Annual Report

2008-09

BANKING CODES AND STANDARDS BOARD OF INDIA

www.bcsbi.org.in

PUBLISHED BY

K.V Subba Rao .

Chief Executive Officer Banking Codes and Standards Board of India C-7, Reserve Bank of India Building Bandra Kurla Complex Mumbai- 400051 Phone Fax : (022) 26573715 : (022) 26573719

Banking Codes and Standards Board of India Governing Council

Chairman K.J. Udeshi

Members M. M. Chitale Chartered Accountant 204 and 205 Agarwal ShyamkamalA Building, Vile Parle (East) Mumbai-400 057 V. P Shetty . Chairman JM Financial Asset Reconstruction Company Private Limited 141, Maker Chambers III, Nariman Point Mumbai-400 021

Cyrus Guzder Chairman and Managing Director AFL Pvt. Ltd., AFL House Lok Bharati Complex Marol Maroshi Road Andheri (East) Mumbai-400 059

Dr. Ajit Ranade Group Chief Economist Aditya Birla Management Corporation Pvt. Ltd. 2-C, S.K. Ahire Marg, Worli Mumbai-400 030

K. V. Subba Rao Chief Executive Officer Banking Codes and Standards Board of India C-7, Reserve Bank of India Building Bandra-Kurla Complex Mumbai-400 051

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

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

Banking Codes and Standards Board of India

Annual Report 2008-09

ANNUAL REPORT OF THE BANKING CODES AND STANDARDS BOARD OF INDIA (BCSBI) 2008-09
The year 2008-09 witnessed the failure of some major financial institutions and banks in the U.S., U.K. and elsewhere, which were considered as too big to fail, causing a world-wide financial crisis. It is against this background of turbulence, stress and uncertainty in financial markets that the performance of member banks of the BCSBI has to be evaluated vis--vis their commitments of rendering quality banking services of a minimum standard to their individual customers and micro and small enterprises. Governing Council 2. The Governing Council (G.C.) which is vested with the general supervision, direction and control of the working of the BCSBI, held seven meetings during the year. On the expiry of its first term of three years, the Reserve Bank of India (RBI) reconstituted the Council in February 2009 in accordance with the Rules and Regulations of the BCSBI. Shri S. Divakara and Shri S.R. Kolarkar completed their term as members of the G.C. and Dr. Ajit Ranade was inducted as a member. The term of the reconstituted Governing Council will be for two years up to February 17, 2011. The G.C. plays a crucial and decisive role in the review of the monitoring and enforcement of the Codes by member banks and BCSBI places on record the invaluable services rendered by S/Shri Divakara and Kolarkar.

Membership and Subscription 3.1 During the year the G.C. approved an amendment to the Banking Code Rules facilitating the admission of scheduled Urban Co-operative Banks (UCBs) and Regional Rural Banks (RRBs) as members of the BCSBI. Four banks viz. Saraswat Co-operative Bank Ltd., Bharat Co-operative Bank (Mumbai) Ltd., State Bank of Mauritius and Nagar Urban Co-operative Bank Ltd. were admitted as members with effect from April 1, 2009 and the membership of 2 more scheduled UCBs and 7 RRBs is in process. Two banks viz. State Bank of Saurashtra and Centurion Bank of Punjab ceased to be members subsequent to their merger with the State Bank of India and HDFC Bank Ltd., respectively. List of members is set out in Annex I. During the year, BCSBI collected Rs.413.44 lakh by way of registration and membership fee from member banks, which includes fee of Rs.200.03 lakh for the year 2008-09 and Rs.213.41 lakh as fee for the year 2009-10. With a view to strengthening the corpus of BCSBI and achieving self-sustainability, it has been decided to raise the target for collection of total annual membership fee from Rs.200.00 lakh for the year 2008-09 to Rs.250.00 lakh for the year 2009-10.

