subordinated debt(allahabad bank)

8/3/2019 Subordinated Debt(ALLAHABAD BANK)

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Private & Confidential Not for Circulation(This is a Disclosure Document prepared in conformity withSecurities and Exchange Board of India (Issue and Listingof Debt Securities) Regulations, 2008 issued vide circularno. LAD-NRO/GN/2008/13/127878 dated June 06, 2008)

ALLAHABAD BANK(A Government of India Undertaking)

Head Office: 2, Netaji Subhas Road, Kolkata 700 001Tel.: (033) 22420899, 22420878, 22420375; Fax.: (033) 22107424

Website: www.allahabadbank.in E-Mail: [email protected]

DISCLOSURE DOCUMENT FOR PRIVATE PLACEMENT OF UNSECURED REDEEMABLE NON-

CONVERTIBLE SUBORDINATED LOWER TIER-II BONDS (SERIES-IX) IN THE NATURE OF

PROMISSORY NOTES OF RS. 10 LAKH EACH FOR CASH AT PAR AGGREGATING RS. 450

CRORES

TRUSTEE FOR THE BONDHOLDERS

IDBI Trusteeship Services Ltd.Registered Office

Asian Building, Ground Floor17, R Karmani Marg, Ballard EstateMumbai - 400 001Tel: (022) 40807000Fax: 91-22-66311776/ 22625247E-mail: [email protected]

REGISTRAR TO THE ISSUE

Maheshwari Datamatics Pvt. Ltd.R.O 6, Mangoe Lane(Surendra Mohan Ghosh Sarani)2nd Floor, Kolkata-700 001Tel: (033) 2243-5809/5029Fax: 91-33-22484787E-mail: [email protected]: www.mdpl.in
mailto:[email protected]:[email protected]:[email protected]:[email protected]


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TABLE OF CONTENTS

INDEX TITLE

I. DEFINITIONS/ ABBREVIATIONS

II. DISCLAIMER

III. NAME AND ADDRESS OF HEAD OFFICE OF THE ISSUER

IV. NAMES AND ADDRESSES OF THE DIRECTORS OF THE ISSUER

V.BRIEF SUMMARY OF BUSINESS/ ACTIVITIES OF ISSUER AND ITS LINE OFBUSINESS

VI

BRIEF HISTORY OF ISSUER SINCE INCEPTION, DETAILS OF ACTIVITIES INCLUDINGANY REORGANIZATION, RECONSTRUCTION OR AMALGAMATION, CHANGES INCAPITAL STRUCTURE, (AUTHORIZED, ISSUED AND SUBSCRIBED) ANDBORROWINGS

VII. SUMMARY TERM SHEET

VIII.

TERMS OF OFFER (DETAILS OF DEBT SECURITIES PROPOSED TO BE ISSUED,MODE OF ISSUANCE, ISSUE SIZE, UTILIZATION OF ISSUE PROCEEDS, STOCKEXCHANGES WHERE SECURITIES ARE PROPOSED TO BE LISTED, REDEMPTIONAMOUNT, PERIOD OF MATURITY, YIELD ON REDEMPTION, DISCOUNT AT WHICHOFFER IS MADE AND EFFECTIVE YIELD FOR INVESTOR)

IX. CREDIT RATING & RATIONALE THEREOF

X. NAME OF DEBENTURE TRUSTEE

XI. STOCK EXCHANGE WHERE SECURITIES ARE PROPOSED TO BE LISTED

XII.

DETAILS OF OTHER BORROWINGS (DETAILS DEBT SECURITIES ISSUED IN THEPAST, PARTICULARS OF DEBT SECURITIES ISSUED FOR CONSIDERATION OTHERTHAN CASH OR AT A PREMIUM OR DISCOUNT OR IN PURSUANCE OF AN OPTION,HIGHEST TEN HOLDERS OF EACH CLASS OR KIND OF SECURITIES, DEBT EQUITYRATIO)

XIII. SERVICING BEHAVIOR ON EXISTING DEBT SECURITIES AND OTHER BORROWINGS

XIV. UNDERTAKING REGARDING COMMON FORM OF TRANSFER

XV. MATERIAL EVENT, DEVELOPMENT OR CHANGE AT THE TIME OF ISSUE

XVI. PERMISSION / CONSENT FROM PRIOR CREDITORS

XVII.MATERIAL CONTRACTS & AGREEMENTS INVOLVING FINANCIAL OBLIGATIONS OF

THE ISSUER

XVIII. DECLARATION

XIX. ANNEXURES

A. CREDIT RATING LETTER FROM CARE

B. CREDIT RATING RATIONALE FROM CRISIL

C. CONSENT LETTER FROM IDBI TRUSTEESHIP SERVICES LTD.


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I. DEFINITIONS/ ABBREVIATIONSALM Asset Liability Management

ATM Automated Teller Machine

Board/ Board ofDirectors

The Board of Directors of Allahabad Bank or Committee thereof

Bonds Unsecured Redeemable Non-Convertible Subordinated Lower Tier-II Bonds(Series-IX) in thenature of Promissory Notes of Rs. 10,00,000/- each offered through private placement routeunder the terms of this Disclosure Document

Book Closure/

Record Date

The date of closure of register of Bonds for payment of interest and repayment of principal

CAR Capital Adequacy Ratio

CARE Credit Analysis & Research Ltd.

CRISIL CRISIL Ltd.

FITCH Fitch Ratings India (P) Ltd.

CAGR Compounded Annual Growth Rate

CDSL Central Depository Services (India) Ltd.

CDR Corporate Debt Restructuring

CRR Cash Reserve Ratio

Debt Securities Non-Convertible debt securities which create or acknowledge indebtedness and includedebenture, bonds and such other securities of the Issuer, whether constituting a charge on theassets of the Issuer or not, but excludes security receipts and securitized debt instruments

Depository A Depository registered with SEBI under the SEBI (Depositories and Participant) Regulations,1996, as amended from time to time

Depositories Act The Depositories Act, 1996, as amended from time to time

Depository Participant A Depository participant as defined under Depositories ActDICGC Deposit Insurance and Credit Guarantee Corporation of India

Director(s) Director(s) of Allahabad Bank unless otherwise mentioned

DP Depository Participant

ECGC Export Credit Guarantee Corporation of India

EPS Earning Per Share

FDI Foreign Direct Investment

FEDAI Foreign Exchange Dealers Association of India

FIs Financial Institutions

FIIs Foreign Institutional Investors

Financial Year/ FY Period of twelve months period ending March 31, of that particular year

GoI Government of India/ Central Government

HUF Hindu Undivided Family

Trustee IDBI Trusteeship Services Ltd.

Issuer Allahabad Bank

Disclosure Document Disclosure Document dated July 24, 2009 for Private Placement of Unsecured RedeemableNon-Convertible Subordinated Lower Tier-II Bonds (Series IX) in the nature of PromissoryNotes of Rs. 10,00,000/- each for cash at par aggregating to Rs. 450 crores to be issued byAllahabad Bank

I.T. Act The Income Tax Act, 1961, as amended from time to time

MoF Ministry of Finance

NPAs Non Performing Assets

NRIs Non Resident Indians

NSE National Stock Exchange of India Ltd.

NSDL National Securities Depository Ltd.

OCBs Overseas Corporate Bodies

PAN Permanent Account Number

PLR/BPLR Prime Lending Rate/ Bench Mark Prime Lending Rate

Rs. Indian National Rupee

RBI Reserve Bank of India

RTGS Real Time Gross Settlement

Registrar Registrar to the Issue, in this case being Maheshwari Datamatics Pvt. Ltd.SARFAESI Act Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act,

2002

SEBI The Securities and Exchange Board of India, constituted under the SEBI Act, 1992

SEBI Act Securities and Exchange Board of India Act, 1992, as amended from time to time

SEBI Regulations Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations,2008 issued vide Circular No. LAD-NRO/GN/2008/13/127878 dated June 06, 2008

SLR Statutory Liquidity Ratio

TDS Tax Deducted at Source

The Bank/ the Issuer Allahabad Bank, constituted under the Banking Companies (Acquisition and Transfer ofUndertakings) Act, 1970

The Companies Act The Companies Act, 1956 as amended from time to time

The Act Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970

The Issue/ The Offer/Private Placement

Private Placement of Unsecured Redeemable Non-Convertible Subordinated Lower Tier-IIBonds (Series IX) in the nature of Promissory Notes of Rs. 10,00,000/- each for cash at par

aggregating Rs. 450 crores to be issued by Allahabad Bank


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II. DISCLAIMER

GENERAL DISCLAIMERThis Disclosure Document is neither a Prospectus nor a Statement in Lieu of Prospectus and is prepared inaccordance with Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations,2008 issued vide Circular No. LAD-NRO/GN/2008/13/127878 dated June 06, 2008. This document does not

constitute an offer to the public generally to subscribe for or otherwise acquire the Bonds to be issued byAllahabad Bank (the Issuer/ the Bank/ the Issuer Bank). The document is for the exclusive use of theInstitutions to whom it is delivered and it should not be circulated or distributed to third party(ies). The Bankcertifies that the disclosures made in this document are generally adequate and are in conformity with thecaptioned SEBI Regulations. This requirement is to facilitate investors to take an informed decision for makinginvestment in the proposed Issue.

DISCLAIMER OF THE SECURITIES & EXCHANGE BOARD OF INDIAThis Disclosure Document has not been filed with Securities & Exchange Board of India (SEBI). The Securitieshave not been recommended or approved by SEBI nor does SEBI guarantee the accuracy or adequacy of thisdocument. It is to be distinctly understood that this document should not, in any way, be deemed or construedthat the same has been cleared or vetted by SEBI. SEBI does not take any responsibility either for thefinancial soundness of any scheme or the project for which the Issue is proposed to be made, or for thecorrectness of the statements made or opinions expressed in this document. The issue of Bonds being madeon private placement basis, filing of this document is not required with SEBI, however SEBI reserves the rightto take up at any point of time, with the Bank, any irregularities or lapses in this document.

DISCLAIMER OF THE ARRANGERIt is advised that the Bank has exercised self due-diligence to ensure complete compliance of prescribeddisclosure norms in this Disclosure Document. The role of the Arranger in the assignment is confined tomarketing and placement of the bonds on the basis of this Disclosure Document as prepared by the Bank. TheArranger has neither scrutinized/ vetted nor has it done any due-diligence for verification of the contents of thisDisclosure Document. The Arranger shall use this document for the purpose of soliciting subscription fromqualified institutional investors in the bonds to be issued by the Company on private placement basis It is to bedistinctly understood that the aforesaid use of this document by the Arranger should not in any way bedeemed or construed that the document has been prepared, cleared, approved or vetted by the Arranger; nordoes it in any manner warrant, certify or endorse the correctness or completeness of any of the contents ofthis document; nor does it take responsibility for the financial or other soundness of this Issuer, its promoters,its management or any scheme or project of the Bank. The Arranger or any of its directors, employees,

affiliates or representatives does not accept any responsibility and/or liability for any loss or damage arising ofwhatever nature and extent in connection with the use of any of the information contained in this document.

