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Annual Report2008-09

BANKING CODES AND STANDARDS

BOARD OF INDIA

www.bcsbi.org.in

PUBLISHED BY

K.V. Subba Rao

Chief Executive OfficerBanking Codes and Standards Board of IndiaC-7, Reserve Bank of India BuildingBandra Kurla ComplexMumbai- 400051

Phone : (022) 26573715Fax : (022) 26573719

Banking Codes and Standards Board of India

Governing Council

Chairman

K.J. Udeshi

Members

M. M. Chitale

Chartered Accountant

204 and 205 Agarwal Shyamkamal-

A Building, Vile Parle (East)

Mumbai-400 057

Cyrus Guzder

Chairman and Managing Director

AFL Pvt. Ltd., AFL House

Lok Bharati Complex

Marol Maroshi Road

Andheri (East)

Mumbai-400 059

V. P. Shetty

Chairman

JM Financial Asset Reconstruction

Company Private Limited

141, Maker Chambers III, Nariman Point

Mumbai-400 021

Dr. Ajit Ranade

Group Chief Economist

Aditya Birla Management

Corporation Pvt. Ltd.

2-C, S.K. Ahire Marg, Worli

Mumbai-400 030

K. V. Subba Rao

Chief Executive Officer


C-7, Reserve Bank of India Building

Bandra-Kurla Complex

Mumbai-400 051

Smt. Usha Thorat, Deputy Governor, RBI interacting with the BCSBI staff during her visit to BCSBI.

Shri K.V. Subba Rao, CEO, BCSBI addressing the gathering at the workshop on the Code forMSEs held at Lucknow.

ANNUAL REPORT OF THE BANKING CODES AND STANDARDS

BOARD OF INDIA (BCSBI)

2008-09

The year 2008-09 witnessed the failure of some major financial institutions and banks in the

U.S., U.K. and elsewhere, which were considered as too big to fail, causing a world-wide

financial crisis. It is against this background of turbulence, stress and uncertainty in financial

markets that the performance of member banks of the BCSBI has to be evaluated vis-à-vis

their commitments of rendering quality banking services of a minimum standard to their

individual customers and micro and small enterprises.

Governing Council

2. The Governing Council (G.C.) which is vested with the general supervision, direction

and control of the working of the BCSBI, held seven meetings during the year. On the

expiry of its first term of three years, the Reserve Bank of India (RBI) reconstituted the

Council in February 2009 in accordance with the Rules and Regulations of the BCSBI.

Shri S. Divakara and Shri S.R. Kolarkar completed their term as members of the G.C.

and Dr. Ajit Ranade was inducted as a member. The term of the reconstituted Governing

Council will be for two years up to February 17, 2011. The G.C. plays a crucial and

decisive role in the review of the monitoring and enforcement of the Codes by member

banks and BCSBI places on record the invaluable services rendered by S/Shri Divakara

and Kolarkar.

Membership and Subscription

3.1 During the year the G.C. approved an amendment to the Banking Code Rules facilitating

the admission of scheduled Urban Co-operative Banks (UCBs) and Regional Rural Banks

(RRBs) as members of the BCSBI. Four banks viz. Saraswat Co-operative Bank Ltd.,

Bharat Co-operative Bank (Mumbai) Ltd., State Bank of Mauritius and Nagar Urban

Co-operative Bank Ltd. were admitted as members with effect from April 1, 2009 and

the membership of 2 more scheduled UCBs and 7 RRBs is in process. Two banks viz.

State Bank of Saurashtra and Centurion Bank of Punjab ceased to be members

subsequent to their merger with the State Bank of India and HDFC Bank Ltd., respectively.

List of members is set out in Annex I.

3.2 During the year, BCSBI collected Rs.413.44 lakh by way of registration and membership

fee from member banks, which includes fee of Rs.200.03 lakh for the year 2008-09 and

Rs.213.41 lakh as fee for the year 2009-10. With a view to strengthening the corpus of

BCSBI and achieving self-sustainability, it has been decided to raise the target for

collection of total annual membership fee from Rs.200.00 lakh for the year 2008-09 to

Rs.250.00 lakh for the year 2009-10.

