MIRA
INFORM REPORT
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Report Date : |
14.09.2007 |
IDENTIFICATION DETAILS
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Name : |
CORPORATION BANK |
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Registered Office : |
Post Box No. 88, |
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Country : |
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Financials (as on) : |
31.03.2007 |
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Date of Incorporation : |
1906 |
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TAN No.: [Tax
Deduction & Collection Account No.] |
BLRC04854D |
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Legal Form : |
Public Sector Bank The Banks shares are listed on the Stock Exchanges. |
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Line of Business : |
Banking and Other related services |
RATING & COMMENTS
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MIRA’s Rating : |
Aa |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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71-85 |
Aa |
Possesses adequate working capital. No caution needed for credit transaction.
It has above average (strong) capability for payment of interest and
principal sums |
Large |
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Maximum Credit Limit : |
Large |
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Status : |
Excellent |
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Payment Behaviour : |
Regular |
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Litigation : |
Clear |
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Comments : |
Subject is a profit making Government of India bank. Available information indicates high financial responsibility of the bank and its' management. The bank is progressing very well. Its' payments are always correct and as per commitments. Its' financial position is good. The bank can be considered good for normal business dealings at usual trade terms and conditions. |
LOCATIONS
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Registered Office / Corporate Office : |
Post Box No. 88, |
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Tel. No.: |
91-824-2426416-20 / 2427911-13 / 2431 1685 / 2424971 (Direct) |
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Fax No.: |
91-824-2441208 / 2425233 / 2423853 / 2444617 / 2440964 |
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E-Mail : |
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Website : |
DIRECTORS
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Name : |
Mr. Ch. Hanumantha Rao |
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Designation : |
Director |
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Name : |
Mr. S. Ravi |
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Designation : |
Director |
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Date of Appointment |
25-07-2002 |
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Name : |
Mr. D. N. Prakash |
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Designation : |
Director |
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Qualification : |
Post Graduate in
economics, graduate in law and holder diploma in industrial relations and
personnel management. |
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Name : |
Mr. V. K. Chopra |
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Designation : |
Director |
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Name : |
Mr. Vinod Kumar Bhasin |
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Designation : |
Director |
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Name : |
Mr. C. V. George |
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Designation : |
Director |
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Name : |
Mr. V. K. Chanana |
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Designation : |
Director |
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Date of Appointment : |
25-07-2002 |
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Qualification: |
Post graduate in
science and economics, is a retired IAS officer |
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Other Directorship : |
Senior Technical
Advisor to UNIDO, Joint Secretary in the
Department of Industrial Development, Commissioner of Industries UP, Deputy
Chairman of UP Finance Corporation, Labour Commissioner For Himachal Pradesh
and Delhi and was in-charge of ILO for assisting projects for growth of small
scale industries in Allahabad. |
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Name : |
Mr. K.K.G. Pillai |
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Designation : |
Director |
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Date of Appointment |
25-07-2002 |
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Qualification |
Post Graduate in
Technology (Industrial Engineering & Management) |
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Experience |
20 years with corporation Bank & 12 years with
Bharat Heavy Electricals Limited |
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Other Directorship |
CEO of TVS
Technology Limited and Bharat Heavy Electricals Limited |
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Name : |
Mr. Dushyant Tyagi |
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Designation : |
Director |
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Date of Appointment |
25-07-2002 |
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Qualification |
M.Com & C. A. |
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Experience |
13 years as a C. A. |
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Other Directorship |
Chairman/ Secretary of Northern India Regional Council of the Institute of Chartered Accountants of India, Hotline CPT Limited as IDBI nominee. |
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Name : |
Mr. Ramakant Vashishtha |
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Designation : |
Director |
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Name : |
Mr. Thomas Mathew
T |
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Designation : |
Director |
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Name : |
Mr. B
Sambamurthy |
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Designation : |
Chairman & Managing Director |
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Name : |
Mr. K L Gopalakrishna |
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Designation : |
Executive Director |
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Name : |
Mr. Mukul Singhal |
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Designation : |
Nominee (Govt) |
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Name : |
Mr. M A Srinivasan |
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Designation : |
Nominee (RBI) |
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Name : |
Mr. C Ramakrishna Kamath |
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Designation : |
Director(Shareholders) |
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Name : |
Mr. P M Sirajuddin |
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Designation : |
Director |
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Name : |
Mr. Hiren Mehta |
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Designation : |
Director |
KEY EXECUTIVES
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Name : |
Mr. K. Achutha Pai |
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Designation : |
General Manager |
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Name : |
Mr. M. D. Mallya |
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Designation : |
General Manager |
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Name : |
Mr. M, Narendra |
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Designation : |
General Manager |
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Name : |
Mr. A. Mohan Rao |
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Designation : |
General Manager |
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Name : |
Mr. K.R. Kamath |
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Designation : |
General Manager |
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Name : |
Mr. V.A. Mendonsa |
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Designation : |
General Manager |
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Name : |
Mr. R. K. Nair |
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Designation : |
General Manager |
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Name : |
Mr. N.N. Pal |
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Designation : |
General Manager |
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Name : |
Mr. M. R. Navak |
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Designation : |
General Manager |
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Name : |
Mr. K.A. Kamath |
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Designation : |
