Sub-group report on United Bank of India – Executive Summary
	List of persons met by the Working Group
	Select ratios for all public sector banks (1997-98 and 1998-99)
		A. Capital Adequacy Ratio
		B. Coverage Ratio
		C. Return on Assets
		D. Net Interest Margin
		E. Ratio of operating profit to average working funds
		F. Ratio of cost to income
		G. Ratio of staff cost to NII + all other income
	Market share of public sector banks
	Gross NPA movement (1996-97 to 1998-99)
	Operating expenses to NII and other income (1996-97 to 1998-99)
	Staff cost to operating expenses (1998-99)
	Ratio of assets to employees
	Staff cost to total income (1996-97 to 1998-99)
	Structure of proposed NPA transfer mechanism

Annex 6

Sub-group report on United Bank of India Executive Summary

1. United Bank of India has a three-tier organisational structure: Head Office, 33 Regional Offices and 1,333 branches. There is a separate Zonal Office to oversee the seven ROs in the North-east Region. The 1,167 branches in the Eastern and North-eastern regions account for 87 per cent of total branches.

2. The bank has lead bank responsibility in 33 districts. It is also convenor of the SLBC in the states of West Bengal, Manipur and Tripura. The bank has sponsored 11 RRBs, five in West Bengal, four in Assam and one each in Manipur and Tripura. The accumulated losses of these RRBs aggregated Rs. 417.44 crore as at the end of March 1998.

3. UBI’s position has marginally improved over the last five years. There has been improvement in profitability and capital adequacy assisted by the regular capitalisation by GOI and income tax refund of Rs 111 crore. For the first time in five years, the bank registered a small profit of Rs. 9.62 crore during 1997-98. Bank has been deploying a larger quantum of incremental resources in zero risk government securities with small investments in corporate debentures. CD Ratio has accordingly come down. Net interest margin has improved due to the higher share of performing assets in the overall portfolio. Fee-based income avenues are weak in comparison to other banks. Cost income ratios and expense income ratios are high.

4. The management approach was cautious and conservative since the early nineties. No plan of action has been formulated and implemented with a view to achieve turnaround, may be as a consequence of the frequent changes at the helm. Short tenure and frequent changes of top management did not help the bank’s cause in pursuing a long term strategy for turnaround.

5. Employee cost accounts for 22 per cent of total income. Employee productivity ratio is also low at Rs. 12 lakh of business per employee. Average age profile of employees is above 45. Infrequent training and unresponsiveness to the same have created gaps in skill levels especially in specialised areas such as credit marketing, treasury, forex and IT. Transfer policy does not support specialisation. Employee motivation has been low. Practically no growth avenues are available for competent officers. Training of officers is not done on the basis of their needs. An officer attends a training programme as infrequently as once in 4-5 years.

6. Growth in credit has been slow during the last five years. Due to overpricing and inadequate services, it has been excluded from various consortiums. The bank lacks a comprehensive marketing strategy and follow-up action plan geared towards attracting and retaining corporate clients. The bank has therefore been deploying surplus resources in government securities.

7. Income from fee based services like remittances, foreign exchange business, guarantees and LCs have been very low due to a combination of reasons such as lack of captive clientele from credit, gaps in service quality, weak bank perception and inadequate marketing.

8. Poor asset quality: The historical focus of the bank in the eastern region and the inability to attract good credit quality clients has led to poor asset quality.

9. Deposit growth rate has been lower than the average for all scheduled commercial banks. UBI’s cost of funds (as a percentage of average working funds) for 1998-99 at 8.3 per cent was higher than that for all SCBs. Current deposits constitute less than 10 per cent of the total deposits. The bank’s average deposits grew at a compounded annual growth rate of 15.4 per cent during 1995-99 as against an industry average of 17.1 per cent.

10. Credit generation has been slow since 1992. The CD ratio fell from 57.5 per cent in 1992 to 36.0 per cent in 1998. Slow credit growth can be attributed to the following reasons:

• Lack of focused marketing strategy.
• Focus on the economically weaker areas of east and north-east.
• Credit embargo by the central bank from 1992 to 1993 and reluctance of bank to take credit exposure due to weak capital position.
• Exclusion from consortiums lending to good quality clients.
• Low demand from existing clients.
• Introduction of credit substitutes and higher level of disintermediation.

11. While the bank monitors single risk exposure and industry

exposures, as per RBI’s norms, there is no system to monitor the credit risk profile

of the overall portfolio, in order to plan future strategies and correct portfolio

imbalances.

12. The main characteristics of the asset portfolio are:

• Weak quality of industrial advances: 21 per cent are non-performing and another 24 per cent appear vulnerable.
• Moderate industry-wise diversification of portfolio: high degree of exposure to the ferrous and non-ferrous metals sector. It also has a substantial exposure to engineering and tea processing industries.
• Relatively large single risk exposures: In view of capital erosion, some of the bigger advances which were within the single and group borrower limits are now outside such limits thereby exposing the bank to high risk.
• High level of NPAs in all forms of priority sector advances: 50 per cent of these advances are NPAs.
• age profile of NPA accounts is such that more than five years old cases account for 42 per cent in terms of number of accounts and 55 per cent in terms of amount.

