 years ago SRs issued more
Particulars
past 5 years but within past 8 than 8 years ago
years
i) Book value of SRs backed by NPAs sold by 1,238.12 58.50 -
Provision held against (i) 518.24 14.62 -
ii) Book value of SRs backed by NPAs sold - - -
by other banks/financial institutions/non-
banking financial companies as underlying
Provision held against (ii) - - -
Total (i) + (ii) 1,238.12 58.50 -
Note: In addition to the above, Bank maintains a provision of `15.91 crore (Previous Year `15.07 crore) against
Security Receipts which are backed up by standard asset sold by the Bank.
(ii) As at March 31, 2019: [` in Crore]
SRs issued more
SRs issued within than 5 years ago SRs issued more
Particulars
past 5 years but within past 8 than 8 years ago
years
i Book value of SRs backed by NPAs sold by 1,268.48 - -
Provision held against (i) 279.04 - -
ii Book value of SRs backed by NPAs sold by - - -
other banks / financial institutions / non-
banking financial companies as underlying
Provision held against (ii) - - -
Total (i) + (ii) 1,268.48 - -

123

D. Details of Non-Performing financial assets purchased/sold [` in Crore]

Non-performing financial assets purchased/sold (from/to banks) Nil Nil
12. Provisions on Standard Assets [` in Crore]

Provisions towards Standard Assets (including provision towards stressed sector) 238.32 227.81
General Provision for COVID-191 76.45 0.00
Provision for Unhedged Foreign Currency Exposure of Borrowers 12.95 13.06
Standard Restructured Accounts under MSME - Restructuring Scheme2 35.08 1.74
Provision for eligible MSME borrowers classified as standard3 0.00 6.51
Provision for accounts restructured under natural calamity4 9.89 8.01
Provision for Specific Standard Assets on Stressed Sectors 1.28 2.59
Grand Total (Refer 5. IV - Other liabilities and provisions) 373.97 259.72
1
The outbreak of COVID – 19 pandemic has affected several countries across the world, including India; and the consequent
lockdown restrictions imposed by the Governments have affected the financial operations of the Bank, more particularly for
periods commencing from the last week of the financial year ended 31st March 2020. In view of continuing uncertainties, the
extent of impact on the Bank’s operations and financial position would depend on several factors including the steps taken by
the Governments, Reserve Bank of India (RBI) and the bank to mitigate the same.
In accordance with the COVID – 19 Regulatory Package announced by RBI vide Notifications dated March 27, 2020, April 17,
2020 and May 23, 2020 the bank has offered an optional moratorium on repayments falling due between March 1, 2020
and August 31, 2020 in respect of accounts classified as standard on February 29, 2020. As permitted by the RBI guidelines,
the bank has considered these concessions for the purpose of asset classification, income recognition and provisioning as at
March 31, 2020.
As per RBI guidelines, the bank is required to make an additional provision of 10% in respect of such accounts which would
have been classified as non-performing as at March 31, 2020, but for the aforesaid concessions (other than accounts in which
dues have been remitted on or before May 31, 2020 as permitted by RBI vide letter dated May 6, 2020). Although the RBI
guidelines permit banks to make the additional provision over the current quarter ended March 31, 2020 and subsequent
quarter ended June 30, 2020, as a prudent measure, the bank has recognised the entire additional provision at the rate of 10%
as stated above, amounting to `20.75 crore in the accounts for the current quarter itself. As a matter of further prudence, the
bank has also made an additional provision (over and above the 10% mandated by RBI as above) amounting to `55.70 crore
as at March 31, 2020 to meet any future impact of the pandemic. The provisions as above, aggregating to `76.45 crore, has
been carried under Other Liabilities and Provisions in the Balance Sheet.
2
As permitted by RBI vide its Circular DBR.No.BP.BC.18/21.04.045/2018-19 dated January 1, 2019 and DOR.No.BP.
BC.34/21.04.048/2019-20 dated February 11, 2020, the bank restructured 131 eligible MSME accounts with outstanding of `
663.48 crore during the year. Out of which accounts amounting to `622.89 crore have been retained as Standard. Additional
Standard Asset provision of `35.08 crore (Previous year `1.74 crore) is maintained in the books towards such accounts.
3
RBI circular DBR.No.BP.BC.100/21.04.048/2017-18 dated February 07, 2018 permitted banks to continue the exposures to
MSME borrowers registered under Goods and Services Tax (GST) to be classified as standard assets where the dues between
September 1, 2017 and January 31, 2018 are paid not later than 180 days from their respective original due dates. Accordingly,
the bank has continued to classify exposure to eligible MSME borrowers of `Nil (Previous year `130.10 crore) as standard. In
accordance with the provisions of the circular the bank had not recognised interest income of `Nil (Previous Year `4.94 Crore)
and has created a standard asset provision of `Nil (Previous Year `6.51 crore) in respect of such accounts.
4
The bank has restructured an amount of `197 crore for eligible borrowers who were affected by floods in the state of Kerala
during the financial year 2018-19 based on RBI Master Direction FIDD.CO.FSD.BC No.8/05.10.001/2017-18 dated July 03,
2017 and as per the scheme formulated by SLBC Kerala.
124

13. Business ratios

(i) Interest Income as a percentage to Working Funds1 8.05% 7.94%
(ii) Non-interest income as a percentage to Working Funds1 1.08% 0.84%
(iii) Operating Profit as a percentage to Working Funds 1, 2
1.71% 1.43%
(iv) Return on Assets [Based on Working Fund]1 0.11% 0.29%
(v) Business (Customer Deposits plus Advances) per employee3, 4 (` in Crore) 17.38 17.25
(vi) Profit per employee 3 (` In Crore) 0.01 0.03
1
For the purpose of computing the ratio, Working Fund represents the average of total assets as reported in Form X to RBI under
Section 27 of the Banking Regulation Act, 1949.
2
For the purpose of this ratio, operating profit is net profit for the year before provisions and contingencies.
3
For the purpose of computing the ratios number of employees (excluding Part time employees) as on Balance Sheet date is
considered.
4
For the purpose of this ratio, business per employee has been recorded as gross advance plus deposits (excluding interbank
deposits).
14. Lending to sensitive sectors:

A. Exposures to Real Estate Sector [` in Crore]
March 31, March 31,
Category
2020 2019
a) Direct Exposure
(i) Residential Mortgages - 4668.96 4366.09
Lending fully secured by mortgages on residential property that is or will be 1707.21 1730.13
occupied by the borrower or that is rented;
of which Individual housing loans eligible for inclusion in priority sector advances
(ii) Commercial Real Estate - 1260.96 1231.90
Lending secured by mortgages on commercial real estate (office buildings, retail
space, multi-purpose commercial premises, multi-family residential buildings,
multi-tenanted commercial premises, industrial or warehouse space, hotels,
land acquisition, development and construction, etc.). Exposure include Non-
Fund Based (NFB) limits
(iii) Investments in Mortgage Backed Securities (MBS) and other securitized
exposures -
a. Residential Nil Nil
b. Commercial Real Estate Nil Nil
b) Indirect Exposure
Fund based and non-fund based exposures on National Housing Bank (NHB) and 946.21 1354.20
Housing Finance Companies (HFCs)
Total Exposure to Real Estate Sector 6876.13 6952.19
B. Exposure to Capital Market Sectors [` in Crore]

March 31, March 31,
Particulars
2020 2019
(i) Direct Investments in equity shares* 113.84 152.75
(ii) Investments in convertible bonds/convertible debentures 5.00 5.00
(iii) Investments in units of equity oriented mutual funds the corpus of which is not
1.93 1.93
exclusively invested in corporate debt
125

March 31, March 31,

Particulars
2020 2019
(iv) Advances against shares/bonds/debentures or other securities or on clean basis to
individuals for investment in shares (including IPOs/ESOPs), convertible bonds and - -
convertible debentures and units of equity oriented mutual funds
(v) Advances for any other purposes where shares or convertible bonds or convertible
- -
debentures or units of equity oriented mutual funds are taken as primary security
(vi) Advances for any other purposes to the extent secured by the collateral security of
shares or convertible bonds or convertible debentures or units of equity oriented
mutual funds i.e. where the primary security other than shares/convertible bonds/ - -
convertible debentures/units of equity oriented mutual funds does not fully cover
the advances
(vii) Secured and unsecured advances to stockbrokers and guarantees issued on behalf
4.38 1.40
of stockbrokers and market-makers
(viii) Loans sanctioned to corporate against the security of shares/bonds/debentures or
other securities or on clean basis for meeting promoter’s contribution to the equity - -
of new companies in anticipation of raising resources
(ix) Bridge loans to companies against expected equity flows/issues - -
(x) Underwriting commitments taken up by the banks in respect of primary issue of
shares or convertible bonds or convertible debentures or units of equity oriented - -
mutual funds
(xi) Financing to stockbrokers for margin trading - -
(xii) All exposures to Venture Capital Funds (both registered and unregistered) - -
Total Exposure to Capital Market 125.15 161.08

*Shares acquired by banks as a result of Conversion of debt under CDR mechanism for `120.50 crores (Previous Year
`119.77 crores) is excluded in line with extant RBI guidelines.
c. Risk category-wise country exposure:

Country Risk exposure has been classified on the following basis: [` in Crore]
Exposure (net) Provision held Exposure (net) Provision held

Risk Category* as at March 31, as at March 31, as at March 31, as at March 31,
2020 2020 2019 2019
Insignificant 790.07 - 1,145.29 -
Low 491.01 - 729.52 -
Moderate 3.15 - 15.29 -
High 5.61 - 11.58 -
Very High 0.62 - 12.51 -
Restricted - - - -
Off Credit - - - -
TOTAL 1290.46 - 1,914.19 -
As the Bank’s net exposure with each country for the year in respect of foreign exchange transaction is less than 1% of the
total assets of the Bank, no provision is required.
* The above figures include both funded as well as non-funded exposure.
126

15. Floating Provision [` in Crore]
Particulars 2019-20 2018-19

(a) Opening balance in the floating provisions account Nil Nil
(b) The quantum of floating provisions made in the accounting year Nil Nil
(c) Amount of drawdown made during the accounting year Nil Nil
(d) Closing balance in the floating provisions account Nil Nil
16. Maturity Pattern of key assets and liabilities:

i) As at March 31, 2020: [` in Crore]
Particulars Day 1 2-7 days 8-14 days 15-30 days 31 days Over 2 Over 3 Over 6 Over 1 Over 3 Over 5 Total
and up to months months months year and years and years
2 months and up to and up to and up to up to 3 up to 5
3 months 6 months 1 year years years
Deposits 527.30 519.24 500.60 952.51 3,911.38 3,145.26 4,535.59 6,530.13 3,730.40 5,432.50 53,248.97 83,033.89
Advances* 430.12 547.00 521.54 818.40 1,515.36 2,864.84 6,437.98 9,587.05 10,164.49 4,278.04 27,274.64 64,439.47
Investments 2,430.01 170.09 110.14 195.01 627.32 491.38 964.77 998.39 789.91 1,302.08 12,546.18 20,625.27
Borrowings 277.69 742.00 6.07 200.00 6.07 706.07 18.21 2,403.71 993.42 500.00 1,040.00 6,893.23
Foreign
Currency- 354.76 37.94 53.74 77.10 193.50 87.63 254.68 643.77 391.32 16.09 5.81 2,116.33
Assets
Foreign
Currency- 455.24 22.21 20.69 36.12 178.37 110.51 169.06 2,677.63 588.84 345.65 - 4,604.31
Liabilities
* In context of COVID-19 pandemic, the Reserve Bank of India on March 27, 2020, announced measures to support the
economy and the financial system by permitting the lending entities to offer a three-month moratorium on all term loans
outstanding as on March 1, 2020. As a prudent measure, for the purpose of ALM, the contractual inflows on borrower
accounts have been suitably adjusted for the moratorium considering the potential relief to borrowers
ii)
As at March 31, 2019: [` in Crore]
Particulars Day 1 2-7 days 8-14 days 15-30 days 31 days Over 2 Over 3 Over 6 Over 1 Over 3 Over 5 Total
and up to months months months year and years and years
2 months and up to and up to and up to up to 3 up to 5
3 months 6 months 1 year years years
Deposits 977.09 1,113.38 904.83 2,295.57 4,541.66 4,436.64 4,737.10 7,424.79 2,753.00 5,078.85 46,157.22 80,420.12
Advances 1,544.22 1,022.09 1,192.04 1,554.77 2,790.79 3,417.92 4,828.99 8,642.84 8,610.75 4,209.12 24,880.22 62,693.74
Investments 355.57 795.83 138.94 322.56 1,005.92 825.74 758.62 1,515.71 1,560.44 1,474.60 10,327.45 19,081.38
Borrowings 89.16 50.00 - - 887.56 133.33 1,506.48 266.67 930.00 - 1,040.00 4,903.20
Foreign
Currency- 141.31 484.13 35.53 110.40 207.87 85.93 240.59 709.42 346.12 13.19 10.42 2,384.91
Assets
Foreign
Currency- 138.82 14.05 12.75 133.52 242.44 621.58 728.06 511.30 459.00 404.43 - 3,265.95
Liabilities
Classification of assets and liabilities under different maturity buckets is based on the same estimates and assumptions as
used by the Bank for compiling the returns submitted to the RBI, which has been relied upon by the auditors.
127

17. Details of Single Borrower Limit (SGL), Group Borrower Limit (GBL) exceeded by the Bank
During the years ended March 31, 2020, March 31, 2019, March 31, 2018 and March 31, 2017, the bank has exceeded the
credit exposure to single borrower and group borrowers limit as per prudential exposure limit prescribed by RBI w.r.t. investment
of `1,040.99 crore in security receipt issued by M/s Phoenix ARC. The regulator has instructed the Bank not to take any further
exposure to the ARC till the exposure is brought within the prudential limit prescribed under large exposure’s framework.
18.
Unsecured Advances [` in Crore]

Total Advances for which intangible securities such as charge over the
117.60 336.97
rights, licenses, authority etc. has been taken as collateral
Estimated value of intangible collateral securities available are sufficient to cover the outstanding balance of advances.

19. Penalties levied by the Reserve Bank of India
The penalty imposed by RBI during the year ended March 31, 2020 was `10,71,250.00 (Previous year `5,00,75,900).
In exercise of powers vested in RBI under the provisions of Section 47A(1)(c) read with Section 46(4)(i) of the Banking Regulation
Act, 1949, RBI vide letter dated June 14, 2019 had imposed a monetary penalty of `10 lakhs on the bank for non-compliance
with directions issued by RBI on ‘Guarantees and Co-acceptances’ as detailed in RBI’s press release and the Banks intimation to
the stock exchanges dated June 19, 2019.
20. Asset quality ratios [` in Crore]

Percentage of net NPAs to net advances 3.34 3.45
Provision Coverage Ratio (%) 54.22 42.46
21. Concentration of Deposits, Advances, Exposures and NPAs

(i) Concentration of Deposits [` in Crore]
Total Deposits of twenty largest depositors 9,435.13 7,979.89
Percentage of Deposits of twenty largest depositors to Total Deposits
11.36% 9.92%
of the bank
Note: Excludes holders of certificate of deposits.
(ii) Concentration of Advances* [` in Crore]

Total Advances to twenty largest borrowers 5,303.34 5,957.21
Percentage of Advances to twenty largest borrowers to Total
6.70% 8.07%
Advances of the bank
* Advance is computed as per definition of Credit Exposure including derivatives furnished in RBI’s Master Circular on
Exposure Norms.
128

Concentration of Exposures*
(iii) [` in Crore]

Total Exposure to twenty largest borrowers/customers 6,230.18 7,000.45
Percentage of Exposures to twenty largest borrowers/customers to
6.17% 9.10%
Total Exposure of the bank on borrowers/customers
*Exposure is computed based on credit and investment exposure as prescribed in RBI’s Master Circular on Exposure Norms.
The bank has compiled the data for the purpose of disclosure in note 21.(i) to note 21.(iii) from its internal MIS system and
has been furnished by the management, which has been relied upon by the auditors.
Concentration of NPAs*
(iv) [` in Crore]

Total Exposure to top four NPA accounts 794.12 848.66
*Represents funded balance.
The bank has compiled the data for the purpose of this disclosure from its internal MIS system and has been furnished by
the management.
22. Sector-wise Advances [` in Crore]
2019-20 2018-19
Percentage
Sl. Percentage of
Sector* Outstanding of Gross Outstanding
No. Gross Gross Gross NPAs to
Total NPAs to Total Total
NPAs NPAs Total Advances
Advances Advances in Advances
in that sector
that sector
A Priority Sector
1 Agriculture and allied activities 9,908.67 344.33 3.48% 8,624.52 403.14 4.67%
Advances to industries sector eligible
2 6,014.53 446.05 7.42% 5,846.59 368.22 6.30%
as priority sector lending
2.a Textile 1,520.88 98.15 6.45% 1,446.99 94.83 6.55%
2.b Basic Metal 728.79 65.02 8.92% 737.20 20.07 2.72%
2.c Infra 63.72 1.22 1.91% 187.18 3.51 1.88%
3 Services 9,940.14 428.63 4.31% 9,062.37 388.88 4.29%
3.a Professional 1,164.54 35.53 3.05% 918.85 18.88 2.05%
3.b Trade 6,719.50 320.54 4.77% 6,534.01 336.69 5.15%
3.c NBFC 98.80 - 0.00% 120.91 0.00 0.00%
4 Personal loans 1,884.75 52.49 2.78% 1,832.50 61.59 3.36%
4.a Housing Loan 1,707.21 33.45 1.96% 1,630.15 35.07 2.15%
4.b Other Personal loans incl. Gold Loan 177.54 19.04 10.72% 202.35 26.52 13.11%
Sub-total (A) 27,748.09 1271.51 4.58% 25,365.98 1,221.83 4.82%
B Non-Priority Sector
1 Agriculture and allied activities 800.65 17.92 2.24% 885.17 40.94 4.63%
2 Industry 10,470.72 976.85 9.33% 12,166.27 1,240.54 10.20%
2.a Textile 1,563.41 72.78 4.66% 1,577.64 51.87 3.29%
129

[` in Crore]
2019-20 2018-19
Percentage
Sl. Percentage of
Sector* Outstanding of Gross Outstanding
No. Gross Gross Gross NPAs to
Total NPAs to Total Total
NPAs NPAs Total Advances
Advances Advances in Advances
in that sector
that sector
2.b Basic Metal 1,847.22 19.43 1.05% 2,085.28 16.72 0.80%
2.c Infra 1,628.53 257.98 15.84% 2,389.15 590.32 24.71%
3 Services 14,627.17 860.94 5.89% 16,325.45 529.46 3.24%
3.a Professional 3,377.19 357.37 10.58% 2,903.56 225.77 7.78%
3.b Trade 2,296.49 60.07 2.62% 2,313.98 78.41 3.39%
3.c NBFC 4,214.96 365.58 8.67% 6,190.90 200.00 3.23%
4 Personal loans 11,877.39 134.54 1.13% 8,893.04 98.90 1.11%
4.a Housing Loan 2,961.74 52.76 1.78% 2,427.90 40.03 1.65%
4.b Other Personal loans incl. Gold Loan 8,915.64 81.78 0.92% 6,465.15 58.87 0.91%
Sub-total (B) 37,775.93 1990.25 5.27% 38,269.94 1,909.84 4.99%
Total (A+B) 65,524.02 3261.76 4.98% 63,635.92 3,131.67 4.92%
Asterisk denotes figure below `1,00,000 Percentage below 0.01.
The Bank has compiled the data for the purpose of this disclosure from its internal MIS system and has been furnished by the
management, which has been relied upon by the auditors.
23. Disclosure on Divergence in Asset Classification and Provisioning for NPAs:
As per RBI Circular vide DBR.BP.BC.No.63/21.04.018/2016-17 dated 18th April, 2017 and DBR.BP.BC.No.32/21.04.018/2018-19
dated April 1, 2019 banks are required to disclose the divergence in asset classification and provisioning consequent to RBI’s
annual supervisory process in their notes to accounts to the financial statement if such divergence exceed the threshold
prescribed by the RBI. The divergences identified by RBI for the Financial Year ended March 31, 2019 are less than the prescribed
thresholds for the year ended March 31, 2019.
24. Micro, Small and Medium Enterprises (MSME) sector – Restructuring of Advances:
During FY 2019-20 During FY 2018-19

Particulars
No. of Accounts Amount No. of Accounts Amount
MSME Restructured Accounts 131 663.48 6 32.20
As permitted by RBI vide its Circular DBR.No.BP.BC.18/21.04.045/2018-19 dated January 1, 2019 and DOR.No.BP.
BC.34/21.04.048/2019-20 dated February 11, 2020, the bank restructured 131 eligible MSME accounts with outstanding of
`663.48 crore during the year. Out of which accounts amounting to `622.89 crore have been retained as Standard. Additional
Standard Asset provision of `35.08 crore (Previous year `1.74 crore) is maintained in the books towards such accounts.
25. Movement in technical/prudential written-off accounts: [` in Crore]

Opening balance of Technical/Prudential written-off accounts as at April 1 628.82 425.63
Add: Technical/Prudential write-offs during the year 838.19 216.72
Sub-total (A) 1,467.01 642.35
Less: Reduction due to recovery made from previously technical/prudential
written-off accounts during the year 17.13 11.61
130

[` in Crore]
Less: Reduction due to sale of NPAs to ARCs from previously technical/
prudential written-off accounts during the year - -
Less: Sacrifice made from previously technical/prudential written-off accounts
during the year 13.07 1.92
Sub-total (B) 30.20 13.53
Closing balance as at March 31 (A-B) 1,436.81 628.82
26. Overseas Assets, NPAs and Revenue - Nil
27. Off-balance Sheet SPVs sponsored - Nil
28. Bancassurance Business [` in Crore]

Fees/remuneration received from bancassurance business:
- For selling life insurance policies 15.82 13.72
- For selling non-life insurance policies 4.86 4.12
Total 20.68 17.84
29. Drawn down from Reserves

