BANKING IN INDIA

Banking in India originated in the last decades of the 18th century. The first

banks were The General Bank of India, which started in 1786, and Bank of

Hindustan, which started in 1770; both are now defunct. The oldest bank in

existence in India is the State Bank of India, which originated in the Bank of

Calcutta in June 1806, which almost immediately became the Bank of Bengal.

This was one of the three presidency banks, the other two being the Bank of

Bombay and the Bank of Madras, all three of which were established under

charters from the British East India Company. For many years the

Presidency banks acted as quasi-central banks, as did their successors. The

three banks merged in 1921 to form the Imperial Bank of India, which, upon

India's independence, became the State Bank of India in 1955.

HISTORY

Merchants in Calcutta established the Union Bank in 1839, but it failed in 1848 as

a consequence of the economic crisis of 1848-49. The Allahabad Bank, established

in 1865 and still functioning today, is the oldest Joint Stock bank in India.(Joint

Stock Bank: A company that issues stock and requires shareholders to be held

liable for the company's debt) It was not the first though. That honor belongs to the

Bank of Upper India, which was established in 1863, and which survived until

1913, when it failed, with some of its assets and liabilities being transferred to

theAlliance Bank of Simla.

Foreign banks too started to app, particularly in Calcutta, in the 1860s.

The Comptoire d'Escompte de Paris opened a branch in Calcutta in 1860, and

another inBombay in 1862; branches in Madras and Pondicherry, then a French

colony, followed. HSBC established itself in Bengal in 1869. Calcutta was the

most active trading port in India, mainly due to the trade of the British Empire,

and so became a banking center.

The first entirely Indian joint stock bank was the Oudh Commercial Bank,

established in 1881 in Faizabad. It failed in 1958. The next was the Punjab

National Bank, established in Lahore in 1895, which has survived to the present

and is now one of the largest banks in India.

Around the turn of the 20th Century, the Indian economy was passing through a

relative period of stability. Around five decades had elapsed since the Indian

Mutiny, and the social, industrial and other infrastructure had improved. Indians

had established small banks, most of which served particular ethnic and religious

communities.

The presidency banks dominated banking in India but there were also some

exchange banks and a number of Indian joint stock banks. All these banks

operated in different segments of the economy. The exchange banks, mostly

owned by Europeans, concentrated on financing foreign trade. Indian joint stock

banks were generally under capitalized and lacked the experience and maturity to

compete with the presidency and exchange banks. This segmentation let Lord

Curzon to observe, "In respect of banking it seems we are behind the times. We

are like some old fashioned sailing ship, divided by solid wooden bulkheads into

separate and cumbersome compartments."

The period between 1906 and 1911, saw the establishment of banks inspired by

the Swadeshi movement. The Swadeshi movement inspired local businessmen and

political figures to found banks of and for the Indian community. A number of

banks established then have survived to the present such as Bank of

India,Corporation Bank, Indian Bank, Bank of Baroda, Canara Bank and Central

Bank of India.

The fervour of Swadeshi movement lead to establishing of many private banks

in Dakshina Kannada and Udupi district which were unified earlier and known by

the name South Canara ( South Kanara ) district. Four nationalised banks started

in this district and also a leading private sector bank. Hence undivided Dakshina

Kannada district is known as "Cradle of Indian Banking".

During the First World War (1914–1918) through the end of the Second World

War (1939–1945), and two years thereafter until the independence of India were

challenging for Indian banking. The years of the First World War were turbulent,

and it took its toll with banks simply collapsing despite the Indian

economy gaining indirect boost due to war-related economic activities. At least 94 banks

in India failed between 1913 and 1918 as indicated in the following table:

YearsNumber of banksthat failed

Authorised capital(Rs. Lakhs)

Paid-up Capital(Rs. Lakhs)

1913 12 274 35

1914 42 710 109

1915 11 56 5

1916 13 231 4

1917 9 76 25

1918 7 209 1

Post-Independence

The partition of India in 1947 adversely impacted the economies

of Punjab and West Bengal, paralyzing banking activities for months.

