shivalik mercantile co-operative bank limited · pdf filedhar branch: mandi samiti road, opp....

Our mission is to serve the lowest strata of society with the best products at the best prices and the best technology-driven services, while at the same time being a model employer for the national industry and emerging as a global role model in the small banking sector.

Shivalik Mercantile Co-operative Bank Limited18th Annual Report 2014-15

Shivalik Mercantile Co-operative Bank LimitedRegd. Office: 13/1207, Ansari Road, Saharanpur - 247001, Uttar Pradesh

Head Office: Hakikat Nagar, Saharanpur - 247001, Uttar Pradesh

Telefax: (0132) 2726125, 2726147, 9927135550

E-mail: [email protected]

Visit us at: www.shivalikbank.com

Like us at: www.facebook.com/shivalikbank

A [email protected]

At Shivalik Mercantile Co‑operative Bank Limited, we are at an inflection point.

In the journey of the past 16 years, we had successfully achieved nearly H400 crore in deposits; going ahead, we intended to replicate the same in just one year.

Making us one of the most exciting stories in India’s co‑operative banking space.

ContentsAbout us .........................................................................2

Directors of the Bank ..............................................5

Corporate background .........................................6

Highlights 2014-15 ...............................................10

Chairman’s review .................................................12

Our pillars of success ...........................................21

Statutory section....................................................22

Financial section .....................................................29

About usRBI license no. UBD. UP. 1468 P. dtd. 20 Sept. 1997.

IFS code IBKL0236SMB

Date of commencement 5th Sept. 1998 (as Primary Urban Coop. Bank)

Area of operation Uttar Pradesh and five districts of Madhya Pradesh

Registered under Multi-state Co-operative Societies Act, 2002Registration no. MSCS/CR/365/2010 dtd. 14 Sept. 2010

Mergers and Acquisitions 1. In 2010 – Bhoj Nagarik Sahakari Bank Maryadit, Dhar, MP2. In 2012 – Malwa Commercial Coop. Bank Ltd., Indore, MP

Head Office Hakikat Nagar, Saharanpur-247001 (UP)Telefax: 0132-2726125; 2726147; 9927135550info@shivalikbank.comwww.shivalikbank.comwww.facebook.com/shivalikbank

Registered office 13/1207, Ansari Road, Saharanpur-247001 (U.P.)Telefax: 0132-2612381; 2612382; 9927145550

Chairman Er. Yashvir Kumar Gupta

MD & CEO Er. Suveer Kumar Gupta

General Managers 1. Mr. Chandra Prakash Agrawal2. Mr. Gaurav Mittal3. Mr. Suneet Kumar Gupta

No. of branches 21 branches in 3 clusters1. Cluster 1: 07 branches in NCR 2. Cluster 2: 12 branches in District Saharanpur3. Cluster 3: 02 branches in MP

Business correspondent offices 12 - Affiliated with and working under various branches.

Banking hours 10 a.m. to 4.00 p.m.

No. of ATMs 25 (all branches and 4 BC offices)

No. of CDMs 25 (all branches and 4 BC offices)

CBS platform in use CBS solution, ‘Profile’ by FIS

ATM-cum-debit cards RuPay powered cards can be used anywhere in India at all RuPay enabled ATMs. Online shopping through Billdesk enabled. Card can be used at all merchant establishments equipped with Point of Sale (PoS)

terminals. Free accidental insurance on each active card is available.

Shivalik Mercantile Co-operative Bank Limited2

Products and Services

Demand deposits Savings Bank Account in various versions - Normal (No-frills)/Basic (reduced KYC)/Classic/Silver/Gold/Diamond/Platinum/Institutional/Scholarship/Fee accounts

Current Account in various versions (Normal/Classic/Silver/Gold/Diamond versions)

Term deposits Short deposits for less than 6 months. Monthly/quarterly income certificates Reinvestment certificate Recurring deposit Recurring flexi deposit Daily deposit account

Loans & Advances Loans to individuals for personal use (housing loan, personal loan, gold loan, vehicle loan, loan against NSC/KVP/LIC/Bank’s own term deposits, education loan, loan against lease rental, loan for solar panels, etc.)

Loans to individuals for business use (traders/ businessmen/ self-employed persons/ professionals) Loans to non-individuals for business use (term loan for plant, machinery and equipment/ business

assets/ business premises, Working capital finance by way of revolving credit limits & term loans, Loan for commercial vehicles, loan against warehouse receipts etc.)

Long term and short term loans to farmers Loans to self-help groups Bank guarantees

Ancillary services Lockers Inland remittances (NEFT/RTGS/DD Issue anywhere in India/Pay Orders) Foreign exchange remittances (inward/outward) Foreign currency sale and purchase Insurance of property & vehicles (general insurance) Health insurance for individuals and family Life insurance (coming soon) PM’s Jeevan Jyoti Bima Yojna PM’s Suraksha Bima Yojna

Other services Electronic clearing services SMS banking: Several services can be invoked through SMS Net banking: Non-financial transactions are available through net banking PoS machines for our banks retailer customers Home banking Phone banking Free SMS alerts in operational accounts Tablet banking Micro ATMs (coming soon) Bulk note acceptors Passbook printer kiosks (coming soon) Camera, copiers and scanners at each branch for the convenience of customers Stamp papers readily available at branches for the convenience of borrower customers Currency counting machines at each branch

Annual Report 2014-15 3

Our Branch, BC and ATM Network (All branches are equipped with ATMs/CDMs)Cluster 1: NCR Region

Noida 27: Bhoja Mkt., Nr. Vinayak Hospital, Sector 27, Noida-201301 Telefax: (0120) 2555333/5334, 09540407222

Noida 135: WA 68, Sector 135, Noida Mobile: 99901 06135

Ghaziabad: G.T. Road, Nr. Bhatia Mod, Ghaziabad-201001 Telefax: (0120) 2860003, 8750037222

Indirapuram Branch: Raison Shopping Complex, Ahinsa Khand-II, Indirapuram Ghaziabad

Tele: (0120) 2651717, 95408 12228

Meerut Branch: C-2/6, Nai Sadak, Shastri Nagar, Meerut-250001 Telefax: (0121) 2604364, 9690563000

Khatauli Branch: Ward No. 8, Ganeshpuri, G.T. Road, Khatauli-251201, Dist.

Muzaffarnagar

Mobile: 95689 25000

Muzaffarnagar Branch: South Bhopa Road, Nai Mandi, Muzaffarnagar-251001 Mobile: 98374 00037

BC Offices: Barola, Nithari & Sadarpur (affiliated to Noida 27 Branch), Mawana,

Hastinapur, Maliyana (affliated to Meerut Branch)

Cluster 2: District Saharanpur

Head Office & Branch: Hakikat Nagar, Saharanpur-247001 Telefax: (0132) 2726125, 2726147, 9927135550

Ansari Road Branch: 13/1207, Ansari Road, Saharanpur-247001 Telefax: (0132) 2612381, 2612382, 9927145550

Ambehta Branch: Main Road, Ambehta, Saharanpur-247340 Telefax: (01331) 225311, 9927165550

Chilkana Road Branch: Chilkana Road, Saharanpur-247001 Telefax: (0132) 2650021, 9690990033

Gangoh Branch: Rambagh Road, Gangoh-247341 Telefax: (01331) 234437, 234438, 9927116660

Sarsawa Branch: Main Market, Sarsawa Telefax: (01331) 246125, 9690004994

Deoband: Manglore Chowki, G.T. Road, Deoband-247554 Telefax: (01336) 222808, 9568880001

Nagal Branch: G.T. Road, Nagal Telefax: (01336) 231112, 9690004794

Nanauta Branch: Deoband Road, Nanauta Telefax: (01336) 253125, 9927986125

Rampur Branch: Moh. Mahajanan, Rampur Maniharan Telefax: (01336) 252125, 9927007125

Sharda Nagar: Near Flyover, Khalasi Line, Saharanpur-247001 Mobile: 84770 06125

Madhav Nagar: Nr. Telephone Exchange, Madhav Nagar, Saharanpur-247001 Mobile: 9837060380

BC Offices: Nakur (affiliated to Ambehta Branch), Chhutmalpur (affiliated to

Hakikat Nagar Branch), and Chilkana (affiliated to Chilkana Road Branch)

Cluster 3: MP Region

Dhar Branch: Mandi Samiti Road, Opp. Dhareshwar Temple, Dhar (MP) PIN 454001

Telefax: (07292) 222413, 9644165550

Indore Branch: Bhagwati Palace, Pooja Dairy Lane, 100 Jaora Compound, Indore-452001 (MP)

Telefax: (0731) 2704268, 7354115550

BC Office: Patnipura, Indore (affiliated to Indore Branch)


Directors of the Bank S.

No.Name Designation Address

Office Residence

1. Sh. Yashvir Kumar

Gupta

Chairman Devendra Service Station, Ambehta,

Distt. Saharanpur

Tel.: (01331) 225204, 225206

13/1207, Ansari Road, Saharanpur

Tel.: (0132) 2644586

Mob.: 9837050500

2. Sh. Shiv Puran

Gulati

Vice-

Chairman

City Railway Booking Agency

Railway Road, Saharanpur

Tel.: (0132) 2724346 2643862

‘Ashirwad’ Gill Colony, Saharanpur

Tel.: (0132) 2727228, 2722638

Mob.: 9719217802

3. Sh. D. K. Mittal Director B-71, Sector 44, Noida

Distt. G.B. Nagar 201301 (U.P.)

Tel.: (0120) 4222439

B-71, Sector 44, Noida

Distt. G.B. Nagar 201301 (U.P.)

Tel.: (0120) 4222439

4. Sh. Sudhakar

Agarwal

Director Indian Herbs Research & Supply Co. Ltd.

Sharda Nagar, Saharanpur

Tel.: (0132) 2727920

B-85 Avas Vikas Colony

Delhi Road, Saharanpur

Tel.: (0132) 2760931, 9837010385

5. Sh. Sanjay Gupta

Chartered

Accountant

Director 15 Kishore Bagh, Delhi Road, Saharanpur

Tel.: (0132) 2762856, 2763530

15, Kishore bagh, Delhi Road, Saharanpur

Tel.: (0132)2762856, 2763530

Mob.: 9837029705

6. Dr. Sanjeev Mittal Director Janakpuri Chowk, Dehradun Road

Saharanpur

Tel.: (0132) 2661399

Janakpuri Chowk, Dehradun Road

Saharanpur

Mob.: 9837058835

7. Sh. Sarvesh

Singhal

Advocate

Director Opp. H.D.F.C. Bank, 1st Floor

Court Road, Saharanpur

5 Phase-II Pant Vihar, Saharanpur

Tel.: (0132) 2765464

Mob.: 9837260747

8. Sh. Pradeep

Kumar Garg

Director Daas Service Station

Deoband, Distt. Saharanpur

Tel.: (01336) 222253, 222248

Moh. Chahparas, Deoband, Distt. Saharanpur

Tel.: (01336) 222348

Mob.: 9837365258

9. Dr. Kamal Kant Director Moh. Baburai

Gangoh, Distt. Saharanpur

Tel.: (01331) 232225

Moh. Baburai, Gangoh

Distt. Saharanpur

Tel.: (01331) 232225, 9412557048

10. Sh. Anvesh Garg Director Om Rice Mill, Main Road

Ambehta, Distt. Saharanpur

Tel.: (01331) 225221

Moh. Bazar Kala

Gangoh, Distt. Saharanpur

Tel.: (01331) 232055, 9412557239

11. Sh. Vijay Kumar

Dhingra

Director C/o Jai Bharat Auto Engineers

G.T. Road, Near Flyover, Ghaziabad

Tel.: (0120) 4165463, 9311585595

Parshvnath Majestic Floors T-II

203-A Indirapuram, Ghaziabad

Mob.: 9310461900

12. Sh. Satyasheel

Rao Pawar

Director Satya Villa, Ratlam Road,

Naugaon, Dhar (MP)

Tel.: (07292) 233370

Satya Villa, Ratlam Road,

Naugaon, Dhar (MP)

Tel.: (07292) 233370


Shivalik Bank is the largest urban co‑operative bank in Uttar Pradesh.

Rated among the best co‑operative banks in Uttar Pradesh.

Associated with 6,000 self‑help groups, among the highest among co‑operative banks in India.

Reported approximately 55% compounded profit growth in the 17 years leading to 2014‑15.

Corporate backgroundShivalik Mercantile Co-operative Bank was registered as a co-operative

society in 1997 as per the tenets of the Uttar Pradesh Co-operative

Societies Act, 1965. The Bank was granted the license to conduct banking

business as a primary urban co-operative bank in the district of Saharanpur

by the Reserve Bank of India in September, 1997. The Bank commenced

operations in September, 1998. The Bank was converted to a multi-state

urban co-operative bank in October, 2010 following the merger of the

erstwhile Bhoj Nagrik Sahakari Bank Maryadit at Dhar, Madhya Pradesh.

In 2010, The Bank became the first Multi-State Co-operative Bank of Uttar

Pradesh upon de-registering from Uttar Pradesh and registering itself

under Multi-state Co-operative Societies Act, 2002.

The Bank subsequently merged erstwhile Malwa Commercial Co-operative

Bank Limited at Indore in 2012 and thus came up with a second branch

in Madhya Pradesh. The present area of operation of the Bank is complete

state of Uttar Pradesh and five districts of Madhya Pradesh.

FocusShivalik Mercantile Co-operative

Bank offers loan products (personal

use, professional use, business

use, micro-finance), deposit

products (like savings account,

current account, fixed deposit

among others) and services like

remittances, lockers, ATM cards,

insurance, forex and modern

payment systems, among others.

Presence Shivalik Mercantile Co-operative

Bank is headquartered in

Saharanpur (Uttar Pradesh) and

operates through 21 branches

across two states. During the

financial year under review, the

Bank opened five branches in Uttar

Pradesh – (two in Saharanpur -

Sharda Nagar and Madhav Nagar),

two branches in Muzaffarnagar

(Muzaffarnagar city and Khatauli)

and one in Indirapuram

(Ghaziabad), thus widening its

network from 16 to 21 branches.