DISCLAIMER OF THE ISSUERThe Issuer confirms that the information contained in this Disclosure Document is true and correct in allmaterial respects and is not misleading in any material respect. All information considered adequate andrelevant about the Issue and the Bank has made available in this Disclosure Document for the use and perusalof the potential investors and no selective or additional information would be available for a section of investorsin any manner whatsoever. The Bank accepts no responsibility for statements made otherwise than in thisDisclosure Document or any other material issued by or at the instance of the Issuer Bank and anyone placingreliance on any other source of information would be doing so at his/her/their own risk.

DISCLAIMER OF THE STOCK EXCHANGEAs required, a copy of this Disclosure Document has been submitted to the National Stock Exchange of India

Ltd. (hereinafter referred to as NSE) for hosting the same on its website. It is to be distinctly understood thatsuch submission of the document with NSE or hosting the same on its website should not in any way bedeemed or construed that the document has been cleared or approved by NSE; nor does it in any mannerwarrant, certify or endorse the correctness or completeness of any of the contents of this document; nor doesit warrant that this Issuers securities will be listed or continue to be listed on the Exchange; nor does it takeresponsibility for the financial or other soundness of the Issuer, its promoters, its management or any schemeor project of the Bank. Every person who desires to apply for or otherwise acquire any securities of this Issuermay do so pursuant to independent inquiry, investigation and analysis and shall not have any claim against theExchange whatsoever by reason of any loss which may be suffered by such person consequent to or inconnection with such subscription/ acquisition whether by reason of anything stated or omitted to be statedherein or any other reason whatsoever.


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III. NAME AND ADDRESS OF REGISTERED/ HEAD OFFICE OF THE ISSUER

Name of the Issuer : Allahabad Bank

Head Office : 2, Netaji Subhas Road, Kolkata 700 001

Telephone Number : (033) 22420899, 22420878, 22420375

Fax Number : (033) 22107424

Website : www.allahabadbank.in

E-mail : [email protected]

IV. NAMES AND ADDRESSES OF THE DIRECTORS OF THE ISSUER

The composition of the Board of Directors of the Bank as date of this Disclosure Document is as under:

Sr.No.

Name of Director Designation Background/ Profile/ Address

1. Mr. K. R. Kamath Chairman & Managing Director Allahabad Bank Head Office,2, Netaji Subhas Road, Kolkata - 700 001.

2. Mr. K. K. Agarwal Executive Director Allahabad Bank Head Office,2, Netaji Subhas Road, Kolkata - 700 001.

3. Mr. J. P. Dua Executive Director Allahabad Bank Head Office,2, Netaji Subhas Road, Kolkata - 700 001.

4. Mrs. Sukriti Likhi Government Nominee Director B-61, Nivedita Kunj, R K Puram, Sector 10,New Delhi- 110022

5. Mr. Mohammad Tahir RBI Nominee Director F-701, Marigold CHS Valley of Flowers,Thakur Village, Kandivli (E), Mumbai-400101

6. Mr. K. K Dogra Officers Nominee Director 155, Old Ashoka Garden, Raisen Road,

Bhopal-4620237. Mr. V. Gurumurthy Workman Nominee Director No. 18 (New No. 35), Apparswamy Koil Street,

Mylapore, Chennai-6000048. Mr. Ashok Jain Part Time Non Official

Government Nominee Director118, Jaipur House, Agra, U.P-282010

9. Mrs. Joginder Kaur Part Time Non OfficialGovernment Nominee Director

560, Sector-36-B, Chandigarh

10. Mr. P. V Gudireddy Part Time Non OfficialGovernment Nominee Director

Vill- Pathapalli, Post- Kallur, Taluk- Srinavaspur,District- Kolar, Karnataka.

11. Dr. Shakeel Uz-ZamanAnsari

Part Time Non OfficialGovernment Nominee Director

J-36, Abdul Fazal Enclave, Jamia Nagar, Okhla,New Delhi-110025

12. Mr. Deveshwer KumarKapila

Shareholders Director 940, Sector 17B, Gurgaon, Harayana,PIN-122007

13. Dr. Vasant Baburao

Kaujalgi

Shareholders Director N-220, Ushas Apts, 16 Main, 4 Block,

Jayanagar, Bangalore-560011


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V. BRIEF SUMMARY OF BUSINESS/ ACTIVITIES OF ISSUER AND ITS LINE OF BUSINESS

HIGHLIGHTS OF THE BANK1. Public sector Bank with major stake with Government of India.2. Bank with more than 144 years of existence.3. Professionally managed Bank with a track record of profitability.4. Large network of branches spread throughout the country. As on Mar 31, 2009 the branch network of

the Bank includes 2259 domestic branches, one foreign branch at Hong Kong and one Rep. Office in

China apart from 69 extension counters.5. Specialized branches to cater the need of industrial finance, trade finance, personal banking,

international banking, NRIs and small-scale industries.6. Capital Adequacy Ratio of 13.11% as on March 31, 2009, which is well above the stipulated minimum of

9% prescribed by RBI.7. Product portfolio includes Trade finance, Consumer Loans, Loan through Internet, Demat Services,

Kisan Cards etc.8. Net NPA to Net Advance Ratio decreased to 0.72% as on March 31, 2009 as compared to 0.80% as on

March 31, 2008.9. Diversified loan portfolio spread over many industries with exposure not more than 15% to any single

non-food industry.10. Modern training facilities for imparting specialised and modern training to its employees through various

staff training colleges/ centers located at Lucknow, Kolkata, Panchkula, Bhubaneswar and Hyderabad.11. Total Business of the Bank stood at Rs. 144415 crores as on 31-03-2009.12. Deposits have grown by 18.65% during FY 2009.13. Gross Advances have grown by 18.15% during FY 2009.14. Consistent growth in clientele base.15. Launching of innovative banking products on regular basis to meet the customers needs.16. Paid dividend @ 25% for the year 2008-09.17. Earning Per Share for the year ended March 31, 2009 was Rs. 17.21.

BACKGROUND OF THE BANKAllahabad Bank, the oldest joint Stock Bank of the country, was set up in the historic town of Allahabad onApril 24, 1865 by a Group of Europeans. At that juncture, organised industry, trade and banking had juststarted taking shape in India. The Bank started with a subscribed capital of Rs. 2 lacs and by the end of 19thcentury, it grew with branches at Jhansi, Kanpur, Lucknow, Bareilly, Nainital, Kolkata and Delhi. In the early20th century, with the start of Swadeshi Movement, Allahabad Bank witnessed a spurt in deposits and thereserves increased to over Rs. 30 lacs by 1910.

In 1920, the Bank was taken over by P&O Banking Corporation at a bid price of Rs. 436 per share. The HeadOffice and the Registered Office of the Bank were then shifted to Kolkata in 1923 for business considerationsand operational convenience. In 1927, the Bank went into the fold of Chartered Bank that acquired thecontrolling interest in the P&O Banking Corporation. The Bank passed through the critical period of GreatDepression during the early thirties, which caused a general stagnation in the global markets without sparingthe Indian Banking Industry. The Bank dovetailed its functioning in accordance with the exigencies of the FiveYear Plans, which were started in 1951. In the post independence era, Allahabad Bank maintained a steadygrowth and the Bank opened its 100th branch by 1964.

On July 19, 1969, along with 13 other major commercial banks, Allahabad Bank was nationalised. At the timeof nationalisation, the Bank had a network of 151 branches, deposits of Rs. 114 crores and advances of Rs. 82crores to its credit. With nationalisation, the Bank spread its activities in the rural, unbanked and under-bankedareas.

In order to bolster the rural economy, a plethora of Social Banking Schemes was introduced. Thus, Lead BankScheme (1969), Regional Rural Banks (1975), Twenty-point Programme (1975), New 20-point Programme(1981), Integrated Rural Development Programme (1980) etc. were introduced in the Indian Banking industry.Directed lending to priority sectors, weaker sections, Scheduled Castes/ Scheduled Tribes and OtherBackward Castes were given a greater thrust and the Bank responded to this initiative and increased itspresence in these areas also. In October 1989, United Industrial Bank Limited was amalgamated intoAllahabad Bank. As on 31 Mar 2009 the Branch network of the Bank increased to 2260 with 968 ruralBranches, 406 semi urban Branches, 464 urban Branches, 421Metropolitan and one foreign Branch. As onMarch 31, 2009 the Banks priority sector credit stood at Rs. 20435 crores, forming 41.10% of adjusted netbank credit and the agriculture credit was over Rs. 9568 crores constituting 19.20% of adjusted net bankcredit.

The Bank also opened specialized branches such as Industrial Finance Branches, International Branches, SSIFinance Branches, and Recovery Branches etc. The Bank made a foray into merchant banking activity in 1984and subsequently transferred the merchant banking activities to AllBank Finance Limited, a wholly ownedsubsidiary, in 1991.


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Disclosure DocumentOne of the major challenges faced by the Bank was the accumulated losses incurred by it for threeconsecutive years, i.e. from 1992-93 to 1994-95, owing to the adoption of prudential accounting norms, in linewith RBI directives. To overcome this situation and to strengthen the bank in various functional areas, a majorrevamping exercise was initiated. The Bank put a greater thrust on areas like technological up-gradation &modernization, improvement in customer service, credit management with focus to reduce non-performingassets etc. The Bank staged a turnaround in 1995-96 with a net profit of Rs. 5.62 crore, which increased to Rs.768.60 crore in 2008-09.

BUSINESS PROFILEThe aggregate deposits of the Bank as on March 31, 2009 were at Rs. 84971.79 crore and total advancesstood at Rs. 59443.40 crores.