13. The yield on investments has increased to 11.95 per cent as at the end of March 1998 from 11.05 per cent at the end of the previous financial year. The yield is lower as compared to other public sector banks due to the higherproportion of low yielding recapitalisation bonds. About 7 per cent of the investments in corporate bonds (total portfolio: Rs 424.20 crore) is in the vulnerable category. Exit strategies have not been devised or resorted to, as the market is not liquid.

14. The bank’s non-interest income has been declining over the last three years and was only 0.55 per cent of its average total assets during 1997-98. Commissions on foreign exchange yielded around Rs. 5 crore during 1998-99 and has been virtually stagnant over the last three years. The impediments to the bank’s efforts in increasing income from foreign exchange business are the following:

• Low export credit at 5.2 per cent of net advances as against the minimum of 12 per cent stipulated by RBI.
• Absence of policy and guidelines for the conduct of foreign exchange business.
• Transfer policy does not support development of expertise in foreign exchange.
• Risk-averse attitude among management leading to bank’s clients not routing a proportionate share of forex transactions through the bank.
• Lack of adequate ongoing training and skills enhancement.
• Poor internal inspection and supervision of authorised dealing branches.
• Negligible trading profits due to insignificant proprietary trading, risk averse attitude, adverse age profile of dealers, low level of merchant turnover and consequent low levels of inter-bank turnover, and negligible/non-existent counterparty limits. The bank’s exchange profits were Rs.9.02 crore (1997-98).

15. According to UBI’s transfer pricing mechanism, for the financial year 1997-98, 1,229 out of 1,333 branches were profitable despite poor financial condition of the bank as a whole. Out of the 104 loss-making branches, 81 are located in the eastern and north-eastern regions.

16. Systems and housekeeping are two neglected areas. Less than 10 per cent of the bank’s branches are partially computerised and only a few large branches have been fully computerised. Low level of mechanisation due to opposition by labour unions and insufficient IT team to manage the implementation process.

17. Around 45 per cent of the total work force is in the age group of 45 per cent and above with around 10 per cent being 55 and above. Among officers, around 60 per cent are in the age group of 45 years and above. This has resulted in low mobility, unwillingness to take higher responsibilities and low receptivity to change. The skewed age profile along with infrequent promotions, weak image and performance of the bank and fear psychosis have gradually made employees demotivated and even indifferent to promotions.

18. A contribution analysis for the year ended March 1998 shows that advances provided negative contribution, primarily on account of the non-accrual of income and the provisioning required to be made for non-performing assets. However, investment provided a positive contribution, which has offset the negative contribution in credit business. This includes proceeds from sale of investments. The bank showed a net profit, after administrative and employee expenses, due to the extraordinary accrual of interest dues of Rs. 111 crore from the income tax department. The bank has a lower net interest margin as compared to other banks, which has led to its poor performance on the profitability front.

19. The bank’s capital adequacy is low in comparison to other banks despite capital infusion of Rs. 1,100 crore during the last five years. The Tier 1 capital coverage of net NPAs is low, at around 77 per cent. External support is imperative since there is no contribution from earnings. There is also a need for further infusion to meet future provisioning requirements.

20. The following recommendations have been made to reduce the costs to the required levels:

• Wage freeze for a minimum of one wage settlement period (1997- 2002): this will save capital worth Rs. 356 crore over the five year period. The cost-income ratio will be reduced to 89 per cent.
• Reduction in manpower strength by 3,000 personnel during 1999- 2000: This measure in addition to wage freeze will reduce cost-income ratio to 81 per cent by 1999-2000.

21. Reduction in manpower should be by offering an attractive VRS targeted at the older personnel in each cadre. This constitutes around 14 per cent of the existing staff strength. The reduction in staff by 3,000 persons will lead to a reduction in staff expenses by around Rs. 42.25 crore in 1999-2000. The target category for VRS in officer cadre are scale 1 and scale 2 officers above the age of 50 numbering around 1,900. The target category in the clerical cadre is those above 45 years numbering around 5,600. The target category in the sub- staff cadre is those above 40 years numbering around 4,200. The VRS will have to be financed through government support as the bank is already short of capital and internal resources generation options do not appear adequate. Sale of branch network to finance VRS will affect future deposit growth. However, sale of a few branches in the non-core regions, where the bank does not have a competitive advantage may be considered. For instance, 10 of the 40 branches in the Southern region do not have a competitive advantage.

22. Transfer of doubtful and loss assets to an ARC will not only augment the bank’s income but also free managerial resources to focus on smaller value NPAs. This would depend on the following:

• Establishment of an ARC on an industry-wide basis, capitalised by external participants and not from the financial system.
• Legal reforms and improved legal infrastructure to enable faster resolution of cases. Specific legal powers for the ARC are warranted.
• Valuation of assets transferred on a case to case basis.

23. The bank should embark on an image building exercise by maintaining high visibility in its areas of operation on a sustained basis, through different media. This should be backed up by a clear action plan on rectifying the weaknesses that the bank currently faces. This will help remove the weak bank image and motivate the bank’s own employees.

24. The bank should follow a cautious strategy to credit growth, powered by selective addition of new clients, till internal systems of credit delivery and risk management are improved in line with the industry standards. The bank should establish separate corporate banking cells at each metro responsible for credit marketing and delivery. The focus should be on meeting the needs of high value corporate customers (potential and existing), based on relationship manager concept, to ensure excellent service standards. Relationships with top clients should be handled out of these corporate banking cells to cut through layers and ensure faster response times, by having direct access to the top management / decision- making committees.