3.2

Investment of Funds 4. During the year, the Investment Committee of the G.C. held three meetings and reviewed the Investment Policy. As on March 31, 2009, the investments of the corpus stood at

Banking Codes and Standards Board of India

Annual Report 2008-09

Rs.809.60 lakh comprising Rs.358.40 lakh in Government Securities and Rs.451.20 lakh in term deposits with banks. During the year the total income from investments amounted to Rs. 49.84 lakh. Code of Banks Commitment to Micro and Small Enterprises (MSEs) 5.1 The Third Census of Small Enterprises conducted by Small Industries Development Organisation in 2001-02 had brought out that an overwhelming 95% of micro enterprises are outside the purview of institutional financial structure. It was, therefore, felt necessary to come out with specific commitments from member banks to address the financial needs of MSEs and the Code of Banks Commitment to MSEs was launched by the then Honble Union Finance Minister, Shri P Chidambaram on May 31, 2008 and all member . banks have since adopted this Code. The Code was given wide publicity in the English and Regional Press by the RBI and BCSBI embarked upon a nation-wide campaign to disseminate the Code both among the MSEs and the field level functionaries of banks. Workshops were organized with the active support of member banks at Thane (Maharashtra), Kochi (Kerala), Chennai and Madurai (Tamilnadu), New Delhi, Kolkata (West Bengal), Guwahati (Assam), Belgaum and Hubli (Karnataka), Cuttack (Orissa), Agra and Lucknow(Uttar Pradesh) and Indore (Madhya Pradesh). The response to these workshops was overwhelming and the BCSBI is grateful to the member banks and the industry associations for the support extended in this endeavour. For dissemination of the MSE Code, the BCSBI also utilized the forum of the State Level Inter Institutional Committee meetings (Empowered Committee on SMEs) convened by the RBI which are attended by senior State Government functionaries and the federations representing the interests of MSEs. In pursuance of the commitments made in the Code, a simple, standardized and easy to understand loan application form for MSEs was finalized by IBA in consultation with the BCSBI and copies of the same were circulated among the banks for expeditious adoption. This is one of the main requirements of MSEs and it is expected that the process of adoption of this standardized loan application form for MSEs by all member banks would be completed shortly.

5.2

5.3

Sample survey of implementation of Code provisions 6.1 As some time had lapsed since the launch of the Code in July 2006 and the subsequent compliance discussions with member banks, it was felt appropriate to review the Code compliance by the banks. After extensive deliberations on the mode of review, 268 branches spread across the five metro cities, viz., Mumbai, Delhi, Kolkata, Chennai and Hyderabad including 70 percent of the branches covered in the previous survey whose adherence to the Code was not considered satisfactory, were visited by representatives of BCSBI in October November, 2008. The scope of these visits included dissemination of both the Codes, display of Information on basic banking services, opening of No Frills accounts, provision of basic banking services, lending practices, grievance redressal systems etc.
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A section of the audience at the workshop for MSEs held at Thane.

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

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

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

Banking Codes and Standards Board of India

Annual Report 2008-09

6.2

Though only a very small sample of bank branches was selected for the review, considering the fact that most of these branches had a poor track record of adherence to the Code, the findings of the Review visits reveal some perceptible improvement in overall adherence to the provisions of the Code over that observed during the last survey. Some of the important findings are set out in Annex II.

Opening of No Frills account Incognito Visits to Branches 7.1 In accordance with the commitment made in the Code of Banks Commitment to Customers, member banks are required to make available basic banking No Frills a/cs either with nil or very low minimum balance. The RBI has also provided enough flexibility in the requirements of documents of identity and proof of address in the KYC guidelines issued to banks so as to facilitate the opening of these accounts. With a view to ascertain the factual position about fulfilment of commitments at the ground level, BCSBI randomly selected 44 branches of 26 banks in public, private and foreign sectors located in Mumbai and carried out incognito visits. The findings revealed that the general awareness about the No Frills accounts and relaxed KYC requirements in respect of the said accounts was insufficient among the staff of the banks visited. The staff at most of the branches were not proactive in opening such accounts. The findings at Annex III have been shared with the banks for taking remedial action.

7.2

Monitoring of Compliance 8. Monitoring of the compliance by member banks of the Code Commitments is done through the scrutiny of the Annual Statement of Compliance submitted by banks, reflecting the position as on December 31, of each year. This years performance of compliance has been significantly better than in the previous year inasmuch as almost all banks have now adopted the model policies on Cheque Collection, Grievance Redressal, Security Repossession and Collection of Dues, Compensation etc. There are gaps observed and the concerned banks are making efforts to comply with the Codes. What is, however, of concern is the ground realities as brought out through the field surveys and incognito visits and the declarations by banks in the Annual Compliance statements. Members are expected to be ethical and fair in their self-appraisal.