PRODUCTS AND SERVICESOther than the offering traditional banking products such as corporate loans, the Bank has made its presenceby introducing certain new products and value added services while continuing to popularize the existingproducts. The Bank has launched All Bank Reverse Mortgage Scheme during 2007-08. The Bank has takeninitiative to promote Retail Banking, some of the products are:

(a) Retail Banking BoutiquesIn the year 2000, Allahabad Bank came out with a unique strategy for marketing its retail loans by putting inplace dedicated Retail Banking Boutiques at potential centers across the country to act as exclusive deliverychannels of various Retail Finance Schemes. The Bank posted young & dynamic officers in these boutiquesand delegated them with adequate authority to sanction loan proposals related to the various schemes on thespot. These officers were also exposed to specialized training not only to serve the customer better but also to

sell the retail products, if need be, by adopting door to door campaign. Total number of Boutiques was 126 withan outstanding of Rs. 2468.46 crores as on March 31, 2009. During the year ended March 31, 2009, the totaldisbursement under the various retail finance schemes was Rs. 1795.60 crores and outstanding was Rs.8406.48 crores.

Brief description of the Banks retail schemes is as under -

Sl.No.

Scheme Details

1 Allahabad Bank Saral LoanScheme

Loan for purchase of entire range of consumer durable/ householdappliances, purchase of two wheeler/ personal computer/ any othertangible items, expenses in connection with any social/ religiousobligations, any other purpose except for speculative purpose

2 Allahabad Bank PersonalLoan Scheme for Pensioners

Loan for meeting personal needs without assigning any specificpurpose

3 Allahabad Bank PersonalLoan Scheme for Doctors/Medical Practitioners

Loan for any personal purpose including purpose for meetingexpenses of professional requirement

4 Allahabad Bank HousingFinance Scheme

Loan for construction of residential house on land already owned/ tobe purchased, for purchase of house/ flat, for renovation / extensionof house/ flat, for purchase of land and construction of housethereon, for taking over of housing loans from other housing financecompanies/ financial institutions

5 Allahabad Bank HousingFinance Scheme forFurnishing and / or Repairingof existing/ new flats/ houses

Loan for furnishing and/ or repairing of existing / new flats/ houses

6 All Bank Rent Scheme Loans against rent receivables for meeting business needs but notfor speculative purposes

7 Allahabad Bank Car FinanceScheme For purchase of new as well as pre owned multi utility vehicle forpersonal use

8 Allahabad Bank Loan againstNSC/ KVP

Loan against NSC/ KVP for any business/ personal purpose otherthan speculative ones

9 Overdraft Facility in SavingsBank A/Cs

To meet immediate exigencies of salaried persons

10 Allahabad Bank EducationalLoan Scheme

To provide financial assistance on reasonable terms to the poor andneedy to undertake basic education to meritorious students topursue higher/ professional / technical education

11 AllBank Gyan Dipika Scheme To provide Educational Loan to Parents/Guardians of studentspursuing school education from Nursery standard to 12th Standard

12 AllBank Property Scheme Loan for meeting credit needs of business by offering building assecurity in the form of equitable mortgage

13 AllBank Mobike Schemes Loan for purchasing two wheelers by salaried persons,

professionals and self employed persons, businessman andagriculturalist


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14 AllBank Abhushan Scheme Loan is given to working and non-working woman for purchase ofgold and diamond jewellary.

15 AllBank Gold Loan Scheme Loan for any purpose for meeting credit needs by offering Goldornaments as security.

16 AllBank Trade Scheme I) Financing of Stock & other assets including book debts to be usedin trade

ii) Development of shop /showroom / Acquiring block / fixed assetslike air conditioners, delivery vans etc.

(ii) Purchase of shop/showroom up to 50% of the value of the shopas per Registered sale deed or market value as assessed by Bank& valuer whichever is less (to be secured by mortgage of registeredsale deed).

17 AllBank Reverse MortgageScheme

Loan for Senior Citizens to supplement their existing income formeeting day-to-day expenses against security of property.

18 Short term loans for financingof Application Money raisedby local Housing Boards &Development Authorities forAllotment of Residential Plot/Flat/ House

Loan for applying for Allotment of Residential Plot/ Flat/ House etc.with Govt. bodies.

19 Personal Loan for LICOfficers, Employees & Agents

Loan for meeting personal needs without assigning any specificpurpose of LIC Officers, Employees & Agents

(b) Loans on InternetThe educational loan facility granted by the Bank was launched in 1997 and was subsequently made possiblevia Internet during 1999. Facility to apply for educational loan on Internet for education loan is available to thestudents of leading 250 institutions like IIMs, IITs, Indian Institute of Science Bangalore, Jamunalal BajajInstitute of Management Mumbai, XLRI Jamshedpur & Indian School of Mines Dhanbad and Bank has so farsanctioned 1770 educational loans amounting to more than Rs. 58.27 crores through Internet.

Kisan Credit CardThe card aims to provide adequate and timely financial assistance to the farmers for their agricultural activitiesamongst other requirements. During the year 2008-09 the Bank issued 1.91 lacs cards. The cumulative KCCnumbered 12.76 lacs with credit line of Rs. 5266.01 crore as on March 31, 2009. The Bank is also providingGroup/Personal Accident insurance cover to the holders of the Kisan Credit Card. The Bank also launched

Kisan Shakti Yojana (KSY) in April 24, 2004. The scheme allowed the farmers to have flexibility and choice inregards to selection of credit for agriculture, allied activities and domestic and personnel purpose.

(c) Depository ServicesThe Bank has had the distinction of being the first nationalized Bank in the eastern region to be a DepositoryParticipant of NSDL at Kolkata to offer Demat and other related services to its customers in 1998. The Bankhad further spread its DP services to its customers by opening DPs at Lucknow, Kanpur and Varanasi underagreement with CDSL. The Bank also opened Branch DPs under NSDL at Mumbai in the year 2004 and NewDelhi in the year 2007 with main DP at Kolkata Main Branch. The Bank booked an income of Rs. 75 lacs from -16000 accounts during financial year 2008-09.

(d) Flexi- Fix Deposit SchemeThis scheme was launched to provide liquidity of a savings bank account and higher yield of a fixed deposit.

(e) Banc-assurance

The Bank has entered into tie up arrangement with Life Insurance Corporation of India (herein after LICI) forLife Insurance business and with Universal Sompo General Insurance Company Ltd and ECGC for Non-lifeInsurance and Export Credit Insurance business for selling of their products through its network of branches.The Bank is also providing life insurance cover to the extent of Rs. 1.00 lac to its depositors in association withLICI on payment of a very nominal premium. The Bank also has tie up arrangements with LICI & Tata AIG forproviding life insurance coverage under group scheme to its Housing Loan Borrowers.

The Bank is having tie-up with Universal Sompo General Insurance Company for providing Free GroupPersonal Accidental Coverage of Rs. 1.00 lac to SB Account holders maintaining an average monthly balanceof Rs. 5000/- as well as to all its ATM cardholders. The Bank has shifted its Corporate Arrangement for non-lifeinsurance business from National Insurance Company Ltd. to Universal Sompo General Insurance Company,a joint venture of the Bank. The Bank also has a tie-up arrangement with LICI for providing group life insurancecoverage to its educational loan borrowers. The Bank has earned an income of Rs11.78 Crores fromBancassurance business during FY 2008-09.


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The Bank has entered into tie up arrangement with UTI-AMC, Principal-Pnb AMC, Kotak- Mahindra AMC,Reliance Capital Asset Management Ltd. and Franklin Templeton Asset Management (India) Pvt. Ltd. forselling of their Mutual Fund Products through our branches. This has generated an income of Rs. 0.78 Croresduring FY 2008-09.

(f) Other ServicesThe Bank has also been providing Cash Management services through its QCS Branches/Centers at Kolkata,New Delhi, Mumbai, Lucknow and Chennai besides 16 Local Cheque Collection (LCC) Hubs at potential

centers pan India. Under CMS activities, the Bank is providing Local Cheque Collection Service, Collect andPay service, Assured Credit up to day 7 to various private and other banks as well as to corporate clients. TheBank has earned an income of Rs.3.86 Crores during FY 2008-09. For expansion of CMS business, the Bankhas introduced many new payment products viz. DD issue, DD Drawing, Direct Credit/Debit facility in CBSBranches.

BRANCH NETWORK OF THE BANKThe Bank has 44 zonal offices, controlling 2260 branches and 69 extension counters as on March 31, 2009,including 74 specialized branches.

The population group wise break up of branches of the Bank in India is as under:Population Group Number of Branches % Share to Total

Rural 968 42.84Semi-Urban 406 17.96

Urban 464 20.53Metropolitan 421 18.63Foreign Branch 1 0.04

Total 2260 100.00

Geographical distribution of the branches of the Bank is as under:State/ Union Territory Number of Branches % Share of TotalAndaman & Nicobar Island 1 0.04Andhra Pradesh 37 1.64

Assam 63 2.79Bihar 167 7.39Chandigarh (U.T.) 4 0.18

Chhattisgarh 29 1.28Delhi 54 2.39

Goa 3 0.13Gujarat 39 1.73Haryana 37 1.64

Himachal Pradesh 7 0.31Jammu & Kashmir 4 0.18Jharkhand 102 4.51Karnataka 25 1.11Kerala 9 0.40

Madhya Pradesh 156 6.90Maharashtra 90 3.98Manipur 1 0.04Meghalaya 1 0.04Nagaland 4 0.18

Orissa 68 3.01Pondicherry (U.T.) 1 0.04Punjab 60 2.65Rajasthan 59 2.61Sikim 1 0.04Tamil Nadu 45 1.99

Tripura 1 0.04Uttar Pradesh 696 30.80Uttaranchal 25 1.11

West Bengal 470 20.81Hong Kong 1 0.04

TOTAL 2260 100.00


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For customers satisfaction and to increase the business, the Bank has given thrust to single window serviceby opening the specialized branches. The Bank has 74 specialized branches as on March 31, 2009 and theyare engaged in financing its corporate borrowers, small-scale industries, specialized trading etc. The detailsare as given below:

Specialized Branches Number of Branches

Industrial Finance 6International 5

Recovery 6SME Finance Branches 18Industrial Finance cum International 1

Non-Resident Indians 1Specialized Personal Banking 2Specialized Savings Bank Branch 1Specialized Commercial Agricultural 1Quick Collection Service 2

Trading Finance 2Forex cum Treasury Management 1Agriculture Finance 4Regional Processing Centre (Forex) 3Agriculture Development Branch 1

Service Branches 19

Cash Management Services 1Total 74

DEPOSITS (Rs. in crores)

As on March 31,2005

March 31,2006

March 31,2007

March 31,2008

March 31,2009

Deposits 40762 48500 59544 71616 84971

Annual Growth Amount 9285 7738 11044 12072 13355Annual Growth Percent 29.50 18.98 22.69 20.27 18.65Cost of Deposits (%) 5.00 4.97 5.67 6.67 6.62

Total deposits of the Bank as on March 31, 2009, stood at Rs. 84971crores. The same was Rs. 71616 croreson March 31, 2008 and thus in 2008-09 the growth was Rs. 13355 crores ( 18.65%).