India's independencemarked the end of a regime of the Laissez-faire for the Indian

banking. The Government of India initiated measures to play an active role in the

economic life of the nation, and the Industrial Policy Resolution adopted by the

government in 1948 envisaged a mixed economy. This resulted into greater

involvement of the state in different segments of the economy including banking

and finance. The major steps to regulate banking included:

The Reserve Bank of India, India's central banking authority, was

established in April 1934, but was nationalized on January 1, 1949 under

the terms of the Reserve Bank of India (Transfer to Public Ownership) Act,

1948 (RBI, 2005b).

In 1949, the Banking Regulation Act was enacted which empowered the

Reserve Bank of India (RBI) "to regulate, control, and inspect the banks in

India".

The Banking Regulation Act also provided that no new bank or branch of

an existing bank could be opened without a license from the RBI, and no

two banks could have common directors.

Nationalisation

Despite the provisions, control and regulations of Reserve Bank of India, banks in

India except the State Bank of India or SBI, continued to be owned and operated

by private persons. By the 1960s, the Indian banking industry had become an

important tool to facilitate the development of the Indian economy. At the same

time, it had emerged as a large employer, and a debate had ensued about the

nationalization of the banking industry. Indira Gandhi, then Prime Minister of

India, expressed the intention of the Government of India in the annual conference

of the All India Congress Meeting in a paper entitled "Stray thoughts on Bank

Nationalisation." The meeting received the paper with enthusiasm.

Thereafter, her move was swift and sudden. The Government of India issued an

ordinance ('Banking Companies (Acquisition and Transfer of Undertakings)

Ordinance, 1969')) and nationalised the 14 largest commercial banks with effect

from the midnight of July 19, 1969. These banks contained 85 percent of bank

deposits in the country.Jayaprakash Narayan, a national leader of India, described

the step as a "masterstroke of political sagacity." Within two weeks of the issue of

the ordinance, the Parliament passed the Banking Companies (Acquisition and

Transfer of Undertaking) Bill, and it received the presidential approval on 9

August 1969.

A second dose of nationalization of 6 more commercial banks followed in 1980.

The stated reason for the nationalization was to give the government more control

of credit delivery. With the second dose of nationalization, the Government of

India controlled around 91% of the banking business of India. Later on, in the year

1993, the government merged New Bank of India with Punjab National Bank. It

was the only merger between nationalized banks and resulted in the reduction of

the number of nationalised banks from 20 to 19. After this, until the 1990s, the

nationalised banks grew at a pace of around 4%, closer to the average growth rate

of the Indian economy.

Liberalisation

In the early 1990s, the then Narasimha Rao government embarked on a policy

of liberalization, licensing a small number of private banks. These came to be

known as New Generation tech-savvy banks, and included Global Trust Bank (the

first of such new generation banks to be set up), which later amalgamated with

Oriental Bank of Commerce, UTI Bank (since renamed Axis Bank), ICICI

Bank and HDFC Bank. This move, along with the rapid growth in the economy of

India, revitalized the banking sector in India, which has seen rapid growth with

strong contribution from all the three sectors of banks, namely, government banks,

private banks and foreign banks.

The next stage for the Indian banking has been set up with the proposed relaxation

in the norms for Foreign Direct Investment, where all Foreign Investors in banks

may be given voting rights which could exceed the present cap of 10%,at present it

has gone up to 74% with some restrictions.

The new policy shook the Banking sector in India completely. Bankers, till this

time, were used to the 4-6-4 method (Borrow at 4%;Lend at 6%;Go home at 4) of

functioning. The new wave ushered in a modern outlook and tech-savvy methods

of working for traditional banks.All this led to the retail boom in India. People not

just demanded more from their banks but also received more.

Currently (2010), banking in India is generally fairly mature in terms of supply,

product range and reach-even though reach in rural India still remains a challenge

for the private sector and foreign banks. In terms of quality of assets and capital

adequacy, Indian banks are considered to have clean, strong and transparent

balance sheets relative to other banks in comparable economies in its region. The

Reserve Bank of India is an autonomous body, with minimal pressure from the

government. The stated policy of the Bank on the Indian Rupee is to manage

volatility but without any fixed exchange rate-and this has mostly been true.