General Manager |
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Name : |
Mr. K.P. Rao |
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Designation : |
General Manager |
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Name : |
Mr. T.M. Lakshmikanthan |
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Designation : |
General Manager |
MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN
As on 30.06.2007
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Category
of Shareholder |
No. of Shares |
Percentage of
Holding |
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Shareholding of Promoter and Promoter Group2 |
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Indian |
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Central Government/ State Government(s) |
82000000 |
57.17 |
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Public shareholding |
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Institutions |
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Mutual Funds/ UTI |
4584368 |
3.20 |
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Financial Institutions / Banks |
38009 |
0.03 |
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Insurance Companies |
39531074 |
27.56 |
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Foreign Institutional Investors |
13173939 |
9.18 |
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Non-institutions |
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Bodies Corporate |
482236 |
0.34 |
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Individuals |
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Individuals -i. Individual shareholders holding nominal share
capital up to Rs 0.100 Million |
3294721 |
2.30 |
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ii. Individual shareholders holding nominal share capital in excess of Rs. 0.100
Million |
32316 |
0.02 |
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Any
Other (specify) |
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Clearing Member |
31951 |
0.02 |
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Non Resident Indians |
266136 |
0.19 |
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Overseas Corporate Bodies |
5100 |
0.00 |
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Trusts |
150 |
0.00 |
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Total |
143440000 |
100.00 |
BUSINESS DETAILS
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Line of Business : |
Banking and Other related services |
GENERAL INFORMATION
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No. of Employees : |
8379 |
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Bankers : |
Reserve Bank of |
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Banking
Relations : |
Good |
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Auditors : |
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Name : |
Chartered Accountants
Chartered Accountants
Chartered Accountants
Chartered Accountants
Chartered Accountants
Chartered Accountants |
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Collaborators : |
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Associates/Subsidiaries : |
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CAPITAL STRUCTURE
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
150,00,00,000 |
Equity Shares |
Rs.10 each |
Rs. 15000.000 millions |
Issued, Subscribed & Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
14,34,40,000 |
Equity Shares |
Rs.10 each |
Rs. 1434.400 millions |
FINANCIAL DATA
[all figures are in
Rupees Millions]
ABRIDGED BALANCE
SHEET
|
PARTICULARS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
|
LIABILITIES |
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Share Capital |
1434.400
|
1434.400
|
1434.376 |
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Reserves &
Surplus |
36220.200
|
32314.500
|
29114.834 |
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Deposits |
423568.900
|
32,8765.300
|
272331.580 |
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Borrowings |
30210.100
|
16600.800
|
12978.929 |
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Other Liabilities
& Provisions |
35772.900
|
25951.300
|
23378.758 |
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TOTAL
|
527206.500 |
405066.300 |
339238.477 |
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ASSETS |
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Cash &
Balances with RBI |
29836.700
|
16397.900
|
19208.887 |
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Balances with
Banks & money at Call & Short notice |
37352.200
|
24489.000
|
16597.453 |
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Investments |
144174.900
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106520.000
|
102611.059 |
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Advances |
299496.500
|
239624.300
|
185463.787 |
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Fixed Assets |
2810.400
|
2558.500
|
2562.033 |
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Other Assets |
13535.800
|
15476.600
|
12795.258 |
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TOTAL
|
527206.500 |
405066.300 |
339238.477 |
PROFIT & LOSS
ACCOUNT
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PARTICULARS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
|
Interest Earned |
34301.600
|
26264.700
|
22498.000
|
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Other Income |
6398.600
|
5752.100
|
5645.700
|
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TOTAL |
40700.200 |
32016.800 |
28143.700 |
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Interest expended |
20523.700
|
13996.600
|
11204.100
|
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Operating Expenses |
8776.100
|
8446.900
|
6669.700
|
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Provisions & Contingencies |
6039.000
|
5128.700
|
6248.200
|
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TOTAL |
35338.800 |
27572.200 |
24122.000 |
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Net Profit for the year |
5361.400
|
4444.600
|
4021.700
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QUARTERLY RESULTS
|
PARTICULARS |
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|
30.06.2007 |
|
Type |
|
|
1st
Qtr |
|
Sales Turnover |
|
|
11201.300 |
|
Other Income |
|
|
1187.000 |
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Total Income |
|
|
12388.300 |
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Total Expenditure |
|
|
2353.000 |
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Operating Profit |
|
|
10035.300 |
|
Interest |
|
|
7479.200 |
|
Gross Profit |
|
|
2556.100 |
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Depreciation |
|
|
00.000 |
|
Tax |
|
|
785.000 |
|
Reported PAT |
|
|
1771.100 |
200706
Quarter 1 –
Provision & Contingencies indicates provisions for Non
Performing Assets of Rs 345.00 million Status of Investor Complaints for the quarter
ended June 30, 2007 Complaints Pending at the beginning of the quarter Nil
Complaints Received during the quarter 49 Complaints disposed off during the
quarter 49 Complaints unresolved at the end of the quarter Nil 1. The financial
results have been prepared following the same accounting policies as those
followed in the annual financial statements for the year ended March 31, 2007.
2. The working results for the quarter ended June 30, 2007 have been arrived at
after considering provision for Non Performing and Standard Assets as per
Reserve Bank of
KEY RATIOS
|
PARTICULARS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
|
Credit Deposit Ratio |
71.66 |
70.72 |
64.33 |
|
Investment Deposit Ratio |
33.32 |
34.79 |
41.54 |
|
Cash Deposit Ratio |
6.15 |
5.92 |
7.17 |
|
Interest Expended/Interest
Earned |
59.83 |
53.29 |
49.80 |
|
Other Income/Total Income |
15.72 |
17.97 |
20.06 |
|
Operating Expense/Total Income |
21.56 |
26.38 |
23.70 |
|
Interest Income/Total Funds |
7.36 |
7.06 |
7.13 |
|
Interest Expended /Total Funds |
4.40 |
3.76 |
3.55 |
|
Net Interest Income/Total Funds |
2.96 |
3.30 |
3.58 |
|
Non Interest Income/Total Funds |
1.37 |
1.55 |
1.79 |
|
Operating Expense/Total Income |
1.88 |
2.27 |
2.11 |
|
Profit Before Provisions/Total
Funds |
2.45 |
2.57 |
3.26 |
|
Net Profit/Total Funds |
1.15 |
1.19 |
1.28 |
|
Return On Net Worth(%) |
15.02 |
13.82 |
13.81 |
LOCAL AGENCY FURTHER INFORMATION
History
Founded in March 1906, Corporation Bank (CBL) (formerly
Canara Banking Corporation) is a 99 year old bank. The bank had its origin in
the temple town of
The growth in the operations and scale of activities of the bank is accompanied
by commensurate growth in its financial strength. Throughout its history, the
bank has maintained a consistent track record of growth and profitability.
Through strategic business planning, technology upgradation, focus on core
competencies and good house-keeping, the bank has emerged as a financially
sound, profitable and well capitalised organisation.