The Bank has not undertaken any drawdown from reserves during the years ended March 31, 2020 and March 31, 2019,
except:
`30.44 crore (Previous year `Nil) is drawn down from revenue and other reserves being unamortized amount of three fraud
a.
cases as permitted by the RBI in accordance with DBR No.BP.BC.92/21.04.048/2015-16 dated April 18, 2016. (Refer note
B.13 of Schedule 18).
b. `Nil (Previous Year: `33.00 crore) from Revenue and Other Reserves being unamortized balance of additional provision on
Debt Asset Swap transaction, as permitted by RBI vide letter: DBS (T).No./424/02.02.006/2018-19 dated May 2, 2019.
c. During FY 2018-19, as a onetime measure, an amount of `50.00 crores and `42.78 crores pertaining to profits for FY 2015-16
and FY 2016-17, respectively, has been transferred from Revenue and Other Reserves and `11.19 crore pertaining to profits
for FY 2015-16 from Balance in Profit and Loss Account (FY 17-18 `13.50 crores pertaining to profits for FY 2014-15) to
Special Reserve u/s 36 (1) (viii) of Income Tax Act, 1961, to make good the shortfall in the special reserve created for the
respective years. Out of the total Deferred Tax Liability created, `21.18 crores and `14.80 crores pertaining to amounts
transferred for FY 2015-16 and 2016-17, respectively, has been drawn down from the Balance in Profit and Loss Account.
Credit to Reserve
d. Bank credited back `33.00 crore (Previous year: `Nil) drawn down from revenue and other reserves relating to
unamortized balance of additional provision on Debt Asset Swap transaction, as permitted by RBI vide letter: DBS (T).
No./424/02.02.006/2018-19 dated May 2, 2019.
30. Provision for taxes during the year: [` in Crore]
Current Tax 86.14 139.35
Deferred Tax (net) (41.18) (6.38)
Total 44.96 132.97
131

In accordance with the Taxation Laws (Amendment) Ordinance 2019 promulgated on September 20, 2019, the bank has opted
to pay tax at the lower rate prescribed therein with effect from the current financial year. Consequently, tax expenses for the
year ended March 31, 2020 comprising current and deferred tax as per Accounting Standard-22 (Accounting for Taxes on
income) has been recognised using the reduced tax rates applicable.
31. Provisions and Contingencies
a) Break-up of ‘Provisions and Contingencies’ shown under the head Expenditure in Profit and Loss Account:
[` in Crore]
Provision for NPAs (including write-off, excluding technical write off)1 995.97 684.30
Provision for NPIs 34.91 3.42
Provision for taxes (Net) 86.14 139.35
Deferred Tax (net) (41.18) (6.38)
Provision for Standard Assets 114.36 27.36
Provision for Restructured Advances 0.02 (1.22)
Provision for depreciation in the value of investments 283.19 140.23
Provision for FITL 36.95 2.19
Provision for unhedged foreign currency exposures (0.11) 1.10
Provision for Non-Banking Asset2 32.12 11.12
Provision for Fraud / Other impaired assets (1.32) (10.02)
TOTAL 1,541.05 991.45
1
The bank has exercised the option to make provision in respect of three Non-Performing Advances identified as fraud
during the quarter ended December 31, 2019, over a period of four quarters as permitted by the RBI in circular DBR No.
BP. BC.92/21.04.048/2015-16 dated April 18, 2016. Accordingly, the Bank has debited `30.46 crore to Profit and Loss
Account, being 50% of the outstanding net book value of the said advances and the remaining unprovided amount
of `30.44 crore has now been debited against other reserves and will be debited in the profit and loss account by
proportionately reversing the debit to other reserves over the two subsequent quarters in equal instalments.
2
The Bank had acquired certain land parcels under a partial Debt Asset Swap transaction (“DAS”) in earlier years aggregating
`110 crores and classified them as “Non-Banking Assets acquired in satisfaction of claims” in the Balance Sheet up to
March 31, 2018. The Reserve Bank of India vide their letter dated May 2, 2019 ref. DBS (T) No./424/02.02.006/2018-19
to the bank prescribed provisioning norms for DAS transactions in respect of assets acquired under DAS from a particular
borrower pursuant to which the Bank has provided an amount of `11 crores for the year ended March 31, 2019 and the
balance of `33.00 crores was debited against other reserves during March 31, 2019. `33.00 crore being the amount
drawn down from Revenue and other reserves during the year ended March 31, 2019 has been credited back to the said
reserve during the FY 2019-2020 by debiting Profit and Loss Account.
b) Movement in provision for debit card reward points: [` in Crore]
Opening provision at the beginning of the year 0.90 0.84
Provision made during the year 2.47 2.19
Reductions during the year 2.47 2.13
Closing provision at the end of the year 0.90 0.90
c) Movement in provision for other contingencies: [` in Crore]
Opening provision at the beginning of the year 24.43 34.45
Incremental expense during the year 7.78 4.94
Redemption during the year 9.21 14.96
Closing provision at the end of the year 23.00 24.43
132

32. Disclosures on Remuneration

a) Information relating to the composition and mandate of the Nomination & Remuneration Committee.
Composition:
The Nomination & Remuneration committee of the Board consists of five members of which two members from Risk
Management committee of the Board facilitate effective governance of compensation.
The roles and responsibilities of the Nomination & Remuneration Committee inter-alia includes the following:
• Scrutinizing the declarations received from persons to be appointed as Directors as well as from the existing Directors
seeking re-appointment and to decide whether to extend or continue the term of appointment of the independent
director, on the basis of the report of performance evaluation of independent directors and make references to the
appropriate authority/persons to ensure compliance with the requirements indicated by Reserve Bank of India vide their
directive dated May 23, 2011 on Fit & Proper Criteria of the Banks.
• To devise a Succession Planning Policy for the Board and Senior Management.
• To formulate a Nomination policy of the Board to guide the Board in relation to appointment/re-appointment/removal of
Directors.
• To identify persons who are qualified to become Directors/KMPs and who may be appointed in senior management
as defined in the Succession Policy in accordance with the criteria laid down and to recommend to the Board their
appointment and/or removal.
• To formulate the criteria for evaluation of Independent Directors and the Board/Committees.
• To devise a policy on Board diversity.
• To carry out any other function as is mandated by the Board from time to time and/or enforced by any statutory
notification, amendment or modification, as may be applicable.
• To perform such other functions as may be necessary or appropriate for the performance of its duties.
• To oversee the framing, review and implementation of Bank’s overall compensation structure and related polices on
remuneration packages payable to the WTDs/MD & CEO and other staff including Performance Linked Incentives,
Perquisites, Stock option scheme etc. with a view to attracting, motivating and retaining employees and review
compensation levels vis-a-vis other Banks and the industry in general.
• The Committee shall work in close coordination with the Risk Management Committee of the Bank, in order to achieve
effective alignment between remuneration and risks. The Committee will also ensure that the cost/income ratio of the
Bank supports the remuneration package consistent with maintenance of sound capital adequacy ratio.
• With respect to the Performance Linked Incentive Schemes, the Committee is empowered to:
a) Draw up terms and conditions and approve the changes, if any, to the Performance Linked Incentive Schemes;
b) Moderate the scheme on an ongoing basis depending upon the circumstances and link the same with the
c) Coordinate the progress of growth of business vis-a-vis the business parameters laid down by the Board and Audit
Committee and effect such improvements in the scheme as considered necessary;
d) On completion of the year, finalize the criteria of allotment of marks to ensure objectivity/equity.
• The Committee shall also function as the Compensation Committee as prescribed under the SEBI (Share Based Employee
Benefits) Regulations, 2014 and is empowered to formulate detailed terms and conditions of the Scheme, administer,
supervise the same and to allot shares in compliance with the guidelines and other applicable laws.
• To obtain necessary clearances and approvals from regulatory authorities, appoint Merchant Bankers and do such other
things as may be necessary in respect of the Employees Stock Option Scheme.
• To oversee the administration of Employee benefits, such as Provident Fund, Pension Fund, Gratuity, Compensation for
absence on Privilege/Sick/Casual Leave etc., which are recognized in accordance with Accounting Standard-15 (revised)
specified in the Companies (Accounting Standards) Rules, 2006 as amended.
• The Committee may suggest amendments to any stock option plans or incentive plans, provided that all amendments to
such plans shall be subject to consideration and approval of the Board.
• Any other matters regarding remuneration to WTDs/MD & CEO and other staffs of the Bank as and when permitted by
the Board.
• To conduct the annual review of the Compensation Policy.
• To fulfill such other powers and duties as may be delegated to it by the Board.
• To review HR Strategy aligning with business strategy of the Bank.
• To review the skill gaps and talent pool creation.
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b) Information relating to the design and structure of remuneration processes and the key features and objectives of
remuneration policy.
• The Bank has formed the compensation policy based on the Reserve Bank of India guidelines vide its Circular No. DBOD.
No.BC.72/29.67.001/2011-12 dated January 13, 2012.
• The fixed remuneration and other allowances including retirement benefits of all subordinate, clerical and officers up to
the rank of General Manager (Scale VII) is governed by the industry level wage settlement under Indian Banks Association
(IBA) pattern. In respect of officers above the cadre of General Manager, the remuneration is fixed by Board / Committee.
• Further, the compensation structure for the Whole Time Directors (WTDs) / Managing Director & Chief Executive Officer
(MD & CEO) of the bank are subject to approval of Reserve Bank of India in terms of Section 35B of the Banking
Regulation Act, 1949. The payment of compensation also requires approval of the shareholders of the Bank in the
General Meeting pursuant to Clause 95 of Articles of Association of the Bank read with Section 197 of the Companies
Act, 2013 and Section 35B (1) of Banking Regulation Act, 1949.
• The Reserve Bank of India vide Circular DOR.Appt.BC.No.23/29.67.001/2019-20 dated November 4, 2019 issued a
detailed revised Guidelines on Compensation of Whole Time Directors/Chief Executive Officers/Material Risk Takers and
Control Function staff. Accordingly, the Compensation Policy has been modified by incorporating the revised provisions
of the RBI circular.
c) Description of the ways in which current and future risks are taken into account in the remuneration processes.
It will include the nature and type of the key measures used to take account of these risks.
The Board of Directors through the NRC shall exercise oversight and effective governance over the framing and
implementation of the Compensation Policy. Human Resource Management under the guidance of MD & CEO shall
administer the Compensation and Benefit structure in line with the best suited practices and statutory requirements as
applicable.
For MRTs:
The Bank will refer to the Basel Committee on Banking Supervision (BCBS) report entitled Range of Methodologies for Risk and
Performance Alignment of Remuneration published in May 2011 for guidance wherever required. It intends to enhance the
banks’ and supervisors’ understanding of risk-adjusted remuneration. This report, by providing some clarification on design of
risk-adjusted remuneration schemes, will support and facilitate the greater adoption of sound practices in the banking sector.
Some of the key stipulations of the report are as under:
1. In order for incentive-based remuneration to work, the variable part of remuneration will be truly and effectively variable
and can even be reduced to zero in line with the symmetry principle defined by the FSB. A key element that supervisors
expect is the ability for banks to demonstrate that the methodologies they developed to adjust variable remuneration to
risk and performance are appropriate to their specific circumstances.
2. The methodologies for adjusting remuneration to risk and performance should also be consistent with the general risk
management and corporate governance framework.
3. The methodologies for adjusting remuneration to risk and performance will also be consistent with the general risk
management and corporate governance framework.
4. Performance measures and their relation to remuneration packages will be clearly defined at the beginning of the
performance measurement period to ensure that the employees perceive the incentives mechanism. The usual annual
determination of bonuses will be based on rules, processes and objectives known in advance, recognizing that some
discretion will always be needed.
5. Bank will use a combination of financial and non-financial measures to assess employee performance and adapt the
measurement to each employee’s specific situation. Qualitative factors (like knowledge, skills or abilities), might play an
important role when it comes to judging and rewarding some activities - particularly when these serve to reinforce the
bank’s risk management goals.
6. The nature and extent to which risk adjustments are needed depends first on the extent to which performance measures
capture risks, but in all cases, some form of risk adjustment is needed as remuneration is often awarded before the final
outcome of an activity is known. Risks taken need to be estimated (ex-ante), risk outcomes observed (ex-post) and both
ex-ante estimates and ex-post outcomes will affect payoffs.
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7. Risk adjustments need to take into account the nature of the risks involved and the time horizons over which they could
emerge. The impact of remuneration adjustments will be linked to actions taken by employees and/or business units, and
their impact on the level of risk taken on by the bank.
8. The nature of the award process, which links the variable remuneration of each individual employee with bonus pools and
the total amount of variable remuneration at a bank's level, is also an area that will be carefully considered by banks and
supervisors, as it directly influences how and when performance and risk adjustment are or can be used.
9. Considering the above parameters, the Board may approve suitable methodologies for fixing of risk adjusted remuneration,
as appropriate, based on the recommendations of Risk Management committee and review/approval of the Nomination
and Remuneration Committee on the same.
The compensation structure for the Whole-Time Directors/Chief Executive Officers/Material Risk Takers (MRTs) of
the bank shall be as under:
Fixed Pay and Perquisites
Based on the recommendations of the Nomination and Remuneration Committee, and subject to the approval of Reserve Bank
of India (for MD & CEO and Executive Directors), Board shall fix the fixed portion of compensation payable which is reasonable,
taking into account all relevant factors including adherence to statutory requirements and industry practice.
Variable Pay
In order to have a proper balance between the cash and share-linked components in the variable pay, the variable pay are to
be structured in the form of share-linked instrument (including Cash-linked Stock Appreciation Rights (CSARs)), or a mix of
cash and share-linked instruments. Only in cases where the compensation by way of share-linked instruments is not permitted
by law/regulations, the entire variable pay can be in cash to be exercised.
d) Description of the ways in which the bank seeks to link performance during a performance measurement period
with levels of remuneration:
a) The factors taken in to account for the annual review and revision in the variable pay and performance bonus are:
 The performance of the Bank
 The performance of the business unit
 Individual performance of the employee
 Other risk perceptions and economic considerations.
The criteria for identification of MRTs are subject to the following:
The persons who satisfy the qualitative criteria and any one of the quantitative criteria as detailed below:
(I) Standard Qualitative Criteria:
• Relate to the role and decision-making power of staff members (e.g., General manager, member of management body)
having jointly or individually, the authority to commit significantly to risk exposures, etc.
and
(II) Standard Quantitative Criteria:
• Their total remuneration exceeds a certain threshold (to be recommended by MD & CEO to NRC for approval); the
determination of which may be done prudently by the bank,
or
• They are included among the 0.3% of staff with the highest remuneration in the bank,
or
• Their remuneration is equal to or greater than the lowest total remuneration of senior management and other risk-takers.
MD & CEO is considered as Material Risk Taker, whose compensation will be guided by the provisions applicable to WTD/CEO
as per the policy. However the Board, on recommendation of NRC, will specify additional Material Risk Takers (MRTs) whose
actions have a material impact on the risk exposure of the bank from time to time.
 MD & CEO is considered as Material Risk Taker, whose compensation will be guided by the provisions applicable to
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WTD/CEO as per the policy. However the Board, on recommendation of NRC, will specify additional Material Risk Takers
(MRTs) whose actions have a material impact on the risk exposure of the bank from time to time.
e) A discussion of the bank’s policy on deferral and vesting of variable remuneration and a discussion of the bank’s
policy and criteria for adjusting deferred remuneration before vesting and after vesting.
 Variable Pay
In order to have a proper balance between the cash and share-linked components in the variable pay, the variable pay are
to be structured in the form of share-linked instrument (including Cash-linked Stock Appreciation Rights (CSARs)), or a
mix of cash and share-linked instruments. Only in cases where the compensation by way of share-linked instruments is not
permitted by law/regulations, the entire variable pay can be in cash to be exercised.
The assessment of the variable pay will be based on ‘Key Performance Indicators’ (KPI) achievement of respective Whole-
Time Directors/Chief Executive Officers /Material Risk Takers (MRTs).
a. Limit on Variable Pay:
A. For Whole-Time Directors and Chief Executive Officers
i. In compliance to the RBI Guidelines and other applicable rules and regulations at least 50%, should be variable
and paid on the basis of individual, business-unit and firm-wide measures that adequately measure performance.
The total variable pay shall be limited to a maximum of 300% of the fixed pay (for the relative performance
measurement period).
ii. In case variable pay is up to 200% of the fixed pay, a minimum of 50% of the variable pay; and in case variable
pay is above 200%, a minimum of 67% of the variable pay should be via non-cash instruments.
iii. In the event that an executive is barred by statute or regulation from grant of share-linked instruments, his/her
variable pay will be capped at 150% of the fixed pay, but shall not be less than 50% of the fixed pay.
iv. The deterioration in the financial performance of the bank should generally lead to a contraction in the total
amount of variable compensation, which can even be reduced to zero.
B. For Material Risk Takers (MRTs)
i. In compliance to the RBI Guidelines and other applicable rules & regulations 50% of total pay for all MRTs is should
be variable pay and paid on the basis of individual, business-unit and firm-wide measures that adequately measure
performance.
ii. 50% of the variable pay should be via non-cash instruments.
iii. The deterioration in the financial performance of the bank should generally lead to a contraction in the total
amount of variable compensation, which can even be reduced to zero.
The Board will from time to time specify the Material Risk Takers (MRTs).
b. Deferral of Variable Pay
(i) For senior executives, including WTDs, and other employees who are MRTs, a minimum of 60% of the total variable
pay must invariably be under deferral arrangements. Further, if cash component is part of variable pay, at least 50% of
the cash bonus should also be deferred.
(ii) However, in cases where the cash component of variable pay is under `25 lakh, deferral requirements is not applicable.
c. Period of Deferral Arrangement
The deferral period should for a period three years. This would be applicable to both the cash and non-cash components
of the variable pay arrangements.
d. Vesting:
Deferred remuneration should be spread out over the course of the deferral period on a pro rata basis as follows:
• Not more than 33.33% of the total deferred variable pay should vest at the end of first year.
• Further, not more than 33.33% of total deferred variable pay should vest at the end of second year.
Additionally, vesting should not take place more frequently than on a yearly basis to ensure a proper assessment of risks
before the application of ex post adjustments.
e. Share-linked Instruments
Such instruments shall be included as a component of variable pay. Norms for grant of share-linked instruments should be
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framed by banks in conformity with relevant statutory provisions and should form part of the bank’s compensation policy.
The details of share-linked instruments granted should also be disclosed in terms of the disclosure requirements stipulated
in these Guidelines. Share-linked instruments should be fair valued on the date of grant by the bank using Black-Scholes
model.
Malus/Clawback
(a) The deferred compensation should be subject to malus/clawback arrangements in the event of subdued or negative
financial performance of the bank and/or the relevant line of business in any year.
(b) A set of situations as detailed below are hereby identified, which require the invocation of the malus and clawback
clauses that may be applicable as detailed below:
i) Applying of Malus / Clawback arrangement on entire variable pay on occurrence of the following Situations:
• Identified fraud / misconduct by the executive (Whole-Time Directors, Chief Executive Officers/Material Risk
Takers (MRTs)) pertaining to the corresponding period for which the clause to be applied.
ii) Applying of Malus / Clawback arrangement on unvested portion of deferred variable pay on occurrence of the
following situation:
• Reporting of operating loss or more than 50% fall in operating profit in any year.
iii) Applying of Malus clause on unvested portion of deferred variable pay on occurrence of the following situation:
• Wherever the assessed divergence in bank’s provisioning for Non-Performing Assets (NPAs) or asset classification
exceeds the prescribed threshold for public disclosure as detailed below: (As referred in RBI Circular No. DBR.
BP.BC.No.32/21.04.018/2018-19 dated April 1, 2019, as amended from time to time),
a. the additional provisioning for NPAs assessed by RBI exceeds 10 per cent of the reported profit before
provisions and contingencies for the reference period, and
b. the additional Gross NPAs identified by RBI exceed 15 per cent of the published incremental Gross NPAs for
the reference period
Further, in such situations, no proposal for increase in variable pay (for the assessment year) shall be entertained. In
case the bank’s post assessment Gross NPAs are less than 2.0%, these restrictions will apply only if criteria for public
disclosure are triggered either on account of divergence in provisioning (Clause (a)) or both provisioning (Clause (a) and
asset classification (Clause (b)).
As part of the criteria for the application of malus and clawback, the following period during which malus and/or clawback
can be applied will be 36 months from application of the clause. Covering at least deferral and retention periods (a period
of time after the vesting of instruments which have been awarded as variable pay during which they cannot be sold or
accessed).
Members of staff engaged in financial and risk control, including internal audit, should be compensated in a manner that is
independent of the business areas they oversee and commensurate with their key role in the bank. Effective independence
and appropriate authority of such staff are necessary to preserve the integrity of financial and risk management’s influence
on incentive compensation. Back office and risk control employees play a key role in ensuring the integrity of risk measures.
If their own compensation is significantly affected by short-term measures, their independence may be compromised. If
their compensation is too low, the quality of such employees may be insufficient for their tasks and their authority may be
undermined. The mix of fixed and variable compensation for control function personnel should be weighted in favour of
fixed compensation. Therefore, the requirement of minimum 50% of total compensation to be paid in the form of variable
pay will not be applicable for this category of staff. However, a reasonable proportion of compensation has to be in the
form of variable pay, so that exercising the options of malus and/or clawback, when warranted, is not rendered infructuous.
For calculating the Variable Pay of Risk Control and Compliance Staff the ‘Key Performance Indicators’ (KPI) will be totally
different and the modalities of the same will be recommended by the Nomination and Remuneration Committee to the
Board for approval.
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f) Description of the different forms of variable remuneration (i.e. cash and types of share linked instruments) that
the bank utilizes and the rationale for using these different forms.
For MRTs
a) both cash and non-cash Performance Linked Incentive Schemes to those employees who are eligible for incentives,
in this regard the Committee is empowered to:
i) Draw up terms and conditions and approve the changes, if any, to the Performance Linked Incentive schemes;
ii) Moderate the scheme on an ongoing basis depending upon the circumstances and link the same with the
iii) Coordinate the progress of growth of business vis -a- vis the business parameters laid down by the Board and Audit
Committee and effect such improvements in the scheme as are considered necessary;
iv) On completion of the year, finalize the criteria of allotment of marks to ensure objectivity/equity.
v) To identify Material Risk Takers (MRTs) as per the recommendations made by MD & CEO and to fix variable pay and
other terms of payment including component (Cash and non-cash), deferment and divergence clause in line with
compensation policy and other RBI guidelines and other policies and guidelines of the bank.
For Others
The Board will from time to time specify the Risk Control and Compliance Staff.
a) Based on the recommendations of the Committee, Board may fix the variable pay not exceeding 50% of the fixed pay in
a year. Within this ceiling, at higher levels of responsibility, the proportion of variable pay will be higher. The variable pay
may be in cash, or stock linked instruments or a mix of both.
b) ‘Variable pay’ means the compensation as fixed by the Board on recommendation of the Committee, which is based on
the performance appraisal of an employee in that role, that is, how well they accomplish their goals. It may be paid as:
i. Performance Linked Incentives’ to those employees who are eligible for incentives.
ii. Ex-gratia for other employees who are not eligible for Performance Linked Incentives.
iii. Bonus for those staff members who are eligible for bonus under the Payment of Bonus Act, 1965.
iv. Any other incentives, by whatever name called having the features similar to the above.
c) The Board may adopt principles similar to that enunciated for WTDs/CEOs, as appropriate, for variable pay-timing, Malus/
Clawback, guaranteed bonus and hedging.
d) Employee Stock Option Scheme/Employee Stock Option Plan as may be framed by the Board from time to time in conformity
with relevant statutory provisions and SEBI guidelines as applicable:
2019-20 2018-19
Quantitative (a) • Number of meetings held by the Remuneration Committee during the financial year 6 8
disclosures • Remuneration paid to its members (` in Lakhs) 10.80 10.50
(b) • Number of employees having received a variable remuneration award during the 1 -
financial year.
• Number and total amount of sign-on awards made during the financial year.
o Number
o Total amount
• Details of guaranteed bonus if any
• Details of severance pay, in addition to accrued benefits, if any.
(c) (i) Total amount of outstanding deferred remuneration, split into cash, shares and share-
linked instruments and other forms.
(ii) Total amount of deferred remuneration paid out in the financial year.
(d) Breakdown of amount of remuneration awards for the financial year to show fixed and
variable, deferred and non-deferred. (` in Lakhs)
• Fixed
114.05 103.68
• Variable
• Deferred 25.92 -
• Non Deferred
(e) (i) Total amount of outstanding deferred remuneration and retained remuneration
exposed to ex post explicit and / or implicit adjustments.
(ii) Total amount of reductions during the financial year due to ex-post explicit adjustments.
(iii) Total amount of reductions during the financial year due to ex-post implicit adjustments.
(f) Number of MRTs identified. 1 -
(g) Number of cases where malus has been exercised.
• Number of cases where clawback has been exercised.
• Number of cases where both malus and clawback have been exercised.
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2019-20 2018-19
General (h) (` in lakhs)
Quantitative The mean pay for the bank as a whole (excluding sub-staff) 8.74 7.40
Disclosure and
the deviation of the pay of each of its WTDs* from the mean pay. 145.98 110.69
*Gross remuneration paid to MD & CEO is considered for this purpose, which excludes the
provisions made for gratuity and leave benefits as they are determined on an actuarial basis
for the Bank as a whole.
33. Securitisation Transactions
The Bank has not undertaken any securitisation transactions during the year ended March 31, 2020 and March 31, 2019.
34. Credit Default Swaps
The bank has not undertaken any transactions in credit default swaps during the year ended March 31, 2020 and March 31,
2019.
35. Status of Complaints
A. Shareholder complaints:
March 31, 2020 March 31, 2019
(a) No. of complaints pending at the beginning of the year 1 -
(b) No. of complaints received during the year 261 332
(c) No. of complaints redressed during the year 261 331
(d) No. of complaints pending at the end of the year 1 1
B. Customer complaints:
March 31, 2020 March 31, 2019
(a) No. of complaints pending at the beginning of the year 1842 358
Complaints on ATM transactions (Included in B above):
Complaints against banks own ATM’s
March 31, 2020 March 31, 2019
Complaints against other bank ATM’s
March 31, 2020 March 31, 2019
C. Status of Awards passed by the Banking Ombudsman:
March 31, 2020 March 31, 2019
(a) No. of unimplemented Awards at the beginning of the year - -
(b) No. of awards passed by the Banking Ombudsman during the year - -
(c) No. of Awards implemented during the year - -
(d) No. of unimplemented Awards at the end of the year - -
The above details are as certified by the Management and relied upon by the auditors.
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36. Letter of Comfort (LoCs) issued by Banks:

The Bank has not issued any reportable Letter of Comfort on behalf of subsidiaries during the year ended March 31, 2020 and
March 31, 2019 respectively.
37. Unhedged Foreign Currency Exposure

The Bank has in place a policy on managing credit risk arising out of unhedged foreign currency exposures of its borrowers.
The objective of this policy is to maximize the hedging on foreign currency exposures of borrowers by reviewing their foreign
currency product portfolio and encouraging them to hedge the unhedged portion. In line with the policy, assessment of
unhedged foreign currency exposure is a part of assessment of borrowers and is undertaken while proposing limits or at the
review stage.
Further, the Bank reviews the unhedged foreign currency exposure across its portfolio on a periodic basis. The Bank also
maintains incremental provision towards the unhedged foreign currency exposures of its borrowers in line with the extant
RBI guidelines. The Bank has maintained provision of `12.95 crore (Previous Year `13.06 crore) and additional capital of
`6.54 crore (Previous Year `12.90 crore) on account of Unhedged Foreign Currency Exposure of its borrowers as at
March 31, 2020.
38. Liquidity Coverage Ratio (LCR)

[` in Crore]
Quarter ended Quarter ended Quarter ended Quarter ended
March 31, 2020 December 31, 2019 September 30, 2019 June 30, 2019
Particulars Total Total Total Total Total Total Total Total
Unweighted Weighted Unweighted Weighted Unweighted Weighted Unweighted Weighted
Value Value Value Value Value Value Value Value
High Quality Liquid Assets
1 Total High Quality Liquid Assets (HQLA) 16,530.74 15,741.44 15,576.38 14,158.17
Cash Outflows
2 Retail deposits and deposits from small business
58,523.21 5,694.29 57,833.20 5,630.02 56,532.89 5,501.56 55,061.29 5,357.11
customers, of which:
(i) Stable deposits 3,160.53 158.03 3,065.95 153.30 3,034.66 151.73 2,980.35 149.02
(ii) Less stable deposits 55,362.68 5,536.27 54,767.25 5,476.73 53,498.23 5,349.82 52,080.94 5,208.09
3 Unsecured wholesale funding, of which: 3,876.31 2,939.30 3,866.16 3,110.87 4,143.55 3,032.25 5,266.16 3,367.39
(i) Operational deposits (all counterparties) - - - - - - - -
(ii) Non-operational deposits (all counterparties) 2,517.61 2,377.49 2,812.06 2,685.49 2,557.68 2,360.94 2,647.83 2,317.08
(iii) Unsecured debt 1,358.70 561.81 1,054.11 425.38 1,585.87 671.30 2,618.33 1,050.30
4 Secured wholesale funding - - - -
5 Additional requirements, of which 0.18 0.18 1.20 1.20 5.31 5.31 1.35 1.35
(i) Outflows related to derivative exposures and other
0.18 0.18 1.20 1.20 5.31 5.31 1.35 1.35
collateral requirements
(ii) Outflows related to loss of funding on debt products - - - - - - - -
(iii) Credit and liquidity facilities - - - - - - - -
6 Other contractual funding obligations 473.75 473.75 362.45 362.45 261.59 261.59 214.09 214.09
7 Other contingent funding obligations 2,517.30 696.87 2,983.61 1,156.30 2,840.20 1,011.12 2,653.85 714.92
8 TOTAL CASH OUTFLOWS 9,804.39 10,260.83 9,811.83 9,654.86
Cash Inflows
9 Secured lending (e.g. reverse repos) - - - - - - - -
10 Inflows from fully performing exposures 4,434.06 2,217.03 4,786.56 2,393.28 4,805.67 2,402.84 5,231.14 2,615.57
11 Other cash inflows 947.23 837.04 1,107.81 1,028.41 750.38 659.86 1,382.26 1,331.75
12 TOTAL CASH INFLOWS 5,381.30 3,054.07 5,894.37 3,421.69 5,556.05 3,062.70 6,613.40 3,947.33
13 TOTAL HQLA 16,530.74 15,741.44 15,576.38 14,158.17
14 TOTAL NET CASH OUTFLOWS 6,750.32 6,839.14 6,749.13 5,707.53
15 LIQUIDITY COVERAGE RATIO (%) 244.89% 230.17% 230.79% 248.06%
Note: The LCR for each quarter is calculated taking daily average.
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[` in Crore]
Quarter ended Quarter ended Quarter ended Quarter ended
March 31, 2019 December 31, 2018 September 30, 2018 June 30, 2018
Particulars Total Total Total Total Total Total Total Total
Unweighted Weighted Unweighted Weighted Unweighted Weighted Unweighted Weighted
Value Value Value Value Value Value Value Value
High Quality Liquid Assets
1 Total High Quality Liquid Assets (HQLA) 13,171.31 12,686.65 10,921.09 9,652.19
Cash Outflows
2 Retail deposits and deposits from small
52,757.53 5,126.90 51,424.33 4,995.72 50,282.88 4,884.31 49,130.99 4,770.06
business customers, of which:
(i) Stable deposits 2,976.9 148.84 2,934.19 146.71 2,879.72 143.99 2,860.75 143.04
(ii) Less stable deposits 49,780.63 4,978.06 48,490.14 4,849.01 47,403.16 4,740.32 46,270.24 4,627.02
3 Unsecured wholesale funding, of which: 5,047.46 3,766.50 4,786.00 3,099.45 4,364.91 3,106.42 4,736.86 3,176.75
(i) Operational deposits (all counterparties) - - - - - - - -
(ii) Non-operational deposits (all counterparties) 3,214.92 3,033.49 2,201.63 2,065.7 2,594.17 2,398.12 2,354.90 2,223.97
(iii) Unsecured debt 1,832.54 733.01 2,584.37 1,033.75 1,770.74 708.3 2,381.96 952.78
4 Secured wholesale funding - - - -
5 Additional requirements, of which - - 0.05 0.05 2.44 2.44 0.48 0.48
(i) Outflows related to derivative exposures and
- - 0.05 0.05 2.44 2.44 0.48
other collateral requirements 0.48
(ii) Outflows related to loss of funding on debt
- - - - - - - -
products
(iii) Credit and liquidity facilities - - - - - - - -
6 Other contractual funding obligations 251.52 251.52 275.85 275.85 174.09 174.09 249.61 249.61
7 Other contingent funding obligations 2,353.50 446.59 2,218.79 407.02 2,536.81 626.69 2,638.82 634.21
8 TOTAL CASH OUTFLOWS 9,591.51 8,778.09 8,793.93 8,831.12
Cash Inflows
9 Secured lending (e.g. reverse repos) - - - - - - - -
10 Inflows from fully performing exposures 4,975.27 2,487.63 6,560.28 3,280.14 5,350.55 2,675.27 5,452.59 2,726.29
11 Other cash inflows 1,542.81 1,477.49 1,203.25 1,146.45 1,172.38 1,099.81 1,205.00 1,122.86
12 TOTAL CASH INFLOWS 6,518.08 3,965.12 7,763.53 4,426.59 6,522.93 3,775.08 6,657.59 3,849.15
13 TOTAL HQLA 13,171.31 12,686.65 10,921.09 9,652.19
14 TOTAL NET CASH OUTFLOWS 5,626.39 4,351.5 5,018.85 4,981.97
15 LIQUIDITY COVERAGE RATIO (%) 234.10% 291.55% 217.60% 193.74%
Note: The LCR for each quarter is calculated taking daily average.
39. Qualitative Disclosure around LCR

The Bank measures and monitors the LCR in line with the Reserve Bank of India’s circular dated June 9, 2014 on “Basel
III Framework on Liquidity Standards - Liquidity Coverage Ratio (LCR), Liquidity Risk Monitoring Tools and LCR Disclosure
Standards”. The LCR guidelines aim to ensure that a bank maintains an adequate level of unencumbered High Quality Liquid
Assets (HQLAs) that can be converted into cash to meet its liquidity needs for a 30 calendar day time horizon under a significantly
severe liquidity stress scenario. At a minimum, the stock of liquid assets should enable the bank to survive until day 30 of the
stress scenario, by which time it is assumed that appropriate corrective actions can be taken. Banks are required to maintain
High Quality Liquid Assets of a minimum of 100% of its Net Cash Outflows from January 01, 2019. However due to the
pandemic, banks are required to maintain an LCR of 80% till 30th September 2020 and 90% from October 01 2020 to March
31, 2021. The daily average LCR of the bank for the quarter ended March 2020 is 244.89%.
The Bank has been maintaining HQLA primarily in the form of SLR investments over and above mandatory requirement,
regulatory dispensation allowed up to 2% of NDTL in the form of borrowing limit available through Marginal Standing Facility
(MSF) and 5% of NDTL as Facility to Avail Liquidity for Liquidity Coverage Ratio (FALLCR). From February 2016 onwards, RBI
has allowed Banks to reckon an additional 3% of NDTL as FALLCR. This has been further increased by 1% from July 2016,
2% from June 2018 and another 2% from October 2018, onwards. Further, towards harmonisation of the effective liquidity
141

requirements of banks with the LCR, RBI has permitted banks to recon an additional 2% of Government securities within the
mandatory SLR requirement as FALLCR in a phased manner from April 04, 2019. As on March 31, 2020, FALLCR stands at
14.50%. On account of COVID-19 pandemic, RBI has also increased MSF from 2% to 3% w.e.f. March 27, 2020 to June 30,
2020.
The principal components of the estimated cash outflows which could arise in next 30 days are retail deposits (58.08%) and
unsecured wholesale funding (29.98%) which are maturing in the period. The Bank intends to fund the short term cash
outflows from extremely liquid Government securities and funding for estimated cash outflows considered in LCR computation
substantially flows from this source. The Bank is managing its liquidity from the centralized fund management cell attached to
Treasury Department, Mumbai.
40. Transfers to Depositor Education and Awareness Fund (DEAF):

In accordance with the guidelines issued by the RBI, the Bank transfers the amount to the credit of any account which has not
been operated upon for a period of ten years or any deposits or any amount remaining unclaimed for more than ten years to
DEAF.
Details of amounts transferred to DEAF are set out below: [` in Crore]
Opening balance of amounts transferred to DEAF 99.92 83.83
Add : Amounts transferred to DEAF during the year 26.06 17.57
Less : Amounts reimbursed by DEAF towards claims 1.87 1.48
Closing balance of amounts transferred to DEAF 124.11 99.92
41. Intra-Group Exposure - Nil.
42. Inter-bank participation with risk sharing

The aggregate amount of participation purchased by the Bank, shown as advances as per regulatory guidelines, outstanding as
of March 31, 2020 was `191.36 crore (Previous Year: `508.33 crore).
43. Priority sector lending certificates

The amount of PSLCs (category wise) sold/purchased: [` in Crore]
Sl. No. Type of PSLCs March 31, 2020 March 31, 2019
Purchase Sale Purchase Sale
1 PSLC – Agriculture - 1,350.00 - 550.00
2 PSLC – SF/MF - 150.00 - -
3 PSLC – Micro Enterprises 1,500.00 - - -
4 PSLC – General - 6,737.50 - 5,119.50
Total 1,500.00 8,237.50 - 5,669.50
44. Disclosures on Flexible Structuring of Existing Loans

[` in Crore]
Amount of loans taken up for Exposure weighted average duration of
No. of borrowers flexible structuring loans taken up for flexible structuring
Period taken up for Before applying
Classified as After applying
flexibly structuring Classified as NPA flexible
Standard flexible structuring
structuring
During the Nil Nil Nil Nil Nil
FY 2018-19
During the Nil Nil Nil Nil Nil
FY 2019-20
142

45. Disclosures on Strategic Debt Restructuring Scheme (accounts which are currently under the stand-still period)
There are no accounts under SDR Scheme and which are currently under stand-still period (Previous Year: Nil).
46. Disclosures on Change in Ownership outside SDR Scheme (accounts which are currently under the stand-still period)
There are no accounts where the bank has decided to affect the change of ownership outside SDR Scheme and which are
currently under stand-still period (Previous Year: Nil).
47. Disclosures on Change in Ownership of Projects Under Implementation (accounts which are currently under the
stand-still period)
There are no accounts where the bank has decided to effect the change of ownership of projects under implementation
(Previous Year: Nil).
48. Disclosures on the Scheme for Sustainable Structuring of Stressed Assets (S4A), as on March 31, 2020
There were no accounts during the year where S4A has been applied.
49. Disclosures with relation of COVID19 Regulatory Package - Asset Classification and Provisioning
Respective amounts in each categories, where the moratorium/deferment was extended, in terms of paragraph 2 and 3
of circular number RBI/2019-20/220DOR.No.BP.BC.63/21.04.048/2019-20 dated April 17, 2020 and after considering the
payments in such accounts till May 31, 2020 as per RBI letter no. VVBPS/8124/21.04.048/2019-20 dated May 6, 2020 is as
below;
[` in Crore]
i Respective amounts in SMA / overdue categories, where the moratorium / deferment was extended in 2,821.76
terms of RBI circular
ii Respective amount where asset classification benefits is extended 207.50
iii Provisions made during the Q4 FY 2020 20.75
iv Provisions adjusted during the respective accounting periods against slippages and the residual provisions -
In accordance with the COVID-19 Regulatory Package announced by RBI vide Notifications dated March 27, 2020, April 17,
2020 and May 23, 2020 the bank has offered an optional moratorium on repayments falling due between March 1, 2020 and
August 31, 2020 in respect of accounts classified as standard on February 29, 2020. As permitted by the RBI guidelines, the
bank has considered these concessions for the purpose of asset classification, income recognition and provisioning as at March
31, 2020.
As per RBI guidelines, the bank is required to make an additional provision of 10% in respect of such accounts which would
have been classified as non-performing as at March 31, 2020, but for the aforesaid concessions (other than accounts in which
dues have been remitted on or before May 31, 2020 as permitted by RBI vide letter dated May 06, 2020). Although the RBI
guidelines permit banks to make the additional provision over the current quarter ended March 31, 2020 and subsequent
quarter ended June 30, 2020, as a prudent measure, the bank has recognised the entire additional provision at the rate of 10%
as stated above, amounting to `20.75 crore in the accounts for the current quarter itself. As a matter of further prudence, the
bank has also made an additional provision (over and above the 10% mandated by RBI as above) amounting to `55.70 crore
as at March 31, 2020 to meet any future impact of the pandemic. The provisions as above, aggregating to `76.45 crore, has
been carried under Other Liabilities and Provisions in the Balance Sheet.
B: Other Disclosures
1. Fixed Assets
a) Fixed Assets as per Schedule 10 include Intangible Assets relating to Software and System Development Expenditure which
are as follows:
[` in Crore]
Gross Block
At the beginning of the year 110.26 79.62
Additions during the year 46.74 30.64
143

[` in Crore]
Closing Balance 157.00 110.26
Depreciation / Amortisation
At the beginning of the year 55.71 33.73
Charge for the year 24.09 21.99
Depreciation to date 79.80 55.71
Net Block 77.20 54.56
2. Earnings Per Share

The Bank reports basic and diluted EPS in accordance with the Accounting Standard - 20 on “Earnings per Share”
Weighted average number of equity shares used in computation of basic
earnings per share 180,97,08,162 180,95,58,085
Potential equity shares arising out of the Employees Stock Option Scheme - -
Weighted average number of equity shares used in computation of diluted
earnings per share 180,97,08,162 180,95,58,085
Earnings used in the computation of basic earnings per share (` in Crore) 104.59 247.53
Earnings used in the computation of diluted earnings per share
(` in Crore) 104.59 247.53
Nominal Value of share (in `) 1.00 1.00
Basic earnings per share (in `) 0.58 1.37
Effect of potential equity shares for ESOS - -
Diluted earnings per share (in `) 0.58 1.37
3. Accounting for Employee Share Based Payments

The company has provided various share based payment schemes to its employees. As on March 31, 2020, the following
schemes were in operation:
Tranche 7 Tranche 8
Date of grant 27.03.2015 06.12.2017
Date of Board approval 27.03.2015 06.12.2017
Date of Shareholders approval 18.08.2008 18.08.2008
Number of options granted 22,26,500 43,04,710
Method of settlement Equity Equity
Vesting period 27.03.2017 to 27.03.2019 06.12.2019 to 06.12.2021
Exercise period (for all Tranches) Eligible to exercise the options during any one of the four specific periods
(i.e., within 30 days after the end of each quarter) within one year from the date
of vesting.
Manner of Vesting (for all Tranches) In a graded manner over a 4 year period with 30%, 30% and 40% of the grants
vesting in each year commencing from the end of 24 months from the grant date.
The Bank had elected to use intrinsic value method to account the compensation cost of ESOS. Intrinsic value is the amount by
which the quoted market price of the underlying share exceeds the exercise price of the option.
144

Activity in the options outstanding under the ESOS

March 31, 2020 March 31, 2019
Particulars Weighted average Weighted average
Options Options
exercise price (`) exercise price (`)
Options outstanding at the beginning
33,95,836 19.36 1,08,47,193 19.22
of the year
Options granted during the year - - - -
Options exercised during the year 40,000 21.65 8,51,071 19.01
Forfeited/lapsed during the year 7,58,806 21.46 66,00,286 19.18
Options outstanding at the end of the year 25,97,030 18.72 33,95,836 19.36
Options Exercisable 4,86,18,160 18.72 7,51,703 21.63
The weighted average share price at the date of exercise of the options was `12.60 (Previous year `24.51)
Details of exercise price for stock options outstanding as at March 31, 2020
Particulars Exercise price per share Number of options Remaining contractual
outstanding life of options
Tranche 7 21.65 600 0.41
Tranche 8 18.72 25,96,430 2.49
Details of exercise price for stock options outstanding as at March 31, 2019
Particulars Exercise Price per Share Number of options Remaining contractual
outstanding life of options
Tranche 6 18.72 3,840 0.45
Tranche 7 21.65 7,46,000 0.99
Tranche 8 18.72 26,45,996 2.79
Fair Value methodology

