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Annual Report 2017-18 1

ContentsShivalik Bank at a Glance ................................ 3

Vision & Values ................................................ 4

A look back at last 20 years ............................. 5

Products & Services ........................................ 6

Area of Operation ............................................. 7

Board of Directors ............................................ 10

Senior Management Team ............................... 12

2017-18: A year of expansion ........................... 14

Five years at a glance ...................................... 15

Digital Services ................................................ 18

Making digital transformation, REAL .............. 19

Financial Inclusion: Microfinance .................... 21

Chairman’s message ....................................... 22

From Customer’s perspective ......................... 25

Our staff grows together with us ..................... 35

Statutory Reports ............................................. 39

Financial Statements ....................................... 47

Annual Operation Plan & Budget .................... 70

Long Term Perspective Plan ............................ 71

AGM Notice ...................................................... 72

Shivalik Mercantile Co-operative Bank Limited2

An overview

Shivalik Mercantile Co-operative Bank is the first and largest multi-state Urban Co-operative Bank in Uttar Pradesh.

It is a pioneer in the co-operative sector

focusing on financial inclusion.

The Bank is headquartered in Saharanpur with the head office split between Saharanpur and Noida. As of 31 March 2018, the Bank had 29 branches and 3 Business Correspondent offices spread over the states of Uttar Pradesh and Madhya Pradesh. Two new branches were added in April 2018 taking the total count of branches to 31.

The bank started micro-finance to help self-help groups (SHGs). All SHGs

comprise only of women, belonging to the marginalised sector. The Bank

has connected more than 7,800 SHGs comprising approximately 95,000

individuals to the micro-finance program.


Shivalik Bank at a glance

29Branches

57.44Proportion of advances

upto B25 lacs (%)

953.40(B crore)

Deposits

611.60(B crore)

Advances

45.45Priority sector lending

(%)

33CASA ratio (%)

4.02Net interest margin

(%)

1.45Net NPA

(%)

(as on March 31, 2018)


Vision

Values

To serve the lowest strata of society with the best products at the best prices and the best technology-driven customer service, at the same time being a model employer for the national industry and emerging as a global role model in the small banking sector.

Strong Relationship with Employees & Customers

Building trust

Unmatched service

Long term relationship

Go an extra mile to help customer

Mutual Respect for all Employees & Customers

Honour each other’s commitments

Put yourself in other’s shoes

Respect one another

Respond to people

Customer Centricity

Listen to the customer

Customer delight

Customer connect

Never underestimate the customer

Big on Integrity & Reputation

Honesty

Transparency

Moral Values

Being Ethical

A money wallet was found lying unattended in the ATM room by the house keeping staff of Deoband branch.

The staff promptly handed over the wallet to the Branch Head who traced its ownership to a CRPF personnel. The owner, who was not even a regular customer of Shivalik Bank was pleasantly surprised to receive the wallet back with all the contents intact. The customer was all praise for the honesty of Shivalik Bank employees.

At Hakikat Nagar Branch in Saharanpur, a box of gold and diamond jewellery was found in the locker room by

one of the branch staff. The branch traced the customer through its daily register for locker operations. The customer was ecstatic on receiving the news and expressed her sincere gratitude towards the bank’s staff who had shown exemplary commitment and honesty.

Bank’s alert staff remains vigilant to the possibility of forged payment instruments especially cheques. Due to

the rigorous efforts and attention to detail, our team of experienced branch employees has regularly prevented financial losses to the bank’s customers through additional checks and telephone verifications.

The Bank’s ATM network has earned a reputation of being one of the most reliable cash dispensers even during

extended public holidays. Branches make special arrangements to keep ATMs replenished with cash so that people do not face shortages during bank holidays. When the people are heard saying to each other - “Shivalik Bank ATM pe jaao, cash vahin milega” - we know that our customers are being looked after.

Time and again, the bank’s staff has exhibited the highest ideals of honesty, trust and care. These words are synonymous with the ideals that each member of Shivalik lives with. A few examples are showcased below:


A look back at the last 20 years...1998First branch starts operations in Saharanpur

1999Achieves full branch computerisation, first in Saharanpur district

2002Second branch starts functioning

2005Sets up another branch and a separate office at Hakikat Nagar

2010 Achieves a deposit base of more than

B100 Cr and becomes a Tier-II bank covering the entire State of Uttar Pradesh

Becomes the first and only multi-state cooperative bank of Uttar Pradesh

Opens a branch in Dhar, Madhya Pradesh after acquisition of Bhoj Nagarik Sahakari Bank Maryadit

Achieves complete Core Banking (CBS) status

2012 Opens a branch in Indore, Madhya

Pradesh after acquisition of Malwa Commercial Cooperative Bank Limited

2013 Starts issuing RuPay ATM cum Debit

cards Installs ATMs at all branches Starts opening business correspondent

offices in remote areas in Uttar Pradesh and Madhya Pradesh

Changes CBS platform to Profile software, developed by FIS

2014 Achieves Net Worth B50 crores Completes installation of CDMs and

ATMs across branches and BC offices Becomes the first co-operative bank

in North India to issue debit cards for online / PoS shopping

Collaborates with merchants to offer in-house PoS devices for electronic payments

Launches SMS Banking

2015 Launches net banking and mobile

banking. Total business of the bank crosses

B1,000 crores.

2016 Launches cloud based RTGS/NEFT

services Launches NACH and NECS to improve

the Bank’s payment system Implemented Anti-Money Laundering

package (AML) Launches Green PIN – Paperless ATM

PIN Becomes enrolled with Direct Benefit

Transfer (DBT) scheme. Installs solar panels at ATMs to

maintain uptime and to reduce the carbon footprint

2017 Sets up a second Head office at Noida Launches account opening via m-ATMs Implements e-KYC authentication Goes live on IMPS

2018 Commences migration of CBS platform

to Finacle by Infosys, India’s second largest tehnology company.

Opens 10 new branches - 7 in U.P. and 3 in M.P.

Receives approval to extend area of operation to Delhi and two districts of Uttarakhand

6

Products and servicesThe Bank continues to grow as a co-operative engaged in assisting the grassroots level, and offers deposit products, loan products, microfinance services and other non-banking services.

DepositsSavings (Different variants)Current (Different variants)Fixed Deposits (Different schemes)Flexi Recurring Deposits Door-to-Door Deposits

LoansHome Loans Personal and Consumption Loans Gold Loans Car/Auto Loans Two-Wheeler Loans Loans for Working Capital Reverse Mortgage Loans Roof Top Solar Loans

Loans to Professionals and Self Employed Loans for Micro/SSI Units Retail Traders Loans Commercial Building Loans Commercial Vehicle Loans Limits to Self Help Groups (SHGs and Mini SHGs) Loans Against Warehouse Receipts Shivalik Green Card (Kisan Credit Card)

Add-on servicesInsurance (Life / Health / General)Remittances (inland and foreign)Lockers (in 3 different sizes)Business Correspondents Forex

Digital servicesNet BankingSMS BankingATM-cum-Debit CardCash Deposit MachinesPoS MachinesAEPS (Aadhar Enabled Payment System)Fund Transfer (RTGS/NEFT/IMPS/NACH)e-commerceMobile BankingUtility Bill Payments


Area of operationDelhiUttarakhand (Dehradun & Haridwar districts)

Uttar Pradesh

Madhya Pradesh (Dhar, Indore, Ujjain, Dewas & Khargone districts)

The Bank has its branches in UP and MP at present. It is planning to open branches in Delhi and Uttarakhand soon. However, the banking services can be offered anywhere within the area of operations through the existing branch network.

Branches & BC Offices in Uttar Pradesh (all equipped with ATMs and CDMs) Cluster : NCRDistrict Branch Name & Address IFS Code Phone & Email ID

G.B. Nagar Noida Sector 27 BranchBhoja Mkt., Nr. Vinayak Hospital, Sector 27, Noida-201301 (U.P.)

SMCB0001007 Ph: (0120) 2555333/5334, 09540407222Email: [email protected]

G.B. Nagar Noida Sector 45 BranchSDA-8, Sector-45, Noida-201303 (U.P.)

SMCB0001027 Ph: 9910079632Email: [email protected]

G.B. Nagar Noida Sector 135 BranchWA 68, Upper GF,Near Shriram Millenium School, Sector 135, Noida-201301 (U.P.)


Ghaziabad Ghaziabad BranchPlot NO. 507, Sachin Complex,G.T. Road, Nr. Bhatia Mod, Ghaziabad-201001 (U.P.)

SMCB0001015 Ph: (0120) 2860003, 8750037222Email: [email protected]

Ghaziabad Indirapuram BranchRaison Shopping Complex, AhinsaKhand-II,Near Ashiana Green, Indirapuram, Ghaziabad-201014 (U.P.)


BC Office in NCR Cluster : Ghizore, Noida

Offsite ATMs :Ghizore, NoidaSalarpur, Noida


Branches & BC Offices in Uttar Pradesh (all equipped with ATMs and CDMs) Cluster : SaharanpurDistrict Branch Name & Address IFS Code Phone & Email IDSaharanpur Ansari Road Branch

13/1207, Ansari Road, Saharanpur-247001 (U.P.)SMCB0001001 Ph: (0132) 2612381, 2612382, 9927145550

Email: [email protected] Hakikat Nagar Branch

Hakikat Nagar, Nr. Old Sales Tax Office, Saharanpur-247001 (U.P.)

SMCB0001003 Ph: (0132) 2726125, 2726147, 9927175550Email: [email protected]

Saharanpur Ground Floor, 1546 A/6, New Madho Nagar, Saharanpur - 247001 (UP)


Saharanpur Sharda Nagar Branch1/1245 Wake Mohalla Khalasi Line, Sharda Nagar, Saharanpur-247001 (U.P.)


Saharanpur Chilkana Road Branch, Near Gyan Garden Colony,Chilkana Road, Saharanpur-247001 (U.P.)


Saharanpur Gangoh BranchRambagh Road, Gangoh-247341 Dist. Saharanpur (U.P.)

SMCB0001002 Ph: (01331) 234437, 234438, 9927116660Email: [email protected]

Saharanpur Ambehta BranchKhera Bus Stand Main Road, Ambehta- 247340 Dist. Saharanpur (U.P.)


Saharanpur Sarsawa Branch51 & 53, Gayatri Market, Ambala Road,Main Market, Sarsawa-247232, Dist. Saharanpur (U.P.)

SMCB0001012 Ph: (01331)246125, 9690004994 Email: [email protected]

Saharanpur Deoband BranchPlot No-780, Subhash Chowk, Railway Road, Deoband-247554, Dist. Saharanpur (U.P.)

SMCB0001004 Ph: : (01336) 222808, 9568880001Email: [email protected]

Saharanpur Rampur Maniharan BranchMoh. Mahajanan, Rampur Maniharan-247451, Dist. Saharanpur (U.P.)


Saharanpur Nagal BranchG.T. Road, Near Petrol Pump, Nagal, Dist. Saharanpur-247551 (U.P.)


Saharanpur Nanauta BranchDeoband Road,Nanauta-247452, Dist. Saharanpur (U.P.)


Shamli Shamli Branch99/2, V.V. Inter College Road, Shamli-247776


BC Offices in Saharanpur Cluster: Nakur, Dist. SaharanpurChhutmalpur, Dist. Saharanpur

Offsite ATMs : Nakur, Dist. SaharanpurChhutmalpur, Dist. SaharanpurThanabhavan, Dist. Shamli


Branches in Madhya Pradesh (all equipped with ATMs and CDMs) Cluster : Madhya PradeshDistrict Branch Name & Address IFS Code Phone & Email ID

Dhar Dhar BranchPlot No-112, MG Road, Chota Rajwada, Dhar – 454001 (M.P.)


Dewas Dewas Branch8, Tarani colony, A.B. Road, Near Hotel Abhilasha, Dewas – 455001 (M.P.)

SMCB0001029 Ph: 07272-490450Email: [email protected]

Indore Indore Branch6,Jagjivan Ram Nagar, Main Road, Patnipura Chowk, Indore-452011 (M.P.)

SMCB0001010 Ph: (0731) 4006044, (0731)4978660; 7354115550Email: [email protected]

Khargone Khargone Branch73 Jawahar Nagar, Khargone-451001 (M.P.)

SMCB0001022 Ph: (07282) 232425Email: [email protected]

Ujjain Ujjain Branch37, Ujjain Trade Centre, Ghatkarpar Marg, Freeganj, Ujjain–456001 (M.P.)


Branches & BC Offices in Uttar Pradesh (all equipped with ATMs and CDMs) Cluster : LucknowDistrict Branch Name & Address IFS Code Phone & Email ID

Lucknow Alambagh Branch565-KA/68, Amrudhi Bagh, Sringar Nagar, Alambagh, Lucknow 226005 (U.P.)

SMCB0001023 Ph: 0522- 4241777Email: [email protected]

Lucknow Vikas Nagar BranchAsha Roop Apartment, 1/135, Vikas Nagar, Lucknow 226022 (U.P.)


Branches & BC Offices in Uttar Pradesh (all equipped with ATMs and CDMs) Cluster : MeerutDistrict Branch Name & Address IFS Code Phone & Email ID

Hapur Hapur BranchW – 29/73(1),Jal Nigam office, Opposite Collector Ganj, Railway Road, Hapur 245101 (U.P.)


Meerut Meerut BranchC-2/6, NaiSadak, Shastri Nagar, Garh Road, Meerut-250004 (U.P.)


Meerut Mawana Branch2422-2423, Hastinapur, Mawana,Near Subhash Chowk, Dist. Meerut 250401, (U.P.)


Meerut Sardhana Branch567-569, Chaudhary Market, Near Union Bank, Binoli Road, Sardhana, Dist. Meerut-250342 (U.P.)


Muzaffarnagar Muzaffarnagar BranchGround Floor 311,South Bhopa Road, Opposite LIC Office, Nai Mandi, Muzaffarnagar-251001 (U.P.)

SMCB0001018 Ph: 98374 00037Email:[email protected]

Muzaffarnagar Khatauli BranchWard No. 8, Ganeshpuri, G.T. Road, Khatauli-251201, Distt. Muzaffarnagar (U.P.)