At Present, the bank has got one subsidiaries i.e Corpbank Securities Limited
Corp Bank Homes Limited, the wholly owned subsidiary of the bank has merged
with Corporation Bank vide Honourable High Court of Karnataka order dated 11th
August, 2006 and the merger was effective from 04.10.2006.
During the fiscal year 2000, the bank apart from its exclusive subsidiary for
housing finance Corpbank Homes, had set up another wholly owned subsidiary
Corpbank Securities to function as a primary dealer in Government Securities.
The Bank offers a wide range of products and services designed to suit every
financial need of the customers. It is also an large provider of credit,
inter-alia, to domestic industries, with a well-diversified credit portfolio
consistent with national needs. Its products and services are marketed under
the theme 'Advantage Corp Bank'. The Bank is also on the threshold of
implementation of further advanced technology and the bank's Internet Banking
initiatives are already underway. It has a significant contribution towards
enhancing civic amenities in the city of
Further, CBL and Life Insurance Corporation of India (LIC) have joined hands in
a strategic alliance for selling LIC's insurance products and bank assurance
products designed by LIC. The bank will become a corporate agent and tap its
vast customer base for selling life products and increase its fee-based income.
LIC will consider providing group insurance cover to the account holders of the
bank. This strategic alliance between an insurance giant and a leading public
sector bank is the first of its kind and will have a far-reaching effect on the
financial sector. This alliance is likely to provide tremendous business
opportunities to both parties. It has also entered into a strategic alliane
with New India Assurance Company for the bank acting as a corporate agent for
selling their general insurance products.
During 2001-02 the bank alloted 2,34,40,000 equity shares of Rs 10/- each for
cash at a premium of Rs 186/- to Life Insurance Corporation of India (LIC) on
preferential basis. LIC's stake thus increased from 13% to 27%, while
subsequently government hoding in the bank stand reduced to 57% from 68%
previously.
During 2006-07, 66 branches were opened by the bank thereby taking the number
of branches to 901 as on 31.03.2007, spread over 23 states and 2 union
territories. Out of the above, the number of specialised branches are 156. The
number of Extension Counters as on 31.03.2007 stood at 47.
Performance
at a glance:
The aggregate business of the Bank crossed another milestone mark of Rs.723000
Millions during the financial year 2006-07. The total business of the Bank
increased by Rs.154670 Millions to Rs.723060 Millions at the end of the year
2006-07, from Rs.568390 Millions recording a growth rate of 27.21%.
The total deposits of the Bank have grown by Rs.9481 Millions from Rs.328760
Millions as on 31st March 2006 to Rs.423570 Millions as on 31st March 2007,
registering a growth rate of 28.83%.
The Bank continued its prudent approach in expanding quality credit assets in
line with its policy on Credit Risk Management. The advances of the Bank
increased by Rs.59880 Millions from Rs.239620 Millions as on 31st March 2006 to
Rs.299500 Millions as on 31st March 2007, registering a growth rate of 24.99%.
During the year, focused attention was given for accelerated lending under
agricultural, SSI and midsized corporate segments for expansion of
credit.
The performance of the Bank under recovery of NPAs during the year was
impressive. During the year the Bank effected a cash recovery of Rs.1900.400
Millions, compared to Rs.1711.5 Millions in the previous year.
While the encouraging performance in different functional areas during the year
2006-07 resulted in increased earnings in absolute terms, the margins were
under pressure and the interest spread declined to 3.24% as on 31st March 2007,
compared to 3.56% during the previous year.
Branch
Network:
During the financial year 2006-07, 66 branches were opened, thereby taking the
number of branches to 901 as on 31.03.2007, spread over 23 states and 2 union
territories.
Out of the above, the number of specialised branches are 156. The number of
Extension Counters as on 31.03.2007 stood at 47.
Specialised Branches No.
Personal Banking Branch 28CAPS 10Industrial Finance Branch 6SME 4Asset Recovery
5Housing Finance 4Overseas 2Commercial Banking 2NRI 1Service Branches
11Commercial & Personal Banking 66Foreign Exchange Service Branch 1Retail
Hub 11Fast Collection Service 5* 156
ANAGEMENT
DISCUSSION AND ANALYSIS
Monetary and Credit Policy for 2006-07:
The stance of monetary policy for the year 2006-07 continued to ensure that
appropriate liquidity is maintained in the system so that all legitimate
requirements of credit, consistent with the objective of price and financial
stability are met.
For 2006-07, GDP growth was placed in the range of 7.5-8.0% and M3 growth at
15.0%. The inflation rate for 2006-07 was projected to be in a range of
5.0-5.5%. Growth in aggregate deposits and non-food credit were expected to be
around 16% and 20%, respectively.
Under monetary measures, Bank Rate, Repo Rate, Reverse Repo Rate and Cash
Reserve Ratio all were left unchanged at 6.0%, 6.5%, 5.5% and 5.00%;
respectively.
While status quo was maintained on interest rate on savings bank deposits, the
ceiling on interest rates on NRE deposits for 1-3 years maturity was raised by
25 basis points to 100 basis points above LIBOR/SWAP rates for US dollar of
corresponding maturity. The ceiling interest rate on export credit in foreign
currency was raised, by 25 basis points to LIBOR plus 100 basis points from
LIBOR plus 75 basis points.
It was decided to introduce `When issued' (WI) market in Government securities.
A screen-based negotiated quote-driven system for dealings in call/notice and
term money market (NDS-CALL) was proposed to be launched with participation by
market constituents. Mutual Funds - NDS members - were permitted to access the
NDS-OM module with immediate effect. Other Mutual Funds were permitted access
through temporary current/SGL accounts with RBI. Purchase and resale of State
Development Loans by the Reserve Bank was introduced under the overnight LAF
repo operations. RRBs were permitted to open/shift offices after obtaining
clearance from the Empowered Committees (ECs) and requests for conduct of
foreign exchange business were to be similarly treated.
SLBC convenors in all States/UTs were advised to identify at least one district
in their area for achieving 100% financial inclusion.