The category-wise break-up of total deposits during last 5 years is presented below: (Rs. in crores)As on March 31,

2005March 31,

2006March 31,

2007March 31,

2008March 31,

2009Current Deposits 3299 4081 5492 5780 6623

Savings Bank Deposits 12472 14967 17120 20028 22774Term Deposits 24991 29452 36932 45808 55574Total 40762 48500 59544 71616 84971

ADVANCES (Rs. in crores)

Year ended March 31,2005

March 31,2006

March 31,2007

March 31,2008

March 31,2009

Advances 22152 30061 41914 50312 59443

Annual growth amount 5764 7909 11853 8398 9131Annual growth (%) 35.17 35.70 39.43 20.04 18.14

The population group-wise classification of the Banks Gross Advances is as under: (Rs. in crores)

* Gross Bank credit excludes deposits under Rural Infrastructure fund (RIDF), Advances under Provident FundPronote etc on last Friday of March / June.

As on March 31,2005

March31,2006

March 31,2007

March 31,2008

March 31,2009

Rural 3170 3963 4730 5338 5094Semi-Urban 2438 2974 4126 4265 3438Urban 4523 5497 7473 8273 9467

Metropolitan 12021 17627 25585 32436 41444Total 22152 30061 41914 50312 59443


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Asset classification and Non-Performing AssetsThe details of Non-Performing Assets of the Bank are furnished in the tables below: (Rs. in crores)

Classification of Assets as on March 31,2005

March31,2006

March 31,2007

March 31,2008

March 31,2009

Standard Assets 20867.25 28877.39 40819.92 49301.64 58365.40Sub Standard Assets 289.14 292.47 523.39 462.61 701.01Doubtful Assets 930.79 829.76 468.56 504.48 330.61Lossed Assets 64.34 61.60 101.64 43.42 46.63

Gross NPAs 1284.27 1183.83 1093.59 1010.51 1078.00Gross Advances 22151.52 30061.22 41913.51 50312.15 59443.40

Gross NPA at the beginning of the year 1418.46 1284.27 1183.83 1093.59 1010.51

Addition during the year 351.39 337.65 569.60 619.22 846.06

Reduction during the year 485.58 438.09 659.84 702.30 778.32

Upgradation 104.60 85.16 62.66 109.68 179.22

Cash Recovery 106.45 89.33 149.27 152.42 188.25

Compromise 198.99 172.10 125.40 153.68 79.53

Write-off 75.54 91.50 322.51 286.52 331.32

Gross NPA at the end of the year 1284.27 1183.83 1093.59 1010.51 1078.00

Provision 1000.70 913.44 623.48 591.69 641.64

Interest Suspense 1.96 22.63 28.97 17.55 12.52

DICGC & ECGC Balance 10.91 1.67 0.95 1.46 1.98

Net NPA at the end of the year 270.70 246.09 440.19 399.81 422.11Gross NPAs to Gross Advances (%) 5.80 3.94 2.61 2.00 1.81

Net Advances 21137.95 29123.48 41260.11 49701.45 58787.26

Net NPAs 270.70 246.09 440.19 399.81 422.11

Net NPA to Net Advances (%) 1.28 0.84 1.07 0.80 0.72

TREASURY OPERATIONS

Investments (Rs. in crores)

Details of Investment (Rs. in crores)

The yield on investments (%) for the last five financial years is given as under:

As on March 31 2005 2006 2007 2008 2009Yield including profit on sale of investments (%) 9.55 8.31 7.96 8.78 9.34

Yield excluding profit on sale of investments (%) 7.61 7.56 7.58 7.43 7.57

As on March 31,2005

March 31,2006

March 31,2007

March 31,2008

March 31,2009

Gross investments 19128.87 18315.67 19049.87 23722.28 30081.35

SLR Investments 15407.25 14153.70 14792.84 17909.05 21801.35

Held Till Maturity (HTM) 10530.40 9370.13 13433.95 12604.24 16554.71Available For Sale 8593.23 8939.99 5615.92 11117.69 13536.51Held For Trading 5.24 5.55 Nil 0.35 0.14% of HTM to entire portfolio (%) 55.05 51.16 70.52 53.13 55.00

Security Details March 31,2005

March 31,2006

March 31,2007

March 31,2008

March 31,2009

Government Securities 14883.58 13659.88 14327.06 17471.23 21502.41

Other Approved Securities 523.67 493.82 465.78 437.82 298.95Shares 85.27 125.42 256.72 439.70 453.22

Debentures & Bonds 2564.79 2631.93 3087.75 3165.78 2356.07Subsidiaries & Joint Ventures 87.62 87.62 42.62 87.62 87.62Others 983.94 1317.00 869.94 2120.13 5383.08

Total 19128.87 18315.67 19049.87 23722.28 30081.35


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CAPITAL ADEQUACY POSITION OF THE BANKThe Capital Adequacy Ratio (CAR) of the Bank stood at 13.11% as on March 31, 2009 . Details of capital vis--vis risk weighted assets for last five financial years are given as under: (Rs. in crores)

March 31,2005

March 31,2006

March 31,2007

March 31,2008

March 31,2009

As on

Basel I Basel I Basel I Basel II Basel II

Capital FundsTier I Capital

Paid up Equity Capital 346.70 446.70 446.70 446.70 446.70

Less: Investment in Subsidiary 60.00 60.00 -- --Less 50% of investment inSubsidiary & Associates

-21.31 -21.31

Less Intangible Assets(FPO Exp.)

Nil 26.84 27.07 - -

LESS Deferred Tax Asset Nil Nil Nil NIL NILSub- Total 286.70 359.86 404.63 425.39 425.39

Reserves & Surplus 950.75 2603.09 3146.64 3893.36 4531.30Add- Innovative Perpetual Debt 150.00

Total Tier I Capital 1237.45 2962.95 3551.27 4318.75 5106.69Tier II Capital

Revaluation Reserve 270.11 264.94 395.57 395.23 393.01General Provisions 53.00 106.00 218.32 258.16 278.54Subordinated Debt 408.32 824.00 1321.90 1761.90 2101.90Investment Fluctuation Reserve 429.95 Nil Nil NIL NILUpper Tier II Bonds 500.00Less 50% of investment inSubsidiary & Associates

-21.31 --21.31

Total Tier II Capital 1161.38 1194.94 1937.79 2393.98 3252.14Total Capital Fund 2398.83 4157.89 5489.06 6712.73 8358.86Risk Weighted Assets 19149.99 31105.90 43841.31 55981.80 63767.87

Capital Adequacy Ratio (%) 12.53 13.37 12.52 11.99 13.11

KEY ACCOUNTING RATIOS

Earning Per Share (Rs.)

Net Profit (A) Rs. In crore 541.80 706.13 750.14 974.74 768.60Weighted Avg. No. of Equity Shares (B) 346700000 439576712 446700000 446700000 446700000

Earning Per Share (Rs.) (A / B) 15.63 16.06 16.79 21.82 17.21Net Asset Value per Share (Rs.)

Net Worth including RevaluationReserve (A) Rs. In crore

2327.65 3648.53 4476.83 5221.05 5851.95

Net Worth excluding RevaluationReserve (B) Rs. In crore

1727.40 3049.78 3593.34 4342.75 4978.58

No. of Shares (C) 346700000 446700000 446700000 446700000 446700000

Net Asset Value per Share (Rs.)

(Including RR) (A / C)

67.14 81.45 100.22 116.88 131.00

Net Asset Value per Share (Rs.) (ExclRR) (B / C)

49.82 68.72 80.44 97.22 111.45

Return On Net Worth beforeextraordinary itemsAdjusted Profit before ExtraordinaryItems Rs. In crore

541.80 706.13 750.14 974.74 768.60

Average Net worth Rs. In crore 1524.11 2388.59 3321.56 3968.05 4660.67Return on Net Worth beforeextraordinary items (%) (A / B)

35.55 29.56 22.58 24.56 16.49


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OTHER RATIOS

Net NPA to Net Advance Ratio (%) 1.28 0.84 1.07 0.80 0.72Interest Income/ Working Fund (%) 7.83 7.57 8.17 8.49 8.67

Non Interest Income/ Working Fund(%)

1.57 1.22 0.63 1.16 1.34

Interest Spread/ Average Working Fund

(%)

3.35 3.17 2.93 2.41 2.54

Operating Exp. / Avg. Working Fund(%)

2.56 2.08 1.72 1.56 1.65

Yield on Advances (%) 8.96 8.75 9.22 10.76 10.88Yield on Investment (%) 7.61 7.56 7.58 7.43 7.57

Cost of Deposits (%) 5.00 4.97 5.67 6.67 6.62CD Ratio (%) 54.30 62.00 70.39 70.25 69.96Operating Profit 933.79 974.36 1099.91 1479.51 1901.15Business per Employee 282 336 495 604 706

Definitions of Key Ratios

Credit/Deposit ratio Total Advances/Total Deposits

Average Working Fund (AWF) Total Average of monthly total assets as per Form X

Interest Spread/AWF (%) Net Interest Earned/AWF

Operating Profit/AWF (%) Profit prior to provisions and contingencies/AWF

Return/AWF (%) Net Profit/AWF

Operating Expenses/AWF (%) Non-interest expenditure/AWF

Cost of deposits (%) Interest expended/Average Deposits as per Form X

Yield on Investments (%) Interest earned on Investments/Average Investments as per FormX

Yield on Advances (%) Interest earned on Advances/Average Advances as per Form X

Return on Average Net Worth (%) Net Profit/Average of Opening & Closing Net Worth

Business per employee (Rs. lacs) Total Deposits excl. Bank Deposits plus Total Advances/EmployeeStrength

Subsidiary and Associates of the BankThe Bank has floated one subsidiary viz. AllBank Finance Ltd.and three Regional Rural Banks viz. TriveniKshetriya Gramin Bank,Lucknow Kshetriya Gramin Bank and Sharda Gramin Bank and one joint venturenamely Universal Sompo General Insurance Company Ltd.

AllBank Finance Ltd. is a wholly owned subsidiary of Allahabad Bank with a capital base of Rs. 15 crore. Thecompany has obtained Category-I Merchant Banking and underwriting registration from SEBI. AllBankFinance Ltd. is engaged in Corporate Advisory Services,Project Appaisal,Issue Management, LoanSyndication and Underwriting. The subsidiary posted a profit of Rs. 9.42 crore during 2008-09 as against Rs.3.95 crore during 2007-2008.