The fair value of the options is estimated on the date of grant using Black Scholes options pricing model with following inputs
Year ended
Year ended March 31, 2019
March 31, 2020
Tranches 7 8 6 7 8 9
Exercise Price per Share (`) 21.65 18.72 18.72 21.65 18.72 28.40
Weighted Average Share Price per Share (`) 27.56 25.91 23.49 27.56 25.91 25.91
Expected Volatility (%) 34.59 33.09 29.95 34.59 33.09 33.09
Historical Volatility (%) 34.83 33.09 32.19 34.83 33.09 34.49
Life of the options granted (Vesting and Exercise 3.10 3.00 2.16 3.10 3.00 3.00
period in years) to 5.10 to 5.00 to 4.16 to 5.10 to 5.00 to 5.00
Average Risk Free Interest rate (%) 8.15 7.10 8.61 8.15 7.10 7.10
to 8.19 to 7.44 to 8.88 to 8.19 to 7.44 to 7.44
Expected Dividend Yield (%) 2.90 1.54 3.41 2.90 1.54 1.54
Effect of the ESOS on the profit and loss account and on its financial position: [` in Crore]
Opening of ESOS Liability 3.57 6.93
Liability on account of ESOS issued 0.00 0.00
Reversal on account of Exercise (0.01) (0.19)
145

[` in Crore]
Reversal on account of lapsed/forfeiture (0.23) (3.17)
Total Employee compensation cost pertaining to ESOS 3.33 3.57
Opening Deferred Compensation Cost 1.83 4.97
Deferred compensation cost on ESOS issued 0.00 0.00
Compensation Cost pertaining to ESOS amortized during the year (1.02) (1.76)
Reversal on account of lapse/forfeiture (0.03) (1.39)
Deferred compensation cost 0.78 1.83
Impact of fair value method on net profit and on EPS:
Had compensation cost for the ESOS outstanding being determined based on the fair value approach instead of intrinsic value
method, the Bank’s net profit and earnings per share would have been as indicated below:
Net Profit as reported (` in Crore) 104.59 247.53
Proforma Net profit based on fair value approach (` in Crore) 104.38 247.33
Basic EPS as reported (`) 0.58 1.37
Basic EPS (Proforma) (`) 0.58 1.37
Diluted EPS as reported (`) 0.58 1.37
Diluted EPS (Proforma) (`) 0.58 1.37
In computing the above information, certain estimates and assumptions have been made by the management which has been
relied upon by the auditors.
4. Deferred Tax Assets (net) [` in Crore]
Deferred Tax Asset (A)
Provisions for Loans/Investments/others 157.97 180.79
Fixed Assets: on differences between book balances and
(1.32) 0.28
tax balance of fixed asset
Total (A) 156.65 181.07
Deferred Tax Liabilities (B)
Special Reserve created u/s 36(1)(viii) of Income Tax Act 100.52 139.56
Total (B) 100.52 139.56
Deferred Tax Asset (net) (A-B) 56.13 41.51
In accordance with the Taxation Laws (Amendment) Ordinance 2019 promulgated on September 20, 2019, the bank has opted
to pay tax at the lower rate prescribed therein with effect from the current financial year. Consequently, tax expenses for the
year ended March 31, 2020 comprising current and deferred tax as per Accounting Standard-22 (Accounting for Taxes on
income) has been recognised using the reduced tax rates applicable.
5. Related party disclosure
a. Key Management Personnel
Sri. V G Mathew, Managing Director & Chief Executive Officer.
b. Gross Remuneration paid.
[` in Crore]
Name Designation 2019-20 2018-19
Sri V G Mathew Managing Director & CEO 1.55 1.18
Note: The remuneration to the key managerial personnel does not include the provisions made for gratuity and leave benefits
as they are determined on an actuarial basis for the bank as a whole.
146

[` in Crore]
Key Management Relatives of Key
Total
Items/Related Party Personnel Management Personnel
2019-20 2018-19 2019-20 2018-19 2019-20 2018-19
Deposits:
Balance outstanding 1.54 1.10 0.67 0.60 2.21 1.70
Peak Balance 1.54 1.14 0.67 0.61 2.21 1.75
Interest paid 0.11 0.07 0.04 0.04 0.15 0.11
6. Employee Benefits
a) Provident Fund:
Employees, who have not opted for pension plan are eligible to get benefits from provident fund, which is a defined
contribution plan. Aggregate contributions along with interest thereon are paid on retirement, death, incapacitation or
termination of employment. Both the employee and the Bank contribute a specified percentage of the salary to the South
Indian Bank Employees’ Provident Fund. The Bank has no obligation other than the monthly contribution.
The Bank recognized `0.19 crore (Previous Year: `0.21crore) for provident fund contribution in the Profit and Loss Account.
b) New Pension Scheme

As per the industry level settlement dated April 27, 2010, employees who joined the services of the Bank on or after
April 1, 2010 are not eligible for the existing pension scheme whereas they will be eligible for Defined Contributory
Pension Scheme (DCPS) in line with the New Pension Scheme introduced for employees of Central Government. Employee
shall contribute 10% of their Basic Pay and Dearness Allowance towards DCPS and the Bank will also make a matching
contribution. There is no separate Provident Fund for employees joining on or after April 1, 2010.
The Bank recognized `25.52 crore (Previous Year: `21.38 crore) for DCPS contribution in the Profit and Loss Account.
c) Retirement Benefits
The bank has recognized the following amounts in the Profit and Loss account towards employee benefits as under:
[` in Crore]
Pension Fund 204.36 140.74
Gratuity Fund 34.40 39.97
Compensation for absence on privilege/sick/casual leave 17.26 20.69
The employee benefits on account of pension, gratuity and Leave have been ascertained on actuarial valuation in accordance
with Accounting Standard-15 prescribed under Section 133 of the Companies Act, 2013.
The following table as furnished by Actuary sets out the funded status of gratuity/pension plan and the amount recognized
in the Bank’s financial statements as at March 31, 2020.
d) Changes in the defined benefit obligations [` in Crore]
Gratuity Plan Pension Plan
March 31, 2020 March 31, 2019 March 31, 2020 March 31, 2019
Projected defined benefit obligation,
216.44 211.50 700.22 650.13
beginning of the year
Current Service Cost 16.73 15.04 162.65 148.69
Past Service Cost - - - -
Interest Cost 15.48 15.17 48.50 45.01
Actuarial (gain)/ loss 18.30 5.25 42.33 (1.98)
Benefits paid (34.30) (30.52) (152.13) (141.63)
Projected defined benefit obligation, end of
232.65 216.44 801.56 700.22
the year
Liability (net) of fair value of plan asset at the
4.90 6.14 54.05 25.66
end of the year
147

e) Changes in the fair value of plan assets [` in Crore]

Fair value of plan assets, beginning of the year 210.30 179.53 674.56 620.98
Expected return on plan assets 16.40 14.45 54.92 49.78
Employer’s contributions 35.92 45.35 176.03 144.22
Actuarial gain/ (loss) (0.58) 1.49 (5.86) 1.21
Benefits paid (34.29) (30.52) (152.13) (141.63)
Fair value of plan assets, end of the year 227.75 210.30 747.52 674.56
The Company expects to contribute `4.90 crore (Previous Year `6.13 crore) towards gratuity and `54.05 crore (Previous
Year `25.66 crore) towards pension in the next year.
f) Net Employee benefit expense (recognized in payments to and provisions for employees)
[` in Crore]
Current Service Cost 16.73 15.04 162.65 148.69
Past Service Cost - - - -
Interest Cost 15.48 15.17 48.50 45.01
Expected return on plan assets (16.40) (14.45) (54.92) (49.78)
Net actuarial (gain)/ loss recognised in the year 18.87 3.76 48.19 (3.18)
Employee cost 34.68 19.52 204.42 140.74
Unamortized cost - - - -
Total 34.68 19.52 204.42 140.74
Actual return on plan assets 15.83 15.94 49.06 50.98
g) Categories of plan assets as a percentage of the fair value of total plan assets
Government Securities (Central & State)
High quality Corporate Bonds
Equity Shares of Listed Companies
Funds Managed by Insurer* 100% 100% 100% 100%
Others (PSU & Special Deposits)
Total 100% 100% 100% 100%
* In the absence of detailed information regarding plan assets which is funded with Insurance Companies, the composition
of each major category of plan assets, the percentage or amount for each category to the fair value of plan assets has not
been disclosed.
h) Experience adjustments
(i) Gratuity [` in Crore]
March 31, March 31, March 31, March 31, March 31,
2020 2019 2018 2017 2016
Defined Benefit Obligations 232.65 216.44 211.50 177.33 165.08
Plan Assets 227.75 210.30 179.53 172.30 150.49
(Surplus)/Deficit 4.90 6.14 31.97 5.02 14.59
Unamortized - - 20.45 - -
Net benefit expenses 4.90 6.14 11.52 5.03 14.59
Experience adjustments on Plan Liabilities (7.48) 5.25 (2.75) 3.88 7.02
Experience adjustments on Plan Assets 0.58 (1.49) (1.94) (2.39) (1.72)
148

(ii) Pension [` in Crore]

March 31, March 31, March 31, March 31, March 31,
2020 2019 2018 2017 2016
Defined Benefit Obligations 801.56 700.22 650.13 620.99 570.16
Plan Assets 747.52 674.56 620.98 574.78 409.61
(Surplus)/Deficit 54.05 25.66 29.14 46.21 160.55
Experience adjustments on Plan Liabilities 42.33 (1.98) (28.78) (10.99) 83.38
Experience adjustments on Plan Assets 5.86 (1.20) (1.48) (6.97) (60.00)
i) Assumptions used by the actuary in accounting for Gratuity/Pension/Compensation for absence

Gratuity Plan Pension Plan Compensation for
absence
March 31, March 31, March 31, March 31, March 31, March 31,
2020 2019 2020 2019 2020 2019
Discount rate 6.65% 7.77% 6.67% 7.77% 6.65% 7.77%
Expected rate of return on
7.77% 7.73% 8.00% 8.00% * *
plan assets
Increase in compensation cost 6.00% 6.00% 5.50% 5.50% 6.00% 6.00%
*Not applicable
Notes:
(i) Discount rate is based on the prevailing market yields of Indian Government Securities as at the balance sheet date for
the estimated term of obligations.
(ii) Expected rate of return on plan assets is based on the average long term rate of return expected on investments of the
funds during the estimated term of the obligations.
(iii) The estimates of future salary increases, considered in actuarial valuation, taken in to account the inflation, seniority,
promotion and other relevant factors.
j) Compensation for absence on Privilege/Sick/Casual Leave

The charge on account of compensation for privilege/sick / casual leave has been actuarially determined and an amount of
`17.26 crore (Previous year `20.69 crore) has been debited to Profit and Loss account.
The above information is as certified by actuary and relied upon by the auditor.
k) During the Financial Year 2019-20, the Bank has debited to Profit and Loss Account ‘Nil’ (Previous Year: `20.45 crore)
of unamortised gratuity expenditure as at March 31, 2018 as per RBI Circular DBR. BP.9730/21.04.018/2017-18 dated
April 27, 2018.
7. Micro Small and Medium Industries

Under the Micro, Small and Medium enterprises development Act 2006, which came into force from 2-10-2006, certain
disclosures are required to be made relating to Micro, Small and Medium enterprises. There have been no reported cases of
delays in payment to micro, and small enterprises or of interest payments due to delays in such payments. The above is based
on information available with the Bank which has been relied on by the auditors.
8. Segment reporting
Business Segments have been identified and reported taking into account, the target customer profile, the nature of product
and services, the differing risks and returns, the organization structure, the internal business reporting system and guidelines
issued by RBI vide notification dated April 18, 2007. The Bank operates in the following business segments;
149

a) Treasury:
The treasury segment primarily consists of interest earnings on investments portfolio of the bank, gains or losses on
investment operations and earnings from foreign exchange business. The principal expenses of the segment consist of
interest expense on funds borrowed and other expenses.
b) Corporate / Wholesale Banking:
The Corporate / Wholesale Banking segment provides loans to corporate segment identified on the basis of RBI guidelines.
Revenues of this segment consist of interest earned on Loans made to corporate customers and the charges / fees earned
from other banking services. The principal expenses of the segment consist of interest expense on funds borrowed and
other expenses.
c) Retail banking:
The Retail Banking segment provides loans to non-corporate customers identified on the basis of RBI guidelines. Revenues
of this segment consist of interest earned on Loans made to non-corporate customers and the charges / fees earned from
other banking services. The principal expenses of the segment consist of interest expense on funds borrowed and other
expenses.
d) Other Banking Operations:

This segment includes income from para banking activities such as debit cards, third party product distribution and
associated costs.
Geographic segment
The Bank operations are predominantly confined within one geographical segment (India) and accordingly this is considered as
the only secondary segment.
In accordance with RBI guidelines in regard to business segments of banks, the bank has determined the business segments
and the required disclosures are as follows:
` in Crore]
Corporate/ Wholesale Other Banking
Business Segments Treasury Retail Banking Total
Banking Operations
Particulars 2019-20 2018-19 2019-20 2018-19 2019-20 2018-19 2019-20 2018-19 2019-20 2018-19
Revenue 1,846.00 1,484.82 3,380.69 3,302.28 3,273.14 2,564.70 309.72 250.93 8,809.55 7,602.73
Result (81.66) (41.97) (427.51) (126.64) 409.39 347.92 249.33 201.19 149.55 380.50
Unallocated
- -
Expenses/ (Income)
Operating profit 149.55 380.50
Income
44.96 132.97
Taxes
Net Profit 104.59 247.53
Other Information:
Segment Assets 21,586.60 20,162.58 38,262.23 40,327.12 34232.68 29,446.95 10.86 13.96 94,092.37 89,950.61
Unallocated Assets 2,940.53 2,328.61
Total Assets 97,032.90 92,279.22
Segment Liabilities 20,633.39 19,128.33 36,898.77 38,576.88 33,012.82 28,168.93 - - 90,544.98 85,874.14
Unallocated
1,013.12 1,069.75
Liabilities
Total Liabilities 91,558.10 86,943.89
Since the Bank operates only in domestic segment, disclosure regarding geographical segment is not applicable.
Segment information is provided as per the MIS available for internal reporting purposes, which include certain estimates/
assumptions. The methodology adopted in compiling and reporting the above information has been relied upon by auditors.
150

9. Description of contingent liabilities*

Sl. Contingent Liability Brief Description
No.
1. Claims not acknowledged as This includes liability on account of, and other legal cases filed against the bank.
debts The bank is a party to various legal proceedings in the ordinary course of business
and these are contested by the Bank and are therefore subjudice. The Bank does
not expect the outcome of these proceedings to have a material adverse impact on
the Bank’s financial position.
2. Liability on account of The Bank enters into foreign exchange contracts with interbank participants on its
outstanding forward contracts own account and for its customers. Forward exchange contracts are commitments
to buy or sell foreign currency at a future date at the contract rate.
3. Guarantees on behalf As a part of banking activities, the Bank issues Letter of Guarantees and documentary
of constituents in India, credit on behalf of its customers, with a view to augment the customer’s credit
Acceptances, endorsements and standing. Through these instruments, the Bank undertakes to make payments for
other obligations its customers’ obligations, either directly or in case the customer fails to fulfill their
financial or performance obligations.
4. Other items for which the bank Includes capital commitments and amount transferred to RBI under the Depositor
is contingently liable Education and Awareness Fund (DEAF).
* Also refer schedule – 12
The Bank’s pending litigations comprise of claims against the Bank by the clients and proceedings pending with Income Tax
authorities/Service Tax Authorities. The Bank has reviewed all its pending litigations and proceedings and has adequately provided
for where provisions are required and disclosed the contingent liabilities wherever applicable, in its financial statements. The
Management believes that the possibility of outflow of resources embodying economic benefits in these cases is possible but
not probable and hence no provision is required in these cases. However, a contingent liability has been disclosed with respect
to these cases.
10. Provision for long term contracts

The Bank has a process whereby periodically all long term contracts (including derivative contracts) are assessed for material
foreseeable losses. At the year end, the bank has reviewed and recorded adequate provision as required under any Law/
Accounting Standards for material foreseeable losses on such long term contracts (including derivative contracts) in the books
of account and disclosed the same under the relevant notes in the financial statements.
11. Corporate Social Responsibility

Operating expenses include `12.01 crore (Previous Year `12.22 crore) for the year ended March 31, 2020 towards Corporate
Social Responsibility (CSR), in accordance with the Companies Act, 2013.
The Bank has spent 1.92% of its average net profit for the last three financial years as part of its CSR for the year ended
March 31, 2020. The Bank is currently in the process of evaluating strategic avenues for CSR expenditure in order to deliver
maximum impact.
Details of amount spent during the year towards CSR are as under:
For the year ended March 31, 2020 [` in Crore]

Paid Yet to be paid Total
i) Construction/Acquisition of any assets 8.76 - 8.76
ii) For purposes other than (i) above 3.25 - 3.25
For the year ended March 31, 2019

Paid Yet to be paid Total
i) Construction/Acquisition of any assets 4.31 - 4.31
ii) For purposes other than (i) above 7.91 - 7.91
151

12. Investor education and protection fund

There has been no delay in transferring amounts, required to be transferred to the Investor Education and Protection Fund by
the Bank.
13. Provisioning pertaining to fraud accounts

The Bank has reported 405 cases as fraud during the Financial Year ended March 31, 2020 amounting to ` 344.07 crore and
has provided for the same in full.
The bank has exercised the option to make provision in respect of three Non-Performing Advances identified as fraud
during the quarter ended December 31, 2019, over a period of four quarters as permitted by the RBI in Circular DBR No. BP.
BC.92/21.04.048/2015-16 dated April 18, 2016. Accordingly, the Bank has debited `30.46 crore to Profit and Loss Account,
being 50% of the outstanding net book value of the said advances and the remaining unprovided amount of `30.44 crore has
now been debited against other reserves and will be debited in the profit and loss account by proportionately reversing the
debit to other reserves over the two subsequent quarters in equal instalments.
14. Proposed Dividend

The Reserve Bank of India, vide its circular dated April 17, 2020, has decided that banks shall not make any further dividend
payouts from profits pertaining to the financial year ended March 31, 2020 until further instructions, with a view that banks
must conserve capital in an environment of heightened uncertainty caused by COVID-19 pandemic. Accordingly, the Board of
Directors of the Bank have not recommended any dividend for the year 2019-20 (Previous Year 25% i.e. `0.25/- per Equity
Share).
15. Figures of the previous year have been regrouped to conform to the current year presentation wherever necessary.

For Varma & Varma
Chartered Accountants (DIN : 06796232) (DIN : 05332797)
ICAI Firm Registration No. 004532 S Sivakumar G

Executive
Vice President Dr. John Joseph Francis Alapatt
Director Director
V Sathyanarayanan Reghunathan K N (DIN : 00021735) (DIN : 01419486)
Partner Executive

Vice President
Membership No. 021941 Chithra H Director Director

Chief Financial Officer (DIN : 00120120) (DIN : 07018289)
Kochi Company Secretary
(DIN : 02192183) (DIN : 01806859)
June 26, 2020
Dy. General Manager
Director Director
(DIN : 08207827) (DIN : 08259944)
Thrissur
June 26, 2020
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Disclosure under Basel III norms as on March 31, 2020
1. Scope of Application
The South Indian Bank Limited is a commercial bank, which was incorporated on January 25, 1929 in Thrissur, Kerala. The Bank
does not have any subsidiary/associate companies under its Management.
2. Capital Adequacy
I. Qualitative Disclosure
RBI Guidelines on capital adequacy
The Bank is subject to the capital adequacy guidelines stipulated by RBI, which are based on the framework of the Basel
Committee on Banking Supervision. As per Basel and RBI guidelines, the Bank is required to maintain a minimum Capital to
Risk Weighted Assets Ratio (CRAR) of 9% {11.5% including Capital Conservation Buffer (CCB)}, with minimum Common Equity
Tier I (CET1) of 5.5% (8% including CCB) as on 30th September 2020. These guidelines on Basel III have been implemented on
1st April 2013 in a phased manner. The minimum capital required to be maintained by the Bank for the year ended 31st March
2020 is 10.875% with minimum Common Equity Tier 1 (CET1) of 7.375% (including CCB of 1.875%).
The bank’s approach in assessment of capital adequacy
The bank is following standardized approach, standardized duration approach and basic indicator approach for measurement
of capital charge in respect of credit risk, market risk and operational risk respectively. Besides, computation of CRAR under
the Pillar I requirement, the Bank also periodically undertakes stress testing in various risk areas to assess the impact of stressed
scenario or plausible events on asset quality, liquidity, profitability and capital adequacy. The bank conducts Internal Capital
Adequacy Assessment Process (ICAAP) on quarterly basis to assess the sufficiency of its capital funds to cover the risks specified
under Pillar - II of Basel guidelines. The adequacy of banks capital funds to meet the future business growth is also assessed in
the ICAAP document.
Quantitative Disclosure
Particulars Amount in ` Million
(a) Capital requirements for Credit Risk 49,702.88
Portfolios subject to standardized approach 49,702.88
Securitization exposures 0.00
(b) Capital requirements for Market Risk (Standardised duration approach) 2,483.33
Interest Rate Risk 2,220.84
Foreign Exchange Risk (including gold) 48.94
Equity Risk 213.55
(c) Capital requirements for Operational Risk (Basic Indicator Approach) 5,202.31
Total Capital Requirement at 10.875%{(a)+ (b)+(c)} 57,388.52
Total Capital Fund 70,755.15
Common Equity Tier - I CRAR % 9.84 %
Tier - I CRAR % 10.79 %
Total CRAR % 13.41 %
Risk Management: Objectives and Organisation Structure market participants a better idea on the risk profile and risk
Risk is an integral part of banking business in an ever dynamic management practices of the bank.
environment, which is undergoing radical changes both on the The bank has a comprehensive risk management system
technology front and product offerings. The main risks faced by set up to address various risks and has set up an Integrated
the bank are credit risk, market risk and operational risk. The Risk Management Department (IRMD), which is independent
bank aims to achieve an appropriate trade-off between risk and of operational departments. Bank has a Risk Management
return to maximize shareholder value. The relevant information Committee functioning at apex level for formulating,
on the various categories of risks faced by the bank is given implementing and reviewing bank’s risk management measures
in the ensuing sections. This information is intended to give pertaining to credit, market and operational risk. Apart from
153
the Risk Management Committee of the Board at apex level, discounted (overdue - Any amount due to the
the Bank has a strong Bank-wide risk management structure bank under any credit facility is “overdue” if it is
comprising of Asset Liability Management Committee, Credit not paid on the due date fixed by the bank.)
Risk Management Committee, Market Risk Management iv. the instalment of principal or interest thereon
Committee and Operational Risk Management Committee at remains overdue for two crop seasons for short
senior management level, risk officers in all Regional Offices/ duration crops, (overdue - Any amount due to the
branches and dedicated mid office at Treasury Department bank under any credit facility is “overdue” if it is
at operational level. The structure and organization of Risk not paid on the due date fixed by the bank.);
Management functions of the bank is as follows:
v. the instalment of principal or interest thereon
remains overdue for one crop season for long
duration crops, (overdue - Any amount due to the
bank under any credit facility is ‘overdue’ if it is
not paid on the due date fixed by the bank.);
vi. any amount to be received remains overdue for a
period of more than 90 days in respect of other
accounts.
vii. in respect of derivative transactions, the overdue
receivables representing positive Mark-to-market
value of a derivative contract, if these remain
unpaid for a period of 90 days from the specified
Integrated Risk Management Department
due date for payment.
A loan for an infrastructure project will be classified as NPA during