25. New areas of financing like infrastructure, services and software offer the bank with opportunity to sustain its credit growth and also diversify its portfolio of advances. The bank would need to evolve methodologies for appraisal, financing and risk mitigation, as these sectors are different in character from traditional sectors. Bank should contain or terminate direct lending to sub-sectors/ regions where experience has not been satisfactory. It should explore giving credit indirectly through institutions like NABARD/SIDBI, etc. where recovery of capital is guaranteed.

26. Portfolio credit quality is to be measured and tracked by adopting a suitable credit evaluation system. Risk and exposure profiles needs to be updated frequently. The bank should contain large exposure concentration in clients/ groups due to its weak net worth. It should enhance associated tracking and follow- up systems at the field level. Assistance of external credit evaluation expertise for particular sectors/corporates should be procured on a case to case basis to aid evaluation as well as improve response times. The bank should focus on diversifying business out of the eastern sector into areas where industrial activity and credit repayment culture are stronger.

27. Total branch mechanisation will be very crucial to improve efficiency and service. TBM of all high business branches and regions should be carried out on a high priority. Networking of these select branches with the Head Office will aid in improving housekeeping, service to clients and decision response times.

28. Export credit needs to be significantly improved through a combination of marketing and improved delivery of services and derive spin off benefits. The forex set-up needs a review in terms of its structure, synergy with credit function and adequacy of staff and skills. Specialists should be retained in this line to derive maximum return on investment in training. Infusion of external expertise in the form of experienced senior level specialist bankers in this area will be crucial.

29. High business potential locations such as Mumbai, Delhi and other metros should have well trained and updated personnel. Targets of these locations should be re-estimated based on business potential.

30. Productivity needs to be enhanced by rationalising branches and relocating human resources. The bank has proposed that it will

• merge / relocate branches where necessary,
• open Sunday branches / morning branches / seven days a week branches, etc.,
• identify and upgrade branches in metro an urban centres and provide service on part with that of foreign / private sector banks,
• open branches in potential centres in different parts of the country in lieu of merger of some of its existing branches.

Annual targets should be set for the above measures and followed diligently.

31. Priority sector norms for weak banks should be relaxed for a period of five years. UBI’s priority sector portfolio has NPA levels in excess of 50 per cent and accounts for 60 per cent of its total NPAs.

32. It is expected that there is an additional capital requirement of Rs. 155 crore. This will enable the bank to meet the capital adequacy norm and also meet the capital required to finance the VRS.

33. Under the proposed restructuring plan and the assumptions made therein, the bank is expected to make profits from 2000-2001 onwards. However, it reaches minimum competitive efficiency levels on return on assets, only in 2003- 04. In 1999-2000, the bank makes a loss of Rs. 122 crore, on account of VRS payment which is assumed to be recognised in the year of incidence. Subsequent to VRS and the wage freeze, the cost to income ratio would come down to 81 per cent in 1998 and would continue to reduce further to 70 per cent at the end of the horizon. The employee cost to total income ratio comes down to 19.8 per cent in 1999-2000 and gradually reduces to 19 per cent by 2003-04.

34. These measures constitute an initial plan to correct the financial position of the bank. It is by no means sufficient to effect a complete turnaround. The bank will have to create its own strategies with regard to regional diversification, operations, human resources management, technology management, etc. so that the bank clearly does not regress back to its old position.

Annex 7 List of persons met by the Working Group
Sr.	Name	Designation
No.
1.	Mr. Eric D. Cruikshank	Manager, International Finance Corporation
2.	Shri Tarun Das	Director General, Confederation of
		Indian Industry
3.	Shri V.V. Desai	Economist, ICICI
4.	Mr. Martin Fish	(then) CEO, Standard Chartered Bank
5.	Shri D.N. Ghosh	Chairman, ICRA Ltd.
6 .	Shri Omkar Goswami	Senior Consultant, Confederation of
		Indian Industry
7.	Shri Rashid Jilani	CMD, Punjab National Bank
8.	Shri Y.H. Malegam	Chartered Accountant and Member,
		Board for Financial Supervision
9.	Shri Sanjiv Minocha	Senior Investment Officer, International
		Finance Corporation
10.	Shri M. Narasimham	Former Governor, Reserve Bank of India
		and Chairman, Administrative Staff
		College of India
11.	Shri A.T. Pannir Selvam	CMD, Union Bank of India
12.	Shri Deepak S. Parekh	Chairman, HDFC Ltd.
13.	Dr. Amrita Patel	Member, Board for Financial Supervision
14.	Prof. Mihir Rakshit	Economist
15.	Shri E. A. Reddy	Member, Board for Financial Supervision
16.	Shri S.S. Tarapore	Former Deputy Governor,
		Reserve Bank of India
17.	Shri S. Venkitaramanan	Former Governor, Reserve Bank of India
18.	Shri R. Viswanathan	Former DMD, State Bank of India
19.	Shri N. Vittal	Chief Vigilance Commissioner
20.	Shri Prakash Yardi	Principal Investment Officer, International
		Finance Corporation