Board of Directors

Mr. Yashvir Kumar GuptaChairman

Mr. S.P. GulatiVice Chairman

Mr. V.K.DhingraDirector

Mr. Sudhakar AgarwalDirector

Mr. Sanjay GuptaDirector

Dr. Sanjeev MittalDirector

Mr. Sarvesh SinghalDirector

Dr. Kamal Kant GuptaDirector

10 Shivalik Mercantile Co-operative Bank Limited


Mr. Arun Kumar MalikDirector

Mr. Satyasheel RaoDirector

Mr. Suveer Kumar GuptaMD & CEO


Mr. Pradeep Shukla, Compliance

Mr. Gyanendra Bajpai Credit (w.e.f. 28.6.2018)

Mr. P. K. Gupta, Audit

Mr. CP Agarwal Mr. Gaurav Mittal Mr. Harsh Mittal, CA

Mr. Ravi R. Singh, Operations

Mr. Ankit Khare, Information Technology

Mrs. Ruchi Kashyap, Learning & Development

Mr. Sumeet Garg, Human Resources

Mr. Vijay P. Agarwal, Microfinance

Mr. Vishal Kaushik, Administration

Mr. Vivek Kansal,Customer Relationship Management

Mr. Gaurav K. Gupta, Finance and Accounts

Mr. Sarul Chaudhary, Bancassurance

Mr. Sahil Joshi, Legal & Recovery

Mr. Harish Bhatia, Investments(w.e.f. 4.12.2017)

Senior Management TeamGeneral Managers

Department Heads


Mr. Jyoti Ranjan DashNCR Cluster(w.e.f. 11.06.2018)

Mr. Divya SethiSaharanpur Cluster

Mr. Himanshu GargM.P. Cluster

Mr. Vivek KansalLucknow Cluster(w.e.f. 13.11.2017)

Mr. Ankit GargMeerut Cluster(w.e.f. 30.07.2018)

Ritika KundraCompany Secretary

Cluster Heads

Others


2017-18: A Year of Expansion

New branches: The bank expanded its branch network by almost 50% in the last financial year by opening eight new branches in 2017-18 and two more in early 2018-19. This has increased the total count of branches from 21 in 2016-17 to 31 by the end of April 2018. Having originated in Uttar Pradesh, the bank opened two branches in Lucknow, the state’s capital, five in western UP (Hapur, Mawana, Noida, Sardhana and Shamli) and three in Madhya Pradesh (Dewas, Khargone and Ujjain). The bank continues to focus on making these branches profitable in the near term.

Increased Area of Operation: Based on the significant progress made by the bank in business and compliance standards, the bank received the permission of the RBI to expand its area of operations to Delhi and two districts of Uttarakhand (Dehradun and Hardwar). This allows the bank to furnish the needs of our customers in NCR and Western UP in a more holistic manner.

CBS Platform: The bank commenced a project to migrate its core banking solution to Finacle by Infosys. The new CBS is expected to offer a broader range of services to our customers and assist in our future digital roadmap.

Mobile Banking: Launched an upgraded mobile Banking app with enhanced customer centric features for fund transfers, utility bill payments and product enquiries. The new app is supported on the iOS platform as well in addition to the previously compatible Android platform.

Heartening recognition for patient and dedicated efforts!Shivalik Bank, was awarded with “Banking Service Excellence Award For Technology” in All India Urban Cooperative Banking Summit organised by Karnataka State Cooperative Urban Banks Federation, held in Bangalore on October 28, 2017.

Centralisation of banking services: In order to provide risk management oversight to the bank’s expanding operations, services such as account opening, cheque book delivery, cheque clearing, credit appraisal and loan disbursement were centralized. This marks an important milestone in the future journey of Shivalik.

Information Security Initiatives: With the current landscape of the banking sector, information security is of prime importance to ensure that the information of all our stakeholders is secure. The bank has implemented a number of initiatives such as new secure email systems, firewalls, network security tools and regular information security and vulnerability assessment audits. Our mobile banking application has been through a mobile security audit.

Third Party Tie Ups: The bank has entered into commercial agreements with National Housing Board for offering loans through the credit linked subsidy scheme and Bajaj Allianz General Insurance to offer insurance products. The bank has also tied up with NERL (National Electronic Repository Limited) for loans against warehousing receipts.


5 years at a glance

CAPITAL2013-14 2014-15 2015-16 2016-17 2017-18

Share Capital (B crore)

41.33 44.66 43.89 45.10 45.70

Reserves (B crore)

6.78 9.78 12.83 19.94 21.25

Capital Adequacy Ratio (CRAR %)

16.15 13.75 13.85 15.07 12.68

Net Worth(B crore)

51.94 57.13 61.22 65.69 65.65

DEPOSITS & ADVANCES2013-14 2014-15 2015-16 2016-17 2017-18

Deposits (B crore)398.86 775.59 809.60 916.97 953.40

Cost of Deposits (%)7.98 8.20 7.85 7.02 6.45

Yield on Advances (%)13.50 13.65 13.03 12.99 12.44

CASA (B Lacs)96.86 138.54 256.71 332.76 319.52

Advances (B crore)283.96 557.09 602.22 559.51 611.61

CD Ratio (%)64.85 71.83 69.79 61.03 64.15


Net Interest Income (B crore)

14.46 18.30 32.87 39.06 39.34

Interest Income (B crore)

42.60 58.67 94.97 100.85 99.03

Interest Expense (B crore)

28.14 40.37 62.10 61.79 59.69

NON-INTEREST INCOME

2013-14 2014-15 2015-16 2016-17 2017-18

Non-Interest Income (B crore)

4.74 5.71 5.01 4.76 7.25

PROFITABILITY 2013-14 2014-15 2015-16 2016-17 2017-18

Operating Profit (B crore)

8.51 9.21 15.09 17.63 5.47

Total Business (B crore)

682.82 1,332.68 1,411.82 1,476.48 1,565.00

Net Profit After Tax & Provisions (B crore)

5.22 4.95 7.35 10.02 3.17

INTEREST INCOME AND EXPENSE

2013-14 2014-15 2015-16 2016-17 2017-18

INVESTMENT2013-14 2014-15 2015-16 2016-17 2017-18

Total Investments (B crore)

116.43 212.34 184.80 245.28 227.85

Yield on Investments (%)

9.33 9.63 8.32 8.86 7.12

(Profitability continued to page 19)


2013-14 2014-15 2015-16 2016-17 2017-18

NON PERFORMING ASSETS (NPA)

2013-14 2014-15 2015-16 2016-17 2017-18

Gross NPA (%)1.50 0.48 1.26 2.29 2.14

Net NPA (%)1.10 0.14 0.60 1.35 1.45

EMPLOYEEPRODUCTIVITY

2013-14 2014-15 2015-16 2016-17 2017-18

Business /Employee (B lacs)

351.97 539.55 445.20 430.15 322.68

No. of Employees194 247 256 389 503

Operating Profit / Employee (B Lacs)

4.39 3.73 5.89 5.14 1.12

PROFITABILITY 2013-14 2014-15 2015-16 2016-17 2017-18

Net Interest Margin (%)4.28 4.22 3.88 4.34 4.15

Average Assets(B crore)

392.05 554.60 862.43 961.72 1,017.40

Dividend (%)12.00 8.00 9.00 9.00 8.00

(Profitability continued from page 18)


Digital servicesShivalik Bank offers an unparalleled range of technologies placing banking at the fingertips of its customers. The Bank uses its local knowledge and leverages technology to extend its reach to the last mile and offers financial services for the masses.

Mobile bankingThe bank launched an upgraded mobile banking application compatible with iPhone & Android platforms offering contemporary features e.g. account / transaction enquiry, funds transfer, utility bill payments, creation and liquidation of FDRs and product enquiries. The app follows two-factor authentication and advanced safety features for customer security.

Net bankingThe Bank offers net banking services to its customers enabling them to avail of banking services from the comfort of their home and office. Net Banking offers a secure operating platform and its user-friendly interface enhances customers’ experience.

Debit cardDebit cards are a modern necessity and the bank continues to offer RuPay Debit Card to its customers. To enhance customer security, the bank began issuing EMV cards to its customers in 2017. EMV is the global standard for cards - increasing security, reducing card-present frauds because of an embedded microchip. The cards can be used at any bank’s ATM in India, Point of Sale (PoS) terminals and e-commerce. Our debit card includes an accidental insurance cover of B1 lac.

AADHARThe bank offers Aadhar-based biometric technology to offer banking services (account opening, carrying out transactions in individual accounts through M-ATMs. In addition, the bank also offers AEPS (Aadhar Enabled Payment System) for transactions and APBS (Aadhar Payments Bridge System) for direct benefit transfer of subsidies. The use of Aadhar coupled with our

m-ATMs has increased operational efficiency and compliance standards significantly. RecyclerA cash recycler is able to accept and dispense cash thereby providing our customers with both options at one outlet. It also stores money securely, keeps an accurate accounting of cash on hand, and automates the cash cycle.

In a cash recycler, notes are placed into a feeder and passed through a bill identifier to determine the denomination and validity of the notes. This cash is then stored in separate cassettes or modules for dispensing in future transactions.

This solution is a win-win for the bank and its customers. It streamlines manual cash handling processes, thus improving both staff productivity and operational efficiency

The bank has commenced a program to install cash recyclers across its network of branches in 2018-19.

m-ATMIn playing its role towards the nation’s clarion call for a ‘Digital India’, the bank has aggressively promoted digital

transactions through its network of m-ATMs. This is an android based internet ready tablet housed in a casing that also incorporates a small printer and biometric sensor. The bank is using this ultra-modern electronic device, especially to offer banking services to customers residing in remote areas. Services like account opening, cash deposit, cash withdrawal, fund transfer, balance enquiry, mini statement are available through this channel. The bank has a large network of agents to reach out to people at their doorstep and help fulfil their banking needs. Transactions carried out on m-ATM are reflected in the bank’s CBS in real time. The machine also generates printed receipts for each transaction for the safety of customers.

Shivalik Bank received The Best I.T. Head FCBA Award 2016.


Making digital transformation, REAL!Shivalik, in true spirit, took on the mantle for the Government’s ‘Digital India’ vision by providing access to digital banking services to the rural population in the geographic areas of its presence. The team ensured that ATMs remained operational night and day. The IT team has pushed our service providers to reduce technical downtimes. Their efforts were supported by the CRM team who called customers whose transactions were repeatedly declined due to technical or customer induced reasons to reinforce their confidence in the system and educate them on using their debit cards appropriately. Other teams assisted customers with m-ATM transactions

thereby increasing their digital awareness and enhancing their happiness quotient. In addition, the Bank focused on customer awareness on the benefits of using debit cards, mobile and internet banking platforms. The painstaking efforts of the entire team have led to the bank being one of the top 5 co-operative banks across North and Central India in terms of digital transaction volume. As a result, Shivalik Bank has been recognised as an active partner in mission ‘Digital India’ by the National Payments Corporation of India (NPCI) for enabling Rural India to be less cash dependent!

Shivalik Bank has been recognised as an active partner in mission ‘Digital India’ by NPCI for enabling Rural India to be less cash dependent!

ATM Transactions (Hits)

POS Transactions

No of m-ATM

Net Banking Users

E-COMM Transactions

Debit Card Users

Mobile banking Users

AEPS Transactions

861,605

50,000

325

979

19,000

92,233

17

51,513

2016-17

2016-17

2016-17

2016-17

2016-17

2016-17

2016-17

2016-17

1,500,661

59,751

350

6,996

63,150

114,834

3,937

7,59,637

2017-18

2017-18

2017-18

2017-18

2017-18

2017-18

2017-18

2017-18

The road…Ahead! Be one of the top 3 co-operative banks

for digital banking transactions in North and Central India

Replacing all CDMs with new recyclers

Ensure card issuance for all new and existing customers

Focus on strengthening customer use of ATM, m-ATM and other digital platforms

Implement paperless account opening for all account types and digitize customer service requests

‘Shivalik Bank ke ATM pe jao, wahaan hamesha cash hota hai’A recall engrained in the minds of Shivalik customers.


Digital Village - a step towards the Digital India dream

India lives in its villages. This is what makes the world’s second most populous nation unique.

But this has its impediments too. The biggest challenge being illiteracy which thwarts their progress and the growth of India. And even as the world is becoming increasingly connected with the Digital Revolution, India’s clarion call for a Digital India is yet to make significant progress.

To contribute to this pathbreaking revolution launched by the Government of India, Shivalik Bank undertook the responsibility of providing vocational training and financial support to the residents of Bagri Turk, a small village in Madhya Pradesh, about 10 kms from the bank’s Dhar branch.

The village – Bagri Turk, with a population of 1200 people, was chosen as it offers a host of challenges – illiteracy, extreme poverty, lack of employment,

Phase I - Financial inclusionThe team of Dhar branch worked patiently with the residents to open their bank accounts with its paperless Aadhar based m-ATM. It opened 400 accounts.

Phase II - Vocational training The Bank joined hands with Vyakti Vikas Sansthan – an NGO from Dhar, for providing vocational training to the women and girls of Bagri Turk in the areas of their preference namely garment-making and applying mehndi. A group of 10-15 members participated in the garment making course. Another group of 10-15 members participated to learn the beautiful art of mehndi application. Phase III - Financial support The Bank will provide loans to the

vocationally trained women as part of the bank’s microfinance model. They will form Self Help Groups and a credit limit will be sanctioned to the group based on their collective savings.

Phase IV - Security cover In this phase, the team will explain the concept of insurance risk cover to the villagers and all eligible (insurable) people will be encouraged to get themselves and their property insured against events impacting the poor such as health cover, personal accident cover and term insurance.

Current StatusThe Shivalik team has completed Phase 2 and have commenced Phase 3, hoping to complete this project in the current financial year. The teams’ efforts have been

applauded by various government dignitaries namely the Divisional Commissioner, District Magistrate and the village Sarpanch. In addition, the bank’s Dhar branch received recognition from NABARD for its work on this project and other microfinance initiatives in the region.

Case Study on Bagri Turk Village, Madhya Pradesh

Phases of the Digital Village Project

lack of water and irrigation facilities to name a few. The aim was to provide self-sustaining skills to the residents of Bagri Turk and assimilate them into the Indian banking system.

The bank commenced working on this unique project in 2017 with many more such villages to be included in the programme in the coming years.


Shivalik Bank ventured into microfinance in 2010-11 starting with just one development block in District Saharanpur. Encouraged with the highly enthusiastic results, the activity now covers numerous districts in Uttar Pradesh and Madhya Pradesh.