Differentiators• The first and largest multi-state

urban co-operative bank of Uttar

Pradesh

• An urban co-operative bank with

the best technology in North India

• Among the top 20 co-operative

banks with regards to technology

• The only UCB with more than 5%

lending towards micro-finance

through women SHGs

• Running a highly successful

micro-finance programme in

western Uttar Pradesh and parts of

Madhya Pradesh

Products and offerings The Bank offers state-of-the art

banking solutions to customers

in line with contemporary

technologies and facilities. The

Bank offers customers various

deposit schemes (savings/current

accounts, fixed and recurring

deposits). The Bank meets the

credit requirements of clients by

offering demand loans, term loans,

overdrafts and financial guarantees

against tangible and intangible

securities. The Bank also offers

additional financial services like

insurance, remittances through

NEFT and RTGS as well as ATM/

CDM facilities.

The Bank has partnered Janhit

Foundation to provide micro-

financial services to self-help

groups of women.

Values Since inception, the Bank abides

by a set of values.

Ethical banking• No hidden/pre-payment charges

• Transparent interest rates and

charges

• Strict vigilance to ensure

avoidance of malpractice

• Robust grievance redressal

system

Professionalism• Streamlined systems and

procedures

• Good infrastructure and business

environment

• Good corporate governance

• Adherence to all statutory and

regulatory norms

Transparency• Full-fledged and routinely

updated website displaying

financial results, rates, charges and

product features, among others

• Multi-tier decision-making

process for sanctioning loans

Green banking• Going paperless in the near future

• Invested in solar energy to run

ATMs and CDMs

Vision In the technology-driven future of

banking and economy, we see ourselves

as the natural and obvious choice of our

constituents by offering the best technology

and the best personalised care.

Mission To serve the lowest strata of society

with the best products at the best prices

and the best technology-driven customer

service, at the same time being a model

employer for the national industry and

emerging as a global role model in

the small banking sector.


Our differentiated business model has translated into attractive growth

19 98

l Shivalik Bank’s

first branch starts

functioning in

Saharanpur 20 10

l Becomes a Tier-II bank

(deposit base of more than

H100 crore), covering the

entire Uttar Pradesh

l Becomes the first and

only multi-state co-

operative bank of Uttar

Pradesh

l Opens a branch in Dhar

(Madhya Pradesh) by

taking over the erstwhile

Bhoj Nagarik Sahkari Bank

Maryadit, Dhar, Madhya

Pradesh

l Achieves full CBS status

19 99

l Achieves full branch

computerisation, first

in Saharanpur district

Loan products

Deposit products

Our offerings

Personal use

Savings account

Daily deposits

Microfinance

Fixed deposit

Business use

Current account

Professional use

Flexi RD


20 12

l Opens a branch in

Indore by taking over

the erstwhile Malwa

Commercial Co-operative

Bank Limited, Indore,

Madhya Pradesh

20 13

l Starts issuing RuPay-powered

ATM cards

l Starts opening business

correspondent offices in remote

Uttar Pradesh and Madhya Pradesh

locations

l Installs ATMs at all branches

l Changes CBS platform to world-

class Profile software, developed by

FIS, a Fortune 500 company and a

world leader in banking technology

20 14

l Completes installation of

CDMs and ATMs across all

branches and select BC offices

l Becomes the first

co-operative bank in northern

India to issue debit cards for

online/PoS shopping

l Starts associating

with various merchant

establishments using in-house

PoS devices for shopping

l Launches SMS-based enquiry

applications

20 15

l Launches

net banking

Our services

Pan card service

Lockers

Insurance

Remittances

ATM cards

Others

l DD/Pay order l NEFT and RTGS l ECS and NACH

l ATMs and CDMs l PoS l Internet and e‑commerce

l SMS‑based mobile application

l General insurance l Health insurance l Life insurance (coming soon) l PMJJB Yojana l PMSB Yojana


The experts said that a co‑operative bank would do worse in a weak economy.We did better, much better.

The critics said that a small bank would struggle for profitability in a challenging 2014‑15.Shivalik Bank strengthened profit after tax to H4.95 crore in 2014‑15, continuing its journey of profit growth.

The doubters said that a small bank could never be adequately liquid.Shivalik Bank achieved a capital adequacy ratio of 13.75% in 2014‑15, higher than the 9% stipulated by the RBI.

The experts said that a small bank would be deluged with non‑performing assets in a weakening economy.Shivalik Bank moderated net non‑performing assets by 95 bps to 0.14% in 2014‑15, well below the country’s banking average.

2010

-11

2011

-12

2012

-13

2013

-14

2014

-15

1,33

0.35

1,88

5.63

3,05

8.74

5,19

4.43

5,71

3.72

Net worth (H in lac)

2010

-11

2011

-12

2012

-13

2013

-14

2014

-15

18,0

96.6

6

24,5

78.1

0

31,8

46.1

8

39,8

85.7

4

77,5

58.7

3

Deposits (H in lac)

2010

-11

2011

-12

2012

-13

2013

-14

2014

-15

9,37

8.09

14,5

18.7

4

22,0

08.0

5

28,3

96.9

3

55,7

09.0

5

Advances (H in lac)20

10-1

1

2011

-12

2012

-13

2013

-14

2014

-15

108.

31

201.

85

217.

12

522.

01

494.

85

Profit after tax (H in lac)


The naysayers said that in a high interest economy, net interest margin would trend lower.Shivalik Bank strengthened its net interest margin to 4.22% in 2014‑15.

The doubters said a small bank would never be able to collect receivables on time in a weak economy.Shivalik Bank strengthened Gross NPA by 102 bps to 0.48% in 2014‑15.

Shivalik Bank is more than an intermediary addressing the realities of the day...It is an institution engaged in delighting customers and reversing the inequity of centuries.

Shivalik Bank is more than a bank with a focus on capital efficiency...It is an organisation with a focus on customer and societal productivity.

2010

-11

2011

-12

2012

-13

2013

-14

2014

-15

13.3

5

13.2

4

14.2

8

16.1

5

13.7

5

Capital adequacy ratio (%)

2010

-11

2011

-12

2012

-13

2013

-14

2014

-15

1.94

0.24

0.23

1.50

0.14

Net non‑performing assets (%)

2010

-11

2011

-12

2012

-13

2013

-14

2014

-15

2.87

2.81

3.20

4.28

4.22

Net interest margin (%) 20

10-1

1

2011

-12

2012

-13

2013

-14

2014

-15

6 7 15 16 21

Branches


I take pride in stating that Shivalik Bank

has raised the bar for co-operative

banks across India by creating a

network of 21 branches and mobilising

H775.58 crore in deposits across only

17 years.

If there is one word that faithfully

describes the

performance

of Shivalik Bank

during the 2014-15

fiscal, it would be

‘outperformance’.

Shivalik Bank

outperformed

the broad Indian

economy’s growth of

7.3% with a 94.45%

growth in deposits

during the year under

review.

The Bank’s visionAt the end of FY2013-

14, we outlined a

target to create (and maintain for a

year) a deposit base of H750 crore –

something that was imperative to our

pursuit of a Scheduled Bank status.

Since the Bank had managed to

accumulate a deposit base of H398.55

crore in 2013-14, achieving an 88%

increase in just 12 months appeared

challenging.

At Shivalik Bank, we addressed this

challenge head-on through a number

of initiatives.

One, we improved our interest rates,

resulting in enhanced depositor

retention, and increase in new deposit

acquisitions and a favourable word-of-

mouth that increased the number of

retail account holders by approximately

150%.

Two, in addition to basic savings

bank accounts, we offered cash

deposit machines and ATM-cum-

debit cards, which could be used for

shopping throughout all merchant

establishments.

Three, we enhanced customer

convenience by selecting to open

H398.55 crore end of fiscal 2013-14

H775.58 crore end of fiscal 2014-15

Retail banking proportion (2014-15)

Fixed deposits

Current deposits

Savings deposits

82.14%

14.96%

2.90%


five new branches at Saharanpur,

Muzaffarnagar, Khatauli and

Ghaziabad. We also opened business

correspondent offices in rural areas

supported by our branches to address

customers outside the ambit of the

country’s organised banking network.

Four, we engaged with various

associations and vyapaar mandals,

offering them attractive interest rates.

We also reached out to automobile

dealers with financing options they

could offer their customers following

purchase.

The result is that the Bank grew its

deposit base by 94.45% – from H398.55

crore at the end of fiscal 2013-14 to

H775 crore at the close of 2014-15.

The implications of gaining scheduled statusAt Shivalik Bank, a Scheduled

Bank status will alter our identity

momentously.

It will facilitate access to sizeable CASA

(current account and savings account)

funds that help widen our footprint

and sustain our financial growth.

It will provide us the opportunity to

forge ties with government institutions

and make institutional business

accessible.

It will enhance access to various

agencies that provide refinance to

scheduled banks. The Bank also intends

to convert to a commercial bank.

Implications of conversion to a Commercial BankThe RBI recently released its Report

of the High Powered Committee on

Urban Co-operative Banks (UCBs).

Shivalik Bank looks to attain Scheduled

Commercial Bank status and the

recommendations will have a far-

reaching effect.

Shivalik Bank will be able to extend

into banking functions (like offering

credit cards), which was not previously

possible as a co-operative bank. As a

scheduled commercial bank, it will be

possible for the Bank’s shares to be

listed and traded on stock exchanges,

resulting in better capital mobilisation

opportunities.

As a commercial bank, Shivalik

Bank can expect greater freedom in

operations, which can translate into a

superior brand, stronger governance

and robust business development. In

line with growing professionalism and

compliance, there would be stronger

customer trust.

Performance reviewI am pleased to state that Shivalik Bank

has adequately prepared itself for a

timely graduation in scale and scope.

Total business grew by 93.31% to

H1,545.02 crore (H775.59 crore in

deposits, H557.09 crore in advances

and H212.34 crore in investments) in

2014-15 compared to H799.26 crore in

2013-14.

Owned funds increased from H0.18

crore in 1999 to H7.08 crore in 2008 to

H57.13 crore in 2014-15.

Net profit stood at H4.95 crore in

2014-15. It remained low due to excess

provision made towards bad and

doubtful debts as a prudent practice.

Net NPA declined by 95 bps to 0.14% in

2014-15.

Strengthening the businessShivalik Bank did not just report better

numbers during the year under review;

it strengthened its business model as

well.

The Bank reached out to small

depositors and borrowers previously

excluded from the organised

banking system due to inadequate

documentation.

The Bank focused on cross-selling,

widened its bouquet of offerings

As a commercial bank, Shivalik Bank can expect greater freedom in operations, which can translate into a superior brand, stronger governance and robust business development.

Lending portfolio, 2014-15 (without loans against Bank’s own deposit)

Large lending (>H30 lacs)

Small lending (upto H30 lacs)

57.56%

42.44%


and marketed the concept of ‘family

banking’, by virtue of which it opened

accounts for a customer’s entire

family. The coming together of these

measures allowed us to augment our

customer base and promote the much-

neglected cause of financial inclusion.

The Bank shrank customer turnaround

time by launching net banking, SMS

banking, ATMs and CDMs in branches,

allowing customers to avail banking

services beyond normal working hours.

The Bank also invested in best-in-class

CBS software to enhance operational

efficiency.

OptimismAbout half of India’s 1.2 billion-strong

population is eligible to open bank

accounts but is still unbanked. (Source:

KPMG). India is home to the largest

number of unbanked families (more

than 145 million). There is only one

bank branch per 14,000 people,

suggesting a vast untapped potential

(Source: RBI). The total number of

villages in the country is estimated at

more than 6,00,000, but the number of

scheduled commercial banks and that

of regional rural banks stands at only

33,495, underlining the skew that has

lasted in the market for far too long.

The Bank aims to plug these market

gaps and capitalise on emerging

opportunities.

PrioritiesThe Indian economy is likely to report

a growth of 8.1% during the 2015-16

fiscal following a keen emphasis on

infrastructure investments, increased

consumer spending, lower inflation

and a gradual improvement in market

sentiment (Source: Moneycontrol).

Going ahead, Shivalik Bank plans to

generate a 20% growth in 2015-16.

The Bank intends to reduce the cost of

deposits by increasing the proportion

of CASA deposits, increase non-interest

income by cross-selling products,

reduce NPAs, moderate expenditure

and focus on high-yielding retail loans.

Furthermore, the Bank will focus on

creating a deposit base of H900 crore

by 31st March 2016 in order to be

deemed a Scheduled Bank by the RBI.

At Shivalik Bank, emerging as a

Scheduled Commercial Bank in due

course would be a decisive step

towards the Bank’s vision of emerging

as a respectable financial institution

with a sizeable corpus of H5,000 crore in

deposits and advances by 2020.

Regards,

Yashvir Kumar Gupta

Chairman

Extensive regulatory compliancel The Bank strictly follows RBI

guidelines across operations.

l The Bank maintains a capital-to-risk

ratio at more than 12% (mandated 9%).

l The Bank maintained statutory

liquidity ratio at mandated level

through investments in government

securities.

l The Bank maintained the required

priority sector lending ratio at 40%

of its total financing; priority sector

advance ratio was 89.06%.

Shivalik Bank is more than a co‑operative bank providing the usual range of banking services...It is a bank providing micro‑finance as well.


Growing relentlessly.

H1,545.02 crore in business

during FY2014‑15 as compared to H799.26 crore in

FY2013‑14.

Broadening horizons.

2 states.

21 branches.

12 business correspondent

centres.

Marching ahead.

To attain a Scheduled Bank

status in 2016 and subsequent

conversion to Commercial Bank.

Transcending boundaries.

H5,000 crore+ in total business

by 2020.


Focus areas l Increase the CASA ratio from 17.86% in 2014‑15 to 25% in 2015‑16l Emphasise on ‘family banking’ by opening accounts of the customer’s family membersl Offer retail lending services by giving out loans to small customersl Add new customers and retain existing ones through a superior service propositionl Maintain interest rates at par with other banksl Cater to the unbanked population by foraying into areas where it is currently not present


At Shivalik Bank, we are raising the bar through superior service

At Shivalik Bank, we strengthened our service, inspired customer trust,

widened our presence, reduced our turnaround time, deepened our

offerings and graduated to a digitised platform.