3. Credit Risk: General Disclosures any time before commencement of commercial operations as
per record of recovery (90 days overdue), unless it is restructured
I. Qualitative Disclosure
and becomes eligible for classification as ‘standard asset’ in
Definition of Non-Performing Assets terms of conditions laid down in the related RBI guidelines. A
The bank follows extant guidelines of the RBI on income loan for an infrastructure project will be classified as NPA if it
recognition, asset classification and provisioning. fails to commence commercial operations within two years from
the original Date of Commencement of Commercial Operations
a) An asset, including a leased asset, becomes non-
(‘DCCO’), even if it is regular as per record of recovery, unless
performing when it ceases to generate income for the
it is restructured and becomes eligible for classification as
bank.
‘standard asset’ in terms of conditions laid down in the related
b) A non-performing asset (NPA) is a loan or an advance RBI guidelines.
where; 3
i. Interest and/or instalment of principal remains A loan for a non-infrastructure project (other than commercial
overdue for a period of more than 90 days in real estate exposures) will be classified as NPA during any time
respect of a term loan, before commencement of commercial operations as per record
of recovery (90 days overdue), unless it is restructured and
ii. the account remains ‘out of order’, in respect of becomes eligible for classification as ‘standard asset’ in terms
an Overdraft/Cash Credit (OD/CC) (out of order of conditions laid down in the related RBI guidelines. A loan
- An account is treated as ‘out of order’ if the for a non-infrastructure project (other than commercial real
outstanding balance remains continuously in
estate exposures) will be classified as NPA if it fails to commence
excess of the sanctioned limit/drawing power.
commercial operations within one year from the original DCCO,
In cases where the outstanding balance in the
even if is regular as per record of recovery, unless it is restructured
principal operating account is less than the
and becomes eligible for classification as ‘standard asset’ in
sanctioned limit / drawing power, but there are no
terms of conditions laid down in the related RBI guidelines.
credits continuously for 90 days as on the date of
Balance Sheet or credits are not enough to cover
A loan for commercial real estate project will be classified as
the interest debited during the same period, these
NPA during any time before commencement of commercial
accounts are treated as “out of order”.);
operations as per record of recovery (90 days overdue), or if the
iii. the bill remains overdue for a period of more project fails to commence commercial operations within one
than 90 days in the case of bills purchased and year from the original DCCO or if the loan is restructured.
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Special Mention Accounts  Bank uses a robust risk rating framework for evaluating
As prescribed by RBI, the Bank is required to identify incipient credit risk of the borrowers. The bank uses segment-specific
stress in the account by creating a Sub Asset category named rating models that are aligned to target segment of the
as ‘Special Mention Accounts’ (SMA). It is considered as a borrowers.
corrective action plan to arrest slippages of standard assets to  Risks on various counterparties such as corporates, banks,
NPA. Accordingly, Bank is identifying three sub categories under are monitored through counterparty exposure limits,
SMA as below: also governed by country risk exposure limits in case of
1. SMA-0-Principal or interest payment or any other amount international transactions.
wholly or partly overdue between 1-30 days.  The bank manages risk at the portfolio level too, with
2. SMA-1-Principal or interest overdue between 31-60 days. portfolio level prudential exposure limits to mitigate
3. SMA-2-Principal or interest overdue between 61-90 days. concentration risk.
Credit Risk Management Practices of our Bank II. Quantitative Disclosure

The bank has a comprehensive credit risk management policy a) Gross Credit Risk Exposures as on 31st March 2020
which deals with identification, assessment, measurement and Amount in ` Million
mitigation of credit risk. The policy has defined credit risk as the
possibility of losses associated with the diminution in the credit Category Exposure
quality of the borrower or the counterparty or the failure on Fund Based1 8,25,081.35
its part to meet its obligations in accordance with the agreed Non-Fund Based2 47,133.47
terms. The Credit Risk Management Committee, an executive Total 8,72,214.82
level committee is entrusted with the task of overseeing various
risk management measures envisaged in the policy. The Credit Note :
Risk Management Committee also deals with issues relating 1. Fund based credit exposure excludes Cash in hand, Balance
to credit risk management policy and procedures and analyse, with RBI, SLR investments, shares, deposits placed with
manage and control credit risk on a bank wide basis. Credit NABARD, SIDBI & NHB, Fixed and Other assets.
risk management policy primarily addresses the credit risk 2. Non-fund based exposure includes Letter of Credit,
inherent in advances. The principal aspects covered under this Acceptances, Bank Guarantee exposures and Forward
policy include credit risk rating, credit risk monitoring, credit risk Contracts. The value of forward contracts is arrived based
mitigation and country risk management. on Current Exposure Method (CEM).
b) Geographic Distribution of Credit Risk Exposure as on
The major specific credit risk management measures followed 31st March 2020
by bank, as listed out in the credit risk management policy are
Particulars Amount in ` Million
given in following points.
 The credit/country risk associated with exposures, like Domestic 8,72,214.82
inter-bank deposits and export bill discounting, to different Overseas 0.00
countries are consolidated regularly and monitored by the Total 8,72,214.82
Board.
c) Industry-wise Distribution of gross advances and NPAs as on 31st March 2020
Total Funded Total Non-Funded Total Credit
Industry Name
Exposure Exposure Exposure
A. Mining and Quarrying 1,733.38 7.37 1,740.75
A.1 Coal 57.44 - 57.44
A.2 Others 1,675.94 7.37 1,683.31
B. Food Processing 1,287.32 31.25 1,318.57
B.1 Sugar 4.97 - 4.97
B.2 Edible Oils and Vanaspati 138.60 - 138.60
B.3 Tea 20.27 1.50 21.77
B.4 Coffee - - -
B.5 Others 1,123.48 29.75 1,153.23
C. Beverages (excluding Tea & Coffee) and Tobacco 3,333.06 172.35 3,505.41
C.1 Tobacco and tobacco products 527.01 - 527.01
C.2 Others 2,806.06 172.35 2,978.41
D. Textiles 30,842.94 2,635.90 33,478.84
D.1 Cotton 14,478.39 1,599.17 16,077.57
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Industry Name
D.2 Jute 427.07 5.00 432.07
D.3 Man-made 205.00 10.54 215.54
D.4 Others 15,732.49 1,021.18 16,753.67
Out of D (i.e., Total Textiles) to Spinning Mills 18,832.94 1,769.08 20,602.03
E. Leather and Leather products 1,703.94 109.13 1,813.07
F. Wood and Wood Products 1,384.50 276.52 1,661.02
G. Paper and Paper Products 4,938.25 856.26 5,794.50
H. Petroleum (non-infra), Coal Products (non-mining) and Nuclear Fuels 4,469.17 12.00 4,481.17
I. Chemicals and Chemical Products (Dyes, Paints, etc.) 7,159.48 1,311.82 8471.30
I.1 Fertilizers 99.86 - 99.86
I.2 Drugs and Pharmaceuticals 2,077.25 105.00 2,182.25
I.3 Petro-chemicals (excluding under Infrastructure) - - -
I.4 Others 4,982.37 1,206.82 6,189.19
J. Rubber, Plastic and their Products 12,848.48 2,056.35 14,904.83
K. Glass & Glassware 1,063.71 0.85 1,064.55
L. Cement and Cement Products 10,467.50 1,100.00 11,567.50
M. Basic Metal and Metal Products 25,760.05 3,734.61 29,494.66
M.1 Iron and Steel 14,068.89 2,507.60 16,576.49
M.2 Other Metal and Metal Products 11,691.16 1,227.01 12,918.17
N. All Engineering 13,347.39 3,709.72 17,057.11
N.1 Electronics 235.77 - 235.77
N.2 Others 13,111.62 3,709.72 16,821.34
O. Vehicles, Vehicle Parts and Transport Equipments 1,989.52 663.95 2,653.47
P. Gems and Jewellery 5,845.77 231.39 6,077.15
Q. Construction 12,012.50 2,723.06 14,735.56
R. Infrastructure 16,922.53 2,043.14 18,965.67
R.a Transport (a.1 to a.8) 7,154.09 9.90 7,164.00
R.a.1 Roads and Bridges 7,154.09 9.90 7,164.00
R.a.2 Ports - - -
R.a.3 Inland Waterways - - -
R.a.4 Airport - - -
R.a.5 Railway Track, tunnels, viaducts, bridges - - -
R.a.6 Urban Public Transport (except rolling stock in case of urban road
- - -
transport)
R.a.7 Shipyards - - -
R.a.8 Logistics Infrastructure - - -
R.b. Energy (b.1 to b.6) 5,439.93 217.70 5,657.63
R.b.1 Electricity Generation 4,463.08 215.20 4,678.28
R.b.1.1 Central Govt. PSUs - - -
R.b.1.2 State Govt. PSUs (incl. SEBs) 504.64 - 504.64
R.b.1.3 Private Sector 3,958.44 215.20 4,173.64
R.b.2 Electricity Transmission 939.59 - 939.59
R.b.2.2 State Govt. PSUs (incl. SEBs) 399.94 - 399.94
R.b.2.3 Private Sector 539.65 - 539.65
R.b.3 Electricity Distribution 37.26 2.50 39.76
R.b.3.2 State Govt. PSUs (incl. SEBs) - - -
R.b.3.3 Private Sector 37.26 2.50 39.76
R.b.4 Oil Pipelines - - -
R.b.5 Oil/Gas/Liquefied Natural Gas (LNG) storage facility - - -
R.b.6 Gas Pipelines - - -
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Industry Name
R.c. Water and Sanitation (c.1 to c.7) - - -
R.c.1 Solid Waste Management - - -
R.c.2 Water supply pipelines - - -
R.c.3 Water treatment plants - - -
R.c.4 Sewage collection, treatment and disposal system - - -
R.c.5 Irrigation (dams, channels, embankments etc) - - -
R.c.6 Storm Water Drainage System - - -
R.c.7 Slurry Pipelines - - -
R.d. Communication (d.1 to d.3) - 5.00 5.00
R.d.1 Telecommunication (Fixed network) - - -
R.d.2 Telecommunication towers - - -
R.d.3 Telecommunication and Telecom Services - 5.00 5.00
R.e. Social and Commercial Infrastructure (e.1 to e.12) - - -
R.e.1 Education Institutions (capital stock) - - -
R.e.2 Hospitals (capital stock) - - -
R.e.3 Tourism - Three-star or higher category classified hotels located outside
- - -
cities with population of more than 1 million
R.e.4 Common infrastructure for industrial parks, SEZ, tourism facilities and
- - -
agriculture markets
R.e.5 Fertilizer (Capital investment) - - -
R.e.6 Post harvest storage infrastructure for agriculture and horticultural
- - -
produce including cold storage
R.e.7 Terminal markets - - -
R.e.8 Soil-testing laboratories - - -
R.e.9 Cold Chain - - -
R.e.10 Sports Infrastructure - - -
R.e.11 Tourism - Ropeways and Cable Cars - - -
R.e.12 Affordable Housing - - -
R.f. Others, if any, please specify 4,328.51 1,810.53 6,139.04
Social Infrastructure 4,328.51 1,810.53 6,139.04
S. Other Industries, pl. specify 8,169.38 282.23 8,451.61
Other industries 8,169.38 282.23 8,451.61
All Industries (A to S) 1,65,278.85 21,957.87 1,87,236.72
Residuary other exposure (to tally with gross exposure) 4,89,961.36 14,934.85 5,04,896.21
Total 6,55,240.21 36,892.72 6,92,132.93
d) Major Industry breakup of NPA (` in Million)

Industry Gross NPA Specific Provision
Top 5 Industries 27,507.58 9,792.77
e) Residual Contractual Maturity breakdown of Assets as on 31st March 2020 (` in Million)