With the growth in the Indian economy expected to be strong for quite some time-

especially in its services sector-the demand for banking services, especiallyretail

banking, mortgages and investment services are expected to be strong. One may

also expect M&As, takeovers, and asset sales.

In March 2006, the Reserve Bank of India allowed Warburg Pincus to increase its

stake in Kotak Mahindra Bank (a private sector bank) to 10%. This is the first time

an investor has been allowed to hold more than 5% in a private sector bank since

the RBI announced norms in 2005 that any stake exceeding 5% in the private

sector banks would need to be vetted by them.

In recent years critics have charged that the non-government owned banks are too

aggressive in their loan recovery efforts in connection with housing, vehicle and

personal loans. There are press reports that the banks' loan recovery efforts have

driven defaulting borrowers to suicide.

Adoption of banking technology

The IT revolution had a great impact in the Indian banking system. The use of

computers had led to introduction of online banking in India. The use of the

modern innovation and computerisation of the banking sector of India has

increased many fold after the economic liberalisation of 1991 as the country's

banking sector has been exposed to the world's market. The Indian banks were

finding it difficult to compete with the international banks in terms of the customer

service without the use of the information technology and computers.

The RBI in 1984 formed Committee on Mechanisation in the Banking Industry

(1984) whose chairman was Dr C Rangarajan, Deputy Governor, Reserve Bank of

India. The major recommendations of this committee was introducing

MICR Technology in all the banks in the metropolis in India.This provided use of

standardized cheque forms and encoders.

In 1988, the RBI set up Committee on Computerisation in Banks (1988) headed by

Dr. C.R. Rangarajan which emphasized that settlement operation must be

computerized in the clearing houses of RBI in Bhubaneshwar, Guwahati, Jaipur,

Patna and Thiruvananthapuram.It further stated that there should be National

Clearing of inter-city cheques at Kolkata,Mumbai,Delhi,Chennai and MICR

should be made Operational.It also focused on computerisation of branches and

increasing connectivity among branches through computers.It also suggested

modalities for implementing on-line banking.The committee submitted its reports

in 1989 and computerisation began form 1993 with the settlement between IBA

and bank employees' association.

In 1994, Committee on Technology Issues relating to Payments System, Cheque

Clearing and Securities Settlement in the Banking Industry (1994) was set up with

chairman Shri WS Saraf, Executive Director, Reserve Bank of India. It

emphasized on Electronic Funds Transfer (EFT) system, with the BANKNET

communications network as its carrier. It also said that MICR clearing should be

set up in all branches of all banks with more than 100 branches.

Committee for proposing Legislation On Electronic Funds Transfer and other

Electronic Payments (1995) emphasized on EFT system. Electronic banking refers

to DOING BANKING by using technologies like computers, internet and

networking,MICR,EFT so as to increase efficiency, quick service,productivity and

transparency in the transaction.

Apart from the above mentioned innovations the banks have been selling the third

party products like Mutual Funds, insurances to its clients.Total numbers of ATMs

installed in India by various banks as on end March 2005 is 17,642.The New

Private Sector Banks in India is having the largest numbers of ATMs which is fol

off site ATM is highest for the SBI and its subsidiaries and then it is followed by

New Private Banks, Nationalised banks and Foreign banks. While on site is

highest for the Nationalised banks of India.

BANK GROUPNUMBER OF

BRANCHES

ON SITE

ATM

OFF SITE

ATM

TOTAL

ATM

NATIONALISED

BANKS33627 3205 1567 4772

STATE BANK OF

INDIA13661 1548 3672 5220

OLD PRIVATE SECTOR

BANKS4511 800 441 1241

NEW PRIVATE

SECTOR BANKS1685 1883 3729 5612

FOREIGN BANKS 242 218 579 797

STRUCTURE OF INDIAN BANKING INDUSTRY

Banking Industry in India functions under the sunshade of Reserve Bank of India -

the regulatory,central bank. Banking Industry mainly consists of:

Commercial Banks

Co-operative Banks

The commercial banking structure in India consists of: Scheduled Commercial

Banks Unscheduled Bank. Scheduled commercial Banks constitute those banks

which have been included in the Second Schedule of Reserve Bank of India (RBI)

Act, 1934. RBI in turn includes only those banks in this schedule which satisfy

the criteria laid down vide section 42 (60) of the Act. Some co-operative banks are

scheduled commercial banks although not all co-operative banks are. Being a part

of the second schedule confers some benefits to the bank in terms of access to

accommodation by RBI during the times of liquidity constraints. At the same time,

however, this status also subjects the bank certain conditions and obligation

towards the reserve regulations of RBI. For the purpose of assessment of

performance of banks, the Reserve Bank of India categorise them as public sector

banks, old private sector banks, new private sector banks and foreign banks.

COMPANY PROFILE

Axis Bank was the first of the new private banks to have begun operations in

1994, after the Government of India allowed new private banks to be established.

The Bank was promoted jointly by the Administrator of the specified undertaking

of the Unit Trust of India (UTI - I), Life Insurance Corporation of India (LIC) and

General Insurance Corporation of India (GIC) and other four PSU insurance

companies, i.e. National Insurance Company Ltd., The New India Assurance

Company Ltd., The Oriental Insurance Company Ltd. and United India Insurance

Company Ltd.

The Bank as on 30th June, 2012 is capitalized to the extent of Rs. 414.29 crores

with the public holding (other than promoters and GDRs) at 54.24%.

The Bank's Registered Office is at Ahmedabad and its Central Office is located at

Mumbai. The Bank has a very wide network of more than 1600 branches

(including 169 Service Branches/CPCs as on 30th June, 2012). The Bank has a

network of over 10000 ATMs (as on 30th June, 2012) providing 24 hrs a day

banking convenience to its customers. This is one of the largest ATM networks in

the country.

The Bank has strengths in both retail and corporate banking and is committed to

adopting the best industry practices internationally in order to achieve excellence.

VISION 2015:

To be the preferred financial solutions provider excelling in customer delivery

through insight, empowered employees and smart use of technology

Core Values

Customer Centricity

Ethics

Transparency

Teamwork

Ownership

AWARDS

Awards & recognition received by the Bank during the Year 2011:

‘Best Risk Master’ award - (private sector category) -

'FIBAC 2011 Banking Awards'

‘Most Productive Private Sector Bank’ Award - 'FIBAC 2011

Banking Awards'

Ranked 3rd Strongest Bank in Asia Pacific region by Asian

Banker

The CLSA survey on personal banking trends validated again

that Axis is the preferred bank amongst retail consumers.

Best Bond house India - 2011 by Finance Asia

Awards & recognition received by the Bank during the Year

2010:

Euromoney – Best Debt House in India

Asiamoney – Best Domestic Debt House in India

Financeasia – Best Bond House in India

FE Best Banks Award – Best New Private Sector Bank, Rank

2

Forbes Fab 50 – The Best of Asia-Pacific’s Biggest Listed

Companies- second year in a row

The Asset Triple A Country Awards 2010:

Best Domestic Bank, India

Best Domestic Bond House, India.

Business Today Best Bank Awards - Overall Winner &

Consistent Performer -(Large Banks Category)

Business World Best Bank Award- Fastest Growing Large

Bank

Ranked No. 1 in "overall experience with bank staff" and

"overall branch facilities" by The Hindustan Times-MaRS

Survey Report dated, 29th March, 2010

BOARD OF DIRECTORS

NETWORK

The Bank's Registered Office is situated in Ahmedabad and its Central Office is

located at Mumbai. The Bank has an extensive network of more than 1600

branches (including 169 Service Branches/CPCs as on 31st March, 2012). The

Bank has a network of over 10000 ATMs (as on 31st March, 2012) Axis Bank

operates one of the world’s highest ATM sites at Thegu, Sikkim (at a height of

13,200 feet above sea level) and has the largest ATM network among private

banks in India.