Banks had been advised to display and update, in their
offices/branches as also on their websites, the details of various service
charges on RBI approved format. The constitution of a working group to
formulate a scheme for ensuring reasonableness of bank charges and to
incorporate the same in the Fair Practices Code was proposed.
Legal amendments were proposed to enable all banks in
Macro-Economic Scenario:
Advance estimates released by the Central Statistical Organisation (CSO) in
Feb'07 have placed the GDP growth for 2006-07 at 9.2% (against 9.0% in
2005-06). The growth is expected to be led by industry (more specifically,
manufacturing) and services. Agriculture sector is found to be an area of
concern, which may expand by a mere 2.7% on top of the 6% for 2005-06.
The sectors which registered significant growth in Q3 of 2006-07 over Q3 of
2005-06 are, `mining & quarrying' at 5.7%, `manufacturing' at 10.7%,
`electricity, gas and water supply at 9.3%, `construction' at 9.8%, `trade,
hotels, transport and communication' at 13.0%, `financing, insurance, real
estate and business services' at 11.6%, and community, social and personal
services' at 7.5%. Agriculture, forestry & fishing' grew by only 1.5% as
compared to a growth of 8.7% in the same quarter of the previous year.
Headline inflation in major advanced economies eased during Sep-Oct.'06 on the
back of base effects as well as the sharp decline in international crude oil
prices, but again rose during Nov-Dec.'06, core inflation remained firm. In
The Indian capital market continued on a flamboyant journey for the fifth
successive year, except at the end of the year when it witnessed a steep
correction. It was the country's consistent economic growth and robust
corporate earnings throughout the year that remained the principal triggers for
the market's (Sensex) rapid travel to new heights, even setting aside some big
hurdles. The Sensex breached 14K level on Dec' 06 to reach 14035.30 but by the
end of the fiscal it was ruling at 13 K levels.
On BoP basis, merchandise exports recorded an increase of 19.3% during
Apr.'06-Feb.'07 (26.3010 in the corresponding period of previous year).
Merchandise import payments, on BoP basis, showed 27.8% growth in
Apr.'06-Feb.'07 (32.7010). According to commodity-wise data released by
DGCI&S (up to Nov'06), deceleration in exports growth occurred on account
of slowdown in exports of manufactured goods viz., chemical and related
products, textile and textile products, leather and manufactures and decline in
exports of handicrafts and gems and jewellery. Oil imports increased by 32.6010
in Apr.'06-Feb.'07 (49.7%) while non-oil imports recorded a more moderate
growth of 25.7% (26.4%). Trade deficit at US$ 55.8 billion during
Apr.'06-Feb.'07 was higher by 48.5% than in the corresponding period of the
previous year (US$ 37.6 billion).
Forex reserves, comprising foreign currency assets, gold, Special Drawing
Rights (SDRs) and Reserve Tranche Position (RTP) reached US$ 197.7 billion on
23 Mar.'07 from $152 billion at end Mar.'06.
The Rupee gained significantly during the year, as strong investor sentiments
driven by robust economic growth and bullish domestic stock markets kept
capital inflows strong over the year. Monetary tightening, adopted through a
series of rate hikes, improved the interest rate differential, thus further
aiding the inflow of funds. The rupee surged to an eight-year high of 43.04105
on 28 Mar.'07, last seen in 1999.
Banking Trends:
RBI continued to modulate market liquidity with the help of LAF repo and
reverse repo and issuance of securities under the Market Stabilisation Scheme
(MSS). Furthermore, the 100 bps hike in CRR announced during (the last quarter
of) the fiscal, resulted in the inter-bank call rate rising rapidly as the
requirement of banks for funds increased to cover reserve requirements with the
central bank. A 100 bps upward revision in the repo rate and a 50 bps hike in
the reverse repo rate, along with monetary tightening by way of a hike in the
CRR during the fiscal, resulted in overall hardening of interest rates. Strong
demand for credit and brewing inflationary pressures resulted in these monetary
tightening measures.
Bank credit continued to grow at a strong pace during 2006-07 but the pace of
growth slowed down to some extent by the end of Mar.'07. Non-food credit
extended by SCBs increased by 28.0% in 2006-07, on top of 31.8% in the previous
year. The growth of bank credit could be accommodated by acceleration in
deposit growth of SCBs by 23.0% in 2006-07 (18.10l0).
Concomitantly, broad money growth has remained above the indicative trajectory.
Broad money growth was 20.8010 in 2006-07 (17.0010).
RBI has increased the provisioning requirements for scheduled commercial banks
(SCBs) from 1% to 2% on their exposure in the standard assets category towards
the real estate sector, outstanding credit card receivables, loans and advances
qualifying as capital market exposure, and personal loans.
In its revised draft guidelines for implementation of new capital adequacy
framework, RBI has suggested a hike in the minimum Tier I ratio from 4.5 % to
6%. The deadline for implementing Basel II, originally set for 31 Mar.'07, has
been extended. Foreign banks in
The Banking Regulation (Amendment) Bill 2007 was passed to provide more operational
flexibility to the RBI in the conduct of monetary policy. This Bill seeks to
empower the RBI to specify the Statutory Liquidity Ratio (SLR) without any
floor.
The Government stocks issued in lieu of nationalised banks' recapitalisation
bonds will count as eligible investment for Statutory Liquidity Ratio. This
step will provide additional liquidity to public sector banks and help them
meet growing credit demand.
In its Annual Policy Statement for the Year 2007-08, announced on 24 Apr.'07,
Reserve Bank of India (RBI) did not change the CRR and repo rates. It laid
stress on effecting some reduction in forex inflows by cutting maximum rates
payable on FCNR(B) and NRE deposits by 50 bps each. On the other hand, movement
towards capital account convertibility was accelerated by allowing greater
forex outflow through measures such as increasing overseas investment limit for
Indian joint ventures and wholly owned subsidiaries abroad from the existing
200% of net worth to 300%, enhancing limit for portfolio investment abroad by
listed Indian companies from 25% of networth to 35%, allowing prepayment of
External Commercial Borrowings (ECBs) up to US$ 400 million (against the
existing limit of US$ 300 million), and hiking remittance limit of US $50,000
for individuals to US$100,000 per financial year, among others.