Even as Shivalik Bank had targeted at the end of FY13-14 to become a

Scheduled Bank, for which it was required to create a deposit base of H750

crore (to be subsequently maintained for a year before it could apply for

the necessary permission), the challenges were considerable. The Bank

leveraged its brand that helped enhance retail and institutional customers in

and outside Saharanpur. The result is that the Bank crossed its target before

schedule and finished the year under review with deposits of H775 crore.

The Bank expanded its deposit base without compromising its Balance

Sheet. The result was that non-performing assets declined and non-interest

income grew significantly even as the volume of business grew.

Besides, the Bank strengthened compliance with stringent norms laid

down by the RBI; it enriched its Board of Directors with eminent individuals

(industrialists, agriculturists, chartered accountants and senior retired bank

professionals, among others).

The Bank intends to apply for a Scheduled Bank status, wishes to be

converted to a Commercial Bank and mobilise H5,000 crore business by

2020.

The graduation of Shivalik Bank to a Scheduled Commercial Bank is

expected to widen opportunities in funds sourcing, profitable deployment

and overall visibility.

Prompt service Shivalik Bank enhanced

customer satisfaction through

an SMS-based service where the

customer can send a text message to

a mobile number that simply reads

‘unhappy’. This triggers an alert,

helping the Bank resolve the

grievance within 48 hours.


At Shivalik Bank, we catalyse the economy grassroots up


At Shivalik Bank, we believe we are in business to transform

destinies and catalyse prosperity.

Over the years, we have lived this philosophy by not only extending

first-rate service to our usual banking customers but by extending

services across the unbanked of the country.

The latter extension has been particularly challenging; we needed

to extend loans to individuals drawn from the weakest sections of

the society (below the poverty line, especially those belonging to

scheduled castes, tribes and other backward classes) through self-

help groups.

The result is that Shivalik Bank has not only extended loans to

these individuals, it has helped engage them within the country’s

mainstream financial system for the first time.

The Bank entered an agreement with Janhit Foundation for

consultancy services in 2010. The Janhit Foundation specialises in the

formation of self-help groups, opening savings accounts and onward

disbursal. After a self-help group has run for four months, it becomes

eligible for financial assistance, for inter-loaning among members of

the group.

The Janhit Foundation provides vocational training to the hitherto

unbanked in responsible loan use – how to operate their bank

account, how to keep transaction records, how to conduct periodical

meetings and how to make the most of their monetary assets.

Shivalik Bank has linked 6,000 self-help groups, touching the lives of

more than 90,000 individuals and disbursing more than H40 crore.

These self-help group members are engaged in dairy farming,

garment making, retail as well as village and cottage industries. These

programmes have helped increase family incomes, enhance literacy,

inculcate responsible banking habits and increase confidence. Best of

all, this form of funding, considered risky, attracted an NPA rate of less

than 1%, which was well below the country’s average.

The Bank plans to introduce fully-equipped BC rural centres and

disburse more than H50 crore to self-help groups by end-FY16.

PartnershipThe Janhit Foundation

provides vocational training to the

hitherto unbanked in responsible

loan use – how to operate their bank

account, how to keep transaction

records, how to conduct periodical

meetings and how to make the

most of their monetary

assets.


Percentage of the world’s poor who

are women

70“Microcredit plays a critical role in empowering women, helps deliver new‑found respect, independence, and participation for women in their communities and in their households.” - Juan Somavia, Director-General, ILO

‘Teejanbai. From village Bandukheri, block Nakur, district Saharanpur. Needed a H50,000 loan. No one was willing to provide her one.’There are thousands of Teejanbais

in India.

Women who possess a simple

understanding of village realities

and how to profit from them.

For instance, how to address a

village shortage of milk supply.

Which cows to buy. What

quantum of milk supply can plug

demand. Where to market that

milk. And at what price.

These Teejanbais have

market access. They possess

the knowledge. They enjoy

entrepreneurial drive.

All they need is someone who

can provide them with a loan.

Someone like Shivalik Mercantile

Co-operative Bank Limited.

Several studies suggest that when women gain control over spending, less family money is devoted to instant gratification and more for education and starting small businesses.

At commercial banks where middle class men are the primary borrowers, repayment rates are typically less than 70%. Women borrowers at the Grameen Bank have repayment rates that have been 97% year‑after‑year.

“I lend money to poor women! I give $30 loans. And when she holds this money, she shakes, she trembles, she cannot stand still. She cannot believe anybody could give such huge money in her hand. She never, not only held this money, she never saw such an amount of money in her life. And tears will roll down her eyes, not believing this is true. And then she starts feeling that if anybody has trusted her with such an enormous amount of money, $30 or $35, she will give her life to make sure that trust is kept.” - Md Yunus, Founder of Grameen Bank


Our pillars of success

Experience Shivalik Bank possesses

a rich experience of 17 years

in the Indian banking industry

translating into timely solutions at the

right place and at the lowest cost . This

leads to complete stakeholder trust. The

Bank comprises experienced bankers and

enthusiastic aspirants with an average

management cadre age of less

than 45 years.

Multi‑locational presence

Shivalik Bank was the first

co-operative bank of Uttar Pradesh to

extend beyond its state, setting up 21

branches across two states. All branches

are in prime locations, strategically

positioned to capture a large slice of

the client base.

Robust financials Shivalik Bank’s credit-deposit

ratio was 71.83% as on 31st March

2015; net interest margin was an

attractive 4.22% and capital adequacy

ratio 13.75% (as against the RBI-

mandated 9%).

Extensive portfolio Shivalik Bank’s product basket

addresses existing and evolving

customer needs. Conventional banking

services are coupled with services addressing

unbanked segment needs. Consequently, the

Bank offers products like recurring deposit

schemes (minimum deposit H10 per

month) and SME loans (up to H10

lac).

Niche services Shivalik Bank offers lockers,

PAN card-related services and

remittance services. Some of its

services for the unbanked populace

have been simplified, widening

inclusion.

Customer base Shivalik Bank provides innovative

and customer-friendly services (home

banking, tele-banking, prompt remittance

instrument issue, quick local clearing, prompt

outstation collection and extended working

hours). The result: the Bank’s retail customer

base exceeded 1.50 lacs in 2014-15.

Stringent compliance

Shivalik Bank complies with demanding

RBI guidelines. The Bank possesses an

impeccable record of compliances across

regulatory agencies, strengthening customer

confidence.

State‑of‑the‑art infrastructure

Shivalik Bank’s branches are fully

computerised. The Bank implemented

the state-of-the-art Core Banking System

software, integrating all its branches. The

Bank’s best-in-class IT department trains

executives and keeps them abreast of

technological advancements.


NoticeNotice is hereby given that the 18th

Annual General Meeting of the Members

of Shivalik Mercantile Co-operative

Bank Ltd. will be held on Sunday, the

27th September, 2015 at 10:00 hrs at

Hotel Royal Residency, Ambala Road,

Saharanpur - 247001, to transact the

following business:

1. To confirm quorum of the meeting.

2. To grant Leave of Absence to

members of the Bank other than those

whose names appear in the Attendance

Register of this 18th Annual General

Meeting.

3. To confirm the minutes of the 17th

Annual General Meeting and minutes

of the Special General Meeting of the

members of the Bank which were held

on 24th August, 2014 and 12th May,

2015 respectively.

4. To take note of the loans and advances

outstanding against the Directors and

their relatives during the year 2014-15.

By Order of the Board of Directors

Regd. Office:

13/1207, Ansari Road,

Saharanpur, UP – 247001 Sd/-

Suveer Kumar Gupta7th September, 2015 Chief Executive Officer

5. To present the list of employees who

are relatives of members of the board or

of the Chief Executive.

6. To consider and approve the

amendments to Bank’s Bye-Laws No. 7

regarding ‘Raising of Funds’.


amendments to Bank’s Bye-Laws No 9.1

regarding ‘Authorised Share Capital’.


amendments to Bank’s Bye-Laws No.

56.1 regarding ‘Loans & Advances’.


amendments to Bank’s Bye-Laws No.

17.3 regarding ‘Withdrawal & Resignation

of the Member’.

10. To consider conversion of the bank

to a Commercial Bank and apply to RBI

and Central Registrar of Co-operative

Societies for permission to convert.

11. To consider and approve the Annual

Accounts, which consist of the Report of

the Board of Directors, the Report of the

Statutory Auditors, the Balance Sheet

and the Profit & Loss Account, for the

year ended 31st March, 2015.

12. To review actual utilisation of reserves

and other funds for the year 2014-15.

13. To appoint the Statutory Auditors for

2015-16 and to authorise the Board of

Directors to fix their remuneration.

14. To consider and approve the Budget

for 2016-17.

15. To consider and approve the long-

term perspective plan of the bank and

the annual operation plan for 2016-17.

16. To appropriate net profit and to ratify

the payment of interim dividend of

4% on the paid up share capital and to

declare final dividend as recommended

by the Board of Directors for the

Financial Year 2014-15.

17. Any other item with the permission

of Chair.


Amendments to bye‑lawsThe existing Bye-Laws No. 7, 9.1, 17.3 & 56.1 and proposed amendments therein

S. No. Existing bye‑law Proposed amendment

7. RAISING OF FUNDSThe funds of the Bank shall be raised in the following manner:7.1 Share Capital;7.2 Admission fees;7.3 Subscriptions;7.4 Deposits;7.5 Loans, credits, advances and overdrafts from

financial institutions;7.6 Grants, aids and donations, and subsidies;7.7 Contributions;7.8 Member’s assets contributory deposits;7.9 Member’s acquisition of interest as specified;7.10 Borrowing from different agencies;7.11 Debentures;7.12 Refinance facilities/line of credit;7.13 Other monetary instruments as approved by RBI;7.14 ProfitThe funds of the bank shall be applied to achieve the objectives of the bank.

RAISING OF FUNDSThe funds of the Bank shall be raised in the following manner:7.1 Share Capital;7.2 Admission fees;7.3 Subscriptions;7.4 Deposits;7.5 Loans, credits, advances and overdrafts from financial institutions;7.6 Grants, aids and donations, and subsidies;7.7 Contributions;7.8 Member’s assets contributory deposits;7.9 Member’s acquisition of interest as specified;7.10 Borrowing from different agencies;7.11 Debentures;7.12 Refinance facilities/line of credit;7.13 Other monetary instruments as approved by RBI;7.14 Profit7.15 Perpetual Non‑cumulative Preference Shares (PNCPs);7.16 Perpetual Cumulative Preference Shares (PCPs);7.17 Redeemable Non‑cumulative Preference Shares (RNCPs);7.18 Redeemable Cumulative Preference Shares (RCPs);7.19 Long Term (Subordinate) Deposits.The funds of the bank shall be applied to achieve the objectives of the bank.

9. AUTHORISED SHARE CAPITAL9.1 The authorised share capital of the Bank shall be

J50 crores divided into 50 lac shares of the face value of H100 each.

AUTHORISED SHARE CAPITAL9.1 The authorised share capital of the Bank shall be J100 crores divided

into 1 crore shares of the face value of H100 each.

17. WITHDRAWAL AND RESIGNATION OF THE MEMBER17.3 During any co-operative year, the aggregate

withdrawal should not exceed 10 percent of the total paid‑up share capital as at 31st March of the preceding year provided the real or exchangeable value of paid up share capital and reserves does not stand reduced to less than H1.00 lac as per section 11(1) of the Banking Regulation Act, 1949 (As Applicable to co-operative Societies) as a result of such withdrawals.

WITHDRAWAL AND RESIGNATION OF THE MEMBER17.3 During any co-operative year, the aggregate withdrawal should be

such that the real or exchangeable value of paid up share capital and reserves does not stand reduced to less than H1.00 lac as per section 11(1) of the Banking Regulation Act, 1949 (As Applicable to co-operative Societies) as a result of such withdrawals.

56. LOANS AND ADVANCES56.1 Loans, cash credits and/or overdrafts on current

accounts may be granted to members on security mentioned below or other security or securities approved by the Board of Directors or without security, subject to the directives issued by the Reserve Bank of India from time to time:

56.1.4 Pledge of government, trustee securities, shares of approved companies, debentures and fixed deposits with the bank.

LOANS AND ADVANCES56.1 Loans, cash credits and/or overdrafts on current accounts may be

granted to members on security mentioned below or other security or securities approved by the Board of Directors or without security, subject to the directives issued by the Reserve Bank of India from time to time:

56.1.4 Pledge of government, trustee securities, shares of approved companies, debentures and fixed deposits with the bank. However, the loan against the security of deposit with the bank may also be granted to a non‑member.


At Shivalik Bank, governance is everything

At Shivalik Bank, we believe that

business sustainability is derived from

trust and trust, in turn, is earned from

responsible governance.

At our Bank, governance is simply

described as the right way of doing

things. In turn, this benefits all our

stakeholders.

At our Bank, responsible governance is

a combination of intent, content and

discipline.

Intent: At Shivalik Bank, we wish to

grow at a pace dictated by the strength

of our Balance Sheet – never too fast

to compromise our risk appetite and

never too slow to underperform our

rich potential. Our business model

addresses the banking needs of usual

customers on the one hand and the

needs of unbanked customers on the

other. In doing so, we make it possible

to enhance customer and societal

productivity. The Bank invested in a

governance structure that is committed

Report of Board of Directors

from H398.86 crore and H283.97 crore

respectively as on 31st March, 2014

to H775.60 crore and H557.09 crore

respectively as on 31st March, 2015. Net

worth of the Bank has gone up from

H51.93 crore to H57.13 crore as on 31st

March, 2015. Net profit stood at H4.95

crore during FY14-15. The decrease in

profit is due to excess provision made

towards Bad & Doubtful Debts, as a

prudent practice. As the provision was

decided & made after the balance-sheet

was duly audited, the balance-sheet was

revised to effect this change. Gross NPA

of the Bank came down from H4.25 crore

to H2.66 crore, while net NPA reduced by

73.87% from H3.10 crore to H0.81 crore

respectively, and gross NPAs and net

It is indeed our proud privilege to

present, on behalf of the Board of

Directors, the 18th Annual Report on

the business and operations of Shivalik

Mercantile Co-operative Bank Limited

and its Audited Statements of Accounts

for the year ended 31st March, 2015,

together with the Auditors’ Report. FY14-

15 has been a year of achievements for

your Bank as it performed exceedingly

well in almost all the areas of its

activities. Salient highlights with respect

to the performance of your Bank during

FY2014-15 are as below: total business

(deposit+advances) increased to H1,332

crore as on 31st March, 2015, reflecting

a robust growth of 95.30%. Deposit and

advances of the Bank have gone up

Dear Members,NPAs at 0.48% and 0.14% respectively

are much below the permitted level of

7% and 3% respectively. The business

per employee of the Bank in 2014-15

has registered an impressive growth of

53.30% from H3.52 crore to H5.40 crore.