Investment of Funds

4. During the year, the Investment Committee of the G.C. held three meetings and reviewed

the Investment Policy. As on March 31, 2009, the investments of the corpus stood at

Annual Report 2008-09Banking Codes and Standards Board of India

Rs.809.60 lakh comprising Rs.358.40 lakh in Government Securities and Rs.451.20

lakh in term deposits with banks. During the year the total income from investments

amounted to Rs. 49.84 lakh.

Code of Bank’s Commitment to Micro and Small Enterprises (MSEs)

5.1 The Third Census of Small Enterprises conducted by Small Industries Development

Organisation in 2001-02 had brought out that an overwhelming 95% of micro enterprises

are outside the purview of institutional financial structure. It was, therefore, felt necessary

to come out with specific commitments from member banks to address the financial

needs of MSEs and the Code of Bank’s Commitment to MSEs was launched by the then

Hon’ble Union Finance Minister, Shri P. Chidambaram on May 31, 2008 and all member

banks have since adopted this Code.

5.2 The Code was given wide publicity in the English and Regional Press by the RBI and

BCSBI embarked upon a nation-wide campaign to disseminate the Code both among

the MSEs and the field level functionaries of banks. Workshops were organized with the

active support of member banks at Thane (Maharashtra), Kochi (Kerala), Chennai and

Madurai (Tamilnadu), New Delhi, Kolkata (West Bengal), Guwahati (Assam), Belgaum

and Hubli (Karnataka), Cuttack (Orissa), Agra and Lucknow(Uttar Pradesh) and Indore

(Madhya Pradesh). The response to these workshops was overwhelming and the BCSBI

is grateful to the member banks and the industry associations for the support extended

in this endeavour. For dissemination of the MSE Code, the BCSBI also utilized the

forum of the State Level Inter Institutional Committee meetings (Empowered Committee

on SMEs) convened by the RBI which are attended by senior State Government

functionaries and the federations representing the interests of MSEs.

5.3 In pursuance of the commitments made in the Code, a simple, standardized and easy to

understand loan application form for MSEs was finalized by IBA in consultation with

the BCSBI and copies of the same were circulated among the banks for expeditious

adoption. This is one of the main requirements of MSEs and it is expected that the

process of adoption of this standardized loan application form for MSEs by all member

banks would be completed shortly.

Sample survey of implementation of Code provisions

6.1 As some time had lapsed since the launch of the Code in July 2006 and the subsequent

compliance discussions with member banks, it was felt appropriate to review the Code

compliance by the banks. After extensive deliberations on the mode of review, 268

branches spread across the five metro cities, viz., Mumbai, Delhi, Kolkata, Chennai and

Hyderabad including 70 percent of the branches covered in the previous survey whose

adherence to the Code was not considered satisfactory, were visited by representatives

of BCSBI in October – November, 2008. The scope of these visits included dissemination

of both the Codes, display of Information on basic banking services, opening of ‘No

Frills’ accounts, provision of basic banking services, lending practices, grievance redressal

systems etc.


2

A section of the audience at the workshop for MSEs held at Thane.

Smt. K.J. Udeshi, Chairman, BCSBI addressing the gathering at the conference on Facilitating Bank Financeto Micro & Small Enterprises held at New Delhi.

A section of the audience at the workshop for MSEs held at Madurai.

Smt. K.J. Udeshi, Chairman, BCSBI delivering a talk on Banking Services to Customersat the Bottom of the Pyramid at Kochi.

6.2 Though only a very small sample of bank branches was selected for the review, considering

the fact that most of these branches had a poor track record of adherence to the Code,

the findings of the Review visits reveal some perceptible improvement in overall adherence

to the provisions of the Code over that observed during the last survey. Some of the

important findings are set out in Annex II.