Bank's Operational Performance:
Deposit
Mobilisation:
The Backdrop:
The strategy of emphasising on clientele base expansion and thrust on increasing
the share of core deposit in the overall deposit mix of the Bank, adopted in
previous year, was continued during this year also. Clientele base expansion
was achieved by conducting Current, Savings Bank and Pay Roll Accounts
campaigns. To cater to the increasing demands of the customer and to
differentiate the offer from that of the competitor Banks, 4 Variants of
Current account are offered based on the quarterly average balance. Free
facilities are offered depending upon the variant chosen by different customer
segments.
Performance Highlights:
The total deposits of the Bank has registered a net accretion of Rs.94800
Millions to reach Rs. 423570 Millions as at 31st March, 2007, registering a
growth of 28.83 % during the year. The Bank's share in the total deposits of
SCBs stood at 1.60% as at the end of the year 2006-2007.
The average deposit of the Bank increased by Rs.71400 Millions and stood at
Rs.354990 Millions as at 31st March 2007, compared to Rs.283590 Millions as at
31st March, 2006, thus recording a growth of 25.18%.
The share of the demand deposits in the total deposit mix marginaly declined
from 34.33% to 34.07% for the year 2006-07. In absolute terms, the demand
deposits of the Bank, grew from Rs.112860 Millions to Rs. 141980 Millions as at
31st March 2007 registering a growth rate of 25.80% during the year.
The term deposits increased by Rs. 63380 Millions and stood at Rs.279280
Millions as at 31st March 2007 registering growth of 29.36%.
The Savings Bank deposit portfolio registered a growth rate of 17% to close at
Rs. 76520 Millions as at 31st March, 2007.
The current deposits of the Bank also improved to Rs. 67770 Millions as at 31st
March, 2007, recording growth rate of 42.79%.
Credit Growth:
The credit portfolio of the Bank recorded a higher growth of 24.99% during the
financial year ended 31-03-2007. Growth in credit was achieved through intense
marketing of the various loan products of the Bank both under retail and
corporate segments. The level of advances increased from Rs.239620 Millions as
on 31-03-2006 to Rs. 299500 Millions as on 31-03-2007, thus registering an
absolute increase of Rs.59880 Millions.
The Average Advances grew by Rs. 62280 Millions from Rs. 199530 Millions in
2005-06 to Rs.261810 Millions in 2006-07 at a growth rate of 31.21%. The CD
ratio as on 31-03-2007 is 70.71%.
Credit Assets Quality and
Classification:
The Bank has recorded improvement in the quality of assets. Gross NPA level has
further come down during the year from Rs. 6255.700 Millions to Rs. 6245.700
Millions whereas the Net NPA level has decreased to Rs. 1419.300 Millions
(0.47%). Prompt preventive as well as recovery measures have contributed to the
improved asset quality of the Bank.
The level of Standard Assets at 97.95% speaks of the good
asset quality of the Bank.
The average returns on advances is 9.05% for the year compared to 8.26% for the
previous year ending 31-03-2006.
Priority Sector Lending:
Sectoral deployment:
The aggregate funds deployed in Priority Sector by way of credit and other
forms of support such as contribution to Rural Infrastructure Development Fund
and investment in eligible bonds moved up from Rs.90440 Millions as at March
2006 to Rs. 115640 Millions as at March 2007, on last reporting Friday basis,
recording an increase of Rs.25200 Millions. The Priority sector advances of the
Bank stood at 40.56 percent of the Net Bank Credit as against RBI norm of 40%
of NBC reckoned for computation of priority sector performance.
Under the Special Agricultural Credit Plan [SACP], the Bank disbursed Rs.21160
Millions (excluding investments) as against the Annual Plan of Rs.12460
Millions, registering an achievement of 170% as at the last reporting Friday of
March 2007.
The agricultural credit witnessed a growth of 42% during the fiscal, i.e., from
Rs.16600 Millions as at March 2006 to Rs.23520 Millions as at March 2007, on
last reporting Friday basis. Funds deployed under Agriculture [both credit and
eligible investments put together] constituted 9.20% of NBC as at March 2007.
Concerted efforts have been made for effective implementation of Annual Credit
Plan.
During the year, the Bank introduced a Scheme for financing
joint Liability Groups of Tenant Farmers. Further, two new schemes aimed at
providing comprehensive credit to farmers and also for reimbursement of
developmental expenditures incurred by the farmers for approved purposes have
been launched.
The Bank has taken up the challenging task of ensuring 100% financial inclusion
in the two districts, Kodagu and Chikmagalur in the State of
The Bank has taken up Financial Inclusion programme in 470 villages through 325
Rural, Semi-Urban and other select branches. As at the end of March 2007,
house-hold survey related work is completed in 413 villages, 1,47,098
households are surveyed, 75689 no frill accounts were opened and 9901 eligible
applicants have been sanctioned Corp General Credit Card facility.
With a view to developing alternative rural credit delivery channels for
enhancing credit disbursements, a new scheme, Corp Gram Mitra Yojana, has been
launched in the State of
For expanding the coverage under Financial Inclusion, a pilot project on smart
card based business transactions through Business Correspondents (BC) model has
been launched through five identified branches.
The Bank continued to leverage the Memorandum of Understanding entered earlier
with various Corporate houses for financing Tractors/Farm machineries, Dairy
Equipments, Agricultural Pumpsets, Agri transport vehicles to supplement
efforts of the branches in increasing the lending to agriculture and allied
activities.
Self Help Group (SHG) concept is being actively promoted. Outstanding credit to
SHGs/Micro Finance Institutions increased from Rs.646.700 Millions as at March
06 (LRF) to Rs.1185.600 Millions as at March 07 (LRF).
The advances of the Bank under Small Scale Industries increased from Rs.16570
Millions as at March 2006 (LRF) to Rs.19380 Millions as at March, 2007 (LRF),
registering a growth of 17%.