PROMOTERS

Axis Bank Ltd. has been promoted by the largest and the best Financial Institution

of the country, UTI. The Bank was set up with a capital of Rs. 115 crore, with UTI

contributing Rs. 100 crore, LIC - Rs. 7.5 crore and GIC and its four subsidiaries

contributing Rs. 1.5 crore each.

SUUTI - Shareholding 23.47%

Erstwhile Unit Trust of India was set up as a body corporate under the UTI Act,

1963, with a view to encourage savings and investment. In December 2002, the

UTI Act, 1963 was repealed with the passage of Unit Trust of India (Transfer of

Undertaking and Repeal) Act, 2002 by the Parliament, paving the way for the

bifurcation of UTI into 2 entities, UTI-I and UTI-II with effect from 1st February

2003. In accordance with the Act, the Undertaking specified as UTI I has been

transferred and vested in the Administrator of the Specified Undertaking of the

Unit Trust of India (SUUTI), who manages assured return schemes along with

6.75% US-64 Bonds, 6.60% ARS Bonds with a Unit Capital of over Rs. 14167.59

crores.

The Government of India has appointed Shri K. N. Prithviraj as the Administrator

of the Specified undertaking of UTI, to look after and administer the schemes

under UTI - I, where Government has continuing obligations and commitments to

the investors, which it will uphold.

BUSINESS FOCUS

Axis Bank operates in four segments: treasury operation, retail banking,

corporate/wholesale banking, and other banking business.

Treasury Operations

The Bank’s treasury operation services include investments in sovereign and

corporate debt, equity and mutual funds, trading operations, derivative trading and

foreign exchange operations on the account, and for customers and central

funding.

Retail Banking

In the retail banking category, the bank offers services such as lending to

individuals/small businesses subject to the orientation, product and granularity

criterion, along with liability products, card services, Internet banking, automated

teller machines (ATM ) services, depository, financial advisory services, and

nonresident Indian (NRI) services.

Corporate/Wholesale Banking

The Bank offers to corporate and other organizations services including corporate

relationships not included under retail banking, corporate advisory services,

placements and syndication, management of public issues, project appraisals,

capital market related services and cash management services.

PRODUCTS

Savings Account

Easy Access Savings Account

Prime Savings Account

Corporate Salary Account

Defense Salary Account

Current Account

Business Prime

Business Advantage Current Account

Business Select Cur rent Account

Business Classic Cur rent Account

Business Global Cur rent Account

Business Priority

Business Privilege Current Account

Channel One Cur rent Account

Business Wealth

CLUB 50 Cur rent Account

Salary Account

Investment Product

Gold and Silver Mohur

Mutual Funds

Life Insurance

General Insurance

Gold And Silver Mohur

Certified Gold and Silver bars

Mutual Funds

Axis Bank offers options from 12mutual fund companies.

Life Insurance

Axis Bank has a corporate agency agreement with Max New York Life ,

one of the most reputed Life Insurance companies in India.

General Insurance

Axis Bank has a Corporate Agency partnership with Bajaj Allianz General

Insurance Company to distribute General Insurance products. The various General

Insurance products available for sale at Axis Bank branches are:

Health Insurance

Motor Insurance

Jewellery Insurance

Personal Accident Cover

Home Insurance

Travel Insurance

Critical Illness

Business Advantage

Loans

Home Loans

Car Loans

Personal Loans

Loans Against Property

Loans Against Share

Loans Against Securities

Cards

Titanium Smart Traveler Credit Cards

Platinum Advantage Credit Card

Visa Signature Credit Card

Visa Infinite Credit Card

Titanium Rewards Card

An upgrade for mass and prime Debit Card customers.

Prepaid Cards

MyMoney Card

Gift Cards

MyMoney Card

A prepaid card for parents to disburse pocket money and monthly expenditure to

kids

Gift Card

Agri Business Loans

Kisan Power

Power Gold

Arthia Power

Agro Power

Kisan power

Kisan Power aims at providing adequate and timely credit to farmers for various

needs. It gives farmers the flexibility to choose between cash ,credit and term

loans with friendly repayment terms. Loan tenure is fixed by allowing reasonable

period for marketing the agricultural produce after harvest of the crop, subject to

maximum of 1 year in case of cash or credit, and 7 years for term loans.