Opening of No Frills account – Incognito Visits to Branches

7.1 In accordance with the commitment made in the Code of Bank’s Commitment to

Customers, member banks are required to make available basic banking ‘No Frills’ a/cs

either with ‘nil’ or very low minimum balance. The RBI has also provided enough flexibility

in the requirements of documents of identity and proof of address in the KYC guidelines

issued to banks so as to facilitate the opening of these accounts.

7.2 With a view to ascertain the factual position about fulfilment of commitments at the

ground level, BCSBI randomly selected 44 branches of 26 banks in public, private and

foreign sectors located in Mumbai and carried out incognito visits. The findings revealed

that the general awareness about the ‘No Frills accounts’ and relaxed KYC requirements

in respect of the said accounts was insufficient among the staff of the banks visited. The

staff at most of the branches were not proactive in opening such accounts. The findings

at Annex III have been shared with the banks for taking remedial action.

Monitoring of Compliance

8. Monitoring of the compliance by member banks of the Code Commitments is done

through the scrutiny of the Annual Statement of Compliance submitted by banks,

reflecting the position as on December 31, of each year. This year’s performance of

compliance has been significantly better than in the previous year inasmuch as almost

all banks have now adopted the model policies on Cheque Collection, Grievance

Redressal, Security Repossession and Collection of Dues, Compensation etc. There are

gaps observed and the concerned banks are making efforts to comply with the Codes.

What is, however, of concern is the ground realities as brought out through the field

surveys and incognito visits and the declarations by banks in the Annual Compliance

statements. Members are expected to be ethical and fair in their self-appraisal.

Complaints and Their Redressal

9.1 Public grievances, is one of the effective tools through which BCSBI carries out its ongoing

monitoring of banks’ compliance with the Code provisions. BCSBI by design and mandate,

is not a redressal agency to arbitrate on a dispute between an individual and his banker.

But grievances ventilated by individuals do sometimes throw up systemic deficiencies.

They enable BCSBI to monitor Code Compliances at systemic or bank specific level.

Therefore, while complaints received by BCSBI are forwarded for redressal to the

Customer Service Department, RBI, those complaints which are indicative of systemic

deficiencies are followed up with the respective bank/s.

9.2. During the year under report, 571 complaints were received against member banks. A

large number of these were episodic grievances, and only 165 complaints were of systemic


5


import or impinged upon breach of code provisions. A profile of these complaints is set

out in Annex IV.

Review of the Code of Bank’s Commitment to Customers

10. As per the commitment made in the Code, BCSBI has commenced the process of review

of the Code. The objective of the review is to enhance the minimum standards of customer

service rendered by banks by bringing about greater transparency. Suggestions in this

regard have been sought from member banks, RBI, IBA, the Banking Ombudsmen,

various bodies representing the interest of banks’ customers and civil society

organisations. Suggestions have also been invited from members of the public through

a notice on the BCSBI website. The process of review of the Code is expected to be

completed by June 30,2009.

Training Support

11. BCSBI continued to extend faculty support to training establishments of member banks

to help their staff understand and appreciate the provisions of the Codes and their

implementation.

Newsletter

12. The inaugural Issue of BCSBI’s Quarterly Newsletter has been circulated to reach out to

each and every branch of member banks.

Way Ahead

13.1 Reflecting his commitment to customer service, the Governor, RBI, Dr. D. Subbarao has

in his message in the inaugural issue of the BCSBI Newsletter emphasized :

“ Customer, they say, is the king. This becomes a reality only if customers are

enabled to enforce accountability. But they cannot do so if information is not

disseminated or where information asymmetries operate.”

On the way ahead, therefore, our focus will be on increased efforts at achieving greater

awareness among customers and bankers about their rights and obligations enshrined

in the two Codes as also to bring about greater transparency in banks’ systems and

practices through the Revised Code of Bank’s Commitment to Customers which will

come into effect this year. BCSBI will also encourage scheduled UCBs and RRBs to

become members of BCSBI to ensure that a larger section of the banking public benefits

from improved quality of customer service. As heretofore, the approach of BCSBI towards

bringing about qualitative improvements in customer service would be collaborative by

enlisting the support of RBI, IBA and member banks.