The activity has benefited approx. 95,000 households in myriad ways. While tangible benefits may be enlisted as employment generation and increased family income, reduced dropout rate among school going children, skill enhancement etc., there are many, no less important, subtle changes in the lives of women - They are not just bread makers in the family, instead, they are commanding respect as bread winners!. Their voice is now heard in their respective families and communities – something that had never happened before. The increased family income is resulting in better food quality, reduced malnutrition, better life style, social prestige, camaraderie and co-operation among group members and reduced neglect towards personal health. The bank is helping these women in a number of other ways. Many of the illiterate who used to put their thumb impression are now able to sign their name. Biometric authentication through Aadhar has provided additional security cover to these women acting as a strong barrier to customer frauds. They now

Financial Inclusion: Microfinance

State Districts Blocks Groups formed Groups financed

Uttar Pradesh Saharanpur 10 4,056 3,455

Meerut 12 2,273 1,757

Ghaziabad 1 61 30

G.B. Nagar 2 497 380

Hapur 1 286 224

Madhya Pradesh Indore 1 194 104

Dhar 1 395 360

Khargone 1 94 34

know how to deposit their money unaided in bank’s cash deposit machines and how to use their ATM card to withdraw money. Instead of keeping their money in their homes, they deposit it in their bank account.

With the ever-expanding portfolio of micro-finance, it has been all the more necessary to monitor the groups’ performance and intervene wherever necessary. Moreover, timely repayment of the money lent to the group is a key to success of the entire activity.

Some initiatives taken during the year 2017-18 are: To prevent occurrences of a single

person becoming a member of various SHGs, Credit Bureau checks have become necessary.

The microfinance team at Shivalik has been expanded to include area managers and block co-ordinators. A defined monitoring matrix has been implemented.

Mini SHG model wherein max 5 members are allowed in a group, is being encouraged in rural blocks also for better monitoring.

m-ATMs have reduced the risk of fraud significantly as they are connected to the bank’s network in real time. The features proving to be most helpful for microfinance are as follows : Real time e-KYC driven account

opening through biometric authentication.

Digital record keeping of all activities andreal time upload to the bank’s CBS

As on 31st March, 2018

Total groups – 7856

Total groups that received lending - 6344

Loans outstanding under microfinance - D43.53 crore

Biometric attendance to ensure inactive group members can be identified.

Card swiping, AEPS and other payment features through biometic authentication ensure security of fund transfers

The machines are insured against theft and can be de-activated remotely to prevent misuse.


Dear friends,

It’s a momentous occasion as your Bank completes 20 years. I take this opportunity to personally thank all our stakeholders who have made meaningful contributions across the last two-decades to position our bank as one of the most respected co-operative banks in India.

In the 90’s when we started, we had envisioned of a bank, that would welcome everyone – rural or urban, underprivileged or high net worth, small traders or big distributors, businessmen or professionals. We wished to offer world class banking experience to everyone – whether rich or poor. We wished to take care of their banking needs in much the same way a technology-driven private foreign bank would do. Today, I can say this with complete conviction that Shivalik Bank is the realisation of this dream. Our unwavering focus towards this goal has earned us immense respect in the financial services space and among our clients.

For our dream to become a reality, we made a conscious effort to have such people on our Board who shared the same vision, had unimpeachable character and reputation in society. As a result, all of us were able to draw more and more clients into our fold.

Besides, the bank was able to strike a perfect balance between technology and personalised service.

What gives me immense satisfaction is that we have made conscious and determined efforts during the past two decades to reach out to that section of our society that had remained unbanked for one or the other reason.

We had taken up financial inclusion as our cherished goal since inception, which continues to be our driving force even today. In keeping with this vision, we had adopted the practice of opening zero balance accounts for the underprivileged even before the Jan Dhan Yojna came into being. Moreover, owing to our efforts towards financial inclusion, illiterate women learnt to read and write. They became gainfully employed in their own business. They now understand the importance of education and therefore make sure their children do not drop out of school. Interestingly, hundreds of women give credit for their newly acquired literacy to our branch staff! This for me is immensely heartwarming.

What has worked for us is our team’s ability to live by our ethos ‘service with a smile’. This is particularly necessary for us owing to our branch locations and our customer segment. As a result, despite the digital wave in transacting business, human relationships still mean a lot. This I believe, is our critical differentiating factor with other banks and financial institutions. I am certain our team will further strengthen this intangible and invaluable bond even as we widen our operating canvas.

As I go down memory lane, 2010 holds a special place in our journey. For it was in this year we achieved Tier-II status enabling us to spread our wings to cover the entire state of Uttar Pradesh. Again, it was in 2010 when Shivalik Bank achieved the status of being a multi-state bank and registered its presence in Madhya Pradesh. Becoming a fully CBS compliant bank and handing over our first ATM-cum-Debit card to a customer are also occasions worth remembering.

Statement from the Chairman’s desk

What gives me immense satisfaction is that we have made conscious and determined efforts during the past two decades to reach out to that section of our society that had remained unbanked for one or the other reason.


It is amazing to think that we started out in a small garage twenty years ago and now have state-of-the-art offices and branches at 33 locations.

Going forwardHaving made it into the top 100 in the World Bank’s ‘Ease of Doing Business’ ranking, India is charged to now make it within the top 50 over the medium term.

If India has to become an important economic power in the world, it must have a robust banking system. It is not an option but a necessity that our banks are able to offer world class banking services that match global trends.

At Shivalik Bank, we have always considered technological advancement as the topmost priority. We have ensured that budgets for new technology are always available. This focus has earned the Bank important accolades. A case in point is the Banking Service Excellence Award for Technology’ in All India Urban Co-operative Banking Summit held in Bangalore, organised by The Karnataka State Co-operative Urban

Banks Federation Ltd. Investments in technology will enable us to widen our product and services basket even as we work aggressively to expand our presence in the Indian landmass.

AcknowledgementBefore I conclude, I express my heartfelt gratitude to all of you once again. You have always stood by us, given us your unqualified support which has been an important source of inspiration for the past 20 years.

We at Shivalik Bank, wish and pray to God that the same level of support, love and guidance would be available in the days and years to come. On our part, we promise to remain as ethical as ever – never hurting your trust in us.

Yashvir Kumar GuptaChairman

Those who made Shivalik Those who happily agreed

to join us as members even before commencement of the bank are our real backbone.

Those who accepted our invitation to open their account during the initial days of bank’s working and entrusted to us their hard earned money are the people we are indebted to in letter and spirit.

Those young people who joined the bank in the early days to make their career in banking and worked tirelessly for its growth are our heros.

We cannot thank you enough.

Our guiding principles remain unchanged since inception…

We will always do whatever is best for the organisation and will not consider the benefit of any individual above the benefit of the organisation.

We will never forget that we are only custodians of the money that public has deposited with us. We will never knowingly allow it to be misutilised.

We shall always strive towards maintaining and strengthening the trust that the public has placed in us.

We shall always respect human relationships and it will form the foundation of customer service in the bank.

… and are entrenched in our values.


SERVICE with a SMILEFor Shivalik, the second intangible made all the difference.

For SMILE revealed the organisation’s mindset. It indicated our pledge to offer great service.

It reflected our desire to be there for our customers. It showcased our passion to go that extra mile. And hence, played the defining role in graduating transactions into relationships.

And while it started before we interacted with customers, it certainly did not end when the transaction was complete.

And for all our numerous smiles, we were showered with words and voices.

Voices that kept us going and growing for all of 20 years!


Humare building mein ek bank hai, fir

bhi humne Shivalik Bank ko hi chuna

Getting a building loan sanctioned from a bank could have taken all of my time had it not been Shivalik Bank who make banking a sheer delight

Mein ek businessman hun. Mere liye har ek minute anmol hai. Mujhe aisa bank chahiye tha jo is chhoti si baat ko samajh sake. Humare building mein ek bank hai, fir bhi humne Shivalik Bank ko hi chuna kyuki hame jo sukoon ki banking Shivalik Bank yahin dukan par baithe baithe de deta hai, uska koi muqabla nahin. Mere dost ya grahak jab mujhse bank account kholne ki salah mangte hain, mein unhe Shivalik Bank hi bhejta hoon. Meri bank se ek hi prarthna hai, “Siyaganj me aapke bahut sare customers hain, aap ek branch yahan Kholne ki bhi sochiye.”

Anoop Kumar Sai Om Trading Co., Siyaganj, Indore

A successful medical practice has its flip side too. Time flies as I attend to hundreds of patients each day. I barely get a few peaceful moments with my family. I thank heavens that when I needed a building loan for my hospital, I had Shivalik Bank to take care of my needs. Getting a building loan sanctioned from a bank could have taken all of my time had it not been Shivalik Bank who makes banking a sheer delight At all stages of the loan processing, they did not demand my physical presence at the branch - except half an hour on a day when security documents were to be signed and executed. My blessings and good wishes to them.

Dr. M.M. Mahajan Mahajan Hospital, Magajpura Road, Dhar

From Customers’ Perspective


In Shivalik, you get quality service from the entire staff. What comes as a pleasant surprise is that the support staff – peons and guards are eager to help

I enjoy a seven years relationship with Shivalik Bank. The most striking feature of this Bank is its service. Usually in banks, customer try to maintain relations with the branch manager to get their work done speedily. But in Shivalik, you get quality service from the entire staff. What comes as a pleasant surprise is that the support staff, even peons and guards, care for you and are eager to help. Transfer of one or more staff members doesn’t pose any problem since new staff is equally cooperative. I maintain all of my personal and family accounts with Meerut branch of Shivalik Bank and I recommend this bank without any hesitation to all of my friends and acquaintances also. I pray to Almighty for good health and prosperity of everyone associated with this bank. May God bless them with steady growth and good name.

H.B. Rastogi Retired Auditor, Shastri Nagar, Meerut

I am very happy that I opted Shivalik out of 200 more bank branches operating in Meerut

In today’s world, for an average businessman, time is of essence. For, we have only 24 hours in a day to work on our long things-to-do list. I need to keep the assembly line running, manage and motivate work force, take care of sales and marketing of our products range, deal with various govt departments and so on…

What a relief it is to know that at least our bankers – Shivalik Bank, Garh Road, Meerut understand and appreciate our busy schedule and accommodate us with a cheerful smile and efficient handling of all of our personal, family and business accounts. 7 years ago, Shivalik Bank was an entirely new name to me but now I can’t think of trying any other bank to fulfil my banking needs.

My best wishes are with Shivalik Bank and I hope that while growing, they would keep attending to their clients in much the same way as they do today.

Shalabh Gupta Managing Partner, J.Sons Engg. Corp. (India), Garh Road, Meerut


Shivalik Bank is God’s blessing to my family

I live in a rented servant quarter in Sector 29 Noida. To make a living, I cook in five households which enables me to earn B12-13 thousand in a month. With this amount, I pay house rent, manage my home and repay my loan. For getting a loan from Shivalik Bank, we have made Bulbul Mini SHG. I wanted this loan to pay the fees of both of my sons.

I feel Shivalik Bank is God’s blessing to my family. Mujhe to pata bhi nahi tha ki SHG scheme ke sahare mujh garib ko bank se loan mil sakta hai. Loan to mila hi, bank ki ek didi ne mujhe apna naam likhna aur rupay paise ka hisaab rakhna bhi sikha diya. Kamal ke log hain Shivalik Bank wale bhi.

Mujhe ummeed hai ki padhai puri hone par mere dono bachchon ko naukri mil jayegi aur main bhi ghar ghar me khana banane ke bajay tiffin service shuru kar sakungi. Shivalik Bank wale meri himmat badhate rahenge to ye sapna jarur poora ho jayega.

Manju Member of Bulbul Mini Shg Group, Sector 29, Noida

My three grown up children being gainfully employed gave me a lot of ‘me time’. So, I decided to follow my passion. I started counselling teenagers, married couples and others to help them in sorting out their myriad of problems. Having gained credibility, I needed funds to expand. For a loan, I could only think of Shivalik Bank owing to the lovely 5-year relationship I shared with them. They took just one hour or so to process my gold loan request and transfer the loan amount in my SB Account.

All the staff members give a lot of respect. What a great surprise it was when two officers of the bank visited me on Diwali. They brought flowers and a small gift from the bank, touched my feet, and sought blessings from me. Shivalik Bank does not just maintain your account... they maintain relations. I consider the Shivalik Bank staff as my children and wish the Bank loads of success in every future endeavour.

Mrs. Sushma Dixit Royal Garden, Sector 61 , Noida

Shivalik Bank does not just maintain your account. They maintain relations


…“ye bank tumhari imaandari dekhega, security nahin. Tum imaandari se apna kaam karti chalo, baki bank par chhod do.

I still remember with vivid detail when one and half year ago, a lady from Shivalik Bank had contacted me to discuss bank’s SHG scheme for women. She described all the benefits of becoming member of SHG, of opening account with Shivalik Bank and depositing our small savings there in our account. She explained that if we do it regularly for a few months, bank will sanction loan to us for doing some business. “Par mere paas to jamanat dene ko kuchh bhi nahin hai, bank kyon loan dega?” when I asked from that lady, she told ki “ye bank tumhari imaandari dekhega, security nahin. Tum imaandari se apna kaam karti chalo, baki bank par chhod do. Quite surprised, I gave my consent to become a member. Within a few months, I got loan also and now look at me! I am the proud owner of this shop. Aur to aur, maine sign karne bhi seekh liye! Rupay paise ka hisaab bhi rakh leti hoon. Mera beta dihadi karta tha (daily wager), usey bhi ab maine apne saath hi kaam par laga liya hai. Vo bazar se kharidaari karke lata hai aur main bechti hoon.

Main to soch bhi nahi sakti thee ki bank wale log itne achche bhi ho sakte hain. Bhagwan kare Shivalik Bank khoob tarakki kare. Meri dua unke liye hamesha rahti hain.

Urmila Devi Bhargava Mini Self Help Group, Salarpur, Noida


I had opened an account with Shivalik Bank in 2012 perhaps when hardly anyone in Meerut knew about them. The Branch Manager seemed a nice fellow. In the past six years, the entire staff have delighted me with the services and behaviour. Currently, all my banking needs are being fulfilled by Shivalik Bank. Not only this, I have recommended Shivalik Bank to scores of my friends, neighbours, relatives and even clients. I wish the bank every success.

Dr. Anil Kumar AgarwalMedical Practitioner, Nai Sarak, Garh Road, Meerut

Timely financial support from Shivalik helped us realise our dreams of taking our little venture of binding books to becoming book publishers. Hence, the name Shivalik will always be etched in my memory. Not only bank’s policies and procedures are user-friendly, the attitude and behaviour of all staff members are highly commendable and makes banking a delightful experience.

Neeraj MittalMittal Offset and Stationery Printers, Meerut

Shivalik Bank is habit forming and people don’t like any other bank after enjoying its services. It is true that the promotors of the bank are highly respectable people and the family is known to me for the last 4-5 decades, I shifted all of my accounts to Shivalik Bank because I like their way of doing banking. I recommend the Bank because mujhe barosa hai ki vo mujhe kabhi sharminda nahin karega.