Out of three Regional Rural Banks (RRBs) sponsored by the Bank, two are operating in Uttar Pradesh andone in Madhya Pradesh. These RRBs further improved their performance during 2008-09 with an aggregateprofit of Rs.47.66 crore during 2008-09 as against 43.01 crore during 2007-08. The accumulated Profit stoodat Rs. 386.62 crore as against Rs. 340.77 crore during 2007-08. The sponsored RRBs disbursed Rs. 1033.02

crore during 2008-09 as against target of Rs. 864.98 crore under the Service Area Credit Plan. A total of1,52,825 Kisan Credit Cards were issued during 2008-09.

With the approval from RBI and Govt. of India , the Bank has floated a Joint Venture company for GeneralInsurance Business in partnership with Indian Overseas Bank, Karnataka Bank Ltd., Dabur Ltd. And SompoJapan. The joint venture has started functioning w.e.f. 2007-08. The Universal Sompo General InsuranceCompany Ltd. has posted a loss of Rs. 13.00 crores during the year 2008-09.


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VI. BRIEF HISTORY OF ISSUER SINCE INCEPTION, DETAILS OF ACTIVITIES INCLUDING ANYREORGANIZATION, RECONSTRUCTION OR AMALGAMATION, CHANGES IN CAPITALSTRUCTURE, (AUTHORIZED, ISSUED AND SUBSCRIBED) AND BORROWINGS

HISTORY SINCE INCEPTIONAllahabad Bank, the oldest joint Stock Bank of the country, was set up in the historic town of Allahabad onApril 24, 1865 by a Group of Europeans. At that juncture, organised industry, trade and banking had juststarted taking shape in India. The Bank started with a subscribed capital of Rs. 2 lacs and by the end of 19th

century, it grew with branches at Jhansi, Kanpur, Lucknow, Bareilly, Nainital, Kolkata and Delhi. In the early20th century, with the start of Swadeshi Movement, Allahabad Bank witnessed a spurt in deposits and thereserves increased to over Rs. 30 lacs by 1910.

In 1920, the Bank was taken over by P&O Banking Corporation at a bid price of Rs. 436 per share. The HeadOffice and the Registered Office of the Bank were then shifted to Kolkata in 1923 for business considerationsand operational convenience. In 1927, the Bank went into the fold of Chartered Bank that acquired thecontrolling interest in the P&O Banking Corporation. The Bank passed through the critical period of GreatDepression during the early thirties, which caused a general stagnation in the global markets without sparingthe Indian Banking Industry. The Bank dovetailed its functioning in accordance with the exigencies of the FiveYear Plans, which were started in 1951. In the post independence era, Allahabad Bank maintained a steadygrowth and the Bank opened its 100th branch by 1964.

On July 19, 1969, along with 13 other major commercial banks, Allahabad Bank was nationalised. At the timeof nationalisation, the Bank had a network of 151 branches, deposits of Rs. 114 crores and advances of Rs. 82crores to its credit. With nationalisation, the Bank spread its activities in the rural, unbanked and under-bankedareas.

In order to bolster the rural economy, a plethora of Social Banking Schemes was introduced. Thus, Lead BankScheme (1969), Regional Rural Banks (1975), Twenty-point Programme (1975), New 20-point Programme(1981), Integrated Rural Development Programme (1980) etc. were introduced in the Indian Banking industry.Directed lending to priority sectors, weaker sections, Scheduled Castes/ Scheduled Tribes and OtherBackward Castes were given a greater thrust and the Bank responded to this initiative and increased itspresence in these areas also. In October 1989, United Industrial Bank Limited was amalgamated intoAllahabad Bank. As on 31 Mar 2009 the Branch network of the Bank increased to 2260 with 968 ruralBranches, 406 semi urban Branches, 464 urban Branches, 421Metropolitan and one foreign Branch. As onMarch 31, 2009 the Banks priority sector credit stood at Rs. 20435 crores, forming 41.10% of adjusted netbank credit and the agriculture credit was over Rs. 9568 crore constituting 19.20% of adjusted net bank credit.

The Bank also opened specialized branches such as Industrial Finance Branches, International Branches, SSIFinance Branches, and Recovery Branches etc.

The Bank made a foray into merchant banking activity in 1984 and subsequently transferred the merchantbanking activities to All Bank Finance Limited, a wholly owned subsidiary, in 1991. AllBank Finance Limitedwas registered as a Category-I Merchant Banker with SEBI and undertook activities such as project advisoryservices, loan syndication, issue management, leasing, trusteeship and portfolio investment services.Consequent upon the SEBI Rules and Regulations notified on December 09, 1997 for segregation of CapitalMarket and fund based activities into separate entities, the Company surrendered its Merchant Bankingregistration with SEBI with effect from July 01, 1998 and got itself registered as a NBFC with RBI on August21, 1998. The AllBank Finance Ltd. posted a profit of Rs. 9.42 crore during 2008-09 as against 3.95 croreduring 2007-08.

One of the major challenges faced by the Bank was the accumulated losses incurred by it for three

consecutive years, i.e. from 1992-93 to 1994-95, owing to the adoption of prudential accounting norms, in linewith RBI directives. To overcome this situation and to strengthen the bank in various functional areas, a majorrevamping exercise was initiated. The Bank put a greater thrust on areas like technological up-gradation &modernization, improvement in customer service, credit management with focus to reduce non-performingassets etc. The Bank staged a turnaround in 1995-96 with a net profit of Rs. 5.62 crore, and consistentlyearned profit .During the year 2008-09 the bank earned a profit of Rs. 768.60 crore.

The Bank became the first Nationalized Bank in Eastern India to become a depository participant of NationalSecurities Depository Limited (NSDL) to offer demat and related services and initiated Flexi-fix DepositScheme to mobilize resources. The Bank also introduced Kisan Card to facilitate agriculture related activitiesas well as to meet the domestic requirements of farmers. In order to boost credit off-take, the Bank haslaunched user-friendly and attractive products namely, consumer finance, car finance, educational loans,personal loan etc.


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The growth of the Bank over the years is given below: (Rs. In crores)

Year ended No. of Branches Paid-up Capital Deposits Advances

1865 1 0.02 0.01 0.01

1890 4 0.04 0.70 0.53

1910 15 0.20 5.53 4.66

1930 37 0.36 11.36 5.21

1950 58 0.46 27.16 14.97

1970 211 1.05 140.70 95.95

1989 1509 57.50 4,034.04 1,831.77

1999 1884 246.70 15,510.35 7,057.07

2000 1893 246.70 17642.10 8240.06

2001 1903 246.70 20106.02 10315.80

2002 1914 246.70 22665.94 11815.01

2003 1923 346.70 25463.38 13486.94

2004 1935 346.70 31476.61 16387.66

2005 1951 346.70 40762.08 22151.52

2006 1999 446.70 48499.69 30061.22

2007 2060 446.70 59544.66 41913.51

2008 2155 446.70 71616.38 50312.16

2009 2260 446.70 84971.79 59443.40

Present StatusAs on March 31, 2009, the Bank had 2260 branches, comprising 968 rural, 406 semi-urban, 464 urban and421 metropolitan, which formed 42.84%, 17.96%, 20.53% and 18.63% of the total respectively. The branchesinclude 74 specialized branches (i.e. 6 Industrial Finance Branches, 18 SME Finance Branches, 5 InternationalBranches, 6 Recovery Branches, 1 NRI Branch, 1 Industrial Finance-cum-International Branch, 2 SpecializedPersonal Banking Branch, 1 Specialized Savings Bank Branch, 2 Quick Collection Service Branches and 2Trading Finance Branches, 1 Specialized commercial agriculture, 1 Forex cum Treasury Management, 4Agriculture Finance , 3 Regional Processing Centre (Forex) ,1 Agriculture Development Branch & 1 CMSBranch besides 19 Service Branches. The Bank has 69 Extension Counters. A number of Banks branchesand offices are housed in the Banks owned premises situated at prime locations in major cities of the country.

Pursuant to organizational restructuring, the Bank is currently operating with a 3-tier structure since June 01,2001 which was further restructured in November, 2004 by reducing the number of Regional Offices from 48 to41 and renaming them as Zonal Offices, on account of synergic reasons and improvement in level of

efficiency, reduction in overhead cost and other operating expenditures.

The Bank has been entrusted with State Level Bankers Committee (SLBC) convener ship in the newly formedstate of Jharkhand. The Bank is continuing its utmost endeavor for economic upliftment of the state through itsvarious developmental programmes. The Bank has set up a residential institute in the name of Birsha MundaInstitute of Entrepreneurship Development( BMIED) at Hazaribagh as a part of promotional measures forenhancement of flow of bank credit in Jharkhand State. The institute has imparted training to 3048unemployed youths of which 633 trained persons received financial assistance amounting to Rs. 7.21 crorefrom our Bank till March 31, 2009.

The Bank came out with its maiden Equity IPO in the month of October 2002. The at par public issue evolvedoverwhelming response from the retail investors. The Bank mobilized more than Rs. 370 crores against theoffer size of Rs. 100 crores. The number of applications from retail investors in the issue exceeded 2.23 lacs.After the issue, the holding of the Government of India came down to 71.16%. Capital Adequacy Ratioimproved to 11.15% as on March 31, 2003 due to increase in capital through maiden equity public issue.

The Bank came out with its follow-on Equity public offer in the month of April 2005 through book building route.The issue demonstrated a repeated overwhelming response from the investors. The Bank mobilized more thanRs. 7380 crore against the offer size of Rs.820 crore. After the issue, the holding of the Government of Indiacame down to 55.23%.

The Bank has been giving much importance to Human Resource Development. It has sent some Officers foroverseas training also. Computerization and automation of operations continued to receive focused attentionfrom the Bank. The Bank has computerized all its branches & extension counters,. ATM numbering 211 andwith membership of National financial switch , our card holders can now have access to over 38000 and 5 lacsPOS terminals.. The bank has entered into tie up with VISA for issuance of Debit Cards and with aggressivemarketing strategies. The bank has already issued nearly 4 lakhs International ATM Debit Cards. M/s TCShas been selected as the system integrator for implementation of CBS in 900 branches of our Bank. As against209 branches under CBS as on March 31,2008, 916 branches/offices were on CBS as on March 31 ,2009

covering more than 81% of business of the Bank.