Complaints and Their Redressal 9.1 Public grievances, is one of the effective tools through which BCSBI carries out its ongoing monitoring of banks compliance with the Code provisions. BCSBI by design and mandate, is not a redressal agency to arbitrate on a dispute between an individual and his banker. But grievances ventilated by individuals do sometimes throw up systemic deficiencies. They enable BCSBI to monitor Code Compliances at systemic or bank specific level. Therefore, while complaints received by BCSBI are forwarded for redressal to the Customer Service Department, RBI, those complaints which are indicative of systemic deficiencies are followed up with the respective bank/s.

9.2. During the year under report, 571 complaints were received against member banks. A large number of these were episodic grievances, and only 165 complaints were of systemic
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Annual Report 2008-09

import or impinged upon breach of code provisions. A profile of these complaints is set out in Annex IV. Review of the Code of Banks Commitment to Customers 10. As per the commitment made in the Code, BCSBI has commenced the process of review of the Code. The objective of the review is to enhance the minimum standards of customer service rendered by banks by bringing about greater transparency. Suggestions in this regard have been sought from member banks, RBI, IBA, the Banking Ombudsmen, various bodies representing the interest of banks customers and civil society organisations. Suggestions have also been invited from members of the public through a notice on the BCSBI website. The process of review of the Code is expected to be completed by June 30,2009.

Training Support 11. BCSBI continued to extend faculty support to training establishments of member banks to help their staff understand and appreciate the provisions of the Codes and their implementation.

Newsletter 12. The inaugural Issue of BCSBIs Quarterly Newsletter has been circulated to reach out to each and every branch of member banks.

Way Ahead 13.1 Reflecting his commitment to customer service, the Governor, RBI, Dr. D. Subbarao has in his message in the inaugural issue of the BCSBI Newsletter emphasized : Customer, they say, is the king. This becomes a reality only if customers are enabled to enforce accountability. But they cannot do so if information is not disseminated or where information asymmetries operate. On the way ahead, therefore, our focus will be on increased efforts at achieving greater awareness among customers and bankers about their rights and obligations enshrined in the two Codes as also to bring about greater transparency in banks systems and practices through the Revised Code of Banks Commitment to Customers which will come into effect this year. BCSBI will also encourage scheduled UCBs and RRBs to become members of BCSBI to ensure that a larger section of the banking public benefits from improved quality of customer service. As heretofore, the approach of BCSBI towards bringing about qualitative improvements in customer service would be collaborative by enlisting the support of RBI, IBA and member banks. 13.2 World over, there is a marked shift on tightening regulation, and concerns are being voiced about the efficacy of self-regulation of banks, particularly in the context of protection of customers rights. In this scenario, the challenges ahead, for BCSBI, are quite formidable and members have to collectively demonstrate that self-regulation does have a useful role.
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Banking Codes and Standards Board of India

Annual Report 2008-09

13.3 The expansion in membership of the BCSBI brings with it the concomitant issue of monitoring of compliance and HR issues within the BCSBI. These issues have to be seen in the context of BCSBI having to gradually wean itself from the staff and financial support extended by RBI. The present financing arrangements for the BCSBI would continue up to 2011. The financial viability of the BCSBI would need to be examined in the ensuing months so as to ensure that the BCSBI is able to more effectively fulfil the role assigned to it. In this context the BCSBI would work closely with the RBI and IBA to work out viable financing arrangement beyond 2011. These and other governance issues would need to be addressed by the G.C. of the BCSBI on the way ahead. Acknowledgements 14. The BCSBI is grateful for the support extended by RBI, IBA and member banks. The BCSBI is thankful to the State Bank of India, Bank of Baroda, Indian Overseas Bank, Bank of India and State Bank of Indore and various industry associations for the logistic support extended to BCSBI for the conduct of the workshops for dissemination of the Code of Banks Commitment to Micro & Small Enterprises.