Dr. S.K. Upadhyay Noted Environmentalist & Retired Head of Botany Dept., M.S. College, Saharanpur

…the entire staff have delighted me with the services and behaviour

Timely financial support from Shivalik helped us realise our dreams

Mujhe Shivalik Bank pe bharosa hai ki vo mujhe kabhi sharminda nahin karega


On my father’s recommendation, I opened my bank account with Shivalik two decades ago. I can’t thank my father enough for this. Although the Bank started net banking and mobile banking only recently (two years ago) but they never let me suffer in absence of these facilities. They always went the extra mile to help me. Even my staff feels the same about this bank. My compounder often says, “You don’t have to be a big shot to enjoy their cooperation and excellent behaviour. Any stranger would feel the same way.”

Dr. Shalabh Jain, M.D. (Psychiatrist)Divya Mangalam Clinic, Church Road, Near Bajoria Hospital, Saharanpur

My relationship with Shivalik Bank dates back to the year 2002. And the bank has never given me any reason to feel dissatisfied. Most of the customers coming to us are illiterate villagers who need a bank account. I tell them that Shivalik Bank staff gives respect to everyone whether big businessman or small farmer. Go there, open your account. You will be happy.

Vikas MittalProp. M/s. Vibhu Trading Co., Nanauta Road, Gangoh, Dist. Saharanpur

We belong to Ambehta and do our business here. However, because of our friendly relations with Shivalik Bank people, we had opened our account in 1998 when the bank started in Saharanpur. Although they opened a branch in Ambehta also in 2010, our account is running smoothly from Saharanpur itself. Our NEFT / RTGS / cash transactions are done effortlessly. Their net banking is very safe and reliable.

Virendra Kumar MittalProp. Agarwal Timber & Iron Merchant, Ambehta, Distt. Saharanpur

You don’t have to be a big shot to enjoy their cooperation and excellent behaviour. Any stranger would feel the same way

The way I recommend people to open their account at Shivalik Bank, many people get the mistaken impression that it is my bank

The services of the bank never made us feel the need to transfer our account


Having a hectic public life leaves people with little time for the family and sometimes a person’s business also suffers. Under the circumstances, I cannot afford to deal with any bank other than Shivalik Bank. The wonderful staff of Shivalik Bank understands my problems and is always supportive. Even when I needed a loan, I visited the bank only once - for signing the documents once. I have no words to express my gratitude towards bank staff and wish them all the best.

Mr. Neeraj AgarwalProp. M/s. Jang Bahadur & Sons., Gangoh

I wanted to take a loan for expanding my dhaba and upgrading it ambience. But my friends dissuaded me from taking a bank loan. Ek bande ne to ye kah kar dara hi diya ki chappal ghis jaati hain bank ke chakkar kaat kaat ke. Ek baar mein saare papers batate hi nahin. Kuchh logon ko to maza aata hai, pareshan karne me.

But when I went to Shivalik Bank, I was instantly informed of the documents needed. They even told me on the same day how much loan account I could get. After one week of handing all the papers the loan was sanctioned. Wow! Bank ho to aisa!

Mr. Suraj SachdevaProp. Janak Dhaba, Rameshwar Mandir Road, Nr. Pul Khumran, Saharanpur

When you move from the small to the big, you may feel good, but the reality is that you become more irrelevant. I understood this when my bank account with a subsidiary of a PSU was shifted to the parent (post merger). The quality of banking services deteriorated considerably thereafter. I shifted my account to Shivalik Bank. That’s when I understood the true essence of the phrase Small is Beautiful.

Atul Kumar JollyProp. R.K. Lighting, Nawab Ganj Chowk, Chakrata Road, Saharanpur

I cannot afford to deal with any bank other than Shivalik Bank

Wow! Bank ho to aisa!

I shifted my account to Shivalik Bank. That’s when I understood the true essence of the phrase Small is Beautiful


People often say, “Youngsters aspiring to be great cricketers should watch Tendulkar, the master. When it comes to banking I tell the staff of other banks, “If you wish to be a good banker, watch Shivalik Bank staff and learn from them.” There is another bank in my office building but my bank is Shivalik.

Mr. Vivek JainM/s Diwakar Construction, Mahavir Marg, Dhar (M.P.)

All busy people look for a bank that would offer good services and won’t become a headache for them. Our search ends with Shivalik Bank. Whatever we need, we never get a NO. What more can we ask for?

Mr. Sunil SenFriends Trading Co., Siyaganj, Indore

Our search ends with Shivalik Bank

Moving from Bhoj Nagarik Sahkari Bank to Shivalik Bank (after its acquisition) has been a heart-warming change

Moving from Bhoj Nagarik Sahkari Bank to Shivalik Bank (after its acquisition) has been a heart-warming change not only for me but for all customers. The bank shifted from a khandahar type building to an ulta-modern air-conditioned building fitted with computers.. Whatever services we need are available now-a-days. There is vast improvement in banking services also. The staff waste no time at all. So banking has become a pleasurable experience.

Mr. Shernik JainProp. Parasnath Traders, Near Dhareshwar Temple, Dhar (M.P.)

If you wish to be a good banker, watch Shivalik Bank staff


My bank, which was opposite my shop (Malwa Bank), shifted to a building some 4.5 km away after it became Shivalik Bank. I don’t mind traveling the distance. The superior service and warmth of its people is such a draw. My love and blessings to all of you

Mr. Rajendra AgrawalSiyaganj, Indore

Our business is wholesale trade of coconuts for which we need to send RTGS to the suppliers almost everyday. Also, we need to deposit sales proceeds into our current account which we are maintaining with Shivalik Bank. We don’t face any problem in our banking transactions thanks to the full support of our bank. Allah ka shukr hai, sab badhiya chal raha hai. Allah aapko tarakki de.

Mr. Abdul Aziz Hasham NursumarRazvi Traders, Indore

I don’t mind traveling the distance. The superior service and warmth of its people is such a draw

Sab badhiya chal raha hai. Allah aapko tarakki de


My husband was the only earning member in a family of 10 people. But this changed five years ago when I got to know about Shivalik Bank. They have brought sunshine into our lives. Main anpadh aurat jo sign karna bhi nahi janti, sirf angutha lagati hoon, ab apna business karti hoon. Meri beti Dilshana ne bahut khubsurat guldaste vagera samaan banana seekh liya hai jo achche daam par bik jata hai. Maine bank se karza lekar apne shauhar ke business me bhi lagaya hai aur unka kaam bhi theek chal raha hai. Gaon ki aurten ab mere paas salaah lene aati hain, meri izzat karti hain.

FemidaKamil Mahila Swayam Sahayta Samooh, Village Ganjheri, Nagal Development Block, Dist. Saharanpur

Shivalik wale kahte hain, “Tum poori lagan se kaam karti raho, loan aur mil jayega

Post marriage, residing in Badholi Village, I could not adequately utilise my B.A. degree. My husband, a Master in computer applications, felt handicapped for want of money. Par vo kahte hain na, jahan chah, vahan raah. Hamare gaon me Shivalik Bank wale aaye, meeting kari, mujhe bhi bulaya. Ham 5 aurton ne Divya Swayam Sahayata Samooh banaya aur bas, baat ban gayi. We took a loan of B20,000/- each to start our small venture. My husband started a Jan Suvidha Kendra and a computer training institute in our village. Meri kishten time par jama ho rahi hain to Shivalik Bank wale bhi khush hain. Kahte hain, “Tum poori lagan se kaam karti raho, loan aur mil jayega.” With our next loan, we will expand the business. Thank you Shivalik Bank for helping us in realising our dream.

PinkyDivya Mini Self Help Group, Village Badholi, Block Baliakheri, Dist. Saharanpur

You are the best bank. Aapko aage badhne se koi nahin rok sakta

Think of a household with school-going children and the bread earner being bedridden. Yes, my husband is bedridden. Rikshaw ulat gaya, pair ki do haddi toot gayi. Aap hi socho, rickshaw ki repair ka kharcha, roj ki dihadi bhi gayi, 3 mahine bistar par tooti taang liye hue lete pati ke ilaaj ka kharcha, ghar ka kharcha, bachcho ki padhai ka kharcha! Saari musibaten ek saath! But I could manage as I had some savings from my little venture where we make Mata-ki-chunari. And this venture happened only because of Shivalik Bank. For, it was Shivalik Bank that introduced the idea of forming a Mini SHG. Words are not enough to thank them. Maine to kabhi sapne me bhi nahin socha tha ki mujh jaisi 5th class tak padhi hui aurat ko bhi business karne ke liye koi bank loan de sakta hai. May God bless you all.

RasutaRasuta Mini Self Help Group, Shivaji Nagar, Saharanpur

…Gaon ki aurten ab mere paas salaah lene aati hain, meri izzat karti hain. Thank you Shivalik Bank


The Staff Grows Together with Us

I joined Shivalik Bank in July 1999 when the bank was less than 1 year old. And have been with them since. Its been a memorable journey as I moved up the organisational hierarchy from a rank junior to the Asst. Vice President at the head Office leading the Accounts and Finance team.

It was a combination of firsts. I applied in 1998 when the bank opened its first branch. It was my first job following the insistence by my father to move from our small family shop onto the larger canvas.

I used to be anxious initially since I had no knowledge or experience in computers whereas Shivalik Bank was working in a computerized environment from its very first day. But while frequent HOWs helped me understand the basics of computerized accounting, the occasional WHYs helped me gain the logic behind what we were doing. As the days passed, I studied computers on my own and gained more and more confidence. My collegues and seniors always encouraged me and remained supportive.

Now, whenever we open a new branch or when we migrate from one platform to another, I assist in ensuring smooth and trouble-free transition.

Shivalik Bank’s difference is that it walks the talk. The Open Door policy is not just on paper. We often meet and communicate with our CEO, Chairman Sir and various directors of the bank. It feels good. We feel safe and happy fulfilling our duties and responsibilities.

It is really thrilling that our bank is going to celebrate its 20th anniversary this year. I wish all the best to all of us and to our bank.

Gaurav Kumar GuptaHead – Finance & AccountsDate of Joining : 1.1.1999

Shivalik Bank has not only shaped my career but my life too!


Our views and feelings are given due consideration not only in routine decision-making process but also in policy formulation at the top level.

The phrase ‘like father like son’ quite applies to me. Following in the footstep of my father who served a PSU bank for 40 years, I also saw myself as a banker in my student days. After I completed my graduation, I joined Shivalik Bank when I was only 21 years.

I have had a close relation with banking. I have seen the arduous task of manual operations and also witnessed the resistance to computerisation. But when I joined Shivalik, I was pleasently surprised. This Bank was ahead of its times. It was fully computerized since its inauguration and was already using many advanced features of computer application.

Despite the multiple offers from various other banks during my 17 year journey with Shivalik, the one reason that makes me continue with Shivalik is that our views and opinion are given due consideration not only in routine decision-making process but also in policy formulation at the top level. It makes you feel important. This feeling of involvement is very precious and goes a long way in ensuring complete dedication from my side. The bank takes care of my personal and professional aspirations. I think this is a precious and priceless bond.

Himanshu GargCluster Head – M.P. RegionDate of Joining – 1.5.2001


With the arrival of Shivalik Bank, our life has changed as if by magic.

I was a part of Malwa Commercial Coop. Bank Ltd., since 1999.It had great aspiration but did not completely take off. Its single branch operations did not get the numbers. Soon it was incurring losses. We were demotivated and anxious. We realised that it would ultimately close down but did not know when.

I was particularly demotivated as this was the career option I had chosen, which I saw was turning sour. But like all optimists I was not willing to let go. And then, among the dark clouds, appeared the silver lining. I heard Shivalik Bank was taking over our Bank.

Those were anxious moment for we were not sure of our future. The gloomy stories of the old workforce being done away with by the acquirer weighed heavy on our heads. But then, the CEO of Shivalik came to our bank. He apprised us of the realities and communicated his vision. It felt like balm to the aching mind.

Six years have flown by since those trying times. Our erstwhile team and our customers are delighted with this change. Customers are delighted with the facilities and the service quality. The look and feel of the branch has completely changed – from a delapidated shop to an ultra-modern office space equipped with state-of-art computers offering latest digital products that match with any other large bank in the country.

We get better facilities, our people policies are cleary defined and articulated and very employee friendly. And yes our pay cheques are better. Our increments and incentives are on time. Performance leads to promotions. Moreover, we get more respect from family, customers and the society at large.

Looking back, I can say with all conviction that Shivalik has made magic happen.

Satish SharmaRemitter, Indore BranchDate of Joining – 15.11.2003


Shivalik gave us respect, position and a platform to excel.

Unemployement is the worst fear for any individual, especially the youth who have great aspirations when they complete their graduation. Especially when you hail from a small town where career opportunities are limited.

I grabbed at the opportunity from Bhoj Nagarik Sahkari Bank in 2000. It was really a very small bank running in loss and with only one branch in Chhota Rajwada area. It was particularly demotivating but it helped in burning the home fires, hence I continued to a decade.

Then we heard that our bank was being taken over by a Shivalik Bank. Like every other colleague I was in a dilemma - to stay on and be part of the change or leave in search of greener pastures. We were all worried about our future with a new management.

But then, the management team of Shivalik visited our branch. They openly talked about the merger. About why it was necessary. And how it would benefit us and customers. They invited questions from all. They replied convincingly and with quiet confidence. I stayed on.

Now, when I look back, I think it was the right decision. Because in eight years, our branch has not just become profitable, it has grown in leaps and bounds. We have grown as individuals and professionals. We have become better in banking. We have become more knowledgeable. We are now digitally literate. From a personal level, our earnings has increased, our increments are regular and our performance determines our promotion. More than anything else, people in our town look upon us with greater respect.

Vijay YadavBranch Operations Manager, Khargone BranchDate of Joining – 1.10.2000


Statutory ReportsDirectors’ Report ................................................... 40Corporate Governance Report .............................. 44


Directors’ Report

Dear shareholders,

On behalf of the Board, it gives us great pleasure to present to you the 21st Annual Report of Shivalik Mercantile Cooperative Bank Limited, and its audited financial statements for the year ended 31st March, 2018.

Poverty is not merely lowness of income, but deprivation of basic resources. An inclusive financial ecosystem is quintessential to the social contract. It surmounts both physical, and more importantly, psychological barriers, and helps achieve sustainable economic growth.

It is gratifying that our policymakers have seized this imperative and have been working along multiple avenues to address this. Appropriate frameworks have been, and are being, designed. Complementing the focused efforts of the government, the Reserve Bank of India (RBI) is propagating financial literacy, which lends sustainability to the inclusion process.