Bank’s capital adequacy ratio, at 13.75%,

is higher than the RBI’s mandated 9%.

Credit-deposit ratio stood at 71.83% as

against 64.85% last year. Your Bank paid

interim dividend of H4.00 per share. The

Board of Directors has recommended

additional dividend of H4.00 per share

(4%) post-AGM. The Board has also

proposed an interim dividend of 4%

again in March, 2016.


Treasury management

to extend beyond the letter of the law.

The result was that even as the Bank

is unlisted, a number of its actions are

benchmarked with the governance

standard of listed companies directed

towards benefiting stakeholders.

Content: As a fast-growing multi-state

cooperative bank, we provide clients

with myriad products and services. At

Shivalik Bank, we extended our presence

from deposit activities to various loan

products -gold loans, loans against

property, car loans, working capital loans

and housing loans, among others. This

widening presence helped broaden

revenues, spread risks, capitalise on fast

growing financing segments, enhance

cross-sell and upsell opportunities,

evolve the brand of the Bank from core

banking to services and solutions. The

result is that the proportion of non-core

banking revenues increased from

H3.88 crore in 2013-14 to H5.70 crore

in 2014-15.

Discipline: In an industry where the

Reserve Bank of India is increasing the

role and extent of compliances, Shivalik

Bank is proud to state that it has proved

itself to be a responsible organisation

that complies completely with complex

regulatory and legal requirements. We

respect the growing role of consistent

vigilance through concurrent audits,

transaction monitoring and other

precautions. Our management and

employees share a responsibility to

strengthen our compliance with local,

regional and national regulations,

professional codes and industry

practices. The Bank has put in place a

seamless system of checks and balances

to identify, assess and mitigate risks.

The Bank follows a well-formulated

approach to guarantee an optimal

risk-return ratio. The Bank has ensured

rigorous compliance with guidelines

issued by the central regulatory body;

the Bank’s operations were time and

again appreciated by RBI officials during

inspections.

H2.54crore

Income from treasury operations (2014-15)

13.75%

Capital adequacy ratio (2014-15)

7.28%

Average cost of funds (2014-15)

H1.49crore

Income from treasury operations (2013-14)

16.15%

Capital adequacy ratio (2013-14)

7.18%

Average cost of funds (2013-14)


OverviewAt the Bank, the role of the treasury

department is to safeguard

organisational liquidity, protect or

enhance Balance Sheet integrity,

mitigate risks and maximise return

on capital; the function enhances the

capital efficiency of assets and liabilities

while managing liquidity.

Since the core business of the Bank is

accepting deposits and providing loans,

a shortage of liquidity can affect growth.

The Bank’s proactive treasury

department utilises funds in best

profitable manner and at the same time

ensures adequate liquidity.

The Bank has in place an investment

policy, which is reviewed in accordance

with guidelines issued by RBI.

Investment operations, funds and

liquidity management operations are

reviewed by the Investment Committee

of the Board. A concurrent audit of the

investment portfolio is undertaken by

the auditors. Optimising the yield on

the Bank’s investment portfolio and

managing market risk is given top

priority.

Highlights, 2014-15 Sustained a capital adequacy ratio

of 13.75%, well above the statutory

requirement of 9% stipulated by the RBI

Maintained Statutory Liquidity Ratio at

prescribed levels entirely in the G-Secs

portfolio

Maintained its net interest margin at

4.22% through the competitive sourcing

of funds and their subsequent disbursal

at a profit

Performed timely treasury operations,

which maximised profits and maintained

adequate liquidity

OutlookGoing ahead, the Bank expects to

grow the scale of resource mobilisation

and loans disbursal while investing in

government securities to maximise

returns.

OverviewAn efficient credit management function

ensures loanees pay on time, credit costs

are moderated and delayed payments

are recovered.

The credit management team assesses

the viability of the customer’s business

model, expansion plans and repayment

ability. The Bank has created a structured

approach to establish credit-worthiness,

including visiting the customer for an

analysis of the business and collateral

offered, followed by loan disbursal and

engagement through the repayment

period.

This function is supported by a

competent legal team that ensures

asset repossession and engages in legal

remedies for loan recovery.

Highlights, 2014-15 Introduced products like short-term

demand loans and agriculture loans,

widening the portfolio.

Credit management

H33.89crore

Average applications per month (2014-15)

H5.85 lac

Average size of loans (2014-15)

57.56%

*Small lending exposure as % of overall (2014-15)

H12.87crore

Average applications per month (2013-14)

H3.26 lac

Average size of loans (2013-14)

55.33%

*Small lending exposure as % of overall (2013-14)

* without loans against bank’s own deposit


Increased disbursements 263% from

H154.48 crore in 2013-14 to H406.64 crore

in 2014-15; average ticket size of the

loan increased from H3.26 lac to H5.85 lac

in 2014-15.

Decentralised the credit team by

authorising branches to disburse lower

ticket loans, shrinking the turnaround

time.

Recruited competent professionals

(chartered accountants and MBAs) with

sectoral understanding.

Strengthened policies to assess

customer eligibility, enhancing process

transparency; checked CIBIL scores

of the customer, guarantor and co-

borrower to ascertain credit-worthiness.

Created focused committees (Micro

Committee, Head Office Committee and

Chairman’s Committee) to accelerate

decision-making; reduced turnaround

time in making customer loan sanctions

from 10 days to 7 days.

Emphasised retail lending in line with

rising consumer purchasing power.

Strengthened asset quality of

advances through stronger checks

during disbursements, assessing

customer credibility, ascertaining

funds use by inspecting documents

and implementing post-disbursement

checks.

Strengthened the credit rating

mechanism to assess the loan eligibility

of customers (financial parameters,

customer relations, guarantees,

customer security as well as the

submission of reports and statements);

offered attractive interest rates to

customers who scored between 85 and

100 (AAA-rated) on the credit rating

mechanism.

OutlookGoing ahead, the Bank plans to increase

core advances from H390 crore to H600

crore, emphasise retail lending, maintain

a high asset quality and graduate

newly-commissioned branches towards

profitability.

Collections management

0.14%

Net NPA (2014-15)

1.10%

Net NPA (2013-14)

OverviewIn the business of financing, collection

efficiency ensures that loans or interest

payments are collected on time, any

inefficiency which can potentially create

an asset-liability mismatch.

The Bank has in place a seamless

collection process reinforced by a legal

team. The Bank strengthened collection

efficiency through various initiatives

(SMS and calling) to intimate customers

about forthcoming due dates and

repayments. The Bank set collection

targets for officers with periodic

appraisal. The Bank examined reasons for

delay (situational, intentional or habitual)

for customised responsiveness.

The Bank’s alert system tracks defaulters

for suitable action; the system is set

into motion whenever there is a delay

of 15 days, leading to automated

reminders being sent; a delay of 30-

60 days is followed by a legal notice

(to the borrower and guarantor) and

physical visit by a recovery officer; a

delay of more than 60 days is classified

as high stress account, resulting in

the concerted action of the collection

and legal teams and further a delay of

90 days classifies the account as NPA

resulting in loan recall notice being sent.

Highlights, 2014-15 Segregated the collections team as

per geographies, strengthening better

collections efficiency.

Recovered 31 NPA accounts as a

result of the combined initiative of the

collection and legal teams.

The Bank, to strengthen the

collections team, recruited staff from the

geographies of its presence, ensuring

that the Bank was able to gauge local

customer aspirations better.

OutlookGoing ahead, the Bank plans to improve

collections efficiency, strengthen its

alert system and delegate collections

responsibility based on employee

expertise.


Information technology

Over the years, the Bank invested

proactively in infrastructure, people and

processes to capture, protect and transmit

information with speed and accuracy. This

graduated the Bank’s service to a modern

standard, leading to customer retention

and accretion.

Highlights, 2014-15 Partnered FIS – the world’s largest

financial technology services provider - to

reduce operational costs.

Invested in Core Banking Solution

technology outsourced from FIS, the

world’s leading CBS provider, which

strengthened the Bank’s ability to offer

diverse services like ATM-cum-debit-

cards, ATMs and CDMs, net banking,

SMS banking, among others. The Bank’s

branches were connected through a

protected network, making it possible to

capture information in real-time.

The Bank’s intranet helped access

information in real-time and assess

the papers of the customers, making it

possible to decide immediately whether

it intended to finance specific cases or

not compared to a conventional decision-

making cycle of two days.

Became the first co-operative bank in

Northern India and the 19th co-operative

bank in India to launch ATM-cum-debit

cards managed by RuPay; the Bank was

recognised by NPCI for this achievement.

Engaged with bill desks which enabled

online shopping, bill payments and online

bookings, among others.

Started tablet-based account opening

services, where the bank executive visits

the customer and provides the account

number instantly, making it possible to

activate the account within 24 hours.

Initiated an Aadhar-based payment

system, utilising the twelve-digit individual

identification number issued by the

Government of India as proof of identity

and address.

Set up Cash Deposit Machines across all

branches so that cash deposited would be

reflected in real-time.

Introduced a Lead Management System

to follow up on leads and updating them

in the system.

Developed a GPS-based Information

System accessible via the internet and

intranet to obtain geographical analysis of

customer information at any point.

Installed a biometric attendance system

as well as an e-register for recording

transaction details to reduce human error.

Initiated an SMS-based service for

customers to instantly resolve customer

issues.

Launched the Instant Mobile Payment

System through which money can be

transferred by sharing the MMID and

mobile number.

Sends transaction alerts through text

messages following every transaction.

Launched NACH and NECS which

helps customers to send the money

from Shivalik Bank to any other bank in

India on a regular basis and vice versa. By

implementing this, customers may get

direct credit for their insurance policy/child

policy/mutual funds payment and any

other policy payments as well as dividend

of shares through companies, registered in

SEBI and can easily pay the EMI of all these

services with his/her Shivalik bank account

number.

Introduced the ‘Unhappy’ concept so

that customer grievances may be escalated

directly to the senior management and

resolved quickly.

Implemented an online complaint

management system for its staff and

customers.

OutlookGoing ahead, the Bank plans to launch

SMS banking for fixed deposits, helping

save time for customers. A bulk note

acceptor will make it possible to accept

an amount of H2 lac at one go. The Bank

intends to expand the IMPS service

whereby customers will be able to send or

transfer money to others. The Bank aims to

introduce an Android-based application,

employee portal and complaint

management system on its website.

The Bank plans to launch a micro ATM

concept by which it can reach the doors

of customers who are still unadressed

by banks. It will provide services like

opening accounts through EKYC, financial

transactions like credit and debit, transfer

of funds, non-financial transaction like mini

statement and balance enquiry, Aadhar-

enabled payments, Biller recharge, among

others.

The Bank plans to implement a Loan

Origination System for better credit

services and to put a transparent system in

place. The Bank is in the process of Direct

RTGS connectivity with RBI.

The Bank also plans to implement a

system so that PAN card, voter ID card,

CIBIL, among others can be checked

automatically by CBS at the time of

opening an account, which shall help

strengthen the KYC process.

Responsible banking: Shivalik Bank

intends to go paperless and use solar

energy to power ATMs and CDMs.



Financial Section


Independent Auditor’s Report

To.

The Members of

Shivalik Mercantile Co-operative Bank Ltd.

Report on the Financial Statements

1. We have audited the accompanying financial statements of

M/s SHIVALIK MERCANTILE CO-OPERATIVE BANK LTD., having

registered office at Ansari Road, Saharanpur- 247001 which

comprise the Balance Sheet as at March 31, 2015, the statement of

Profit and Loss Account for the year ended on 31st March 2015 and

a summary of significant accounting policies and other explanatory

information incorporated in these financial statements of the Bank

along with the branches audited by us for the period from 01st

April, 2014 to 31st March, 2015.

Management’s Responsibility for the Financial Statements

2. Management is responsible for the preparation of these ¬financial

statements that give a true and fair view of the financial position and

financial statements of the Bank in accordance with the Banking

Regulation Act, 1949, Multi State Co-operative Societies Act, 2002

and Rules made there-under. This responsibility includes the design,

implementation and maintenance of internal control relevant to

the preparation and presentation of the financial statements that

give a true and fair view and are free from material misstatement,

whether due to fraud or error.

Auditor’s Responsibility

3. Our responsibility is to express an opinion on these financial

statements based on our audit. We conducted our audit in

accordance with the Standards on Auditing issued by the Institute

of Chartered Accountants of India. Those Standards require that

we comply with ethical requirements and plan and perform the

audit to obtain reasonable assurance about whether the financial

statements are free from material misstatement, whether due to

fraud or error.

4. An audit involves performing procedures to obtain audit evidence

about the amounts and disclosures in the financial statements. The

procedures selected depend on the auditor’s judgement, including

the assessment of the risk of material misstatement of the financial

statements, whether due to fraud or error. In making those risk

assessments, the auditor considers internal control relevant to the

Bank’s preparation and fair presentation of the financial statements

in order to design audit procedures that are appropriate in the

circumstances, but not for the purpose of expressing an opinion

on the effectiveness of the Bank’s internal control. An audit also

includes evaluating the appropriateness of accounting policies

used and the reasonableness of accounting estimates made by

management, as well as evaluating the overall presentation of the

financial statements.

5. We believe that the audit evidence we have obtained is sufficient

and appropriate to provide a basis for our audit opinion.

