About State Bank of India

State Bank of India was incorporated on July 01, 1955. The Government of India nationalized the Imperial Bank of India in the year 1955, with the Reserve Bank of India taking a 60% stake, and name was changed to State Bank of India. State Bank of India (SBI) is the largest state-owned banking and financial services company in India. The bank provides banking services to the customer. In addition to the banking services, the bank through its subsidiaries, provides a range of financial services, which include life insurance, merchant banking, mutual funds, credit card, factoring, security trading, pension fund management and primary dealership in the money market. The Bank operates in four business segments, namely Treasury, Corporate/ Wholesale Banking, Retail Banking and Other Banking Business. The Treasury segment includes the investment portfolio and trading in foreign exchange contracts and derivative contracts. The Corporate/ Wholesale Banking segment comprises the lending activities of Corporate Accounts Group, Mid Corporate Accounts Group and Stressed Assets Management Group. The Retail Banking segment consists of branches in National Banking Group, which primarily includes personal banking activities, including lending activities to corporate customers having banking relations with branches in the National Banking Group. SBI provides a range of banking products through their vast network of branches in India and overseas, including products aimed at NRIs. The State Bank Group, with over 16,000 branches, has the largest banking branch network in India. The State bank of India is the 10th most reputed company in the world according to Forbes. The bank has 206 overseas offices spread over 27 countries. They have 22,414 branches of the parent in Colombo, Dhaka, Frankfurt, Hong Kong, Johannesburg, London and environs, Los Angeles, Male in the Maldives, Muscat, New York, Osaka, Sydney, and Tokyo. They have offshore banking units in the Bahamas, Bahrain, and Singapore, and representative offices in Bhutan and Cape Town. In the year 2001, the SBI Life Insurance Company was started by the Bank. It is the only Bank that has been permitted 74% stake in the insurance business. The Bank's insurance subsidiary 'SBI Life Insurance Company' is a joint venture with Cardif S.A in which Cardif holds 26% of the stake. During the year 2005-06, the bank introduced 'SBI e-tax' an online tax payments facility for direct and indirect tax payment. They also launched the centralized pension processing. The Bank made a partnership with Tata Consultancy Services for setup C-Edg Technologies and consulting services to the banking, financial services and insurance industry. The bank was noted as 'The most preferred bank' in a survey by TV18 in association with AC Nielsen-ORG Marg. Also, the Bank was voted as 'The most preferred housing loan provider' in AWAAZ consumer awards for the year 2006. In the customer loyalty survey 2006-07 conducted by 'Business World', the Bank was ranked number one in all parameters of customer satisfaction, service orientation, customer care/ call center, and customer's loyalty and home loans. SBI Funds was judged 'Mutual fund of the year' by CNBC/TV-18/CRISL. The Bank introduced new products and services such as web-based remittance, instant fund transfer, online-trading and comprehensive cash management. During the year 2007-08, the Bank launched 965 branches all over the country. They inaugurated a new state-of-the art Dealing Room with online connectivity to all active forex intensive Branches at Corporate Centre in Mumbai. They launched a new product, Construction Equipment Loan to cater to construction Companies. Also, they introduced new products such as SBI Reverse Mortgage Loan and SBI Home Plus in the areas of Home Loans. During the year, the RBI transferred their entire shareholding in the Bank representing 59.73% of the issued capital of the Bank to the Government of India. The Bank acquired 92.03% of equity of Global Trade Finance Ltd. Consequently; GTFL became a subsidiary of the Bank. They signed an MoU with the Indian railways for installing ATMs at 682 railway stations. In March 2008, the Bank opened their 10,000th branch and became only the second bank in the world to have more than 10,000 branches after China's ICBC. During the year 2008-09, the company launched Import factoring, a new product in association with SBI Factors & Commercial Services Ltd. They increased the number of branches for retail sale of gold coins from 250 to 518. Also, they re-launched Gold Deposit Scheme at 50 branches to mobilize gold from domestic market for deployment as metal loans to jewellers. During the year, the Bank opened their 11,111th Branch at Sonapur (Kamrup District) in Assam. They introduced three new products viz., SBI Special Home Loan, SBI Happy Home Loan and SBI Lifestyle in response to the stimulus package announced by the Government of India. Also, they entered into an exclusive arrangement with Tata Motors for handling the booking process of Tata 'Nano' cars. During the year, the Bank launched on their website an on-line application form for registering Auto Loan enquiries and expeditiously monitoring and converting these leads into Auto Loans. Also, they launched 'e-invest' for the ASBA (applications supported by blocked accounts) to aid investors for their equity subscriptions, IPO and Rights applications. During the year, the Bank set up a custodial services company namely SBI Custodial Services Pvt. Ltd., in joint venture with Societe Generale, France. They signed letter of intent for setting up of joint venture company for undertaking General Insurance Business. Also, they divested 10% equity stake in its wholly owned subsidiary SBI Pension Fund Pvt. Ltd at cost in favour of its subsidiaries. In October 2008, the Bank signed an MoU with State General Reserve Fund (SGRF) of Oman, for a general purpose private equity fund. State Bank of Saurashtra (SBS), a wholly owned subsidiary of the Bank, amalgamated with the Bank with effect from August 13, 2008. They signed a joint venture agreement with Insurance Australia Group for undertaking General Insurance business. Also, they signed a joint venture agreement with Macquarie Capital Group, Australia and IFC, Washington for setting up an Infrastructure fund of USD 3 billion for investing in various infrastructure projects in India. During the year 2009-10, the Bank opened 1,049 branches. In July 2009, SBI introduced 'SBI Loan to Affluent Pensioners' enabling the government pensioners to avail personal loans upto Rs 3 lakh. During the year, the Bank designed a special package, the Defence Salary Package, for personnel of the three Armed Forces i.e. the Army, Navy and Air Force who maintain their Salary accounts with them. In June 2009, the company increased their shareholding in Nepal SBI Bank Ltd to 55.02% and thus Nepal SBI Bank Ltd became a subsidiary of the Bank with effect from June 14, 2009. In May 2010, the Bank selected consortium of Elavon Incorporation, USA and Visa International, USA as their joint venture (JV) partner for Merchant Acquiring Business. They set up a wholly owned subsidiary, namely SBI Payment Services Pvt Ltd for conducting Merchant Acquiring Business. In August 2010, State Bank of Indore was amalgamated with the Bank as per the scheme of amalgamation approved by the Central Board. During the year 2010-11, the Bank introduced 2 new products, namely 'Pushpa Ullas' and 'Arthias Plus' on pilot basis. They made substantial progress in establishing itself as a leading PE fund player of the country. Also, they signed a Joint Venture agreement with State General Reserve Fund (SGRF) of Sultanate of Oman, a sovereign entity, to set up a general-purpose private equity fund with an initial corpus of USD 100 million, expandable further to USD 1.5 billion. During the year, the Bank opened 576 new branches besides merger of 470 branches of erstwhile State Bank of Indore. Also, they opened 14 foreign offices during the year, taking the total to 156. In July 1, 2010, the Bank launched their 'Green Channel Counter' at select branches across the country. In General Insurance business, the Bank launched limited operations in April 2010 for the Corporate and Mid Corporate customers based at Mumbai, and it was expanded to six other major locations in July 2010. In the Retail segment, the Bank launched their Long Term Home Insurance business at Mumbai in October 2010, which was gradually extended to cover 56 RACPCs and RASMECCs. General Insurance SME business was launched on a pilot basis in Mumbai and Chennai in February 2011. During the first quarter of the financial year 2011-12, the Government of India issued the 'Acquisition of State Bank of India Commercial & International Bank Ltd. vide notification dated July 29, 2011. Consequent to the said notification, the undertaking of State Bank of India Commercial & International stands transferred to and vest in State Bank of India with effect from July 29, 2011. In 2012, State Bank of India signed a Preliminary Non-Binding Memorandum of Understanding with Russian Direct Investment Fund (RDIF), to facilitate advancing bilateral economic cooperation and trade between Russia and India aimed at exploring investment opportunities in both the countries. State Bank of India (SBI) also entered into an agreement with StarAgri Warehousing Ltd (StarAgri), India's leading agri-services & solutions provider, for Warehousing Receipt Financing and Collateral Management Services during the year under review. The bank launched virtual debit cards to check online fraud and promote e-commerce. In 2013, State Bank of India (SBI) inaugurated its 2nd branch in China in Tianjin, a major port city in northeastern China. The bank introduced smart pre-paid card for students, blue-collar workers. In 2014, State Bank of In-dia launched new digital Online and self-service banking solutions with support from Accenture. The bank also unveiled 6 digital branches. In 2015, State Bank of India launched a RuPay Platinum debit card in association with National Payment Corporation of India (NPCI). The bank also introduced online facility for overdraft against FDs. SBI partners with Amazon. SBI entered into a MoU with PayPal, an American online money transfer services provider firm, for facilitating cross-border transactions. State Bank of India launched SBI eforex. SBI also launched an initiative to provide doorstep services and expedite home loans application process. State Bank of India jointly launched a cyber crime awareness campaign. On 26 March 2015, State Bank of India (SBI) announced that consequent upon the promulgation of the Insurance Laws (Amendment) Ordinance, 2014 and subsequently passed by both the houses of parliament, the Executive Committee of the Central Board (ECCB) of the bank has decided to initiate the necessary action as per JV agreement for dilution of SBI's stake in SBI General Insurance from 76% to 51% with corresponding increase of stake of IAG from 26% to 49%, including appointment of a valuer to facilitate valuation and price discovery. On 31 March 2015, State Bank of India (SBI) announced that the Executive Committee of the Central Board (ECCB) of the bank has authorised divestment of SBI's stake in SBI Life Insurance Co. Ltd. by up to 10%. The Committee of Directors for Capital Raising of the bank at its meeting held on 1 April 2015 considered and accorded approval to allot 10.04 crore equity shares on preferential basis to Government of India (GoI) at an issue price of Rs 295.59 per share aggregating Rs 2969.99 crore. The Committee of Directors for Capital Raising of the bank at its meeting held on 29 September 2015 considered and accorded approval to allot 19.65 crore equity shares on preferential basis to Government of India (GoI) at an issue price of Rs 274.37 per share aggregating Rs 5392.99 crore. On 21 December 2015, State Bank of India announced that the Committee of Directors, duly authorized by the Board authorized the bank to raise up to Rs 12000 crore by way of issue of Basel III compliant Tier II bonds, at par, through private placement. State Bank of India and Reliance Industries Limited (RIL) signed the shareholders agreement on 30 June 2016 for setting up Payments Bank. The Subscription and Shareholders' Agreement was signed by RIL as promoter with a 70% equity contribution and SBI as joint Venture partner with 30% equity contribution. The Payments Bank will leverage SBI's nationwide distribution network and risk management capabilities alongwith the substantial investments made by RIL in its retail and telecom businesses. On 4 July 2016, State Bank of India announced that it has sold 5% stake in National Stock Exchange of India Limited (NSE) constituting 22.50 lakh equity shares of NSE to Veracity Investments Limited, a Mauritius based FII, at Rs 4,050 per share for a total consideration of Rs 911.25 crore. Post this transaction, SBI holds 5.19% stake in NSE while its subsidiary SBI Capital Markets Limited holds another 4.33% in the NSE. The Committee of Directors for Capital Raising of the bank at its meeting held on 24 August 2016 authorized the bank to raise up to Rs 11100 crore Additional Tier 1 capital by way of issue of Basel III compliant Perpetual Debt instrument in USD and/or INR, at par, through private placement to overseas and/or Indian investors. The Executive Committee of the Central Board (ECCB) of State Bank of India (SBI) at its meeting held on 14 October 2016 approved to dilute up to 5% stake of SBI in its subsidiary SBI Life Insurance Company Limited to a non-promoter entity. On 25 October 2016, SBI announced that it has issued and allotted 25,000 AT1 Basel III compliant Non-convertible, Perpetual, Subordinated, Unsecured Debt instrument in the nature of debenture, of face value Rs 10 lakh each at par through private placement bearing coupon at 8.39% p.a. payable annually with call option after 5 years or any coupon payment date thereafter aggregating to Rs 2500 crore in third tranche. The Executive Committee of the Central Board (ECCB) of State Bank of India at its meeting held on 9 December 2016 approved divestment of 3.9 crore equity shares constituting 3.9% stake in SBI Life Insurance Company Ltd. at a price of Rs 460 per share, subject to all regulatory approvals. On 17 January 2017, SBI announced that it has concluded the issue of USD 500 million Fixed Rate Senior Unsecured Notes having a maturity of 5 years at a coupon of 3.25 percent payable semi-annually under Regulation-S. The bonds will be issued through the bank's London Branch and listed on Singapore Stock Exchange. The Committee of Directors for Capital Raising of State Bank of India considered and approved on 20 January 2017 by circulation the allotment of 21.07 crores equity shares at an issue price of Rs 269.59 per share on preferential basis to Government of India aggregating Rs 5680.99 crore. The Executive Committee of the Central Board of State Bank of India at its meeting held on 15 March 2017 accorded approval for infusing additional capital of up to Rs 1160.04 crore in credit card joint venture companies viz. SBI Cards & Payment Services Ltd. and GE Capital Business Process Management Services Ltd. through purchase of equity shares from GE Capital so as to increase the bank's stake in both the companies to 74%. SBI merged five of its associate banks viz. State Bank of Bikaner & Jaipur, State Bank of Mysore, State Bank of Travancore, State Bank of Patiala and State Bank of Hyderabad and Bhartiya Mahila Bank with itself with effect from 1 April 2017. In February 2017, the Union Cabinet approved the acquisition by State Bank of India of its subsidiary banks namely State Bank of Bikaner and Jaipur, State Bank of Mysore, State Bank of Travancore, State Bank of Patiala and State Bank of Hyderabad. On 8 June 2017, State Bank of India (SBI) announced closure of qualified institutional placement of equity shares. The bank successfully rose about Rs 15000 crore from issue of 52.21 crores equity shares at a price of Rs 287.25 per share to qualified institutional buyers. The Central Board of State Bank of India at its meeting held on 27 December 2017 accorded approval to raise Additional Tier 1 capital by way of issuance of Basel III compliant debt instrument in USD and/or INR to the tune of Rs 8000 crore from domestic/international market including rupee denominated Masala Bonds till 31 March 2018. The Executive Committee of the Central Board of State Bank of India at its meeting held on 8 January 2018 approved long term fund raising in single or multiple tranches up to USD 2 billion under Reg-S/144A, through a public offer and/or private placement of senior unsecured notes in US Dollar or any other convertible currency during FY 2018 and FY 2019. The Executive Committee of Central Board of State Bank of India at its meeting held on 17 January 2018 approval the proposal for issuance of long term bonds of Rs 20000 crore for financing of infrastructure and affordable housing in domestic and overseas market in FY 2018 and FY 2019. The Committee of Directors for Capital Raising of State Bank of India at its meeting held on 16 February 2018 accorded its approval for preferential allotment of 29.25 crore equity shares at Rs 300.82 per share (including a premium of Rs 299.82 per share) to Government of India (GoI) aggregating Rs 8800 crore.

State Bank of India Chairman Speech

Our transformation strategy going forward will focus predominantly on five areas: customer service, corporate credit revamp, digitisation of banking operations, synergy between subsidiaries and human resource.

Dear Shareholders,

It gives me great pleasure to place before you the highlights of your Bank's performance during the financial year 2018-19. Details of the achievements and initiatives taken by your Bank are provided in the enclosed Annual Report for the year 2018-19.

ECONOMIC OVERVIEW

After picking up pace in 2017, global growth moderated to 3.6% in 2018 with both the developed and the emerging markets witnessing slow growth. Fiscal support in the form of US$1.5 trillion tax cuts and enhanced Government spending enabled the US economy to advance strongly. However, the protectionist policies by the US, uncertainty over Brexit and slowing GDP growth in other advanced economies including Euro Zone, Japan, the UK, Canada accentuated the slowdown. Meanwhile continued easing in China's GDP growth also pulled down overall growth of the developing world.

The financial markets also witnessed increased volatility in 2018. Oil prices remained volatile throughout the year. However, with supply cuts by OPEC and sanctions by the US on Venezuela and Iran, crude prices are now showing an upward bias. Financial volatility that eased somewhat after the adoption of dovish stance by the Fed has increased recently amidst enhanced trade tensions between the US and China. Looking ahead, global economic growth is expected to decelerate to around 3% in 2019.

Against this backdrop, India is still a beacon of growth. Structural changes such as IBC and stabilisation of GST are expected to provide impetus to economic activity. Low inflation, accommodative monetary policy and Government income support to farmers are also likely to support domestic economic activity. However, prolonged US-China trade war and rise in oil prices remain the key risks to growth momentum.

DEPOSITS GROWTH

In the year FY19, your bank's total deposits grew by 7.58% to `29,11,386 crore from the previous year's level of `27,06,343 crore. The domestic deposits grew by 8.27%, while there was a contraction in deposits of foreign offices by 9.17%, due to the formation of subsidiary State Bank of India (UK) Ltd and transfer of the Bank's existing business to the same. The growth in domestic deposits was mainly due to robust growth in CASA deposits, which grew by 8.42%. The Bank's overall CASA ratio improved from 45.68% in FY18 to 45.74% in FY19.

CREDIT GROWTH

After a significantly low credit growth in the last couple of years, the banking industry's credit growth has picked up in FY19, due to a strong revival in credit to corporate sector driven largely by Government investment and continued demand from personal loan segment. In line with the ASCBs double digit credit growth, your bank's domestic advances grew by 13.99% to `19,90,746 crore, while the foreign offices advances grew by 0.23% to `3,02,708 crore. Therefore, the gross advances of your Bank grew by 11.96% to the level of `22,93,454 crore by March 2019 from the previous year level of `20,48,387 crore. The credit to corporates increased by 14.83% to `8,51,638 crore in FY19 and major share of the credit went into sectors such as Infrastructure (Power, Roads & Ports) and Services especially NBFCs. The corporate and NBFC credit growth was mostly driven by either PSUs/Govt. sector or the GoI undertakings.

With the revival of credit to corporates, the share of Retail segment (Personal, SME & Agri) in the domestic loan book declined marginally to 57.22% from 57.53% last year. Much of the growth in domestic advances came from Personal segment including Home Loans. Overall, the Personal loans showed a robust growth of 18.52% in FY2019, which is in line with the Bank's strategy towards this segment. Within retail, Home loans and Xpress credit grew substantially by 17.41% to `4,00,377 crore and 40.79% to `1,04,906 crore respectively in FY19. The growth in Xpress credit is mainly driven by our YONO and INB platforms.

Your Bank's home loan portfolio now constitutes around 62% of the Personal loans. Additionally, your Bank continues to be the largest home loan provider in the banking sector, with a market share of 34.51% as on 31^st March 2019 amongst ASCBs.

INVESTMENTS

Your Bank's investment portfolio has declined to `9,78,124 crore (domestic portfolio was `9,26,651 crore and foreign portfolio was `51,473 crore) in FY19 compared to `10,73,097 crore in FY18, due to pick up in corporate lending coupled with calibration of term deposit rates to ensure a more optimal Asset Liability structure.

CUSTOMER CONVENIENCE

With a view to build and ensure customer convenience at all times, the Bank has created a large network of touch points. The Bank has 57,467 operating BCs, over 22,000 branches and 58,415 ATMs including 7,658 Automated Deposit & Withdrawal Machines (ADWMs). More than 36% of the financial transactions of your Bank are routed through ATMs/ADWMs. On an average, over 1.4 crore transactions per day are routed through your Bank's ATM network.

Your Bank's first global footprint was with the branch of Bank of Madras in Colombo, Sri Lanka in July, 1864 (first amongst Indian banks). With presence across all time zones through 208 offices in 34 countries, State Bank of India has gradually spread its wings across the globe and has become a pioneer of International Banking among the Indian PSBs. During FY2019, your Bank has endeavoured to consolidate and strengthen its overseas operations and in line with our growth strategy in SAARC region, Nepal SBI Bank Limited, a subsidiary of State Bank of India has opened 10 offices. Furthermore, 12 retail branches of UK were carved out from your Bank's UK operations to form the overseas Subsidiary-State Bank of India (UK) Limited.

TECHNOLOGY AND INNOVATION

A steady stream of technology driven innovations, necessitated by changing customer preferences, is transforming the retail banking landscape. State Bank of India has a multi-channel delivery model, which allows it to offer its customers a choice to carry out transactions through any channel, at any time and at any place. In FY2018-19, your Bank has increased its offerings across various channels - digital, mobile, internet, social media, along with additions to its branches, ATMs and Customer Service Points.

The digital offering, YONO is expected to bring a paradigm shift in terms of customer convenience through more efficient deliveries at lower costs and greater reach for the Bank. The digital application is steadily strengthening in terms of reach as well as value. YONO caters to various banking & financial services as well as lifestyle requirements and delivers world class customer experience through distinctive, omni-channel and seamless customer journeys. YONO has achieved 2 crore downloads and around 73.49 lakh registered users. Over 10 lakh users log in daily and around 25,000 digital accounts are opened per day which is over 75% of all eligible accounts being opened by the bank with 30-40% higher balances than regular accounts.

With 29.67 crore active Debit Cards as of March 2019, your Bank continues to lead in Debit Card issuance in the country. Additionally, your Bank has launched various innovations and functionalities around Debit Cards such as Contactless Debit Cards, Bharat QR, Samsung Pay, Visa Checkout and Personalized Image Debit Card "My Card".

Your Bank has set up over 2,200 e-Corners across the country where customers can avail the entire gamut of services through ATMs, ADWMs, SWAYAMs, Check deposit Kiosk and online banking kiosk.

To ensure safety of ATMs and customers, coverage under electronic surveillance is being enhanced. Your Bank has covered approximately 13,000 ATMs under e-surveillance as on 31^st March 2019, while process for 15,000 ATM sites is slated to commence shortly.

Your Bank has installed around 3,200 SWAYAMs (Barcode based Passbook Printing Kiosks) during FY2019, taking the total number of SWAYAMs deployed to 17,400 units. Your Bank has also deployed "Through the Wall" SWAYAMs, offering extended working hours for printing. More than 3.45 crore transactions are recorded at these kiosks per month.

Green Channel Counters (GCC) installed at all retail branches extend services such as cash withdrawal, cash deposit, funds transfer within State Bank of India, in addition to balance enquiry and Mini Statement. On an average 8.20 lakh transactions are being routed through GCC per day.

Your Bank's Uni_ed Payments Interface (UPI) based App is an interoperable offering, which provides the convenience of transferring funds across different Bank accounts using Virtual Payment Address (VPA), Bank Account Number + IFSC and scanning a QR Code. Over 553 lakh users have registered and are availing UPI services, resulting in more than 129 crore transactions, amounting to more than `2.96 lakh crore, processed through the SBI UPI channel during FY2018-19.

With the introduction of new features and several add-ons provided on the ‘Onlinesbi' to enhance customer comfort and experience, the platform handled transaction volume exceeding 162 crore with transaction value of nearly `127.78 lakh crore, recording a quantum jump over the last year. This reflects the growing customer confidence in our offerings and deliverables.