The Digital India initiative has helped considerably to improve the reach of formal financial services to economically disadvantaged sections of the populace and geographically remote regions.

We, at Shivalik Mercantile Cooperative Bank Ltd., consider ourselves fortunate to contribute to the nation’s efforts in financial inclusion and in its efforts to eradicate poverty. Having a grassroots-level understanding of the requirements of the people and difficulties they face, in the areas of our presence, places us at an advantage in serving them better. This has also enabled us to make significant headway in promoting digital services to our customers in rural locales. We take this opportunity to state that Shivalik Bank was recognised as an active partner in mission ‘Digital India’ by NPCI for enabling Rural India to be less cash dependent. In addition, NABARD recognized us for our efforts in Microfinance and the Digital Village project, aimed at bringing unbanked villages into the banking system.

2017-18 has been a year of expansion in our branch network and our digital service offerings. We opened 8 new branches in U.P and M.P and equipped our customers with a new mobile banking application and other digital facilities. Significant investment has also been made in improving systems and procedures of the bank to ensure better compliance, rigorous monitoring and minimising credit and other risks. We are also in the process of switching over to a new CBS platform to be able to offer better and wider range

of services to our customers. In addition, your bank has added the state of Delhi and two districts of Uttarakhand (Dehradun and Haridwar) to its area of operation.

The financial performance for FY 2017-18 is summarized as under: • The deposit base as on 31st March, 2018 stood at

`953.39 Crores, growing 4% against previous year’s figure of `916.97 Crores. CASA deposits were approx. 33% of the total deposits bringing down cost of deposits from 7.02% to 6.45% during the previous year.

• Aggregate advances as on 31st March 2018 were ̀ 611.61 Crores as against previous year’s `559.50 Crores. This growth of 9% to prior year reflects the bank’s focus on expanding its lending base and a general sense of recovery in the national economy post several reforms including demonetisation and migration to GST regimen. While the NPA situation in most of the Indian banking sector is a matter of grave concern, your bank has been able to restrict Gross NPA at 2.14% and Net NPA at 1.45% only.

• Total business mix stood at `1,565.00 crores as against previous year’s `1,476.48 crores.

• Due to the expansion in new branches and investment in internal systems, bank’s operating profits have gone down but the overall strength of the bank remains excellent. Bank’s non-interest income increased from `4.76 Crores in 2016-17 to `7.15 Crores for 2017-18.

• The Bank is well capitalized and has a Capital to Risk weighted Assets Ratio (CRAR) as on 31st March, 2018 of 12.68%.

• The Bank has a consistent dividend payment history. The Board of Directors is pleased to recommend a dividend of `8 per equity share of `100/- each entailing a payout of `3.63 crores, for the year ended March 31, 2018.

Our prime focus has always been the conversion of small savings into bank deposits. The bank has been pushing up its proportion of current and savings accounts (CASA) which stood at 33% at the end of 2017-18.

While the financial performance was a little muted as a result of the expansion in new branches which have a break even period of 12-18 months, factors beyond our control such as the rise in bond yields also impacted the result in comparison to prior year. Despite these factors, the team has worked relentlessly in widening our presence, improving our service quotient and strengthening our systems and processes – towards creating a superior customer service

Initiatives taken during 2017-18Administration • Prepared and implemented infrastructure design and brief manual towards

infrastructure standardization at branches, business correspondent centers and ATMs.

• Centralised key administration activities including bill payments, service contracts, printing.

• Ensured centralization of various expenses such rent, electricity, repairs and maintenance to improve branch efficiency.

• Implemented physical verification and tagging of banks assets in coordination with IT team.

Compliance & Taxation • Assisted in successful completion of the scheduled RBI inspection in 2017-18 and closure of any associated compliance actions.

• Trainings imparted to branches on KYC, anti money laundering and counterfeit currency detection.

• Successful migration to the GST regime through the implementation of a firm wide GST policy.

• Applications to the regulator for NRE accounts, Internet Banking with transaction facility and CCIL membership. Successful responses have been received on these applications in 2018-19.

Credit • Introduction of CCAT (Centralized Credit Appraisal Team) for the purpose of assessing credit applications from customers. It has reduced turn around time, increased transparency in decision making and improved compliance of RBI norms.

• A central disbursement team has also been put in place to ensure all sanction stipulations are met prior to loan disbursal. Both these steps have resulted in lower slippage of loan accounts to overdue and NPAs.

• Insta-loan calculator utility has been developed by the bank that enables customers to get an assessment of their loan eligibility based on certain basic details within a matter of minutes. This has reduced turn around time, complexity in business processes significantly and has been a key driver for growth in advances in 2017-18.

• Set up of an organization structure for credit including teams for policy, appraisal, disbursement and product development.

• Initiated the development of an upgraded loan origination system to be rolled out in 2018-19.

Customer Service • Centralized call centre set up for inbound customer queries.• Implementation of customer grievance redressal policy through online

complaints portal.

and a sustainable onward journey for Shivalik. The teams’ dedicated efforts were rewarded as the bank was awarded with the “Banking Service Excellence Award for Technology” in All India Urban Cooperative Banking Summit organized by Karnataka State Cooperative Urban Banks Federation, held in Bangalore on October 28, 2017.

Annual Report 2017-18 41Shivalik Mercantile Co-operative Bank LimitedPB

IT and Information Security • Initiated the migration of t CBS solution from FIS Profile to Infosys Finacle, one of the leading CBS solutions worldwide and used by major Indian Banks like PNB, ICICI, AXIS, OBC, UBI etc.

• Organization-wide roll out of Microsoft Office 365, a suite of Office products encompassing Email, Office and Collaborative Tools, Skype for Business etc. to make it easier for our employees to service the customer better.

• Paper-Less account opening initiated through micro-ATM.• Initiated the roll out of auto-reconciliation systems for payment reconciliations

and an upgraded Loan Origination System.• Complete Branch Hardware revamp, replacing all existing desktops with

the modern All-In Ones (AIO). Other IT equipment including Printers and Scanners upgraded as well.

• Branch connectivity upgrade including bandwidth and back-up links for 100% uptimes.

• Network security initiatives rolled-out including state-of-the-art Firewalls, advanced Wi-Fi Access Points and Network Switches.

• Managing all the IT requirements associated with opening the 8 new branches.

Digital Banking • Ranked 4th for co-operative banks in North and Central India on digital transactions in FY 2017-18. (Source NPCI)

• Launched the mobile Banking app enabling all basic banking on Android as well as iPhones.

• IMPS services started through new version of Mobile App.• By the end of 2017-18, 4000 unique customers started accessing 8300

accounts through Mobile App.• Bill Payments and Recharge facility started through website and mobile app.• Bank has installed 10 new recyclers in FY 17-18, which includes two offsite

locations too.• Bank started issuance of EMV debit cards only from FY 17-18 for added

customer security.• Total issued debit cards crossed 1 lac mark in the year• Started AEPS OFF-US transactions through our m-ATMs in FY 2017-18.

Human Resources, Learning and Development

• Implemented a reward and recognition policy for recognizing exceptional performance by staff.

• Improved gender diversity by increasing women recruitment from 7% to 11% of total workforce.

• Introduced psychometric assessment tests to improve quality of new hires.• Implemented a buddy program for new hires to enable connect with existing

staff.• Conducted a Learning Needs Analysis to identify role-specific training

required at various levels.• Conducted mandatory trainings as required by RBI for branch and head office

staff.• Introduced a course and certification policy allowing reimbursement of

course fee to enhance employee performance.

Annual Report 2017-18 43Shivalik Mercantile Co-operative Bank Limited42

Internal Audit • Pre and post go-live audits conducted for each of the 8 new branches opened in the year.

• Audit process and systems set up for centralized functions such as account opening, cheque book processing, cheque clearing, credit appraisal and credit disbursement. In addition, microfinance was also brought under the ambit of internal audit.

• Significant improvement in the compliance of branch audits, avoiding repetition of issues through trainings and staff awareness.

• Conducted external audits for information security, Head Office functions and Internet Banking security.

• Inherent risk analysis prepared for the organization to drive a risk driven approach to audit.

Microfinance • Onboarded CRIF-High Mark which is a credit bureau with greater data points for microfinance business to introduce credibility checks on new and existing SHG members.

• Launch and structuring of Mini SHG Product entirely for Urban & Rural Portfolio. Mini SHG groups comprise of upto 5 members.

• Expanded the microfinance team, designated area managers and implemented robust monitoring matrix for day to day supervision.

• Linkage and migration of existing portfolio to m-ATM network.

Operations • Centralized various branch banking functions including account opening, cheque book printing and dispatch, cheque clearing, and document verification.

• Implemented CKYC guidelines as issued by RBI.• Standardized key branch banking processes and reporting structures to

improve effective control mechanism.• Implemented, paperless account opening for multiple variants of savings

account to improve customer experience, adopt digital work flow, improve risk management, and enhance efficiency.

• Strengthened the grievance redressal mechanism to effectively handle complaints and enhance customer experience..

Marketing • Automation of leads generated through branches and online channels to improve business development.

• Implemented online marketing campaigns across bank’s social media channels and website.

• Installation of non-lit boards with joint branding of bank and customer to improve brand awareness.


CORPORATE GOVERNANCE REPORT

The Indian economy continues to grow strongly post the twin impacts of demonetization and GST. The equity markets continue to scale new heights and the success stories of Indian companies are ringing through the entire world. In order to ensure honest, transparent and fair decision making, the various regulatory bodies operating in India have started to lay significant emphasis on the Corporate Governance framework adopted by Indian companies. This is imperative to ensure that the credibility of reporting remains top notch and the trust of the investors remains intact.

Corporate Governance has assumed even greater importance at Shivalik Bank over the last few years. The responsibility of being UP’s first and largest multi-state urban co-operative bank drives the board and management team to ensure that decision making and disclosures are true and fair for all stakeholders. The Corporate Governance framework at Shivalik Bank takes into account the relevant statutory provisions of the Banking Regulations Act, 1949 (AACS), Multi State Co-operative Societies Act, 2002 and Reserve Bank of India (RBI) directives and guidelines. RBI plans to introduce the concept of establishing a board of management for co-operative banks which will include external subject matter experts. The bank is supportive of these changes which will enhance the reputation and prestige of co-operative banks and will lead to a general strengthening of the Indian banking system.

The following principles are embedded in our governance framework:• Strategic and critical review of the past, current and

future performance of the bank by the Board of Directors and its sub-committees.

• Transparent approach to decision making by Executive Management and Board.

• A sound system of internal controls to mitigate and monitor internal and external risks.

• Accuracy and transparency in disclosures to all stakeholders for all material information.

• Compliance of laws, rules and regulations in true letter and spirit.

1. BOARD OF DIRECTORS

1.1 COMPOSITION The Bank is managed by the Board of Directors, which

formulates strategies, policies and reviews performance periodically. The composition and election of the Board of Bank is governed by the Multi-State Co-operative Societies Act, 2002 and the Bye-Laws of the Bank. As per the Bye-Laws of the Bank, the maximum strength of

the Board of Directors shall be twelve directors including two co-opted directors. The Board of Directors are elected by the members of the Bank and tenure of Board of Directors is five years from the date of their appointment. The tenure of the Board of Directors for the year 2011 to 2016 ended in the month of February 2016 and election to the Board of Directors for the year 2016-2021 was held on February 14, 2016 under the supervision of Mr Anil Kumar, who had been appointed as a Returning Officer to conduct the election. During the year Mr. K C Mishra, co-opted director of the bank resigned on 18th June 2017. The Board includes eminent persons including a Chartered Accountant having professional expertise in management, finance, accountancy and audit systems. The MD & CEO is the ex-officio member of all the Committees of the Board.

Responsibility for day-to-day management of the Bank is entrusted with senior management personnel under the leadership of the MD & CEO who operates under the guidance and control of the Board. The Board is responsible for reviewing the performance of the bank including steps taken by senior management and approving future strategic vision with the aim of enhancing stakeholder value.

1.2 CHAIRMAN OF THE BOARD Mr. Yashvir Kumar Gupta, a graduate in Mechanical

Electrical Engineering from IIT – BHU, is the Chairman of the Board, and has been at the helm of Shivalik Bank since inception. He set up the bank to provide a great banking experience to customers. Over the last 20 years, he has provided much needed guidance on business principles and ethics which has led to the bank achieving a business size of close to `1,600 Crore with an employee base of more than 500 individuals. He has a rich experience of close to five decades in the field of trading, agribusiness and banking industries and worked at Hindustan Aeronautics Limited (HAL) prior to taking on entrepreneurial ventures.

1.3 ROLES & RESPONSIBILITIES OF BOARD OF DIRECTORS The primary responsibility for good corporate

governance of the Bank rests with its Board of Directors. The Board has been entrusted by the shareholders with the responsibility of overall direction, supervision and control of the Bank. The Board’s fiduciary responsibility to the shareholders requires that the Board should act in their shared corporate interest, in good faith, and with due diligence. At the same time, the Board should recognize and take into account the interests


of other stakeholders in the Bank, such as depositors, other creditors, employees, the government, and the community in which it functions.

The bank conducts board meetings over video and/or audio conference which has increased the efficiency of the boards operations and reduced logistical expenditure.

In addition to the Multi State Cooperative Societies Act, 2002 read with MSCS Rules, 2002 and Bye Laws of the Bank, Master Circular on Board of Directors for Urban Co-operative Banks (UCBs) issued by Reserve Bank of India is also applicable to the Board of Directors of the Bank mutatis mutandis.

1.4 BOARD MEETINGS During April 1, 2017 to March 31, 2018, Ten Board

meetings were held to drive strategic decision making and performance review. The board also received regular updates on the geographical expansion through new branches and met with the RBI inspecting officers during their scheduled inspection of the bank in 2017-18.

Except Mr. Yashvir Kumar Gupta, Chairman, Dr. Sanjeev Mittal, Director and Mr. Suveer Kumar Gupta, MD & CEO of the Bank, no other directors are related to each other.

Directors’ Remuneration Shivalik Bank does not remunerate its Directors.

However, expenses related to travelling and lodging are borne by the Bank for attending Board/Committee meetings. MD & CEO is an employee of the bank and the remuneration paid to him is disclosed as a part of mandatory disclosures each year.

2. BOARD COMMITTEES The Bank has the following Committees of the Board of

Directors:

2.1 AUDIT COMMITTEE OF BOARD (ACB) In order to ensure and enhance the effectiveness of

internal audit/ inspection as a management tool, an Apex Audit Committee of Board has been set up at the board level for overseeing and providing directions to the internal audit/ inspection machinery and other executives of the bank.