Opinion

6. In our opinion and to the best of our information and according

to the explanations given to us, the said accounts together with

the notes thereon give the information required by the Banking

Regulation Act, 1949 as well as Multi State Co-operative Societies

Act, 2002 and rules made there-under, in the manner so required

for the Urban Co-operative Banks subject to our comments

and observations contained in Audit Memorandum, give the


information so required and give a true and fair view in conformity

with the accounting principles generally accepted in India:

(a) In the case of the Balance Sheet, of the state of affairs of the

Bank as at March 31, 2015;

(b) In the case of the Profit and Loss Account, of the profit for the

year ended on that date.

7. Emphasis of Matter: The original audit report dated 11th April, 2015

is being revised by this report due to adoption of prudent practice

by the Board of Directors of the bank to increase the provision of

bad and doubtful debts relating to FY 2014-15 by `50 Lacs, which

leads to change in the financial statements pertaining to the said

financial year. The above change has been approved by the board in

their meeting dated 9th September, 2015. As such, our audit report

has been revised to give effect of this change.

Report On Other Legal and Regulatory Requirements

a. We have obtained all the information and explanations which to the

best of our knowledge and belief were necessary for the purpose of

our audit and have found them to be satisfactory.

b. In our opinion, proper books of account as required by law have

been kept by the Bank so far as appears from our examination of

those books and proper returns adequate for the purpose of our

audit have been received from the branches not visited by us.

c. The Balance Sheet, the Profit and Loss Account dealt with by this

report are in agreement with the books of account and returns.

d. In our opinion, the Balance Sheet and the Profit and Loss Account

comply with the Accounting Standards issued by Institute of

Chartered Accountants of India (ICAI) to the extent applicable.

e. In our opinion and according to information given to us, there has

been no material impropriety or irregularity in the expenditure or in

the realisation of money due to the bank;

f. In our opinion and according to information given to us, the

transactions of the Bank, which have come to our notice, have been

within the competence of the Bank.

g. Bank has adequate internal financial control system in place and

financial internal control system is effective.

h. The Bank has undertaken Information System Audit as per the

RBI circular dated 11.06.2014. The audit report has been received

in bank. The bank is in the process of Compliance of the audit

comment.

Memorandum of Changes: NIL

For M R S & CO.

Chartered Accountants

Firm Registration Number:- 016610N

Ram Kumar Dhiman

Place: Saharanpur Partner

Date: 10th September 2015 Membership No. 096852


Balance Sheet as at 31st March 2015

(Amount in C)

Schedule Current Year 31.03.2015

Previous Year 31.03.2014

CAPITAL & LIABILITIES

(1) Capital 1 44,66,06,300.00 41,33,23,700.00

(2) Reserve fund & other reserves 2 9,78,32,720.00 6,77,81,150.00

(3) Deposits & other accounts 3 7,75,58,73,272.21 3,98,85,74,117.62

(4) Borrowings - – 90,00,000.00

(5) Bills for collection being bills receivable as per contra - 23,044.00 1,70,034.00

(6) Branch adjustments - – –

(7) Overdue interest reserves (on NPA) - 53,95,509.67 13,31,799.84

(8) Interest payable (on term deposits) - 96,36,430.37 –

(9) Other liabilities & provisions 4 9,23,84,380.37 6,84,05,876.14

(10) Profit & loss 5 4,06,77,851.79 5,99,71,672.93

Grand total 8,44,84,29,508.41 4,60,85,58,350.53

Contingent liabilities - 93,98,600.00 1,17,24,800.00

PROPERTY & ASSETS

(1) Cash in hand & balance with RBI - 3,79,69,952.00 3,99,85,893.00

(2) Balances with other banks 6 55,05,11,110.90 38,34,58,785.21

(3) Money at call & short notice - – –

(4) Investments 7 2,12,34,32,289.00 1,16,43,37,011.00

(5) Advances 8 5,57,09,05,071.42 2,83,96,93,079.37

(6) Interest receivable 9 2,51,98,500.67 8,14,24,452.40

Of which overdue (on NPA) 53,95,509.67 13,31,799.84

(7) Bills receivable being bills for collection as per contra - 23,044.00 1,70,034.00

(8) Fixed assets less depreciation 10 6,27,51,311.00 4,42,98,750.35

(9) Other assets 11 7,76,38,229.42 5,51,90,345.20

Grand total 8,44,84,29,508.41 4,60,85,58,350.53

As per our report of even date attached

For M R S & Co. Suveer Kumar Gupta Sarvesh Singhal

Chartered Accountants Managing Director & CEO Director

(Firm Regn. No. 016610N)

Ram Kumar Dhiman Dr. Sanjeev Mittal Sudhakar Agarwal Shiv Puran Gulati

Partner (M. No. 096852) Director Director Vice Chairman

Saharanpur: 10th September, 2015

Note:

The Balance-sheet as on 31st March, 2015 was audited on 11th April, 2015. Subsequently, as a prudent practice the Board of Directors decided to

increase the Provision for Bad & Doubtful Debts relating to FY 2014-15 by `50 lacs. This increase was affected by debit to Profit & Loss account for

FY 2014-15 and approved by the Board in its meeting dated 9th September, 2015. As such, the audited Balance-sheet and Profit & Loss Account have

been revised to give effect of this change.


Profit and Loss Account for the year ended 31st March 2015

(Amount in C)

Current Year 31.03.2015


EXPENDITURE

(1) Interest on deposits, borrowings etc.

i) Interest on deposits 40,17,89,791.52 27,97,51,559.11

ii) Interest on borrowings 19,27,089.00 16,68,379.00

iii) Interest - others 1,040.00 8,244.00

Total 40,37,17,920.52 28,14,28,182.11

(2) Salaries, allowances, provident fund, bonus & gratuity etc. 7,60,40,204.32 4,81,41,880.11

(3) Rent, taxes, insurance, lighting etc.

i) Building rent 1,23,27,802.00 86,85,828.00

ii) Taxes 33,31,833.50 18,77,230.34

iii) Insurance 58,30,530.67 45,80,194.00

iv) Lighting 66,85,380.03 45,57,239.73

Total 2,81,75,546.20 1,97,00,492.07

(4) Law charges 5,48,804.10 4,99,063.00

(5) Postage and telephone charges

i) Postage 3,70,438.56 82,365.00

ii) Telephone 9,49,371.57 5,67,056.42

iii) Computer networking, connectivity & hostage 69,40,399.76 22,72,061.63

Total 82,60,209.89 29,21,483.05

(6) Audit & consultancy fees 2,18,35,193.17 1,31,67,062.00

(7) Depreciation and repairs

i) Depreciation 1,06,54,130.51 74,77,966.50

ii) Written off/ impaired assets 1,214.00 95,233.00

iii) Repairs 43,05,667.87 30,96,136.80

Total 1,49,61,012.38 1,06,69,336.30

(8) Stationery, printing and advertisement

i) Printing & stationery 31,73,128.72 17,06,038.69

ii) Advertisement 31,93,190.75 15,06,952.46

Total 63,66,319.47 32,12,991.15

Contd…



(Amount in C) Current Year 31.03.2015


EXPENDITURE (9) Other expenditure

i) Subscription 5,90,668.04 2,86,704.65

ii) Training & development of staff 45,765.00 22,660.00

iii) AGM & conference 2,27,398.00 1,78,267.00

iv) Security 34,06,106.62 21,91,019.00

v) Business promotion & gifts 16,29,912.16 78,949.00

vi) Staff welfare 17,20,093.57 11,33,633.00

vii) Travel & transport 30,57,841.53 19,34,711.50

viii) Commission on daily deposit 13,87,902.72 13,72,767.00

ix) Banking correspondent expenditure 25,57,329.00 –

x) Charges paid to other banks 6,67,247.92 3,90,151.34

xi) Amortization on investments 9,45,572.00 4,95,199.00

xii) Miscellaneous expenses 10,17,509.49 4,74,321.29

Total 1,72,53,346.05 85,58,382.78

(10) Loss from sale of non-banking assets – 5,782.00

(11) Provisions

i) Contingent provision on standard assets 45,26,779.00 7,02,730.00

ii) Provision for bad & doubtful debts (NPA) 70,90,848.00 62,00,000.00

iii) Special reserve u/s 36(1)(viii) of income tax act 23,52,098.00 26,15,047.00

iv) Provision for current income tax 2,80,73,398.00 2,31,44,848.00

v) Provision for deferred tax for current year 6,00,115.00 2,14,291.00

Total 4,26,43,238.00 3,28,76,916.00

(12) Balance of profit 4,94,85,072.86 5,22,01,492.83

Grand total 66,92,86,866.96 47,33,83,063.40

Explanatory note:

Transferred to investment fluctuation reserve 17,83,645.00 –

Contd… from previous page

Contd…

Note:

The Balance-sheet as on 31st March, 2015 was audited on 11th April, 2015. Subsequently, as a prudent practice the Board of Directors decided to


FY 2014-15 and approved by the Board in its meeting dated 9th September, 2015. As such, the audited Balance-sheet and Profit & Loss Account have

been revised to give effect of this change.



(Amount in C)



INCOME

(1) Interest & discount

i) Interest on loans & advances 45,84,03,988.72 32,87,88,592.70

ii) Interest on investments 12,83,38,819.22 9,71,70,752.16

iii) Income on investment in mutual funds 2,54,45,552.76 85,67,079.08

Total 61,21,88,360.70 43,45,26,423.94

(2) Commission, exchange & brokerage 5,39,228.63 5,07,886.10

(3) Profit from sale of non-banking assets 38,214.00 –

(4) Profit on sale of securities 2,54,34,136.00 1,48,29,478.00

(5) Other receipts

i) Loan processing charges 1,72,95,959.79 1,04,49,495.40

ii) Incidental charges 21,72,523.99 21,87,905.59

iii) Locker rent 24,28,174.69 18,30,016.00

iv) Dividend from mutual funds 60.00 17,090.00

V) Bad debts recovered 21,59,000.00 37,74,000.00

vi) Commission from insurance business 5,20,187.00 –

vii) Miscellaneous income 65,11,022.16 52,60,768.37

Total 3,10,86,927.63 2,35,19,275.36

Grand total 66,92,86,866.96 47,33,83,063.40

Explanatory note:

Contingent prov. against depreciation in investments 17,83,645.00 –

Contd… from previous page









Schedules to Balance Sheet as at 31st March 2015

(Amount in C)



i) Authorized capital

50,00,000 shares of `100/= each 50,00,00,000.00 50,00,00,000.00

ii) Subscribed capital

44,66,063 shares of `100/= each (Previous Year 41,33,237 Shares of `100/- each) 44,66,06,300.00 41,33,23,700.00

iii) Amount called up 44,66,06,300.00 41,33,23,700.00

On 44,66,063 shares at `100/= each

Of (iii) above, held by

(a) Individuals & Others 44,66,06,300.00 41,33,23,700.00

(b) Co-operative institutions – –

(c) Government – –

Schedule 1: CAPITAL

(Amount in C)



i) Statutory reserve 5,41,38,308.00 4,05,23,497.00

ii) Investment fluctuation reserve 63,43,728.00 20,05,995.00

iii) Other funds and reserves

(a) Share transfer fund 50,00,000.00 50,00,000.00

(b) Provision on standard assets 1,24,78,400.00 79,51,621.00

(c) Special reserve u/s 36(1)(viii) of I.T. Act 79,88,039.00 56,35,941.00

(d) Contingency reserve 1,18,84,245.00 66,64,096.00

Total 3,73,50,684.00 2,52,51,658.00

Grand total 9,78,32,720.00 6,77,81,150.00

Schedule 2: RESERVE FUND & OTHER RESERVES

(Amount in C)



i) Fixed deposits

a) Individuals & others 6,37,04,54,281.17 3,01,99,68,524.70

b) Central co-operative banks – –

c) Other societies – –

Total 6,37,04,54,281.17 3,01,99,68,524.70

ii) Savings bank deposit

a) Individuals & others 1,16,05,18,489.54 79,58,07,809.28



Total 1,16,05,18,489.54 79,58,07,809.28

iii) Current deposits

a) Individuals & others 22,49,00,501.50 17,27,97,783.64



Total 22,49,00,501.50 17,27,97,783.64

iv) Money at call and short notice – –

Grand total 7,75,58,73,272.21 3,98,85,74,117.62

Schedule 3: DEPOSIT & OTHER ACCOUNTS



(Amount in C)

Current Year

31.03.2015

Previous Year

31.03.2014

i) Bills payable (DDs/POs issued but not yet presented for payment) 1,01,35,411.31 75,23,446.19

ii) Unclaimed dividends 79,01,305.00 8,87,413.00

iii) Sundries 1,93,26,512.02 1,90,87,954.75

iv) Provision for bonus 18,46,633.00 12,59,650.00

v) Provision for income tax 2,80,73,398.00 2,31,44,848.00

vi) Deferred tax liability 13,31,871.00 7,31,756.00

vii) Tax deducted at source 32,46,133.84 5,96,595.00

viii) Provision for audit fees 2,02,500.00 2,00,000.00

ix) Provision for bad & doubtful debts (NPA) 1,85,57,116.20 1,14,66,268.20

x) Paid-up capital (collection account) of Erstwhile Bhoj Nagrik Sahakari Bank Ltd., Dhar,

& Erstwhile Malwa Bank, Indore

17,63,500.00 17,24,300.00

xi) Investment depreciation reserve – 17,83,645.00

Total 9,23,84,380.37 6,84,05,876.14

Schedule 4: OTHER LIABILITIES & PROVISIONS

(Amount in C)

Current Year

31.03.2015

Previous Year

31.03.2014

i) Profit as per last balance-sheet 5,99,71,672.93 3,05,18,087.10

ii) Less: Appropriations of profit for last year

Statutory reserve 1,30,50,373.00 54,28,041.00

Co-operative education fund 5,22,015.00 2,17,122.00

Share transfer fund – –

Contingency reserve 52,20,149.00 21,71,216.00

Investment fluctuation reserve 30,00,000.00 –

Bad & doubtful debts reserve – –

Contingent prov. on standard assets – –

Dividend @ 12% 2,80,17,096.00 1,49,31,528.00

MOC adjustment for fy 2013-14 1,818.00 –

Self assessment tax for fy 2013-14 22,59,670.00 –

Income tax adjustments of past years (32,339.00) –

Share capital of borrowers/guarantors of Erstwhile Malwa Bank recreated 69,600.00 –