Government of India
1.	Dr. Vijay L. Kelkar (then) Finance Secretary
2.	Shri C.M. Vasudev (then) Special Secretary (Banking)
3.	Shri M. Damodaran Joint Secretary, Banking Division
4.	Shri Sudhir Shrivastava PS to Finance Minister
Reserve Bank of India
1.	Dr. Bimal Jalan Governor
2.	Shri S.P. Talwar Deputy Governor
3.	Dr. Y.V. Reddy Deputy Governor
4.	Shri Jagdish Capoor Deputy Governor
5.	Shri G.P. Muniappan Executive Director
Organisations whose representatives met the Working Group
1.	United Forum of Bank Unions
2.	All India Bank Employees Association
3.	All India Bank Officers Confederation
4.	National Confederation of Bank Employees
5.	All India Bank Officers Association
6.	Bank Employees Federation of India
7.	Indian National Bank Employees Federation
8.	Indian National Bank Officers Congress
9.	National Organisation of Bank Workers
10.	National Organisation of Bank Officers
11.	Federation of Indian Bank Employees’ Unions
12.	All India Indian Bank Officers’ Association
13.	Indian Bank Officers Federation
14.	National Association of Indian Bank Officers
15.	All India Indian Bank Staff Union
16.	All India Federation of UCO Bank Officers
17.	All India UCO Bank Officers Federation
18.	UCO Bank Officers Congress
19.	All India UCO Bank Employees Federation
20.	UCO Bank Employees Association
21.	All India UCO Bank Employees Staff Federation
22.	United Bank of India Employees’ Association
23.	United Bank of India Employees’ Union
24.	United Bank of India Shramik Karmachari Samity
25.	United Bank of India Employees’ Congress
26.	United Bank Officers’ Association
27.	United Bank of India Officer Employees Association

Annex 8 Select ratios for all Public Sector Banks
A.	Capital Adequacy Ratio
S.No.	Name of the Bank	March 1998	March 1999
1.	State Bank of Saurashtra	18.14	14.35
2.	Oriental Bank of Commerce	15.28	14.10
3.	Bank of Baroda	12.05	13.30
4.	Corporation Bank	16.90	13.20
5.	State Bank of India	14.58	12.51
6.	State Bank of Patiala	13.24	12.47
7.	State Bank of Indore	9.83	12.35
8.	State Bank of Bikaner & Jaipur	10.65	12.26
9.	Central Bank of India	10.40	11.88
10.	Dena Bank	11.88	11.14
11.	Andhra Bank	12.37	11.02
12.	Canara Bank	9.54	10.96
13.	Punjab & Sind Bank	11.39	10.94
14.	Punjab National Bank	8.81	10.79
15.	State Bank of Hyderabad	10.83	10.65
16.	Bank of India	9.11	10.55
17.	Allahabad Bank	11.64	10.38
18.	State Bank of Travancore	11.48	10.27
19.	State Bank of Mysore	11.61	10.23
20.	Indian Overseas Bank	9.34	10.15
21.	Union Bank of India	10.86	10.09
22.	Vijaya Bank	10.30	10.02
23.	Bank of Maharashtra	10.90	9.76
24.	UCO Bank	9.07	9.63
25.	United Bank of India	8.41	9.60
26.	Syndicate Bank	10.50	9.57
27.	Indian Bank	1.41	(-) 8.94
	Minimum prescribed level	8.00	9.00

B. Coverage Ratio
S.No.	Name of the Bank	March 1998	March 1999
1.	Corporation Bank	6.45	5.68
2.	Oriental Bank of Commerce	5.38	4.70
3.	State Bank of Saurashtra	4.48	3.19
4.	Andhra Bank	3.65	2.59
5.	State Bank of Patiala	2.88	2.41
6.	State Bank of India	2.84	2.02
7.	Bank of Baroda	2.31	1.88
8.	Canara Bank	2.07	1.85
9.	Syndicate Bank	0.14	0.88
10.	Bank of India	1.10	0.79
11.	Bank of Maharashtra	0.80	0.66
12.	Vijaya Bank	0.29	0.65
13.	Union Bank of India	0.94	0.51
14.	Dena Bank	0.53	0.30
15.	State Bank of Hyderabad	(-) 1.08	0.21
16.	State Bank of Bikaner & Jaipur	0.90	0.09
17.	Punjab National Bank	(-) 0.63	(-) 0.28
18.	State Bank of Indore	(-) 1.00	(-) 0.39
19.	Central Bank of India	(-) 1.24	(-) 0.56
20.	Indian Overseas Bank	(-) 0.24	(-) 0.81
21.	State Bank of Travancore	(-) 1.68	(-) 0.85
22.	Punjab & Sind Bank	(-) 1.12	(-) 0.93
23.	United Bank of India	(-) 1.36	(-) 1.03
24.	UCO Bank	(-) 2.19	(-) 1.18
25.	State Bank of Mysore	(-) 1.52	(-) 1.43
26.	Allahabad Bank	(-) 2.32	(-) 1.48
27.	Indian Bank	(-) 10.42	(-) 12.13
	Threshold rate	0.50	0.50