13.2 World over, there is a marked shift on tightening regulation, and concerns are being

voiced about the efficacy of self-regulation of banks, particularly in the context of

protection of customers’ rights. In this scenario, the challenges ahead, for BCSBI, are

quite formidable and members have to collectively demonstrate that self-regulation does

have a useful role.

6


13.3 The expansion in membership of the BCSBI brings with it the concomitant issue of

monitoring of compliance and HR issues within the BCSBI. These issues have to be

seen in the context of BCSBI having to gradually wean itself from the staff and financial

support extended by RBI. The present financing arrangements for the BCSBI would

continue up to 2011. The financial viability of the BCSBI would need to be examined in

the ensuing months so as to ensure that the BCSBI is able to more effectively fulfil the

role assigned to it. In this context the BCSBI would work closely with the RBI and IBA to

work out viable financing arrangement beyond 2011. These and other governance issues

would need to be addressed by the G.C. of the BCSBI on the way ahead.

Acknowledgements

14. The BCSBI is grateful for the support extended by RBI, IBA and member banks. The

BCSBI is thankful to the State Bank of India, Bank of Baroda, Indian Overseas Bank,

Bank of India and State Bank of Indore and various industry associations for the logistic

support extended to BCSBI for the conduct of the workshops for dissemination of the

Code of Bank’s Commitment to Micro & Small Enterprises.

7

A section of the audience at the workshop for MSEs held at Agra.

A section of the audience at the workshop for MSEs held at Lucknow.

01 AB Bank Ltd.

02 ABN AMRO Bank N.V.

03 Allahabad Bank

04 Andhra Bank

05 Axis Bank Ltd.

06 Bank of America

07 Bank of Baroda

08 Bank of Ceylon

09 Bank of India

10 Bank of Maharashtra

11 Bank of Novascotia

12 Barclays Bank P L C

13 BNP Paribas

14 Calyon Bank

15 Canara Bank

16 Central Bank of India

17 Citibank N A

18 City Union Bank

19 Corporation Bank

20 DBS Bank Ltd.

21 Dena Bank

22 Deutsche Bank

23 Development Credit Bank Ltd.

24 HDFC Bank Ltd.

25 ICICI Bank Ltd.

26 IDBI Bank Ltd.

27 Indian Bank

28 Indian Overseas Bank

29 Indusind Bank

30 ING Vysya Bank Ltd.

31 J P Morgan Chase Bank N A

32 Karnataka Bank Ltd.

33 Kotak Mahindra Bank Ltd.

34 Krung Thai Bank P C L

35 Mashreq Bank Psc

36 Oman International Bank S.A.O.G.

37 Oriental Bank of Commerce

Annex I

List of banks which have enrolled as members of the BCSBI

38 Punjab National Bank

39 SBI Commercial & International Bank Ltd.

40 Shinhan Bank

41 Societe Generale

42 Sonali Bank

43 Standard Chartered Bank

44 State Bank of Bikaner And Jaipur

45 State Bank of Hyderabad

46 State Bank of India

47 State Bank of Indore

48 State Bank of Mauritius

49 State Bank of Mysore

50 State Bank of Patiala

51 State Bank of Travancore

52 Syndicate Bank

53 Tamilnad Mercantile Bank Ltd.

54 The Bank of Rajasthan Ltd.

55 The Catholic Syrian Bank Ltd.

56 The Dhanalakshmi Bank Ltd.

57 The Federal Bank Ltd.

58 The Hongkong And Shanghai Banking

Corporation Ltd.