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

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

Banking Codes and Standards Board of India

Annual Report 2008-09

Annex I List of banks which have enrolled as members of the BCSBI

S. No. Name of the Bank S. No. Name of the Bank

01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37

Scheduled Commercial banks AB Bank Ltd. ABN AMRO Bank N.V. Allahabad Bank Andhra Bank Axis Bank Ltd. Bank of America Bank of Baroda Bank of Ceylon Bank of India Bank of Maharashtra Bank of Novascotia Barclays Bank P L C BNP Paribas Calyon Bank Canara Bank Central Bank of India Citibank N A City Union Bank Corporation Bank DBS Bank Ltd. Dena Bank Deutsche Bank Development Credit Bank Ltd. HDFC Bank Ltd. ICICI Bank Ltd. IDBI Bank Ltd. Indian Bank Indian Overseas Bank Indusind Bank ING Vysya Bank Ltd. J P Morgan Chase Bank N A Karnataka Bank Ltd. Kotak Mahindra Bank Ltd. Krung Thai Bank P C L Mashreq Bank Psc Oman International Bank S.A.O.G. Oriental Bank of Commerce

38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 01 02 03

Scheduled Commercial banks Punjab National Bank SBI Commercial & International Bank Ltd. Shinhan Bank Societe Generale Sonali Bank Standard Chartered Bank State Bank of Bikaner And Jaipur State Bank of Hyderabad State Bank of India State Bank of Indore State Bank of Mauritius State Bank of Mysore State Bank of Patiala State Bank of Travancore Syndicate Bank Tamilnad Mercantile Bank Ltd. The Bank of Rajasthan Ltd. The Catholic Syrian Bank Ltd. The Dhanalakshmi Bank Ltd. The Federal Bank Ltd. The Hongkong And Shanghai Banking Corporation Ltd. The Jammu & Kashmir Bank The Karur Vysya Bank The Lakshmi Vilas Bank Ltd. The Nainital Bank Ltd. The Ratnakar Bank Ltd. The South Indian Bank Ltd. UCO Bank Union Bank of India United Bank of India Vijaya Bank Yes Bank Ltd.

Scheduled Urban Cooperative banks

The Bharat Co-operative Bank (Mumbai) Ltd. Nagar Urban Co-operative Bank Ltd. The Saraswat Co-operative Bank Ltd.

List of banks which have registered for membership of the BCSBI 1. a. b. Scheduled Urban Cooperative banks The Cosmos Cooperative Bank Ltd. The Karad Urban Cooperative Bank Ltd. 2. a. b. c. d. e. f. g. Regional Rural banks Saurashtra Gramin Bank South Malabar Gramin Bank Vananchal Gramin Bank Kashi Gomti Samyut Gramin Bank Karnataka Vikas Grameena Bank Pandyan Grama Bank Prathama Bank

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

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

Annex II Progress in banks' compliance with the Code of Bank's Commitment to Customers Branch Visit Findings

1.

Comparative position The comparative position of adherence to select provisions of the Code as per the findings of the survey held in year 2007 and the branch visits conducted in 2008 are presented below.
S. No. Item Description

Percentage of branches adhering to the Code Provisions As per survey of 2007 As per branch visits in 2008 87 56

1. 2. 3. 4. 5.

Dissemination of the Code Availability of copies of Code at branches Display of information about availability of Code Transparency and Customer Education Display of address and contact details of Banking Ombudsman Display of contact details of Compliance Officer/Nodal Officer Availability of copy of customer centric policies e.g. Security Repossession Policy. Grievance Redressal Redressal of grievance of customers within 15 days. Lending Issue of acknowledgement for receipt of loan application Conveying terms and conditions of loans sanctioned in writing to the borrowers.

56 12

69 58 29 88 60 76

75 58 74 93 72 95

6. 7. 8.

2.

Centre-wise position Centre-wise position of adherence to select Code provisions as observed during the branch visits in year 2008 are presented in the charts below: (a) Position of branches displaying information about availability of copies of the Code. (b) Position of branches making available copies of the Code to their customers.

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Banking Codes and Standards Board of India

Annual Report 2008-09

(c) Position of branches acknowledging receipt of complaints from customers.

(d) Position of branches paying compensation as per their policy without waiting for a demand from customers.

3.

Bank Group-wise status Bank Group-wise position of adherence to select Code provisions as observed during the branch visits in year 2008 are presented in the charts below: (a) Status of branches displaying information about availability of copies of the Code. (b) Status of branches making available copies of the Code to their customers.