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The Bank has undertaken strategic planning in order to become one of the strongest banks in the country innear future through both product and geographical diversification. For this purpose tie up arrangements havebeen made with various insurance companies and mutual funds such as Franklin Templeton, Kotak Mahindra,PNB Mutual Funds, Life Insurance Corporation, UTI Mutual Fund etc. The Bank has opened its maidenoverseas branch at Hong Kong and also representative office at Shenzhen, China. With the Approval fromReserve Bank of India, General insurance business under Joint venture with Indian Overseas Bank, KarnatakaBank Ltd, Dabour Ltd and Sampo Japan has started functioning.

CAPITAL STRUCTURE (as on March 31, 2009) (Rs. in crores)Particulars Amount1. SHARE CAPITALa. Authorised Equity Share Capital

150,00,00,000 Equity Shares of Rs. 10/- each 1500.00b. Issued Equity Share Capital

44,67,00,000 Equity Shares of Rs. 10/- each (includes 24,67,00,000 equityshares of Rs 10/- each amounting to Rs. 24,67,00,000 held by GOI)

446.70

c. Subscribed & Paid-up Equity Share Capital

44,67,00,000 Equity Shares of Rs. 10/- each (includes 24,67,00,000 equityshares of Rs 10/- each amounting to Rs. 246,70,00,000 held by GOI)

446.70

2. SHARE PREMIUM ACCOUNT 720.00

SHARE CAPITAL HISTORY (since nationalisation on July 19, 1969) (Rs. in crores)

Year/ Half Year ended Increase/(Decrease)in capital

Mode Paid-UpCapital

December 31, 1970 - Acquisition of Share Capital on Nationalisation by GoI 1.05

December 31, 1984 0.12 Contribution to Capital by GoI 1.17



March 31, 1989 31.50 Contribution to Capital by GoI 57.50






March 31, 1997 (532.00) Adjustment of Accumulated losses against capital 246.70

November, 26, 2002 100.00 Fresh issue of capital (public issue) 346.70

April 26, 2005 100.00 Fresh issue of capital (public issue) 446.70

TOP 10 SHAREHOLDERS (as on June30, 2009)

SHAREHOLDING PATTERN (as on June 30, 2009)

Sr.No.

Category No. ofShareholders

No. of SharesHeld

%Shareholding

I. Promoter (Government of India) 1 246700000 55.23Total (Promoters) 1 246700000 55.23

II. Institutionsa. Mutual Funds/ UTI 31 12063477 2.70b. Financial Institutions/ Banks 9 377102 0.08c. Insurance Companies 15 56852542 12.73d. Foreign Institutional Investors 68 48876548 10.94

Total (Institutions) 123 118169669 26.45

Sr.No.

Name of Shareholder Number of Shares Held % Shareholding

1 President of India 246700000 55.232 Life Insurance Corporation of India 51970523 11.633 Citigroup Global Markets Mauritius Pvt. Ltd. 10425223 2.33

4 Swiss Finance Corporation (Mauritious) 9901318 2.225 Sanford C Bernstein and Co. Delaware 4386600 0.98

6 FIL Trustee Company Pvt. Ltd. 3350075 0.757 Goldman Sachs Company Pvt. Ltd 2649625 0.59

8 The State Teachers Retirement System 2605900 0.589 ACM Bernstein Value Investment-EM 2110174 0.4710 Bajaj Allianz Life Insurance Company Ltd. 2061278 0.46


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III. Non-Institutionsa. Bodies Corporate 1774 14508076 3.25

b. Individuals (less than Rs. 1 lac of nominal value) 199470 59575943 13.34c. Individuals (more than Rs. 1 lac of nominal value) 215 7375956 1.65d. Non-Resident Indians 657 370356 0.08

Total (Non-Institutions) 202116 81830331 18.32IV. Shares held by Custodians and against which

Depository Receipts have been issued0 0 0

Grand Total 202240 446700000 100.00

BORROWINGSThe borrowings of Bank other than Savings, Current & Term deposit aggregating to Rs. 937.03 crores as onMarch 31, 2009 stood as under: (Rs. in crores)

Particulars of Borrowings Amount outstanding Interest Rate Repayment Date/ ScheduleBorrowing in India

Refinance from NABARD/SIDBI 74.19 4.00% to 8.5% Withdrawable on demandBorrowings Outside India

Borrowing at Hong Kong Branch 862.84 0.30% to 3.95% Withdrawable on demandTotal 937.03

Besides the above, an amount of Rs. 2911.90 crores was outstanding under Unsecured Bonds as on March31, 2009, details of which are as under:

A. LOWER TIER II BONDS

Particulars Deemed Dateof Allotment

Tenure(in months)

Credit Rating Interest Rate(% p.a., annually)

Date ofRedemption

IssueAmount(Rs. Incrores)

SubordinatedTier II BondsSeries III

31.03.2003 85 AA(ind) byFITCH

7.00 30.04.2010 100.00

SubordinatedTier II BondsSeries IV

31.03.2004 99 AA+ by CARE& AA(ind) byFITCH

5.90 30.06.2012 200.00

SubordinatedTier II Bonds

Series V

13.03.2006 120 AA+ by CARE& AA/Stable

by CRISIL

8.00semi annually

12.03.2016 500.00

SubordinatedTier II BondsSeries VI

29.09.2006 120 AA+ by CARE& AA/Stableby CRISIL

8.85 29.09.2016 561.90

SubordinatedTier II BondsSeries VII

25.09.2007 120 AA+ by CARE& AA/Stable byCRISIL

10.00 25.09.2017 500.00

SubordinatedTier II BondsSeries VIII

26.03.2009 120 AA+ by CARE& AA/Stable byCRISIL

9.23 26.03.2019 400.00

Total 2261.90

B. UPPAR TIER II BONDS

Issue Series DeemedDate ofAllotment

Tenure(in months) Credit Rating Interest Rate(% p.a., annually) Date ofRedemption IssueAmount(Rs. Incrores)

SubordinatedUpper Tier IIBonds Series I

19.03.2009 180* AA/Stable byCRISIL &CARE AA byCARE

9.28 19.03.2024 500.00

Total 500.00* Call Option at the end of 10th

year with step up coupon option of 0.50% after the end of 10 year if call optionis not exercised.


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C. INNOVATIVE PERPETUAL DEBT INSTRUMENT (IPDI) TIER-I BONDS

Particulars Date ofAllotment

OutstandingBalance

(Rs. in crs.)

InterestRate

(% p.a.)

Credit Rating Tenure Call OptionDue Date

SubordinatedPerpetualBonds Series I

30.03.2009 150.00 9.20 AA/Stable byCRISIL & CAREAA by CARE

Perpetual * 30.03.2019& every yearthereafter

TOTAL 150.00* Call Option at the end of 10th

year with step up coupon option of 0.50% after the end of 10 year if call optionis not exercised.

Details of Top 5 Borrowings of the Bank as on March 31, 2009

Sr. No Lender Outstanding Balance(Rs. in crore)

Interest Rate (%)

Refinance from RBI

1 Borrowing from NABARD/SIDBI 74.19 4.00% to 8.50%Borrowing Outside India

2 Borrowing from Axis Bank Ltd. 62.50 0.30% to 1.30%3 Borrowing from Bank of Musket Oman 300.00 3.45% to 3.81%

4 Borrowing from Standard CharteredSingapore

109.00 3.71% to 3.85%

5 Borrowing from Syndicate Bank London 144.00 3.10% to 3.95%

All the above borrowings are unsecured. No directors have given any personal guarantee for collaterallysecuring the borrowings.


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VII. SUMMARY TERM SHEET

Issuer Allahabad Bank

Issue Size Rs. 450.00 crore

Issue Objects Augmenting Tier II Capital for strengthening the Capital Adequacy and enhancinglong term resources of the Bank

Instrument Unsecured Redeemable Non-Convertible Subordinated Lower Tier-II Bonds(Series IX) in the nature of Promissory Notes (Bonds)

Nature & Status ofInstrument

These Bonds shall be fully paid-up, unsecured, subordinated to the claims of othercreditors, free of restrictive clauses and shall not be redeemable at the initiative ofthe holder or without the consent of the Reserve Bank of India.

Issuance/ Trading In Dematerialized Form

Credit Rating CARE AA+ by CARE and AA+/Stable by CRISIL

Security Unsecured

Face Value Rs. 10,00,000/- per Bond

Issue Price At par (Rs. 10,00,000/- per Bond)

Redemption Price At par (Rs. 10,00,000/- per Bond)

Minimum Subscription 1 Bond and in multiples of 1 Bond thereafter

Tenure 10 Years (120 Months)

Put & Call Option None

Redemption/ Maturity At par at the end of 10 Years from the Deemed Date of Allotment(with prior approval of RBI)Redemption Date August 04, 2019Coupon/ Interest Rate*

8.45 % p.a.

Interest Payment AnnualInterest Payment Date On August 04, every yearListing Proposed on the Wholesale Debt Market (WDM) Segment of the National Stock

Exchange of India Ltd. (NSE)Trustee IDBI Trusteeship Services Ltd.Depository National Securities Depository Ltd. and Central Depository Services (India) Ltd.

Registrars Maheshwari Datamatics Pvt. Ltd.Banker to the Issue Allahabad Bank

Interest on Application

Money *

At the coupon rate (i.e. @ 8.45% p.a.) from the date of realization of cheque(s)/

demand draft(s)/ RTGS upto but excluding the Deemed Date of AllotmentSettlement Payment of interest and repayment of principal shall be made by way of cheque(s)/

interest/ redemption warrant(s)/ demand draft(s)/ credit through RTGS systemMode of Subscription Cheque(s)/ demand draft(s) may be drawn in favour of Allahabad Bank A/c -

Subordinated Lower Tier II Bonds (Series IX) " and crossed Account PayeeOnly payable at par at designated centers mentioned elsewhere in the DisclosureDocument or by way of electronic transfer of funds through RTGS mechanism forcredit in the account of Application Money for Allahabad Bank SubordinatedLower Tier II Bonds (Series IX) at Allahabad Bank, Fort Mumbai branch havingIFSC Code No. ALLA0210182

Issue Opens on ^ July 28, 2009Issue Closes on ^ July 31, 2009Pay-In Dates ^ July 28, 2009 to July 31, 2009Deemed Date of

Allotment ^

August 04, 2009

* subject to deduction of tax at source, as applicable.

^ The Bank reserves its sole and absolute right to modify (pre-pone/ postpone) the issue opening/ closing/pay-in date(s) without giving any reasons or prior notice. In such a case, investors shall be intimated about therevised time schedule by the Bank. The Bank also reserves the right to keep multiple Deemed Date(s) ofAllotment at its sole and absolute discretion without any notice.