Total (5,21,08,382.00) (2,27,47,907.00)

iii) Add: Profit of the year b/f from P&L a/c 4,94,85,072.86 5,22,01,492.83

Less: interim diviend paid for FY 2014-15 (1,66,70,512.00) –

Grand total 4,06,77,851.79 5,99,71,672.93

Schedule 5: PROFIT & LOSS



(Amount in C)



i) Current deposits a) District co-operative bank ltd 7,63,38,068.43 3,63,85,004.69 b) SBI & subsidiary banks 91,90,102.59 1,27,35,205.65 c) Other public sector banks 16,48,28,957.52 3,47,72,739.22 d) Other scheduled banks 82,33,586.80 14,73,85,094.65

Total 25,85,90,715.34 23,12,78,044.21 ii) Savings bank deposits – – iii) Fixed deposits a) district co-operative bank ltd. – 40,00,000.00 b) sbi & subsidiary banks – – c) other public sector & scheduled banks 29,19,20,395.56 14,81,80,741.00

Total 29,19,20,395.56 15,21,80,741.00 Grand total 55,05,11,110.90 38,34,58,785.21

Schedule 6: BALANCES WITH OTHER BANKS

(Amount in C)



i) In central & state government securities 1,72,59,58,289.00 1,00,38,63,011.00 Market value: 1,73,07,81,450.00 1,00,23,33,382.00 Face value: 1,71,00,00,000.00 1,01,00,00,000.00 ii) Other trustee securities – – iii) Shares in co-operative institutions 2,000.00 2,000.00 iv) Other investments 39,74,72,000.00 16,04,72,000.00 Grand total 2,12,34,32,289.00 1,16,43,37,011.00

Schedule 7: INVESTMENTS

(Amount in C)



i) Short term loans, cash credits overdrafts and bills discounted of which secured

against

3,30,57,25,173.28 1,60,08,61,463.97

a) Govt. & other approved securities – – b) Other tangible securities 3,30,57,25,173.28 1,60,08,61,463.97 Of the advances, amt. due from individuals 3,30,57,25,173.28 1,60,08,61,463.97 Of the advances, amount overdue 1,43,71,492.05 37,68,661.30 Considered bad & doubtful of recovery (fully provided for) 1,08,63,571.00 – ii) Medium term loans of which secured against 45,42,54,269.18 30,87,01,002.48 a) Govt. & other approved securities – – b) Other tangible securities 45,42,54,269.18 30,87,01,002.48 Of the advances, amt. due from individuals 45,42,54,269.18 30,87,01,002.48 Of the advances, amount overdue 85,64,899.22 43,86,879.25 Considered bad & doubtful of recovery (fully provided for) 9,49,173.55 9,44,744.87 iii) Long term loans of which secured against 1,81,09,25,628.96 93,01,30,612.92 a) Govt. & other approved securities – – b) Other tangible securities 1,81,09,25,628.96 93,01,30,612.92 Of the advances, amt. due from individuals 1,81,09,25,628.96 93,01,30,612.92 Of the advances, amount overdue 36,73,326.32 1,16,17,290.47 Considered bad & doubtful of recovery (fully provided for) – 1,50,300.00 Grand total 5,57,09,05,071.42 2,83,96,93,079.37

Schedule 8: ADVANCES



(Amount in C)



i) Interest receivable on investments (accrued)

a) Government securities 1,80,96,451.00 1,56,48,601.00

b) Bank FDRs – 6,44,44,051.56

c) Other investments 17,06,540.00 –

Total 1,98,02,991.00 8,00,92,652.56

ii) Interest receivable on NPA (overdue) 53,95,509.67 13,31,799.84

Total 2,51,98,500.67 8,14,24,452.40

Schedule 9: INTEREST RECEIVABLE

(Amount in C)



As on 01.04.2014 4,42,98,750.35 3,55,80,671.59

Additions during the year 2,95,03,891.49 1,63,05,060.26

Less: Sale/adjustments (3,97,200.33) (1,09,015.00)

Less: Depreciation for current year (1,06,54,130.51) (74,77,966.50)

Written down value as on 31.03.2015 6,27,51,311.00 4,42,98,750.35

Schedule 10: FIXED ASSETS

(Amount in C)



i) Refundable securities 12,45,095.00 11,24,095.00

ii) Stock of printed stationery 12,01,331.98 7,21,354.20

iii) Miscellaneous receivables 3,32,00,778.44 1,87,30,419.00

iv) Tax deducted at source 1,44,208.00 70,875.00

v) Income tax refundable 58,06,776.00 57,03,562.00

vi) Advance income tax paid 2,64,00,000.00 1,92,00,000.00

vii) Non-banking assets acquired under sarfaesi 96,40,040.00 96,40,040.00

Total 7,76,38,229.42 5,51,90,345.20

Schedule 11: OTHER ASSETS









(A) BACKGROUND AND OPERATIONS:1. Shivalik Mercantile Co-operative Bank Ltd. was registered in 1997 under Uttar Pradesh Co-operative Societies Act 1965 and started operations in

September, 1998. After achieving a deposit base of `100 crores on 31.03.2010, the Bank became a Tier II bank and expanded its area of operation to whole of the state of Uttar Pradesh. Subsequently Bhoj Nagrik Sahakari Bank Maryadit, Dhar, Madhya Pradesh was merged into Shivalik Bank with effect from 1st November, 2010. Consequent upon this inter-state merger, Shivalik Mercantile Co-operative Bank Ltd. was deregistered under Uttar Pradesh Co-operative Societies Act, 1965 and was re-registered under the Multi State Co-operative Societies Act, 2002, in September 2010, as a Multi-State Urban Co-operative Bank. The Bank again merged erstwhile Malwa Commercial Co-operative Bank Ltd., Indore with effect from 1st September, 2012. The Bank also continues to open new branches and presently has twenty one branches, twelve in District Saharanpur, two in District Muzaffarnagar, one in Meerut, two in Ghaziabad & two in Noida, U.P., and one each in Indore & Dhar, M.P. The Bank provides complete retail and corporate banking services. Bank has applied to RBI for license to open seven more branches, five in UP & two in MP.

2. Merger of Malwa Commercial Co-operative Bank Ltd. with our bank: Malwa Commercial Co-operative Bank Ltd., Indore, M.P. (Target Bank) merged with Shivalik Mercantile Co-operative Bank Ltd. (Acquirer Bank)

with effect from 1st September, 2012. In accordance with the scheme of merger, the Share Capital of the Target Bank was kept in Collection Account in the books of the Acquirer Bank for a period of 1 year from the date of merger. On the expiry of the period of one year the balance amount (less, held by borrowers & guarantors) remaining in collection account was transferred to General Reserve. During the year only an amount of `61,600 remains in the books of the bank that pertains to share capital held by borrowers & guarantors.

3. Merger of Bhoj Nagrik Sahakari Bank with our bank: a. Bhoj Nagrik Sahakari Bank Maryadit, Dhar, M.P. (Target Bank) merged with Shivalik Mercantile Co-operative Bank Ltd. (Acquirer Bank) with

effect from 1st November, 2010. As per the scheme of merger, the Share Capital of the Target Bank is being treated as Collection Account in the books of the Acquirer Bank and will remain so for a period of 10 years from the date of merger. During this period any share-holder of the Target bank desiring to withdraw his/her shares shall be paid back the amount at par. After the expiry of 10 years’ period, the amount remaining unpaid shall be converted to the share capital of the equivalent amount of Shivalik Bank. The current balance in the said account is `17,01,900.

b. As a part of the prudential practice the non-performing loans of the Target Bank which remained unrealized till 31st March, 2012 were written off as bad debts in the F.Y. 2011-12. During the current year, `21.59 lacs has been recovered and credited to current year’s Profit & Loss Account. The further efforts for recovery of these loans will continue and recoveries, if any, shall be considered as income for the year in which the recoveries are made.

(B) SIGNIFICANT ACCOUNTING POLICIES:-1. Accounting Convention The financial statements have been prepared in accordance with the historical cost convention and on going concern concept and in accordance

with the generally accepted accounting principles and the statutory provisions prescribed in Banking Regulation Act 1949, the Multi State Co-operative Societies Act, 2002, circulars and guidelines issued by the Reserve Bank of India from time to time, and the Accounting Standards issued by the Institute of Chartered Accountants of India and practices prevailing within the banking industry in the country, except as otherwise stated.

2. Use of estimates The preparation of the financial statements, in conformity with generally accepted accounting principles, requires management to make

estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses and disclosure of contingent liabilities at the date of the financial statements. Actual results could differ from those estimates. Management believes that the estimates used in the preparation of the financial statements are prudent and reasonable. Any revisions to the accounting estimates are recognized prospectively

3. Foreign Exchange Transactions The bank has not done any foreign exchange business, nor does it have any foreign exchange assets/liabilities.

4. Investments 4.1. In accordance with the extant instructions issued by Reserve Bank of India for the purpose of valuation of Investments, the Bank has

classified its Investment portfolio as at 31st March 2015 into the following three categories:

(a) Held To Maturity (HTM): Investments under this category are carried at their book value. Any premium on acquisition of a security is amortized over the balance period to maturity.

Significant Accounting Policies, Disclosures and Notes on Accounts (Schedule annexed to and forming part of the Balance Sheet as on 31st March, 2015 and Profit & Loss Account for the year ended 31st March, 2015)


(b) Available For Sale (AFS): Investments in the category are valued at market rate and net depreciation in the category, if any, is provided

for. Net appreciation, if any, is ignored.

(c) Held For Trading (HFT): Investments in the category are valued at market rate and net depreciation in the category, if any, is provided

for. Net appreciation, if any, is ignored.

4.2. The Investments have been disclosed in the Balance Sheet as under:

SLR: (a) Central and State Government Securities

Non-SLR: (a) Other Trustee Securities

(b) Shares of Co-operative Institutions

(c) Other Investments

4.3. Market Value of Central and State Government Securities is determined in terms of Yield to Maturity method indicated by Fixed Income

Money Market Dealers Association (FIMMDA).

4.4. The Amortization of premium on investments in HTM category is calculated on days basis to maturity.

4.5. No provision is required to be made for depreciation on Investments under AFS & HFT categories as on 31st March, 2015 (previous year

`15,29,629). An amount of 17,83,645, held on account of Contingent Provision against depreciation in Investments (past years) is being

transferred back to IFR, through profit & loss account, by showing it below the line. Further, 25% of this amount (`4,45,912) is taken to

Statutory Reserve to compensate for less amount transferred in the year this provision was created and only the net amount (`13,37,733) is

taken to IFR.

4.6. Investment Fluctuation Reserve is being created as per the extant instructions of RBI.

5. Loans and Advances 5.1. (a) The classification of advances into Standard, Sub-standard, Doubtful & Loss assets as well as provision on non-performing advances

has been arrived at in accordance with the extant instructions issued by the Reserve Bank of India with regard to Income Recognition

and Assets Classification (IRAC) from time to time and as applicable for preparation of this Balance Sheet.

(b) In addition to this, a general provision on standard assets is also made as per the extant instructions issued by Reserve Bank of India

i.e. @ 0.40% of the outstanding amount on a portfolio basis except in the case of direct advances to agricultural and SME sector

which has been @0.25%, advance under Commercial Real Estate sector for housing needs, which attract provisioning @0.75% and

advance under Commercial Real Estate sector for commercial needs, which attract provisioning @1%. Further, advances against bank’s

deposits/NSCs/KVPs/LIC Policies do not attract any provision.

5.2. The overdue interest in respect of non-performing advances is provided separately under “Overdue Interest Reserve” in accordance with the

extant instructions issued by Reserve Bank of India.

6. Fixed Assets and Depreciation 6.1. Fixed Assets are stated and carried in the Balance Sheet at written down value, purchase/ additions during the year less depreciation for the

year thereon. Cost includes incidental expenses incurred on acquisition of assets.

6.2. Fixed Assets are depreciated at the rates mentioned below:

(a) Furniture and Fixtures: 15% (W.D.V.)

(b) Office Equipments: 15% (W.D.V.)

(c) Office Vehicles: 15% (W.D.V.)

(d) Safe, Locker Steel Almirah: 2.5% (W.D.V.)

(e) Computer Hardware & Software: 33.33% (Straight Line)

(f ) Temporary Structures: 100%



6.3. Depreciation on assets purchased in the first 6 months of the year is provided at full rates. Depreciation at 50% rates is provided for fixed

assets purchased in the last 6 months of the financial year. Depreciation on assets sold during the year is charged up to the date of sale.

6.4. Depreciation on assets, where cost of each item is below `5,000/- is provided @ 100% in the year of purchase itself.

6.5. There has been no change in method and rates of providing depreciation as compared to the previous year.

7. Revenue Recognition (Accounting Standard AS-9)

7.1. Items of income and expenditure are generally accounted for on accrual basis.

7.2. Income from non-performing assets is recognized to the extent realized, as per the extant instructions issued by Reserve Bank of India.

7.3. Dividend received from shares of co-operative institutions is accounted on receipt basis.

7.4. Interest on overdue fixed deposits is provided on ad-hoc basis in accordance with the extant instructions of RBI. Actual interest expense is

accounted for at the time of renewal of FDR

7.5. There are no material prior period item’s included in Profit and Loss account.

7.6. Certain items of income such as Locker Rent, loan processing fee are recognized on cash basis. The quantum of such income is not material.

8. Non-Performing Assets

8.1. Non-Performing assets of the bank have been identified and provision thereon has been made as per the extant instructions of Reserve

Bank of India.

8.2. Any advance including Bills Discounted, which became Non Performing Assets at the close of the year, interest accrued and credited to

income account is reversed or provided for, if the same is not realized.