Power Gold

Power Gold gives easy loans up to 15, 00,000 to individuals engaged in

agriculture or allied activities, against the pledge of Gold ornaments.

Arthia Power

Arthia Power is a loan facility to local Arthias .

Foreign Exchange

Travel Card

Outward Remittances

Foreign Currency Demand Drafts

Foreign Currency Cash

Foreign Currency Travelers’ Cheques

India Travel Card

Travel Card

Axis Bank became the first bank in the world to cross USD 2 billion in loading on

such cards in December 2011.

Outward Remittances

Foreign Currency Demand Drafts Foreign Currency Cash Foreign Currency

Travelers Cheque India Travel Card

Inward Remittances

AXISREMIT Online

AXISREMIT Direct

Money Transfer Operators -(Money Gram, Easy Remit, Express Money)

Wire Transfers

Axis Remit Online

Our online money transfer service helps NRIs from 8 geographies (USA,UK,

Canada, Euro Zone , Australia,Singapore, Hong Kong and UAE) remit money to

India in a safe and convenient manner.

Salient Features

• Superior Exchange Rates

• Zero Transaction Charges

• Remittance to over 1400 Axis Bank branches and 77000 other bank branches

• Online tracking of your funds

• Reliable Customer Service for any queries

Axis Remit Direct

This is a quick and easy way to remit money back home through our partner

Exchange Houses in the Middle East.

Salient Features

• Available to everyone –Axis Bank customers and non-Axis Bank customers

• Instant credits to accounts held with Axis Bank in India

• Credit within 24 hours to over 72000 non-Axis Bank branches

• Real-time alerts via email / SMS

Money Transfer Operators

Allows the customer to send money from across 191 countries to beneficiaries in

India.

Wire Transfers

This facility to transfer funds to Axis Bank Nostroaccount in these currencies

Maybank, Malaysia and Bank AlBilad,Saudi Arabia are our main partners for this.

Online Trading

Axis Direct 3-IN-1 online Trading Account

Through Axis Direct 3-in-1 online trading account, Savings and Demat accounts

are offered by Axis Bank while the trading account is held with Axis Securities

and Sales Ltd.

MARKET SHARE

Name of bank Market Share

State Bank of India 18

PNB 6

Bank of Baroda 5

ICICI Bank 5

Bank of India 5

HDFC 4

IDBI Bank 4

Axis Bank 3

Central Bank of India 3

Other Banks 47

Source : ICRA Research

OPERATIONS

The business model of the Bank has separated production and distribution

functions within the Bank, with transaction processing and customer databases

(production technology) becoming increasingly centralised and product sales and

customer handling (the distribution technology) being the primary function at the

branches. The separation of functions has helped reduce transaction costs besides

ensuring smoothness in operations and increasing productivity. Operational

processes were constantly refined during the year from the perspective of

implementation of best practices, risk identification and containment. Operational

instructions were revisited on a continual basis and efforts were made to minimise

risks at branches.

Retail Banking Operations

Retail Banking Operations (RBO) provides seamless service to retail customers

while ensuring secure and compliant systems for risk containment and regulatory

compliance. The Bank continued to strengthen the oversight function through

centralised monitoring of the working of the branches in respect of KYC, AML

and other regulatory compliances, cash management, clearing operations and

internal housekeeping with the objective of ensuring compliance with risk

guidelines and delivering operational efficiency and customer service. To ensure

enhanced customer service and better handling of cash, the Bank has installed note

sorting machines at cash intensive branches. The Bank has implemented the Clean

Note Policy of RBI across all branches of the Bank. The Bank has been appointed

as the Primary Clearing House at certain places. A currency chest was

operationalised at Guwahati, making the first private sector bank, to have a

currency chest in the North East.

Wholesale Banking Operations

The Wholesale Banking Operations (WBO) is responsible for providing best in

class services to non-retail customers of the Bank through four verticals: Corporate

Banking Operations, Treasury Operations, Trade and Forex Operations, and

Centralised Collection and Payment Hub.