Composition The Committee is headed by Mr. Yashvir Kumar Gupta,

Chairman of the Bank. The committee was reconstituted

on November 15, 2017. All members of the Committee have requisite financial and management experience including a Chartered Accountant. General Manager (Risk Management) and Audit Controller of the Bank are the permanent invitees. Other members of management and representatives of statutory auditors are also invited to attend and participate in the meetings, whenever required. The MD & CEO of the Bank acts as the Secretary to the Committee.

Audit Committee of Board (ACB) Meetings During April 1, 2017 to March 31, 2018, Four meetings

of Audit Committee of Board were held where the outcomes of the audits conducted by the internal audit team and external agencies were discussed.

2.2 BOARD LOAN & SHARE COMMITTEE The major functions of this committee are:

a) To ensure the compliance of Loan Policy approved by the Board;

b) To consider, approve and sanction all the loan proposals;

c) To form different committees of bank functionaries and delegate loan sanctioning powers to them;

d) To consider and approve the waiver and settlement cases of all kind;

e) To approve applications for new membership (Regular and Nominal) for both borrowers and non-borrowers;

f) To allot shares to new as well as existing members; g) To approve share refunds and transfers.

Members comprise of Mr. Yashvir Kumar Gupta, who is also the Chairman of this Committee, Mr. S P Gulati, Mr. Sarvesh Singhal, Directors and Mr. Suveer Kumar Gupta, MD & CEO of the Bank are the members of the Committee. Credit (Head), Credit Manager and GM (Risk Management) of the Bank are permanent Invitees.

Board Loan & Share Committee Meetings Thirty six meetings of the above Committee were held

during Financial Year 2017-18.

2.3 SPECIAL COMMITTEE OF THE BOARD FOR MONITORING LARGE VALUE FRAUDS

The RBI mandates the constitution of a Board Committee which would be exclusively dedicated to the monitoring of large value fraud cases including detection procedures, reporting to regulatory and enforcement agencies and action against the perpetrators of the frauds at the highest level. This committee monitors all


Year Location Date Time (IST)

2014-15 Hotel Royal Residency, Ambala Road, Saharanpur – 247001, Uttar Pradesh Sunday, September 27, 2015 10:00 AM



During the Financial Year 2017-18, one Special General Meeting was held on July 9, 2017 to consider and approve the amendment, pursuant to the provisions of the Multi State Co-Operative Societies Act, 2002 to substitute the Bye Law No.4 with the following:

4. AREA OF OPERATION:The Area of operation of the bank shall be the following:a) The state of Uttar Pradesh;b) The districts of Dhar, Indore, Ujjain Dewas and West Nimar (Khargone) In Madhya Pradesh; c) The state of Delhi;d) The districts of Dehradun and Haridwar in Uttarakhand”

cases of fraud with a direct financial impact of B1 Crore and above and includes five members of the Board of Directors including Chairman, two members from ACB. The meeting was called in the first quarter of the FY 17-18 for having the review on the prevention mechanism for the frauds during the FY 16-17, and as there was no fraud occurred during the FY 17-18, no other meeting was held for this committee.

2.4 NOMINATION & HUMAN RESOURCE COMMITTEE This committee was re-constituted on November 15,

2017 to consider policies related to human resource development. The terms of reference include consideration of all issues/areas concerning Human Resource Planning & Management, all HR Policies and initiatives. The composition of the Committee includes 4 members of Board including MD & CEO and General Manager (HR & Marketing), General Manager (Risk Management) and HR Head are the permanent Invitees.

During April 1, 2017 to March 31, 2018, one meeting was held.

2.5 OTHER FUNCTIONAL COMMITTEES Apart from the above, the Board has delegated its power

to MD & CEO of the Bank to constitute such Functional Committees with specific terms of reference as he may deem fit from time to time. These include the following: a) Asset Liability Committee (ALCO) b) Investment Committee c) KYC and AML Committee d) Purchase and Expenditure Committee e) IT Vision Committee

3. ANNUAL GENERAL MEETINGS AND SPECIAL GENERAL MEETINGS Location, date and time of the AGMs held during the

preceding 3 years are as under:


Financial SectionStatutory Audit Report ........................................... 48Balance Sheet ....................................................... 50Statement of Profit & Loss ................................... 51Cash Flow Statement ............................................ 54Schedules to Balance Sheet ................................. 56Significant Accounting policies ............................. 60Appropriation of Profit .......................................... 70


To, The Members, Shivalik Mercantile Co-operative Bank Ltd, Saharanpur.

Report on the Financial Statements

1. We have audited the accompanying financial statements of Shivalik operative Bank Ltd (PAN- AAAAS3251Q) having Registered Office at, Ansari Road, Saharanpur-247001 which comprise the Balance Sheet as at 31st March 2018, and Profit and Loss Account for year ended on March 31, 2018, and Cash Flow Statement for the year then ended on that date, and a summary of Significant Accounting Policies, Disclosures and Notes on accounts. Out of 29 Branches, the returns of Head Office & its departments and twelve branches audited by us and returns of seventeen branches not audited by us but verified by us from the centralized records maintained by Head office, are incorporated in these financial statements. All the Branches are covered under Concurrent / Internal Audit department of the Bank. The Branches and other departments audited by us accounts for 72.15 percent of advances, 74.60 percent of deposits, 75 percent of income and 77.34 percent of expenses.

Management’s Responsibility for the Financial Statements

2. The Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Bank in accordance with provisions of the Banking Regulations Act, 1949, the guidelines issued by the Reserve Bank of India and the guidelines issued by the National Bank for Agricultural and Rural Development, the Central Registrar of Cooperative Societies, the Multi State Co-operative Societies Act, 2002, the Multi State Co-operative Societies Rules, 2002 (as applicable) and accounting principles generally accepted in India so far as applicable to Banks. This responsibility includes the design, implementation and maintenance of internal controls relevant to the preparation and presentation of the financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

3. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Standards on Auditing issued by the Institute of Chartered Accountants of India.Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatements.

4. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Bank’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on effectiveness of the Bank’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

5. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

6. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements together with the Notes thereon give the information required by the Banking Regulation Act, 1949, the Multi State Co-operative Societies Act, 2002 and the Multi State Co-operative Societies Rules, 2002 and the guidelines issued by the National Bank for Agricultural and Rural Development (as applicable) and guidelines issued by Reserve Bank of India and the Central Registrar of Cooperative Societies, in the manner

INDEPENDENT AUDITOR’S REPORT


so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

a) In the case of the Balance Sheet, of state of affairs of the Bank as at 31st March 2018;

b) In the case of the Profit and Loss Account, of the profit for the year ended on that date; and

c) In the case of the Cash Flow Statement, of the cash flows for the year ended on that date.

Report on Other Legal & Regulatory Requirements

7. The Balance Sheet and the Profit and Loss Account have been drawn up in Forms “A” and “B” respectively of the Third Schedule to the Banking Regulation Act, 1949 and the Multi State Co-operative Societies Act, 2002, the Multi State Co-operative Societies Rules, 2002.

8. As required by Section 73(4) of the Multi State Co-operative Societies Act, 2002, we report that:

a) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purpose of our audit and have found to be satisfactory;

b) In our opinion, proper books of account as required by law have been kept by the Bank so far as it appears from our examination of those books and proper returns adequate for the purposes of our audit have been received from the branches/offices

c) The transactions of the Bank which came to our notice have been within the powers of the bank;

d) The Balance Sheet and the Profit and Loss Account dealt with by this report, are in agreement with the books of account and the returns;

e) The reports on the accounts of the branches/offices audited by the branch auditors have been forwarded to us and have been properly dealt with by us in preparing this Report - Not Applicable in our case as the Bank has not appointed any separate Statutory Auditor for Branch Audits. We have reviewed the accounts of all the Branches as well as Head Office;

f) The accounting standards adopted by the Bank are consistent with those laid down by accounting principles generally accepted in India so far as applicable to Banks;

g) In our opinion and according to information and explanations given to us, we have not noticed any material impropriety or irregularity in the expenditure or· in the realization of money due to the bank.

9. As per the information and explanations given to us and based on our examination of the books of account and other records, we have not come across material instances which need to be reported under Rule 27(3) of the Multi State Cooperative Societies Rules, 2002.

Audit Memorandum-NIL

Saharanpur: 16th July, 2018

For G. P. Gupta & Co.

Chartered Accountants

(Firm Regn. No. 004998C)

Sd/-

CA G. P. Gupta

Partner (M. No. 073778)


Balance Sheet as at 31st March 2018

As per our report of even date attached

For G. P. Gupta & Co. Sd/- Sd/-

Chartered Accountants Suveer Kumar Gupta Sarvesh Singhal

(Firm Regn. No. 004998C) MD & CEO DIRECTOR

Sd/- Sd/- Sd/- Sd/-

G. P. Gupta Sudhakar Agarwal Shiv Puran Gulati Yashvir Kumar Gupta

Partner (M. No. 073778) DIRECTOR VICE CHAIRMAN CHAIRMAN


(Amount in `)

SCHEDULE CURRENT YEAR

31.03.2018 PREVIOUS YEAR

31.03.2017

CAPITAL & LIABILITIES

(1) CAPITAL 1 45,69,82,300.00 45,10,10,000.00

(2) RESERVE FUND & OTHER RESERVES 2 21,24,61,816.00 19,93,75,077.00

(3) DEPOSITS & OTHER ACCOUNTS 3 9,53,38,93,269.10 9,16,96,71,965.98

(4) BORROWINGS - - -

(5) BILLS FOR COLLECTION BEING BILLS RECEIVABLE AS PER CONTRA - - -

(6) BRANCH ADJUSTMENTS - - -

(7) OVERDUE INTEREST RESERVES (ON NPA) - 4,18,71,888.68 2,84,27,802.38

(8) INTEREST PAYABLE (ON TERM DEPOSITS) - 10,01,574.51 22,09,068.48

(9) OTHER LIABILITIES & PROVISIONS 4 17,82,29,448.88 17,49,42,293.48

(10) PROFIT & LOSS 5 5,06,13,813.96 6,75,11,917.33

GRAND TOTAL 10,47,50,54,111.13 10,09,31,48,124.65

CONTINGENT LIABILITIES - 93,98,600.00 44,33,600.00

PROPERTY & ASSETS

(1) CASH IN HAND & BALANCE WITH RBI - 23,30,88,212.77 23,04,95,182.71

(2) BALANCES WITH OTHER BANKS 6 80,90,73,131.70 98,93,23,086.61

(3) MONEY AT CALL & SHORT NOTICE - 56,00,00,000.00 52,00,00,000.00

(4) INVESTMENTS 7 2,27,84,59,111.00 2,45,28,37,990.00

(5) ADVANCES 8 6,11,61,09,802.41 5,59,50,64,050.85

(6) INTEREST RECEIVABLE 9 12,52,55,503.88 10,36,01,697.58

OF WHICH OVERDUE (ON NPA) 4,18,71,888.68 2,84,27,802.38

(7) BILLS RECEIVABLE BEING BILLS FOR COLLECTION AS PER CONTRA - - -

(8) FIXED ASSETS LESS DEPRECIATION 10 21,76,80,191.49 7,95,30,623.27

(9) OTHER ASSETS 11 13,53,88,157.88 12,22,95,493.63

GRAND TOTAL 10,47,50,54,111.13 10,09,31,48,124.65


Statement of Profit & Loss for the year ended 31st March 2018

(Amount in `)

CURRENT YEAR 31.03.2018

PREVIOUS YEAR 31.03.2017

EXPENDITURE

(1) INTEREST ON DEPOSITS, BORROWINGS ETC.

i) INTEREST ON DEPOSITS 59,57,50,571.68 61,60,56,805.28

ii) INTEREST ON BORROWINGS 11,23,031.50 18,82,599.00

TOTAL 59,68,73,603.18 61,79,39,404.28

(2) SALARIES, ALLOWANCES, PROVIDENT FUND, BONUS & GRATUITY ETC.

21,41,66,644.47 14,23,15,416.79

(3) RENT, TAXES, INSURANCE, LIGHTING ETC.

i) BUILDING RENT 3,71,08,111.50 1,97,34,269.80

ii) TAXES 9,14,050.85 37,15,060.69

iii) INSURANCE 1,31,75,621.86 1,11,74,722.83

iv) LIGHTING 99,93,662.92 78,67,856.14

TOTAL 6,11,91,447.13 4,24,91,909.46

(4) LAW CHARGES 8,58,123.00 26,47,831.00

(5) POSTAGE AND TELEPHONE CHARGES

i) POSTAGE 11,37,558.04 8,02,267.74

ii) TELEPHONE 13,02,827.88 17,23,792.40

iii) COMPUTER NETWORKING, CONNECTIVITY & HOSTAGE 1,29,64,703.42 94,76,321.00

TOTAL 1,54,05,089.34 1,20,02,381.14

(6) AUDIT & CONSULTANCY FEES 3,16,09,324.22 3,04,53,445.94

(7) DEPRECIATION AND REPAIRS

i) DEPRECIATION 1,97,41,370.00 1,54,36,702.00

ii) WRITTEN OFF/ IMPAIRED ASSETS (512.10) -

iii) REPAIRS 1,21,43,070.86 90,12,343.17

TOTAL 3,18,83,928.76 2,44,49,045.17

(8) STATIONERY, PRINTING AND ADVERTISEMENT

i) PRINTING & STATIONERY 29,75,488.59 33,15,876.88

ii) ADVERTISEMENT 24,72,301.32 22,16,048.50

TOTAL 54,47,789.91 55,31,925.38

Contd…



Contd… from previous page(Amount in `)