A unique facility ‘YONO-Cash' has been made available to our esteemed customers for card-less cash withdrawal through ATM using YONO app.

PROFITABILITY

The FY2019 has been a year of reversal of the negative trend and has brought about significant improvement on asset quality front, provision coverage, NIM and yield on advances. This coupled with reduction in cost of deposits and overall control on the overheads has been a significant improvement over the previous years. The profit of the Bank could have been much higher but for the provisions, mark to market losses on Government securities leading to fall in trading income and pension and enhanced provision on gratuity payable to employees.

The Net Interest Income of the bank stood at `88,349 crore registering a healthy growth of 18.03%. The growth is owing to focused efforts in retail credit, corporate credit as well as control in slippages, thereby resulting in good growth under interest income and a simultaneous control on interest expenses by CASA oriented deposit accretion. The Operating Profit of the Bank stood at `55,436 crore. The Bank made a standalone profit of `862 crore and consolidated profit of `2,300 crore.

During the year, the domestic bond yields have seen volatile movements due to unpredictable crude oil prices, US sanctions on Iran, US dollar movements, the trade tensions between US and China and other geo-political risks which captured the headlines for major part of the year. The relatively high domestic interest rates also added to the hardening of G-Sec yields. All these factors led to a fall in trading income and MTM losses eventually impacting the Non-interest income. The Recovery in Written-Off Accounts, however, registered a robust growth of 57% and the trend is expected to continue with better recoveries in FY2019-20.

On the cost front, the Bank has been very conscious in controlling the overheads and strong awareness has been created across the branches and offices of the Bank. As a result of the ongoing measures of cost optimisation, the increase in overheads was restricted to below 7%. Staff expenses is another major head, which recorded an increase of 23.74% during FY19, but that is on account of higher growth in largely one time provisions made for employees.

ASSET QUALITY

Steep growth in provisioning due to rise in stressed assets in FY18 had pushed the profitability of the Bank into negative territory. However, concerted efforts toward recovery in stressed assets and strict monitoring were undertaken in FY19. While the gross NPA ratio of the bank fell to 7.53% in March 2019 from 10.91% the previous year, the net NPA ratio of the Bank also declined by 272 bps to 3.01% in March 2019.

The all-round effort in managing stressed accounts in FY19 resulted in the fresh slippages being contained to `32,738 crore, a reduction of 65.5% from previous year through strict monitoring. Recoveries and upgrades during FY19 more than doubled from last year's level of `14,530 crore to `31,512 crore in March 2019. NPA ratios declined in all segments, with corporate segment registering the steepest decline. The NPA in corporate segment declined from 21.92% in FY18 to 13.62% in FY19.

Despite the ups and downs, the average recovery rate in stressed accounts under the NCLT route was in excess of 60%.

CAPITAL STRUCTURE

The capital adequacy of the Bank improved during the financial year on the back of better Capital planning, including raising of additional Tier I as well as Tier II capital, some amount of internal resource generation and containment of risk in trading and banking books. Accordingly, the Credit Risk Weighted Assets (RWA) on Advances to Gross Advances ratio of the Bank declined to 56.60% in March 2019 from 60.66% in the previous year. The Total RWA to Total Asset ratio also declined by 2.34% to 52.37% in March 2019. The modified duration of the AFS portfolio was also reduced to 2.62 years in line with evolving risk to conserve capital.

The Bank raised AT1 Bonds to the tune of `7,317 crore in FY19. This was further supplemented by raising of `4,116 crore of Tier II Bonds.

The combined impact of above efforts saw the capital adequacy position of the Bank improving from 12.60% in March last year to 12.72% in March 2019. The Tier I capital and AT1 capital ratios put together increased by 29 bps to 10.65%. With satisfactory recoveries under NPA accounts lined up going forward and slowdown in fresh slippages, internal accruals are expected to support normal credit growth during FY20. However, Bank retains the option to raise capital at an opportune time to build a suitable buffer to support higher than expected credit growth as well as risk absorption capacity.

STRATEGIC INITIATIVES

During FY19, your Bank has undertaken certain strategic initiatives to give an additional thrust to each and every business segment of the Bank. Some of the important initiatives are as under:

• Your Bank has conducted a mass communication program, Nayi Disha Phase 1, for all the employees to improve the customer centric approach in the Bank. The Bank has also revised the assessment of customer satisfaction measures, redesigned ‘customer service index' with weightage to critical parameters.

• To revamp the corporate credit structure and systems, the Bank has strengthened the credit risk process and credit review process independent of the Appraisal/Sanction process. The credit risk function has been strengthened by onboarding sector specialists and improved due diligence.

• In HR, the Bank has taken substantial efforts in identifying potential leaders and developing them through customized training programs to create leadership pipeline. With this, your Bank was ranked top among the PSBs in EASE Index for "Developing Personnel for Brand PSBs". Additionally, your Bank's performance management system, Career Development System (CDS) has now made 95% of the roles measurable.

• To increase the reach of its subsidiaries, your Bank is at the forefront in driving Cross Sell Products of the subsidiaries. The Bank expects cross selling income to grow more than 50% over the medium term, for which, your Bank has initiated a CRM Platform for SBG entities (Project IMPACT) to leverage data analytics for lead generation by leveraging the technology enablers in the bank. The Bank is also training more and more officials/employees and encouraging them to acquire the professional certification to cross sell products.

• Your Bank has introduced niche products such as ‘SBI Smart Home Top-Up' for existing Home loan customers, SBI ‘Wealth' for HNI/High-end customers and Flexible Margin Schemes for real-estate developers.

• Your Bank has started an IFSC Banking Unit (IBU) at International Financial Services Centre (IFSC) located at the GIFT-SEZ, Gandhinagar, Gujarat. This centre aims to provide suitable regulatory regime and create a business environment to attract talent and capital.

• As a responsible corporate citizen, your Bank has taken several initiatives for a better and cleaner environment. Under the Green initiative and cleanliness drive, your Bank has discontinued printing of transaction slips for 43 types of unsuccessful transactions. It has installed solar panels on around 2,400 ATM sites. Your Bank intends to become a plastic free organisation by 2^nd October 2019 as part of Bank's sustainability commitment. This major initiative by your Bank is in sync with the Honourable Prime Minister's Swachh Bharat Abhiyan and the national commitment to abolish single use plastic by the year 2022.

SUBSIDIARIES

Through its subsidiaries, SBI provides a wide gamut of financial services to its customers. The growth exhibited by the subsidiaries has been healthy year after year.

SBI Capital Markets Limited posted a PAT of `168.19 crore on a standalone basis for FY19 against `236.26 crore in FY18 whereas on a consolidated basis it has posted a profit of `236.73 crore as against `323.53 crore in the previous year. SBICAP Securities Limited, a subsidiary of SBI Capital Markets Limited has booked gross revenue of `408.36 crore during FY19 as against `357.56 crore in FY18.

SBI Life Insurance has continued to maintain the leadership position amongst private players in the number of policies issued, which reflects mass coverage and strong market acceptance across geographies amongst life insurers. The Company recorded PAT of `1,327 crore in FY19 against `1,150 crore in FY18.

SBI Cards and Payment Services Private Limited delivered PAT of `788 crore for FY19 vis--vis `581 crore in FY2018. The company is positioned at Rank 2 with 17.2% Spends share and 17.4% Cards base. SBI Funds Management Private Limited, the Asset Management Company (AMC) of SBI Mutual Fund, is one of the fastest growing AMCs with growth of 7.36% against the industry growth of 3.66% in FY19. It has posted PAT of `428 crore during FY19 against PAT of `336 crore during FY18.

SBI General Insurance Company Limited (SBIGC) recorded 32.83% growth in Gross Written Premium YoY against an industry growth of 12.95%.The PAT has increased to `334 crore for FY2019 vis--vis `265 crore (excluding onetime reinsurance income from Fire business) in FY2018. The Company's market ranking stands 13^th in the industry and 8^th among the private players in FY2019.

SBI Global Factors Private Limited, a leading provider of factoring services for domestic and international trade, displayed turnover of `4,387 crore for FY19 as compared to turnover of `3,555 crore in FY18. SBI Pension Funds Private Ltd, one of the Pension Fund Managers (PFM) to manage the pension corpus, maintained lead position amongst PFM in terms of Assets Under Management (AUM) in both Government and Private Sectors. The total AUM of the company as on 31 March 2019 was `1,21,959 crore (YoY growth of 37%) against `89,283 crore on 31 March, 2018.

RECOGNITION & AWARDS

Your Bank has over the years garnered numerous awards and accolades and this year was no different. Your Bank was rated the Best Transaction Bank in India by "The Asian Banker" for the second time in a row. Your Bank was awarded as "The Best Trade Finance Bank (India)-2019" for the eighth consecutive year by Global Finance Magazine. Your Bank received "Green Bond Pioneer Award" for being the largest new emerging markets Certified Climate Bond issuer of 2018 by Climate Bond Initiative. Your Bank was also awarded ‘Best MSME Bank Award-Large bank' by CIMSME. YONO, our digital initiative, won the "Mobile Banking Initiative of the Year - India" at the Asian Banking and Finance Retail Banking Awards, Singapore and ET BFSI Innovation Awards among many others. At the Asian Banker Financial Technology Innovation Awards 2018 SBI received awards in a number of categories including The Risk Data and Analytics Technology Implementation of the Year for OFSAA.

Among the subsidiaries, SBI Cards won the ‘Excellent Compliance Performer Award 2018' at the coveted Compliance 10/10 awards. SBI General has been conferred the title "General Insurance Company of the Year" at the India Insurance Summit and Awards 2019, which is the biggest strategic business summit for the entire insurance industry in India.

CORPORATE SOCIAL RESPONSIBILITY

Social Responsibility is deeply ingrained in the culture of your Bank. Consequently, Your Bank has been undertaking social welfare initiatives much before the formal CSR concept was coined. The Bank believes that it owes a solemn duty to the less fortunate and underprivileged members of the society to make sustainable social change in their lives. State Bank of India always places the interest of the common man, especially the most marginalised, at its core. In addition to this, the Bank earmarks 1% of the previous year's net profit as the budget for CSR spend for the year. Its CSR activities are widespread and deep-rooted and have made a true difference in the lives of millions from underserved communities. The Bank is committed towards the economic and social wellbeing of the downtrodden.

During the year, the Bank has made donation of an amount of `5 Crore towards Chief Minister Distress Relief fund, Kerala for _oods. Apart from that, Bank has also donated an amount of `1.24 crore under CSR mainly towards Healthcare and Sanitation.

ENVIRONMENT AND SUSTAINABILITY

State Bank of India is committed towards environment protection and to reduce its carbon footprints. Hence, your Bank prioritises responsible interaction with environment to avoid depletion and degeneration of natural resources to maintain its long term quality. Some of these initiatives are:

Waste to gold: An initiative to motivate and develop the skills of vulnerable youth to address waste management in the city; and develop small sustainable businesses for their livelihood.

SBI Corbett: An initiative to provide villages a sustainable waste management system and conduct trainings of SHG Workers to spread awareness in nearby schools and hotels.

Swachh Belur Math: SBI Foundation supported Ramkrishna Mission for construction of 201 toilets at new Pilgrims Abode in Belur Math that will serve 13 lakh visitors each year by contributing `1.67 crore to this project.

Beat Plastic Pollution: State Bank of India's Local Head Office (LHO) Mumbai organised Cleanliness Drive with the theme ‘Beat Plastic Pollution', on the eve of "World Environment Day" at Dadar Beach. More than 125 staff members actively participated collecting 2 tractor load of garbage.

WAY FORWARD

FY20, in all respects, will be a turning point for your Bank. Not only will the financials improve going forward, efforts will also be directed to achieve a more sustainable mix of business, both domestically and in overseas operations.

Taking cues from the last year, the Bank has set the goal to achieve a healthy credit growth of 10-12% in FY2020. To an extent the credit revival and recoveries in FY19 have already set the tone and the Bank is confident of achieving the target set for FY20. It was envisaged last year that growth in business will be achieved by portfolio reordering that will reduce the Credit RWA to Total advances ratio and internal reorganisation of the corporate banking. My message this year highlights the progress in the revival strategy.

However, a sustainable recovery is not just a mechanical arithmetic but it also requires deep structural transformation and strategic shifts in portfolio. Such an exercise should ultimately improve the RoA, minimise asset liability mismatches and reduce the payback period of our investments. Accordingly, our transformation strategy going forward will continue to focus predominantly on five areas: Customer Service, Corporate Credit Revamp, Digitisation of Banking operations, Synergy between subsidiaries and Development of our human resource.

The Bank already has a large customer base in every business segment. The benefits of retaining the existing customer base far outweigh the cost of acquiring new. Accordingly, in the coming year the Bank will roll out revised customer satisfaction measures to gauge customer satisfaction. Our unique training programme - ‘Nayi Disha- Phase 2', will be focusing on a customer centric approach for employees, thus linking our human resource training with customer service.

The Corporate Credit area had attracted considerable attention in the last two years. Revamping of Corporate Credit structure and system within the Bank on lines that will widen the universe of clients and focus on new segments has already been initiated and the results are visible. Strengthening of credit processes and increased product penetration across high priority relationships has been and will be our guiding principle going forward. Defficiencies in human resource, if any, will be mitigated and human resources will be strengthened by on-boarding sector specialists.

The use of technology in delivering banking services has become more broad-based. The Bank is already in leadership position in digital channels, ATMs and mobile banking. Asset and liability side product offerings through the YONO platform will be scaled up. Encouraged by successful implementation of e-DFS, our Dealer Finance Scheme, we shall try more technology enabled products for our esteemed corporate clients.

Our subsidiaries have leading market share in their respective products and services. Going forward your Bank will explore technology options to leverage upon the synergies with subsidiaries for distribution of Life and General Insurance, Mutual Funds, Credit Card and Demat Account ensuring instant Customer satisfaction.

I thank all our shareholders for their continued faith in our strength and capabilities, our customers for their valuable support and trust and our employees for their tireless efforts towards achieving our goals.

"Alone we can do so little; together we can do so much". -Hellen Keller

Yours Sincerely,

(Rajnish Kumar)

State Bank of India Company History

State Bank of India was incorporated on July 01, 1955. The Government of India nationalized the Imperial Bank of India in the year 1955, with the Reserve Bank of India taking a 60% stake, and name was changed to State Bank of India. State Bank of India (SBI) is the largest state-owned banking and financial services company in India. The bank provides banking services to the customer. In addition to the banking services, the bank through its subsidiaries, provides a range of financial services, which include life insurance, merchant banking, mutual funds, credit card, factoring, security trading, pension fund management and primary dealership in the money market. The Bank operates in four business segments, namely Treasury, Corporate/ Wholesale Banking, Retail Banking and Other Banking Business. The Treasury segment includes the investment portfolio and trading in foreign exchange contracts and derivative contracts. The Corporate/ Wholesale Banking segment comprises the lending activities of Corporate Accounts Group, Mid Corporate Accounts Group and Stressed Assets Management Group. The Retail Banking segment consists of branches in National Banking Group, which primarily includes personal banking activities, including lending activities to corporate customers having banking relations with branches in the National Banking Group. SBI provides a range of banking products through their vast network of branches in India and overseas, including products aimed at NRIs. The State Bank Group, with over 16,000 branches, has the largest banking branch network in India. The State bank of India is the 10th most reputed company in the world according to Forbes. The bank has 206 overseas offices spread over 27 countries. They have 22,414 branches of the parent in Colombo, Dhaka, Frankfurt, Hong Kong, Johannesburg, London and environs, Los Angeles, Male in the Maldives, Muscat, New York, Osaka, Sydney, and Tokyo. They have offshore banking units in the Bahamas, Bahrain, and Singapore, and representative offices in Bhutan and Cape Town. In the year 2001, the SBI Life Insurance Company was started by the Bank. It is the only Bank that has been permitted 74% stake in the insurance business. The Bank's insurance subsidiary 'SBI Life Insurance Company' is a joint venture with Cardif S.A in which Cardif holds 26% of the stake. During the year 2005-06, the bank introduced 'SBI e-tax' an online tax payments facility for direct and indirect tax payment. They also launched the centralized pension processing. The Bank made a partnership with Tata Consultancy Services for setup C-Edg Technologies and consulting services to the banking, financial services and insurance industry. The bank was noted as 'The most preferred bank' in a survey by TV18 in association with AC Nielsen-ORG Marg. Also, the Bank was voted as 'The most preferred housing loan provider' in AWAAZ consumer awards for the year 2006. In the customer loyalty survey 2006-07 conducted by 'Business World', the Bank was ranked number one in all parameters of customer satisfaction, service orientation, customer care/ call center, and customer's loyalty and home loans. SBI Funds was judged 'Mutual fund of the year' by CNBC/TV-18/CRISL. The Bank introduced new products and services such as web-based remittance, instant fund transfer, online-trading and comprehensive cash management. During the year 2007-08, the Bank launched 965 branches all over the country. They inaugurated a new state-of-the art Dealing Room with online connectivity to all active forex intensive Branches at Corporate Centre in Mumbai. They launched a new product, Construction Equipment Loan to cater to construction Companies. Also, they introduced new products such as SBI Reverse Mortgage Loan and SBI Home Plus in the areas of Home Loans. During the year, the RBI transferred their entire shareholding in the Bank representing 59.73% of the issued capital of the Bank to the Government of India. The Bank acquired 92.03% of equity of Global Trade Finance Ltd. Consequently; GTFL became a subsidiary of the Bank. They signed an MoU with the Indian railways for installing ATMs at 682 railway stations. In March 2008, the Bank opened their 10,000th branch and became only the second bank in the world to have more than 10,000 branches after China's ICBC. During the year 2008-09, the company launched Import factoring, a new product in association with SBI Factors & Commercial Services Ltd. They increased the number of branches for retail sale of gold coins from 250 to 518. Also, they re-launched Gold Deposit Scheme at 50 branches to mobilize gold from domestic market for deployment as metal loans to jewellers. During the year, the Bank opened their 11,111th Branch at Sonapur (Kamrup District) in Assam. They introduced three new products viz., SBI Special Home Loan, SBI Happy Home Loan and SBI Lifestyle in response to the stimulus package announced by the Government of India. Also, they entered into an exclusive arrangement with Tata Motors for handling the booking process of Tata 'Nano' cars. During the year, the Bank launched on their website an on-line application form for registering Auto Loan enquiries and expeditiously monitoring and converting these leads into Auto Loans. Also, they launched 'e-invest' for the ASBA (applications supported by blocked accounts) to aid investors for their equity subscriptions, IPO and Rights applications. During the year, the Bank set up a custodial services company namely SBI Custodial Services Pvt. Ltd., in joint venture with Societe Generale, France. They signed letter of intent for setting up of joint venture company for undertaking General Insurance Business. Also, they divested 10% equity stake in its wholly owned subsidiary SBI Pension Fund Pvt. Ltd at cost in favour of its subsidiaries. In October 2008, the Bank signed an MoU with State General Reserve Fund (SGRF) of Oman, for a general purpose private equity fund. State Bank of Saurashtra (SBS), a wholly owned subsidiary of the Bank, amalgamated with the Bank with effect from August 13, 2008. They signed a joint venture agreement with Insurance Australia Group for undertaking General Insurance business. Also, they signed a joint venture agreement with Macquarie Capital Group, Australia and IFC, Washington for setting up an Infrastructure fund of USD 3 billion for investing in various infrastructure projects in India. During the year 2009-10, the Bank opened 1,049 branches. In July 2009, SBI introduced 'SBI Loan to Affluent Pensioners' enabling the government pensioners to avail personal loans upto Rs 3 lakh. During the year, the Bank designed a special package, the Defence Salary Package, for personnel of the three Armed Forces i.e. the Army, Navy and Air Force who maintain their Salary accounts with them. In June 2009, the company increased their shareholding in Nepal SBI Bank Ltd to 55.02% and thus Nepal SBI Bank Ltd became a subsidiary of the Bank with effect from June 14, 2009. In May 2010, the Bank selected consortium of Elavon Incorporation, USA and Visa International, USA as their joint venture (JV) partner for Merchant Acquiring Business. They set up a wholly owned subsidiary, namely SBI Payment Services Pvt Ltd for conducting Merchant Acquiring Business. In August 2010, State Bank of Indore was amalgamated with the Bank as per the scheme of amalgamation approved by the Central Board. During the year 2010-11, the Bank introduced 2 new products, namely 'Pushpa Ullas' and 'Arthias Plus' on pilot basis. They made substantial progress in establishing itself as a leading PE fund player of the country. Also, they signed a Joint Venture agreement with State General Reserve Fund (SGRF) of Sultanate of Oman, a sovereign entity, to set up a general-purpose private equity fund with an initial corpus of USD 100 million, expandable further to USD 1.5 billion. During the year, the Bank opened 576 new branches besides merger of 470 branches of erstwhile State Bank of Indore. Also, they opened 14 foreign offices during the year, taking the total to 156. In July 1, 2010, the Bank launched their 'Green Channel Counter' at select branches across the country. In General Insurance business, the Bank launched limited operations in April 2010 for the Corporate and Mid Corporate customers based at Mumbai, and it was expanded to six other major locations in July 2010. In the Retail segment, the Bank launched their Long Term Home Insurance business at Mumbai in October 2010, which was gradually extended to cover 56 RACPCs and RASMECCs. General Insurance SME business was launched on a pilot basis in Mumbai and Chennai in February 2011. During the first quarter of the financial year 2011-12, the Government of India issued the 'Acquisition of State Bank of India Commercial & International Bank Ltd. vide notification dated July 29, 2011. Consequent to the said notification, the undertaking of State Bank of India Commercial & International stands transferred to and vest in State Bank of India with effect from July 29, 2011. In 2012, State Bank of India signed a Preliminary Non-Binding Memorandum of Understanding with Russian Direct Investment Fund (RDIF), to facilitate advancing bilateral economic cooperation and trade between Russia and India aimed at exploring investment opportunities in both the countries. State Bank of India (SBI) also entered into an agreement with StarAgri Warehousing Ltd (StarAgri), India's leading agri-services & solutions provider, for Warehousing Receipt Financing and Collateral Management Services during the year under review. The bank launched virtual debit cards to check online fraud and promote e-commerce. In 2013, State Bank of India (SBI) inaugurated its 2nd branch in China in Tianjin, a major port city in northeastern China. The bank introduced smart pre-paid card for students, blue-collar workers. In 2014, State Bank of In-dia launched new digital Online and self-service banking solutions with support from Accenture. The bank also unveiled 6 digital branches. In 2015, State Bank of India launched a RuPay Platinum debit card in association with National Payment Corporation of India (NPCI). The bank also introduced online facility for overdraft against FDs. SBI partners with Amazon. SBI entered into a MoU with PayPal, an American online money transfer services provider firm, for facilitating cross-border transactions. State Bank of India launched SBI eforex. SBI also launched an initiative to provide doorstep services and expedite home loans application process. State Bank of India jointly launched a cyber crime awareness campaign. On 26 March 2015, State Bank of India (SBI) announced that consequent upon the promulgation of the Insurance Laws (Amendment) Ordinance, 2014 and subsequently passed by both the houses of parliament, the Executive Committee of the Central Board (ECCB) of the bank has decided to initiate the necessary action as per JV agreement for dilution of SBI's stake in SBI General Insurance from 76% to 51% with corresponding increase of stake of IAG from 26% to 49%, including appointment of a valuer to facilitate valuation and price discovery. On 31 March 2015, State Bank of India (SBI) announced that the Executive Committee of the Central Board (ECCB) of the bank has authorised divestment of SBI's stake in SBI Life Insurance Co. Ltd. by up to 10%. The Committee of Directors for Capital Raising of the bank at its meeting held on 1 April 2015 considered and accorded approval to allot 10.04 crore equity shares on preferential basis to Government of India (GoI) at an issue price of Rs 295.59 per share aggregating Rs 2969.99 crore. The Committee of Directors for Capital Raising of the bank at its meeting held on 29 September 2015 considered and accorded approval to allot 19.65 crore equity shares on preferential basis to Government of India (GoI) at an issue price of Rs 274.37 per share aggregating Rs 5392.99 crore. On 21 December 2015, State Bank of India announced that the Committee of Directors, duly authorized by the Board authorized the bank to raise up to Rs 12000 crore by way of issue of Basel III compliant Tier II bonds, at par, through private placement. State Bank of India and Reliance Industries Limited (RIL) signed the shareholders agreement on 30 June 2016 for setting up Payments Bank. The Subscription and Shareholders' Agreement was signed by RIL as promoter with a 70% equity contribution and SBI as joint Venture partner with 30% equity contribution. The Payments Bank will leverage SBI's nationwide distribution network and risk management capabilities alongwith the substantial investments made by RIL in its retail and telecom businesses. On 4 July 2016, State Bank of India announced that it has sold 5% stake in National Stock Exchange of India Limited (NSE) constituting 22.50 lakh equity shares of NSE to Veracity Investments Limited, a Mauritius based FII, at Rs 4,050 per share for a total consideration of Rs 911.25 crore. Post this transaction, SBI holds 5.19% stake in NSE while its subsidiary SBI Capital Markets Limited holds another 4.33% in the NSE. The Committee of Directors for Capital Raising of the bank at its meeting held on 24 August 2016 authorized the bank to raise up to Rs 11100 crore Additional Tier 1 capital by way of issue of Basel III compliant Perpetual Debt instrument in USD and/or INR, at par, through private placement to overseas and/or Indian investors. The Executive Committee of the Central Board (ECCB) of State Bank of India (SBI) at its meeting held on 14 October 2016 approved to dilute up to 5% stake of SBI in its subsidiary SBI Life Insurance Company Limited to a non-promoter entity. On 25 October 2016, SBI announced that it has issued and allotted 25,000 AT1 Basel III compliant Non-convertible, Perpetual, Subordinated, Unsecured Debt instrument in the nature of debenture, of face value Rs 10 lakh each at par through private placement bearing coupon at 8.39% p.a. payable annually with call option after 5 years or any coupon payment date thereafter aggregating to Rs 2500 crore in third tranche. The Executive Committee of the Central Board (ECCB) of State Bank of India at its meeting held on 9 December 2016 approved divestment of 3.9 crore equity shares constituting 3.9% stake in SBI Life Insurance Company Ltd. at a price of Rs 460 per share, subject to all regulatory approvals. On 17 January 2017, SBI announced that it has concluded the issue of USD 500 million Fixed Rate Senior Unsecured Notes having a maturity of 5 years at a coupon of 3.25 percent payable semi-annually under Regulation-S. The bonds will be issued through the bank's London Branch and listed on Singapore Stock Exchange. The Committee of Directors for Capital Raising of State Bank of India considered and approved on 20 January 2017 by circulation the allotment of 21.07 crores equity shares at an issue price of Rs 269.59 per share on preferential basis to Government of India aggregating Rs 5680.99 crore. The Executive Committee of the Central Board of State Bank of India at its meeting held on 15 March 2017 accorded approval for infusing additional capital of up to Rs 1160.04 crore in credit card joint venture companies viz. SBI Cards & Payment Services Ltd. and GE Capital Business Process Management Services Ltd. through purchase of equity shares from GE Capital so as to increase the bank's stake in both the companies to 74%. SBI merged five of its associate banks viz. State Bank of Bikaner & Jaipur, State Bank of Mysore, State Bank of Travancore, State Bank of Patiala and State Bank of Hyderabad and Bhartiya Mahila Bank with itself with effect from 1 April 2017. In February 2017, the Union Cabinet approved the acquisition by State Bank of India of its subsidiary banks namely State Bank of Bikaner and Jaipur, State Bank of Mysore, State Bank of Travancore, State Bank of Patiala and State Bank of Hyderabad. On 8 June 2017, State Bank of India (SBI) announced closure of qualified institutional placement of equity shares. The bank successfully rose about Rs 15000 crore from issue of 52.21 crores equity shares at a price of Rs 287.25 per share to qualified institutional buyers. The Central Board of State Bank of India at its meeting held on 27 December 2017 accorded approval to raise Additional Tier 1 capital by way of issuance of Basel III compliant debt instrument in USD and/or INR to the tune of Rs 8000 crore from domestic/international market including rupee denominated Masala Bonds till 31 March 2018. The Executive Committee of the Central Board of State Bank of India at its meeting held on 8 January 2018 approved long term fund raising in single or multiple tranches up to USD 2 billion under Reg-S/144A, through a public offer and/or private placement of senior unsecured notes in US Dollar or any other convertible currency during FY 2018 and FY 2019. The Executive Committee of Central Board of State Bank of India at its meeting held on 17 January 2018 approval the proposal for issuance of long term bonds of Rs 20000 crore for financing of infrastructure and affordable housing in domestic and overseas market in FY 2018 and FY 2019. The Committee of Directors for Capital Raising of State Bank of India at its meeting held on 16 February 2018 accorded its approval for preferential allotment of 29.25 crore equity shares at Rs 300.82 per share (including a premium of Rs 299.82 per share) to Government of India (GoI) aggregating Rs 8800 crore.