C. Return on Assets
S.No.	Name of the Bank	1997-98	1998-99
1.	Corporation Bank	1.49	1.43
2.	Oriental Bank of Commerce	1.40	1.20
3.	State Bank of Patiala	1.48	0.99
4.	State Bank of Bikaner & Jaipur	1.08	0.98
5.	State Bank of Hyderabad	0.91	0.85
6.	Bank of Baroda	1.01	0.81
7.	Punjab National Bank	1.20	0.80
8.	Andhra Bank	0.84	0.78
9.	Allahabad Bank	0.85	0.77
10.	Dena Bank	0.86	0.75
11.	Syndicate Bank	0.45	0.71
12.	State Bank of Indore	0.68	0.63
13.	Punjab & Sind Bank	0.76	0.58
14.	Union Bank of India	0.97	0.51
15.	State Bank of Mysore	0.86	0.49
16.	Canara Bank	0.47	0.47
17.	State Bank of India	1.04	0.46
18.	Bank of Maharashtra	0.55	0.43
19.	Central Bank of India	0.61	0.43
20.	State Bank of Travancore	0.69	0.40
21.	Bank of India	0.79	0.40
22.	State Bank of Saurashtra	2.32	0.38
23.	Vijaya Bank	0.26	0.28
24.	Indian Overseas Bank	0.53	0.23
25.	United Bank of India	0.07	0.09
26.	UCO Bank	(-) 0.57	(-) 0.36
27.	Indian Bank	(-) 1.77	(-) 4.26
	Median @	0.86	0.61
@ Median of all banks excluding Indian Bank, UCO Bank and United Bank of India.

D. Net Interest Margin
S.No.	Name of the Bank	1997-98	1998-99
1.	State Bank of Indore	3.86	3.92
2.	State Bank of Mysore	3.94	3.58
3.	Punjab National Bank	3.25	3.57
4.	State Bank of Hyderabad	3.61	3.53
5.	State Bank of Patiala	3.68	3.53
6.	State Bank of Saurashtra	3.63	3.49
7.	Bank of Maharashtra	3.64	3.29
8.	Canara Bank	2.49	3.24
9.	State Bank of Bikaner & Jaipur	3.68	3.23
10.	Central Bank of India	3.22	3.12
11.	Oriental Bank of Commerce	3.38	3.10
12.	Syndicate Bank	3.00	3.02
13.	Bank of Baroda	2.91	3.01
14.	Dena Bank	3.48	2.97
15.	Vijaya Bank	2.86	2.94
16.	Andhra Bank	3.46	2.91
17.	Allahabad Bank	2.82	2.82
18.	State Bank of India	3.01	2.72
19.	Union Bank of India	3.17	2.66
20.	Bank of India	2.77	2.61
21.	Corporation Bank	3.46	2.52
22.	Punjab & Sind Bank	2.77	2.38
23.	UCO Bank	2.14	2.36
24.	Indian Overseas Bank	2.31	2.31
25.	State Bank of Travancore	2.94	2.18
26.	United Bank of India	2.22	1.95
27.	Indian Bank	0.65	1.08
	Median @	3.24	3.02
@ Median of all banks excluding Indian Bank, UCO Bank and United Bank of India.

E. Ratio of operating profit to average working funds
S.No.	Name of the Bank	1997-98	1998-99
1.	State Bank of Indore	2.37	2.50
2.	State Bank of Patiala	2.48	2.34
3.	State Bank of Hyderabad	2.85	2.30
4.	Oriental Bank of Commerce	2.60	2.30
5.	Corporation Bank	3.23	2.28
6.	Canara Bank	1.74	2.17
7.	Bank of Baroda	1.95	1.95
8.	State Bank of Saurashtra	2.12	1.91
9.	Punjab National Bank	2.00	1.85
10.	State Bank of Bikaner & Jaipur	2.50	1.79
11.	State Bank of Mysore	2.70	1.79
12.	Andhra Bank	1.86	1.63
13.	Dena Bank	2.55	1.59
14.	State Bank of India	1.96	1.55
15.	Allahabad Bank	1.65	1.42
16.	Bank of India	1.61	1.41
17.	State Bank of Travancore	2.06	1.30
18.	Bank of Maharashtra	1.30	1.24
19.	Vijaya Bank	0.81	1.22
20.	Union Bank of India	1.46	1.13
21.	Punjab & Sind Bank	1.22	0.95
22.	Central Bank of India	1.29	0.89
23.	Syndicate Bank	0.76	0.89
24.	Indian Overseas Bank	0.75	0.59
25.	United Bank of India	1.30	0.30
26.	UCO Bank	0.09	0.21
27.	Indian Bank	(-) 1.23	(-) 0.89
	Median @	1.96	1.61
@ Median of all banks excluding Indian Bank, UCO Bank and United Bank of India.