EXPENDITURE

(9) OTHER EXPENDITURE

i) SUBSCRIPTION 1,02,60,224.65 43,22,160.28

ii) TRAINING & DEVELOPMENT OF STAFF - 5,18,936.00

iii) AGM & CONFERENCE 7,45,797.00 11,41,543.72

iv) SECURITY 68,00,724.25 53,17,408.57

v) BUSINESS PROMOTION & GIFTS 8,92,361.09 8,89,174.75

vi) STAFF WELFARE 44,20,345.25 23,81,909.38

vii) TRAVEL & TRANSPORT 1,31,37,387.85 81,72,100.90

viii) COMMISSION ON DAILY DEPOSIT/DSA 54,45,571.79 42,78,747.36

ix) BANKING CORRESPONDENT EXPENDITURE 22,50,661.45 16,41,122.64

x) CHARGES PAID TO OTHER BANKS 18,27,033.36 10,35,392.44

xi) AMORTIZATION ON INVESTMENTS 43,69,371.00 44,76,455.00

xii) INTEREST & PENALTIES 22,598.00 11.00

xiii) PROVISION ON STANDARD ASSETS - 7,73,361.82

xiv) MISCELLANEOUS EXPENSES 5,70,585.89 7,89,083.26

TOTAL 5,07,42,661.58 3,57,37,407.12

(10) LOSS FROM SALE OF NON-BANKING ASSETS 4,02,476.00 -

(11) PROVISIONS FOR CURRENT YEAR

i) PROVISION FOR BAD & DOUBTFUL DEBTS (NPA) - 1,30,96,568.58

ii) SPECIAL RESERVE U/S 36(1)(viii) OF INCOME TAX ACT 12,33,850.00 37,63,448.00

iii) PROVISION FOR CURRENT INCOME TAX 1,35,22,824.00 5,37,40,458.00

iv) PROVISION FOR DEFERRED TAX 23,18,465.00 19,60,851.00

v) PROVISION FOR IDR 63,72,269.00 19,98,100.00

TOTAL 2,34,47,408.00 7,45,59,425.58

(12) PRIOR PERIOD ADJUSTMENTS

i) PRIOR PERIOD EXPENSES (8,37,438.00) 1,889.00

ii) ADUSTMENT FOR INCOME TAX - 54,535.00

iii) ADJUSTMENT FOR DEFERRED TAX - 6,74,578.00

TOTAL (8,37,438.00) 7,31,002.00

(13) BALANCE OF PROFIT 3,16,49,325.63 10,02,57,719.12

GRAND TOTAL 1,06,28,40,383.22 1,08,91,16,912.98

EXPLANATORY NOTE:CONTINGENT PROV. AGAINST DEPRECIATION IN INVESTMENTS

31,25,216.00

Contd…



Contd… from previous page(Amount in `)



INCOME

(1) INTEREST & DISCOUNT

i) INTEREST ON LOANS & ADVANCES 70,77,40,980.18 73,22,77,975.01

ii) INTEREST ON INVESTMENTS 24,69,00,193.68 21,60,40,801.13

iii) INCOME ON INVESTMENT IN MUTUAL FUNDS 3,56,92,980.38 6,01,48,014.70

TOTAL 99,03,34,154.24 1,00,84,66,790.84

(2) COMMISSION, EXCHANGE & BROKERAGE 11,35,352.74 11,02,106.31

(3) PROFIT FROM SALE OF NON-BANKING ASSETS 1,23,536.50 1,940.00

(4) PROFIT ON SALE OF SECURITIES 9,78,178.00 3,31,04,689.00

(5) OTHER RECEIPTS

i) LOAN PROCESSING CHARGES 1,43,33,654.48 1,12,06,571.83

ii) INCIDENTAL CHARGES 1,13,17,555.29 60,27,103.98

iii) LOCKER RENT 35,79,905.95 41,10,101.84

iv) DIVIDEND FROM MUTUAL FUNDS - -

v) BAD DEBTS RECOVERED 20,00,000.00 2,00,000.00

vi) COMMISSION FROM INSURANCE BUSINESS 1,20,80,693.61 60,74,805.85

vii) MISCELLANEOUS INCOME 2,69,57,352.41 1,88,22,803.33

TOTAL 7,02,69,161.74 4,64,41,386.83

GRAND TOTAL 1,06,28,40,383.22 1,08,91,16,912.98

EXPLANATORY NOTE:

TRANSFERRED FROM INVESTMENT FLUCTUATION RESERVE 31,25,216.00 -





Sd/- Sd/- Sd/- Sd/-





Cash Flow Statement for the year ended 31st March 2018

(Amount in `/Lacs)

S. NO.

PARTICULARSCURRENT YEAR

31.03.2018PREVIOUS YEAR

31.03.2017

A Cash Flow From Operating Activity

Net Profit after tax 316.49 1,002.58

Add

Depreciation 197.41 154.37

Amortisaton on Investment 43.69 44.76

Provision for Income Tax 135.23 537.95

Provision for Deferred Tax 23.18 26.35

Provision for BDDR - 130.97

Provision on Standard Assets - 7.73

Reserve against Profit u/s 36 12.34 37.63

Provisions & Contigencies (AFS/HFT) 63.72 19.98

Loss from sale of Fixed Assets 4.02 479.60 - 959.74

Less

Profit on Sale of Investements (9.78) (331.05)

Profit on Sale of Assets (1.24) (0.02)

Prior Period Adjustment (8.37) (19.39) - (331.07)

Adjustment for (Increase/Decrease)

Loan & Advances (5,210.46) 4,271.67

Investments 3,957.10 (11,240.32)

Other Assets (427.40) (122.70)

Deposit 3,642.21 10,791.06

Other Liabilities 389.77 62.35

Interest Payable (12.07) (17.56)

Interest Receivable (82.10) 298.78

Income Tax paid (229.26) 2,027.79 (622.29) 3,420.99

Net Cash Generated from Operating Activity 2,804.49 5,052.24


Cash Flow Statement for the year ended 31st March 2018

S. NO.

PARTICULARSCURRENT YEAR

31.03.2018PREVIOUS YEAR

31.03.2017

B Cash Flow from Investing Activity

Purchase of Fixed Assets (1,578.91) (301.87)

Profit on sale of non banking assets 1.24 0.02

Loss on Sale of Fixed Assets (4.02) -

Profit on Sale of Investment 9.78 (1,571.91) 331.05 29.20

Net Cash Flow from Investing Activity (1,571.91) 29.20

C Cash Flow from Financing Activity

Increase/(Decrease) in share capital 60.28 121.78

Education Fund Paid (10.03) (7.35)

Dividend paid (402.40) (352.15) (387.84) (273.41)

Net Cash Flow from Financing Activity (352.15) (273.41)

D Net Increase/Decrease in Cash and Cash Equivalents 880.43 4,808.03

E Cash and Cash Equivalent at the beginning of the year 9,379.18 4,571.15

F Cash and Cash Equivalent at the end of the year 10,259.61 9,379.18

Break-up of Cash and Cash Equivalents 31.03.2018 31.03.2017

Cash in hand and Balance with RBI 2,330.88 2,304.95

Balance with Bank in Current Account 2,328.73 1,874.23

Money at Call and Short Notice 5,600.00 5,200.00

Total 10,259.61 9,379.18

(Amount in `/Lacs)





Sd/- Sd/- Sd/- Sd/-





Schedules to Balance Sheet as at 31st March 2018

SCHEDULE 1: CAPITAL (Amount in `) CURRENT YEAR


31.03.2017

i) AUTHORIZED CAPITAL 1,00,00,00,000.00 1,00,00,00,000.00

1,00,00,000 shares of `100/= each

ii) SUBSCRIBED CAPITAL 45,69,82,300.00 45,10,10,000.00

45,69,823 shares of `100/= each

(Previous Year 45,10,100 Shares of `100/- each)

iii) AMOUNT CALLED UP 45,69,82,300.00 45,10,10,000.00

On 45,69,823 shares at `100/= each

Of (iii) above, held by

(a) Individuals & Others 45,69,82,300.00 45,10,10,000.00

(b) Co-operative institutions - -

(c) Government - -

SCHEDULE 2: RESERVE FUND & OTHER RESERVES (Amount in `) CURRENT YEAR


31.03.2017

i) STATUTORY RESERVE 11,87,47,949.00 11,04,11,246.00

ii) INVESTMENT FLUCTUATION RESERVE 1,86,20,702.00 2,17,45,918.00

iii) OTHER FUNDS AND RESERVES

a) PROVISION ON STANDARD ASSETS 2,08,44,321.00 1,73,67,852.00

b) SPECIAL RESERVE U/S 36(1)(VIII) OF I.T. ACT 1,68,78,316.00 1,56,44,466.00

c) CONTINGENCY RESERVE 3,73,70,528.00 3,42,05,595.00

TOTAL 7,50,93,165.00 6,72,17,913.00

GRAND TOTAL 21,24,61,816.00 19,93,75,077.00

SCHEDULE 3: DEPOSIT & OTHER ACCOUNTS (Amount in `) CURRENT YEAR


31.03.2017

i) FIXED DEPOSITS

a) INDIVIDUALS & OTHERS 6,33,86,78,675.84 5,84,21,18,097.30

b) CENTRAL CO-OPERATIVE BANKS - -

c) OTHER SOCIETIES - -

TOTAL 6,33,86,78,675.84 5,84,21,18,097.30

ii) SAVINGS BANK DEPOSIT

a) INDIVIDUALS & OTHERS 2,73,23,19,170.96 2,97,45,30,528.86



TOTAL 2,73,23,19,170.96 2,97,45,30,528.86

iii) CURRENT DEPOSITS

a) INDIVIDUALS & OTHERS 46,28,95,422.30 35,30,23,339.82



TOTAL 46,28,95,422.30 35,30,23,339.82

iv) MONEY AT CALL AND SHORT NOTICE - -

GRAND TOTAL 9,53,38,93,269.10 9,16,96,71,965.98



SCHEDULE 4: OTHER LIABILITIES & PROVISIONS (Amount in `) CURRENT YEAR


31.03.2017

i) BILLS PAYABLE (DDs/POs ISSUED BUT NOT YET PRESENTED FOR PAYMENT) 3,09,96,475.96 1,75,95,048.52

ii) UNCLAIMED DIVIDENDS 31,09,107.00 36,18,019.00

iii) SUNDRIES 4,86,03,204.71 2,48,56,578.39

iv) PROVISION FOR INCOME TAX 1,35,22,824.00 5,37,40,458.00

v) DEFERRED TAX LIABILITY 1,03,82,898.00 80,64,433.00

vi) TAX DEDUCTED AT SOURCE 1,12,79,046.21 90,39,579.57

viii) PROVISION FOR AUDIT FEES 4,13,000.00 3,15,000.00

ix) PROVISION FOR BAD & DOUBTFUL DEBTS (NPA) 4,95,23,531.00 5,30,00,000.00

x) PAID-UP CAPITAL (COLLECTION ACCOUNT) OF ERSTWHILE BHOJ NAGRIK SAHAKARI BANK LTD., DHAR, & ERSTWHILE MALWA BANK, INDORE

17,12,500.00 17,12,500.00

xi) CONTINGENT PROV. AGAINST DEPRECIATION IN INVESTMENTS (IDR) 83,70,369.00 19,98,100.00

xii) CO-OPERATIVE EDUCATION FUND 3,16,493.00 10,02,577.00

TOTAL 17,82,29,448.88 17,49,42,293.48

SCHEDULE 5: PROFIT & LOSS (Amount in `) CURRENT YEAR


31.03.2017

i) PROFIT AS PER LAST BALANCE-SHEET 6,75,11,917.33 7,46,53,420.71

ii) LESS: APPROPRIATIONS OF PROFIT FOR LAST YEAR

STATUTORY RESERVE - (1,83,67,677.00)

CO-OPERATIVE EDUCATION FUND - (7,34,707.00)

CONTINGENCY RESERVE - (73,47,071.00)

INVESTMENT FLUCTUATION RESERVE - -

DIVIDEND (4,02,78,888.00) (3,94,54,798.50)

TOTAL (4,02,78,888.00) (6,59,04,253.50)

iii) ADD: AMOUNT OF IFR TAKEN BACK TO P&L, 31,25,216.00 -

BELOW THE LINE, IN PARTIAL ADJUSTMENT OF IDR

TOTAL 31,25,216.00 -

iv) ADD: PROFIT OF THE YEAR B/F FROM P&L A/C 3,16,49,325.63 10,02,57,719.12

LESS PROPOSED APPROPRIATIONS:

STATUTORY RESERVE (79,12,331.00) (2,50,64,430.00)

CO-OPERATIVE EDUCATION FUND (3,16,493.00) (10,02,577.00)

CONTINGENCY RESERVE (31,64,933.00) (1,00,25,772.00)

INVESTMENT FLUCTUATION RESERVE - (54,02,190.00)

TOTAL 2,02,55,568.63 5,87,62,750.12

GRAND TOTAL 5,06,13,813.96 6,75,11,917.33



SCHEDULE 6: BALANCES WITH OTHER BANKS (Amount in `) CURRENT YEAR


31.03.2017

i) CURRENT DEPOSITS

a) DISTRICT CO-OPERATIVE BANK LTD 3,47,05,416.89 3,28,32,279.25

b) SBI & SUBSIDIARY BANKS 7,02,44,570.56 1,75,82,537.08

c) OTHER PUBLIC SECTOR BANKS 12,21,55,440.04 13,26,73,056.43

d) OTHER SCHEDULED BANKS 57,67,704.21 43,35,213.85

TOTAL 23,28,73,131.70 18,74,23,086.61

ii) SAVINGS BANK DEPOSITS - -

iii) FIXED DEPOSITS

a) DISTRICT CO-OPERATIVE BANK LTD. - -

b) SBI & SUBSIDIARY BANKS - 13,96,00,000.00

c) OTHER PUBLIC SECTOR & SCHEDULED BANKS 57,62,00,000.00 66,23,00,000.00

TOTAL 57,62,00,000.00 80,19,00,000.00

GRAND TOTAL 80,90,73,131.70 98,93,23,086.61

SCHEDULE 7: INVESTMENTS (Amount in `) CURRENT YEAR


31.03.2017

i) IN CENTRAL & STATE GOVERNMENT SECURITIES 2,27,59,87,111.00 2,45,03,63,990.00

MARKET VALUE: 2,22,28,60,650.00 2,49,56,65,550.00

FACE VALUE: 2,24,25,00,000.00 2,40,25,00,000.00

ii) OTHER TRUSTEE SECURITIES - -

iii) SHARES IN CO-OPERATIVE INSTITUTIONS - 2,000.00

Iv) OTHER INVESTMENTS 2,472,000.00 2,472,000.00

GRAND TOTAL 2,27,84,59,111.00 2,45,28,37,990.00

SCHEDULE 8: ADVANCES (Amount in `) CURRENT YEAR


31.03.2017

i) SHORT TERM LOANS, CASH CREDITS OVERDRAFTS AND BILLS DISCOUNTED 2,46,29,26,611.82 2,43,34,11,160.72

• OF WHICH SECURED AGAINST:

a) GOVT. & OTHER APPROVED SECURITIES - -

b) OTHER TANGIBLE SECURITIES 2,46,29,26,611.82 2,43,34,11,160.72

• OF THE ADVANCES, AMT. DUE FROM INDIVIDUALS 2,46,29,26,611.82 2,43,34,11,160.72

• OF THE ADVANCES, AMOUNT OVERDUE 7,39,89,318.74 64,63,223.24

• CONSIDERED BAD & DOUBTFUL OF RECOVERY 2,36,00,206.88 1,23,85,797.30

(FULLY PROVIDED FOR)

ii) MEDIUM TERM LOANS 27,05,73,387.98 32,76,97,449.14



b) OTHER TANGIBLE SECURITIES 27,05,73,387.98 32,76,97,449.14

• OF THE ADVANCES, AMT. DUE FROM INDIVIDUALS 27,05,73,387.98 32,76,97,449.14

• OF THE ADVANCES, AMOUNT OVERDUE 2,29,64,472.66 46,55,129.22

• CONSIDERED BAD & DOUBTFUL OF RECOVERY 26,13,060.11 90,74,125.74


Contd…



SCHEDULE 8: ADVANCES (Amount in `) CURRENT YEAR


31.03.2017 iii) LONG TERM LOANS 3,38,26,09,802.60 2,83,39,55,440.99



b) OTHER TANGIBLE SECURITIES 3,38,26,09,802.60 2,83,39,55,440.99

• OF THE ADVANCES, AMT. DUE FROM INDIVIDUALS 3,38,26,09,802.60 2,83,39,55,440.99 • OF THE ADVANCES, AMOUNT OVERDUE 4,28,43,549.83 1,62,45,381.88