The advances of the Bank under Other Priority Sectors increased from Rs. 51780
Millions as at March 2006 (LRF) to Rs.66950 Millions as at March 2007 (LRF),
registering a growth of 29%.
Social Lending:
Dispensation of credit under various Government Sponsored Social
Lending/Poverty Alleviation Schemes and to Weaker sections of the society was
given due importance so as to fulfil the Bank's socio-economic
obligations.
As at March 2007 (LRF), out of total priority sector credit of Rs.109850
Millions, the outstanding credit to Scheduled Caste/ Scheduled Tribes is
Rs.2910 Millions. As at March 2007 (LRF), total NPAs in priority sector loans
is Rs.3270 Millions, of which, NPAs in loans to SC/STs is Rs.129.600 Millions.
4.6 Retail Lending:
Retail lending continued to be a focus area of the Bank during the year
2006-07. The outstanding credit under Retail lending improved from Rs.60830
Millions as on 31-03-2006 to Rs. 76610 Millions as on 31-03-2007, recording a
growth of Rs. 15780 Millions [2.9%]. The share of the Retail lending to net
Bank Credit stood at 25.58%.
During the year 18 Retail Hubs for centralised processing of retail loans were
operationalised, for providing speedy service for retail customers. The Bank
has also outsourced due diligence at 17 centres in retail loans as a risk
containment measure.
During the year the Bank has launched 3 new retail lending schemes viz. Corp
Byte [loan for purchase of Laptops by students], Corp IPO [for financing
IPOs/Public Issues/Rights/ESOPs] & Corp Mitra Gold [for financing LIC
Agents for purchase of Gold Coins/ Bars].
Recovery:
The Bank has been complying with the RBI guidelines relating to Income
Recognition, Assets Classification and Provisioning.
The gross NPA of the Bank was Rs.6245.700 Millions as on 31st March 2007,
compared to Rs. 6255.700 Millions at the end of the previous financial year.
The Bank has shown good recovery performance mainly due to the close follow up
of borrowal accounts settlements under the RBI OTS Scheme for small loans,
thrust on special recovery campaign and also vigorous action initiated under
SARFAESI Act. The Gross NPA was 2.05% of the Gross Advances as on 31st March,
2007 against 2.56% at the end of the previous year.
The Net NPA of the Bank was Rs.1419.300 Millions as on 31st March, 2007,
compared to Rs.1537.900 Millions as at the end of the previous financial year.
The Net NPA Ratio of the Bank against the net advances has improved from 0.64%
of the previous year to 0.47% as at 31-03-2007. As a matter of prudence, the
Bank provides in full for all NPA accounts with borrower-wise aggregate
liability of less than Rs. 25,000/-, irrespective of the nature and extent of
securities held.
The cash recovery in NPAs during the financial year 2006-07 is Rs.1900.400
Millions compared to Rs. 1711.500 Millions in the previous financial year. The
NPA upgradation during the financial year stood at Rs. 696.400 Millions as
against Rs. 323.700 Millions in the previous financial year.
The Bank held 'LOKADALATS' in select centres to recover small and chronic
NPAs.
A special OTS scheme for compromise settlement of chronic NPAs upto Rs. 0.200
Millions is launched.
An exclusive monitoring Cell is set up at Corporate Office to prevent slippages
of special mentioned/problem accounts.
Treasury and Investment Operations.
The aggregate investments of the Bank as on 31st March, 2007 were Rs.152646.200
Millions with a maturity mix of securities consistent with the risk perceptions
and investment policy guidelines of the Bank.
The average yield on investments during the year report stood at 7.73% compared
to the previous level of 7.94%.
The Bank continued to participate in the Government Borrowing Programmes
through floatation of Government securities. The primary subscription amounted
to Rs. 20350 Millions during the year. The Bank has also been active n the
secondary market for securities.
The net income from sale of investments was Rs. 1270.100 Millions for the year
ended 31-03-2007, as compared to Rs. 1357.500 Millions in the previous
year.
The Bank has put in place the risk management tools like Duration, Modified
Duration and Value at Risk for all interest bearing Securities.
International Banking:
During the year 2006-07, the total forex turnover registered a growth of
40.47%. Out of the total forex turnover; inter-bank turnover was Rs.2434220
Millions as against Rs.1644040 Millions during the previous year recording a
growth of 48.06%. Merchant turnover increased from Rs.370280 Millions to
Rs.395320 Millions registering a growth of 6.76%.
The Bank has 40 'B' category branches which cater to the foreign exchange
business. There is an encouraging growth in the area of merchant turnover, fee
based income, clientele growth and export credit in all these branches.
During the year, the bank introduced sale of 2, 5, and 50 gm gold coins apart
from 8 gm gold coins in more than 350 branches as against 175 branches in the
previous year and the response is encouraging.
In order to increase the forex business, Exporter-Importer meets were conducted
at important trade centers. Executives from Corporate Office and International
Banking Division addressed the Foreign Institutional Investors in
During the year, the Bank had accessed international syndication market twice
to generate low cost foreign currency funds for onward lending to exporter
customers and for generating low cost rupee funds.
The Bank secured permission from Reserve Bank of
Real Time Gross Settlement System
(RTGS):
RBI has implemented RTGS, a technology based payment system, during 2004-05.
RTGS offers payment mechanism for both inter-bank and customer transactions.
The Bank offers the facility of RTGS through 836 branches/Extension Counters
covering 427 locations. RTGS, a service branch attached to the Investment &
International Banking Division Mumbai, acts as the main hub for the
activity.
Merchant Banking Activities
During the year, the Bank has further reactivated the issue collection and
dividend payment service through the Capital Market branch, Mumbai. Bank
handled 93 dividend payout and 3 issue collection assignments successfully,
during the year. The Bank has also started 'Monitoring Agency' services to
corporates approaching the market through IPOs. Currently the Bank is acting as
Monitoring Agency to 4 companies through various branches.
Collection And Payment Services
(CAPS):
As part of the its effort to retain its premier position in Cash Management,
the Bank initiated a host of `customer centric' technological initiatives
during the year.
* New Product 'Speed Cash' was launched during the year for effecting Cash
remittance through any of the CBS Branches of the Bank.