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VIII. TERMS OF OFFER (DETAILS OF DEBT SECURITIES PROPOSED TO BE ISSUED, MODE OFISSUANCE, ISSUE SIZE, UTILIZATION OF ISSUE PROCEEDS, STOCK EXCHANGES WHERESECURITIES ARE PROPOSED TO BE LISTED, REDEMPTION AMOUNT, PERIOD OF MATURITY,YIELD ON REDEMPTION, DISCOUNT AT WHICH OFFER IS MADE AND EFFECTIVE YIELD FORINVESTOR)

PRIVATE PLACEMENT OF UNSECURED REDEEMABLE NON-CONVERTIBLE SUBORDINATED LOWER

TIER II BONDS (SERIES IX) IN THE NATURE OF PROMISSORY NOTES OF RS. 10 LAKH EACH FORCASH AT PAR AGGREGATING RS. 450 CRORES TO BE ISSUED BY ALLAHABAD BANK

Issue SizeAllahabad Bank (the Issuer or the Bank) proposes to raise upto Rs. 450 crore through issue of UnsecuredRedeemable Non-Convertible Subordinated Lower Tier II Bonds (Series IX) in the nature of Promissory Notes(hereinafter referred to as theBonds) of the face value of Rs. 10, 00,000/- each by way of private placement('the Issue).

Governing Law & ProvisionsThe Bonds offered are subject to provisions of the Companies Act, 1956, Securities Contract Regulation Act,1956, Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970, terms of this DisclosureDocument, Instructions contained in the Application Form and other terms and conditions as may beincorporated in the Trust Agreement and Bond Trust Deed. Over and above such terms and conditions, the

Bonds shall also be subject to the applicable provisions of the Depositories Act 1996 and the laws asapplicable, guidelines, notifications and regulations relating to the allotment & issue of capital and listing ofsecurities issued from time to time by the Government of India (GoI), Reserve Bank of India (RBI), Securities &Exchange Board of India (SEBI), concerned Stock Exchanges or any other authorities and other documentsthat may be executed in respect of the Bonds. Any disputes arising out of this issue will be subject to theexclusive jurisdiction of the courts of Kolkata.

Authority for the PlacementThe present private placement of Unsecured Redeemable Non-Convertible Subordinated Lower Tier II Bonds(Series IX) in the nature of Promissory Notes is being made in accordance with extant RBI master circular no.DBOD.No.BP.BC.21/21.06.001/ 2009-10 dated July 01, 2009 on Prudential Guidelines on Capital Adequacyand Market Discipline - Implementation of the New Capital Adequacy Framework covering terms andconditions for issue of Subordinated Bonds to qualify for inclusion as Lower Tier-II Capital. The privateplacement of Bonds under the terms of this Disclosure Document is being made pursuant to the approvalgiven by the Board of Directors of the Bank in their meeting held on June 15, 2009. The Bonds to be raised arewithin the overall borrowing powers of the Bank. This being a private placement of debt securities, the eligibilitynorms of SEBI (DIP) Guidelines, 2000 shall not be applicable. Further the Bank, its promoter, its associatesand companies with which the directors of the Bank are associated as directors or promoters are not prohibitedfrom accessing the capital market/ debt securities market under any order or directions passed by SEBI. TheBank can undertake the proposed issue of bonds in view of the present approvals and no further approval fromany government authority(ies)/ Reserve Bank of India (RBI) is required by the Bank in this connection.

Objects of the IssueThe proposed issue of Bonds is being made for augmenting Tier II Capital of the Bank for strengthening itsCapital Adequacy and for enhancing the long-term resources of the Bank. The expenses of the issue shall beborne by the Bank.

Utilisation of Issue ProceedsThe funds raised through this private placement are not meant for any specific project as such and therefore

the proceeds of this Issue shall be utilized for the regular business activities of the Bank. The Bank has toshore up its capital base to match the growth in assets and maintain level of CAR higher than the minimumlevel prescribed by RBI. The requirement of capital has increased on account of phased convergence to BaselII norms by Reserve Bank of India and growth in credit. The Bank is managed by professionals under thesupervision and control of its Board of Directors. Further, the Bank is subject to a number of regulatory checksand balances as stipulated in its regulatory environment. Therefore, the management shall ensure that thefunds raised via this private placement shall be utilized only towards satisfactory fulfilment of the Objects of theIssue.

Minimum SubscriptionAs the current issue of Bonds is being made on private placement basis, the requirement of minimumsubscription shall not be applicable and therefore the Bank shall not be liable to refund the issuesubscription(s)/ proceed(s) in the event of the total issue collection falling short of issue size or certainpercentage of issue size.


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UnderwritingThe present Issue of Bonds on private placement basis has not been underwritten.

Nature and Status of BondsThe Bonds are to be issued in the form of Unsecured Redeemable Non-Convertible Subordinated Lower Tier IIBonds (Series IX) in the nature of Promissory Notes for inclusion as Lower Tier II capital. As per RBI mastercircular no. DBOD.No.BP.BC.21/21.06.001/ 2009-10 dated July 01, 2009 on Prudential Guidelines on Capital

Adequacy and Market Discipline - Implementation of the New Capital Adequacy Framework covering termsand conditions for issue of Subordinated Bonds to qualify for inclusion as Lower Tier-II Capital, these Bondsshall be fully paid-up, unsecured, subordinated to the claims of other creditors, free of restrictive clauses andshall not be redeemable at the initiative of the holder or without the consent of the Reserve Bank of India.

Face Value, Issue Price, Effective Yield for InvestorAs each Bond has a face value of Rs. 10,00,000/- and is issued as well as redeemable at par i.e. Rs.10,00,000/- per Bond, theeffective yield for the investors shall be the same as coupon rate on the Bonds (i.e.8.45% p.a.).

Terms of PaymentThe full face value of the Bonds applied for is to be paid alongwith the Application Form. Investor(s) need tosend in the Application Form and the cheque(s)/ demand draft(s)/ RTGS for the full face value of the Bondsapplied for.

Face Value per Bond Minimum Application for Amount Payable on Application per BondRs. 10,00,000/- 1 Bond and in multiples

of 1 Bond thereafterRs. 10,00,000/-

Deemed Date of AllotmentInterest on Bonds shall accrue to the Bondholder(s) from and including August 04, 2009 which shall be theDeemed Date of Allotment. All benefits relating to the Bonds will be available to the investors from the DeemedDate of Allotment. The actual allotment of Bonds may take place on a date other than the Deemed Date ofAllotment. The Bank reserves the right to keep multiple allotment date(s)/ deemed date(s) of allotment at itssole and absolute discretion without any prior notice. In case if the issue closing date is changed (pre-poned/postponed), the Deemed Date of Allotment may also be changed (pre-poned/ postponed) by the Bank at itssole and absolute discretion.

Letter(s) of Allotment/ Bond Certificate(s)/ Refund Order(s) Issue of Letter(s) of Allotment

The beneficiary account of the investor(s) with National Securities Depository Ltd. (NSDL)/ Central DepositoryServices (India) Ltd. (CDSL)/ Depository Participant will be given initial credit within two working days from theDeemed Date of Allotment. The initial credit in the account will be akin to the Letter of Allotment. Oncompletion of the all statutory formalities, such credit in the account will be akin to a Bond Certificate.

Issue of Bond Certificate(s)Subject to the completion of all statutory formalities within 3 months from the Deemed Date of Allotment, orsuch extended period as may be approved by the appropriate authority(ies), the initial credit akin to a Letter ofAllotment in the Beneficiary Account of the investor would be replaced with the number of Bonds allotted. TheBonds since issued in electronic (dematerialized) form, will be governed by the provisions of The DepositoryAct, 1996, Securities and Exchange Board of India (Depositories and Participants) Regulations, 1996, rulesnotified by NSDL/ CDSL/ Depository Participant from time to time and other applicable laws and rules notifiedin respect thereof.

Depository Arrangements

The Bank has appointed M/s Maheshwari Datamatics Pvt. Ltd. (herein after referred to as the Registrar/RTA)[R.O 6, Mangoe Lane,Surendra Mohan Ghosh Sarani, 2nd Floor, Kolkata-700 001.Tel No. (033) 2243-5809/5029, Fax No. 033-2248-4787, E-mail: [email protected], Website: www.mdpl.in] as Registrars & TransferAgent for the present Bond Issue. The Bank shall make necessary depository arrangements with NationalSecurities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL) for issue andholding of Bonds in dematerialized form. In this context the Bank shall sign two tripartite agreements as under:

Tripartite Agreement between Allahabad Bank, Maheshwari Datamatics Pvt Ltd. and National SecuritiesDepository Limited for offering depository option to the investors.

Tripartite Agreement between Allahabad Bank, Maheshwari Datamatics Pvt. Ltd. and Central DepositoryServices (India) Limited for offering depository option to the investors.

Investors can hold the bonds only in dematerialized form and deal with the same as per the provisions ofDepositories Act, 1996 as amended from time to time.
mailto:[email protected]://www.mdpl.in/http://www.mdpl.in/mailto:[email protected]


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Procedure for applying for Demat Facility

The applicant must have at least one beneficiary account with any of the Depository Participants (DPs) ofNSDL or CDSL prior to making the application.

The applicant must necessarily fill in the details (including the beneficiary account number and DepositoryParticipants ID) appearing in the Application Form under the heading Details for Issue of Bonds inElectronic/ Dematerialised Form.

Bonds allotted to an applicant will be credited directly to the applicants respective Beneficiary Account(s)

with the DP. For subscribing the bonds, names in the application form should be identical to those appearing in the

account details in the depository. In case of joint holders, the names should necessarily be in the samesequence as they appear in the account details in the depository.

The Registrars to the Issue will directly send non-transferable allotment advice/refund orders to theapplicant.

If incomplete/ incorrect details are given under the heading Details for Issue of Bonds in Electronic/Dematerialised Form in the application form, it will be deemed to be an incomplete application and thesame may be held liable for rejection at the sole discretion of the Bank.

For allotment of Bonds, the address, nomination details and other details of the applicant as registeredwith his/her DP shall be used for all correspondence with the applicant. The Applicant is thereforeresponsible for the correctness of his/her demographic details given in the application form vis--vis thosewith his/her DP. In case the information is incorrect or insufficient, the Issuer would not be liable for losses,if any.

It may be noted that Bonds being issued in electronic form, the same can be traded only on the StockExchanges having electronic connectivity with NSDL or CDSL. National Stock Exchange of India Ltd.where the Bonds of the Bank are proposed to be listed has connectivity with NSDL and CDSL.

