CHAIRPERSON AND MANAGING DIRECTOR
It is my pleasure to present the Annual Report of your Bank along with the Balance
Sheet as at 31st March,2012 and Profit & Loss Account for the financial year ended
31st March 2012. After crossing the landmark business mix of Rs. 1 Lac Crore last year I
am pleased to inform you that with your support and confidence of the customers the Bank
was able to cross Business Mix of Rs. 1,34,000 crore during the year.
The Financial Year 2011-12 had been a challenging year. The Global Economies witnessed
a modest recovery with accelerated GDP growth in US. However concerns persisted with
regard to the sustaining of the momentum. The uncertainty in the EURO zone primarily
because of the sovereign debt crisis even after large scale infusion of liquidity by the
European Commercial Banks has resulted in the negative GDP growth in the fourth quarter.
The increase in oil prices which are mainly fuelled by uncertainties of supply have raised
concerns on escalation of global inflation. The emerging market economies which are viewed
as growth engines of the world economy world over have also slowed down due to tightening
of the monetary conditions to tame the rising inflation. The Indian economy which had
registered a growth of 8.6% during 2011 has further moderated during 2012 and is expected
to grow at 6.9% very close to the base line projection of 7.00% by Reserve Bank of India.
This has been mainly on account of slowdown in the industrial sector due to cumulative
effect of the monetary tightening and slackening of external demands. The Reserve Bank of
India monetary stance in the first half concentrating on containing the inflation paused
with unchanged policy rates in the mid quarter review in December 2011 and modified policy
rates downwards in its major policy announcements for 2012-2013 to provide greater
liquidity to financial system to enhance growth and at the same time ensure safeguards
against any demand side inflationary pressures re-emerging.
In view of the moderation in growth and inflationary trends the non food credit growth
during 2011-2012 has remained subdued as compared to FY. 2010-2011. As on March, 2012
credit growth was 17% whereas the deposit growth was 13.40%. This resulted in wide gap
between credit growth and deposit growth. This has been inspite of Scheduled Commercial
Banks maintaining high interest rates on deposits for most part of the financial year.
Performance of the Bank:
Despite this challenging environment your Bank has been able to perform reasonably well
registering an all-round growth in various parameters. I would like to touch upon some of
the areas where your Bank has performed well during 2011-12. Business Mix of the Bank has
increased from Rs. 1,09,372.99 crore as of March 2011, to a new height of Rs. 1,34,326
crore as of March 2012, registering a growth of 22.81%. Total Deposits have grown to the
level of Rs. 77,166.80 crore as of March 2012 as compared to Rs. 64,209.62 crore as of
March 2011, registering a growth of 20.18%.
Total Advances of the Bank stood at Rs. 57,159.20 crore as of March 2012 as compared to
Rs. 45,163.37 Crore as of March 2011, registering a growth of 26.56%.
Keeping in view the policy of risk diversification, the credit deployment has been
strategically focused with emphasis on MSME, Retail and Agriculture sectors. Retail loans
stood at Rs. 7,283 crore, up by 18.69%, MSME loans stood at Rs. 8,291 crore showing an
increase of 22.22% while loans to agriculture sector stood at Rs. 6,989 crore, registering
a growth of 9.39% as of March 2012. Having identified MSME as one of the growth engine
Bank has significantly reduced interest rates on such advances to make it competitive and
has entered into tie up with auto manufacturers for financing of three wheelers.
Total income of the Bank for the year has increased by Rs. 1,808.63 Crore (32.49%) and
stood at Rs. 7,376 Crore. as compared to an Income of Rs. 5,567.37 Crore earned during the
previous year. Interest income of the Bank registered an increase by 34.98% and reached a
level of Rs. 6,794.13 Crore during the current year.
Whereas, the Banks net interest income (NII) has increased substantially by
19.15% and stood at Rs. 2,101 Crore as compared to Rs. 1,763.37 Crore posted during the
Core Fee based income has increased by Rs. 102.48 crore (27.31%) from Rs. 375.25 crore
as of March 2011 to Rs. 477.73 crore as of March 2012.
I am pleased to announce that your Bank has been successful in registering an increase
of 31.31 % in Net Profit from a level of Rs. 611.63 crore as on March 2011 to Rs. 803.14
crore during the current year. I am happy to announce that the Board of Directors of the
Bank have recommended an enhanced dividend of 30% (i.e Rs. 3.00 per Share ) for the
current year as against 22%( Rs. 2.20 per Share ) for the previous year.