* The entire operations under Cash Management Services have been centralized by
setting up a country CMS HUB at
* An effective interface is implemented between Bank's Core Banking System and
Cash Management System to effect On-line transactions Processing.
* In order to expand the reach, new CAPS outfit was opened at Guwahati and
local cheques collection centres have been increased to 301.
* In order to offer competitive price to the customers, Coordinator setup was
extended to 51 locations during the year and entered into tie-up arrangement
with other Banks.
* As a new initiative, CMS Core branch has been opened at Mumbai to offer
ABB/MCC facility and Centralised Cheque debit services under CAPS setup.
* Considering the good potential available in PDC collection business, PDC Hub
has been opened at Chennai.
* Branded the RTGS product as 'Corp Bullet' for the purpose of popularising the
RTGS.
* Undertook a comprehensive exercise to re-position CAPS in the area of Cash
Management Services.
The above initiatives taken not only improved service standards through
operational efficiency but also helped in reducing the cost of operations. The
CAPS known for customised solutions and MIS maintained its premier position by
further enhancement in its capabilities in developing MIS as required by
corporate customers.
Precious Metals Business:
The Division had imported 65000 coins of various denominations viz., 2 grams, 5
grams, 8 grams and 50 grams and recorded a sale of 60753 coins. In addition to
the above, the division supplied coins to Vijaya Bank and BHEL.
Income from sale of coins was Rs.5357.400 Millions which forms 52% of aggregate
income from precious metals business.
During the financial year, 535 Kgs of fresh Corp Gold deposits were mobilised.
The aggregate deposits outstanding were 809 Kgs as on 31-03-2007.
Deployment under Corp Gold Loans was 794 Kgs which forms 98% of the corp gold
deposits outstanding as on 31-03-2007. There was an interest income of Rs.
7.000 Millions from corp gold loans. 395 Kgs were lent under Consignment Scheme
(Borrowings outside
Inter-Branch Accounts
Reconciliation:
Timely reconciliation of and speedy elimination of inter branch transactions
continue to be the forte of the Bank. The Bank has a Central Processing System
of Inter Branch Transactions in order to maintain efficiency in this vital area
of housekeeping.
During the year 2006-07, the Bank maintained its core
competence in the area of timely reconciliation of Inter-branch transactions.
The inter-branch transactions were generally reconciled within 10 days. All
inter-branch transactions originated up to 31-03-2007 have been matched and all
entries (other than credits in respect of Demand drafts issued) up to February
2007 have been eliminated.
Adoption of Accounts under US GAAP
Method:
The Bank is the first public sector bank to present its financial statements
under US GAAP format beginning with the year 1999-2000. In tune with its
strategy for improved internal reporting system according to international
standards, the Bank continued to present the financial statements under US
GAAP.
Information Technology
Initiatives:
The Bank has consolidated its technology drive during the year by offering
several innovative and tailor made products and services, with the ultimate
objective of enhancing value to the customers.
Branch Automation:
All the Branches and ECs of the Bank are fully computerized. During the year,
66 new units opened were computerized, taking the tally of computerized units
to 948 comprising of 901 Branches and 47 ECs.
Core Banking Solution (CBS):
The Core Banking Solution (CBS) has been implemented in all the branches, thus
covering 100% of Bank's overall Business.
Wide Area Network (WAN):
Wide Area Network (WAN) connecting all the computerized branches being a
pre-requisite for Core Banking to be operational, the project is scheduled to
run parallel to the Core Banking project. 917 units of the Bank have been
already linked to the WAN. Apart from Core Banking, the WAN is used for mail
massaging, transmission of Swift messages, Straight through processing of RTGS
transactions, accessing e-Circular etc.
Real Time Gross Settlement System
(RTGS):
The Bank is participating in the RTGS system set up by RBI facilitating transactions
through 836 Branches and ECs as on 31-03-2007.
CORPORATE
COMMUNICATION, PUBLICITY AND PUBLIC RELATIONS DIVISION
Ref.
No.CCPPRD/PR/216/2007-08 31st July 2007
Corporation Bank
enters m-commerce space
1. Corporation
Bank became the first nationalized Bank in the country to launch “SMS based –
“Pay by Mobile Service”. This product was formally launched by Executive
Director of the Bank Shri K.L. Gopalakrishna at Mumbai today. Shri B.R. Bhat,
General Manager of the Bank, Shri Ajay Adiseshann, Founder & MD, PayMate
and Shri Loney Antony, MD, Euronet Services India were present on the occasion.
2. Launching the
new product, Shri K. L. Gopalakrishna said that the Mobile base in
3. Ajay
Adiseshann, MD and Founder, PayMate said “Partnering with the country’s best
PSU bank is surely a feather in the cap for PayMate. While the convenience of
being able to pay anywhere, anytime via mobile is what will enable the growth
of m-commerce, it’s the simplicity and easy of use that gives PayMate the
cutting edge over other m-payment platforms. We will also offer several value
added services on the mobile wherein a customer can make purchases
start-to-finish via SMS. To layer this further we also have several promotions
and offers to encourage Corporation Bank customer to experience the service”
4. Corporation
Bank is introducing this facility to its customers in association with PayMate
India Pvt. Limited, a leading wireless transaction platform provider based in
Mumbai. PayMate has already created an m-Payment system, comprising over 3000
Merchant Establishments across various categories. These include online
portals, voice portals, utilities, Airlines, Retailers and Restaurants. The
service is secure, easy to access and
simple to use.
5. All the
CorpBank customers who have been issued CorpBank ATM Cards & Corp
Convenience Debit cards can use this 'Pay by Mobile Service'. To start with the
facility, the customer has to register at any of the CorpBank ATMs of the Bank.
The user-friendly menu at the ATM will guide the customer to fill in the
details along with the mobile number of the customer. On successful
registration, the customer will receive a 4-digit PIN though an SMS on his
mobile. The PIN number received will be used to authenticate all the future
transactions. A customer, now, can shop at Internet, do Tele Shopping and
purchase at over 3000 merchant establishments across categories and interfaces
which include airlines, restaurants, retailers etc. On completion of the
purchase, the customer will receive an SMS to which he has to reply to
authorize the payment. The customer will also receive a confirmatory SMS after
the payment.