State Bank of India Directors Reports

I. ECONOMIC BACKDROP AND BANKING ENVIRONMENT

GLOBAL ECONOMIC SCENARIO

Global economic momentum eased moderately in 2018 with GDP growth estimated at 3.6%, as per IMF. Persistent moderation in China, owing to financial tightening amidst rising shadow banking and local government debt, coupled with continuing trade conflict with the US had a dampening effect on overall emerging market and developing economies' performance.

As far as developed economies were concerned, US economic activity picked up against the backdrop of fiscal stimulus. However, there now seems to be a question mark over the continuation of such momentum. The Euro Area grew less than expected, with uncertainty over Brexit and threat of US tariffs on EU automobiles taking a toll on their manufacturing sector.

Meanwhile, financial conditions tightened moderately in 2018 with monetary normalisation in the advanced economies. The US Fed raised the interest rate four times last year consequent to which capital outflows increased from developing economies. However financial volatility has reduced after the Fed adopted a dovish stance.

Going forward, with waning fiscal stimulus in the US and weaker European economy, global growth slowdown is expected to continue in 2019 with GDP growth of around 3%. No deal-Brexit, lingering of trade tensions between the US and China and more than expected tightening of global financing conditions remain the key risks to growth prospects.

After decelerating sharply from 8.2% in FY2017 to 7.2% in FY18 and then to 7.0% in FY2019, India's GDP growth is expected to grow by 7.2% (RBI projection) in FY2020. Going forward, several factors appear crucial regarding economic growth. First, private consumption is expected to get a fillip from measures such as public spending in rural areas and increase in disposable income of households due to income tax benefits. Second, resolution of stressed assets and decline in the level of nonperforming advances (NPAs) on Bank balance sheets is expected to improve credit flows, which augurs well for economic activity. Third, improving capacity utilisation, tailwinds from lower oil prices and rate cuts are likely to support economic activity. Fourth, projection of ‘near normal' monsoon this year with weak El Nio will be helpful for food grains production and subsequently for food inflation.

In the industrial sector, GVA decelerated to 6.4% in H2 FY2019 from 8.1% in H1 and 8.3% a year ago, pulled down by a fall in the growth of manufacturing activity, as subdued demand was reflected in a moderation in sales growth. Activity in the services sector picked up and became broad-based in H2 FY2019, boosted by resilience in construction activity and acceleration in financial, real estate and professional services and public administration, defence and other Services.

Headline CPI inflation has declined sharply since mid-2018, driven by the sustained fall in food inflation, the waning away of the direct impact of house rent allowances for central government employees, and more recently, by a sharp fall in fuel inflation. Owing to that the average CPI inflation for FY2019 stood at 3.43% compared to 3.58% in FY2018.

The outlook for inflation may be impacted by various upside and downside risks. The major upside risks include: geopolitical tensions and supply disruptions in the global crude oil market, volatility in international and domestic financial markets, the risk of a sudden reversal in the prices of volatile perishable food items, fiscal slippages and possibility of below-normal monsoon this year. Among the downside risks are: a sharper than anticipated slowdown in global growth and its softening impact on crude oil and other commodity prices, and the persistence of a food supply glut. For FY2020, we expect average inflation would be less than 4%.

Against the backdrop of slowing global trade and commerce-inhibiting trade tensions, India's merchandise exports Y- ( o-Y) grew by 9.1% in FY2019 vis--vis 10.0% in FY18. An important feature of India's export basket in recent years has been a shift away from primary and traditional low value-added exports to higher value-added manufacturing and technology-driven items. This shift has imparted a measure of resilience to export demand in a hostile international trading environment. The Current Account De_cit (CAD) increased to 2.6% of GDP during Apr-Dec'18 from 1.8 % during Apr-Dec'17 due to widening of the trade deficit on account of higher oil prices. As oil prices started moderating from November'18, the CAD has moved down from 2.9% in Q2 FY2019 to 2.1% in Q3 FY2019.

The Indian banking sector has been facing a large overhang of balance sheet stress. In the year 2017-18, the persisting deterioration in asset quality necessitated sharp increase in provisions and for the first time since 1993-94, the banking system as a whole, particularly driven by public sector Banks (PSBs), registered losses.

To manage the crisis, the regulator and supervisor, RBI, has tried for the revival of the banking system by following a three-pronged approach: (i) Through Asset Quality Reviews (AQRs) a fuller recognition of stressed assets is nearing completion and provisioning is being policy-driven; (ii) In consonance, the implementation of a new framework for resolution of stressed assets under the overarching mandate of the Insolvency and Bankruptcy Code (IBC) is speeding up the de-stressing of balance sheets and (iii) the Government has undertaken steps for recapitalisation of the PSBs. Re_ecting such resolution efforts, asset quality of the banking sector currently appears to be on course to recovery as the load of impaired assets recedes; the first half-yearly decline in gross NPA ratio since September 2015 and improving Provision Coverage Ratio, being positive signals. Stress test results suggest further improvement in NPA ratio. Notwithstanding the significant costs in lieu of enhanced recognition of asset impairment in PSBs, it appears to have led to a greater discipline in credit assessment, higher sensitivity to market risk and better appreciation of operational risks. Meanwhile, the Insolvency and Bankruptcy Code (IBC) has bridged an important institutional gap to strengthen the much-needed credit discipline. Some of the resolutions, however, are lagging behind the envisaged timelines. A time-bound resolution of impaired assets will go a long way in unclogging the credit pipeline, thus improving the allocative efficiency in the economy.

The shift in credit intermediation from Banks to non-Banks has given the corporate sector a diverse choice of financing instruments. Such market-intermediated credit flows require robust supporting infrastructure in the form of appropriate valuation regime as also informative and responsive credit rating framework. However, the stress in the NBFC sector have underscored the need for greater prudence in risk-taking. While the role of Banks and non-Banks in supporting the growth needs of an emerging economy like India is well recognised, emphasis should continue to be on diligent, prudent and sound risk management practices.

With the sustained efforts, the Bank credit has picked up momentum in 2018-19, after remaining depressed for nearly two years, and grown by 11.96%, its highest level in the last five years, compared to last year growth of 10%. Aggregate deposits grew by 7.58% in 2018-19, compared to 6.2% growth in 2017-18. The incremental credit flows are also getting increasingly broad-based, with services accounting for the highest share as against personal loans a year ago. Credit growth to industry, which has turned positive in November 2017 after more than a year-long contraction, has improved, particularly in respect of Infrastructure, Chemical and Chemical products, Engineering and Petroleum, Coal products and Nuclear fuels. The share of credit to agriculture, however, moderated.

The up-tick in credit growth is likely to be supported by the progress being made under the aegis of the IBC in addressing stress on balance sheets of both corporates and Banks, recapitalisation of PSBs, and a positive outlook on the economy. The prevailing negative credit-to-GDP gap indicates that there is sufficient scope for credit absorption and expansion in Bank lending on a sustained basis.

The last financial year was particularly challenging for Banks in India. Operational risk increased and there was considerable market volatility, adversely impacting treasury operations. Although the resolution of stressed assets has reached an advanced stage, counter litigations have elongated the realisation of final leg of resolution process. The consolidation in PSB space has changed the landscape of competition and this process may gather pace in the next financial year.

The cumulative effect of policy decisions over the last five years has been positive in FY2019. Reform measures such as GST, IBC, Roads and Inland waterways etc. have stabilised. There is now a larger appreciation of the fact that there will be greater use of digital technology in every sector of the economy. Report of the Taskforce on Artificial Intelligence talks about the use of advanced data and AI techniques in financial services. The credit growth, which has improved in FY2019 and is supported by accommodative policy stance articulated in the First Bi-monthly monetary policy, will remain robust in this financial year as well.

The external environment continues to be challenging. IMF's latest Financial Stability Report observes that rising financial vulnerabilities point to elevated medium-term risks to financial stability. Accordingly, the trend to reorganise foreign business in light of the emerging challenges and new opportunities such as regional trade agreements will shape the things to come. Your Bank has already taken many initiatives in this direction, such as reorganisation of its UK operations. Close monitoring of risk in all overseas operations will be pursued.

Lastly, the first quarter of current financial year is punctuated by the results of general elections. Once this short-term uncertainty is cleared, the course of policy direction will also be visible. With monetary policy already accommodative, a low inflation coupled with manageable fiscal position, the future outlook of growth is positive. The risks in banking sector is likely to ebb with the resolution of large ticket IBC cases. This will create room for business expansion and structural transformation of Banks.

Your Bank's aggregate liabilities (excluding capital and reserves) rose by 6.93% from `32,35,623.44 crore as on 31<sup>st</sup> March 2018 to `34,60,000.42 crore as on 31^st March 2019. The deposits rose by 7.58% and stood at `29,11,386.01 crore as on 31<sup>st</sup> March 2019 against `27,06,343.28 crore as on 31^st March 2018. The borrowings also increased by 11.29% from `3,62,142.07 crore at the end of March 2018 to `4,03,017.12 crore as at the end of March 2019.

Non-interest income decreased by 17.55% to `36,774.89 crore in FY2019 as against `44,600.69 crore in FY2018. During the year, your Bank received an income of `348.01 crore (`448.52 crore in FY2018) by way of dividends from subsidiaries and joint ventures in India and abroad, and `3,146.86 crore (`13,423.35 crore in FY2018) by way of profit on sale of investments.

The Operating Profit of your Bank for FY2019 was at `55,436.03 crore as compared to `59,510.95 crore in FY2018 (including exceptional item of `1,560.55 crore in the FY2018-19 and `5,436.17 crore in FY2017-18). Your Bank posted a Net Profit of `862.23 crore for FY2019, as compared to Net Loss of `6,547.45 crore in FY2018.

Provision of `54,529.06 crore for non-performing assets (as against `70,680.24 crore in FY2018) and a write back of `762.09 crore towards Investments Depreciation (as against provision `8,087.57 crore in FY2018) was made during the year.

An amount of `258.67 crore (as against nil in FY2018) was transferred to Statutory Reserves. An amount of `379.21 crore (as against `3,288.88 crore in FY2018) was transferred to Capital Reserves. An amount of `371.84 crore (as against withdrawal of `1,165.14 crore in FY2018) was transferred to Investment reserve. An Amount of `194.05 crore (as against

1. RETAIL & DIGITAL BANKING GROUP

With a view to enhance its customers' experience, your Bank is making continuous efforts in providing a pleasing ambience within customer service areas, with proper seating arrangements, clean and uncluttered surroundings, along with courteous and smartly attired staff at all its branches.

1. Home Loans

Affordable Housing was a key driver of growth in the overall Housing sector, based on the Government's thrust to bridge the massive Demand-Supply gap of dwelling houses in India, along with the relaxation of the CLSS (Credit Linked Subsidy Scheme) norms under Prime Minister's Awas Yojana (PMAY), covering more beneficiaries, Government has also extended the PMAY MIG Scheme up to 31^st March 2020. As of 31^st March 2019, State Bank of India has 64.46% of its Home Loan portfolio under Affordable Housing. Your Bank was recognised by the National Housing Board (NHB) as the Best Home Loan provider in the country, under the PMAY MIG category, for FY2017-18.

(March'17 figure includes that of merged Associate Banks too)

• Home Loans on YONO was a significant step towards digitisation and provided the registered YONO customers with 24*7 access to Home Loan needs, such as exploring SBI Home Loan products, calculating eligibility, and getting instant In-principle approval. To meet the personal needs of existing Home Loan customers, Insta Home Top-Up Loan was also introduced on YONO.

• Sanctioning of Home Loans and Home related products from non-BPR centre branches through centralised Rural Assets Credit Centres (RACCs), and Loan Processing Cells (LPCs), has brought about uniformity in processes and better quality of underwriting, resulting in pan-India growth of quality assets. The overall fresh NPA during FY2019 was below 1% of the total Home Loans portfolio. • In order to help and support the _ood affected people of Kerala, within a month of the calamity, your Bank introduced Home Loan Schemes for Repair and Renovation within the Kerala Circle on softer terms, irrespective of category, gender, LTV ratio and risk score of the customers. • Your Bank introduced niche products such as ‘SBI Smart Home Top-Up' for existing Home loan customers; SBI ‘Wealth' for HNI / High-end customers; and Flexible Margin Schemes for real-estate developers. • Your Bank is leveraging its vast branch network and the strength of its committed staff, with the latest state-of-the-art technology to improve the Home Loan journey of the customer. Namely making it faster, more transparent and easier. Your Bank continues to work towards being the first choice Home Loan provider of customers.

2. Auto Loans

Your Bank is helping with upgrading the living standards of its customers by providing auto loans at competitive rates, and by making owning a car an affordable proposition. The auto loan products of your Bank are available in many variants to suit the requirements of various customer segments viz. - salaried, businessmen, self-employed, professionals, senior citizens, NRIs, agriculturists and existing borrowers, amongst others. Multi-channel sourcing of proposals and quick TAT has made the auto loan products highly popular. This has helped your Bank to increase its penetration in financing cars sold by various manufacturers such as Maruti, Hyundai, TATA Motors, to name a few. The Auto Loan portfolio reached a level of `71,884 crore by FY2019, and the market share of Your Bank in Auto Loans rose from 34.97% in FY2018, to 35.45% in FY2019, amongst All Scheduled Commercial Banks (ASCBs). Additionally, State Bank of India plans to start financing high-value super bikes, a new and fast emerging segment.

3. Education Loans

Education is the key prerequisite for creating human capital, as it helps in developing skilled and productive human resources. Loans provided for this purpose contribute to the development of the nation and is a growth driver for any economy. Therefore, the financing of up to `10 lakh under Education Loans is considered as Priority Sector Advance. Your Bank takes pride in being the largest Education Loan provider in the country, with a market share of 30%. During FY2019, it helped more than 66,947 meritorious students to realise their dreams by providing financial assistance to the tune of `6,635 crore. Out of this, 35% of the loans were extended to girl students. To broaden the scope of Education Loans, book quality business and enhance customer satisfaction, your Bank has taken following steps: • Shortlisted 158 top-rated, premier and reputed institutions to extend Education Loans under the Scholar Loan scheme at relaxed norms and concessional interest rates. • Door-step services were extended for sourcing high-value education loan applications for studying abroad at select centres. • To ensure better tracking of the loan applications and faster sanctioning of loans, your Bank's Loan Origination System was integrated with Vidya Lakshmi Portal (VLP) of the Government of India.

4. Personal Loans

Your Bank provides EMI based loans to pre-selected elite customers for purchase of consumer durable goods worth up to `1,00,000 from online shopping portals such as Flipkart and Amazon on a real time basis. Online e-commerce financing under tie-up with Flipkart was launched in May 2018 and with Amazon in October 2018. The portfolio is 19,974 accounts with an outstanding of `19 crore as on March 2019.

SBI Debit card holders were empowered to fulfil their shopping needs on POS enabled swipe machines with an EMI facility, given to the pre-selected ones for purchasing consumer durable goods from the approved shops, mall, stores, and show rooms worth up to `1 lakh. The facility was launched during the latter part of FY2019.

5. Liability and Investment Products

6. Corporate and

7. Digital Personal Loan Offerings

While offering products on multiple platforms for portfolio growth with higher profit margins, we have kept in mind the ease of Banking for our Customers, and have implemented following digital products: • On the YONO Platform, your Bank is providing Pre-Approved Personal Loans (PAPLs) to pre-selected customers through four product lines, viz., Pre-approved Xpress Credits up to `5 lakh, Pre-approved Pension loans up to `2.5 lakh, Xpress Credit Insta Top-up up to `3 lakh, and Pre-Approved Personal Loans (PAPLs) up to `2 lakh to CSP and Non-CSP customers. • Xpress Credit Insta Top-up loans on INB Platform: Top-up loans up to `3 lakh are being offered to pre-approved Xpress Credit customers through INB platform. • Tatkal e-Personal Loan: Loans up to `1 lakh are being offered to cater to the needs of pre-selected unserved and under- served non-salaried customers, based on selected parameters. This product was launched in May 2018 and has a portfolio of 27,853 accounts worth `122 crore as on March 2019. • Personal loans were extended against security of Sovereign Gold Bonds of Government of India.

8. NRI Business

As on 31^st March 2019, your Bank has around 37 lakh NRI Customers, who are being catered to by 93 dedicated NRI branches in India and a well-connected network of foreign offices. We also have correspondent banking relations with 234 global Banks and tie- ups with 55 exchange houses and six Banks (in the Middle-East) to facilitate remittances. The Indian diaspora, spread across the globe, has always reposed immense trust on us. As a result, a quarter of their deposits (within the Indian Banking system) is with us. Your Bank has launched the following products/services in FY2019 for the benefit of its NRI clientele: • SBI Tax Savings Scheme for NRIs (NRO Deposits) was introduced in which customers can avail Tax benefits under section 80C of Income Tax Act, 1961 (minimum tenor of deposit is 5 years and tax-relief is available up to `1,50,000 per Financial Year). • Missed call and SMS Banking facilities were launched for NRIs, in which customers can get their latest balance and mini statements of their accounts via SMS, just by giving a missed call on a predefined number. This is especially useful for customers who are not using Internet Banking facilities. Customers can also block or restrict ATM card usage through this functionality. • NRIs can now plan and secure retirement with the National Pension System (NPS) scheme. The product is now available to all SBI NRI customers. They can open and maintain NPS account through their Internet Banking portal as well. • SBI Wealth, the wealth management initiative of your Bank, which offers a platform to create, preserve and grow wealth, is now available to NRI clientele from Gulf Cooperation Council Countries.