(c) Status of branches acknowledging receipt of complaints from customers.

(d) Position of branches paying compensation as per their policy without waiting for a demand from customers.

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Banking Codes and Standards Board of India

Annual Report 2008-09

Annex III Findings of Incognito Visits to Branches Opening of No Frills Accounts

(i)

Awareness of No-Frills Accounts (a) Awareness about the relaxed KYC norms for opening No-Frills account was very poor. Officials in over 63 percent of branches visited were unaware of the instructions of RBI on the simplified procedure for opening No-Frills accounts. Lack of awareness was pronounced at the branches of SBI & associates as well as PSBs. The staff at all the 5 branches of SBI and Associates, 14 of the 21 branches of PSBs and 3 of the 4 branches of foreign banks were unaware about No-Frills accounts and related information. Private Sector banks were relatively more informed as 8 out of 14 branches were aware about the facility of No-Frills accounts. (b) Although some banks branches have displayed information on these accounts, as per regulatory requirement, none of the dealing staff members was aware of the same. The staff was not even aware of the basic features like minimum balance requirement.

(ii)

Opening of No Frills Account (a) At the outset, most of the branches did not come forward to open No Frills accounts in the names of persons of small means, say a maid or a driver. When it was mentioned that there are some savings accounts with limited facilities for people with lower income, the staff expressed unwillingness to open such account, if the customer was not in a position to produce document such as PAN card, Voters ID, Postal ID, etc. as proof of identity and address. While none of the branches of foreign banks and those in SBI group visited were willing to open No Frills accounts with relaxed KYC documents, the response from branches of PSBs (other than SBI group) and Private banks was mixed. While in the case of PSBs 12 out of 21 branches showed unwillingness to open these accounts, 5 of 9 new private sector banks, 3 of 5 old private sector banks were unwilling to open such accounts. (b) Branches of some of the banks showed preparedness to open a No Frills account in the name of a driver having a valid Driving Licence as proof of identity. These branches also showed willingness to accept a declaration supported by documents from the person with whom the prospective account holder resides, as proof of address.

(iii) Format of Account Opening Form (AOF) (a) With the exception of two banks, no other bank has introduced simplified account opening form for No Frills account. (b) A solitary bank provided in the account opening form, information about simplified KYC norms. (c) In spite of the relaxations in KYC requirements as per regulatory guidelines, the account opening forms of 25 banks did not contain any information about the requirement of documents under simplified KYC norms. The account opening form of these banks indicated only the usual documents required such as Passport, PAN Card, Voter ID, Postal ID, Electricity/Telephone Bill, Ration Card, etc. as proof in support of identity and address, thereby excluding a large section of population not in possession of such documents from opening a No Frills account.
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Annual Report 2008-09

Annex IV Profile of Complaints

Sr. No. Nature of complaints 01 02 03 04 05 06 07 08 09 10 11 12 Deposit accounts Credit/Debit Cards Pension Tariff Schedule & Service Charges Cheque Collection/Clearing Cycle Foreign Exchange Services ATM related services Compensation Policy Unsolicited telemarketing Loans & Advances (including Collection of dues, etc.) Grievance Redressal mechanism Miscellaneous Total 2007-08 55 109 2 23 22 4 2

2008-09 111 205 7 18 21 4 5

5 59 17 38 336

132 21 47 571

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Statement of Accounts for the year

2008-09

Banking Codes and Standards Board of India LOONKER & CO. Chartered Accountants

Annual Report 2008-09 8-Dhun Mahal, Garden Road Colaba, Mumbai 400 039 Tel : 2282 5580; 2285 6740 Mobile: 93246 14750.

Auditors Report We have audited the Balance Sheet of Banking Codes and Standards Board of India as at 31st March 2009 and the Income and Expenditure account for the year ended on that date annexed thereto. These financial statements are the responsibility of the trustees of the Board. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. We report that: i) ii) iii) iv) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purpose of the audit. In our opinion, proper books of account as required by the law have been kept by the Trust so far as it appears from our examination of such books. The Balance Sheet and Income & Expenditure Account dealt with by this report are in agreement with the books of account. In our opinion and to the best of our information and according to the explanations given to us, the said accounts give a true and fair view in conformity with the accounting principles generally accepted in India:in the case of Balance Sheet of the state of affairs of the above named trust as at 31st March 2009 and in the case of Income & Expenditure account of the surplus for the accounting year ended on that date.

