This year (FY 2020-21) has been an unimaginable year due to COVID pandemic & strict containment measures across the World. Despite facing myriad personal and professional challenges perhaps never encountered in over a century our employees displayed exceptional courage & served our customers without any interruption. Many of us may have lost our near & dear ones including several colleagues in APGVB Family. My heartfelt condolences to all those who succumbed to COVID. The Bank took several measures to safeguard the well-being of employees & their family members including conducting vaccination drives.
In this current Business environment, with prudent decision making by the Management & precise execution by Operating Staff Bank delivered very good results & posted a healthy growth in operating profit, Net interest Income & Balance sheet size without compromising on asset quality. The operating profit increased by 26.51 percent to Rs.1534.48 Crore in FY 2021 and balance sheet size by 11.2 percent to Rs.34780.91 Crore. Net Interest Income, an indication of the difference between interest earned and interest paid grew by 24.72% to Rs.1512.91 Crore. The Bank posted net profit of Rs.1009.66 Crore in FY 2021 an increase of 63.49% from Rs.617.57 Crore in FY 2020. Net Interest Margin remained healthy at 4.85% (4.73% in FY 2020).
The Bank's total Business has registered a growth of Rs 6180.05 Crore at 16.34 % to reach Rs. 43998.71 Crore as on 31st March 2021 from Rs. 37818.66 Crore on 31st March 2020. While deposits grew by 18.07% to Rs. 21838.48 Crore from the previous year’s level of Rs.18495.69 Crore, Credit grew by 14.68% to Rs.22160.23 Crore from Rs.19322.97 Crore in FY 2020. The strong performance in credit is led by growth in Gold & Housing loan portfolio. Especially after the outbreak of COVID, as the demand for Gold loans surged, the Bank immediately revamped the existing Gold Loan schemes to make it more convenient, competitive & customer – friendly. Banks gold loan portfolio witnessed Spectacular growth of 97% in FY 2021.
On the back of prudent capital planning, the capital adequacy of the Bank improved from 16.15% in March last year to 19.27% in March 2021. The Bank's total investment portfolio (SLR & Non SLR) increased to Rs. 12705.68 Crore in FY 2021 compared to Rs. 11970.07 Crore in FY 2020.
Due to COVID induced slowdown many of the Agencies forecasted heightened risks of increase in NPA levels for Indian Banks. However, Governments and Regulatory agencies timely interventions with pragmatic supportive measures coupled with normal monsoon countered the financial stress in the system. Two such measures introduced by the Reserve Bank of India were the moratorium & loan restructuring package, which helped alleviate the socio-economic effects of the pandemic & supported growth in the economy. While the moratorium allowed Customers to temporarily suspend their loan repayments (From March to August 2020), the second eased the burden on loan repayments upto maximum 2 years.
The loan restructuring programme was aimed at easing the burden of monthly repayments for eligible customers who were significantly affected by the pandemic. Eligible Customers seeking loan restructuring were allowed to reschedule their loan repayments and were offered lower payment structures, with extended tenors of up to 24 months.
Despite all this, the Bank ended the year with Gross NPA level of 1.06% compared to previous year’s 1.03%. Bank being one among the top lenders catering to Agriculture activities & Self Help Groups in all the districts being served, overall performance under NPA was quite satisfactory. The Provision coverage ratio of the Bank continued to be 100%.
Financial Inclusion & Customer Convenience
Financial inclusion & Customer convenience continues to be Bank’s priority & for this Bank has created multiple touch points. Bank has 2251 Bank Mithras catering to the customers at their doorstep. Due to COVID lockdown, as people are confined to their homes, Bank Mithras played a pivotal role in extending Bank’s services to the citizens by effectively leveraging technology. Bank’s focus on strengthening Bank Mithra channel to extend basic Banking facilities to the citizens yielded positive results. Bank has seen a significant jump in transactions being performed at Bank Mithra points which also enabled customers to stay safe at their homes.
During the year, Bank also launched Doorstep Banking facility to differently abled customers & customers aged above 70 at selected Branches. Eligible customers can now avail basic Banking services at the comfort of their homes.
Even during these difficult times Bank has conducted customer meets seeking their feedback & suggestions for enhancing customer experience. Bank also conducted digital financial literacy awareness camps & procured 9 new Mobile ATM Demo Vans during the FY (Total – 15) to create awareness on using digital mode of banking facilities & Social Security schemes.
During the year, in order to improve monitoring mechanism & for enhancing customer experience Bank has opened two new Regional Offices in Telangana State at Nagarkurnool & Bhongir. Bank also received permission for opening one more Regional Office at Anakapalli in Andhra Pradesh.
During the year, Bank has launched a Mobile app for Digital on boarding of mostly new to Bank customers with Video KYC facility. This has helped in reducing Account opening TAT with higher conversions. Bank also received permission to provide Internet Banking with transaction rights to the customers. In order to decongest the Branches during this pandemic time, Bank has deployed 111 kiosk passbook printing machines in the Branches through which customers can get their passbooks updated by themselves. In addition to this, the Bank has developed several in-house paperless solutions for internal correspondence & approval mechanisms as part of its green Banking initiatives.
Due to COVID pandemic, Business continuity remained a key challenge & by adopting a detailed Business continuity plan Bank has ensured uninterrupted services to the customers. Further, fuelled by COVID led pandemic, Transactions across all alternative delivery channels recorded a significant improvement.
Despite severe disruption in Business operations due to COVID-19 in the last year, Bank sustained its growth momentum by diversifying portfolio & adopting new strategies to curtail the NPA. The plans worked out well & this is reflected in our financial statements as of March 2021. As uncertainty looms on the depth of COVID - II wave & subsequent waves, I am confident that we will continue to be adaptive to the situation as we did in the last FY by fine tuning our strategies & will embrace the new normal. We shall continue to expand our Digital reach by effectively leveraging new IT initiatives launched during last FY & strengthening Bank Mitra model. I am hopeful that the Bank's consistent performance will be continued in FY 2022 as well & the No.1 profit making Regional Rural Bank crown will be retained.
(K. Praveen Kumar)