59 The Jammu & Kashmir Bank

60 The Karur Vysya Bank

61 The Lakshmi Vilas Bank Ltd.

62 The Nainital Bank Ltd.

63 The Ratnakar Bank Ltd.

64 The South Indian Bank Ltd.

65 UCO Bank

66 Union Bank of India

67 United Bank of India

68 Vijaya Bank

69 Yes Bank Ltd.

Scheduled Urban Cooperative banks

01 The Bharat Co-operative Bank (Mumbai) Ltd.

02 Nagar Urban Co-operative Bank Ltd.

03 The Saraswat Co-operative Bank Ltd.

S. No. Name of the Bank

Scheduled Commercial banksScheduled Commercial banks

S. No. Name of the Bank

1. Scheduled Urban Cooperative banks

a. The Cosmos Cooperative Bank Ltd.

b. The Karad Urban Cooperative Bank Ltd.

2. Regional Rural banks

a. Saurashtra Gramin Bankb. South Malabar Gramin Bankc. Vananchal Gramin Bankd. Kashi Gomti Samyut Gramin Banke. Karnataka Vikas Grameena Bankf. Pandyan Grama Bankg. Prathama Bank

List of banks which have registered for membership of the BCSBI


9

Smt. K.J. Udeshi, Chairman, BCSBI addressing the gathering at the workshop organized byKarnataka Chamber of Commerce and Industry at Hubli.

A section of the audience at the workshop for MSEs held at Indore.

11

1. Comparative position

The comparative position of adherence to select provisions of the Code as per thefindings of the survey held in year 2007 and the branch visits conducted in 2008 arepresented below.

Annex II

Progress in banks' compliance with the Code of Bank's Commitment to Customers –

Branch Visit Findings

S. No. Item Description Percentage of branches

adhering to the Code Provisions

As per survey As per branch

of 2007 visits in 2008

Dissemination of the Code

1. Availability of copies of Code at branches 56 87

2. Display of information about availability of Code 12 56

Transparency and Customer Education

3. Display of address and contact details of BankingOmbudsman 69 75

4. Display of contact details of Compliance Officer/Nodal Officer 58 58

5. Availability of copy of customer centric policiese.g. Security Repossession Policy. 29 74

Grievance Redressal

6. Redressal of grievance of customers within 15 days. 88 93

Lending

7. Issue of acknowledgement for receipt of loan application 60 72

8. Conveying terms and conditions of loans sanctioned inwriting to the borrowers. 76 95

2. Centre-wise position

Centre-wise position of adherence to select Code provisions as observed during thebranch visits in year 2008 are presented in the charts below:

(a) Position of branches displayinginformation about availability of copiesof the Code.

(b) Position of branches making availablecopies of the Code to their customers.


3. Bank Group-wise status

Bank Group-wise position of adherence to select Code provisions as observed duringthe branch visits in year 2008 are presented in the charts below:

12

(c) Position of branches acknowledgingreceipt of complaints from customers.

(d) Position of branches paying compensa-tion as per their policy without waitingfor a demand from customers.

(a) Status of branches displayinginformation about availability ofcopies of the Code.

(b) Status of branches making availablecopies of the Code to their customers.

(c) Status of branches acknowledgingreceipt of complaints from customers.

(d) Position of branches paying compensa-tion as per their policy without waitingfor a demand from customers.


Annex III

Findings of Incognito Visits to Branches – Opening of “No Frills” Accounts

(i) Awareness of No-Frills Accounts

(a) Awareness about the relaxed KYC norms for opening ‘No-Frills’ account was verypoor. Officials in over 63 percent of branches visited were unaware of the instructionsof RBI on the simplified procedure for opening No-Frills accounts. Lack of awarenesswas pronounced at the branches of SBI & associates as well as PSBs. The staff atall the 5 branches of SBI and Associates, 14 of the 21 branches of PSBs and 3 ofthe 4 branches of foreign banks were unaware about ‘No-Frills’ accounts and relatedinformation. Private Sector banks were relatively more informed as 8 out of 14branches were aware about the facility of No-Frills accounts.