9. Wealth Management Business

Your Bank's Wealth Management Services are now made available at 44 Centres with 121 Wealth Hubs, four e-Wealth Centres and a Global e-Wealth Centre by adding 31 new Centres and 45 new Wealth-Hubs during the year. The Wealth-Hubs are managed by a team of dedicated Relationship Managers and Investment Counsellors who have in-depth knowledge on products and markets, along with Senior Internal Officials for operational roles.

An open Investment Platform, with a state-of-the-art technology and right selling approach based on Risk Pro_ling, provides the best possible experience to the Bank's clients by offering exclusivity in its services and benefits.

Your Bank's Wealth Management Business has shown an exponential growth in terms of client acquisition and Assets Under Management during the financial year. The number of Clients increased from 24,168 in March 2018 to 55,502 in March 2019 and AUM reached `30,270 crore against `14,284 crore during the period.

B. ANYTIME CHANNELS

1. ATMs/ ADWMs

Nearly, 36% of the financial transactions of your Bank are routed through ATMs/ ADWMs. With a market share of 28.73% (as per RBI Data) in ATM network in India, it transacts 50.81% of the country's total ATM transactions. On an average, over 1.40 crore transactions per day are routed through your Bank's ATM network.

2. SWAYAMs: Barcode based Passbook Printing Kiosks

Your Bank installed around 3,200 SWAYAMs (Barcode based Passbook Printing Kiosks) during FY2019, making the total number of SWAYAMs deployed cross 17,400 units. Using these kiosks, customers can print their own passbooks using barcode technology. Your Bank has also deployed "Through the Wall" SWAYAMs, offering extended working hours for printing. More than 3.45 crore transactions are recorded at these kiosks per month.

3. Green Channel Counter (GCC)

4. Green Remit Card (GRC)

GRC, especially useful for migrant depositors, is a card through which one can remit money using GCC/CDMs/ ADWMs in a specified account of State Bank of India. As a daily average, over 1.50 lakh transactions are being routed through GRC.

5. Banking on Mobile

YONO Lite - Your Bank's Mobile Banking App for retail customers, YONO Lite, as it is now known offers Intra and Inter Bank funds transfer (NEFT/RTGS/IMPS/ UPI amongst others.), opening of fixed deposits, e-MOD Accounts and add / manage beneficiaries etc. Additional value-added services such as Aadhaar Linking, Voice Assisted Banking, e-statement subscription/download, Stop / Revoke cheque instructions, and facility to submit Form 15G/ 15H online for TDS exemption and a host of other features are also available.

SBI Anywhere Corporate - Your Bank's Mobile Banking App for proprietorship firms allows businesses to transfer funds across Banks, open and operate fixed deposit accounts, payment to EPFO, view account statements, schedule transactions, and Recharge/bill payment amongst others. Furthermore, it facilitates large Corporate firms with multiple users and allows business houses to operate accounts, transfer funds through NEFT/ RTGS, make bill payments/supplier payments, authorise e-cheques /e-STDR, open and operate fixed deposit accounts amongst others. With above 141 Lakh registered users, the Mobile Banking channel has processed transactions amounting to `2,74,029 crore.

6. SBI Pay (BHIM)

Large multinational corporations have implemented digital payments bandwagon to help achieve a Less Cash India. State Bank of India has partnered with Google India to offer UPI services to the users of their App - Google Pay under the UPI Multi-Bank Integration Model. Consequently, over 312 lakh Google Pay users have linked their Bank accounts with their @OKSBI handle till 31^st, March 2019.

SBIePay, started in March 2014, is the first and only Bank based Payment Aggregator in India. In its essence, SBIePay is a platform for merchants to acquire a Bank agnostic large customer base and provides a bouquet of online payment options to the merchant's online customers. During last year, SBIePay has witnessed exceptional growth, as a result of an increase in the number of merchants on-boarded, which rose from 125 in FY2018 to 225 in FY2019. Moreover, your Bank has added four new channels to the bouquet of online payment offerings - NEFT, Prepaid Card, UPI, and SBIePay-POS and have made direct integration with INB of other Banks such as HDFC, ICICI, Bank of Baroda, amongst others. This has resulted in a 115% YoY growth in number of transactions. The value of the transactions settled has jumped from `24,487 crore in FY2018, to `38,207 crore in FY2019, leading to an increase in the commission/revenue earned by your Bank. SBIePay has achieved a revenue of `49.68 crore during FY2019, a growth of 54% over FY2018.

7. Digital Banking

YONO: YONO, our flagship customer-facing digital Bank caters to various banking, financial services, lifestyle requirements and delivers world class customer experience through distinctive omni-channel and seamless customer journeys. It is also an employee facing platform that enables end-to-end digitisation of regular banking services.

With YONO our customers today can: • Open an account digitally and do all banking transactions on a mobile app or website.

• Get advice on and purchase a host of non-banking financial services products such as mutual funds, life and general insurance, credit cards, among others. • Get the widest variety and lowest prices on beyond banking products, across 89 merchant partners and 21 categories on the platform. • At the same time, our employees can provide the same services to our customers when they need assisted services. Besides, processes that take up close to 60% of branch activities have been digitised with a view to streamline processes, deliver superior in-branch customer experience and free up capacity for value creating activities.

A year since launch, YONO has already generated significant value for the Bank in terms of business growth, new customer on-boarding and customer engagement

Significant momentum on new customer on-boarding achieved with approximately 25,000 digital accounts opened per day, which was over 75% of all eligible accounts being opened by the Bank with 30-40% higher balances than regular accounts.

The non-banking financial services product suite, that is, insurance mutual funds, amongst others are achieving all-time highs.

On end-to-end digitisation, we have drastically reduced the TAT for account opening from over 50 minutes to less than 10 minutes and are in process of eliminating the back-office for few key transactions.

Various other intangible benefits were achieved through YONO, for example simpli_ed CKYC process, elimination of paper-based application forms, automated customer validations, amongst others.

Awards won by YONO : • "CSI IT Innovation & Excellence Awards 2018" - Best BFSI for Implementation of Digital Trasnformation ( Dec 2018) • "ABP News BFSI Award 2018" - Best Bank in Technology Orientation ( November 2018). • "Mobile Banking Initiative of the Year - India" at the Asian Banking and Finance Retail Banking Awards, Singapore (July 2018). • Indian Express Award 2018 - Enterprise Mobility Category (June 2018). • ET BFSI Innovation Awards (September 2018).

Performance Highlights of YONO as on 31^st Mar 2019 : • 2 crore + application downloads • 73.49 lakh Registrations • App rating on Android is at 3.7 and 2.8 on iOS • 10 lakh+ daily logins • 98.31+ lakh Fund Transfers (` 13,413.64 crore ) executed • 2.40+ lakh Fixed Deposits opened • 13.84+ lakh Bill payments done • 27.50 lakh+ Digital Savings accounts • `3,800 crore worth disbursals of Digital paperless Pre-Approved Personal Loans to 3.14+ lakh customers, having delinquency rate of less than 0.01 %. • 89 merchant partners live on the B2C Market Place platform across 21 categories, witnessing approximately 1,37,000 transactions (around `60 crore Gross Merchandise Volume), 1.66 crore merchant clicks, and approximately 54,115 IRCTC ticket bookings. • Mutual Funds Gross Sales worth `8,324.79 lakh • General insurance policies worth `981.46 lakh (No: 3,19,936) • Life Insurance Policies value `1,315.47 lakh (renewal) and `550.93 lakh (New) achieved on the YONO platform. • 2.16+ lakh SBI Credit Cards linked; 5.79 lakh card payments worth `678 crore done; 1.93 lakh new Card leads generated. • Online lead generation and issuance of In-principle approval and sanction of Retail Loans for Home Loan (existing customers), approximately 45,475 leads generated, out of which around 9,356 in-principle approval generated (around `1,402 crore). • Innovative product ‘YONO Cash'

Metro and Transit Projects: Your Bank has implemented a first- of-its-kind end to end ticketing solution for the Noida Metro Project using the National Common Mobility Card (NCMC) specifications based RuPay Prepaid Card. State Bank of India has also been awarded the Hyderabad and Nagpur metro project for implementation of Open Loop Automatic Fare Collection System based on the NCMC card specifications, the work of which is under way.

Smart City: Your Bank has a dedicated team to capture the payment eco-system in the 100 identified Smart-Cities in India. The plan is to foray into the transit solution/ integrated ticketing solution for ‘One City One Card', which is a payment initiative for the Smart Cities.

Cash@PoS: To reach out and facilitate maximum number of people looking for convenient cash withdrawal, State Bank of India, provides facilities of cash through ‘Cash@POS' initiative. Debit card holders of State Bank of India and all other Banks can withdraw cash from PoS machines installed by your Bank across various merchant locations. As per the RBI guidelines customer can withdraw ` 1000 in Tier I and Tier II cities whereas ` 2000 can be withdrawn in Tier 3 to Tier 6 cities per day per card. Presently, your Bank is not charging any fee. State Bank of India has a total of 5.75 lakh PoS machines of which 4.78 lakh PoS machines are enabled to dispense cash to the customers of your Bank and the Banks who have enabled this facility for their customers.

Merchant Acquisition: The digital payments landscape in India is evolving at a rapid rate and your Bank is playing an effective role in building momentum for transforming India through digitalisation of the economy. In sync with the focus of the Government of India to create a less-cash economy, your Bank has expanded digital payment acceptance infrastructure across the length and breadth of the country. During the year, your Bank introduced a multi option payment acceptance device named MOPAD facilitating payments via cards, Bharat QR, UPI, and SBI Buddy (e-wallet) on a PoS terminal. In addition, your Bank continued to expand digital footprint across the country and deployed 5.75 lakh PoS terminals, 4.19 lakh Bharat QR code and on-boarded 6.31 lakh merchants on BHIM-Aadhaar-SBI. In total, the number of merchant payment acceptance touch points crossed 27.91 lakh as on 31^st March 2019. Your Bank has acquired nearly 54 crore transactions during FY2019 with 24% increase on Y-o-Y basis. In addition to offering basic acquiring services, your Bank is also providing other services such as: • NFC acceptance on PoS terminals • DCC-Dynamic Currency Conversion • EMI • Cash@POS • Acceptance of AMEX, DINERS, DFS, JCB, and UPI

Your Bank continued the efforts to onboard merchants from premium segments like OMCs, retail chains, life style stores, and holiday resorts apart from consolidating the existing business. Your Bank has tied up with major Corporates and with Government departments to migrate their operations from cash to digital mode. This involve customisation and integration of its systems with those of corporate and Government departments to ensure seamless flow of digital transactions. Some of the notable integrations are with Indian Railways, SOUTHCO (Odisha), APDCL (Assam Power Distribution Co. Limited), Goa - GBSS project (Government of GOA), Cyber Treasury (Govt of Madhya Pradesh), IGR (Inspector General of Registrar) Pune, Noida, and Nagpur

8. Customer Value Enhancement

Performance Highlights: (Commission on Cross Selling)

• Number of Specified Person for Life insurance has increased to 54,317 as on March 19 as against 46,180 in March 18 (Increase of 17.6%)

• SBI has become India's No.1 Bank distributor in terms of AUM (more than `72,000 crore).

• SBI continues to be the market leader in terms of Live SIP numbers (more than 22 lakh) and SIP Book Value as on March 19.

• Number of Specified Person for General Insurance has increased to 22,034 as on March 19 as against 20,646 in March 18 (Increase of 6.72%)

• No of cards issued through Banca Channel crossed 15 lakh in FY2019.

• Cards sourced from Banca Channel has increased from 45% in FY2018 to 55% of total cards issued by SBI Card in FY2019.

• Bank continues to maintain its dominance in mobilising maximum number of NPS accounts this year as well.

• Bank was qualified as Top Performing Point of Presence (POP) under various campaigns observed by PFRDA.

• Bank has shown a significant growth in income earned by sourcing Demat accounts and by opening NPS accounts.

9. Internet Banking and e-Commerce

State Bank of India continues to grow and lead the digital banking space propelled by the enhanced outreach of ‘Onlinesbi' across all customer segments. The channel has expanded its footprint with over 129.23 lakh new user additions during the first nine months showing a marked increase over the last year's reach (see Table).

With introduction of new features and several add-ons provided in ‘Onlinesbi' to enhance customer comfort and experience, the platform handled transaction volume exceeding 162 crore with transaction value of nearly 127.78 lakh crore, recording a quantum jump over the last year (see Table). This reflects on the growing customer confidence on our offerings and deliverables.

• One of the key enablers provided to customers is the facility, which enables them to reply to transaction alerts received through SMS and email for instant reporting of unauthorised transactions. • Mobile registration was made mandatory to facilitate receipt of SMS alerts by customers. • Online download of Form 16 A is now made available through OnlineSBI.

Your Bank is pioneer and market leader in SME financing. With over ten lakh customers, the SME portfolio of `2,88,583 crore, as on 31^st March 2019 accounts for nearly 12.58% of your Bank's total advances. State Bank of India has always held SMEs as an important segment, considering the role being played by them in the Indian economy in terms of their contribution to manufacturing output, exports and employment generation. Being committed to providing Simple and Innovative Financial Solutions, your Bank's approach in driving SME growth rests on the following three pillars: a) Customer Convenience, b) Risk Mitigation, c) Technology based digital offerings and process improvements

Key Performance Indicators 2017-18 2018-19

New User Registration (`in lakh) 94.63 129.23 Transaction Volume (Rs.in crore) 156.56 162.06 Transaction Value (Rs.in crore) 95,07,340 127,77,976

• Green Password has been launched during the year to enhance customers' ease in joining our digital platform with a hassle-free self-registration process. This is set to expand the INB coverage among existing and new customers.

• Launch of Virtual Account Number (VAN), a customised collection tool for big corporates with its unique alphanumeric code that masks the account details of the corporates from the remitter, is another big milestone reached during the year.

• Facility for the non-INB customers to update their email ID in CBS records by accessing the option

1. Customer Convenience

With a view to build and sustain the momentum for transforming India, your Bank has created the highest units of touch points in terms of branches and other modes. With a view to enhance ease of business for the Small and Medium Enterprises, State Bank of India modified its existing delivery model of Small and Medium Enterprises Centre (SMEC) and created Asset Management Teams (AMTs) to maintain end to end relationship with the customers for micro loans up to `50 lakh. The SMECs have also been strengthened in terms of manpower, which has resulted in improvement in the service.

2. Digital offerings:

Your Bank is leveraging technology in every aspect of the value proposition from sourcing business, designing products, streamlining process, improving delivery to monitoring. Furthermore, it has taken several initiatives to build SME portfolio in a risk mitigated manner and has implemented significant changes in (i) Product suite, (ii) Process (iii) Delivery.

State Bank of India is one of the members of SIDBI led PSB consortium and your Bank's path-breaking initiative, psbloanin59minutes.com, provides easy access for loans to SMEs registered on GST platform and _ling income tax. On this Contactless Lending Platform (CLP), in-principle sanction of loans up to `1 crore is processed. 8,377 in-principle sanctions were generated through CLP by FY2019, amounting to `3,250 lakh.

Project Vivek heralded a paradigm shift in your Bank's appraisal system from traditional Balance Sheet based funding, to a more objective appraisal system of leveraging cash flow and other information sources. It is a promising initiative launched by State Bank of India to implement a new Credit Underwriting Engine (CUE) for the SME segment, thereby bringing objectivity in better risk assessment. Moreover, it reduces Turn Around Time (TAT) resulting in better customer experience. By FY2019, a total of 34,477 proposals were processed under Project Vivek. Further, during the year, technical enhancements were done in the project to improve the underwriting process.

SBI and QCI sign MoU on Zero Defect Zero Effect (ZED) Certification for MSMEs: State Bank of India becomes the first Bank to sign a Memorandum of Understanding (MoU) with Quality Council of India on the Zero Defect Zero Effect (ZED) Certification Scheme of Ministry of Micro, Small and Medium Enterprises, Government of India.

Brie_y, this MoU will pave way for a collaborative arrangement on implementation of ZED on a nation-wide scale on specific activities aimed for the benefit of MSMEs. Both your Bank and QCI will define a strategic framework to take forward the vision of Hon'ble Prime Minister for making our MSMEs adopt Zero Defect and Zero Effect practices.

The ZED Certification Scheme of Ministry of MSME is aimed at enhancing the global competitiveness of Indian MSMEs on quality and environment aspects in their systems and processes. It is a continual improvement and rating scheme involving handholding and certification of MSMEs with financial support from the Government of India. Ministry of MSME has nominated QCI as the National Monitoring and Implementing Unit (NMIU) of this Scheme.

State Bank of India was the first among all PSBs to register as a financier during the year on the TReDS platform RXIL and M1xchange, set up to provide finance to MSMEs. With this we now have our presence on all the 3 TReDS platforms in the country. Your Bank was actively participating in the online biddings on the platform and was offering very competitive rates for the benefit of MSMEs. Your Bank rediscounted bills worth `72.51 crore, which were discounted by SBI Global Factors Limited on the 3 TReDS platforms.

3. Business Partnerships/ Tie-ups

Your Bank has introduced Warehouse Receipt Financing scheme (WHR) to extend finance to traders/owners of goods/manufacturers for processing, provided against Warehouse Receipts issued by Collateral Managers having a tie-up with State Bank of India. Further, WHR issued by Central Warehousing Corporation (CWC) and State Warehousing Corporation (SWC) would also be eligible for WHR finance. The WHR portfolio as on 31^st March, 2019 stands at `6,111 crore.

During the fiscal year, State Bank of India entered into 61 new e-DFS (Electronic Dealer Finance Scheme) and four new e-VFS (Electronic Vendor Finance Scheme) tie-ups covering 351 Industrial Majors, 25,921 of their dealers and 16,572 vendors. The number of oil dealers (Petrol Pumps) on e-DFS crossed 14,806 during the last fiscal.

4. Risk Mitigation:

1. Agri Business

Credit support for agriculture and allied activities gained greater momentum during this year, although the external environment was marred by farm distress and the effects of debt waivers announced by various State Governments. In line with the past trends, the credit flow to agriculture set by the Government for FY2019 was surpassed by your Bank.

During the year, the Agri portfolio growth was ahead of the YTD ASCB trends. The YTD growth in total Agri advances, as on 31^st March, 2019 is `14,430 crore. The comparative growth in overall Agri Advances portfolio is as under:

A new product designed to meet the general-purpose needs of farmers against the collateral of property, called the Asset Backed Agri Loan (ABAL), picked up momentum during the year with a growth of about 142%, albeit on a lower base. This product was readily accepted by customers because of the flexibility it offers.

Your Bank is de-risking its Agri portfolio and supporting farmers at the same time by tying up with local and national level Agri Corporates, wherein the supply chain will ensure cash flows for timely renewal of loan and better incomes for the farmers. Additionally, it is lending under a Cluster-based approach to tap opportunities revolving around areas and centres, which have traditionally been known for shrimp farming, dairy, poultry and, higher value horticulture crops such as pineapple and mango.

Deendayal Antyoday Yojana: National Rural Livelihood - Mission (DAY-NRLM):

Since inception of DAY-NRLM on 1^st April, 2013, your Bank has financed 14,25,670 SHGs under Bank-SHG Linkage and disbursed `23,939 crore.

Recognising the contribution of rural India to the nation's economic growth, your Bank is striving to meet the financial needs of the rural segment through various new channels and services. To create focused attention on the importance of soil health card and advocating for sustainable management of soil resources aimed at enhanced Agri production, State Bank of India has observed World Soil Testing Day on 5^th December, 2018 across the country at selected branches by inviting Agriculture Scientists and farmers at field level. The programme was themed "Be the Solution to soil pollution" to encourage Organic Farming.

Your Bank announced Rinn Samadhan:2018-19 scheme, covering farm sector loans and achieved the set internal targets.

Keeping in view the large number of customers served by your Bank, it organised mass contact programmes on five occasions during the year. Under this initiative, all Rural and Semi-urban branches held informal meetings with farmers to improve customer connect and spread awareness about your Bank's and Government's schemes. As estimated, at least 14 lakh farmers attended these meets.

As part of Kisan Mela, your Bank also offers KCC farmers an enhancement of 10% to their credit limit on renewing the account. In addition to this, State Bank of India has taken this initiative to reach out to the farmers to educate about the benefits of renewing KCC account to get maximum benefits of interest subvention from Government and coverage under Pradhan Mantri Fasal Bima Yojana. Your Bank has also made farmers aware about the benefits of timely renewal of KCC account and usage of KCC Rupay Card for transactional convenience.

2. Financial Inclusion (FI):

Your Bank realises the role it must play as the largest Bank in the country in practicing and promoting FI activities. The spread of digital banking channels and expansion of Business Correspondents (BC) network is giving your Bank the impetus to further grow its FI activities. Thus, to achieve inclusive development and growth, your Bank has worked out strategies and leveraged technology to expand financial services to the door steps of the unbanked with the purpose of bringing them under the ambit of formal banking system.

Under the flagship Pradhan Mantri Jan Dhan Yojana (PMJDY) of Government of India, State Bank of India has paved the way for universal financial access by being a pioneer in implementing the programme. Your Bank has opened 10.97 crore accounts by FY2019 and issued 9.20 crore RuPay debit cards to the eligible customers. These initiatives taken under financial inclusion as part of key economic policy agenda of the Government over the last decade, has ensured access to Bank accounts for the excluded persons.

To fulfil the needs of Social Security measures, low cost Micro insurance products (PMJJBY, PMSBY) and pension schemes (APY) are provided to the unorganised sector in a big way, covering around 3 crore customers.

With the objective of imparting financial literacy and facilitating effective use of financial services, your Bank has set up around 338 Financial Literacy Centres (FLCs) across the country. During FY2019, a total of 29,450 financial literacy camps were conducted by these FLCs across the country. As a part of the pilot project implemented by RBI, your Bank has set up 15 centres for Financial Literacy at Block level, five each in the state of Maharashtra, Chhattisgarh and Telangana in association with NGOs identified by RBI.

State Bank of India hosted a panel discussion on ‘India-China: Financial Inclusion - Experiences and Challenges'. The discussion was attended by a high-level delegation from China, which included Mr. Li Wei, President, Development Research Centre, PRC, and Minister. Furthermore, it was centred around the initiatives taken by the Indian and Chinese governments towards financial inclusion, the experiences and the challenges thereto.

Your Bank has stepped up the target for purchase of good quality portfolio of assets from NBFCs, as it believes that there is good opportunity to expand its loan portfolio at attractive rates. Your Bank is looking for opportunities both in priority and non-priority sectors. Your Bank had initially planned for a growth of `15,000 crore through portfolio purchase during the current year, which is now being enhanced.

1. Special Projects

IFSC Banking Unit at GIFT SEZ: The Chairman, inaugurated your Bank's IFSC Unit(IBU)atInternationalFinancialServices Centre (IFSC) located at the GIFT-SEZ, Gandhinagar, Gujarat. Many developed countries have financial hubs, which have evolved over a period as International Financial Centres (IFC). These centres provide suitable regulatory regimes and create a business environment to attract talent and capital. Successful IFCs are places where business is conducted between organisations from all over the world using latest financial technologies and products.