The Bank has continued its efforts in maintaining asset quality and NPA management
during the year 2011-12 also, irrespective of the deteriorating asset quality experienced
by the banking industry in general. The concerted efforts made for upgradation of recently
slipped NPAs, recovery through compromise settlements, action under SARFAESI Act etc has
enabled Bank to maintain NPA at a minimum possible level. The efforts have also
contributed in achieving improved cash recovery during the year. The Gross NPA, in
absolute terms, increased by Rs. 114.26 Crore from Rs. 842.24 Crore as on 31st March 2011
to Rs. 956.50 Crore as on 31st March, 2012. Gross NPA ratio of the Bank decreased to 1.67%
as on 31.03.2012 from 1.86 % as on 31.03.2011.
The Net NPA ratio of the Bank stood at 1.01% as on 31.03.2012 as against 1.22% as on
31.03.2011. Net NPAs, in absolute terms increased by Rs. 22.78 Crore from Rs. 548.95 Crore
as on 31st March, 2011 to Rs. 571.73 Crore as on 31st March, 2012. Provision Coverage
Ratio (including prudential write off) stood at 75.53% i.e. well above the regulatory
requirement of 70%. The cash recovery in NPA Accounts during the year 2011-12 was Rs.
222.56 Crore and up gradation in the accounts was Rs. 191.47 Crore. The Bank recorded
recovery in written off accounts during the year of Rs. 81.93 Crore including recovery of
interest in written off accounts of Rs. 12.17 Crore.
The Bank has conducted 1461 recovery camps in various Regions during the year, which
were attended by 16940 borrowers. A total of 2785 accounts were settled for Rs. 32.46
Crore and 864 accounts were upgraded for Rs. 21.33 Crore during the year through such
New Capital Adequacy Norms:
During the year, the Bank allotted 1.67 Crore Equity Shares of face value of Rs. 10/-
at a price of Rs. 90.73 (including premium of Rs. 80.73) aggregating Rs. 151 crore, to the
Life Insurance Corporation of India on preferential basis. With the above allotment,
Government of India`s holding in the Bank stands reduced to 55.24% from 58.01%. The
Capital to Risk (Weighted) Asset Ratio (CRAR) stood at 11.51% as of March 2012, compared
to 13.41% as of March 2011, against the requirement of 9%. However, the Core CRAR of the
Bank under Basel II is 8.86 % as on 31st March, 2012 which indicates healthy level of Core
Capital. The Net Worth of the Bank improved to Rs. 4,256.14 crore as on 31.03.2012 from
Rs. 3,366.43 crore as on 31.03.2011, registering a growth of Rs. 889.71 Crore (26.43%).
Network and Delivery Channels:
With the focus on increasing the number of delivery channels, the Bank has opened 51
new branches during 2011-12. The total number of branches of the Bank stood at 1342 as of
March 2012. All the branches of the Bank are covered under CBS.
As at 31st March 2012, the Bank had an installation base of 543 ATMs comprising of 430
On-site ATMs and 113 Off-site ATMs for the convenience of customers. Two of the ATMs can
be operated by thumb impression which is convenient for small customers (under financial
inclusion) and semi-literate persons.
Human Resource Development:
It is my firm belief that for a service oriented organization like Bank to succeed,
human resource which interfaces with customers of the Bank should be adequately skilled
and efficient. In this regard your Bank has continued to focus on imparting training to
its employees in an on going process for development / improvement of their knowledge,
skill and business confidence. Trainings are conducted in- house at various training
centers and also through reputed institutions like NIBM, CAB, BIRD, BTC, etc. Bank has
also been nominating executives / officers for training programs in different foreign
During the year, the Bank had provided training to 3974 employees in thrust areas of
Credit, Rural Banking, Retail Banking, Risk Management, Treasury, Marketing, Information
Technology, Management Development, Customer Orientation, etc. During the year, 21
executives / officers were sent abroad for attending training.
The Bank, to meet its requirements of personnel for increasing business levels and
opening of new branches, has recruited 408 officers (incl. POs) under various scales and
disciplines and 404 clerks during the year.
Transformation through Technology:
As of March 2012, all the 1342 branches of the bank and the entire business have been
brought under CBS.
With a view to keep pace with the advancement in Banking technology the Bank has
launched "Dena i Connect" and Dena MConnect the internet and mobile
Banking Service for the customers of all branches. Dena i Connect enables the customers to
access their account information through internet which under normal circumstances would
have required them to visit the branch. The customers of the Bank can make payment of
Direct Taxes and Indirect Taxes through internet without visiting the branch. With Dena
MConnect customers can avail various facilities including funds transfer using
their mobile handset.