(b) Although some banks’ branches have displayed information on these accounts, asper regulatory requirement, none of the dealing staff members was aware of thesame. The staff was not even aware of the basic features like minimum balancerequirement.

(ii) Opening of No Frills Account

(a) At the outset, most of the branches did not come forward to open ‘No Frills’ accountsin the names of persons of small means, say a maid or a driver. When it wasmentioned that there are some savings accounts with limited facilities for peoplewith lower income, the staff expressed unwillingness to open such account, if thecustomer was not in a position to produce document such as PAN card, Voter’s ID,Postal ID, etc. as proof of identity and address. While none of the branches offoreign banks and those in SBI group visited were willing to open ‘No Frills’ accountswith relaxed KYC documents, the response from branches of PSBs (other than SBIgroup) and Private banks was mixed. While in the case of PSBs 12 out of 21 branchesshowed unwillingness to open these accounts, 5 of 9 new private sector banks, 3 of5 old private sector banks were unwilling to open such accounts.

(b) Branches of some of the banks showed preparedness to open a No Frills account inthe name of a driver having a valid Driving Licence as proof of identity. These branchesalso showed willingness to accept a declaration supported by documents from theperson with whom the prospective account holder resides, as proof of address.

(iii) Format of Account Opening Form (AOF)

(a) With the exception of two banks, no other bank has introduced simplified accountopening form for ‘No Frills’ account.

(b) A solitary bank provided in the account opening form, information about simplifiedKYC norms.

(c) In spite of the relaxations in KYC requirements as per regulatory guidelines, theaccount opening forms of 25 banks did not contain any information about therequirement of documents under simplified KYC norms. The account opening formof these banks indicated only the usual documents required such as Passport, PANCard, Voter ID, Postal ID, Electricity/Telephone Bill, Ration Card, etc. as proof insupport of identity and address, thereby excluding a large section of population notin possession of such documents from opening a ‘No Frills’ account.

13

Sr. No. Nature of complaints 2007-08 2008-09

01 Deposit accounts 55 111

02 Credit/Debit Cards 109 205

03 Pension 2 7

04 Tariff Schedule & Service Charges 23 18

05 Cheque Collection/Clearing Cycle 22 21

06 Foreign Exchange Services 4 4

07 ATM related services 2 5

08 Compensation Policy — —

09 Unsolicited telemarketing 5 —

10 Loans & Advances (including Collection of dues, etc.) 59 132

11 Grievance Redressal mechanism 17 21

12 Miscellaneous 38 47

Total 336 571

Annex IV

Profile of Complaints


14

Statement of Accountsfor the year

2008-09


LOONKER & CO. 8-Dhun Mahal, Garden RoadChartered Accountants Colaba, Mumbai 400 039

Tel : 2282 5580; 2285 6740

Mobile: 93246 14750.

Auditors’ Report

We have audited the Balance Sheet of Banking Codes and Standards Board of India as at 31st

March 2009 and the Income and Expenditure account for the year ended on that date annexed

thereto. These financial statements are the responsibility of the trustees of the Board. Our

responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted in India.

Those standards require that we plan and perform the audit to obtain reasonable assurance

about whether the financial statements are free of material misstatement. An audit includes

examining, on a test basis, evidence supporting the amounts and disclosures in the financial

statements. An audit also includes assessing the accounting principles used and significant

estimates made by management, as well as evaluating the overall financial statement

presentation. We believe that our audit provides a reasonable basis for our opinion.

We report that:

i) We have obtained all the information and explanations, which to the best of our knowledge

and belief were necessary for the purpose of the audit.

ii) In our opinion, proper books of account as required by the law have been kept by the

Trust so far as it appears from our examination of such books.

iii) The Balance Sheet and Income & Expenditure Account dealt with by this report are in

agreement with the books of account.

iv) In our opinion and to the best of our information and according to the explanations

given to us, the said accounts give a true and fair view in conformity with the accounting

principles generally accepted in India:-

- in the case of Balance Sheet of the state of affairs of the above named trust as at 31st

March 2009 and

- in the case of Income & Expenditure account of the surplus for the accounting year

ended on that date.