While the 100% tax concession available till 2020 and 50% for the next 5 years till 2025 are surely an attraction, they are not the only reason why your Bank has set up an Office in IFSC. The proceeds of ECBs (External Commercial Borrowings) which were hitherto being parked at high cost jurisdictions like London, New York, Singapore and Hong Kong, are now being parked at IFSC GIFT City, to optimise on the cost.

2. Strategy

Following the best global practice, your Bank has created the position of Chief Strategy Officer (CSO) during 2018-19 with the objective of defining journey towards realising Mission Statement of your Bank and transforming vision of Top Management into reality. The position of CSO in your Bank will help in establishing robust strategy framework for enhancing value. The CSO's role also aims for strategic synergy amongst all verticals for enhancing value for Customers, Shareholders and Employees.

Few of the projects taken up by CSO for comprehensive improvement of Market Share in major cities of the country include

• Strategic Tie-up for enhancing the Brand value

• Marketing and Branding of YONO

• Realising group synergy

Your Bank has traditionally been the banker of choice to the Government and is the accredited Banker to the major Central Government Ministries and Departments. Being the market leader in Government Business (with a market share of more than 80% in Government commission), your Bank is at the forefront in the development of e-Solutions for both Central and State Governments. This has facilitated their transition to the online mode, resulting in greater efficiency and transparency. Your Bank is an active stakeholder in the Government's latest initiatives namely, Government e-Marketplace, and is continuously engaged in developing customised technology solutions such as e-Tendering, e-BG, e-Trade, amongst others, to keep pace with the Government's digital initiatives.

With a view to facilitate e-Governance, digitisation and bringing in more efficiency and transparency, the following initiatives were implemented during the year:

1. GeM (Govt. e-Marketplace)

State Bank of India is the pioneer amongst Banks for financial integration of payments to suppliers for procurement of common goods and services through GeM portal. Five State GeM Pool Accounts were opened at Uttar Pradesh, Tamil Nadu, Himachal Pradesh, Puducherry, and Gujarat. GeM Pool Accounts of more than 70 Autonomous bodies were opened.

3. PMJAY-Ayushman Bharat

4. Indian Railways

5. Direct Benefit Transfer (DBT)

State Bank of India is the sole Banker for processing Direct Benefit Transfer of LPG subsidy (DBTL). Total number of transactions and amount processed in FY2019 are as following:

6. Auction of items gifted to Honourable Prime Minister

7. National Testing Agency

8. CBSE

9. Pension Payments

Your Bank's Transaction Banking Unit (TBU) leverages technology to provide comprehensive solutions for bulk transaction requirement of clients, facilitating their efficient funds management along with other value-added services such as customised MIS, integration with Corporate ERP and dedicated single point Client Support Cell. Transaction Banking services not only facilitate your Bank to maintain close relationship with clients, but also to assess their other Banking requirements such as Credit, Fund Management and Cross Selling.

Keeping in line with market trends, your Bank is continuously updating/evolving the bouquet of TBU products/services offered to clients to match the competitors' products/services.

• TBU Fee Income increased by 48.50% from `893.66 crore in FY2018 to `1,327.08 crore in FY2019. A 30% plus annual growth has been consistently achieved in fee income during the last few years.

• TBU Float Income increased by 81.15% from `356.69 crore in FY2018 to `646.15 crore in FY2019.

• Turnover registered a Y-o-Y increase of 78.39% with transactions amounting to `38,08,314 crore in FY2019 over `21,34,867 crore in FY2018.

• Your Bank was recognised as "The Best Transaction Bank in India" by The Asian Banker for the second time in a row in 2018.

2. GLOBAL BANKING

The Wholesale Banking Business in your Bank focuses on servicing Corporate clients through customised financial solutions such as working capital finance, export finance, trade transactions and foreign currency loans. It comprises of several teams focused on specific areas such as specialisation of product offerings, acquiring new business and generating new income streams with continuous focus on profitability and risk mitigation.

The Corporate Accounts Group (CAG) is a dedicated vertical handling the "large credit portfolio" of your Bank through 4 offices in 3 Centres viz., Mumbai with two branches and one each in Delhi and Chennai. CAG now is a super specialised set-up handling 29 top rated Business Group accounts and 66 Non-group accounts to ensure that the quality of service for these prioritised relationships is maintained as the best in the class.

The business model of CAG is anchored on the Relationship Management Concept wherein each client group is mapped to a Relationship Manager who leads across -functional Client Service Team. The Account Management Teams (AMTs) work on a central strategy of delivering integrated and comprehensive financial solutions to the clients, through structured products, within a strict TurnAround-Time. The principal objective of the strategy is to make your Bank the first choice of top corporates.

To firmly align with the changing Banking landscape, in June 2018, your Bank undertook a major revamp of Corporate Credit dispensation Structure making it a future ready set-up to drive sustainable growth. Core objectives of this holistic revamp were, strengthening credit risk management function, leveraging analytics, making a paradigm shift of focus in business from ‘Fund to Fee" and Originate to Distribute (O-t-D) so as to improve Bank's overall wallet share in Corporate Banking Business. In addition to credit relationship, Bank is now actively looking at customer 360 requirements especially in credit light sectors viz - Pharma, FMCG, IT, Auto etc. through its newly established Credit Light Group (CLG) set within the CAG set up.

A Specialised Group, FIG (Financial and Institutional Group) to address credit and transactional banking needs of Insurance Companies, Brokering Firms, Banks (Private and Foreign) and Mutual Funds has also been created within CAG. Both the newly created groups have taken off and have started contributing to the Bank's business growth.

Banking technology is revolutionising the way customers engage with their finances. Convenience, speed and flexibility are no longer considered attractive add-ons, but have become a standard expectation of the rapidly changing customer-Bank relationship. Towards this end, your Bank is investing continuously in building technological capabilities to become more agile towards customers' needs. We are currently offering cutting edge technology products to our Corporate customers and are using the latest CRM application for customer management.

The total post revamped outstanding loans to clients in the Corporate Accounts unit stood at `2.33 lakh crore and `1.68 lakh crore in respect of fund-based and non-fund-based products as on 31^st March 2018 and the corresponding fund based and non-fund based outstanding are `4.07 lakh crore and `1.75 lakh crore as on 31^st March 2019 respectively.

During the year, with the credit growth outstripping the deposit growth, your Bank's SLR portfolio was brought down in a calibrated manner to generate liquidity. However, in view of the elevated yield levels, your Bank increased the Corporate Bond portfolio as a measure of improving the overall portfolio yield. Net Interest Income stood at `88,349 crore as against `74,854 crore for FY2018. Profit on sale of investments is at `1,023 crore against `12,303 crore for FY2018.

The equity markets touched its all-time high levels in FY2019. Post default by IL&FS and on NBFC liquidity concerns, market saw sharp correction in the Benchmark indices. However, market rallied sharply towards the end of the financial year due to strong inflows from FIIs and Nifty ended with 14.93% gains in FY2019. The outcome of General elections, Fed Policy actions, expectation of Global economic slowdown and the increasing tension on trade war is expected to keep volatility on the higher side. Your Bank has managed its equity portfolio following a strategy of actively rebalancing the portfolio based on key events, global and domestic market conditions, quarterly earnings of the companies and, their future outlook. In addition to the secondary market, your Bank continues to profitably invest in IPOs to improve the return on the portfolio.

The GMU handles the foreign exchange business of your Bank, providing solutions to customers for managing their currency flows and hedging risks through options, swaps and forwards, in addition to providing liquidity to markets. Your Bank is a dominant player in Rupee Spot and Rupee Forward markets and has a sufficiently high market share in customer foreign exchange flows. Your Bank is the leader in providing liquidity in CCIL Fx Clear platform. The volume generated in Currency Futures puts your Bank in the bracket of top three client Banks of exchange houses.

Foreign Investments and Institutional Treasury sales desk is part of TMG. It is responsible for mobilising treasury business from Foreign Portfolio Investors (FPI)/Foreign Direct Investment (FDI) clients and financial institutions.

The Bank is the largest retirement benefit fund manager in the country with an impeccable track record. The total AUM as on 31^st March 2019 is `5,08,230 crore. Major clients include Employees' Provident Fund Organisation, SBI Retirement Benefit Funds, Coal Mines Provident Fund Organisation, Kendriya Vidyalaya Sanghthan Employees' Provident Fund and Seamen's Provident Fund Organisation. The Bank also assists its RRBs in managing their SLR Portfolio. However, the PMS activity of the Bank is being closed by 31^st March 2019, as per RBI's directives.

The breakup of overseas offices of our Bank: and supported by the Deputy Managing Director (IBG) for its overseas operations.

Your Bank's first global footprint was with the branch of Bank of Madras in Colombo, Sri Lanka in July, 1864 (First amongst Indian Banks). With a presence across all time zones through 208 offices in 34 countries, State Bank of India has gradually spread its wings across the globe and has become a pioneer of International Banking among the Indian PSBs. These offices are being managed by the IBG.

During FY2019, your Bank has endeavoured to consolidate and strengthen its overseas operations in line with the Public-Sector Banks Reforms Agenda envisaged by the Department of Financial Services, Government of India, in order to achieve capital conservation, cost efficiencies, and to build synergies in overseas markets. As a result, your Bank has rationalised its overseas operations by closing two Sub-offices- Laudium and Capetown in South Africa, one branch in Jaffna, Sri Lanka, one Representative office in Cairo, Egypt and consolidated its India Visa Application Centres (IVACs) in Bangladesh by merging three IVACs at Shyamoli (Previously Dhanmondi), Uttara and Dhaka at Jamuna Park. In the overseas subsidiary-SBI Indonesia Limited, two Sub-branches Jatinegra, Kebonjeruk were merged with

Jakarta Main branch and one Sub-branch Buah Batu was merged with Bandung branch. During this period, a Remittance Centre was started in Singapore to facilitate remittances for expat blue collar workers. Further, in line with our growth strategy in SAARC region, Nepal SBI Bank Limited, a subsidiary of State Bank of India has opened ten offices. Furthermore, twelve retail branches of UK were carved out from your Bank's UK operations to form the overseas Subsidiary- State Bank of India (UK) Limited.

Year after year, your Bank is consistently creating value for investors by generating good returns and profits. The International Banking arm has consistently been a major contributor in profit, even during the recent troubled times.

1. Credit Contribution: Business Driver

Your Bank has facilitated Indian corporates in their growth strategy including Green Field ventures by arranging debt in Foreign Currency by way of External Commercial Borrowings through syndicated deals in conjunction with other Indian and Foreign Banks, and through bilateral arrangements. As a recognition of its exemplary efforts, your Bank was chosen as the "Syndicated Loan House of the Year" - India by APLMA (Asia Pacific Loan Market Association).

State Bank of India has sanctioned Foreign Currency loans to the tune of USD 12.91 billion to Indian corporates and USD 10.36 billion loans to overseas entities. Your Bank has also funded a top Indian pharmaceutical company for its overseas acquisition during the year. In the field of Energy, your Bank was active in funding Oil Marketing companies for their working capital requirement after recent Special Dispensation, which has significant strategic importance to India, both in terms of augmenting India's Energy Security amid unstable Crude and Forex prices. In the field of Power, your Bank has always been the leader in providing the External Commercial Borrowings to power sector companies and NBFCs engaged in on-lending to power sector. Presently, your Bank offers a wide range of products and services to exporters and importers through an extensive, well equipped branch network that operates domestically and internationally.

2. Retail and Remittances Strategy

Your Bank was a "window to India" for NRIs residing in different parts of the world through its specialised retail and remittances products. As IT infrastructure is the bedrock for improving customer offerings in Retail and remittances segment, a detailed IT strategy was put in place for implementation of IT enablers. The highlights of the year are:

• Remittance business strategy was re-imagined by focusing on developing various area specific payment and remittance corridors, such as Gulf to Nepal and Gulf to Sri Lanka.

• SBI Rupee Express, which provides real time, convenient, reliable, and cost saving remittance system to expatriates for remittance to India, was launched in SBI Indonesia (SBI Subsidiary).

• Remittance through UPI launched in Singapore

• ATM Card Hot listing and ATM Card requests through Internet Banking (FEBA) installed in 11 identified territories.

• CRM Solution is successfully launched in 13 identified countries.

• Remittance from USA to India through Transfast Remittance LLC, USA was launched.

3. Global Payments and Services

Global Payments and Services (GP&S), a unit of your Bank, facilitates online inward remittances from overseas locations to India, Foreign Currency Cheque collection, Opening and Maintenance of Vostro Accounts, Asian Clearing Union (ACU) Transactions, and Bank for Foreign Economic Affairs (BFEA) of USSR section. The highlights of the year are:

• Tie-up with 55 Exchange Companies, and six Banks and one Money Service Business for channelising inward rupee remittances from overseas to India

• Compliance framework strengthened for enhanced post transaction monitoring through an application called AMLOCK, related to remittances.

4. Trade Finance

State Bank of India provides a slew of Trade Finance products and services to exporters and importers through an extensive, well equipped branch network that operates in all time zones in India and abroad. The business is monitored through a focused Department, Global Trade Department (GTD) in IBG. Trade Finance forms a significant part of the International Asset portfolio. State Bank of India being one of the top global Banks, provides low cost trade finance to Indian corporates for their imports.

To support Trade Credit for imports to India, your Bank has introduced a new product namely - Non-LC Reimbursement Finance (NLRF) to cater import financing for Bank's domestic branch customers and also, through its another product called SBLC backed Buyers Credit, your Bank renders its trade finance service to importer customers of other Indian Banks.

5. International Banking-Domestic (IBD)

IB-Domestic department at IBG of your Bank, serves as a single point of contact for the Domestic Offices and Foreign Offices in areas related to Trade Finance and International Banking on domestic front. A Centralised Co-ordination Cell for processing Inward Foreign Bank Guarantee (CCC-FBG) had been set up under the ownership of IB-Domestic to provide a single stop solution for Correspondent Banks/ Foreign Offices seeking Foreign Bank Guarantees based on their counter Guarantees. Recently, Outward Foreign Bank Guarantee cell has started functioning under CCC-FBG, with a view to further provide momentum to Inward Foreign Bank Guarantee business.

In order to provide momentum to Domestic Trade activity and to address the regulatory concerns as well as to keep in line with the market forces, IB-Domestic is vigorously involved in introducing latest technological tools and product innovations. Moreover, IBD is coordinating and liaising with trade bodies and ICC subgroups for developing relations and strengthening ties. It contributes immensely in synergising Forex business flows from Domestic Offices to Foreign Offices / Foreign Correspondent Banks and trade community by acting as a robust link between them and addressing regulatory gaps.

6. Overseas Treasury Management

Treasury Management Group at IBG of the State Bank of India, known for managing the liquidity, dealing room operations and investments of foreign offices, has priced your Bank's inaugural USD denominated public green bond for USD 650 million under MTN Program in

September, 2018 and Standalone Reg-S/ 144A USD issuance for USD 1250 million in January, 2019. The green bond was the first public USD bond issued by an Indian public sector Bank in the fiscal year for which your Bank has received "Green Bond Pioneer Award" for being the largest new emerging markets Certified Climate Bond issuer of 2018 by Climate Bond Initiative. These issues were listed on the Singapore Exchange Securities Trading Limited (Singapore SGX) and the India International Exchange (India INX). Nimble footed transactions were executed in a narrow window during a period of currency and rate market volatility. The successful issuances demonstrate a strong investor base, which the Bank has created for itself in offshore capital markets, allowing it to efficiently raise funds from world's leading fixed income investors, even during the periods of heightened currency and rates volatility.

Investment book of IBG currently stands at USD 6.80 billion, holding investments in high rated and liquid scrips, which provide stable interest income for IBG with low/ medium risk. The Treasury Management group monitors Dealing Rooms at major centres, to facilitate Money Market, Forex and Derivative functions at Foreign offices. Currently there are four major dealing rooms at London, New York, Hong Kong and Bahrain, which work on a hub and spoke model to help smaller Foreign Offices in their operations. Dealing room operations also provide hedging solutions to the balance sheet in optimum manner.

7. Overseas IT Initiatives

Your Bank continues to leverage technology solutions to automate processes, enhance customer experience and manage risk. The initiatives undertaken at our overseas offices include:

1. YONO (You Only Need One), one of the most ambitious and secure digital offerings of your Bank, is being extended to overseas offices during FY2020.

2. Online Account Opening Facility is being extended to customers at overseas offices.

3. Additional functionalities were introduced in Finacle E-Banking Application (FEBA) for a better digital banking experience to the customers.

4. Implementation of a new Anti-Money Laundering solution (FICO Tonbeller) to efficiently counter money-laundering risks and events through online screening of transactions / SWIFT messages, customer on-boarding, risk scoring, and transaction monitoring.

5. Enhancing the security of ATM/Debit Cards by introducing additional card management functionalities in the online banking platform (FEBA viz., Hot listing of Cards, New Card Activation, New Card Request, Green PIN, Limit change).

6. SWIFT Operational Controls were strengthened in tune with regulatory guidelines by implementing Straight Through Processing between Core Banking System and SWIFT messaging system and enforcing user restrictions.

7. Technology Risk Management initiatives included upgradation of Networking Equipment, implementation of Standardised Information Security and Incident Management Framework Plans for FY2020.

8. The websites of overseas offices were standardised to provide a uniform look and feel for a better user experience.

9. Leveraged Data Analytics for Product Innovation and Marketing, Fraud Risk Management, Regulatory Reporting, Early Warning Signal for Loans, and Transaction Monitoring.

8. Financial Institutions Group - Correspondent Relations

The Group, on one hand, enables linkages of your Bank with international stakeholders viz. Correspondent Banks, Foreign Government Agencies and Developmental Financial Institutions, International Chamber of Commerce amongst others, and on the other hand, facilitates synergy between IBG and other Business Verticals such as Corporate Accounts Group, Commercial Clients Group and Global Markets amongst others. The key highlights during FY2019 were: • Focused on creating valuable relationships globally by collaboration with Financial Institutions for delivering better value to our stakeholders in the value chain. Furthermore, your Bank maintains relationship with 235 Banks in 57 countries and periodically reviews its relationship based on your Bank's internal policies, local country guidelines and sanction terms. There has been an increased focus for FI Business by leveraging the relationship with Major Global and Regional Banks. • Actively engaged with IT Innovation teams of the Bank for bringing in technological advances in the correspondent Banking landscape and also by partnering with major Global Banks. • Product focus areas include Trade Finance, Credit, Treasury, Debt Capital Markets, Forex Business, Transaction Banking, Remittances, and Currency Clearing. • Representative offices of SBI in Dubai, Abu Dhabi, Istanbul, Sao Paulo, Tehran, Manila, and Washington are engaged in marketing activities for assets and liabilities support for your Bank's Foreign Offices from Financial Institutions and extending support to the local corporates and NRIs. • Your Bank has always been an integral part of the growth strategy of the Indian economy and is on the forefront in stimulating growth and facilitating opportunities for building momentum towards a transforming India.

3. COMMERCIAL CLIENTS GROUP (CCG)

The Corporate Credit Structure and System in your Bank was revamped to setup, a future ready organisation to manage the risks and sustain growth. There was a reorientation of CAG to focus on the highest priority and quality individual and group relationships with differentiated coverage. The CCG is formed for consolidation of select corporate client accounts across CAG, MCG and NBG verticals based on a criterion decided by your Bank. This includes rationalisation of the remaining CAG branches and existing MCG branches into 47 CCG branches. The CCG vertical is headed by a MD and supported by a DMD, five CGMs and other functionaries.

The Non- food domestic advances level in CCG at the end of FY2019 was at `4,00,766 crore registering a YoY growth of 3.93 %. The Yield on Advances in CCG has improved from 7.50% as on Mar'18 to 8.68% as on March 2019 recording a growth of 118 bps. During the same period, business per employee has gone up from `121.73 crore as on March 2018 to `146.72 crore as on March 2019. Profit per employee has improved from `1.98 crore as on March 2018 to `3.99 crore as on March 2019. Cost to Income Ratio has declined by 295 bps during the year going down from 9.25% as on March 2018 to 6.30 % as on March 2019. On the recovery front, CCG was successful in recovering `1,364 crore in Advance Under Collection Account under IBC / NCLT mechanism during the said period.

In contrast to the challenges faced by PFSBU during the previous year, which saw stressed accounts becoming NPA, particularly on Thermal Power, Road sector, Telecom among other sectors, this fiscal year 2019 started with a cautious optimism based on learnings from the past experiences. Policy for funding Renewable, City Gas Distribution and

Hybrid Annuity Model in Road sector were framed to mitigate the risks involved. The sectors, which showed signs of revival were Roads, Oil and Gas, Renewable Power, Cement, Fertiliser amongst others. The stressed accounts mainly comprising of Thermal Power, Road sector accounts have been transferred to SARG for resolution. Experienced officials are being recruited from different industries to provide Structuring Solutions to our clients. Chartered Accountants are being employed by your Bank to plug income leakages to boost fee income.

Your Bank's Special Business Unit known as Project Finance and Structuring (PFSBU) deals with the appraisal and arrangement of funds for large projects in infrastructure and other sectors such as Power, Roads, Ports, Railways, Airports, amongst others. It also covers other non-infrastructure projects in sectors viz. Metals, Fertilisers, Cements, Oil and Gas amongst others, with certain threshold on minimum Project Cost. PFSBU also provides support to other verticals for vetting their large ticket term loan proposals. In order to strengthen the policy and regulatory framework for financing infrastructure, inputs are provided to various Ministries of Government of India and the RBI with respect to lenders views on new policies, Model Concession Agreements and broader issues being faced in infrastructure finance.

Project Finance and Structuring Business Performance:

4. STRESSED ASSETS MANAGEMENT

1. Over the last few years, there has been a significant rise in the Gross Non-Performing Assets (GNPA) in the Banking Industry. However, in the first half of FY2019, the GNPA of the SCBs declined, which can be attributed to the following factors: i. Resolution of a few high value NPA accounts from the 1^st and 2^nd RBI list of accounts referred to NCLT under IBC, 2016. ii. A revival in economic growth conditions of India in FY2018, leading to control in fresh slippages. iii. Favourable outlook of steel sector, which was under stress over past few years. Mainly driven by increase in demand, consumption and simultaneous imposition of anti-dumping safeguard duties as well as minimum import prices, the sector has yielded some good recoveries in NPA. iv. Strengthening of due diligence, credit appraisal and loan monitoring systems in the Banking industry. v. Significant improvement in the Ease of Doing Business ranking for India at 77^th position from 130^th rank due to two successive jumps i.e., 30 positions in 2017 rankings and 23 positions in 2018. It reflects the adoption of global best practices in business reforms. vi. Stabilisation after facing short term impacts of demonetisation and implementation of GST. vii. Greater interest evinced by ARCs and NBFCs in purchase of impaired/ stressed assets backed by foreign investments.