F. Ratio of cost to income
S.No.	Name of the Bank	1997-98	1998-99
1.	Corporation Bank	43.12	46.94
2.	Oriental Bank of Commerce	47.11	49.38
3.	State Bank of Patiala	53.99	50.70
4.	Bank of Baroda	57.05	56.07
5.	Canara Bank	60.03	56.26
6.	State Bank of Hyderabad	48.34	58.36
7.	State Bank of Indore	60.56	59.54
8.	State Bank of Saurashtra	57.70	60.99
9.	State Bank of Travancore	52.05	61.51
10.	Punjab National Bank	58.49	62.62
11.	State Bank of India	57.39	63.08
12.	Dena Bank	55.20	63.61
13.	Bank of India	62.61	64.46
14.	Allahabad Bank	64.91	66.60
15.	State Bank of Mysore	61.36	67.13
16.	State Bank of Bikaner & Jaipur	58.89	67.18
17.	Andhra Bank	63.66	67.62
18.	Union Bank of India	65.88	71.67
19.	Vijaya Bank	81.36	72.76
20.	Bank of Maharashtra	73.36	73.42
21.	Punjab & Sind Bank	71.65	74.86
22.	Central Bank of India	72.09	78.61
23.	Syndicate Bank	82.56	80.05
24.	Indian Overseas Bank	78.00	82.49
25.	UCO Bank	97.28	93.94
26.	United Bank of India	87.50	97.61
27.	Indian Bank	166.85	141.22
	Median @	60.30	64.04
@ Median of all banks excluding Indian Bank, UCO Bank and United Bank of India.

G. Ratio of staff cost to NII + all other income
S.No.	Name of the Bank	1997-98	1998-99
1.	Corporation Bank	24.20	28.61
2.	Oriental Bank of Commerce	28.99	28.65
3.	State Bank of Patiala	39.94	36.96
4.	Bank of Baroda	39.35	39.27
5.	Canara Bank	41.07	40.20
6.	State Bank of Indore	41.37	42.02
7.	State Bank of Hyderabad	35.39	42.70
8.	State Bank of Travancore	36.35	44.33
9.	State Bank of India	43.25	44.37
10.	State Bank of Saurashtra	44.16	45.87
11.	Dena Bank	40.08	46.41
12.	Bank of India	41.32	46.57
13.	Allahabad Bank	42.09	46.59
14.	Union Bank of India	42.53	46.99
15.	Punjab National Bank	45.16	48.65
16.	Andhra Bank	46.42	49.60
17.	State Bank of Bikaner & Jaipur	45.03	50.83
18.	State Bank of Mysore	47.12	51.31
19.	Vijaya Bank	58.65	51.68
20.	Punjab & Sind Bank	51.26	51.85
21.	Bank of Maharashtra	57.05	59.39
22.	Central Bank of India	55.21	59.46
23.	Indian Overseas Bank	58.18	62.28
24.	Syndicate Bank	64.86	63.20
25.	UCO Bank	80.19	76.37
26.	United Bank of India	72.23	80.60
27.	Indian Bank	124.86	107.79
	Median @	42.89	46.58
@ Median of all banks excluding Indian Bank, UCO Bank and United Bank of India.

Annex 9 Market share of Public Sector Banks
Name of the Bank	Interest Income		Non-int. income		Total income		Branches
	1996-97	1997-98	1996-97	1997-98	1996-97	1997-98	1997	1998
1. State Bank of India	13,991	14,968	3,106	2,605	17,097	17,573	8,888	8,925
	(20.3)	(20.9)	(30.0)	(22.3)	(21.5)	(21.1)	(17.9)	(17.6)
2. State Bank of Bikaner	737	851	128	163	865	1,013	764	767
and Jaipur
	(1.1)	(1.2)	(1.2)	(1.4)	(1.1)	(1.2)	(1.5)	(1.5)
3. State Bank of Hyderabad	970	1,035	146	170	1117	1,205	800	832
	(1.4)	(1.4)	(1.4)	(1.5)	(1.4)	(1.5)	(1.6)	(1.6)
4. State Bank of Indore	378	407	53	73	431	480	372	379
	(0.6)	(0.6)	(0.5)	(0.6)	(0.5)	(0.6)	(0.8)	(0.8)
5. State Bank of Mysore	568	610	84	104	651	714	557	562
	(0.8)	(0.9)	(0.8)	(0.9)	(0.8)	(0.9)	(1.1)	(1.1)
6. State Bank of Patiala	906	940	94	98	1,000	1,038	699	707
	(1.3)	(1.3)	(0.9)	(0.8)	(1.3)	(1.3)	(1.4)	(1.4)
7. State Bank of Saurashtra	486	503	80	93	566	596	380	384
	(0.7)	(0.7)	(0.8)	(0.8)	(0.7)	(0.7)	(0.8)	(0.8)
8. State Bank of Travancore	909	982	124	149	1,033	1,131	654	660
	(1.3)	(1.4)	(1.2)	(1.3)	(1.3)	(1.4)	(1.3)	(1.3)
9. Allahabad Bank	1,278	1,405	178	217	1,456	1,621	1,863	1,875
	(1.9)	(2.0)	(1.7)	(1.9)	(1.8)	(2.0)	(3.7)	(3.7)
10.Andhra Bank	789	916	95	117	883	1,033	978	974
	(1.1)	(1.3)	(0.9)	(1.0)	(1.1)	(1.2)	(2.0)	(1.9)
11.Bank of Baroda	3,417	3,760	384	458	3,801	4,218	2,493	2,493
	(5.0)	(5.3)	(3.7)	(3.9)	(4.8)	(5.1)	(5.0)	(4.9)
12.Bank of India	3,057	3,434	354	423	3,410	3,857	2,475	2,495
	(4.4)	(4.8)	(3.4)	(3.6)	(4.3)	(4.6)	(5.0)	(4.9)
13.Bank of Maharashtra	864	991	85	100	949	1,091	1,147	1,162
	(1.3)	(1.4)	(0.8)	(0.9)	(1.2)	(1.3)	(2.3)	(2.3)
14.Canara Bank	3,418	3,766	450	583	3,868	4,349	2,262	2,312
	(5.0)	5.3)	(4.3)	(5.0)	(4.9)	(5.2)	(4.5)	(4.6)

