If FY21 saw the toughest period due to the pandemic, FY22 was the year of hope. As COVID-19 zipped all along an unpredictable path, the nationwide rollout of the vaccine programme meant that lives were more secure, and coupled with precautions, people could get back to some degree of normalcy. In FY22, Bank continued to help customers navigate the impacts of economic lockdowns and access the short and long term loans they have needed to navigate through the pandemic. Despite the challenges they have faced at home and in their personal lives, I am so proud of how our staff have recouped from the pandemic and delivered for our customers.
Bank’s Performance – Improved operating metrics
Our operating performance was robust with net profit at Rs.813.82 Crore on back of good growth in net interest income. As Staff Wage revision provisions, additional NPA provisions, investment depreciation provisions and other provisions were provided for during the year there is a marginal decrease in net profit of the Bank compared to previous year. The details of our performance are elaborated in the report.
Bank has also registered improvement in Net Interest Margin and it remained healthy at 5.21% (4.85% in FY 2021).
Asset quality continues to remain healthy and amongst the best in the RRBs. Our Balance Sheet has been resilient during the pandemic and has grown further. Our Balance sheet increased by 4.45% to Rs.36329.08 Crore & GNPA stood at 1.74%. Return on Assets (ROA) was at a healthy 2.32% and Return on Equity at a healthy 16.9%.
Keeping in view the long term sustainability of the Bank, Bank has initiated some measures due to which we witnessed tepid growth in deposits and advances compared to previous year however the CASA share in total deposits increased from 36.78% in FY21 to 39.27% in FY22.
The total Business increased at a slower pace of 6.13% i.e., Rs 2695.20 Crore to reach Rs. 46693.94 Crore as on 31st March 2022 from Rs. 43998.71 Crore on 31st March 2021. The deposits grew by little over 4% to Rs. 22731.95 Crore from the previous year’s level of Rs.21838.48 Crore. Advances grew by 8.13% to Rs.23961.99 Crore from Rs.22160.23 Crore in FY21. Banks gold loan portfolio witnessed robust growth of 35% during this FY.
We have taken concrete actions towards strengthening our policies, processes and controls in the last 3 years. On back of better planning and efficient risk management our capital adequacy improved from 19.27% in March 2021 to 23.46% in March 2022, which signifies the strength of the Bank and is one of the best among all RRBs. The Bank's total investment portfolio (SLR & Non SLR) increased to Rs.13508.64 Crore in FY22 compared to Rs. 12705.68 Crore in FY 21. Within the investment portfolio, 70.57 % is in AFS category while the remaining is under HTM category.
During FY22, Bank’s gross non-performing assets (NPA) stood at Rs.415.94 Crore. Consequently, the gross NPA ratio of the Bank marginally increased to 1.74% compared to 1.06% during FY21. Bank has provided provision for 100% of NPAs and net NPA of the Bank remained at NIL consecutively for third year.
Customer focus has been a core value for years and maintaining the best possible standards in customer service has been the key to our success. As part of offering best customer service we respect every customer and address their enquiries or complaints on time and working on the issues raised for a permanent fix. I and my colleagues strive to make every customer satisfied with our service.
We try to ensure that some of the issues that our customers face do not arise at all by investing in technology. Bank’s performance on complaints resolution has also improved considerably during the year. We are not complacent about the progress and are being conscious and mindful of much more that needs to improve. We are working further to improve our customer service.
Financial inclusion continues to be Bank’s priority and for this Bank has created multiple touch points. As of March 22, Bank has 771 Branches & 2739 Bank Mithras operating in 24 Districts across two states. Bank’s focus on strengthening Bank Mithra channel to extend basic Banking facilities to the citizens yielded good results. Share of transactions at Bank Mithra points improved to 53.88% from 50.02% registered during the previous year, which also helped us in curtailing operating costs.
Bank has organised 8,357 Digital Financial Literacy Awareness camps during the FY22 to create financial awareness among rural people and to encourage them to use Alternate Delivery channels. They were also educating public about Government’s flagship social security schemes PMJJBY, PMSBY and APY.
During the year, in order to improve monitoring mechanism and for enhancing customer experience Bank has opened one more Regional Office at Anakapalli in Andhra Pradesh taking the total number of regional offices to 14 across two states.
Over the last few years, we have made significant investments in building digital and tech capabilities and made key transformational bets for future. Last year I had said that we have launched a mobile application for digital on boarding of customers with Video KYC facility. This facility proved to be very successful and more than 1.5 Lakh accounts have been opened through this mode. Taking this initiative further ahead and to take advantage of huge network of Bank Mithras we have rolled out APGVB VIKSA MITHRA BANKING product in November 2021 wherein digital accounts can be opened directly by Bank Mithras. During the year Bank also upgraded its mobile banking application with additional features and enhanced security.
In addition to this, we have rolled out various new IT initiatives which will further strengthen the transparency and efficiency of the operating units.
To enhance the knowledge levels of the frontline staff and enhance customer experience, Bank has trained 1236 Staff during the FY22.
Bank’s efforts in various areas of banking were acknowledged and it has won various awards during the year. Esteemed jury of NABARD has selected our Bank for a “Special Commemorative Award” in the category of Regional Rural Banks based on our Bank’s overall performance in the fields of Agriculture Credit, Micro Finance, Financial Inclusion and Technology adoption on the eve of NABARD 40th Foundation day. Bank has also been awarded the “Best Regional Rural Bank – 2021” by Inclusive Finance India.
Way Forward – Building for the future
Bank’s financial performance over the last few years shown considerable improvement in all parameters. As part of our strategy to build a future ready organisation, we have made strong focus towards our MSME & ATL Segment. We have declared 2022 as a “Year of MSME” and already launched few innovative products to cater to the MSME clientele. Further, due to improved irrigation facilities in Telangana State we see good potential in improving our share of Agriculture Term Loans portfolio. We have already started focussing on these segments from Q4FY22 and we are hopeful that in FY23 we will be registering good growth in these segments.
Our core enabling functions of internal Audit, Credit, Risk management and Compliance/Governance are being strengthened even further to support our growth. We shall continue to expand our Digital reach by effectively leveraging new IT initiatives launched during last FY & strengthening Bank Mitra model.
Summing up, despite FY22 being a tough year in terms of business growth, Bank has adapted well to the challenges posed by the operating environment and hopeful that performance in FY23 will be much better than FY22.
(K. Praveen Kumar)