For M/s. Loonker & Co. Chartered Accountants

Place : Mumbai Date: May 5, 2009

Sd/(S. C. Loonker) Partner (Membership No:10135)

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Banking Codes and Standards Board of India

Annual Report 2008-09

BANKING CODES AND STANDARDS BOARD OF INDIA Balance Sheet as on March 31, 2009
( As per Schedule VIII of Bombay Public Trusts Act, 1950) As on March 31, 2008 FUNDS AND LIABILITES As on March 31, 2009 As on March 31, 2008 35,723,000 41,344,000 77,067,000 29,873,356 3,299,000 1,873 4,984,796 8,285,669 152,451 1,527,711 1,873 (1,873) 7,556,568 695 39,127,931 Total 85,505,120 39,127,931 12,640 152,689 1,500 2,772 PROPERTY & ASSETS (Amount in Rupees) As on March 31, 2009 35,839,604

Trust Funds or Corpus 35,723,000 Balance as per last Balance Sheet Add: Contribution received during the year Other earmarked funds - Public Awareness Fund 3,299,000 Balance as per last Balance Sheet Add: Tfd. From Income & Exp. A/c - From Opening Balance - From Current Year Loans (Secured or unsecured) Liabilities104,058 For advances from RBI Income and Exp. Account 1,873 Balance as per last Balance Sheet Less: Appropriation, if any

Immovable properties Investments Govt.securities (cost)-Annex-I Furniture and fixtures Loans (Secured or unsecured) Advances To others- Trade Mark - Tax Deducted at Source - Deposit (MTNL) - Premium on GOI Securities Income Outstanding - Interest Cash and Bank Balances- In current account or fixed deposit account-Annex II - Stamps Total 46,273,268 1,440 12,640 217,560 1,500 8,053

239,753

3,151,055

46,274,708 85,505,120

As per our report of even date Sd/(K.J. Udeshi) Chairman Sd/(K.V. Subba Rao) Chief Executive Officer Banking Codes and Standards Board of India Place: Mumbai Date: May 5, 2009 Place: Mumbai Date: May 5, 2009 M/s.Loonker & Co. Chartered Accountants Sd/Partner Auditors

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Banking Codes and Standards Board of India

Annual Report 2008-09 Annex-I

BANKING CODES AND STANDARDS BOARD OF INDIA Schedule of Investments belonging to the Trust as on March 31. 2009
( As per Part III - Schedule VIII of Bombay Public Trusts Act, 1950) Date and year of preparation Kind of investments Full description such as name of the company, distinctive Nos. of shares and certificates, type of shares, etc. Date of redemption or repayment 3 Shares Bonds and Debentures Deposits Others Public Securities Face Value Cost (Amount in Rupees) Rate of interest borne by investments 6 Remarks

1 At the beginning of the year (as on April 1, 2008)

2 (i) (ii) (ii) (iv) (v)

5 14,118,650 1,484,292 11,470,414 2,800,000 29,873,356 2,466,248 3,500,000 5,966,248

(a) 7.37% GOI Securities 2014 (b) 8.07% GOI Securities 2017 (c) 7.49% GOI Securities 2017 (d) 7.99% GOI Securities 2017 (a) 7.59% GOI Securities 2016 (b) 8.24% GOI Securities 2017

14,500,000 1,480,000 12,000,000 2,800,000 30,780,000 2,500,000 3,500,000 6,000,000

7.37% 8.07% 7.49% 7.99% 7.59% 8.24%

Increase during the year (2008-09) Decrease during the year (2008-09)

Total at the end of the year (as on March 31, 2009)

36,780,000 35,839,604

Annex-II BANKING CODES AND STANDARDS BOARD OF INDIA Annexure to Balance Sheet as on March 31, 2009
(Amount in Rupees)

As on March 31, 2008 2,856 73,712 1,300,000 6,000,000 180,000

Bank Accounts In Savings Account - ICICI Bank In Current Account - Central Bank of India In Fixed Deposits - HDFC Bank - HSBC Bank - Kotak Mahindra Bank - Axis Bank - Citibank - ICICI Bank - IDBI Bank - Karnataka Bank - Karur Vysya Bank - Yes Bank [All accounts in the name of Banking Codes and Standards Board of India]