6. The process is
secured by means of registration process involving fixed mobile number,
16-digit private encryption key storage, unique alpha code, 4-digit PIN and
confirmatory SMS. Customers have the facility of changing the PIN number,
issuance of duplicate PIN, blocking and unblocking the PIN, deactivation in
case of mobile loss and cancellation of the facility.
7. In its pursuit
of new ways of reaching various segments of customers, Corporation Bank has
been continuously designing new products and services aided by technology -
"SMSbased - Pay by Mobile Service" is one such initiative taken by
the Bank. It is also the first and the only nationalised bank to bring its
entire operational units under Core Banking Solutions, which provides customers
array of technology-aided services.
CMT REPORT (Corruption, Money Laundering & Terrorism]
The Public Notice information has been collected from various sources
including but not limited to: The Courts,
1] INFORMATION ON
DESIGNATED PARTY
No exist designating subject or any of its beneficial owners, controlling
shareholders or senior officers as terrorist or terrorist organization or whom
notice had been received that all financial transactions involving their assets
have been blocked or convicted, found guilty or against whom a judgement or
order had been entered in a proceedings for violating money-laundering,
anti-corruption or bribery or international economic or anti-terrorism sanction
laws or whose assets were seized, blocked, frozen or ordered forfeited for
violation of money laundering or international anti-terrorism laws.
2] Court Declaration :
No records exist to suggest that subject is
or was the subject of any formal or informal allegations, prosecutions or other
official proceeding for making any prohibited payments or other improper
payments to government officials for engaging in prohibited transactions or
with designated parties.
3] Asset Declaration :
No records exist to suggest that the property or assets of the subject
are derived from criminal conduct or a prohibited transaction.
4] Record on Financial
Crime :
Charges or conviction
registered against subject: None
5] Records on Violation of
Anti-Corruption Laws :
Charges or
investigation registered against subject: None
6] Records on Int’l
Anti-Money Laundering Laws/Standards :
Charges or
investigation registered against subject: None
7] Criminal Records
No
available information exist that suggest that subject or any of its principals
have been formally charged or convicted by a competent governmental authority for
any financial crime or under any formal investigation by a competent government
authority for any violation of anti-corruption laws or international anti-money
laundering laws or standard.
8] Affiliation with
Government :
No record
exists to suggest that any director or indirect owners, controlling
shareholders, director, officer or employee of the company is a government
official or a family member or close business associate of a Government
official.
9] Compensation Package :
Our market
survey revealed that the amount of compensation sought by the subject is fair
and reasonable and comparable to compensation paid to others for similar
services.
10] Press Report :
No press reports / filings exists on
the subject.
CORPORATE GOVERNANCE
MIRA INFORM as part of its Due Diligence do provide comments on
Corporate Governance to identify management and governance. These factors often
have been predictive and in some cases have created vulnerabilities to credit
deterioration.
Our Governance Assessment focuses principally on the interactions
between a company’s management, its Board of Directors, Shareholders and other
financial stakeholders.
CONTRAVENTION
Subject is not known to have contravened any existing local laws,
regulations or policies that prohibit, restrict or otherwise affect the terms
and conditions that could be included in the agreement with the subject.
FOREIGN EXCHANGE RATES
|
Currency |
Unit
|
Indian Rupees |
|
US Dollar |
1 |
Rs.40.26 |
|
|
1 |
Rs.81.15 |
|
Euro |
1 |
Rs.56.28 |
SCORE & RATING EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
9 |
|
PAID-UP CAPITAL |
1~10 |
9 |
|
OPERATING SCALE |
1~10 |
9 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
10 |
|
--PROFITABILIRY |
1~10 |
8 |
|
--LIQUIDITY |
1~10 |
9 |
|
--LEVERAGE |
1~10 |
9 |
|
--RESERVES |
1~10 |
9 |
|
--CREDIT LINES |
1~10 |
9 |
|
--MARGINS |
-5~5 |
- |
|
DEMERIT POINTS |
|
|
|
--BANK CHARGES |
YES/NO |
YES |
|
--LITIGATION |
YES/NO |
NO |
|
--OTHER ADVERSE INFORMATION |
YES/NO |
NO |
|
MERIT POINTS |
|
|
|
--SOLE DISTRIBUTORSHIP |
YES/NO |
NO |
|
--EXPORT ACTIVITIES |
YES/NO |
YES |
|
--AFFILIATION |
YES/NO |
YES |
|
--LISTED |
YES/NO |
YES |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
TOTAL |
|
81 |
This score serves as a reference to assess SC’s credit risk
and to set the amount of credit to be extended. It is calculated from a
composite of weighted scores obtained from each of the major sections of this
report. The assessed factors and their relative weights (as indicated through
%) are as follows:
Financial
condition (40%) Ownership
background (20%) Payment
record (10%)
Credit history
(10%) Market trend
(10%) Operational
size (10%)
RATING EXPLANATIONS
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
>86 |
Aaa |
Possesses an extremely sound financial base with the strongest
capability for timely payment of interest and principal sums |
Unlimited |
|
71-85 |
Aa |
Possesses adequate working capital. No caution needed for credit transaction.
It has above average (strong) capability for payment of interest and
principal sums |
Large |
|
56-70 |
A |
Financial & operational base are regarded healthy. General unfavourable
factors will not cause fatal effect. Satisfactory capability for payment of
interest and principal sums |
Fairly Large |
|
41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
|
26-40 |
B |
Unfavourable & favourable factors carry similar weight in credit
consideration. Capability to overcome financial difficulties seems
comparatively below average. |
Small |
|
11-25 |
Ca |
Adverse factors are apparent. Repayment of interest and principal sums
in default or expected to be in default upon maturity |
Limited with
full security |
|
<10 |
C |
Absolute credit risk exists. Caution needed to be exercised |
Credit not
recommended |
|
NR |
In view of the lack of information, we have no basis upon which to
recommend credit dealings |
No Rating |
|