2. According to the Financial Stability Report of RBI for December 2018, in a sign of possible recovery from the impaired asset load, the asset quality of Banks showed an improvement with the Gross Non-Performing Assets (GNPA) ratio of SCBs declining from 11.5% in March, 2018 to 10.8% in September, 2018. Further, the resilience of the Indian banking system against macroeconomic shocks was tested through macro stress tests. The results of macro tests suggest that the GNPA of all SCBs may come down from 10.8% in September, 2018 to 10.3% by March, 2019. Moreover, sensitivity analysis conducted to study the resilience of SCBs with respect to credit, interest rate, equity prices and liquidity risks predicts that a severe credit shock is likely to impact the capital adequacy and profitability of a significant number of Banks, mostly PSBs.

3. The movement of NPAs in the Banking industry and recovery in Written-off accounts during the last four years are furnished below:

4. The Government of India in its Reforms Agenda for Responsive and Responsible PSBs has directed creation of a Stressed Assets Management Vertical (SAMV). Your Bank takes immense pride for being a pioneer in establishing a dedicated vertical almost decade and a half back by establishing Stressed Assets Management Group (SAMG) during FY2005. In order to focus towards resolution of stressed accounts, SAMG was renamed as Stressed Assets Resolution Group (SARG), which continues to work as a specialised vertical for efficient resolution of high value NPAs. The structure of SARG has been revamped to give focussed approach for resolution of stressed assets across various sectors. At present, the vertical is headed by a Deputy Managing Director and three Chief General Managers overseeing the specialised sector, AMTs functioning under the leadership of seven General Managers. SARG has turned into a centre of excellence in resolution of NPA and stressed assets. As on March 2019, SARG has

5. Besides initiating hard recovery measures, SARG introduced certain innovative methods and gave first mover advantage to your Bank in areas such as arranging Mega e-Auction of large number of properties on Pan-India basis, identification of un-encumbered properties of the borrowers / guarantors and arranging for attachment of properties before judgement. The cases referred to NCLT for resolution are monitored at a specialised cell at SARG. A total of 442 cases have been referred to NCLT, out of which 350 cases were admitted. Furthermore, 18 cases have been resolved including a few high value cases from the 1^st list of 12 accounts.

6. A significant portion of the recovery in SARG comes from Compromise and Sale of Assets to ARCs. The vertical also implements special OTS schemes (Non-discretionary and Non-discriminatory) from time to time, giving the borrowers a onetime opportunity to settle their dues. A team is set up to look after the sale of Assets to Asset Reconstruction Companies (ARCs) on Cash and Security Receipts (SR) basis.

7. Today, SARG stands as one of the most important verticals of your Bank, when the GNPA of your Bank has already peaked and is on course of a downward journey. Though the credit growth is picking up steadily and performance of treasury operations is dependent on market rates, the importance of NPA resolution/ recovery by SARG is significant as it directly impacts your Bank's performance. Resolution of stressed assets by SARG presents the following latent income generating avenues for your Bank: i. Cash recovery in NPAs and AUCA; ii. Up-gradation of accounts; iii. Reduction in loan loss provisions; iv. Reduced capital requirement;

8. Enactment of Insolvency and Bankruptcy Code (IBC) 2016 for resolution of Stressed/NPA assets has provided Banks with a time bound, transparent and effective mechanism to tackle stressed assets. It has led to an efficient price discovery and transparent resolution of accounts resulting in unlocking maximum value in the assets charged to your Bank. A significant portion of recoveries in FY2019 have come through this route. Some of the large accounts from 1^st and 2^nd list of accounts referred to NCLT directed by RBI have been resolved and a few more are expected with resolution plans already in place. This has helped in strengthening your Bank's balance sheet and provides the opportunity to deploy the realised funds into income yielding assets.

1. HUMAN RESOURCES AND TRAINING

• Your Bank has been maintaining its leadership position in the banking industry by leveraging its core strengths. The Human Resources of your Bank has been a strategic partner while performing the role of a catalyst in implementing the various business strategies. This has been made possible with the workforce channelising and harnessing their optimum potential and profoundly impacting the value generation in the desired direction. Your Bank's Human Resources has aligned the policy, processes, and systems towards creating enablers for achieving your Bank's ‘Vision' with set ‘Values'. • Many initiatives have been undertaken during the year in the Human Resources space in the areas of automation and streamlining of systems and processes, design and redesign of value preposition that each intervention brings to the fore, to increase efficiency and create a pleasant environment at the work place. There has been a paradigm shift in the approach of handling the increasing aspirations of the Bank's changed workforce demographics with more Millennial and Generation Z joining. • The summarised HR Profile of the Bank as on 31.03.2019 is as under:

1. Vision, Mission and Values

• Your Bank has been continuously engaged in providing ethical awareness in the organisation as a cultural premise. Your Bank has come out with a Code of Ethics synchronised around normative commitments to its stakeholder's viz. values of STEPS (Service, Transparency, Ethics, Politeness and Sustainability) with the purpose of articulating your Bank's new Vision, Mission and Values Statement. Your Bank believes that ethics is a perpetual process of infusing excellence in its operational fabric and will go on making consistent endeavours to shape the moral sensibilities of the rank and file of the organisation.

2. HR Function Revamp

• Your Bank has undertaken initiatives in HR Automation to streamline the Human Resource processes. Furthermore, your Bank has taken steps towards centralisation of Human Resources for seamless process execution, uniform implementation, and better control and quality of key HR functions under seven project streams- Introduction of Organisational Structure in HRMS, data cleaning, bringing Employee Payments on HRMS, efficiency enablers for seamless flow of HR operations in HRMS, creating an interface between relevant employee information with HRMS, automating HR process through HRMS, and meaningful and timely HR related MIS.

3. Productivity Enhancement Initiatives

• Your Bank adopts an objective and data driven model for Manpower Planning to ensure optimal utilisation of Human Resources. Around 12 out of 82 work drivers of the model based on Time and Motion study have been modified for Manpower Planning for the year 2019-20. In addition to this, manpower requests from various units are now being validated based on a footfall study undertaken by the Analytics department.

• The promotion and transfer process have been streamlined and shall be completed in the first quarter of the Financial Year. This will give required assurance and stability to the branches and other units to actively focus on business activities during the major part of the year.

• The Career Development System (CDS) has stabilised and has brought greater transparency, inclusiveness, accountability, and effectiveness in the performance management. The current CDS system is data backed, where targets are set partnering with the business units and constant evaluation of performance has been made possible. Additionally, the CDS system has become robust by operating through its five functional levers- ‘Strategic alignment', ‘Stakeholder Commitment', ‘SMART goals', ‘At least one role per employee', and 'Constant Evaluation'.

• An employee opinion survey on CDS was held during the year to understand the perception, reach, acceptance, familiarity, and expectations of the employees and modifications were implemented based on the feedback. Moreover, it helped to bring refinement and transparency to the system. A structured feedback mechanism, as a part of the performance evaluation, has been introduced in your Bank to develop and drive a cultural change. • Conscious efforts were made to bring more employees under Budgetary/ Measurable roles. As on date, more than 95% of the total roles in CDS system are budgetary/measurable. In case of non-measurable roles, KRAs have been made objective in nature. Furthermore, your Bank's goals and corporate concerns are built on parameters of the Competency mapping framework. Additionally, competency mapping parameters were revised to align them with the organisational goals by finalising 15 parameters for DGM grade and above and 10 parameters for the AGM grade. • Your Bank has formulated a policy on Succession Planning for the Senior Leadership positions to ensure smooth transition at the critical executive level positions. Under this, the eligible executives in the rank of GM and DGM were evaluated and identified as potential successors for one or more critical profiles. In addition to this, identified potential successors are provided with individual development and training plans. Likewise, the framework ensures that your Bank has a necessary talent pipeline for smooth transition.

4. Recruitment

• Your Bank has streamlined the recruitment process with the implementation of a regular recruitment calendar and by leveraging Information Technology. During FY2019, around 2003 Probationary Officers and 7954 Junior Associates were recruited.

• Your Bank is actively recruiting specialised talent on lateral and contractual basis in the areas of Wealth Management, Information Technology, Information Security, Risk, Credit among others, in order to meet the demands of the fast-changing business landscape.

• Specialised recruitments have been done where requisite skills are not available and skills development may take time especially in the fields of Marketing, Information Technology, Credit and Risk, Human Resources, Analytics, Wealth Management etc. Moreover, domain experts have been hired for the required competitive edge. 692 specialists have been hired during FY2019.

• HR specialists in the domains - manpower planning, recruitment, and internal communication have been recruited to enhance HR Management skills.

5. Employee Engagement Initiatives

• Employee engagement is critical to organisational success. It has been a constant endeavour of your Bank to reduce the pain points and ensure pleasant employee experience during their journey with State Bank of India.

• To streamline the on-boarding process of new recruits, your Bank has introduced an ‘On boarding portal'. Consequently, it will improve employee experience as they will not be required to provide information and documents multiple times. Also, this will enable the HR functionaries to access information of new joiners onboarding on real time basis.

• ‘Sanjeevani': State Bank of India's HR helpline introduced in your Bank offers speedy resolutions within three days of lodging a complaint and has addressed over 20,000 queries and grievances. Additionally, your Bank has engaged with the services of trained Counsellors at Sanjeevani. With this, the employees may contact the Counsellors to share their issues and concerns, which will help in easing stress, coping with work and societal pressures, and enable them to perceive the issue in a better way. • Your Bank launched during the year Employee Engagement Survey "Abhivyakti", which is among the largest such surveys held. The objective of "Abhivyakti" was to identify the factors that actually drive employees to perform their best and also the ones that limit their performance. The survey drew participation of nearly 95% of the employees covered. The survey results have provided one with comprehensive information regarding opinions of our employees on our performance, culture, relationships, processes and policies and also on how we go about our work. The survey report and its findings have been analysed by your Bank under various parameters, in appropriate contexts and engagement scorecards have been worked out across various employee groups. Employees of your Bank share a high sense of pride and belongingness with the Bank. It is reassuring to note that most of our employees are aware of the long term vision and values of the Bank. The feedback received from the survey will be utilized in redesigning the established policies and to implement key changes in order to increase the efficiency, output, involvement, dedication and productivity of the employees.

6. Gender Diversity

• Gender Sensitivity and Inclusiveness have always been the corner stone of your Bank's HR policy. Women represent 24.34% of the total work force. Moreover, women employees are spread across geographies and different levels of hierarchy. In addition to this, more than 2,600 branches are at present headed by women officers.

• Your Bank has a Zero Tolerance Policy towards sexual harassment at workplace and has put in place an appropriate mechanism for prevention as well as redressal of complaints of sexual harassment.

7. Reservations and Equal Opportunity

• Your Bank meticulously follows the Government of India directives on Reservation Policy for SC/ST/OBC/PWD. Your Bank has representation of SC, ST, OBCs and differently-abled persons among all the cadres of its work force. Moreover, your Bank has implemented reservation applicable to 'Economically Weaker Sections' in direct recruitment w.e.f. 1^st February, 2019 in terms of the Government of India guidelines.

Representation as on 31.03.2019

* Differently Abled Person

• Your Bank has introduced "Equal Opportunity Policy" in terms of ‘Rights of Persons with Disabilities Act, 2016'. Your Bank takes special care in providing basic amenities, assistive devices, and other infrastructure to enable employees with disabilities to effectively discharge their duties.

8. Industrial Relations and Staff Welfare

• Your Bank has a harmonious relationship with the Staff and Officers' Federations. Your Bank has been continuously emphasising on good and healthy work environment, mutual respect and empathy at work place and a good work-life balance to foster a healthy and happy workforce. • Your Bank has taken several transformative initiatives during the year in the area of Staff Welfare. These initiatives are crucial to ensure that your Bank remains in the forefront of the banking sector in India and our employees are equipped to meet the challenges of tomorrow.

9. Care for Retired Employees

• Well-being of its retired employees continues to be important to your Bank and several initiatives were taken during the year for the benefit of the retirees. Membership to Retired Employees Medical Benefit Scheme (REMBS), which was closed a few years ago, was reintroduced.

• A dedicated online portal for pensioners was also introduced during the year with the purpose of information sharing.

• The ‘Sanjeevani' helpline has also been extended to cover Bank pensioners from the 2^nd quarter of FY2019.

The Bank has always promoted a high-performance culture originated in ethically and financially sound business practices. The quality and competence of the workforce is most critical for sustainable results, hence over the years, it has developed an effective training system which translates your Bank's vision into actionable plans by amplifying the strengths, bridging the skill gaps and unleashing the potential of the employees. The training system with a classroom training capacity of 4,200 people per day, caters to the multifaceted skill development needs of more than a quarter million multi-generational, culturally diverse workforce every year.

With the understanding that in a constantly changing world old ways won't open new doors, the constant endeavour of the training system is to innovate to overcome the challenges of an increasingly volatile financial ecosystem, rapid digital disruption, changing customer demographics, and growing competition. Several initiatives have always been conceptualised with the objective of re-skilling employees to make them future ready and relevant in the fast-changing business environment.

1. Radical change in Training System Structure:

• This year, profound changes were implemented in the training system - the ATIs were repositioned as caches of high quality specialty training in areas of Credit, International Banking, Risk, Marketing, Rural Banking, IT, Leadership, and Human Resources amongst others and turned into umbrella institutes for the SBILDs with hand-picked Advisory Councils comprising of top Bank officials and eminent educationists/ experts from various fields were instituted to mentor each ATI. Experienced Bankers with a passion and _air for teaching with requisite domain expertise were posted at the ATIs & SBILDs. 95% officers of your Bank attended at least 1 institutional training. Training capacity utilization was more than 100% • State Bank Institute of Leadership (SBIL), Kolkata: The Bank's flagship ATI is a fully operational leading institut-e for training senior executives in the BFSI sector in India and neighbouring countries and is positioning itself as a centre of global excellence for research and training in BFSI sector. In addition to various Leadership Development Programmes for in-house participants, several paid programmes pertaining to BFSI sector were launched in association with State Bank of India's Knowledge Partners. All AGMs, DGMs and GMs were exposed to high end customized leadership trainings at State Bank Institute of Leadership, Kolkata

2. Complete Redesign of the Training Content

• Benchmarking competency: Around 47 critical roles were identified in your Bank, which require precise skills to enable holistic customer service, create a digital mindset, and reduce operational and other risks. Hence for each role, mandatory in-house certification courses and comprehensive role manuals were developed and implemented. This is over and above the external certifications mandated by RBI. • Linking Knowledge to Performance: With the end-goal of exemplary customer service, all employees, from Award staff to DMD level, must obtain internal/ external/edX certifications within stipulated time frame. In FY 18-19, 93% of our Top Executives which includes Deputy General Manager and above completed their mandatory learnings.

Certifications were linked to performance appraisal and for officials up to AGM grade for promotion eligibility. 97% Officers completed their role relevant certifications. • Identify, Engage & Develop the talent of POs/TOs/ Millenials: The Bank has completely revamped the training process for Probationary and Trainee Officers, wherein a fair and holistic evaluation is an ongoing process, which incorporates immediate feedback. Effectively, the one-time confirmation test at the end of probation was replaced with a continuous assessment mechanism. 6114 POs/TOs of subsequent concurrent batches have been groomed under the new policy. 4579 promotees to officer scale across the country were also imparted a uniform 3 week training at SBILDs • External Training to Junior Associates-Developing a Digital Mindset: Today's young staff can do much more than manning counters. In order to make them future ready and train them in soft skills, digital banking and marketing of products apart from general banking, your Bank has provided special training to nearly 7000 newly recruited Junior Associates. • Cross-Functional Readiness and Managerial Effectiveness of our Leaders: Personalised Managerial

& Leadership development Plan

- IDPs, were devised for TEG Officials under the "Competency Assessment and 360degree Feedback Mechanism" for 1142 Top Executives of DGM and above grades with course correction being carried out with the aid of reference literature and training interventions.

• Approach on External Training to all TEG Leaders: Senior Functionaries in the grade of Deputy General Manager and above need to be exposed to high end/ focused external trainings to internalise and adopt the latest concepts, thoughts and best practices to effectively steer the organisation because their management views, approach and ethos have a significant impact on your Bank. Consequently, an approach was instituted for a planned and systematic external training intervention for these officials.

• Inclusion with Acceptance-Training to Persons with Disabilities(PwD) employees: your Bank imparts specialised need based training to differently abled employees. An Inclusion Centre at STU operates to facilitate resolution of issues and address new requirements of differently abled staff members. At the instance of the Inclusion Centre, special pre-promotion training for your Bank's PwD employees was introduced from FY2018-19.

3. Progressive Training Techniques

• Non-conventional training techniques: A Gami_cation App- "Play2Learn" was soft launched to supplement the traditional learning tools for better experience and enhanced retention. • Leveraging digital technologies: A real time help portal ‘ask SBI' was launched with a document repository of over 23,000 to serve as a one-stop knowledge source for all employees whereby they can access help documents related to operational instructions / guidelines at their workstation. More than 4 lakh queries were originated within 2 weeks of its operationalization.

• Developing a High impact learning culture through self-learning: Our in-house developed e-learning courseware is platform agnostic and can be accessed through intra and internet for convenient and efficient learning. your Bank has a repertoire of 807 e-lessons, 480 e-capsules and 739 mobile nuggets besides case studies, Research Projects and e-publications.

• Power Talks- Developing a Global Mindset: As part of "facing outward" initiatives for employees, State Bank of India continues to organise Power Talks by eminent personalities for its workforce. These are broadcast to Circles and are made accessible on the intranet for future reference.

• Reducing logistical challenges, expense and workplace disruption: Rather than imparting role-based training in classrooms, employees go through the in-house developed role manuals available on the intranet before nominating themselves for short doubt-clearing workshops and examination at the Training Institutes. 6498 such workshops were organised in FY 2018-19. Case study and Group discussion pedagogy was adopted for classroom training.

4. Revenue Generation from surplus classroom capacity

Spare capacity at ATIs and SBILDs, freed up due to a shift to a new pedagogy and non-traditional teaching techniques is being used for revenue generation by designing and marketing of BFSI sector specific paid programmes. The Bank has also licensed use of its Learning Management System and e-content to select external organisations.

5. Contribution to Nation Building

• Responsible Corporate Entity: Various Conclaves and Workshops such as HR Heads Conclave on Re-Vitalising our Human Capital and PSB Heads workshop on Corporate Governance and Media Management was organised at SBIL, Kolkata to initiate discussions on these key issues within the industry.

• Thought Leader in Executive Education: A workshop on "Navigating Disruption and Managing Innovation in the New Economy" aimed at bringing together the established players and young professionals with disruptive ideas on a common platform for exchange of ideas and gaining perspective, was organised by your Bank in collaboration with Wharton University. It was attended by top Corporate clients and young professionals and entrepreneurs.

6. R&D

• PDRFs: The Bank has recruited PostDoctoral Research Fellows (PDRFs) for innovative and high-end research activities relevant to the BFSI sector. Moreover, they will present papers in National / International conferences and publish their research work in leading international publications to establish State Bank of India's footprint in the domain of BFSI research.

7. Employee Engagement Programme- Nayi Disha:

Your Bank launched "Nayi Disha" an employee engagement program with the objective of imparting the significance of staying agile & relevant, adopting a growth mindset, managing challenges, inculcating the Bank's values STEPS to improve customer centricity and brand image. 2.40 lakh employees were covered in 90 days under the Nayi Disha Phase-I, themed as "Vision 2030" and all employees will again be taken through the future phases of this programme which has been designed as an ongoing intervention.

8. Awards & Accolades:

9. Developments

State Bank of India entered in a Memorandum of understanding (MoU) with National Banking Institute (NBI), Kathmandu (Nepal) to establish a mutually beneficial strategic alliance for development of NBI's human resources in the areas of education, training and research.

2. INFORMATION TECHNOLOGY

Through LLMS, an in house developed application, the entire life cycle of the credit process has been automated. Besides improving efficiency and reducing TAT of processing of the loan proposals, LLMS aims at standardising the credit process as per the extant instructions, with a view to managing risk, enhancing user experience and providing useful MIS for better decision making.

Being the Banker to the Nation, your Bank is in the forefront in serving the customers hitherto left out of formal financial system. Following are the latest developments in the direction of FI: • Customer Service Points (CSPs) are now offering Banking Services (Enquiry, Deposit and Withdrawal) to FI Customers at their Door Step, by using Portable Hand Held Devices. • Mobile Number seeding facility has been made available to the FI Customer account through the FI Kiosks.

• Additional Fields have been added in Kiosk for capturing CSP details to effectively monitor functioning of CSPs.

• Aadhaar Authentication for PMJJBY, PMSBY, APY and Green Pin Services have been enabled during the year.

A new subsidiary of your Bank, SBI Payment System Private Limited. (SBIPSPL) came into existence on 29^th September 2018 in order to tap the growing market opportunities. However, MAB IT-Operations shall continue to perform all the operations (like funds settlement, handing chargeback, disputes etc.) that it was performing hitherto, on behalf of SBIPSPL. With 5,75,358 terminals, your Bank ranks 2^nd in the country as on 31^st March, 2019.

Your Bank is working on special projects to bring better banking experience to its customer. Few of the projects are mentioned as under:

• sbiINTOUCH: Advanced KIOSKs facilitating instant account opening and Debit Card Printing to provide better user experience.

• Wealth Management Solution: ‘SBI wealth' for PREMIUM customers offering a complete range of Financial Products. The new SBI Wealth Transactional Mobile App enables the use of Wealth Management services anytime/ anywhere.

• CKYC: CKYC Application launched as per Government of India guidelines, to upload the KYC documents to the CERSAI site and therein generate the CKYC number, which are provided to the customers.

• OFSAA: OFSAA enables to measure and meet risk adjusted performance objectives and facilitates risk-based decision making with greater transparency and efficiency.

• CMLS: Centralised Litigation Management System application has been installed with centralised database of all the legal cases by and against the Bank.

• ETC FASTag: application facilitates issue of FASTag for vehicles, making the process faster and more efficient at Toll Plazas.

• GST: Tax and Compliance Engine facilitates timely _ling of GSTR Returns to meet statutory compliance.

• Pension Seva: Your Bank serves approximately 55 lakh pensioners across the country. The new portal ‘Pension Seva' facilitates services like pension slip, arrear calculation sheet, Form 16 download among others.

During the year, ATM and Switch department got PCI-DSS certification, which will ensure adherence to global standards in enhancing security of card data and related environment. Your Bank stands in premier position with 50.95 cr. Debit cards issued to the customers, out of which 29.67 cr. cards are used actively. A unique facility ‘YONO-Cash' has been made available to our esteemed customers for card-less cash withdrawal through ATM using YONO app. Your Bank is the first Bank to test NCMC (National Common Mobility Card) an initiative of GOI, successfully on 04.03.2019 at Delhi Metro, which was launched by Honourable Prime Minister of India, Shri Narendra Modi.

Internet Banking continues to provide seamless online experience, offering diverse Banking services to 581.76 lakh Retails Users and 23.12 lakh Corporate Users. Many new services like Real Time Demand Loan for e-Commerce transactions, UPI Payment Integration for SB Collect, Sovereign Gold Bond subscription for Joint Account holders, facility to download Form 16A, and Partial MOD breaking facility have been added to RINB portal during the year. Recurring deposit facility for SARAL Users, uploading of financial statements by Corporate customer, Virtual Account Number (VAN) based collection are now being provided through CINB. Over 9,939 merchants have been on-boarded during the year to fuel the e-Commerce eco system.