8.3. Interest accrued on NPA is not shown as income but shown as “Overdue Interest Reserve” in the Balance-sheet.

9. Employee Benefits (Accounting Standard AS-15)

9.1. The liability towards gratuity is assessed and calculated on actuarial valuation and paid every year to L.I.C. of India as Employees Group

Gratuity Scheme.

9.2. Bank’s Contribution towards provident fund is paid every month to Commissioner of Provident Fund in accordance with the provisions of

Employees Provident Fund Scheme, 1952 and Employees Pension Fund Scheme, 1995.

9.3. Leave encashment is accounted on actual payment basis.

9.4. The bank does not have any scheme of LTC for its employees, however a regular taxable allowance in this regard is being paid as a part of

salary.

10. Reserve Fund and Other Reserves

10.1. Dividend remaining unclaimed over 3 years are transferred to Statutory Reserve Fund a/c.

10.2. Nominal Membership and Entrance Fees are transferred to Statutory Reserve Fund every year.

11. Taxation

11.1. Income Tax expense comprises of Current Tax. Current Tax is provided on the Taxable Income using applicable Tax Rates and Tax Laws.

11.2. Deferred Tax Liability in accordance with AS-22 (Accounting for Taxes on Income) has been recognized, as per the details given below:

Due to Depreciation

For period up to 31st March 2014 7,31,756

For the year 2014-15 6,00,115

As on 31st March 2015 13,31,871



(C) DISCLOSURES AND NOTES ON ACCOUNTS:

1. Disclosure As Per the extant instructions of Reserve Bank of India: (Amount in `/Lacs)

Sr. No. Particular 31.03.2015 31.03.2014

1.1. Capital to Risk Asset Ratio (CRAR) 13.75% 16.15%

1.2. a. Movement of CRAR (Basis Points) -240 187

b. Risk Weighted Assets 41542.17 31743.19

1.3. Values of Investments are as under:

A. Government /Approved Securities (SLR)

a. HELD TO MATURITY

Face Value 11390.00 8390.00

Book Value 11547.43 8398.17

b. AVAILABLE FOR SALE

Face Value 1710.00 1710.00

Book Value 1682.00 1640.47

Market Value 1698.79 1625.17

c. HELD FOR TRADING

Face Value 4000.00 –

Book Value 4030.15 –

Market Value 4034.96 –

B. Other Investments (Non-SLR)

Shares of Co-operative Institution 0.02 0.02

Others (Book Value) 3974.72 1604.74

Others (Market Value) 3977.67 1605.62

1.4. Advances against Shares & Debenture NIL NIL

(Amount in `/Lacs)

Sr. No. Particular 31.03.2015 31.03.2014

1.6. Average Cost of Deposits 8.20% 7.98%

1.7. a. Gross NPAs 266.10 424.70

b. Net NPAs 80.53 310.04

1.8. Movement in NPA

Opening Balance 424.69 50.99

Add : Additions during the year 260.01 560.09

Less : Closed/ Recovered /Written off 418.60 186.39

Closing Balance 266.10 424.69

1.5. Advances of `5,57,09.05 Lacs (Previous year `2,83,96.93 Lacs) shown in the Balance Sheet include: (` In lacs)

ParticularsFUND BASED NON- FUND BASED

31.03.2015 31.03.2014 31.03.2015 31.03.2014

i) Advances against Real Estate, Construction

Business, Housing

14,055.30 14,652.25 Nil Nil

ii) Advance to Directors Nil Nil Nil Nil

iii) Advances to Relatives of Directors &

Companies/ firms in which they are interested

Nil Nil Nil Nil

iv) Advances to Chairman Nil Nil Nil Nil



(Amount in `/Lacs)

Sr. No. Particular 31.03.2015 31.03.20141.9. a. Interest income as a percentage of working funds 10.58% 10.87%

b. Non-Interest income as percentage of working funds 1.49% 1.21%c. Operating profit as a percentage of working funds 1.85% 2.17%d. Return on Assets 1.49% 1.81%e. Business (Deposits + Advances) per employee 539.55 351.97f. Profit per employee (Before Tax) 3.14 3.87g. Profit per employee (After Tax) 2.00 2.68

1.10. a. Provision on NPAs required to be made 135.57 45.61b. Provision on NPAs actually made 185.57 114.66c. Provisions on depreciation in investments required to be made – 17.84d. Provisions on depreciation in investments – 17.84e. Provision on Standard Assets required to be made 124.78 79.42f. Provision on Standard Assets actually made 124.78 79.52

1.11. No restructuring of Loans & Advances accounts has been made in the year.1.12. No fixed assets were revalued in the year.


1. Related Party Disclosure (Accounting Standard AS-18) A. List of the related parties and their relationship

Name of the party Relationshipa. Key Managerial Personnel

1. Shri Yashvir Kumar Gupta Chairmanb Relatives of the Key Managerial Personnel

1. Shri Suveer Kumar Gupta Son of Shri Yashvir Kumar Gupta2. Smt. Swarn Lata Gupta Wife of Shri Yashvir Kumar Gupta3. M/s Yashvir Kumar Gupta HUF HUF of Shri Yashvir Kumar Gupta

B. Details of transactions with the relateD parties carrieD out on an arm’s length Basis. (Amount in `/Lacs)

Sr. No. Nature of the transactionsRelatives of Key

Managerial PersonnelRelatives of Key

Managerial Personnel31.03.2015 31.03.2014

1. Salary paid 19,09,666 16,06,0402. Rent paid 14,13,000 9,86,000

3. Leases (Accounting Standard AS-19) The bank has cancelable operating lease and the disclosures under AS 19 on ‘Leases’ issued by ICAI are as follows:

i) Lease rent payments of `1,23,27,802/- (Previous Year `86,85,828/-) have been recognized in the statement of profit and loss for the year ended March, 2015.

ii) The lease agreements entered into pertain to use of premises by the bank. The lease agreements do not have any undue restrictive or onerous clauses other than those normally prevalent in similar agreements.

4. Intangible Assets (Accounting Standard AS-26) Details of Computer Software included in Other Assets in accordance with AS-26 on Intangible Assets issued by the ICAI are as under:

(Amount in `/Lacs)

Opening balance as on 01.04.2014 17.61

Additions during the year 4.30

Less: Amortization/Depreciation 12.42

Closing balance as on 31.03.2015 9.49


(Amount in `/Lacs)

Particular 31.03.2015 31.03.2014Bank Guarantees 93.99 117.25


5. Impairment of Assets (Accounting Standard AS-28) In accordance with Accounting Standard 28 the bank has written off a sum of `1,214/- to its profit and loss account on account of Impairment

of assets.

7. Segment reporting (Accounting Standard AS-17): There is only one segment namely “Banking”.

6. Provisions, Contingent Liabilities & Contingent Assets (Accounting Standard AS-29)

(Bank Guarantees are 100% secured against tangible securities.)

8. Details of Other Investments: 8.1. Details of Non-SLR investments: (` In lacs)

S. No. Issuer AmountExtant of ‘below

investment grade securities’

Extant of ‘unrated securities’

Extant of ‘unlisted securities’

(1) (2) (3) (4) (5) (6)

1. PSUs (NHAI) 24.72 – – –

2. FIs – – – –

3. Public Sector Banks – – – –

4. Mutual Funds 3450.00 – – 3450.00

5. Others 500.02 N/A 0.02 500.02

6. Provision held towards Depreciation – – – –

8.2. Non-SLR Investments of the bank comprise the following items:

S. No. Name of Investment Amount (`)

1. IDBI Liquid Growth Fund 1,50,00,000

2. LIC Nomura MF Liquid Fund 6,00,00,000

3. LIC Nomura Savings Fund 1,00,00,000

4. UTI Liquid Cash Plan 7,00,00,000

5. Reliance Liquid Treasury plan 6,00,00,000

6. Reliance Liquidity Fund 6,00,00,000

7. Reliance Money Manager Fund 7,00,00,000

8. Shares of District Co-operative Bank Ltd., Saharanpur 1,000

9. Shares of Indore Premier Central Co-op. Bank Ltd., Indore 1,000

10. 8.30% Tax-free Bonds issued by NHAI. 24,72,000

11. Mannapuram NCD Bonds 2,00,00,000

12. Mannapuram NCD Bonds 3,00,00,000

TOTAL 39,74,74,000

8.3. All the investments under this head are within limits defined as per the extant instructions of RBI.

8.4. Investments under this head have been valued at the lower out of book value and market value.

8.5. Non performing non-SLR investments are Nil.


9. Borrowings:

The Bank has taken overdraft limits from other banks, against the security of its Fixed Deposits in these banks, to meet short term liquidity

requirements during the year. The details of the limits sanctioned are as under:

Sr. No. Name of Bank from which limit has been availedLimit Amount

(` in Crores)

Amount of

FDRs pledged to

secure the limit

(` in Crores)1. IDBI Bank 13.49 17.682. ICICI Bank 3.15 5.14

10. Statutory Liability

10.1. The Bank had a statutory liability, towards Education Fund of `5,22,015/- which had to be paid to The National Co-operative Union of India

Ltd., New Delhi under The Multi-State Co-operative Societies Act, 2002 towards appropriation made for the same in the year. The payment

was made on 27th August, 2014.

10.2. DICGC Premium has been paid up-to-date & the next payment due date will fall in May, 2015.

10.3. No penalty has been imposed by RBI till date.

11. The Balance-sheet as on 31st March, 2015 was audited on 11th April, 2015. Subsequently, as a prudent practice the Board of Directors decided to


FY 2014-15 and approved by the Board in its meeting dated 9th September, 2015. As such, the audited Balance-sheet and Profit & Loss Account

have been revised to give effect of this change.

12. Previous year figures have been regrouped and recasted wherever considered necessary to make them comparable with those of current year.

As per our report of even date attached For Shivalik Mercantile Co-operative Bank Ltd.

For M R S & Co. Suveer Kumar Gupta

Chartered Accountants Managing Director & CEO


(CA Ram Kumar Dhiman) Sarvesh Singhal Dr. Sanjeev Mittal

Partner Director Director

(M. No. 096852)

Sudhakar Agarwal Shiv Puran Gulati

Saharanpur: 10th September, 2015. Director Vice Chairman



Budget for FY 2016-17Income Amount Expenditure Amount

Interest on loans 95.00 Interest on Deposits and borrowings 85.00

Interest on Investments 30.00 Operating Expenses 24.00

Miscellaneous Income 7.00 Depreciation & Repairs 3.00

Miscellaneous Expenses 4.00

Tax & Provisions 6.00

Net profit 10.00

132.00 Total 132.00

(Figures in lacs)

Annual Operation Plan/Target for F.Y. 2016-17 and Long-term Perspective PlanDescription Proposed Targets for the year 2016-17

Branches 28

Deposits 1000 crores

Loans & Advances 700 crores

Share capital 50 crores

membership 20,000

New Schemes Area of operation to adjoining states and getting scheduled status.

l Branch expansion

Starting out with a single branch in 1998,

Shivalik Mercantile Cooperative Bank

has 21 branches in two states. The Bank

opened five branches at Saharanpur,

Muzaffarnagar, Khatauli and Ghaziabad.

Two facts demonstrate the pressing need

for rapid expansion – India is home to

the largest unbanked population and

the presence of just one bank branch on

average per 14,000 people.

We plan on scaling operations to nearby

states – Uttarakhand, Himachal Pradesh,

Haryana, Punjab, Rajasthan, Delhi and

Chandigarh.

l Centralised Payment System

Shivalik Bank has acquired the necessary

approval from RBI to participate in

Centralised Payment System directly,

enabling RTGS (Real Time Gross

Settlement) and NEFT (National

Electronics Fund Transfer).

The infrastructure required to put this

in place is under way and by December,

2015, the Bank expects to provide RTGS/

NEFT services to customers as direct

members.

l Scheduled Bank status

A Scheduled Bank status will facilitate

access to sizeable CASA (current account

and savings account) funds, allow the

bank to forge ties with government

institutions, make institutional business

accessible and enable the bank to

approach agencies that provide refinance

to scheduled banks.

At the end of the last financial year, we

targeted a deposit base of `750 crore,

imperative to our goal of obtaining

Scheduled Bank status. The challenge

was clear – after 16 years of existence, the

bank had a deposit base of `398.55 crore;

it had to achieve an 88% increase within

12 months.

The Bank finished the year under review

with deposits of `775 crore and hopes to

create a deposit base of `900 crore by the

end of 2015-16.

l Conversion to Commercial Bank

The total number of villages in India is

over 6 lac but the number of scheduled

commercial banks and that of regional

rural banks stands at just 33,495.

The Bank aims to help plug this gap by

addressing emerging opportunities.

At Shivalik Bank, emerging as a Scheduled

Commercial Bank would be a decisive

step in the Bank’s vision to emerge as a

respectable financial institution with a

sizeable corpus of ̀ 5,000 crore in deposits

and advances by 2020.

We expect to emerge as a leading

commercial bank in North India across

the foreseeable future.


Opening Balance Amount (in `) Closing Balance Remarks

Accumulated Profit of

previous years

1,01,62,039.93

Less: Adjustments during

the year

(22,98,749.00)

Profit for the year 2014-15 4,94,85,072.86

Total Profit 5,73,48,363.79

Proposed Appropriation:

Statutory Reserve 5,41,38,308.00 1,23,71,268.00 6,65,09,576.00 25% of current year's Profit (Mandatory as per Multi-

State Co-operative Societies Act, 2002)

Education Fund – 4,94,851.00 4,94,851.00 1% of current year's Profit (Mandatory as per Multi-


Contingency Reserve 1,18,84,245.00 49,48,507.00 1,68,32,752.00 10% of current year's Profit (Mandatory as per Multi-


Investment Fluctuation

Reserve

63,43,728.00 1,00,00,000.00 1,63,43,728.00 In accordance with RBI guidelines

Share Transfer Fund 50,00,000.00 (50,00,000.00) – Proposed to do away with STF & utilize the Share

Capital Account for share refunds in future

Interim Dividend @ 4% 1,66,70,512.00 1,66,70,512.00 Already paid on 31.03.2015

Proposed Dividend @ 4% 1,66,70,512.00 1,66,70,512.00 Last year's dividend amount was `2,80,17,096 @ 12%

Total Appropriation 5,61,55,650.00

Accumulated Profit C/F to

next year

11,92,713.79

Appropriation of Profit 2014-15


Our Profile & Achievements

Shivalik Mercantile Co-operative Bank Ltd. was

registered as a Co-operative Society under

Uttar Pradesh Co-operative Societies Act,

1965 in 1997. It was granted the license to

conduct banking business as a Primary Urban

Co-operative Bank in the district Saharanpur

by Reserve Bank of India in September,

1997. The Bank started operations on 5th

September, 1998 and has registered constant

growth since then. Presently the bank is rated

amongst the best Urban Co-operative Banks

in the state.