The Corporate Banking Operations (CBO) involves delivery, control, monitoring

and administration of credit facilities of large and mid-corporates, SME, corporate

agriculture, channel finance and micro finance transactions. CBO operates through

a network comprising of Corporate Banking Branches (CBBs)/Credit Management

Centres (CMCs) at 8 major cities, 52 MiniCredit Management Centres (MCMCs)

at Tier II cities, and Corporate Credit Operations Hub (CCOH) at Hyderabad.

Treasury Operations provides operational support to the Bank’s Treasury and

operates the centralised electronic payment hubs for RTGS and NEFT. Trade and

Forex Operations (TFO) supervise and control the entire cross border trade and

foreign exchange operations of the Bank. TFO provides trade finance and retail

forex services to corporates, full-fledged money changers (FFMCs) and

individuals through 197 B-category branches and state-of-the-art centralised

knowledge processing centres viz. ‘Trade Finance Centres’ located at Mumbai and

Hyderabad. TFO is also responsible for ensuring compliance of regulatory and

internal guidelines in respect of foreign exchange transactions of the Bank.The

Bank’s payment service is one of the key differentiating services for all customer

segments. In order to enhance speed, scalability and straight through processing by

technological advancement, the Bank has launched a plan of introducing an

Enterprise Payment Hub to handle all types of payment services through a

centralised and channel agnostic processing engine.

FINANCIAL HIGHLIGHTS

FINANCIAL HIGHLIGHTS 2007 - 2008 2008 - 2009 2009 - 2010 2010 - 2011 2011 - 2012

Total Deposits 87, 6 26 . 22 117, 3 74 .11 141,300.22 18 9, 2 37. 8 0 220,104.30

- Saving Bank Deposits 19,982.41 25 , 8 2 2.12 33,861.80 40,850.31 51,667.96

- Current Account Deposits 20,044.58 24,821.61 3 2 ,16 7.74 3 6 ,917.0 9 39,754.07

Total Advances 59 , 6 61.14 81,556.77 104,340.95 142, 4 07. 8 3 169,759.54

- Retail Advances 13,591.68 16,051.78 20,820.73 27,759.23 37,570.33

Total Investments 33 ,70 5 .10 46,330.35 55,974.82 71,991.62 93,192.09

Shareholders' Funds 8,768.50 10,213.59 16,044.45 18,998.83 22,808.54

Total Assets/Liabilities 10 9,57 7. 85 147,722.0 5 18 0, 6 47. 85 242,713.37 285,627.79

Net Interest Income 2,585.35 3,686.21 5,004.49 6,562.99 8,017.75

Other Income 1,795.49 4,380.84 2,896.88

6,583.09

3,945.78

8,950.27

4 , 6 32.13

11,19 5 .12

5,420.22

Operating Revenue 13,437.97

Operating Expenses 2,154.92 2,858.21 3,709.72 4,779.43 6,007.10

Operating Proft 2,225.92 1,154.89 3,724.88

1,909.52

5,240.55

2,726.02

6,415.69

3,027.20

7,430.87

Provisions and

Contingencies

3,188.66

Net Proft 1,071.03 1,815.36 2,514 .53 3,388.49 4,242.21

FINANCIAL RATIOS

FINANCIAL RATIOS 2007 - 2008 2008 - 2009 2009 - 2010 2010 - 2011 2011 - 2012

Earnings Per Share (Basic)

(in `)

32.15 50.61 65.78 82.95 102.94

Book Value (in `) 24 5 .14 284.50 395.99 462.77 551.99

Return on Equity 16.09 19.93 19.89 20.13 21.22%

Return on Assets 1.24 1.44 1.67 1.68 1.68%

Capital Adequacy Ratio

(CAR)

13.73 13.69 15.80 12.65 13.66%

Tier I Capital (CAR) 10 .17% 9.26% 11.18 % 9.41% 9.45%

Dividend Per Share (in `) 6.00 10.00 12.0 0 14.00 16.00

Dividend Payout Ratio 23.49% 2 3 .16 % 22.57% 19.78% 18.15%

FINANCIAL PERFORMANCE