The Bank has started SMS Alert facility through which customers get alerts on
occurrence of any financial transactions or through delivery channels. Customers also
receive alerts for due dates of Term Deposits as well as Loan installments due date.
Financial Inclusion Plan:
During the year 2011-12, the Bank has implemented Financial Inclusion Plan ( FIP ) in
728 villages allocated to it by various SLBCs under Lead Bank Scheme. During 2011-2012
Bank has covered 41 villages by opening Brick and Motor Branches and has covered 34
villages by setting up Ultra Small Branches. The remaining 653 villages are covered by
engaging individual Business Correspondents.
The Financial Inclusion plan apart from providing banking outlets, also includes
extension of facilities like No Frills Accounts, Inbuilt Overdraft facility in the No
Frills Accounts, Entrepreneurship Credit, Remittance facilities, Micro-Insurance products
and issuance of Dena Kisan Credit Cards and Dena General Credit Cards.
Corporate Social Responsibilities
Your Bank believes in Corporate Social Responsibility by creating sustainable
livelihoods and contribute to rural transformation and education. In these efforts your
Bank has taken initiatives to address to some of the pressing developmental challenges.
Bank has set up some of the social projects like setting up of RSETI and supplementary
girl child education .
Rural Self Employment Training Institutes (RSETIs) :
The Bank has set up a Society known as Dena Rural Development Foundation (DRDF) with a
corpus of Rs. 150.00 lacs to take up various initiatives in Rural Development. DRDF in
turn has established 12 Rural Self Employment Training Institutes (RSETIs) in its lead
districts, 6 RSETIs in the State of Gujarat and 5 RSETIs in the state of Chhattisgarh and
1 in Silvassa in the U T. of Dadra & Nagar Haveli where your Bank is shouldering the
responsibility of Lead Bank.
Sponsoring Education of Girl Child:
As a part of Corporate Social Responsibility, the Bank has continued with the Nobel
Scheme viz. Dena Laxmi Shiksha Protsahan Yojana, to sponsor education of Girl students in
the villages served by the Bank. Under the scheme the Bank has been providing scholarships
of Rs. 2000/- and Rs. 1500/- per annum to identified girl student belonging to Below
Poverty Line (BPL) family. Such students are selected from each of the schools based on
first and second rank secured in 7th Standard from the villages under the command area of
the Bank. The Bank has so far provided scholarships to 2213 girl students under the
The Road Ahead:
With the policy stance of Reserve Bank of India intending to adjust policy rates to
levels in consistent with the current growth moderation, ensuring safe guards against
demand led inflation re-emerging and to provide adequate liquidity to the financial
system, the growth process is likely to stabilise and hence, the GDP growth outlook for
2012-13 is expected to be around 7.3%. The expectation on maintaining the economic growth
is based on the assumptions of increase in investment due to easing of liquidity and
stabilization of the inflation during the year. In view of the easier liquidity conditions
resulting from the moderation of the Monetary Policy stance of the Reserve Bank of India
with the intention of sustaining growth and also reigning in the inflationary pressures,
the Bank will be required to have a prudent and balanced approach in credit delivery and
monitoring system. The regulatory measures on implementation of Liquidity Risk Management
and Basel III Framework will also have impact on the Bank`s performance.
The Bank will continue with its strategy to remain focused on expanding its outreach by
opening branches in new areas and concentrate on thrust areas such as MSME, Retail and
Agriculture. The easing of liquidity can enable Bank to bring down the cost of deposit by
focusing on increasing CASA Deposits. Bank shall also accelerate efforts in increasing non
interest / fee based income. Bank has appointed IDBI Intech ( a PSU owned by IDBI ) to
suggest strategies and assist in the implementation of Business Process Re-Engineering
exercise involving people, processes and technology.
In line with the Government of India initiatives on Financial Inclusion, the Bank will
embark upon its urban financial inclusion plan by providing banking services to migrant
workers / labourers in select urban areas of Gujarat and Maharashtra through third party
I express my sincere thanks to the Banks valued customers, shareholders and well
wishers for their valuable contribution to the progress of the Bank and seek their
continued support and cooperation in future.
I acknowledge with gratitude, the timely advice, valuable guidance and support received
from Government of India and Reserve Bank of India.
I also acknowledge the valuable guidance, support and cooperation received from the
Directors on the Board of the Bank.
I am also thankful to the Financial Institutions / Banks and Correspondents for their
co-operation and support to the Bank.
I wish to place on record, the deep appreciation of the valuable contribution of the
staff, at all levels, without which the progress achieved, would have been unattainable. I
look forward to your continued co-operation in faster business development and progress of
Chairperson & Managing Director