Market share of Public Sector Banks
Name of the Bank	Interest Income		Non-int. income		Total income		Branches
	1996-97	1997-98	1996-97	1997-98	1996-97	1997-98	1997	1998
15.Central Bank of India	2,530	2,821	305	364	2,836	3,184	3,087	3,088
	(3.7)	(3.9)	(2.9)	(3.1)	(3.6)	(3.8)	(6.2)	(6.1)
16. Corporation Bank	828	1,036	112	144	940	1,180	507	581
	(1.2)	(1.5)	(1.1)	(1.2)	(1.2)	(1.4)	(1.0)	(1.2)
17. Dena Bank	1,022	1,228	119	184	1,141	1,413	1,143	1,156
	(1.5)	(1.7)	(1.2)	(1.6)	(1.4)	(1.7)	(2.3)	(2.3)
18. Indian Bank	1,435	1,342	212	186	1,647	1,528	1,487	1,494
	(2.1)	(1.9)	(2.1)	(1.6)	(2.1)	(1.8)	(3.0)	(2.9)
19. Indian Overseas Bank	1,683	1,826	187	215	1,869	2,042	1,371	1,380
	(2.4)	(2.6)	(1.8)	(1.8)	(2.4)	(2.5)	(3.0)	(2.7)
20. Oriental Bank of	1,269	1,471	104	138	1,374	1,610	755	841
Commerce	(1.8)	(2.1)	(1.0)	(1.2)	(1.7)	(1.9)	(1.5)	(1.7)
21. Punjab & Sind Bank	732	845	88	115	820	960	704	711
	(1.1)	(1.2)	(0.9)	(1.0)	(1.0)	(1.2)	(1.4)	(1.4)
22. Punjab National Bank	3,787	4,237	421	681	4,209	4,918	3,765	3,893
	(5.5)	(5.9)	(4.1)	(5.8)	(5.3)	(5.9)	(7.6)	(7.7)
23. Syndicate Bank	1,523	1,583	159	219	1,682	1,802	1,611	1,627
	(2.2)	(2.2)	(1.5)	(1.9)	(2.1)	(2.2)	(3.2)	(3.2)
24. UCO Bank	1,148	1,293	106	175	1,254	1,468	1,803	1,802
	(1.7)	(1.8)	(1.0)	(1.5)	(1.6)	(1.8)	(3.6)	(3.6)
25. Union Bank of India	2,302	2,497	199	214	2,501	2,712	2,030	2,087
	(3.3)	(3.5)	(1.9)	(1.8)	(3.2)	(3.3)	(4.1)	(4.1)
26. United Bank of India	1,007	1,342	97	141	1,104	1,482	1,333	1,333
	(1.5)	(1.9)	(0.9)	(1.2)	(1.4)	(1.8)	(2.7)	(2.6)
27. Vijaya Bank	732	809	64	82	796	892	835	835
	(1.1)	(1.1)	(0.6)	(0.7)	(1.0)	(1.1)	(1.7)	(1.7)
Total for PSBs	51,767	56,898	7,533	8,212	59,300	65,110	44,763	45,355
	(74.9)	(79.4)	(72.7)	(70.3)	(74.6)	(78.1)	(89.9)	(89.4)
Total for all Banks	69,102	71,644	10,361	11,680	79,463	83,324	49,771	50,743
	(100)	(100)	(100)	(100)	(100)	(100)	(100)	(100)
Note: Figures in brackets indicate percentage to total for all banks.

Annex 10 Gross NPA Movement
(Rs. crore)
Movement in	Indian Bank	UCO Bank	United Bank of
Gross NPA			India
As on 31 March 1996	3,140	1,840	1,401
Reduction during 1996-97	482	354	167
Addition during 1996-97	645	387	164
As on 31 March 1997	3,303	1,873	1,398
Reduction during 1997-98	347	371	97
Addition during 1997-98	472	278	150
As on 31 March 1998	3,428	1,780	1,451
Reduction during 1998-99	164	327	101
Additions during 1998-99	445	263	199
As on 31 March 1999	3,709	1,716	1,549

Annex 11 Operating Expenses to NII and Other Income
Name of the Bank	Operating Expenses to NII & Other income
	1996-97	1997-98	1998-99
Indian Bank	140.91	166.85	141.22
UCO Bank	116.41	97.28	93.94
United Bank of India	122.38	87.50	97.61
Median for PSBs	63.20	61.36	66.60