For M/s. Loonker & Co.Chartered Accountants

Place : Mumbai Sd/-Date: May 5, 2009 (S. C. Loonker)

Partner(Membership No:10135)

16


As per our report of even date

Sd/-

(K.J. Udeshi) M/s.Loonker & Co.

Chairman Chartered Accountants

Sd/- Sd/-

(K.V. Subba Rao) Partner

Chief Executive Officer Auditors


Place: Mumbai Place: Mumbai

Date: May 5, 2009 Date: May 5, 2009

BANKING CODES AND STANDARDS BOARD OF INDIA

Balance Sheet as on March 31, 2009

As onMarch 31,

2008

PROPERTY & ASSETS As onMarch 31,

2009

( As per Schedule VIII of Bombay Public Trusts Act, 1950) (Amount in Rupees)

As onMarch 31,

2009

As onMarch 31,

2008

FUNDS AND LIABILITES

Trust Funds or Corpus

35,723,000 Balance as per last Balance Sheet 35,723,000

Add: Contribution received duringthe year 41,344,000 77,067,000

Other earmarked funds

- Public Awareness Fund

3,299,000 Balance as per last Balance Sheet 3,299,000

Add: Tfd. From Income & Exp. A/c

- From Opening Balance 1,873

- From Current Year 4,984,796 8,285,669

– Loans (Secured or unsecured) —

Liabilities-

104,058 For advances from RBI 152,451

Income and Exp. Account

1,873 Balance as per last Balance Sheet 1,873

Less:Appropriation, if any (1,873) —

39,127,931 Total 85,505,120

— Immovable properties —

Investments —

29,873,356 Govt.securities (cost)-Annex-I 35,839,604

— Furniture and fixtures —

— Loans (Secured or unsecured) —

Advances -

To others-

12,640 - Trade Mark 12,640

152,689 - Tax Deducted at Source 217,560

1,500 - Deposit (MTNL) 1,500

2,772 - Premium on GOI Securities 8,053 239,753

Income Outstanding -

1,527,711 - Interest 3,151,055

Cash and Bank Balances-

7,556,568 - In current account or fixed deposit account-Annex II 46,273,268

695 - Stamps 1,440 46,274,708

39,127,931 Total 85,505,120

17


( As per Part III - Schedule VIII of Bombay Public Trusts Act, 1950) (Amount in Rupees)

Date and year Kind of investments Full description such as name of the Face Value Cost Rate of Remarksof preparation company, distinctive Nos. of shares interest

and certificates, type of shares, etc. borne byDate of redemption or repayment investments

1 2 3 4 5 6 7

At the (i) Shares —beginning of (ii) Bonds and Debentures —the year (as on (ii) Deposits —April 1, 2008) (iv) Others —

(v) Public Securities (a) 7.37% GOI Securities 2014 14,500,000 14,118,650 7.37%(b)8.07% GOI Securities 2017 1,480,000 1,484,292 8.07%(c) 7.49% GOI Securities 2017 12,000,000 11,470,414 7.49%(d) 7.99% GOI Securities 2017 2,800,000 2,800,000 7.99%

30,780,000 29,873,356

Increase (a) 7.59% GOI Securities 2016 2,500,000 2,466,248 7.59%during the year (b) 8.24% GOI Securities 2017 3,500,000 3,500,000 8.24%(2008-09) 6,000,000 5,966,248

Decrease —during the year(2008-09)