Your Bank provides indigenous, unique, PCIDSS certified secured ePay platform for facilitating seamless e-Commerce transactions between business, merchants, customers and financial institutions, for various kinds of payment modes. It offers large number of payment options to customers to enable them to pay to the partner Merchant and simultaneously provides platform for Merchants to acquire Bank agnostic large customer base. The platform is provided through our Payment Aggregator (SBIePay) and Payment Gateway (SBIPG) applications by integrating with thousands of Merchants on the one end and large number of Payment Channels like Banks, Wallets and Cards at the other end. Payment Gateway also processes all debit/credit card transactions of SB Collect and SBI-MOPS.

The database is used for analysis of lead generation, risk mitigation and improving operational efficiency. Additionally, predicative analysis is also done to detect fraud prone branches and also to find delinquencies prone accounts. Also, analytics is used to generate lead for pre-approved personal loan (PAPL) in YONO.

Awards received by your Bank during the year (IT related):

Your Bank is extending a service through which customers can block his/her State Bank of India ATM debit card, RINB credentials by forwarding the transactional SMS or email received from the Bank on his/her registered email with Bank on designated number 9223008333 / email ID registered with the Bank. Consequently, the system will immediately block the Debit card/RINB credentials if the customer reports an unauthorised transaction.

• During the Financial Year, your Bank commissioned its first, advanced ‘TIER- 3', Data Centre at a safe seismic zone in Hyderabad, with a capacity to host around 1000 racks. The Data Centre is designed with Green Building Design concept and is equipped with nine layers of security.

• Your Bank's branches are equipped with 2 Mbps and 4 Mbps internet connections. Additionally, National Optic Fibre Network (NOFN) connectivity will be implemented at 768 branches to improve rural banking.

• Network Access Control (NAC), has been implemented for protection from Cyber Attacks in addition to existing services like Anti-Virus, AD among others. NAC prevents access to the network by unauthorised and non-compliant endpoints or devices.

• IT Service Management (ITSM) processes have been implemented to manage IT infrastructure.

• State Bank Intelligent Voice Assistant (SIVA) is transactional and FAQ Voice Bot powered by emerging technologies including Machine Learning and Natural Language Processing. The objective is to provide voice-based simple alternate banking channel for routine banking needs. • YONO Cash will enable card less cash withdrawals (with transaction limits) from ATMs anywhere in the country.

• AI based email segregation for Complaint Resolution, which understands and identifies customer's queries and directs them to the targeted desk, using Machine Learning and Natural Language processing, is in progress.

• GPS technology enabled Mobile app to provide location based CSP Inspection.

• Customer Feedback analytics to get instant feedback on service quality at the customer home branch.

• Branch Darpan: Web based dashboard for branches and controllers for Brand Building and Customer Service

• Centralised Database for Prepaid Payment Instruments

• SBI WORKSPACE - Enterprise

Mobility Management (EMM): This solution facilitates work from anywhere, anytime enhancing employee productivity and efficiency.

• OFFICE 365: Enables employees to access the Bank's email and other services like One Drive, Skype for Business, Teams, Forms among others from anywhere using mobile devices while reducing the dependency on office desktop

• In house Centre of Excellence for LINUX: IT Departments to resolve LINUX related issues thereby reducing dependency on vendor support system.

• SME Gyan and Assist on mobile for customer onboarding helps: The operating functionaries, Branch Heads of SME Intensive Branches, and SMEC staff can keep abreast of current Bank Policies, products, services, and schemes.

Jio and SBI are entering into a digital partnership aimed to increase SBI's digital customer base multi-fold. SBI YONO is a revolutionary omni channel platform offering digital banking, commerce and financial superstore services to customers. YONO's digital banking features and solutions will be enabled through the MyJio platform for a seamless, integrated and superior customer experience. MyJio, one of India's largest over-the-top (OTT) mobile applications will now bring in financial services capabilities of SBI and Jio Payments Bank.

Jio and SBI customers will benefit from Jio Prime, a consumer engagement and commerce platform from Reliance. Jio Prime will offer exclusive deals from

3. RISK MANAGEMENT

Risk Management at your Bank includes risk identification, risk assessment, risk measurement and risk mitigation with its main objective to minimise negative impact on profitability and capital.

Your Bank is committed towards creating an environment of increased risk awareness at all levels. It also aims at constantly upgrading the appropriate security measures, including cyber security measures, to ensure avoidance or mitigation of various risks. Moreover, it is equipped with a Disaster Recovery/ Business Continuity Plan across all its branches and offices, to render uninterrupted services, in the event of any possible business disruption.

RBI Guidelines on Basel III Capital Regulations were implemented, and your Bank is adequately capitalised as per the current requirements under Basel III. An independent Risk Governance Structure, in line with international best practices, was put in place, in the context of separation of duties and ensuring independence of Risk Measurement, Monitoring and Control functions. This framework visualises empowerment of Business Units at the operating level, with technology being the key driver, enabling identification and management of risk at the place of origination. The various risks across your Bank and the SBI Group are monitored and reviewed through the Executive Level Committees and the Risk Management Committee of the Board (RMCB), which meets regularly. Risk Management Committees at Operational unit and Business unit level are also in place.

1. Credit Risk

Credit Risk is defined as the possibility of losses associated with the diminution in the credit quality of borrowers or counter- parties from outright default or from reduction in portfolio value. Credit Risk emanates from a Bank's dealings with an individual, non-corporate, corporate, Bank, financial institution or sovereign.

Your Bank has put in strong credit appraisal and risk management frameworks in place for identification, measurement, monitoring and control of the risks in credit exposures. Industrial environment is scanned, researched and analysed in a structured manner by a dedicated team for deciding its outlook and growth appetite for each of the identified 39 industries/sectors, which constitute about 71% of your Bank's total domestic outstanding (excluding Retail and Agri). Risks in these sectors are monitored continuously and wherever warranted, the industries concerned are reviewed immediately. Impact of events such as the rise in Crude oil prices, policy initiatives taken by the Government in respect of Telecom and Power sectors, impact of increase in production of sugar vis--vis reduction in price on the industry, impact analysis on awarding of Road projects by NHAI, Gems and Jewellery to name a few, were analysed and appropriate responses to these situations were strategised by your Bank to mitigate possible risks. Exposure to sensitive/ stressed sectors such as Real Estate/Telecom are being reviewed at half-yearly intervals. Sectors such as Power, Telecom, Iron and Steel, Textiles, which are going through a challenging phase, are watched continuously and analysis of new developments are shared with the business groups to enable them to make informed credit decisions. Knowledge sharing sessions are conducted for the benefit of the operating staff at various levels.

State Bank of India has put improved mechanism in place to manage Credit Concentration Risk, by way of risk sensitive Internal Prudential Exposure Limits framework for single as well as group borrowers. These limits are fixed based on the internal risk rating of the borrower.

This framework is one step ahead of the regulatory prescription of Prudential Exposure norms, which is ‘one size fits all' in nature. These exposure norms are monitored regularly at a defined periodicity.

Your Bank undertakes specific analytical studies to identify trends in movement of NPAs, quarterly review of loan sanction, time-to-default etc., in order to keep track of quality of asset portfolio on regular basis.

A new role of Portfolio management was created under Risk Management Department. Credit Portfolio Management function will focus on both, profitability and risk view while performing portfolio management activities. Key functions comprise portfolio risk appetite and target definition, portfolio packaging, risk assessment and review, and portfolio optimisation, amongst others.

2. Market Risk

Your Bank's market risk management consists of identification and measurement of risks, control measures, monitoring, and reporting systems.

3. Operational Risk

Key elements of your Bank's Operational Risk Management Policy, among others, include ongoing review of systems and controls, creation of awareness of operational risk throughout your Bank, timely incident reporting, enhancing operational risk awareness through RAW (Risk Awareness Workshop), improving early warning information through implementation of Key Indicators (comprising of Key Risk Indicators (KRIs), Key Control Indicators (KCIs) and Key Process Indicators (KPI), the resolution of risk issues by effectively tracking and follow- up of outcomes of assessment, assigning risk ownership, aligning risk management activities with business strategy. Your Bank has a detailed Business Continuity Plan (BCP) in place for ensuring continuity of operations at the branches and Offices during disruptions. BCP enabled us to ensure minimum business disruption during the natural disasters such as goods in Kerala and Cyclone in Tamil Nadu, which occurred during the year.

4. Enterprise Risk

With an objective of maintaining a sound risk profile, your Bank has developed a Risk Appetite Framework incorporating limits for major risk metrics. For promotion of a strong risk culture in your Bank, Risk Culture Framework is being operationalised in a phased manner.

Your Bank conducts a comprehensive Internal Capital Adequacy Assessment Process (ICAAP) exercise on a yearly basis with respect to adequacy of Capital under normal and stressed conditions. In the ICAAP, besides the Pillar 1 risks, such as Credit Risk, Market Risk and Operational Risk, Pillar 2 Risks, such as Liquidity Risk, Interest Rate Risk in Banking Book (IRRBB), Concentration Risk and others are also assessed, and capital is provided if required. New and emerging risks are identified and discussed in the ICAAP.

5. Group Risk

The Group Internal Capital Adequacy Assessment Process (Group ICAAP) document includes an assessment of identified risks by Group entities, internal controls and mitigation measures, and capital assessment, under normal and stressed conditions. All Group entities where SBI has 20% or more stake and management control, including Non- banking entities, carry out the ICAAP exercise and a Group ICAAP Policy is in place to ensure uniformity.

6. Basel Implementation

Your Bank is identified as D-SIB by the Regulator and is required to keep additional Common Equity Tier 1 (CET1) of 0.60% of RWAs applicable from 1^st April, 2016 in a phased manner and it will become fully effective from 1^st April, 2019. Additionally, it has also started maintaining Capital Conservation Buffer (CCB) in a phased manner and will reach 2.5% by 31^st March, 2020.

Internal Audit (IA) in your Bank is independent of the audited activities and has sufficient standing and authority within your Bank. The IA Department, headed by a Deputy Managing Director, works under the guidance and supervision of the Audit Committee of the Board. Your Bank's IA function works in close co-ordination with the Risk Management and Compliance Departments to evaluate effectiveness of controls, assess compliance with controls, and adherence to internal processes and procedures. The IA function undertakes a comprehensive risk-based audit of the operating units of your Bank, in line with regulatory guidelines relating to Risk Based Supervision.

Keeping pace with rapid digitalisation in your Bank, the IA function has initiated technological interventions for providing enhanced efficiency and effectiveness through system driven and analytics-based audits.

• Web based, online Risk Focused Internal Audit (RFIA) for assessing compliance with controls at a granular level.

• Analytics based, continuous assessment of compliable controls through remote evaluation of big data.

• System driven; analytics based off-site monitoring of transactions.

• Concurrent Audit of business units to ensure contemporaneous scrutiny of compliances.

• Early review of sanctions to assess quality of loans of `1 crore & above.

• Online self-audit by branches for self-assessment by branches and vetting by controllers.

As part of RFIA, IA Department conducts various audits, viz. Credit Audit, Information Systems Audit, Cyber Security Audit, Home Office Audit (audit of foreign offices), Concurrent Audit, FEMA Audit, Audit of Outsourced Activities of your Bank, Expenditure Audit and Compliance Audit. In addition to this, it undertakes Management Audit of business verticals to assess their strategic effectiveness and special audits as per the directions of the Audit Committee or the regulators.

A Department undertakes critical review of the operations of auditee units through RFIA, an adjunct to Risk Based Supervision, as per RBI directives. The domestic branches are broadly segregated into three groups (Group I, II and III) based on business profile and advances exposures. Your Bank has initiated a system driven process for identification of branches for audit, whereby, analytical algorithms are deployed to identify units displaying significantly different behavioural patterns. This enables your Bank to step in with a prioritised audit to identify the causative factors at these outlier branches and flag the underlying problem areas for early intervention.

Individual accounts with credit exposure of `1 crore & above are subjected to an off-site early review mechanism (Early Review of Sanction) of the pre-sanction processes. The reviews are carried out within three to four weeks of sanction /enhancement/ renewal to identify the defficiencies, if any, in the credit underwriting process at an early stage and initiate remedial measures. The ERS system was integrated with loan processing software for seamless, real time flow of sanction proposal to the ERS reviewers for online review.

The Branches that are authorised to deal (Authorised Dealers) in Foreign currency transaction, including Trade Finance Centralised Processing Cells-TFCPC are subjected to FEMA audit. Branches with high credit exposures as well as the centralised trade finance processing centres are subjected to audit under FEMA at least once every year. Other AD branches are audited as per their risk profile within a maximum period of 21 months. During FY2019, around 411 auditee units were covered under FEMA Audit.

State Bank of India's branches are subjected to Information System audits ("IS audits") to assess the IT-related risks as part of RFIA of the branch(es). IS audit of centralised IT establishments is also carried out by a team of qualified officials, which includes IS auditors appointed through lateral recruitment. During the period from 1^st April, 2018 to 31^st March, 2019, IS audits of 48 centralised IT establishments were completed. In addition, a cyber-security audit of your Bank is also executed annually, as per the cyber security policy of your Bank.

During FY2019, Foreign Office Audit was carried out at 19 Foreign Offices and Management Audit was conducted at five Subsidiaries, three Representative Offices and six Country Head/Regional Head Offices.

Concurrent Audit System in your Bank covers advances and other risk exposures as prescribed by the regulatory authority. Additionally, it was revamped by recruiting qualified personnel and placing additional resources at the Central Processing Cells to identify and rectify shortcomings in underwriting and controls at a very early stage of the client relationship.

OTMS in your Bank is a web-based solution, which generates scenario-based alerts for monitoring transactions at branches across the whole Bank and _ags them to the business units for corrective actions. Presently, there are 55 types of scenarios embedded in the system against which the transactions are scrubbed at regular periods, wherein inconsistent transactions are _agged by the system for affirmation of the related compliances. The scenarios are periodically reviewed and enlarged, depending upon the need and certain triggers.

Your Bank recognises the need of service providers engaged with your Bank to be as compliant with the legal and regulatory requirements as your Bank itself. Audit of Outsourced activities is therefore conducted at regular intervals to gain a reasonable assurance that adequate systems and procedures are in place to mitigate legal, financial and reputational risks that may arise on account of the outsourced activities.

Your Bank has engaged the services of more than 57,000 individual BCs and CSPs under financial inclusion plan, of which 28,245 units were audited by FY2019.

Management Audit covers business verticals, Administrative Offices/ Departments and examines the strategy, processes and risk management practices. It encompasses Corporate Centre establishments/Circle Local Head Offices and Regional Rural Banks (RRB) sponsored by your Bank. During FY2019, 42 establishments/administrative offices were audited under Management Audit.

In order to mitigate risks arising out of non-compliance of KYC norms, AML/CFT guidelines, your Bank has put in place an approved Board and transparent Know Your Customer (KYC) Policy incorporating your Bank's framework for customer acceptance, customer identification, monitoring of transactions, Customer Risk categorisation, and reporting of transactions to Financial Intelligence Unit India (FIU-IND). The policy was updated and subsequent changes, as notified by RBI, are being circulated through e-Circular for Branches/ Offices for ensuring meticulous compliance of the same by the operating functionaries. Your Bank has put in place a robust system containing a combination of manual and system enabled methodology to ensure KYC compliance in your Bank.

Your Bank has allotted Uniform Customer Identification Code (UCIC) to the individual customers as per RBI guidelines. Periodical updating of KYC is undertaken as per RBI guidelines.

Your Bank has taken several initiatives to bring greater awareness amongst its staff about KYC and AML/CFT compliances. AML-CFT Day is being observed on 2^nd November every year wherein pledge is taken on that day at all branches/processing centres and Administrative Offices. Similarly, 1^st August is observed as KYC Compliance and Fraud Prevention Day.

Monetisation of unused non-banking assets worth `407 crore have been identified for sale from different circles, out of which assets worth `17.33 crore have been monetised during the current financial year 2018-19.

4. OFFICIAL LANGUAGE

Your Bank has taken innovative steps to propagate the use of official language in reaching out to customers and has earned many laurels for the organisation.

11^th World Hindi Conference was held from 18^th to 20^th August, 2018 at Mauritius. Your Bank sentadelegation in which the members organised an exhibition with the support of your Bank's subsidiary State Bank of Mauritius. The theme of the exhibition was "Vishwa Mein Hindi Pahunchai, Yug Yug Jio SBI". Furthermore, your Bank's products, services, and publications depicting your Bank's contribution in popularising Hindi around the globe were showcased in the exhibition.

To popularise the use of Hindi among the staff members of your Bank in India and abroad, a Hindi Fortnight was organised from 14^th to 29^th September 2018 at national level and at international level. Additionally, 10^th January, 2019 was observed as World Hindi Day during which different Hindi programs and competitions were organised. Furthermore, the circles, departments, and staff including foreigners who make maximum use of Hindi in the official work, during the year, were awarded.

Rajbhasha Kirti Award 2017-18 for SBI ‘PRAYAS' Magazine: State Bank of India bagged first prize under Government of India Rajbhasha Kirti Awards 2017-18 for its Quarterly Hindi house magazine PRAYAS. Honourable Vice President of India Shri M. Venkaiah Naidu conferred the award to SBI Chairman Shri Rajnish Kumar on 14^th September 2018 at Plenary Hall, Vigyan Bhawan, New Delhi.

Rajbhasha Kirti Award 2017-18 for SBI ‘PRAYAS' Magazine : Honourable Vice-President of India conferred the award to SBI Chairman on 14^th September 2018 at Vigyan Bhawan, New Delhi.

Your Bank released the prestigious Hindi book ‘Rajbhasha Karyanvayan: Anubhav Evam Uplabdhiyaan' under aegis of Department of Financial Services, Ministry of Finance, Government of India. The book was released by Dr. Bhushan Kumar Sinha, Joint Secretary (Financial Inclusion), Government of India on 6^th July, 2018 at Patna.

Dr. Satya Narayan Jatia, Vice-Chairman, Committee of Parliament on Official Language awarded 1^st prize to your Bank for the best implementation of O.L. Policy on behalf of renowned literary - social - cultural organisation Ashirwad. He also honoured our GM (O.L. & C.S.) with prestigious ‘Rajbhasha Gaurav Award'. Moreover, our Hindi house magazine ‘Prayas' was awarded with ‘Best Magazine'.

Town Official Language Implementation Committees chaired by your Bank at Bhubaneswar and Hyderabad centres got 1^st and 2^nd prizes respectively in Rajbhasha Kirti Awards from Honourable Vice President of India. Also, Town Official Language Implementation Committee, Siliguri won 3^rd prize by the Regional Implementation Office (East), Kolkata.

5. MARKETING AND COMMUNICATION

The Marketing and Communications (M&C) Department is responsible for your Bank's initiatives towards branding, product marketing and corporate communications. With the objective of optimising its efforts in promoting the products and services by adopting contemporary marketing approach and to give impetus to the digital initiatives to connect with the youth, the M&C Department's key responsibilities include developing and implementing integrated marketing strategies to address business challenges of different divisions of your Bank including Indian and overseas operations. This department comprises of domain skilled professionals and specialists drawn from various relevant fields - media, marketing communications, digital marketing, advertising, and public relations.

The focus of this year for your Bank's M&C team was to promote its flagship product YONO. For this, your Bank undertook initiatives to make the customers aware of YONO and its unique features. During the year, the team also devised various marketing initiatives for YONO such as the YONO Shopping Festival (YSF), a first of its kind shopping festival ever organised by any Bank across the country. Your Bank conducted its maiden thought leadership event on _ntech called ‘Infinite'. One of the major marketing initiatives, which your Bank launched was the YONO 20Under20 concept. This was one of the biggest external events conducted and appreciated, where your Bank honoured

20 (10 Male + 10 Female) extra ordinary achievers in 10 different fields. Your Bank has also conducted a 17-city quiz called "Numero Yono".

The M&C team was instrumental in changing the brand identity of the Wealth Management Services from Exclusif to SBI Wealth. The team worked on organising Green Marathon, which was conducted in six cities last year and this year it was taken to 15 cities, Bhubaneswar, Trivandrum, Bhopal, Jaipur, Kolkata, Lucknow, Patna, Guwahati, to name a few in the current financial year to accentuate your Bank's commitment to sustainability.

Going forward, along with the other marketing initiatives, your Bank plans to further promote its flagship product YONO. The thrust of the department is to stay ahead of the competition and develop brand "State Bank of India'' into a more vibrant and competitive brand.

6. VIGILANCE MECHANISM

The concept of Whistle-blower is another effective tool used for Preventive Vigilance. To highlight any malpractices under Whistle-blower Scheme, a portal was launched by your Bank wherein a complaint can be lodged online, and its progress can be monitored. There is an existing well-defined Whistle-blower policy in your Bank, which acts as a deterrent for the employees to keep themselves away from malicious activities.

Branches, where lapses of grave nature are observed, are identified and suo-motu investigations are conducted to check possible fraudulent activities and to execute remedial measures are undertaken.

7. ASSET AND LIABILITY MANAGEMENT

Efficient Management of Assets and Liabilities (ALM) is vital for sustainable and qualitative growth of Banks. ALM aims to strengthen Balance Sheet by pro-actively reviewing the market dynamics, capturing the signals emanating, therefrom, assessing the regulatory requirements to ensure value creation.

The levels of High-Quality Liquid Assets (HQLA) and cash outflows are effectively monitored in a highly dynamic environment for computing LCR on daily basis.

Your Bank has adopted an advanced approach for assessing the impact on Earnings at Risk (EaR) and Market Value of Equity (MVE) with pre-defined tolerance limits that determine the risks associated with them and enables the Management to initiate appropriate preventive steps in a likely scenario of erosion in Net Interest Income.

In order to encourage branches to garner stable funds and assess their profitability based on cost of funds, a Market Linked Internal Funds Transfer Pricing was implemented by your Bank.

8. ETHICS AND BUSINESS CONDUCT

Your Bank was engaged during the year with promotion of ethical awareness in the organisation as a cultural premise. Having put in place a structure for the purpose under the Chief Ethics Officer and articulation of Bank's new Vision, Mission and Values Statements (VMVS), Bank has come out with a Code of Ethics synchronised around the normative commitments to its stakeholders viz. values of STEPS (Service, Transparency, Ethics, Politeness and Sustainability). The Code provides staff-members with behavioural guidelines and a moral compass for conducting a collective journey towards realisation of your Bank's vision. Sustained efforts were taken to ensure that the essence of the VMVS and Code seeps into the sinews of organisation and strengthens its moral fibre. Activities such as sharing situational Quiz for ethical sensitisation (both, a general daily quiz to all employees of your Bank and a domain specific weekly quiz for Global Markets, Foreign Offices, GITC, MTs amongst others, covering ethical dilemmas related to their area of work), broadcasting Ethical Decision Making Guide, posting a motivational weekly blog namely ‘Coffee with Aristotle', fortnightly Ethics Tutorials amongst others, are undertaken. Besides, this regular Ethical Awareness Workshops are organised for different staff- constituencies ranging from messengers, security guards, Management Trainees to the Deputy General Managers including workshops on Procurement Ethics. ‘Code of Conduct for Expressing Views in Social Media' was revised in response to expanding reach of social media platforms. Several measures were initiated for humanising the disciplinary eco-system further in your Bank.