Cash and Balance Balance with
Time band Investments Loans & Advances Fixed Asset Other Assets
with RBI Banks
Next Day 4,621.36 4,152.31 24,300.13 4,301.23 - 143.17
2 - 7 Day - 9,539.80 1,700.85 5,469.95 - 532.53
8 - 14 Day - 41.70 1,101.42 5,215.37 - 675.71
15 - 30 Day 522.27 49.40 1,950.13 8,184.01 - 1,334.20
31 - 2 Months 834.78 51.00 6,273.18 15,153.61 - 2,612.50
29 - 3 Months 1,011.02 - 4,913.76 28,648.44 - 2,617.33
3 - 6 Months 1,494.24 - 9,647.73 64,379.84 - 6,625.24
6 - 12 Months 2,367.02 - 9,983.89 95,870.52 - 12,689.78
1 - 3 Year 1,262.79 - 7,899.15 1,01,644.91 - 27,213.26
3 - 5 Year 1,559.88 - 13,020.76 42,780.40 - 995.91
Over 5 Year 14,386.46 - 1,25,461.76 2,72,746.43 8,000.42 14,347.43
Total 28,059.82 13,834.21 2,06,252.76 6,44,394.71 8,000.42 69,787.06
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f) The composition of Gross NPAs and NPIs, Net NPAs, Geographical Distribution of NPA and Provision
NPA ratios and provision for GNPAs and GNPIs as on Geography Gross NPA Specific Provision General Provision
31st March 2020 and movement of gross NPAs and Domestic 32,617.66 10,801.81
provisions during the year ended 31st March 2020 are Overseas 0.00 0.00
given in following table. Total 32,617.66 10,801.81
(` in Million)
1 Amount of Gross NPAs 32,617.66 Details of write-offs and recoveries that have been booked
• Substandard 11,136.52 directly to the income statement for the year ending
• Doubtful-I 10,962.48 31st March 2020
• Doubtful-2 10,006.66 Write-offs that have been booked directly to the 458.69
• Doubtful-3 73.52 income statement
• Loss 438.48 Recoveries that have been booked directly to the 184.84
2 Net NPA 21,507.80 income statement
3 NPA Ratios
4. Credit Risk: Disclosure for Portfolios under Standardized
• Gross NPA to Gross Advance (%) 4.98
Approach
• Net NPA to Net Advance (%) 3.34
Movement of NPA (Gross) I. Qualitative Disclosure
• Opening Gross NPA (balance as on 01.04.2019) 31,316.73 a Names of credit rating agencies used
• Additions to Gross NPA 13,695.90 Bank has approved all the seven External Credit Rating
Reductions to Gross NPA Agencies accredited by RBI for the purpose of credit risk
• Upgradations 1,599.86 rating of domestic borrowal accounts that forms the basis
for determining risk weights under Standardized Approach.
• Recoveries (excluding recoveries made from
1,882.97 External Credit Rating Agencies approved are:
upgraded accounts)
• Technical/prudential write offs 8,675.06 1. Credit Rating Information Services of India Limited
• Reduction by sale of assets to ARCs 237.08 (CRISIL)
• Closing Balance of Gross NPA 32,617.66 2. Credit Analysis and Research Limited (CARE)
3. India Ratings and Research Private Limited
Movement of Specific & General Provision – Position as on 4. ICRA Limited (ICRA)
31st March 2020
5. Brickwork Ratings India Pvt. Ltd.
(` in Million) 6. Acuite Ratings and Research Ltd.
Specific General 7. Infomerics Valuation and Rating Pvt. Limited
Movement of Provision
Provision Provision
• Opening Balance as on 01.04.2019 9,378.25 The Bank computes risk weight on the basis of external rating
• Provision made in 2019-20 10,913.69 assigned, both Long Term and Short Term, for the facilities
• Write-off/Write-back of excess 9,490.13
availed by the borrower. The external ratings assigned are
provision generally facility specific. The Bank follows below mentioned
procedures as laid down in the Basel III guidelines for use of
• Closing Balance as on 31.03.2020 10,801.81
external ratings:
NPIs and Movement of Provision for Depreciation on  The external rating assigned by an agency is considered if it
Investments – Position as on 31st March 2020 fully takes into account the credit exposure of the bank.
 If an issuer has a long term exposure with an external long
(` in Million)
term rating that warrants a risk weight of 150 percent, all
1 Amount of Non-Performing Investments (Gross) 1,220.60 unrated claims on the same counterparty, whether short
Amount of Provisions held Non-Performing term or long term, should also receive a 150 percent
2 832.00
Investments risk weight, unless the bank uses recognized credit risk
3 Movement of Provisions for Depreciation on mitigation techniques for such claims.
Investments
 If an issuer has a short term exposure with an external
• Opening Balance (as on 01.04.2019) 482.80 short term rating that warrants a risk weight of 150 per
• Provision made in 2019-20 515.60 cent, all unrated claims on the same counterparty, whether
• Write-offs / Write-back of excess provisions during long term or short term, should also receive a 150 percent
166.40
the period risk weight, unless the bank uses recognized credit risk
• Closing Balance (as on 31.03.2020) 832.00 mitigation techniques for such claims.
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 The unrated short term claim of counterparty will attract a necessary in granting credit, evaluation methods for different
risk weight of at least one level higher than the risk weight types of credit and collateral, applicable “haircuts” to collateral,
applicable to the rated short term claim on that counter- frequency of revaluation and release of collateral are stipulated
party. If a short-term rated facility to counterparty attracts in the bank’s credit policy, policy on collateral management
a 20 percent or a 50 percent risk weight, unrated short and credit risk mitigant policy. The bank uses net exposure for
term claims to the same counter party cannot attract a risk capital calculations after taking cognizance of eligible financial
weight lower than 30 percent or 100 percent respectively. collaterals. All collaterals and guarantees are recorded and the
details are linked to individual accounts.
b. Process used to transfer public issue ratings onto
comparable assets in the banking book Collateral valuation
(i) In circumstances where the borrower has a specific As stipulated by the RBI guidelines, the Bank uses the
assessment for an issued debt - but the bank’s claim comprehensive approach for collateral valuation. Under this
is not an investment in this particular debt - the rating approach, the Bank reduces its credit exposure to counterparty
applicable to the specific debt (where the rating maps when calculating its capital requirements to the extent of risk
into a risk weight lower than that which applies to an mitigation provided by the eligible collateral as specified in the
unrated claim) may be applied to the bank’s unassessed Basel III guidelines.
claim only if this claim ranks pari passu or senior to
the specific rated debt in all respects and the maturity The Bank adjusts the value of any collateral received to adjust
of the unassessed claim is not later than the maturity for possible future fluctuations in the value of the collateral in
of the rated claim, except where the rated claim is a line with the requirements specified by RBI guidelines. These
short term obligation. If not, the rating applicable to adjustments also referred to as ‘haircuts’, to produce volatility-
the specific debt cannot be used and the unassessed adjusted amounts for collateral, are reduced from the exposure
claim will receive the risk weight for unrated claims. to compute the capital charge based on the applicable risk
weights.
(ii) If either the issuer or single issue has been assigned a
rating which maps into a risk weight equal to or higher Types of collateral taken by the Bank
than that which applies to unrated claims, a claim on
the same counterparty, which is unrated by any chosen The Bank determines the appropriate collateral for each facility
credit rating agency, will be assigned the same risk based on the type of product and risk profile of the counterparty.
weight as is applicable to the rated exposure, if this In case of corporate and small and medium enterprises
claim ranks pari passu or junior to the rated exposure financing, fixed assets are generally taken as security for long
in all respects. tenor loans and current assets for working capital finance.
For project finance, security of the assets of the borrower and
II. Quantitative Disclosures assignment of the underlying project contracts is generally
Amount of exposure (after risk mitigation) outstanding as taken. In addition, in some cases, additional security such as
on 31st March 2020 under major three risk buckets pledge of shares, cash collateral, charge on receivables with an
Description of risk bucket ` in Million
escrow arrangement and guarantees is also taken.
Below 100% Risk Weight 5,74,965.09 For retail products, the security to be taken is defined in the
product policy for the respective products. Housing loans and
Risk Weight at 100% 2,18,302.77
automobile loans are secured by the security of the property/
More than 100% Risk Weight 44,300.79 automobile being financed. The valuation of the properties is
Deducted if any 0.00 carried out by an empanelled valuer at the time of sanctioning
the loan.
(Amount of exposures includes cash in hand, balance with RBI,
investments, loans and advances, Fixed and other assets, off The Bank also offers products which are primarily based on
balance sheet items and forward contracts) collateral such as shares, specified securities, warehoused
commodities and gold jewellery. These products are offered in
5. Credit Risk Mitigation: Disclosures for Standardised line with the approved product policies, which include types of
Approaches collateral, valuation and margining.
I. Qualitative Disclosure The Bank extends unsecured facilities to clients for certain
Policies and processes for collateral valuation and management products such as derivatives, credit cards and personal loans.
Bank has put in place a comprehensive policy on Credit Risk The decision on the type and quantum of collateral for each
Mitigants and Collaterals for recognizing the eligible collaterals transaction is taken by the credit approving committees as
and guarantors for netting the exposures and reducing the credit per the credit approval authorisation approved by the Board
risk of obligors. Basic procedures and descriptions of controls of Directors. For facilities provided as per approved product
as well as types of standard/acceptable collaterals, guarantees policies, collateral is taken in line with the policy.
159
Credit Risk Mitigation techniques where the daily NAV is available in public domain;
The RBI guidelines on Basel III allow the following credit risk and
mitigants to be recognised for regulatory capital purposes: b. Mutual fund is limited to investing in the instruments
listed in this paragraph.
A. Eligible Financial Collaterals
B. On-balance sheet netting, which is confined to
 Cash and fixed deposit receipts, issued by our bank.
loans/advances and deposits, where banks have legally
 Gold: Gold would include both bullion and jewellery. enforceable netting arrangements, involving specific lien
However, the value of the collateralized jewellery with proof of documentation.
should be arrived at after notionally converting these
C. Guarantees, where these are direct, explicit, irrevocable
to 99.99% purity.
and unconditional. Further, the eligible guarantors would
 Kisan Vikas Patra, Indira Vikas Patra and National comprise:
Savings Certificates provided no lock-in period is a. Sovereigns, sovereign entities (including Bank for
operational and if they can be encashed within the International Settlements, the International Monetary
holding period. Fund, European Central Bank and European
 Life Insurance policies with a declared surrender value Community as well as those Multilateral Development
of an insurance company which is regulated by an Banks, Export Credit Guarantee Corporation of India
insurance sector regulator. and Credit Guarantee Fund Trust for Small Industries,
 Securities issued by Central and State Governments. Credit Risk Guarantee Fund Trust for Low Income
 Debt securities rated by a chosen Credit Rating Agency Housing) banks and primary dealers with a lower risk
in respect of which banks should be sufficiently weight than the counterparty;
confident about the market liquidity where these are b. Other entities that are externally rated except when
either: credit protection is provided to a securitisation
a. Attracting 100 percent or lesser risk weight i.e., exposure. This would include credit protection provided
rated at least BBB(-) when issued by public sector by parent, subsidiary and affiliate companies when
entities and other entities (including banks and they have a lower risk weight than the obligor.
Primary Dealers); or II. Quantitative Disclosure
b. Attracting 100 percent or lesser risk weight i.e., a. Details of exposure covered by eligible financial
rated at least CARE A3 / CRISIL A3 / India Ratings collateral and information about (credit or market)
and Research Private Limited (India Ratings) A3 / concentration within the mitigation taken as on
ICRA A3 /Brickwork A3 / Acuite A3 for short term 31st March 2020 is given in table below
debt instruments.
Amount Risk
 Debt Securities not rated by a chosen Credit Rating Sl.
Nature of Exposure Exposure of Risk Weighted
Agency in respect of which banks should be sufficiently No.
Mitigants Assets
confident about the market liquidity where these are: 1 Exposure covered by Gold 78,023.51 1,06,367.80 0.06
a. issued by a bank; and 2 Exposure covered by deposits 17,836.95 19,818.83 0.00
b. listed on a recognised exchange; and 3 Loan against KVP / IVP/NSC/LIC 76.42 101.89 0.00
c. classified as senior debt; and
d. all rated issues of the same seniority by the issuing 6. Securitisation Exposures: Disclosure for Standardised
bank are rated at least BBB(-) or CARE A3/CRISIL Approach
A3/India Ratings and Research Private Limited Not applicable since the bank does not undertake
(India Ratings) A3/ICRA A3/Brickwork A3/Acuite securitisation activity.
A3/Infomerics A3 by a chosen Credit Rating
Agency; and 7. Market Risk in Trading Book
e. The bank holding the securities as collateral has I. Qualitative disclosures
no information to suggest that the issue justifies Market Risk Management Policy
a rating below BBB(-) or CARE A3/CRISIL A3/ Market risk is the possibility of loss arising from changes in
India Ratings and Research Private Limited (India the value of a financial instrument as a result of changes in
Ratings) A3/ICRA A3/Brickwork A3/Acuite A3 (as market variables such as interest rates, exchange rates, credit
applicable) and; spreads and other asset prices. The market risk for the Bank
f. Banks should be sufficiently confident about the is managed in accordance with the Market Risk Management
market liquidity of the security. Policy, Investment Policy and ALM Policy which are approved
 Units of Mutual Funds regulated by the securities by the Board. The policies ensure that operations in securities,
regulator of the jurisdiction of the banks operation foreign exchange etc. are conducted in accordance with sound
mutual funds where: and acceptable business practices and are as per the extant
a. A price for the units is publicly quoted daily i.e., regulatory guidelines, laws governing transactions in financial
160
securities and the financial environment. The policies contain the II. Quantitative disclosures
limit structure that governs transactions in financial instruments. Capital requirements for different categories of Market
The policies are reviewed periodically to incorporate changed Risks [Amount in ` Million]
business requirements, economic environment and changes in S. No. Particulars Capital Requirement
regulations. 1 Interest rate risk 2,220.84
Structure and organisation of the market risk management 2 Foreign Exchange Risk 48.94
function 3 Equity Position Risk 213.55
The Market Risk Management Committee (MRMC), which
is an independent function, reports to the Risk Management 8. Operational Risk
Committee. MRMC exercises independent control over the Operational risk management framework
process of market risk management and recommends changes Operational risk is the risk of loss resulting from inadequate or
in risk policies, controls, processes and methodologies for failed internal processes, people or systems, or from external
quantifying and assessing market risk. There is clear functional events. Operational risk includes legal risk but excludes
separation of: strategic and reputation risk. Operational risk is inherent in the
Bank’s business activities in both domestic as well as overseas
 Trading i.e. front office; and
operations and covers a wide spectrum of issues.
 Monitoring, control, settlements and accounting i.e.
Treasury back office. Objectives
Strategies and processes The objective of the Bank’s operational risk management
is to manage and control operational risks in a cost effective
 The Bank has put in place a comprehensive Market risk
manner within targeted levels of operational risk consistent
management Framework to address the Market risks (bank
with the Bank’s risk appetite as specified in the Operational
wide) including that of the Trading Book.
Risk Management Policy (the Policy) approved by the Board of
 Within the above Framework, various policies of the
Directors. The Policy aims to:
Bank prescribes Limits like Value at Risk (VaR) for Central
Government securities & Currencies, maximum holding  Define Bank level operational risk appetite;
period, duration, minimum holding level for liquid assets,  Establish clear ownership and accountability for
defeasance period, exposure limits, Forex open position management and mitigation of operational risk;
limits (day light/overnight), stop-loss limits etc .  Help business and operations to improve internal controls,
 Risk profiles are analyzed and the effectiveness of risk reduce likelihood of occurrence of operational risk incidents
mitigants is regularly monitored. and minimise potential impact of losses;
 The Bank’s Board/Market Risk Management Committee  Minimise losses and customer dissatisfaction due to failure
(MRMC)/Investment Management Committee (IMC) in processes;
approves the volume composition holding/defeasance
 Develop comprehensive operational risk loss database for
period etc. of the trading book.
effective mitigation;
The scope and nature of risk reporting and /or measurement  Meet regulatory requirements as set out in the guidance
system risk reporting note on management of operational risk issued by the RBI;
Adherence to limits are being monitored by dedicated mid office, and
reporting exceptions to chief risk officer (CRO), independent of  Compute capital charge for operational risk as per the
Treasury operational units. guidelines issued by the RBI.
Risk Measurement 9. Interest Rate Risk in the Banking Book (IRRBB)
 Values at Risk (VaR) numbers are arrived for Trading book
Central Government securities, T Bills and Currencies. I. Qualitative disclosures
 The positions are marked-to-market at stipulated intervals. IRRBB refers to the risk arising on account of adverse interest
The Duration/Modified Duration is computed and its rate fluctuations on interest rate sensitive assets and interest
adherence to the prescribed duration limits is ensured. rate sensitive liabilities, which are held in banking book. In short
 The bank is computing capital charge on “Held for Trading” term perspective -Traditional Gap Analysis (TGA) approach - it
and “Available for Sale” categories using Standardized is the risk of an adverse impact on net interest income arising
Duration Approach as required under RBI guidelines for from timing differences in re-pricing of various items of assets
Basel III. liabilities. In long term perspective - Duration Gap Analysis
(DGA) approach - it is the risk arising from adverse impact
 Stress testing analyses are done by applying rate shocks for
on the Bank’s economic value of equity, due to duration gap
parallel shift in the yield curve under current economic and
between assets and liabilities.
political scenario.
161
Interest rate risk on banking book assumes the form of basis II. Quantitative Disclosures
[Amount in ` Million]
risk, yield curve risk, re-pricing risk or embedded options risk. For
purposes of measuring the impact of these risks on net interest Particulars As on 31st March 2020
income under TGA approaches, the risk position is identified as Change in NII
the gap between rate sensitive assets and liabilities in different Probable impact on Net Interest income for 500.79
100 Bps downward movement in interest rate
maturity buckets. For purposes of measuring the impact of these
Change in MVE
risks on economic value of net worth under DGA approach,
Probable impact on Market Value of equity
the risk position is defined as the modified duration of equity 3,554.84
(MVE) for a 200 Bps movement in interest rates.
which is derived from the modified duration gap, which in
turn requires computation of the weighted average modified 10. General Disclosure for Exposures Related to
duration of assets and weighted average modified duration of Counterparty Credit Risk
liabilities. I. Qualitative disclosures
Bank has put in place Counterparty Credit Risk limits for banks
The bank calculates the impact on the earnings by gap analysis as counterparty, based on internal rating considering a number
with the assumed change in yield over one year. Bank has of financial parameters like net worth, capital adequacy ratio,
put in place prudential limits for probable reduction in Net rating etc. of the counterparty bank and with the approval
Interest Income (NII) for buckets below one year due to adverse of the Board. Counterparty exposures for other entities are
change in interest rates. Earnings at Risk (EaR) are being subject to comprehensive exposure ceilings fixed by the Board.
calculated using Traditional Gap Analysis as per ALM guidelines Capital for Counterparty Credit Risk is assessed based on the
of RBI. Standardized Approach.
II. Quantitative Disclosures
The bank calculates the impact on the Market value of equity by The Bank does not recognize bilateral netting. The credit
Duration Gap Analysis and the impact is calculated by applying equivalent amounts of derivatives that are subjected to risk
a notional interest rate shock of 200 basis points as per ALM weighting are calculated as per the Current Exposure Method
guidelines of RBI. (CEM). The balance outstanding for forward contract as on 31st
March 2020 is as follows:
Risk evaluation and adherence to risk limits are reported to
Market Risk Management Committee/ALCO through Chief Risk Particulars ` in Million
Officer. Forward Contracts valued based on CEM 3,831.83
Total 3,831.83
Table DF-11. Composition of capital as on 31st March 2020

` in Million
Basel III common disclosure template Ref. No.
Common Equity Tier 1 capital: instruments and reserves
1 Directly issued qualifying common share capital plus related stock surplus (share premium) 17,361.70
2 Retained earnings 32,171.10
3 Accumulated other comprehensive income (and other reserves) 3,227.72
4 Directly issued capital subject to phase out from CET1 (only applicable to non-joint stock companies) 0.00
5 Common share capital issued by subsidiaries and held by third parties (amount allowed in group CET1) 0.00
6 Common Equity Tier 1 capital before regulatory adjustments 52,760.52
Common Equity Tier 1 capital: regulatory adjustments
7 Prudential valuation adjustments 0.00
8 Goodwill (net of related tax liability) 0.00
9 Intangibles other than mortgage-servicing rights (net of related tax liability) 799.26
10 Deferred tax assets 0.00
11 Cash flow hedge reserve 0.00
12 Shortfall of provisions to expected losses 0.00
162

13 Securitization gain on sale 0.00
14 Gains and losses due to changes in own credit risk on fair valued liabilities 0.00
15 Defined-benefit pension fund net assets 0.00
16 Investments in own shares (if not already netted off paid-in capital on reported balance sheet) 0.00
17 Reciprocal cross-holdings in common equity 13.79
Investments in the capital of banking, financial and insurance entities that are outside the scope of
0.00
18 regulatory consolidation, net of eligible short positions, where the bank does not own more than 10% of
the issued share capital (amount above 10% threshold)
Significant investments in the common stock of banking, financial and insurance entities that are outside 0.00
19
the scope of regulatory consolidation, net of eligible short positions (amount above 10% threshold)
20 Mortgage servicing rights (amount above 10% threshold) 0.00
Deferred tax assets arising from temporary differences (amount above 10% threshold, net of related tax
21
liability) 0.00
22 Amount exceeding the 15% threshold 0.00
23 of which: significant investments in the common stock of financial entities 0.00
24 of which: mortgage servicing rights 0.00
25 of which: deferred tax assets arising from temporary differences 0.00
26 National specific regulatory adjustments (26a+26b+26c+26d) 0.00
26a of which: Investments in the equity capital of the unconsolidated insurance subsidiaries 0.00
26b of which: Investments in the equity capital of unconsolidated non-financial subsidiaries 0.00
of which: Shortfall in the equity capital of majority owned financial entities which have not been 0.00
26c
consolidated with the bank
26d of which: Unamortized pension funds expenditures 0.00
Regulatory adjustments applied to Common Equity Tier 1 due to insufficient Additional Tier 1 and Tier 2
27 0.00
to cover deductions
28 Total regulatory adjustments to Common equity Tier 1 813.05
29 Common Equity Tier 1 capital (CET1) 51,947.48
Additional Tier 1 capital: instruments
30 Directly issued qualifying Additional Tier 1 instruments plus related stock surplus (share premium) (31+32) 50,00.00
of which: classified as equity under applicable accounting standards (Perpetual Non-Cumulative
31 0.00
Preference Shares)
50,00.00
32 of which: classified as liabilities under applicable accounting standards (Perpetual debt Instruments)
33 Directly issued capital instruments subject to phase out from Additional Tier 1 0.00
Additional Tier 1 instruments (and CET1 instruments not included in row 5) issued by subsidiaries and 0.00
34
held by third parties (amount allowed in group AT1)
0.00
35 of which: instruments issued by subsidiaries subject to phase out
36 Additional Tier 1 capital before regulatory adjustments 50,00.00

Additional Tier 1 capital: regulatory adjustments
37 Investments in own Additional Tier 1 instruments 0.00
38 Reciprocal cross-holdings in Additional Tier 1 instruments 0.00
163

Investments in the capital of banking, financial and insurance entities that are outside the scope of 0.00
the issued common share capital of the entity (amount above 10% threshold)
Significant investments in the capital of banking, financial and insurance entities that are outside the 0.00
40
scope of regulatory consolidation (net of eligible short positions)
41 National specific regulatory adjustments (41a+41b) 0.00
41a of which: Investments in the Additional Tier 1 capital of unconsolidated insurance subsidiaries 0.00
of which: Shortfall in the Additional Tier 1 capital of majority owned financial entities which have not 0.00
41b
been consolidated with the bank
42 Regulatory adjustments applied to Additional Tier 1 due to insufficient Tier 2 to cover deductions 0.00
43 Total regulatory adjustments to Additional Tier 1 capital 0.00
44 Additional Tier 1 capital (AT 1) 0.00
45 Tier 1 capital (T1 = CET1 + AT1) (29 + 44) 56,947.48
Tier 2 capital: instruments and provisions
46 Directly issued qualifying Tier 2 instruments plus related stock surplus 10,400
47 Directly issued capital instruments subject to phase out from Tier 2 0.00
Tier 2 instruments (and CET1 and AT1 instruments not included in rows 5 or 34) issued by subsidiaries 0.00
48
and held by third parties (amount allowed in group Tier 2)
49 of which: instruments issued by subsidiaries subject to phase out 0.00
50 Provisions 3,186.21
51 Tier 2 capital before regulatory adjustments 13,807.67
Tier 2 capital: regulatory adjustments
52 Investments in own Tier 2 instruments
53 Reciprocal cross-holdings in Tier 2 instruments 0.00
Investments in the capital of banking, financial and insurance entities that are outside the scope of 0.00
the issued common share capital of the entity (amount above the 10% threshold)
Significant investments in the capital banking, financial and insurance entities that are outside the scope 0.00
55
of regulatory consolidation (net of eligible short positions)
56 National specific regulatory adjustments (56a+56b) 0.00
56a of which: Investments in the Tier 2 capital of unconsolidated subsidiaries 0.00
of which: Shortfall in the Tier 2 capital of majority owned financial entities which have not been 0.00
56b
consolidated with the bank
57 Total regulatory adjustments to Tier 2 capital 0.00
58 Tier 2 capital (T2) 13,807.67
59 Total Capital (TC = T1 + T2) (45 + 58) 70,755.15
60 Total risk weighted assets (60a + 60b + 60c) 5,27,710.47
60a of which: total credit risk weighted assets 4,57,037.93
60b of which: total market risk weighted assets 22,835.14
60c of which: total operational risk weighted assets 47,837.40
Capital ratios and buffers
61 Common Equity Tier 1 (as a percentage of risk weighted assets) 9.84%
62 Tier 1 (as a percentage of risk weighted assets) 10.79%
63 Total capital (as a percentage of risk weighted assets) 13.41%
164

Institution specific buffer requirement (minimum CET1 requirement plus capital conservation and
64 countercyclical buffer requirement plus G-SIB buffer requirement, expressed as a percentage of risk 0.00
weighted assets)
65 of which: capital conservation buffer requirement 1.875%
66 of which: bank specific countercyclical buffer requirement 0.00
67 of which: G-SIB buffer requirement 0.00
68 Common Equity Tier 1 available to meet buffers (as a percentage of risk weighted assets) 2.46%
National minima (if different from Basel III)
69 National Common Equity Tier 1 minimum ratio (if different from Basel III minimum) 5.50%
70 National Tier 1 minimum ratio (if different from Basel III minimum) 7.00%
71 National total capital minimum ratio (if different from Basel III minimum) 9.00%
Amounts below the thresholds for deduction (before risk weighting)
72 Non-significant investments in the capital of other financial entities 0.00
73 Significant investments in the common stock of financial entities 0.00
74 Mortgage servicing rights (net of related tax liability) 0.00
75 Deferred tax assets arising from temporary differences (net of related tax liability) 0.00
Applicable caps on the inclusion of provisions in Tier 2
Provisions eligible for inclusion in Tier 2 in respect of exposures subject to standardized approach
76
(prior to application of cap) 3,186.21
77 Cap on inclusion of provisions in Tier 2 under standardized approach 5,728.24
Provisions eligible for inclusion in Tier 2 in respect of exposures subject to internal ratings-based approach 0.00
78
(prior to application of cap)
79 Cap for inclusion of provisions in Tier 2 under internal ratings-based approach 0.00
Capital instruments subject to phase-out arrangements (only applicable between March 31, 2017 and March 31, 2022)
80 Current cap on CET1 instruments subject to phase out arrangements 0.00
81 Amount excluded from CET1 due to cap (excess over cap after redemptions and maturities) 0.00
82 Current cap on AT1 instruments subject to phase out arrangements 0.00
83 Amount excluded from AT1 due to cap (excess over cap after redemptions and maturities) 0.00
84 Current cap on T2 instruments subject to phase out arrangements 0.00
85 Amount excluded from T2 due to cap (excess over cap after redemptions and maturities) 0.00
Notes to the Template

Row No. of the
Particular (` in Million)
Template
10 Deferred tax assets associated with accumulated losses 0.00
Deferred tax assets (excluding those associated with accumulated losses) net off deferred tax liability 561.25
Total as indicated in row 10
19 If investments in insurance subsidiaries are not deducted fully from capital and instead considered under 0.00
10% threshold for deduction, the resultant increase in the capital of bank
of which: Increase in Common Equity Tier 1 capital 0.00
of which: Increase in Additional Tier 1 capital 0.00
of which: Increase in Tier 2 capital 0.00
165
Row No. of the

Particular (` in Million)
Template
26b If investments in the equity capital of unconsolidated non-financial subsidiaries are not deducted and hence, 0.00
risk weighted then:
(i) Increase in Common Equity Tier 1 capital 0.00
(ii) Increase in risk weighted assets 0.00
50 Eligible Provisions included in Tier 2 capital 3,186.21
Eligible Investment Fluctuation Reserve included in Tier 2 capital 221.45
Total of row 50 3,407.67
Table DF-12 Composition of Capital - Reconciliation Requirements

Step I
As on the reporting date there is consolidation and hence the bank is not required to disclose the reported balance sheet under the
regulatory scope of consolidation.
Step II ` in Million
Balance Balance Sheet
Sheet as in under regulatory
Ref. No.
financial scope of
statements consolidation
As on As on
reporting reporting
date date
A Capital & Liabilities
i. Paid-up Capital 1,809.72 (a)
of which : Amount eligible for CET1 1,809.72 (a)(i)
of which : Amount eligible for AT1
Reserves & Surplus 52,938.29 (b)
of which : Amount eligible for CET1
Statutory Reserve 11,413.14 (b)(i)
Share Premium 15,551.98 (b)(ii)
General Reserve 13,757.77 (b)(iii)
Capital Reserve 3,529.56 (b)(iv)
Special reserve under Section 36(i) (viii) of Income Tax Act 3,993.90 (b)(v)
Balance in P/L a/c at the end of the Previous Financial Year 2,221.89 (b)(vi)
Current Financial Year carry forward Profit -962.35 (b)(vii)
Investment Fluctuation Reserve Account (part of Tier 2 Capital) 221.45 (b)(viii)
Revaluation Reserve (part of Tier I Capital, at a discount of 55 per cent is `1444.92). 3,210.95 (b)(ix)
Minority Interest
Total Capital 54,748.01 (a)+(b)
ii Deposits 8,30,338.88 (c)
of which: Deposits from banks 33,698.13 (c)(i)
of which: Customer deposits 7,80,760.79 (c)(ii)
of which: Other deposits (pl. specify) CD 15,879.95
166
iii Borrowings 68,932.35 (d)

of which: From RBI 5,520 (d)(i)
of which: From banks 2,428.80 (d)(ii)
of which: From other institutions & agencies 38,533.79 (d)(iii)
of which: Others (pl. specify) Borrowings from outside India 22,449.75 (d)(iv)
of which: Capital instruments (d)(v)
iv. Other liabilities & provisions & ESOP 16,309.77 (e)
of which: Standard Asset provision included under Tier 2 Capital 3,610.22 (e)(i)
of which : DTLs related to goodwill (e)(ii)
of which : Details related to intangible assets
(a)+(b)+(c)+(d)+
Total 9,70,329.01
(e)
B Assets
i Cash and balances with Reserve Bank of India 28,059.83 (f)
Balance with banks and money at call and short notice 13,837.78 (g)
ii Investments: 2,06,252.75 (h)
of which: Government securities 1,91,835.93 (h)(i)
of which: Other approved securities (h)(ii)
of which: Shares 822.43 (h)(iii)
of which: Debentures & Bonds 5,934.51 (h)(iv)
of which: Subsidiaries/Joint Ventures/Associates
of which: Others (Commercial Papers, Mutual Funds etc.) 7,659.86 (h)(v)
iii Loans and advances 6,44,394.73 (i)
of which: Loans and advances to banks
of which: Loans and advances to customers 6,44,394.73 (i)(i)
iv Fixed assets 8,000.41 (j)
v Other assets 69,783.50 (k)
of which: Goodwill and intangible assets
Out of which :
Goodwill (k)(i)
Other Intangibles (excluding MSRs) 799.26 (k)(ii)
Deferred tax assets (k)(iii)
vi Goodwill on consolidation (l)
vii Debit balance in Profit & Loss account (m)
(f)+(g)+(h)+(i)+
Total Assets 9,70,329.01
(j)+(k)+(l)+(m)
Table DF-13: Main features of Regulatory Capital Instruments