Total at the end of the year (as on March 31, 2009) 36,780,000 35,839,604


Schedule of Investments belonging to the Trust as on March 31. 2009

Annex-I

Annex-II

As on Bank Accounts As onMarch 31, 2008 March 31, 2009

In Savings Account

2,856 - ICICI Bank 1,030,638In Current Account

73,712 - Central Bank of India 123,031In Fixed Deposits

1,300,000 - HDFC Bank 4,200,000

6,000,000 - HSBC Bank —

180,000 - Kotak Mahindra Bank 5,300,000

- Axis Bank 5,000,000

- Citibank 3,775,000

- ICICI Bank 7,100,000

- IDBI Bank 7,500,000

- Karnataka Bank 3,598,453

- Karur Vysya Bank 2,921,146

- Yes Bank 5,725,000[All accounts in the name of Banking Codes and Standards Board of India]

7,556,568 46,273,268


Annexure to Balance Sheet as on March 31, 2009

(Amount in Rupees)

As per our report of even dateSd/-(K.J. Udeshi) M/s. Loonker & Co.Chairman Chartered Accountants

Sd/- Sd/-(K.V. Subba Rao) PartnerChief Executive Officer AuditorsBanking Codes and Standards Board of India

Place: Mumbai Place: MumbaiDate: May 5, 2009 Date: May 5, 2009

18



Sd/-



Sd/- Sd/-(K.V. Subba Rao) Partner






Income and Expenditure Account for the year ended March 31,2009

[As per Schedule IX of Bombay Public Trusts Act, 1950] (Amount in Rupees)

Yearended

March 31,2008

EXPENDITURE Yearended

March 31,2009

— To expenditure in respect of properties —

— To establishment expenses —

— To remuneration to trustees —

— Legal expenses —

— Audit fees —

— To contribution and fees —

To amount written off

308 - Preimum on Govt. Securities 929

— To Miscellaneous expenses —

— To Depreciation —

To Amounts transferred to Reserve

2,799,000 - Public Awareness Fund 4,984,796

— To Expenditure on objects of the Trust —

551 To surplus carried over to Balance Sheet —

2,799,859 Total 4,985,725

Yearended

March 31,2008

Yearended

March 31,2009

— By Rent —

By Interest

2,092,303 - On securities 2,759,527

704,836 - On bank account 2,224,528 4,984,055

— By Dividend —

— By Donations in cash or kind —

— By Grants —

2,720 By Income from other sources 1,670

— By Transfer from Reserve —

— By Deficit carried over to Balance Sheet —

2,799,859 Total 4,985,725

INCOME

19


Notes forming part of accounts for the year ended March 31, 2009

1. The financial statements are prepared on accrual basis.

2. Expenses Borne by Reserve Bank of India

The Income and Expenditure Account does not show any expenses since all the expenses

have been borne by the Reserve Bank of India. The Reserve Bank has agreed to extend

financial support to the Board by way of meeting its full expenses for the first five years of

operation and providing furnished Office accommodation & Office equipments, etc. free

of cost at the Reserve Bank of India Building, Bandra Kurla Complex, Mumbai-400 051.

3. Advance for Expenses from Reserve Bank of India

In addition to the unspent opening balance of Rs.1,04,058/- shown as advance from Reserve

Bank of India on the liability side in Balance Sheet, Reserve Bank of India had advanced

a sum of Rs.2,00,000/- to the Board by cheque on September 19,2008 for meeting minor

establishment expenses. The unspent closing balance of Rs. 1,52,451/- is shown as advance

from Reserve Bank of India on the liability side in Balance Sheet.

4. Corpus Fund

During the first five years of operation, the Board would build up its Corpus from

registration and membership fees so that when the RBI funding is phased out, the Board

would become self-financing. The member banks have also desired that the entire

contribution made by them in the form of registration fees and membership fees be credited

to the Corpus of the Banking Codes and Standards Board of India. Therefore, the

registration fees and the membership fees are credited to the Corpus Fund, during the

first five years of operation.

5. Public Awareness Fund

The Board has transferred Rs. 49,86,669/- to Public Awareness Fund to be spent for this

purpose within the next five years.

6. Previous Year’s figures

The corresponding figures for the previous year are re-grouped / re-classified, wherever

necessary.


Sd/-



Sd/- Sd/-

(K.V. Subba Rao) Partner





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