Subsequent to achieving a deposit base of

more than `100 crores on 31st March, 2010,

the bank was recognized as a Tier-II bank and

was allowed to extend its area of operation to

entire state of Uttar Pradesh.

The bank has constantly been endeavouring

to expand and had taken over an Urban Co-

operative Bank by the name of Bhoj Nagrik

Sahakari Bank Maryadit at Dhar, Madhya

Pradesh. As a result of this merger, which was

effective on 1st November, 2010, the bank

was de-registered from the state Government

(UP Co-operative Societies Act, 1965) and was

re-registered under the Central Government

(Multi-state Co-operative Societies Act, 2002)

under the overall control of the Central

Registrar of Co-operative Societies, Ministry

of Agriculture & Co-operation, New Delhi.

Shivalik Bank thus became the first Multi-state

Urban Co-operative Bank of the state of UP.

Continuing the saga of inter-state expansion,

Shivalik Bank again took over a weak co-

operative bank, Malwa Commercial Co-

operative Bank Ltd. in Indore, MP. The merger

was made effective on 1st September, 2012.

Thus Shivalik Bank got a second branch in the

state of Madhya Pradesh.

The Bank is fully computerized under CBS

environment and has 21 branches at present,

out of which 12 branches are located within

District Saharanpur, 1 at Meerut, 2 each at

District Muzaffarnagar, Ghaziabad and Noida,

and 1 each at Indore & Dhar in Madhya

Pradesh.

The Bank is managed by a Board, which is

well diversified, reputed and experienced.

The Board comprises persons from all walks of

society viz. Industrialists, Agriculturists, Traders,

Professionals, Chartered Accountants, Retired

Senior Bank Personnel etc. The phenomenal

growth & excellent reputation of the bank is

much accredited to the personal reputation

and fame enjoyed by its Chairman & the

Board of Directors, apart from the professional

management style of the Bank.

The bank has its head-quarters at Saharanpur,

which is located at the junction of UP,

Uttrakhand, Haryana & Himachal Pradesh. The

population of Saharanpur is approximately 9

lakhs as per census 2011. The main activities

include trading, agriculture, handicrafts &

small industries. Saharanpur is famous for its

wood carving work and wooden articles are

exported all over the world from here. Some

very reputed industries like I.T.C. and Star

Paper Mills Ltd. are also located here.

A few of our major achievements are as

follows.

MANAGEMENT:

The Bank has maintained highest norms of

account keeping and has been very prompt

in finalizing its annual accounts and getting it

audited. The bank feels pride that the Balance-

Sheet of the bank is ready on 1st of April every

year after finalizing annual accounts.

The IT awareness is very high in our bank. This

is also due to the fact that the Chairman and

the CEO of the Bank are engineers with work

experience with M/s Hindustan Aeronautics

Limited and M/s Tata Consultancy Services

respectively.

The bank tends to manage its business in a

very professional and transparent manner. We

are regularly publishing our results/policies/

interest rates/charges etc. on our website

apart from displaying them in our branches.

All the senior personnel of the bank are

IT conversant and make extensive use of

technological communication modes such as

email and video conferencing, which enables

fast and cheap communication. The bank

is gradually moving towards the ‘paperless

office’ concept.

TECHNOLOGY INITIATIVES & INNOVATION:

We have professionalized our management by

having full computerization, and by employing

well-qualified staff. We have successfully

implemented ‘Core Banking System’, thereby

providing any branch banking to all our

customers. The bank has sourced state of the

art CBS software named ‘Profile’ from a leading

multi-national software company namely FIS.

FIS proudly features in the Fortune 500 list &

is one of the top five Financial Technology

providers, world-wide. The CBS software,

Profile, is capable of handling all future growth

in bank’s business. Apart from scalability, the

software is also capable of being upgraded

to confirm to latest technology from time to

time. This software helps the bank in efficient

control of all its branches and business. Further

the installation of CBS and use of technology

has also enabled the bank to provide Internet

Banking to its customers. Very soon, Mobile

Banking is also going to be launched.

The Bank is successfully connected to the

country-wide ATM network, ‘Rupay’ managed

by NPCI. As a result, the customer of Shivalik


Bank can use their ATM cards not only at our

own ATMs but also at the ATMs of all other

banks. All branches and some BC offices of

the bank are equipped with ATMs and cash

deposit machines.

The bank is also participating in the RTGS/

NEFT transactions as a sub-member of IDBI

Bank Ltd. Very soon this participation shall be

done directly.

The bank constantly looks forward to

innovations in banking. Apart from

participation in RTGS/NEFT network, the

bank has arrangements with leading private

commercial banks for issue of ‘at-par cheques’

to facilitate remittances for its customers

and for speedy collection of outstation

instruments of its customers.

Other technological initiatives of the bank

includes SMS alerts, ATMs, Cash & Cheque

Deposit Machines, Debit Cards, POS

machines, E-commerce, Internet banking,

Mobile banking, Forex services, generation of

automatic AML alerts, Aadhar based payment

systems etc. The bank is providing above

services to its customers and some more are

in process subject to approval by RBI from

time to time.

An I.T. department has also been set up at the

Bank and we are providing computer training

to our staff officers also to keep them abreast

of all relevant innovations and advancements

in technology.

OPERATIONS:

Within a short span of about 17 years, the total

business of the bank has grown to `1,545.02

crores with the deposits at `775.59 crores, the

advances at `557.09 crores and investments

at `212.34 crores.

The Owned Funds of the bank have grown

from `15.50 lacs as on 5th September, 1998,

the bank’s opening day, to a net worth of

more than `57.13 crores as on 31st March,

2015. This shows the trust our shareholders

and the public have in the bank.

The Bank has been in profit from the very first

year of its working and has shown constant

growth. The bank has continuously been

paying a dividend of 12% to its members.

The share of Government or large institutions

in the deposit base of the Bank is not

substantial. The Bank relies on the trust and

confidence that individual investors have

placed in it. As a result the customer base

of the Bank has well exceeded 1,50,000 in

number.

The bank is very cautious & prudent in lending.

The gross NPA of the bank as on 31.03.2015 is

0.48% with a CD Ratio of 71.87%.

REGULATORY COMPLIANCE:

The Bank has been strictly following the

guidelines issued by RBI in all of its operations

and the working of the bank was appreciated

by the officials of RBI during the course of RBI

inspections.

The Bank neither makes any investments

in the shares/debentures nor does it give

any advances against the security of shares/

debentures i.e. the exposure of the bank

towards share/debentures market is Nil.

The Capital to Risk Assets Ratio of the bank,

has constantly remained more than 12% and

presently is 13.75% as on 31.03.2015.

The bank has successfully met the targets for

maintenance of SLR through investments in

Government and Approved Securities as per

RBI norms.

The Bank is regularly maintaining the required

ratio of 40% of total financing to Priority Sector.

FINANCIAL INCLUSION:

The bank is pioneering in the Co-operative

Sector towards efforts made for Financial

Inclusion. We have taken a great initiative by

starting micro-finance to self-help groups.

To run this efficiently we have entered into

partnership with an NGO, which provides

livelihood development trainings to members

of SHG apart from training them in better

money management. Almost all members of

these groups are women belonging to BPL

category with many groups inhabited by

women belonging to minority community.

Till the end of June, 2015, the bank has

linked approx. 7000 SHGs comprising app.

85,000 individual families to its microfinance

program. The total amount sanctioned by

the bank to these SHGs is `40 crores as on 30

June, 2015. These figures are increasing at a

rapid rate.

The bank has initiated a program to appoint

BCs in rural areas to provide banking services

to rural masses. In view of this, Bank has

opened its BC offices at remote places where

full size branch was not needed at present.

In Saharanpur, we have BC offices in Nakur,

Chhutmalpur and Chilkana. 3 BC offices

have been opened in Meerut at Hastinapur,

Mawana and Maliyana village. There are three

BC offices in Noida also at Nithari, Sadarpur

and Barola villages. Lastly, there is one BC

office in Patnipura, Indore.


Customer Service Initiatives

The Bank has earned an excellent reputation

for providing good customer service

and utilization of latest technological

enhancements. The bank is providing

some very innovative and customer friendly

services to its clients. Some of these are

home banking, tele-banking, prompt issue of

remittance instruments, same day payment

of local clearing instruments, promptness

in outstation collection, extended working

hours etc.

A List of Customer Service initiatives taken by

the bank is as follows:

l Extended working hours: Our branches

are open for customer dealing and locker

operations from 10 am to 4 pm. Also, all

the staff at a branch does not take lunch/

tea breaks together, so that the customer

service does not stop even during lunch

hours.

l Entertaining of late customers: If a

customer walks in after 4 pm (close

of business hours), we entertain him

by marking his transactions for the

next business day. Such transactions

are recorded in the registers/systems

duly provided to the branches and are

executed after day open on next business

day.

l May I Help You & other specialized

counters: All our branches are equipped

with a ‘May I Help You/Inquiry’ counter,

a ‘Senior Citizen’ counter and a ‘Digital

Banking’ counter, which help the new

customers to get their work done without

any delay or confusion. The staff sitting at

these counters are well trained to handle

inquiries, suggestions and help in filling

up forms etc.

l Cheque Deposit Machines: All our

branches have installed cheque deposit

machines where a customer can deposit

a cheque intended for clearing/transfer

24 hours a day. This machine securely

accepts the cheque & provides a proper

receipt along with photocopy of the

cheque to the customer. All cheques

received during the night are taken up

for clearing/transfer the next day. This

way the customers can save one day in

clearing transactions.

l Passbook Printer: All our branches are

equipped with passbook printers, so that

customers get neat and legible passbooks

updated instantly.

l Currency counting & currency sorting

machines: All our branches are equipped

with adequate number of currency-

counting machines so that the work

of the customer is attended to within

the shortest time possible. Branches

which deal in high volumes of cash are

also equipped with currency sorting

machines.

l SMS Alerts facility: We provide free SMS

alerts to our customers for all transactions

made in their accounts. The information

provided in the alerts includes transaction

type, amount, date, closing balance and

transaction information.

l Camera for customer’s photo: All our

branches have been provided with a

portable camera so that customers

need not submit their passport size

photographs. The branch officials directly

click their photographs and get it printed.

l Photocopy machine: The branches are

equipped with photocopy machines so

that customers do not have to go out to

get copies of their documents done.

l Availability of Stamp papers: For

use in loan documentation, the bank

directly purchases stamp papers from

the Government Treasury and gets the

cost reimbursed from the customer. This

way the customers neither have to run

around in search of stamp papers nor do

they have to pay commissions to private

vendors to purchase stamp papers.

l Personalized service: The bank keeps a

track of its good customers and provides

personalized services to suit individual

needs. We try to delight the customer

by bonding with him strongly. The bank

wishes its good customers on their

birthdays, anniversaries and special

occasions.

l Home/Telephone banking: We entertain

our customers over telephone and take

their telephonic requests. Based on

their telephonic requests their account

statements/ drafts/ cheques/ other

documents are delivered/ picked up

from their homes/ offices. We also accept

service requests over e-mail. We also

arrange to get the accounts opened/

documentations done at customers’

homes in case customer is unable to

come to the bank.

l Branch infrastructure: It may also be

noted that we have provided excellent


branch infrastructure to enhance

customer satisfaction. Our branches are

equipped with air conditioning, clean

toilets, proper waiting lounges, availability

of drinking water etc.

l Technology: We have installed suitable

CBS software to enhance customer

satisfaction. The software provides any

counter operation, any branch banking

etc. We are also connected with the

‘Rupay’ network for ATMs and to NFS for

RTGS/NEFT as a sub-member through a

leading bank.

l Customer oriented banking procedures:

We have strong customer oriented

banking procedures that ensure that

the customer feels pleasure in dealing

with us. For example whenever a new

customer approaches the bank we get

his KYC formalities done once and later

whenever he/she approaches the bank

again, we refer to his earlier ID and do not

ask for documents again & again.

l Security: We take utmost care to instil

faith and trust in our customers by

keeping all our premises safe & secure.

We take the services of expert security

agencies to provide strong and capable

security guards, all our premises are CCTV

enabled and are closely monitored.

l ATMs: The branches are equipped with

ATMs to facilitate cash withdrawals for

customers at all times. Further, the bank

is connected to the countywide ATM

network to help its customers withdraw

money anywhere in the country.

l Technology: The bank is highly conscious

of technological advancements and

endeavours to provide the latest & best

technology to its customers. Some of the

latest features are SMS alerts, ATMs, Cash

& Cheque Deposit Machines, Debit Cards,

POS machines, E-commerce, Internet

banking, Mobile banking, Forex services,

generation of automatic AML alerts,

Aadhar based payment systems, ECS &

NACH etc.

The Bank has achieved a high level of

satisfaction for all its stakeholders viz. the

Shareholders, the Customers, the Staff and

the Regulating Authorities.

A [email protected]

Our mission is to serve the lowest strata of society with the best products at the best prices and the best technology-driven services, while at the same time being a model employer for the national industry and emerging as a global role model in the small banking sector.

Shivalik Mercantile Co-operative Bank Limited18th Annual Report 2014-15

Shivalik Mercantile Co-operative Bank LimitedRegd. Office: 13/1207, Ansari Road, Saharanpur - 247001, Uttar Pradesh

Head Office: Hakikat Nagar, Saharanpur - 247001, Uttar Pradesh

Telefax: (0132) 2726125, 2726147, 9927135550

E-mail: [email protected]

Visit us at: www.shivalikbank.com

Like us at: www.facebook.com/shivalikbank

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