As on March 31, 2009 1,030,638 123,031 4,200,000 5,300,000 5,000,000 3,775,000 7,100,000 7,500,000 3,598,453 2,921,146 5,725,000 46,273,268 As per our report of even date

7,556,568

Sd/(K.J. Udeshi) Chairman Sd/(K.V. Subba Rao) Chief Executive Officer Banking Codes and Standards Board of India Place: Mumbai Date: May 5, 2009

M/s. Loonker & Co. Chartered Accountants Sd/Partner Auditors Place: Mumbai Date: May 5, 2009

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Banking Codes and Standards Board of India

Annual Report 2008-09

BANKING CODES AND STANDARDS BOARD OF INDIA Income and Expenditure Account for the year ended March 31,2009
[As per Schedule IX of Bombay Public Trusts Act, 1950] Year ended March 31, 2008 EXPENDITURE Year ended March 31, 2009 2,092,303 704,836 929 2,720 Year ended March 31, 2008 By Rent By Interest - On securities - On bank account By Dividend By Donations in cash or kind By Grants By Income from other sources By Transfer from Reserve By Deficit carried over to Balance Sheet 2,759,527 2,224,528 4,984,055 1,670 INCOME (Amount in Rupees) Year ended March 31, 2009

To expenditure in respect of properties To establishment expenses To remuneration to trustees Legal expenses Audit fees To contribution and fees To amount written off

308

- Preimum on Govt. Securities To Miscellaneous expenses To Depreciation To Amounts transferred to Reserve

2,799,000 551 2,799,859

- Public Awareness Fund To Expenditure on objects of the Trust To surplus carried over to Balance Sheet Total

4,984,796 4,985,725 2,799,859 Total 4,985,725

As per our report of even date Sd/(K.J. Udeshi) Chairman Sd/(K.V. Subba Rao) Chief Executive Officer Banking Codes and Standards Board of India Place: Mumbai Date: May 5, 2009

M/s.Loonker & Co. Chartered Accountants Sd/Partner Auditors

Place: Mumbai Date: May 5, 2009

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Banking Codes and Standards Board of India

Annual Report 2008-09

Notes forming part of accounts for the year ended March 31, 2009 1. The financial statements are prepared on accrual basis. 2. Expenses Borne by Reserve Bank of India The Income and Expenditure Account does not show any expenses since all the expenses have been borne by the Reserve Bank of India. The Reserve Bank has agreed to extend financial support to the Board by way of meeting its full expenses for the first five years of operation and providing furnished Office accommodation & Office equipments, etc. free of cost at the Reserve Bank of India Building, Bandra Kurla Complex, Mumbai-400 051. 3. Advance for Expenses from Reserve Bank of India In addition to the unspent opening balance of Rs.1,04,058/- shown as advance from Reserve Bank of India on the liability side in Balance Sheet, Reserve Bank of India had advanced a sum of Rs.2,00,000/- to the Board by cheque on September 19,2008 for meeting minor establishment expenses. The unspent closing balance of Rs. 1,52,451/- is shown as advance from Reserve Bank of India on the liability side in Balance Sheet. 4. Corpus Fund During the first five years of operation, the Board would build up its Corpus from registration and membership fees so that when the RBI funding is phased out, the Board would become self-financing. The member banks have also desired that the entire contribution made by them in the form of registration fees and membership fees be credited to the Corpus of the Banking Codes and Standards Board of India. Therefore, the registration fees and the membership fees are credited to the Corpus Fund, during the first five years of operation. 5. Public Awareness Fund The Board has transferred Rs. 49,86,669/- to Public Awareness Fund to be spent for this purpose within the next five years. 6. Previous Years figures The corresponding figures for the previous year are re-grouped / re-classified, wherever necessary.

As per our report of even date Sd/(K.J. Udeshi) Chairman Sd/(K.V. Subba Rao) Chief Executive Officer Banking Codes and Standards Board of India Place: Mumbai Date: May 5, 2009 20 M/s.Loonker & Co. Chartered Accountants Sd/Partner Auditors

Place: Mumbai Date: May 5, 2009