Your Bank believes that ethics is a continuous process of infusing excellence in its operational fabric and will go on making endeavours unremittingly to shape the moral sensibilities of rank and file in the organisation.

9. CORPORATE SOCIAL RESPONSIBILITY

Social Responsibility is deeply ingrained in the culture of your Bank. Consequently, it has been undertaking social welfare initiatives much before the formal CSR concept was coined. Your Bank believes that it owes a solemn duty to the less fortunate and underprivileged members of the society to make sustainable social change in their lives. State Bank of India always places the interest of the common man, especially the most marginalised, at its core. In addition to this, your Bank earmarks 1% of the previous year's net profit as the budget for CSR spend for the year. Its CSR activities are widespread and deep-rooted and have made true difference in the lives of millions from underserved communities. Your Bank is committed towards the economic and social wellbeing of the downtrodden.

• Supporting Healthcare

• Supporting Education

• Skill Development and Livelihood Creation

• Environment Protection.

• Sanitation

As a part of mission to provide the entire gamut of financial services across India, the State Bank Group, through its various subsidiaries, provides a whole range of financial services, including Life Insurance, Merchant Banking, Trustee Business, Mutual Funds, Credit Card, Factoring, Security Trading, Pension Fund Management, Custodial Services, General Insurance (Non Life Insurance) and Primary Dealership in the Money Market.

( Rs. crore)

(Rs. crore)

1. SBI CAPITAL MARKETS LIMITED (SBICAP)

SBICAPs is India's leading investment banker, offering a bouquet of investment banking and corporate advisory services to diversified clients across three product groups - Project Advisory and Structured Finance, Equity Capital Markets and Debt Capital Markets. These services include Project Advisory, Loan Syndication, Structured Debt Placement, Mergers and Acquisitions, Private Equity, Restructuring Advisory, Stressed Assets Resolution, IPO, FPO, Rights Issues, Debt and Hybrid Capital raising. On a standalone basis, SBICAPs posted a PBT of `242.60 crore during FY2019 as against `336.49 crore during the FY2018 and a PAT of `168.19 crore for FY2019 against `236.26 crore in FY2018. On a consolidated basis it has posted a profit of `236.73 crore as against `323.53 crore in the previous year. SBICAPS has not declared any dividend for FY2019 as against 225% in FY2018

SSL, a wholly owned subsidiary of SBI Capital Markets Limited, besides offering equity broking services to retail and institutional clients both in cash as well as in Futures and Options segments, is also engaged in sales and distribution of other financial products such as Mutual Funds, Tax Free Bonds, Home Loan, Auto Loan, Tractor Loan, amongst others.

First closure of ‘Neev Fund' was on 10^th April, 2015 and the final closure happened on 31^st March 2019 with final corpus of the Fund being `504.20 crore. Fund has invested in the infrastructure sectors such as renewable energy, water and sanitation, agricultural supply chain in eight identified states of India (Bihar, Chhattisgarh, Jharkhand, Madhya Pradesh, Odisha, Rajasthan, Uttar Pradesh, and West Bengal).

SUL, a wholly owned subsidiary of SBI Capital Markets Limited, is positioning itself as a relationship outfit for SBI Capital Markets Limited in UK and Europe. It has built relationships with FIIs, Financial Institutions, Law Firms, Accounting Firms, amongst others, to market the business products of SBICAP.

SSGL, is a wholly owned subsidiary of SBI Capital Markets Limited. It commenced business in December, 2012. It has built relationships with FIIs, Financial Institutions, Law Firms, Accounting Firms, amongst others, to market the business products of SBICAP. It is specialised in marketing of Foreign Currency Bonds and securing clients for SBICAP SEC.

SBICAP Trustee Co Limited (STCL), is a wholly owned subsidiary of SBI Capital Markets Limited. STCL commenced security trustee business with effect on 1^st August, 2008. STCL posted Net Profit of `14.90 crore during FY2019 as against `11.90 crore during FY2018. Moreover, it has launched an Online Will Creation service for the individuals in the name of ‘My Will Service Online'. In addition to this, ‘Trustee Enterprise Management System' - an integrated system to address all the trustee related operations was implemented, thereby becoming the first and only Trustee Company in India to have full automation across all trustee related operations.

2. SBI DFHI LIMITED (SBIDHFI)

State Bank of India group holds 72.17% share in the Company, which posted a Net Profit of `61.58 crore as on 31<sup>st</sup> March, 2019 as against `32.07 crore as on 31^st March, 2018. Total balance sheet size was `7,206.09 crore as on 31<sup>st</sup> March, 2019 as against `5,659.46 crore as on 31^st March, 2018.

3. SBI CARDS &

SBI Cards and Payment Services Private Limited is a joint venture between State Bank of India and the Carlyle Group wherein State Bank of India holds 74% stake and CA Rover Holdings (An af_liate of Carlyle) holds 26% stake. SBICPSL is an NBFC and issues credit cards in India. State Bank of India increased its stake in the company in December 2017 from 60% to 74% by buying shares from exiting partner GE Capital.

During FY2019, the Company's Card base has grown by 32% YoY with total number of credit cards reaching to a level of 82.71 lakh as at 31^st March 2019. Total Spends on card witnessed a YoY growth of 35% to reach a level of `107,350 crore for the same period. The company is positioned at Rank #2 with 17.2% Spends Share and 17.4% Cards base as per RBI report for February 2019 (Previous Year 16.7% in terms of both Spends and Cards base as per RBI report for March 2018). The company delivered Profit after Tax of `788 crore in FY2019 at YoY growth of 36% (Profit after Tax in FY2018 - `581 crore).

• New cobranded ‘Apollo SBI Card' launched offering host of benefits and privileges on health and wellness services.

• ‘SBI Doctors Card' in association with Indian Medical Association launched exclusively for Doctors.

• Etihad Guest SBI Card offering best-in-class value combined with word class travel experience to frequent international travellers

• SME Card offering unmatched value proposition to Small and Medium Enterprises (SME) segment

• Allahabad Bank SBI Card, Co-branded Credit Card with Allahabad Bank, catering to the customers of Allahabad Bank.

• SBI Card received the Reader's Digest Trusted Brand Award 2018, for the tenth time in the credit card category.

• SBI Card won the Best Data Quality Award from CIBIL, for the third consecutive year.

• SBI Card m-Gurukul won Silver Award in Best Learning, Performance and Capability Project - Sales Training category by LEARNX Foundation, Australia.

• SBI Card won the ‘Excellent Compliance Performer Award 2018' at the coveted Compliance 10/10 awards.

• SBI Card was awarded as Best Arrangements - Governance & Compliance Awards 2018 at the Compliance Register Platinum held at London, UK.

• The SBI Card L&D team was awarded with Learning Innovator Award at the GP Strategies India, Learning Connect Event held at Gurugram.

4. SBI BUSINESS PROCESS AND MANAGEMENT SERVICES PRIVATE LIMITED (SBIBPMSL)

For FY2019, the Company generated PAT of `78 crore at a YoY growth rate of 15% (Profit after Tax in FY2018 of `68 crore).

Initiatives undertaken during FY2019: • Vision Plus migration to India completed • Excalibur (Collection CRM) Phase-I Go-Live from Mar'19 • Chat Bot- ELA introduced- 98% Success rate

5. SBI LIFE INSURANCE COMPANY LIMITED (SBILIFE)

SBI Life has a multi-channel distribution network comprising an expansive bancassurance channel, including State Bank, the largest bancassurance partner in India, a large and productive individual agent network comprising 123,613 agents as of March 31, 2019, as well as other distribution channels including direct sales and sales through corporate agents, brokers, insurance marketing firms and other intermediaries.

During the year ended March 31, 2019, the Company operated in sound and stable manner, with its sole objective of increasing insurance penetration and concentrating on individual regular business through an active and prudent strategy, sales team maintaining the quality as well as quantity and established a firmer market position. The Company has proven its market leadership in the year ended March 31, 2019 with numero-uno position in Individual New Business Premium among private insurers.

The Company continues to maintain the leadership position amongst private players in number of policies issued, which reflects mass coverage and strong market acceptance across geographies amongst life insurer. During the period, total 15,25,439 individual new policies were issued and registered growth of 7%.

Leveraging wider reach achieved through its network of 908 offices, SBI Life has systematically brought large rural areas under insurance reach.

1. For the Financial Year 2018-19, SBI Life was awarded the ‘Life Insurer of the Year 2018 - India' by Insurance Asia News Awards for Excellence 2018.

2. SBI Life Insurance Company Limited has also been declared as the Winner of the ‘Golden Peacock Award for Risk Management' for the year 2018.

3. SBI Life won the 2^nd Runner Up in the Category of Improvement & Innovation at the 30^th Qualtech Prize 2018.

4. The RIMS India Enterprise RISK Management (ERM) Award of Distinction 2018, organised by the Risk & Insurance Management Society (RIMS), USA, was also awarded to SBI Life in 2018.

5. Awarded ‘ICAI - Gold Shield' for Excellence in Financial Reporting for FY2018 under the Insurance category

6. SBI Life Insurance Company Limited received the ‘Smart Insurer Award in the Life Insurance - Large Category' at ET Insurance Summit 2018.

7. SBI Life Insurance also won the ‘Life Insurance Provider of the Year 2018' by Outlook Money in the Silver Category.

8. SBI Life Insurance was recognised as ‘The Economic Times Best Brands 2019' by The Economic Times

9. SBI Life Insurance won the ‘Intelligent Enterprise' award in the ‘Artificial Intelligence' category by Express Computers.

10. SBI Life Insurance won the awards for ‘Best Blended Learning Program' and ‘Chief Learning Officer of the Year' at TISS Leapvault CLO Awards 2018.

6. SBI FUNDS MANAGEMENT PRIVATE LIMITED (SBIFMPL)

7. SBI GLOBAL FACTORS LIMITED (SBIGFL)

8. SBI PENSION FUNDS PRIVATE LIMITED (SBIPFPL)

9. SBI GENERAL INSURANCE COMPANY LIMITED (SBIGIC)

The cornerstone of the Company's growth aspiration is focused on the Banca channel whilst developing other channels and products that meet business objectives and drive profitable growth. The Company has entered in to strategic tie-ups with four large car manufactures to drive growth in the Motor portfolio. Gross Written Premium (GWP) stood at `4,717 for FY2019.

In the ninth year of operation, SBIGIC had achieved a profit, to the tune of `334 crore. The Company recorded 32.83% of growth in GWP YoY against an industry growth of 12.95% including crop whereas excluding Crop, SBIGIC recorded growth of 12.4% against Industry growth of 12.6% for FY2019. SBIGIC has grown by 115.6% in Crop Insurance in FY2019 by participating in the PMFBY schemes and extending its geographies. The overall market share among all general insurance companies stands at 2.77% and 5.77% among private insurers (Excluding Standalone Health Insurers). The Company's market ranking stands 13^th in the industry and 8^th among the private players (Excluding Standalone Health Insurers) in FY2019. SBIGIC occupies 2^nd position in "Personal Accident" both amongst private insurers and overall in the industry in FY2019. The company ranks 3^rd in "Fire" among private insurers and 6^th position in the industry in FY2019. Share of health business decreased from 13.3% to 10.9%. However, there is a growth to the tune of 8.6% for FY2019.

& Awards 2019, which is the biggest strategic business summit for the entire insurance industry in India. SBI General has won the Gold Award in the category ‘Non-Life Insurance Provider of the Year 2018' at the 17^th edition of Outlook Money Awards. SBI General newsletters, ‘Network' and ‘Connect', have received an award for "Best Content in Email Marketing Campaign for E-Newsletters" at the India Content Leadership conference and awards 2018, organised by Inkspell Media. The Company Chief Risk Officer was awarded the ‘CRO of the year' in the 2^nd Edition CRO Leadership Summit and Awards 2019.

SBI-SG, a joint venture between State Bank of India and Societe Generale with 65% holding by SBI. The Company was set up to offer high quality custodial and fund administration services to complete the bouquet of premier financial services offered by the SBI Group. SBI-SG commenced commercial operations in 2010. The Company's Net Profit was `34.45 crore as on 31<sup>st</sup> March 2019 as against `26.03 crore as on 31^st March 2018. Accumulated profit is `79.90 crore.

The SBIIMS is a wholly owned subsidiary incorporated on 17^th June 2016. The Company has since expanded its operation pan India w.e.f., 1^st July 2018 by setting 17 Circles Infra Offices at all SBI LHO Centres. Its Head Office is located at Raheja Chamber, Ground Floor Free Press Journal Marg Mumbai 400021.The Company is in the process of stabilising its operation at pan India level.

The aim of the company is to give specialised services on Civil, Construction, Electrical, Facility Management, Leasing of Premises etc. It also aims at relieving SBI Officials from dealing with Premise and Facility related issues and compliment it by giving specialised inputs. The company also instrumental in saving cost, manpower, time, and energy used to be consumed by SBI.

Announcement of MAB JV between SBI and Hitachi by Hon'ble Prime Minister of India at Tokyo.

Following services are also being offered by SBIPSPL to cater to the requirements of various merchants:

• DCC-Dynamic Currency Conversion

• EMI (Equal Monthly Installments)

• Cash@POS

• NFC acceptance on PoS terminals

• Acceptance of AMEX/DINERS/DFS/ JCB/UPI Cards.

• Electronic Toll Collection.

SBI Foundation is committed towards contributing positively to United Nation's Sustainable Development Goals (SDGs)-Goal#3: Good Health and Well Being by bringing about positive change in the lives of underprivileged sections of society by providing free access to quality healthcare. To contribute towards improving the health scenario, your Bank has continued the support to following CSR projects through SBI Foundation:

• Life: An initiative to prevent and control Thalassemia disease by conducting free tests for around 20,000 people. 5.9% of the tested people were found to be positive.

• Gift Hope, Gift Life: An initiative to augment deceased Organ Donation in India with a 24/7 toll free national helpline. Moreover, healthcare professionals (Doctors, Nurses, Surgeons amongst others.) were trained and massive awareness programs were conducted during the year.

• Cancer Care: An initiative to prevent and control Breast, Cervical and Oral Cancer among women by conducting free Biopsy, Mammography and Colposcopy tests.

• Darpan: An initiative to mitigate damages of Sickle Cell Anaemia disease by conducting free tests. • Anugraha: An initiative to provide support for home-based Hospice and Palliative Care services for the rural poor community.

• Umeed: An initiative to provide crucial preventive care information for safe motherhood from gestation period to delivery and safe childhood for new born babies up to one year of age by use of mMitra- a free mobile voice call service.

Beat Plastic Pollution: State Bank of India's Local head Office (LHO) Mumbai organised Cleanliness Drive with the theme ‘Beat Plastic Pollution', on the eve of "World Environment Day" at Dadar Beach near Chaitya bhoomi. More than 125 staff members actively participated under the leadership of Mr P. K. Gupta, MD (Retail and Digital Banking) and cleaned the plastics and other wastes on Dadar Beach and collected 2 tractor load of garbage.

Plastic free organisation: State Bank of India announced to be a plastic free organisation as part of Bank's sustainability commitment. This major initiative by your Bank is in sync with the Honourable Prime Minister's Swachh Bharat Abhiyan and the national commitment to abolish single use plastic by the year 2022. In the next 12 months, SBI will be undertaking phase wise steps to become plastic free. PET water bottles will be replaced with water dispensers at all its offices and meetings. Your Bank will also start using standardised paper folders replacing the plastic ones. Moreover, it will replace single use plastic cutleries and containers in its canteens with those made from biodegradable substances.

India has a rich legacy of arts, culture and heritage and your Bank is committed to preserve them. • Swachh Iconic CSMT: To achieve the dual goals of preservation of culture and heritage and contribute to "The Swachh Iconic Places" initiative, your Bank has initiated a project named "SBI Swachh Iconic CST", an initiative for Conservation and Restoration of South and East Faade of the Heritage Building at Chhatrapati Shivaji Maharaj Terminus Mumbai, A UNESCO World Heritage Site.

• SBI Eklavya: An initiative to provide basic sports facility to the children studying in ashram schools.

Majority of differently abled persons can lead a better quality of life if they have equal opportunities and effective access to rehabilitation measures. There was an increasing recognition of the abilities and emphasis on mainstreaming them in the society based on their capabilities. CoE, conceptualised with an aim to be a centralised support centre for differently able persons, works on empowering PwDs through skill enhancement to make a significant and measurable improvement that enables a more productive and satisfying life by optimising their cognitive, physical, social, and vocational functioning.

CoE has set up a skill centre under its ‘Swabhiman' project for placement linked skill development of PwDs. It has also initiated project ‘Shravan Shakti' to support surgery for fitment of Cochlear implants for hearing impaired children.

10 Gram panchayats covering 50 of villages in six states of India. Integrated village development is aimed to promote education for all, environment protection, livelihood development, digitisation in Gram Panchayat, skill development and improvement of preventive and primary health care in villages. Over 11,000 families are benefiting from this project.

• To link and leverage the specific government schemes/services to villages

• To lay emphasis on digitalisation and create awareness about online banking

• Improve the basic infrastructure of villages

• Encourage Panchayat/Village self-governance and create environment for participatory efforts by the people for rural asset creation and community development.

SBI Foundation has won two national level awards during this year for its CSR initiatives.

Ownership Percentage of SBI In RRBs sponsored by SBI

With more than 2/3^rds of our country's population living in Rural - India, it presents a huge yet under tapped opportunity for the Indian Banking Sector. Our large network of sponsored Regional Rural Banks (RRBs) is well placed, to play a larger role and have a great potential to address this scenario. Regional Rural Banks have a distinct competitive advantage, due to their large account base and decades of trust-earning service tradition, resulting in close proximity to the rural customers.

• The State Bank has sponsored (17) Regional Rural Banks operating at regional levels in (17) different States. These RRBs have a combined branch strength of (5,647) spread across (215) Districts. (as on 31^st March 2019).

• State Bank of India holds 35% stake in each of them except Madhyanchal Gramin Bank (40.37%) and Utkal Grameen Bank (37.15%) as on 31.03.2019 due to delayed infusion of proportionate share capital by Govt of India, with Government of India holding 50% and the respective State Governments holding the remaining 15% stakes.

• The Sponsored RRBs of SBI are on CBS platform and offer banking services on par with any other commercial Banks operating in the country. The Banks have adopted the best practices and are well placed to handle the ever-evolving demands of customers, particularly in Rural and Semi-urban space, through their customer centric approach.

• The aggregate deposits and advances of the (17) RRBs (sponsored by the Bank) as on (31^st March 2019) stood at (`103,258 cr) and (`61,741 cr) respectively.

• During the year under review, despite the persistently challenging macroeconomic environment, the Bank improved its business, with Deposits growing by (10.80%) and Advances by (10.64%) over the previous year. (up to 31^st March 2019). As a planned strategy to diversify to the portfolio, RRBs expanded their Housing Loan exposure by 26% to take the portfolio to `6599.00 cr.

• During FY2019, the RRBs together have posted a Net-Loss of (`113.81 crs) due to substantial provision of Pension. RRBs have generated gross profit of `1846.75 cr (Profit before Tax and Pension provisions) which was 88% higher than the previous year. However, on account of Provisions towards Pension liability (`1811.76 cr), the Post Tax Net Profit slid to (-) `113.81 cr as against Net Profit of `584.03 crs in FY20118. The Banks continue to focus on improving earnings from their core banking business, strengthening the fee income streams, and maintaining control on operating costs.

• The combined Gross Non-Performing Assets ratio of the RRBs has improved to (6.92%) in current Financial year as against 8.60% in the previous FY. Net NPA stands at (3.35%) as against (4.53%) in the previous FY.

• Business per employee during the FYimproved to (`7.48 Crs) (as on 31<sup>st</sup> March 2019) as against `6.78 Crs in the previous FY.

The year under review witnessed several significant events, some of which are listed below: • In January 2019, in line with a Government of India decision to amalgamate all RRBs operating in the state of Punjab, ‘Malwa Gramin Bank', an RRB in which the Bank had 35% stake, was amalgamated with Punjab Gramin Bank, an RRB sponsored by Punjab National Bank, through a scheme of arrangement as facilitated by Ministry of Finance, Government of India. This event brought down the number of Sponsored RRBs in our fold from 18 to 17.

In terms of compliance with the SEBI (Listing Obligations & Disclosure Requirements) (Amendment) Regulations 2018, following ratios have changed by more than 25%, as per details given below:

The Net Profit has registered YoY growth of 113.17% (from Loss of `6,547 Cr in FY18 to Net Profit of `862 Cr during FY19) as against YoY growth of only 5.49% in Total Income (from `2,65,100 Cr in FY18 to `2,79,644 Cr in FY19).

The Net Profit has registered YoY growth of 113.17% (from Loss of `6,547 Cr in FY18 to Net Profit of `862 Cr during FY19) as against a meager YoY growth of 0.77% in Net worth of the Bank (from `1,77,191 crore in FY18 to `1,78,552 crore in FY19).

• Similarly, Govt. of India has issued notification for amalgamating two of our RRBs namely Kaveri Grameena Bank and Langpi Dehangi Rural Bank with RRBs sponsored by other Banks w.e.f. 01.04.2019.

• The 17 RRBs marginally expanded their branch network to reach 5,647 branches, as against 5,620 branches at the beginning of the year. The existing Branch network is expected to work more efficiently in the upcoming years, thanks to the introduction of Asset Management Hubs (AMHs) - a Centralised Credit Processing system.

• The RRBs have opened 168 Asset Management Hubs (AMHs) in the Financial Year, which will henceforth facilitate in processing and sanction of quality loan proposals, thus helping to improve the asset quality of the Banks.

• An RRB IT Tech Cell has been established at Hyderabad. This hub will act as a single point ‘solution center' for undertaking and responding promptly to the IT requirements/challenges faced at the RRBs. Several of the RRBs have well established in-house IT cells and the Hub will act as a control center for standardising, exchanging and facilitating collaborative development of IT products and solutions between the RRBs.

ii. that they have selected such accounting policies and applied them consistently and made judgements and estimates as are reasonable and prudent, so as to give a true and fair view of the state of affairs of your Bank as on the 31^st March 2019, and of the profit and loss of Your Bank for the year ended on that date;

iii. that they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Banking Regulation Act, 1949 and State Bank of India Act, 1955 for safeguarding the assets of your Bank and preventing and detecting frauds and other irregularities;

v. that the internal financial controls had been laid down, to be followed by your Bank and that such internal financial controls are adequate and were operating effectively; and

Shri Arijit Basu was appointed as Managing Director on the Board w.e.f. 25^th June 2018 and Shri B. Sriram resigned from the Board w.e.f. 29^th June 2018. Smt Anshula Kant was appointed as Managing Director on the Board w.e.f. 7^th September 2018.

The Directors also thank all the valued clients, shareholders, Banks and financial institutions, stock exchanges, rating agencies and other stakeholders for their patronage and support and take this opportunity to express their appreciation for the dedicated and committed team of employees of the Bank.