Interest or other benefits would be paid to those Bondholders whose names appear on the list of beneficialowners given by the Depositories to the Bank as on Record Date/ Book Closure Date. In case of thoseBonds for which the beneficial owner is not identified by the Depository as on the Record Date/ BookClosure Date, the Bank would keep in abeyance the payment of interest or other benefits, till such timethat the beneficial owner is identified by the Depository and conveyed to the Bank, whereupon the interestor benefits will be paid to the beneficiaries, as identified, within a period of 30 days.

Investors may note that pursuant to current provision , the Bonds of the Bank would be issued and traded onlyin dematerialised form.

Market LotThe market lot will be one Bond (Market Lot). Since the Bonds are being issued only in dematerialised form,the odd lots will not arise either at the time of issuance or at the time of transfer of Bonds.

Trading of BondsThe marketable lot for the purpose of trading of Bonds shall be Rs.10 lakhs i.e the face value of one bond.Trading of Bonds would be permitted in demat mode only in standard denomination of Rs.10 lakhs and suchtrades shall be cleared and settled in recognised stock exchange(s) subject to conditions specified by SEBI. Incase of trading in Bonds which has been made over the counter, the trades shall be executed and reported ona recognized stock exchange having a nation wide trading terminal or such other platform as may be specifiedby SEBI.

Mode of Transfer of BondsBonds shall be transferred subject to and in accordance with the rules/ procedures as prescribed by the NSDL/CDSL/ Depository Participant of the transferor/ transferee and any other applicable laws and rules notified inrespect thereof. The normal procedure followed for transfer of securities held in dematerialized form shall befollowed for transfer of these Bonds held in electronic form. The seller should give delivery instructionscontaining details of the buyers DP account to his depository participant.

Transfer of Bonds to and from NRIs/ OCBs, in case they seek to hold the Bonds and are eligible to do so, willbe governed by the then prevailing guidelines of RBI. The transferee(s) should ensure that the transferformalities are completed prior to the Record Date. In the absence of the same, interest will be paid/redemption will be made to the person, whose name appears in the records of the Depository. In such cases,claims, if any, by the transferee(s) would need to be settled with the transferor(s) and not with the Bank.

Interest on Application MoneyInterest at the coupon rate (i.e. at the rate of 8.45 per cent per annum) (subject to deduction of income taxunder the provisions of the Income Tax Act, 1961, or any other statutory modification or re-enactments thereof,as applicable) will be paid to all the applicants on the application money for the Bonds. Such interest shall bepaid from the date of realisation of cheque(s)/ demand draft(s)/ RTGS upto one day prior to the Deemed Dateof Allotment. The interest on application money will be computed on an Actual/ 366 day basis. Such interestwould be paid on all the valid applications. Where the entire subscription amount has been refunded, theinterest on application money will be paid alongwith the Refund Orders. Where an applicant is allotted lessernumber of bonds than applied for, the excess amount paid on application will be refunded to the applicantalongwith the interest on refunded money.


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The interest cheque(s)/ demand draft(s) for interest on application money (alongwith Refund Orders, in case ofrefund of application money, if any) shall be dispatched by the Bank within 15 days from the Deemed Date ofAllotment by registered post to the sole/ first applicant, at the sole risk of the applicant.

Interest on the BondsThe Bonds shall carry interest at the rate of 8.45 % per annum (subject to deduction of tax at source at therates prevailing from time to time under the provisions of the Income Tax Act, 1961, or any other statutory

modification or re-enactment thereof for which a certificate will be issued by the Bank) from, and including,August 04, 2009 upto, but excluding, August 04, 2019, payable on August 04, in each year, to the holders ofBonds (the Holders and each, a Holder) as of the relevant Record Date. The interest payable on anyInterest Payment Date will be paid to the Bondholder(s) whose names appear in the List of Beneficial Ownersgiven by the Depository to the Bank as on the Record Date.

The interest period is defined as the actual number of days in a year as 365 (366 in case of a leap year)between August 04, and August 04, including the first day but excluding the last day and so on. The lastinterest period is defined as the actual number of days falling between August 04, 2018 and redemption dateincluding the first date but excluding the last date. The last interest payment would be made on the redemptiondate alongwith the redemption of principal amount.

If any interest payment date falls on a day which is not a Business Day (Business Day being a day on whichCommercial Banks are open for Business in the city of Kolkata, West Bengal) then payment of interest will be

made on the next day that is a business day but without liability for making payment of interest for theintervening period.

In case the Deemed Date of Allotment is revised (pre-poned/ postponed) then the above Interest PaymentDate may also be revised pre-poned/ postponed) accordingly by the Bank at its sole & absolute discretion.

Computation of InterestInterest for each of the interest periods shall be calculated, on 'actual/ 365 (366 in case of a leap year) days'basis, on the face value of principal outstanding on the Bonds at the coupon rate rounded off to the nearestRupee.

Record DateThe Record Date for the Bonds shall be 30 days prior to each interest payment date and/ or redemption date.

Deduction of Tax at Source

Tax as applicable under the provisions of Income Tax Act, 1961, or any other applicable statutory modificationor re-enactments thereof will be deducted at source at the time of payment of interest/principal amount. Theinvestor(s) desirous of claiming exemption from deduction of income tax at source on the interest onapplication money are required to submit the necessary certificate(s) as applicable thereof, in duplicate, alongwith the Application Form in terms of Income Tax rules.

Interest payable subsequent to the Deemed Date of Allotment of Bonds will be treated as Interest onSecurities in accordance with the provisions of Income Tax Rules. Bondholders desirous of claimingexemption from deduction of income tax at source on the interest payable on Bonds should submit taxexemption certificate/ document, as per Section 193 of the Income Tax Act, 1961, if any, at the Head Office ofthe Bank, at least 45 days before the due date of payment.

Regarding deduction of tax at source and the requisite declaration forms to be submitted, prospective investorsare advised to consult their own tax consultant(s).

Put Option/ Call OptionThere is no Put Option available to the Bondholder(s). As per RBI master circular no.DBOD.No.BP.BC.21/21.06.001/ 2009-10 dated July 01, 2009 on Prudential Guidelines on Capital Adequacyand Market Discipline - Implementation of the New Capital Adequacy Framework covering terms andconditions for issue of Subordinated Bonds to qualify for inclusion as Lower Tier-II Capital, these Bonds shallbe free of restrictive clauses and shall not redeemable at the initiative of the holder or without the consent ofthe Reserve Bank of India. Similarly there is no Call Option available to the Bank to redeem the bonds prior tomaturity.


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RedemptionThe face value of the Bonds shall be redeemed at par, on expiry of 10 Years from the Deemed Date ofAllotment i.e. on August 04, 2019. The Bonds will not carry any obligation, for interest or otherwise, after thedate of redemption. The Bonds held in the dematerialized form shall be taken as discharged on payment of theredemption amount by the Bank on maturity to the registered Bondholders whose name appear in the Registerof Bondholders on the Record Date. Such payment will be a legal discharge of the liability of the Bank towardsthe Bondholders. On such payment being made, the Bank will inform NSDL/CDSL and accordingly the account

of the Bondholders with NSDL/CDSL will be adjusted.

As per RBI master circular no. DBOD.No.BP.BC.21/21.06.001/ 2009-10 dated July 01, 2009 on PrudentialGuidelines on Capital Adequacy and Market Discipline - Implementation of the New Capital AdequacyFramework covering terms and conditions for issue of Subordinated Bonds to qualify for inclusion as LowerTier-II Capital, these Bonds shall be free of restrictive clauses and shall not redeemable at the initiative of theholder or without the consent of the Reserve Bank of India. Thus redemption of these Bonds shall be madeonly with the prior approval of the RBI.

In case if the principal redemption date falls on a day which is not a Business Day (Business Day being a dayon which Commercial Banks are open for business in Kolkata), then the payment due shall be made on thenext Business Day together with additional interest for the intervening period.

Effect of HolidaysShould any of dates defined above or elsewhere in the Disclosure Document, excepting the Deemed Date ofAllotment, fall on a Saturday, Sunday or a Public Holiday, the next working day shall be considered as theeffective date(s). In case any Interest Payment Date(s) and/or the Date(s) of Redemption falls on a holiday,interest/ redemption will be paid on the next working day (i.e. a day on which scheduled commercial banks areopen for business in the city of Kolkata).

List of Beneficial OwnersThe Bank shall request the Depository to provide a list of Beneficial Owners as at the end of the Record Date.This shall be the list, which shall be considered for payment of interest or repayment of principal amount, asthe case may be.

SuccessionIn the event of demise of the sole/first holder of the Bond(s) or the last survivor, in case of joint holders for thetime being, the Bank will recognize the executor or administrator of the deceased Bondholder, or the holder ofsuccession certificate or other legal representative as having title to the Bond(s). The Bank shall not be bound

to recognize such executor or administrator, unless such executor or administrator obtains probate, letter ofadministration wherever it is necessary, or such holder is the holder of succession certificate or other legalrepresentation, as the case may be, from a Court in India having jurisdiction over the matter. The Bank may, inits absolute discretion, where it thinks fit, dispense with production of probate or letter of administration orsuccession certificate or other legal representation, in order to recognize such holder as being entitled to theBond(s) standing in the name of the deceased Bondholder on production of sufficient documentary proof orindemnity.

Where a non-resident Indian becomes entitled to the Bond by way of succession, the following steps have tobe complied:a. Documentary evidence to be submitted to the Legacy Cell of the RBI to the effect that the Bond was

acquired by the NRI as part of the legacy left by the deceased holder.b. Proof that the NRI is an Indian National or is of Indian origin.Such holding by the NRI will be on a non-repatriation basis.

Who Can ApplyThe following categories of investors may apply for the Bonds, subject to fulfilling their respective investmentnorms/ rules by submitting all the relevant documents alongwith the application form.

1. Scheduled Commercial Banks;2. Financial Institutions;3. Insurance Companies;4. Primary/ State/ District/ Central Co-operative Banks (subject to permission from RBI);5. Regional Rural Banks;6. Mutual Funds;7. Provident, Gratuity, Superannuation and Pension Funds;8. Companies, Bodies Corporate authorised to invest in Bonds;9. Trusts, Individuals, Association of Persons, Societies registered under the applicable laws in India which

are duly authorised to invest in bonds.


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Application not to be made by1. Hindu Undivided Family (neither by the name of the Karta);2. Partnership Firms or their nominees;3. Overseas Corporate Bodies

subordinated debt(allahabad bank)

Documents