Annex 12 Staff cost to operating expenses
Sr.No.	Name of the Bank	1997-98	1998-99
1.	Oriental Bank of Commerce	61.54	58.03
2.	Corporation Bank	56.11	60.94
3.	Union Bank of India	64.55	65.56
4.	Punjab & Sind Bank	71.55	69.27
5.	Allahabad Bank	64.84	69.95
6.	Bank of Baroda	68.98	70.03
7.	State Bank of India	75.36	70.34
8.	State Bank of Indore	68.31	70.57
9.	Vijaya Bank	72.09	71.03
10.	Canara Bank	68.42	71.46
11.	State Bank of Travancore	69.83	72.07
12.	Bank of India	65.99	72.24
13.	State Bank of Patiala	73.96	72.90
14.	Dena Bank	72.61	72.96
15.	State Bank of Hyderabad	73.21	73.16
16.	Andhra Bank	72.92	73.35
17.	State Bank of Saurashtra	76.53	75.20
18.	Indian Overseas Bank	74.59	75.50
19.	Central Bank of India	76.58	75.63
20.	State Bank of Bikaner & Jaipur	76.46	75.66
21.	Indian Bank	74.83	76.33
22.	State Bank of Mysore	76.79	76.43
23.	Punjab National Bank	77.21	77.68
24.	Syndicate Bank	78.56	78.96
25.	Bank of Maharashtra	77.77	80.89
26.	UCO Bank	82.43	81.29
27.	United Bank of India	82.55	82.57
	Median @	72.77	72.57
@ Median of all banks excluding Indian Bank, UCO Bank and United Bank of India.

Annex 13 Ratio of assets to employees (March 1998)
(Amt. in Rs. crore)
Sr.No. Name of the Bank		Total	Total	Asset to
		assets	staff	staff
				ratio
1.	Corporation Bank	11,214	9,615	1.17
2.	Oriental Bank of Commerce	14,782	14,238	1.04
3.	Bank of Baroda	45,841	45,935	1.00
4.	Bank of India	46,338	52,518	0.88
5.	Union Bank of India	25,753	30,901	0.83
6.	Dena Bank	12,264	15,109	0.81
7.	Canara Bank	43,112	54,703	0.79
8.	Indian Overseas Bank	21,432	28,347	0.76
9.	State Bank of India	1,79,673	2,39,649	0.75
10.	State Bank of Hyderabad	10,618	14,269	0.74
11.	State Bank of Patiala	9,641	13,108	0.74
12.	Punjab & Sind Bank	9,031	12,167	0.74
13.	Indian Bank	19,454	26,994	0.72
14.	State Bank of Travancore	9,133	13,049	0.70
15.	Allahabad Bank	15,153	22,606	0.67
16.	Vijaya Bank	9,440	14,138	0.67
17.	State Bank of Saurashtra	5,204	7,993	0.65
18.	United Bank of India	14,389	22,041	0.65
19.	Bank of Maharashtra	10,656	16,596	0.64
20.	Andhra Bank	9,231	14,936	0.62
21.	Central Bank of India	30,519	49,702	0.61
22.	State Bank of Indore	4,093	6,831	0.60
23.	Punjab National Bank	39,768	66,599	0.60
24.	State Bank of Bikaner & Jaipur	8,523	15,046	0.57
25.	UCO Bank	18,586	32,830	0.57
26.	Syndicate Bank	19,476	36,266	0.54
27.	State Bank of Mysore	5,863	11,217	0.52
	Median @			0.72
@ Median of all banks excluding Indian Bank, UCO Bank and United Bank of India.

Annex 14 Staff cost to total income
Sr.No.	Name of the Bank	1997-98	1998-99
1.	Oriental Bank of Commerce	11.59	10.59
2.	Corporation Bank	11.00	10.61
3.	State Bank of Travancore	13.40	14.79
4.	Bank of Baroda	15.67	15.65
5.	Union Bank of India	16.06	16.42
6.	Canara Bank	15.60	16.54
7.	State Bank of Patiala	17.41	16.56
8.	Dena Bank	17.48	16.74
9.	Punjab & Sind Bank	18.86	17.22
10.	Bank of India	17.06	17.89
11.	Allahabad Bank	16.79	18.07
12.	State Bank of India	19.03	18.52
13.	State Bank of Hyderabad	16.28	19.76
14.	Vijaya Bank	22.50	19.87
15.	Indian Overseas Bank	18.62	19.95
16.	Andhra Bank	19.21	19.98
17.	State Bank of Indore	19.88	20.40
18.	State Bank of Saurashtra	20.92	20.83
19.	Punjab National Bank	18.83	21.41
20.	United Bank of India	22.67	22.26
21.	State Bank of Bikaner & Jaipur	21.17	22.27
22.	Central Bank of India	22.40	22.89
23.	State Bank of Mysore	21.78	22.99
24.	Indian Bank	23.48	23.40
25.	Bank of Maharashtra	24.52	24.31
26.	Syndicate Bank	26.31	25.00
27.	UCO Bank	27.07	25.74
	Median @	18.73	19.14
@ Median of all banks excluding Indian Bank, UCO Bank and United Bank of India.

Annex 15 Structure of proposed NPA transfer mechanism

FRA: Independent agency set up under separate Act, government owned, approves and monitors bank-specific restructuring programmes, owns ARF, and appoints AMCs.

ARF: Government-owned (through FRA), profit-oriented, buys loans from weak banks against bonds at negotiated prices, recovers/sells loans, limited life span as for FRA.

AMC: Independent, private sector entity or existing Fund Manager, miniority government holding, manages ARF, staffed with top class professionals, incentive-driven.