Series 1
1 Issuer The South Indian Bank Ltd.
2 Unique identifier (e.g. CUSIP, ISIN or Bloomberg identifier for private placement) INE683A09091
3 Governing law(s) of the instrument Indian Law
Regulatory treatment
4 Transitional Basel III rules Sub-ordinated Tier 2 Bonds
5 Post-transitional Basel III rules Eligible
6 Eligible at solo/group/group & solo Solo
167
7 Instrument type Unsecured Redeemable Non-Convertible Subordinated

Tier II Lower Bonds
8 Amount recognised in regulatory capital ` 0 Million
(` in million, as of most recent reporting date)
9 Par value of instrument `1 Million
10 Accounting classification Liability
11 Original date of issuance 20.08.2009
12 Perpetual or dated Dated
13 Original maturity date 20.04.2020
14 Issuer call subject to prior supervisory approval No
15 Optional call date, contingent call dates and redemption amount NA
16 Subsequent call dates, if applicable NA
Coupons / dividends
17 Fixed or floating dividend/coupon Fixed
18 Coupon rate and any related index 9.75 % p.a.
19 Existence of a dividend stopper No
20 Fully discretionary, partially discretionary or mandatory Mandatory
21 Existence of step up or other incentive to redeem No
22 Noncumulative or cumulative Non-cumulative
23 Convertible or non-convertible Non-convertible
24 If convertible, conversion trigger(s) NA
25 If convertible, fully or partially NA
26 If convertible, conversion rate NA
27 If convertible, mandatory or optional conversion NA
28 If convertible, specify instrument type convertible into NA
29 If convertible, specify issuer of instrument it converts into NA
30 Write-down feature No
31 If write-down, write-down trigger(s) NA
32 If write-down, full or partial NA
33 If write-down, permanent or temporary NA
34 If temporary write-down, description of write-up mechanism NA
35 Position in subordination hierarchy in liquidation (specify instrument type All depositors and other creditors
immediately senior to instrument)
36 Non-compliant transitioned features No
37 If yes, specify non-compliant features NA
Series II
6 Eligible at solo/group/ group & solo Solo
7 Instrument type Unsecured Redeemable Non-Convertible Subordinated
Tier II Lower Bonds
8 Amount recognised in regulatory capital (` in million, as of most recent ` 3000 Million
reporting date)
9 Par value of instrument ` 10,00,000
168

11 Original date of issuance 30-09-2015
13 Original maturity date 31-10-2025
14 Issuer call subject to prior supervisory approval No
15 Optional call date, contingent call dates and redemption amount NA
Coupons / dividends
18 Coupon rate and any related index 10.25%
19 Existence of a dividend stopper No
20 Fully discretionary, partially discretionary or mandatory NA
21 Existence of step up or other incentive to redeem NA
22 Non-cumulative or cumulative Non-Cumulative
23 Convertible or non-convertible Non-Convertible
30 Write-down feature Yes
31 If write-down, write-down trigger(s) PONV
32 If write-down, full or partial Full
33 If write-down, permanent or temporary Permanent
Series III
7 Instrument type Non-convertible, Redeemable, Fully Paid-Up, Unsecured,
Basel III compliant Tier 2 Bonds in the nature of
debentures for augmenting Tier 2 capital of the Issuer
with face value of `1,00,000 each.
8 Amount recognised in regulatory capital (` in million, as of most recent `4,900 Million
reporting date)
9 Par value of instrument `1,00,000
169

14 Issuer call subject to prior supervisory approval YES
15 Optional call date, contingent call dates and redemption amount On the fifth anniversary from the Date of Allotment
i.e. November 28, 2022
16 Subsequent call dates, if applicable On every anniversary of Coupon Payment Date after
First Call Option Due Date
Coupons / dividends
18 Coupon rate and any related index 9.50 % p.a.
19 Existence of a dividend stopper NA
22 Non-cumulative or cumulative Non-cumulative
Series IV
7 Instrument type Non-convertible, Redeemable, Fully Paid-Up, Unsecured,
Basel III compliant Tier 2 Bonds with face value of
`1,00,000 each
8 Amount recognised in regulatory capital (` in million, as of most recent `2,500 million
reporting date)
9 Par value of instrument `1,00,000
12 Perpetual or dated dated
170
14 Issuer call subject to prior supervisory approval Yes

15 Optional call date, contingent call dates and redemption amount Only after a minimum period of 5 years and 3 months
post allotment of the Bonds with the approval of RBI.
i.e. June 26, 2024
16 Subsequent call dates, if applicable On every anniversary of Coupon Payment Date after
First Call Option Due Date
Coupons / dividends
18 Coupon rate and any related index 11.75% p.a.
35 Position in subordination hierarchy in liquidation (specify instrument type all depositors and general creditors of the Bank

Series V Additional Tier I Bonds
3 Governing law(s) of the instrument Indian law
4 Transitional Basel III rules Non-convertible, Fully Paid-Up, Unsecured, Perpetual,
Basel III compliant Tier 1 Bond
7 Instrument type Non-convertible, Fully Paid-Up, Unsecured, Perpetual,
Basel III compliant Tier 1 Bonds in the nature of
debentures for augmenting Tier 1 capital of the Issuer
with face value of ` 1,00,000 each.
8 Amount recognised in Regulatory capital (` in million, as of most recent `5,000 million
reporting date)
9 Par value of instrument `1,00,000/- per bond
12 Perpetual or dated Perpetual
171
13 Original maturity date NA

14 Issuer call subject to prior supervisory approval Call option: On fifth anniversary from the Deemed
Date of Allotment or any anniversary date thereafter
with prior approval of RBI, subject to tax call/regulatory
call.
In case of tax call or regulatory Call, the date may be
specified in the notice to Trustees.
15 Optional call date, contingent call dates and redemption amount On fifth anniversary from the Deemed Date of
Allotment or any anniversary date thereafter with prior
approval of RBI, subject to tax call/regulatory call.
In case of tax call or regulatory Call, the date may be
specified in the notice to Trustees.
Coupons / dividends
18 Coupon rate and any related index 13.75% p.a.
20 Fully discretionary, partially discretionary or mandatory Fully discretionary
23 Convertible or non-convertible non-convertible
30 Write-down feature
31 If write-down, write-down trigger(s) Trigger event is earlier of the trigger event:
a. Write-off is necessary without which the firm would
become non-viable as determined by RBI
b. Decision to make public sector injection of capital
without which firm would become non-viable.
34 If temporary write-down, description of write-up mechanism
35 Position in subordination hierarchy in liquidation (specify instrument type Subordinated to the claims of depositors general
immediately senior to instrument) creditors and subordinated debts of the bank
37 If yes, specify non-compliant features
Table DF-14: Full Terms and Conditions of Regulatory Capital Instruments

Series I
Nature of Instrument Unsecured Redeemable Non-Convertible Subordinated Tier II Lower Bonds
Amount Subscribed `2,000 Million
Face Value `10,00,000/-
Date of allotment 20/08/2009
Date of Redemption 20/04/2020
Coupon Rate 9.75 % p.a.
Put and call option Nil
Issuance, Trading & Listing Listed on BSE Ltd., Mumbai
172
Series II
Nature of Instrument 10.25% Unsecured Redeemable Non-Convertible Basel III Compliant Tier 2
Bonds in the nature of Debentures
Face Value `10,00,000/-
Date of allotment 30-09-2015
Date of Redemption 31-10-2025
Coupon Rate 10.25% p.a.
Put and call option Nil
Issuance, Trading & Listing Listed in BSE
Series III
Nature of Instrument Non-convertible, Redeemable, Fully Paid-Up, Unsecured, Basel III compliant Tier 2 Bonds in the nature of
debentures for augmenting Tier 2 capital of the Issuer with face value of `1,00,000 each
Face Value `1,00,000
Put option: NA
Put and call option
Call option: Applicable
Series IV
Nature of Instrument Non-convertible, Redeemable, Fully Paid-Up, Unsecured, Basel III compliant Tier 2 Bonds in the nature of
debentures for augmenting Tier 2 capital of the Issuer with face value of `1,00,000 each.
Amount Subscribed `2,500 million
Face Value `1,00,000/-
Coupon Rate 11.75% p.a
Put Option : NA
Put and call option
Call option: Applicable
Series V
Nature of Instrument Non-convertible, Fully Paid-Up, Unsecured, Perpetual, Basel III compliant Tier 1 Bonds in the nature of
debentures for augmenting Tier 1 capital of the Issuer with face value of ` 1,00,000 each (“Bonds”)
Amount Subscribed `5,000 million
Face Value `1,00,000/- per bond
Date of Redemption N.A
Put and call option Put option : NA
Call option : Applicable
Table DF-15: Disclosures on Remuneration consists of five members of which two members from Risk
Remuneration Management committee of the Board facilitate effective
governance of compensation.
Qualitative disclosures
The roles and responsibilities of the Nomination &
(a) Information relating to the composition and mandate Remuneration Committee inter-alia includes the following:
of the Nomination and Remuneration Committee. • Scrutinizing the declarations received from persons to
Composition: be appointed as Directors as well as from the existing
The Nomination & Remuneration committee of the Board Directors seeking re-appointment and to decide whether
173
to extend or continue the term of appointment of the • The Committee shall also function as the Compensation
independent director, on the basis of the report of Committee as prescribed under the SEBI (Share
performance evaluation of independent directors and Based Employee Benefits) Regulations, 2014 and is
make references to the appropriate authority/persons to empowered to formulate detailed terms and conditions
ensure compliance with the requirements indicated by of the Scheme, administer, supervise the same and to
Reserve Bank of India vide their directive dated May 23, allot shares in compliance with the guidelines and other
2011 on Fit & Proper Criteria of the Banks. applicable laws.
• To devise a Succession Planning Policy for the Board and • To obtain necessary clearances and approvals from
Senior Management. regulatory authorities, appoint Merchant Bankers and
• To formulate a Nomination policy of the Board to guide do such other things as may be necessary in respect of
the Board in relation to appointment/re-appointment/ the Employees Stock Option Scheme.
removal of Directors. • To oversee the administration of Employee benefits,
• To identify persons who are qualified to become Directors/ such as Provident Fund, Pension Fund, Gratuity,
KMPs and who may be appointed in senior management Compensation for absence on Privilege/Sick/Casual
as defined in the Succession Policy in accordance with Leave etc., which are recognized in accordance with
the criteria laid down and to recommend to the Board Accounting Standard-15 (revised) specified in the
their appointment and/or removal. Companies (Accounting Standards) Rules, 2006.
• To formulate the criteria for evaluation of Independent • The Committee may suggest amendments to any
Directors and the Board/Committees. stock option plans or incentive plans, provided that
• To devise a policy on Board diversity. all amendments to such plans shall be subject to
• To carry out any other function as is mandated by consideration and approval of the Board;
the Board from time to time and / or enforced by any • The Committee may suggest amendments to any
statutory notification, amendment or modification, as stock option plans or incentive plans, provided that
may be applicable. all amendments to such plans shall be subject to
consideration and approval of the Board.
• To perform such other functions as may be necessary or
appropriate for the performance of its duties. • Any other matters regarding remuneration to
• To oversee the framing, review and implementation WTDs/MD & CEO and other staffs of the Bank as and
of Bank’s overall compensation structure and related when permitted by the Board.
polices on remuneration packages payable to the • To conduct the annual review of the Compensation
WTDs/MD & CEO and other staff including performance Policy.
linked incentives, perquisites, Stock option scheme etc. • To fulfill such other powers and duties as may be
with a view to attracting, motivating and retaining delegated to it by the Board.
employees and review compensation levels vis-a-vis • To review HR Strategy aligning with business strategy of
other Banks and the industry in general. the Bank.
• The Committee shall work in close coordination with • To review the skill gaps and talent pool creation.
the Risk Management Committee of the Bank, in order
to achieve effective alignment between remuneration (b) Information relating to the design and structure of
and risks. The Committee will also ensure that the cost/ remuneration processes and the key features and
income ratio of the Bank supports the remuneration objectives of remuneration policy.
package consistent with maintenance of sound capital The Bank has formed the compensation policy based on
adequacy ratio. the Reserve Bank of India guidelines vide its Circular No.
• With respect to the Performance Linked Incentive DBOD.No.BC.72/29.67.001/2011-12 dated January 13,
Schemes, the Committee is empowered to: 2012.
a) Draw up terms and conditions and approve the The fixed remuneration and other allowances including
changes, if any, to the Performance Linked Incentive retirement benefits of all subordinate, clerical and officers
schemes; up to the rank of General Manager (Scale VII) is governed
b) Moderate the scheme on an ongoing basis depending by the industry level wage settlement under Indian Banks
upon the circumstances and link the same with the Association (IBA) pattern. In respect of officers above the
recommendations of Audit Committee; cadre of General Manager, the remuneration is fixed by
c) Coordinate the progress of growth of business Board/Committee.
vis-a-vis the business parameters laid down by
the Board and Audit Committee and effect such Further, the compensation structure for the Whole
improvements in the scheme as considered necessary; Time Directors (WTDs)/Managing Director & Chief
d) On completion of the year, finalize the criteria of Executive Officer (MD & CEO) of the bank are subject
allotment of marks to ensure objectivity/equity. to approval of Reserve Bank of India in terms of Section
35B of the Banking Regulation Act, 1949. The payment of
174
compensation also requires approval of the shareholders of the beginning of the performance measurement
the Bank in the General Meeting pursuant to clause 95 of period to ensure that the employees perceive the
Articles of Association of the Bank read with Section 197 of incentives mechanism. The usual annual determination
the Companies Act, 2013 and Section 35B (1) of Banking of bonuses will be based on rules, processes and
Regulation Act, 1949. objectives known in advance, recognizing that some
The Reserve Bank of India vide Circular DOR.Appt. discretion will always be needed.
BC.No.23/29.67.001/2019-20 dtd. 04.11.2019 issued a 5. Bank will use a combination of financial and non-
detailed revised Guidelines on Compensation of Whole financial measures to assess employee performance
Time Directors/Chief Executive Officers/Material Risk Takers and adapt the measurement to each employee's
and Control Function staff. Accordingly the Compensation specific situation. Qualitative factors (like knowledge,
Policy has been modified by incorporating the revised skills or abilities), might play an important role when
provisions of the RBI Circular. it comes to judging and rewarding some activities-
particularly when these serve to reinforce the bank's
(c) Description of the ways in which current and future risk management goals.
risks are taken into account in the remuneration 6. The nature and extent to which risk adjustments
processes. It will include the nature and type of the are needed depends first on the extent to which
key measures used to take account of these risks. performance measures capture risks, but in all cases,
The Board of Directors through the NRC shall exercise some form of risk adjustment is needed as remuneration
oversight and effective governance over the framing and is often awarded before the final outcome of an activity
implementation of the Compensation Policy. Human is known. Risks taken need to be estimated (ex ante),
Resource Management under the guidance of MD & CEO risk outcomes observed (ex post) and both ex ante
shall administer the compensation and Benefit structure estimates and ex post outcomes will affect payoffs.
in line with the best suited practices and statutory 7. Risk adjustments need to take into account the nature
requirements as applicable. of the risks involved and the time horizons over which
they could emerge. The impact of remuneration
For MRTs: adjustments will be linked to actions taken by
The Bank will refer to the Basel Committee on Banking employees and/or business units, and their impact on
Supervision (BCBS) report entitled Range of Methodologies the level of risk taken on by the bank.
for Risk and Performance Alignment of Remuneration 8. The nature of the award process, which links the
published in May 2011 for guidance wherever required. variable remuneration of each individual employee
It intends to enhance the banks' and supervisors' with bonus pools and the total amount of variable
understanding of risk-adjusted remuneration. This report, remuneration at a bank's level, is also an area that will
by providing some clarification on design of risk-adjusted be carefully considered by banks and supervisors, as
remuneration schemes, will support and facilitate the it directly influences how and when performance and
greater adoption of sound practices in the banking sector. risk adjustment are or can be used.
Some of the key stipulations of the report are as under: 9. Considering the above parameters, the Board may
1. In order for incentive-based remuneration to work, approve suitable methodologies for fixing of risk
the variable part of remuneration will be truly and adjusted remuneration, as appropriate, based on the
effectively variable and can even be reduced to zero recommendations of Risk Management committee and
in line with the symmetry principle defined by the FSB. review/approval of the Nomination and Remuneration
A key element that supervisors expect is the ability Committee on the same .
for banks to demonstrate that the methodologies
they developed to adjust variable remuneration to The compensation structure for the whole-time
risk and performance are appropriate to their specific directors/Chief Executive Officers / Material Risk Takers
(MRTs) of the bank shall be as under:
circumstances.
Fixed Pay and Perquisites
2. The methodologies for adjusting remuneration to risk
Based on the recommendations of the Nomination and
and performance should also be consistent with the
Remuneration Committee, and subject to the approval
general risk management and corporate governance
of Reserve Bank of India (for MD & CEO and Executive
framework.
Directors), Board shall fix the fixed portion of compensation
3. The methodologies for adjusting remuneration to
payable which is reasonable, taking into account all relevant
risk and performance will also be consistent with the
factors including adherence to statutory requirements and
general risk management and corporate governance
industry practice.
framework.
4. Performance measures and their relation to Variable Pay
remuneration packages will be clearly defined at In order to have a proper balance between the cash and
share-linked components in the variable pay, the variable
175
pay are to be structured in the form of share-linked  Variable Pay

instrument (including Cash-linked Stock Appreciation Rights In order to have a proper balance between the cash and
(CSARs)), or a mix of cash and share-linked instruments. share-linked components in the variable pay, the variable
Only in cases where the compensation by way of share- pay are to be structured in the form of share-linked
linked instruments is not permitted by law/regulations, the instrument (including Cash-linked Stock Appreciation
entire variable pay can be in cash to be exercised. Rights (CSARs)), or a mix of cash and share-linked
instruments. Only in cases where the compensation by
(d) Description of the ways in which the bank seeks to
way of share-linked instruments is not permitted by law/
link performance during a performance measurement
regulations, the entire variable pay can be in cash to be
period with levels of remuneration.
exercised.
a) The factors taken in to account for the annual review
and revision in the variable pay and performance The assessment of the variable pay will be based on ‘Key
bonus are: Performance Indicators’ (KPI) achievement of respective whole-
 The performance of the Bank time directors/Chief Executive Officers/Material Risk Takers
 The performance of the business unit (MRTs).
 Individual performance of the employee a. Limit on Variable Pay:
 Other risk perceptions and economic considerations. A. For Whole-Time Directors and Chief Executive Officers
The criteria for identification of MRTs are subject to the i. In compliance to the RBI Guidelines and other
following: applicable rules and regulations at least 50%, should
The persons who satisfy the qualitative criteria and any one of be variable and paid on the basis of individual,
the quantitative criteria as detailed below: business-unit and firm-wide measures that adequately
(I) Standard Qualitative criteria measure performance. The total variable pay shall be
• Relate to the role and decision-making power of limited to a maximum of 300% of the fixed pay (for
staff members (e.g., General manager, member of the relative performance measurement period).
management body) having jointly or individually, the ii. In case variable pay is up to 200% of the fixed pay,
authority to commit significantly to risk exposures, etc. a minimum of 50% of the variable pay; and in case
AND variable pay is above 200%, a minimum of 67% of
(II) Standard Quantitative Criteria: the variable pay should be via non-cash instruments.
• Their total remuneration exceeds a certain threshold (to iii. In the event that an executive is barred by statute or
be recommended by MD & CEO to NRC for approval); regulation from grant of share-linked instruments, his/
the determination of which may be done prudently by her variable pay will be capped at 150% of the fixed
the bank, pay, but shall not be less than 50% of the fixed pay.
or iv. The deterioration in the financial performance of the
• They are included among the 0.3% of staff with the bank should generally lead to a contraction in the
highest remuneration in the bank, total amount of variable compensation, which can
or even be reduced to zero.
• Their remuneration is equal to or greater than the lowest B. For Material Risk Takers (MRTs)
total remuneration of senior management and other risk i. In compliance to the RBI Guidelines and other
takers. applicable rules & regulations 50% of total pay for all
MD & CEO is considered as Material Risk Taker, whose MRTs is should be variable pay and paid on the basis
compensation will be guided by the provisions applicable of individual, business-unit and firm-wide measures
to WTD/CEO as per the policy. However the Board, on that adequately measure performance.
recommendation of NRC, will specify additional Material ii. 50% of the variable pay should be via non-cash
Risk Takers (MRTs) whose actions have a material impact on instruments.
the risk exposure of the bank from time to time. iii. The deterioration in the financial performance of the
 MD & CEO is considered as Material Risk Taker, whose bank should generally lead to a contraction in the
compensation will be guided by the provisions applicable total amount of variable compensation, which can
to WTD/CEO as per the policy. However the Board, on even be reduced to zero.
recommendation of NRC, will specify additional Material
Risk Takers (MRTs) whose actions have a material impact The Board will from time to time specify the Material Risk Takers
on the risk exposure of the bank from time to time. (MRTs).
b. Deferral of Variable Pay
(e) A discussion of the bank's policy on deferral and (i) For senior executives, including WTDs, and other
vesting of variable remuneration and a discussion of employees who are MRTs, a minimum of 60% of the
the bank's policy and criteria for adjusting deferred total variable pay must invariably be under deferral
remuneration before vesting and after vesting. arrangements. Further, if cash component is part of
176
variable pay, at least 50% of the cash bonus should also RBI Circular No. DBR.BP.BC.No.32/21.04.018/2018-
be deferred. 19 dated April 1, 2019, as amended from time to
(ii) However, in cases where the cash component of variable time),
pay is under `25 lakh, deferral requirements is not a. the additional provisioning for NPAs assessed by
applicable. RBI exceeds 10 per cent of the reported profit
c. Period of Deferral Arrangement before provisions and contingencies for the
The deferral period should for a period three years. This would reference period, and
be applicable to both the cash and non-cash components of b. the additional Gross NPAs identified by RBI exceed
the variable pay arrangements. 15 per cent of the published incremental Gross
NPAs for the reference period
d. Vesting:
Deferred remuneration should be spread out over the course Further, in such situations, no proposal for increase in variable
of the deferral period on a pro rata basis as follows: pay (for the assessment year) shall be entertained. In case the
• not more than 33.33% of the total deferred variable pay bank’s post assessment Gross NPAs are less than 2.0%, these
should vest at the end of first year. restrictions will apply only if criteria for public disclosure are
• Further, not more than 33.33% of total deferred variable triggered either on account of divergence in provisioning (Clause
pay should vest at the end of second year. (a)) or both provisioning (clause (a) and asset classification
(Clause (b)).
Additionally, vesting should not take place more frequently than
As part of the criteria for the application of malus and clawback,
on a yearly basis to ensure a proper assessment of risks before
the following period during which malus and/or clawback can
the application of ex post adjustments.
be applied will be 36 months from application of the Clause,
Share-linked Instruments covering at least deferral and retention periods (a period of time
Such instruments shall be included as a component of variable after the vesting of instruments which have been awarded as
pay. Norms for grant of share-linked instruments should be variable pay during which they cannot be sold or accessed).
framed by banks in conformity with relevant statutory provisions
Members of staff engaged in financial and risk control,
and should form part of the bank’s compensation policy. The
including internal audit, should be compensated in a manner
details of share-linked instruments granted should also be
that is independent of the business areas they oversee and
disclosed in terms of the disclosure requirements stipulated in
commensurate with their key role in the bank. Effective
these Guidelines. Share-linked instruments should be fair valued
independence and appropriate authority of such staff are
on the date of grant by the bank using Black-Scholes model.
necessary to preserve the integrity of financial and risk
Malus / Clawback management’s influence on incentive compensation. Back
(a) The deferred compensation should be subject to malus/ office and risk control employees play a key role in ensuring
clawback arrangements in the event of subdued or negative the integrity of risk measures. If their own compensation
financial performance of the bank and/or the relevant line of is significantly affected by short-term measures, their
business in any year. independence may be compromised. If their compensation is
(b) A set of situations as detailed below are hereby identified, too low, the quality of such employees may be insufficient for
which require the invocation of the malus and clawback their tasks and their authority may be undermined. The mix of
clauses that may be applicable as detailed below: fixed and variable compensation for control function personnel
i) Applying of Malus / Clawback arrangement on entire should be weighted in favour of fixed compensation. Therefore,
variable pay on occurrence of the following Situations: the requirement of minimum 50% of total compensation
• identified fraud / misconduct by the executive (whole- to be paid in the form of variable pay will not be applicable
time directors, Chief Executive Officers / Material Risk for this category of staff. However, a reasonable proportion
Takers (MRTs)) pertaining to the corresponding period of compensation has to be in the form of variable pay, so
for which the clause to be applied. that exercising the options of malus and/or clawback, when
ii) Applying of Malus / Clawback arrangement on unvested warranted, is not rendered infructuous.
portion of deferred variable pay on occurrence of the For calculating the Variable Pay of Risk Control and Compliance
following situation: Staff the ‘Key Performance Indicators’ (KPI) will be totally
• Reporting of operating loss or more than 50% fall in different and the modalities of the same will be recommended
operating profit in any year by the Nomination and Remuneration Committee to the Board
iii) Applying of Malus clause on unvested portion of deferred for approval.
variable pay on occurrence of the following situation: (f) Description of the different forms of variable
• Wherever the assessed divergence in bank’s remuneration (i.e. cash and types of share linked
provisioning for Non-Performing Assets (NPAs) or instruments) that the bank utilizes and the rationale
asset classification exceeds the prescribed threshold for using these different forms.
for public disclosure as detailed below: (As referred in
177
For MRTs may fix the variable pay not exceeding 50% of the fixed pay
a) both cash and non-cash Performance Linked Incentive in a year. Within this ceiling, at higher levels of responsibility,
Schemes to those employees who are eligible for incentives, the proportion of variable pay will be higher. The variable
in this regard the Committee is empowered to: pay may be in cash, or stock linked instruments or a mix of
i) Draw up terms and conditions and approve the changes, both.
if any, to the Performance Linked Incentive schemes; b) 'Variable pay' means the compensation as fixed by the Board
ii) Moderate the scheme on an ongoing basis depending on recommendation of the Committee, which is based on
upon the circumstances and link the same with the the performance appraisal of an employee in that role, that
recommendations of Audit Committee; is, how well they accomplish their goals. It may be paid as:
iii) Coordinate the progress of growth of business vis-a-vis i. Performance Linked Incentives’ to those employees who
the business parameters laid down by the Board and are eligible for incentives.
Audit Committee and effect such improvements in the
scheme as are considered necessary; ii. Ex-gratia for other employees who are not eligible for
iv) On completion of the year, finalize the criteria of Performance linked Incentives.
allotment of marks to ensure objectivity/equity. iii. Bonus for those staff members who are eligible for
v) To identify Material Risk Takers (MRTs) as per the bonus under the Payment of Bonus Act, 1965.
recommendations made by MD & CEO and to fix variable iv. Any other incentives, by whatever name called having
pay and other terms of payment including component the features similar to the above.
(Cash and non-cash), deferment and divergence clause c) The Board may adopt principles similar to that enunciated
in line with compensation policy and other RBI guidelines for WTDs/CEOs, as appropriate, for variable pay-timing,
and other policies and guidelines of the bank. Malus/Clawback, guaranteed bonus and hedging.
For Others d) Employee Stock Option Scheme/Employee Stock Option
The Board will from time to time specify the Risk Control and Plan as may be framed by the Board from time to time in
Compliance Staff. conformity with relevant statutory provisions and SEBI
a) Based on the recommendations of the Committee, Board guidelines as applicable.
Quantitative disclosures
2019-20 2018-19
(g) • Number of meetings held by the Remuneration Committee during the financial year 6 8
• Remuneration paid to its members (` in Lakhs) 10.80 10.50
(h) • Number of employees having received a variable remuneration award during the financial year. 1 -
• Number and total amount of sign-on awards made during the financial year
o Number
o Total amount
• Details of severance pay, in addition to accrued benefits, if any
(i) (i) Total amount of outstanding deferred remuneration, split into cash, shares and share-linked instruments
and other forms.
(ii) Total amount of deferred remuneration paid out in the financial year
(j) Breakdown of amount of remuneration awards for the financial year to show fixed and variable, deferred and
non-deferred (` in Lakhs)
• Fixed 114.05 103.68
• Variable 25.92 0
• Deferred
• Non Deferred
(k) (i) Total amount of outstanding deferred remuneration and retained remuneration exposed to ex post explicit
and / or implicit adjustments
(ii) Total amount of reductions during the financial year due to ex-post explicit adjustments
(iii) Total amount of reductions during the financial year due to ex-post implicit adjustments
(l) Number of MRTs identified 1 0
(m) Number of cases where malus has been exercised
• Number of cases where clawback has been exercised
• Number of cases where both malus and clawback have been exercised
General Quantitative Disclosure

(n) The mean pay for the bank as a whole (excluding sub-staff) 8.74 7.40
and
the deviation of the pay of each of its WTDs* from the mean pay. (` in lakhs) 145.98 110.69
*Gross remuneration paid to MD & CEO is considered for this purpose, which excludes the provisions made
for gratuity and leave benefits as they are determined on an actuarial basis for the Bank as a whole.
178
Summary comparison of accounting assets vs. leverage ratio exposure measure

Leverage Ratio:
Leverage ratio is a non-risk based measure of exposure over capital. The leverage ratio is calibrated to act as a credible supplementary
measure to the risk based capital requirements.
The Basel III leverage ratio is defined as the capital measure (the numerator) divided by the exposure measure (the denominator),
with this ratio expressed as a percentage.
Leverage Ratio = Capital Measure (Tier I Capital)
Exposure Measure
Summary comparison of accounting assets vs. leverage ratio exposure measure
Sl.
Item (` in Million)
No.
1 Total consolidated assets as per published financial statements 9,70,329.00
2 Adjustment for investments in banking, financial, insurance or commercial entities that are consolidated for accounting 0.00
purposes but outside the scope of regulatory consolidation
3 Adjustment for fiduciary assets recognised on the balance sheet pursuant to the operative accounting framework but (813.05)
excluded from the leverage ratio exposure measure
4 Adjustments for derivative financial instruments 3,831.83
5 Adjustment for securities financing transactions (i.e. repos and similar secured lending) 9,500.00
6 Adjustment for off-balance sheet items (i.e. conversion to credit equivalent amounts of off- balance sheet exposures) 33,784.55
7 Other adjustments 0.00
8 Leverage ratio exposure 10,16,632.33
Leverage ratio common disclosure template
Leverage ratio
Sl.
Item framework
No.
(` in million)
On-balance sheet exposures
1 On-balance sheet items (excluding derivatives and SFTs, but including collateral) 9,70,329.00
2 (Asset amounts deducted in determining Basel III Tier 1 capital) (813.05)
3 Total on-balance sheet exposures (excluding derivatives and SFTs) (sum of lines 1 and 2) 9,69,515.95
Derivative exposures
4 Replacement cost associated with all derivatives transactions (i.e. net of eligible cash variation margin) 2,036.61
5 Add-on amounts for PFE associated with all derivatives transactions 1,795.22
6 Gross-up for derivatives collateral provided where deducted from the balance sheet assets pursuant to the operative 0.00
accounting framework
7 (Deductions of receivables assets for cash variation margin provided in derivatives transactions) 0.00
8 (Exempted CCP leg of client-cleared trade exposures) 0.00
9 Adjusted effective notional amount of written credit derivatives 0.00
10 (Adjusted effective notional offsets and add-on deductions for written credit derivatives) 0.00
11 Total derivative exposures (sum of lines 4 to 10) 3,831.83
Securities financing transaction exposures
12 Gross SFT assets (with no recognition of netting), after adjusting for sale accounting transactions 9,500.00
13 (Netted amounts of cash payables and cash receivables of gross SFT assets) 0.00
14 CCR exposure for SFT assets 0.00
15 Agent transaction exposures 0.00
16 Total securities financing transaction exposures (sum of lines 12 to 15) 9,500.00
Other off-balance sheet exposures
17 Off-balance sheet exposure at gross notional amount 1,98,269.01
18 (Adjustments for conversion to credit equivalent amounts) (1,64,484.46)
19 Off-balance sheet items (sum of lines 17 and 18) 33,784.55
Capital and total exposures
20 Tier 1 capital 56,947.48
21 Total exposures (sum of lines 3, 11, 16 and 19) 10,16,632.33
Leverage ratio
22 Basel III leverage ratio 5.60 %
179
NOTES
Form No. SH-13

Nomination Form
[Pursuant to section 72 of the Companies Act, 2013 and rule 19(1) of the Companies (Share Capital and Debentures) Rules 2014]
(To be filed in duplicate)
To,
Regd. Office, SIB House
PB No. 28, T. B. Road, Thrissur, Kerala – 680 001
I/We ……………………………………………………………………………………………………… the holder(s) of the securities of

The South Indian Bank Ltd. Thrissur – 680 001 Kerala, particulars of which are given hereunder wish to make nomination and
do hereby nominate the following persons in whom shall vest, all the rights in respect of such securities in the event of my/our
death.
(1) PARTICULARS OF THE SECURITIES (in respect of which nomination is being made):
Nature of Securities Folio No. No. of securities Certificate No. Distinctive Nos.
(2) PARTICULARS OF NOMINEE:

Name:
Date of Birth:
Father’s/Mother’s/Spouse’s name:
Occupation:
Nationality:
Address:
E-mail id:
Relationship with the Security Holder:
(3) IN CASE NOMINEE IS A MINOR:
Date of birth:
Date of Attaining Majority:
Name of guardian:
Address of guardian:
(4) SHAREHOLDERS INFORMATION
Signature
HOLDER 1
Name
Address
Date
Signature
HOLDER 2
Name
Address
Date
(5) Name, Address and Signature of two Witnesses
Name and Address Signature with Date
1.
2.
Encl.: Photo ID Proofs of shareholder(s) : Please mark [√ ] and write ID registration No.(s)
Driving Electoral Voter ID PAN Card Passport Bank Pass book Bank/Govt. employee Others (specify)
Licence (With photo) ID card
(For instructions, please see overleaf)
181
INSTRUCTIONS:
1. Please read the instructions given below very carefully and follow the same. If the form is not filed as per instructions, the
same will be rejected.
2. The Nomination can be made by Individuals holding shares on their own behalf singly or jointly. Non-individuals including
Society, Trust, Body Corporate, Partnership Firm, Karta or Hindu Undivided Family, Holders of Power of Attorney cannot
nominate. If the shares are held jointly, all joint holders shall sign (as per the specimen registered with the Company) the
nomination form.
3. A Minor can be nominated by a holder of shares and in that event, the name and address of the Guardian should be
provided.
4. The Nominee shall not be a Trust, Society, Body Corporate, Partnership Firm, Karta of Hindu Undivided Family or a Power
of Attorney Holder; A Non-Resident Indian can be a nominee on re-patriable basis.
5. Nomination stands rescinded upon transfer of shares.
6. Transfer of shares in favour of Nominee shall be valid discharge by the Company against the Legal heir.
7. Only one person can be nominated to a given folio.
8. Details of all holders in a folio need to be filled. Else the request will be rejected.
9. The nomination will be registered only when it is complete in all respects including the signature of all registered holders
(as per the specimen lodged with the company).
10. Whenever the shares in the given folio are entirely transferred, transpositioned or dematerialized with some other folio,
then this nomination shall stand rescinded.
11. The Nomination form shall be filed in duplicate with the Share Transfer Agents M/s BTS Consultancy Services Pvt.
Ltd., MS Complex, 1st Floor, No. 8, Sastri Nagar, Near 200 Feet Road/RTO Kolathur, Kolathur, Chennai – 600 099,
Tamilnadu, who will return one copy thereof to the Shareholders.
12. Upon receipt of a duly executed nomination form, the Company/Share Transfer Agent of the Company will register the
form and allot a registration number. The registration number and Folio No. should be quoted by the nominee in all future
correspondence.
13. The nomination can be varied or cancelled by giving a notice to the Company in Form No. SH-14. The cancellation/variation
shall take effect from the date on which the notice of such variation or cancellation is received by the company.
14. This form is meant for shareholders holding shares in physical mode.
15. Shareholders holding shares in dematerialized mode, nomination is required to be filled with the Depository Participants
(DPs) in their prescribed form.
FOR OFFICE USE ONLY

Nomination Registration Number and Date
Share Registrar/Company Seal
182
FORMAT FOR REGISTERING EMAIL ID
To
M/s BTS Consultancy Services Pvt. Ltd. FOR SHARES HELD IN PHYSICAL MODE
Unit: South Indian Bank Ltd.
Please complete this form and send it to
MS Complex, 1st Floor, No. 8, Sastri Nagar
Near 200 Feet Road / RTO Kolathur M/s BTS Consultancy Services Pvt. Ltd., Chennai
Tel : 044 - 2556 5121 SHAREHOLDERS HOLDING SHARES IN DEMAT MODE
Fax : 044 - 2556 5131 Should inform their DPs directly
Email : [email protected]
Sub.: Registering of e-mail address for service of documents through e-mail
I hereby request the Bank to register my e-mail address given below and give consent for service of documents
including the notice of shareholders’ meeting and Postal Ballot, Balance sheet, Profit & Loss Account, Auditors’
Report, Directors’ Report etc. through e-mail;
1. Folio No. :
2. Name of the 1st Registered Holder :
3. E-mail address :
--------------------------------------------------------
Signature of the 1st registered holder as per
the specimen signature with the company
Name :
Place :
Date : ___/___/___
183
ECS MANDATE FORM
To
M/s BTS Consultancy Services Pvt. Ltd. FOR SHARES HELD IN PHYSICAL MODE
Unit: South Indian Bank Ltd.
MS Complex, 1st Floor, No. 8, Sastri Nagar Please complete this form and send it to
Near 200 Feet Road / RTO Kolathur M/s BTS Consultancy Services Pvt. Ltd., Chennai
Tel: 044-2556 5121 SHAREHOLDERS HOLDING SHARES IN DEMAT MODE
Fax: 044-2556 5131 Should inform their DPs directly
email: [email protected]
I hereby consent to have the amount of dividend on my equity shares credited through the Electronic Clearing Service (Credit
Clearing) – (ECS). The particulars are :
1) Folio No. : _____________________________________________________________________
2) Name of the 1st Registered Holder : _____________________________________________________________________
3) Bank Details :
 Name of the Bank : _____________________________________________________________________
 Full Address of the Branch : _____________________________________________________________________
_____________________________________________________________________
 Complete Account Number : _____________________________________________________________________
 Account Type : (Please tick the relevant box for Savings Bank A/c, Current A/c or Cash Credit A/c)
10-Savings 11-Current 12-Cash Credit
 9 Digit Code Number of the Bank and Branch appearing on the MICR Cheque issued by the Bank
(Please attach a photocopy of a cheque for verifying the accuracy of the code number).
I hereby declare that the particulars given above are correct and complete. If the transaction is delayed because of incomplete or
incorrect information, I will not hold the company responsible.
Signature of the 1st Registered holder as per

the specimen signature with the Company
Name : ________________________________________________
Date:__/___/ 2020
Address: ________________________________________________
Note:
1. This form should be submitted to our Share Transfer Agents at the address given above to reach them on or before ____________
for receipt of dividend declared, if any, for the financial year 2019-20.
2. This form is meant for shareholders holding shares in physical mode.
3. Shareholders holding shares in Demat mode should register their ECS particulars with their Depository Participants (DPs).
184

Annual Report SIB 2019-20

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Experience Next Generation Banking

DIRECTORS’ REPORT to the shareholders

PRODUCTS NON-PERFORMING ASSETS (NPA)

made in connection with the various CSR initiatives, product MANPOWER

Continuous Assessment Test for Prob. Officers ISO 270001:2013 certification

Particulars of Employees • Protection of national heritage, art and culture including

Composition of Audit Committee b) Special knowledge or practical experience in Banking,

Woman Director Criteria for determining Independence of a director

CORPORATE GOVERNANCE Material Changes and Commitment Affecting Financial

a) in the preparation of the annual accounts for the financial

(SALIM GANGADHARAN) (V G MATHEW)

PARTICULARS PURSUANT TO SECTION 197(12) OF THE COMPANIES ACT, 2013

For this purpose, sitting fees paid to the Directors (except

(SALIM GANGADHARAN) (V G MATHEW)

Details of CSR spent during the Financial Year

Sector-wise utilization of CSR funds for FY 2019-20 (Amount in `)

To (a) The Securities and Exchange Board of India

During the period, the following issues have taken place:

Sl. Method of Mode of Approval Date of Number of shares issued/Amount

Non-Convertible, unsecured, Basel III Compliant Tier I bonds

For SVJS & Associates

For SVJS & Associates

SECTION B: FINANCIAL DETAILS OF THE COMPANY

SECTION C: OTHER DETAILS

1. Details of Director/Directors responsible for BR

ANNEXURE TO THE DIRECTORS’ REPORT

REPORT ON CORPORATE GOVERNANCE

Bank’s Philosophy on Code of Governance:

ANNEXURE TO THE DIRECTORS’ REPORT

ANNEXURE TO THE DIRECTORS’ REPORT

ANNEXURE TO THE DIRECTORS’ REPORT

ANNEXURE TO THE DIRECTORS’ REPORT

ANNEXURE TO THE DIRECTORS’ REPORT

ANNEXURE TO THE DIRECTORS’ REPORT

ANNEXURE TO THE DIRECTORS’ REPORT

ANNEXURE TO THE DIRECTORS’ REPORT

(D) N P A REVIEW COMMITTEE Terms of reference of Customer Service Committee:

ANNEXURE TO THE DIRECTORS’ REPORT

ANNEXURE TO THE DIRECTORS’ REPORT

ANNEXURE TO THE DIRECTORS’ REPORT

ANNEXURE TO THE DIRECTORS’ REPORT

ANNEXURE TO THE DIRECTORS’ REPORT

ANNEXURE TO THE DIRECTORS’ REPORT

** Ceased to be a member w.e.f. 18.10.2019 (N) INTERVIEW COMMITTEE

ANNEXURE TO THE DIRECTORS’ REPORT

ANNEXURE TO THE DIRECTORS’ REPORT

ANNEXURE TO THE DIRECTORS’ REPORT

Resume of Directors seeking ratification at the 92nd Annual

4. DETAILS OF GENERAL BODY MEETINGS HELD IN THE LAST 3 YEARS

ANNEXURE TO THE DIRECTORS’ REPORT

90th Annual General Wednesday, July 11, Casino Cultural Yes.

ANNEXURE TO THE DIRECTORS’ REPORT

ANNEXURE TO THE DIRECTORS’ REPORT

O) Credit Ratings and Change/Revisions in Credit Ratings for Debt Instruments

ANNEXURE TO THE DIRECTORS’ REPORT

ANNEXURE TO THE DIRECTORS’ REPORT

DISTRIBUTION OF SHAREHOLDING AS ON MARCH 31, 2020

ANNEXURE TO THE DIRECTORS’ REPORT

Shareholders holding more than 1% as on March 31, 2020

ANNEXURE TO THE DIRECTORS’ REPORT