• CONSIDERED BAD & DOUBTFUL OF RECOVERY - -


6,11,61,09,802.41 5,59,50,64,050.85

SCHEDULE 9: INTEREST RECEIVABLE (Amount in `) CURRENT YEAR


31.03.2017 i) INTEREST RECEIVABLE ON INVESTMENTS (ACCRUED)

a) GOVERNMENT SECURITIES 3,63,80,199.00 4,30,06,845.00

b) BANK FDRs 4,52,83,086.20 3,16,02,179.20

c) OTHER INVESTMENTS 17,20,330.00 5,64,871.00

TOTAL 8,33,83,615.20 7,51,73,895.20 ii) INTEREST RECEIVABLE ON NPA (OVERDUE) 4,18,71,888.68 2,84,27,802.38

GRAND TOTAL 12,52,55,503.88 10,36,01,697.58

SCHEDULE 10: FIXED ASSETS (Amount in `) CURRENT YEAR


31.03.2017 AS ON 01.04.2017 7,95,30,623.27 6,47,79,858.79

ADDITIONS DURING THE YEAR 15,86,01,979.52 3,10,18,469.08

LESS: SALE/ADJUSTMENTS (7,11,041.30) (8,31,002.60)

LESS: DEPRECIATION FOR CURRENT YEAR (1,97,41,370.00) (1,54,36,702.00)

WRITTEN DOWN VALUE AS ON 31.03.2018 21,76,80,191.49 7,95,30,623.27

SCHEDULE 11: OTHER ASSETS (Amount in `) CURRENT YEAR


31.03.2017 i) REFUNDABLE SECURITIES 65,78,666.00 77,77,666.00

ii) STOCK OF PRINTED STATIONERY 26,73,008.56 11,33,430.29

iii) MISCELLANEOUS RECEIVABLES 6,46,57,398.97 3,52,83,148.34

iv) TAX DEDUCTED AT SOURCE 8,11,614.35 9,01,919.00

v) INCOME TAX REFUNDABLE 1,09,27,430.00 60,59,290.00

vi) ADVANCE INCOME TAX PAID 2,70,00,000.00 6,15,00,000.00

vii)NON-BANKING ASSETS ACQUIRED UNDER SARFAESI 2,27,40,040.00 96,40,040.00

GRAND TOTAL 13,53,88,157.88 12,22,95,493.63





Sd/- Sd/- Sd/- Sd/-





Significant Accounting Policies, Disclosures and Notes on Accounts

(A) BACKGROUND AND OPERATIONS:1. Shivalik Mercantile Co-operative Bank Ltd. was

registered in 1997 under Uttar Pradesh Co-operative Societies Act 1965 and started operations in September 1998. Later, in September 2010, consequent upon the inter-state merger, the Bank was re-registered under the Multi State Co-operative Societies Act 2002, as a Multi-State Urban Co-operative Bank, and expanded its area of operation beyond the entire state of Uttar Pradesh (UP) to include area in the state of Madhya Pradesh (MP), which comprises five districts in the state, namely Dhar, Indore, Ujjain, Dewas and Khargone. Subsequently, in financial year 2017-18, after receiving due approval from RBI, the bank has extended its area of operation to the state of Delhi and districts of Dehradun and Haridwar in Uttarakhand. Thus, the present area of operation of the bank comprises area in four states – UP, MP, Delhi and Uttarakhand.

2. Till last financial year (2016-17) the Bank had twenty-one branches - twelve in District Saharanpur, two in District Muzaffarnagar, one in Meerut, two in Ghaziabad and two in Noida, U.P., and one each in Indore and Dhar, MP. The bank had further been granted permission by RBI to open ten more branches, seven in UP and three in MP. Out of these, eight branches (six in UP and two in MP) have been opened in the current financial year. The remaining two (one each in UP and MP) are proposed to be opened in the month of April, 2018. Thus, the bank presently has twenty-nine branches as on 31.3.2018 - twenty-five in UP and four in MP. The Bank provides retail and corporate banking services.

3. Merger of Malwa Commercial Co-operative Bank Ltd. with our bank:

Malwa Commercial Co-operative Bank Ltd., Indore, M.P. (Target Bank) merged with Shivalik Mercantile Co-operative Bank Ltd. (Acquirer Bank) with effect from 1st September, 2012. In accordance with the scheme of merger, the Share Capital of the Target Bank was kept in Collection Account in the books of the Acquirer Bank for a period of 1 year from the date of merger. On the expiry of the period of one year, the balance amount (less, held by borrowers and guarantors) remaining in collection account was transferred to the General Reserve. As at the end of the current year, only an amount of ̀ 24,600/- remains in the books of the bank, that pertains to share capital held by borrowers and guarantors of the above-mentioned bank.

4. Merger of Bhoj Nagrik Sahakari Bank with our bank:

a. Bhoj Nagrik Sahakari Bank Maryadit, Dhar, M.P. (Target Bank) merged with Shivalik Mercantile Co-operative Bank Ltd. (Acquirer Bank) with effect from 1st November, 2010. As per the scheme of merger, the Share Capital of the Target Bank is being treated as Collection Account in the books of the Acquirer Bank and will remain so for a period of 10 years from the date of merger. During this period any share-holder of the Target bank desiring to withdraw his/her shares shall be paid back the amount at par. After the expiry of 10 years’ period, the amount remaining unpaid shall be converted to the share capital of the equivalent amount of Shivalik Bank. The balance in the said account as at the end of the year is `16,87,900/-.

b. As part of prudent business practice, the non-performing loans of the Target Bank which remained unrealized till 31st March, 2012, were written off as bad debts in the F.Y. 2011-12. During the current year, `20.00 Lacs has been recovered and credited to current year’s Profit & Loss Account. Further efforts for recovery of these loans will continue and recoveries, if any, shall be considered as income for the year in which the recoveries are made.

(B) SIGNIFICANT ACCOUNTING POLICIES:1. Accounting Convention The financial statements have been prepared in

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

2. Use of estimates The preparation of the financial statements, in conformity

with generally accepted accounting principles, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses and disclosure of contingent liabilities at the date of the financial statements. Actual results could differ from these estimates and will be adjusted in the accounts of the year in which they arise. Management believes that the estimates used in the

(Schedule annexed to and forming part of the Balance Sheet as on 31st March 2018 and Profit & Loss Account for the year ended 31st March, 2018)


Significant Accounting Policies, Disclosures and Notes on Accounts(Schedule annexed to and forming part of the Balance Sheet as on 31st March 2018 and Profit & Loss Account for the year ended 31st March, 2018)

preparation of the financial statements are prudent and reasonable. Any revisions to the accounting estimates are recognized prospectively.

3. Foreign Exchange Transactions The bank holds Foreign Exchange Authorized Dealer

Category-II license and has entered into transactions related to exchange of foreign currency on behalf of customers during the year. The same are accounted in the books of the bank as liability incurred on the date of the transaction. The bank does not have any foreign exchange assets/liabilities.

4. Investments

4.1. In accordance with the extant instructions issued by Reserve Bank of India for the purpose of valuation of Investments, the Bank has classified its Investment portfolio as at 31st March 2018 into the following three categories:

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

(b) Available For Sale (AFS): Investments in the category are valued at market rate and net depreciation in the category, if any, is written off as expense of the year. Net appreciation, if any, has not been recognized in these financial statements.

(c) Held For Trading (HFT): Investments in the category are valued at market rate and net depreciation in the category, if any, is written off as expense of the year. Net appreciation, if any, has not been recognized in these financial statements.

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

(a) Government Securities

(b) Other Approved Securities

(c) Shares

(d) Bonds of Public Sector Units (PSUs)

(e) Other Investments

4.3.Market Value of Central and State Government Securities is determined in terms of Yield to Maturity method indicated by Financial Benchmark India Pvt. Ltd.

4.4. The Amortization of premium on investments in HTM category is calculated on the basis of days remaining to maturity and the amount of amortization is directly debited to the Profit and Loss Account as suggested in the RBI guidelines.

4.5.The bank maintains investment related reserves such as Investment Depreciation Reserve (IDR) and Investment Fluctuation Reserve (IFR) in line with the guidelines of the RBI.

4.6.Broken period interest on debt instruments is treated as a profit and Loss item.

5. Loans and Advances 5.1. The classification of advances into Standard, Sub-

standard, Doubtful and Loss assets, as well as provision on non-performing advances has been arrived at in accordance with the extant instructions issued by the Reserve Bank of India with regard to Income Recognition and Assets Classification (IRAC) from time to time and as applicable for preparation of this Balance Sheet.

5.2. In addition to this, a general provision on standard assets is also made as per the extant instructions issued by Reserve Bank of India in the following manner:

Category of Advance (Excluding NPA)

%age provision made

Advances for Commercial Real Estate for commercial use

1.00%

Advances for Commercial Real Estate for Housing needs

0.75%

Advances to agricultural and SME sector 0.25%

Advances against FD, LIC, KVP and NSC Nil

Other Advances 0.40%

5.3.The interest in respect of non-performing advances is provided separately under “Overdue Interest Reserve” in accordance with the extant instructions issued by Reserve Bank of India.

6. Fixed Assets and Depreciation

6.1. Fixed Assets are stated and carried in the Balance Sheet at written down value, arrived at cost less depreciation. Cost includes incidental expenses incurred on acquisition of assets.

6.2.As per applicable accounting standards, the residual value and useful life of assets should be reviewed periodically and if expectations differ from future estimates, this should be considered a change in accounting estimates. Change in accounting estimates are applied prospectively starting with the current financial year and restatement of prior year comparatives is not required.

6.3.As part of this review of residual value and useful life, the bank changed its depreciation methodology in FY 2017-18 from Written Down Value to Straight Line Method for


all assets which is in line with the prescribed provisions of AS-6. The bank intends to apply this methodology for future subsequent periods as well.

6.4. A comparison of the depreciation methodology between old and new estimates is presented as follows:

S. No.

Asset CategoryOld Method New Method

Depreciation Method Depreciation Rate Depreciation Method Useful Life

1 Furniture and Fixtures Reducing Balance / WDV 15% Straight Line 10 Years

2 Office Equipment Reducing Balance / WDV 15% Straight Line 10 Years

3 Office Vehicles Reducing Balance / WDV 15% Straight Line 8 Years

4 Safe, Locker Steel Almirah Reducing Balance / WDV 2.50% Straight Line 30 Years

5 Computer Hardware & Software Straight Line 33.33% Straight Line 3 Years

6 Temporary Structures Reducing Balance / WDV 100% Straight Line 3 Years

7 Other assets N/A N/A Straight Line Internal Assessment

6.5. Depreciation would be calculated on the basis of the number of days that the asset has been put to use in any given accounting period. Previously, depreciation on assets purchased in the first 6 months of the year was provided at full rates. Depreciation at 50% rate was provided for fixed assets purchased in the last 6 months of the financial year.

6.6.Depreciation on assets sold during the year is charged up to the date of sale.

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

6.8.Any items with a WDV of `2,000 and below as of the end of the financial year should be written down to the minimum residual value.

6.9.The financial impact of the change in depreciation methodology is estimated to be a reduced depreciation in the written down value of the bank’s assets of `78.2 Lacs.

6.10.No fixed assets were revalued during the year.

6.11.Recognition of other assets: Certain capital expenditures made on assets prior to being available for use represents ‘work in progress’ assets. Depreciation/ amortization of these assets would begin once these are available for use in line with the applicable accounting standards. This includes the expenditure on the migration of the bank’s core banking solution (CBS) and the fee paid for the creation of bank’s policy and procedure manuals.

7. Revenue Recognition (Accounting Standard AS-9)

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

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

7.3.Income derecognized on classification of any advance account as NPA is recognized as income on subsequent actual realization and re-classification of asset as standard asset.

7.4.Interest on Government securities, debentures and other fixed income securities is recognized on a period proportional basis. Income on discounted instruments is recognized over the tenor of the instrument on a straight-line basis

7.5. Any recovery against advances written off in earlier years is considered as income of the year in which the same is recovered.

7.6.Interest on overdue fixed deposits is provided at rate of interest applicable on savings account in accordance with the extant instructions of RBI.

7.7. There are no material prior period items included in Profit and Loss account.

7.8.Certain items of income such as Locker Rent, DD Commission and others are recognized on cash basis. The quantum of such income is not material.

8. Non-Performing Assets

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

8.2.Interest accrued and credited to income on any advance which is classified as a Non-Performing Asset at any time during the year is reversed to the extent this has not been realized.



(C) DISCLOSURES AS PER THE EXTANT INSTRUCTIONS OF THE RESERVE BANK OF INDIA:1. Disclosure as per the extant instructions of Reserve Bank of India:

(Amount in `/Lacs)

S.No. Particulars 31.03.2018 31.03.2017

1.1. Capital to Risk Asset Ratio (CRAR) 12.68% 15.07%

A. Capital Tier I 6,443.21 6,387.72

B. Capital Tier II 466.80 391.14

C. Total of Tier I and II Capital 6,910.01 6,778.86

D. Total Risk Weight Assets 54,500.70 44,983.98

1.2. Movement of CRAR (Basis points) -239.00 122.00

1.3. Values of Investments are as under:

1) Government /Approved Securities (SLR)

i) HELD TO MATURITY

(a) Face Value 19,715.00 19,815.00

(b) Book Value 20,044.58 20,179.20


8.3.Interest accrued on NPA is not shown as income but shown as a contra item under the “Overdue Interest Reserve” and “Interest Receivable on Advances” in the Balance-sheet.

9. Employee Benefits (Accounting Standard AS-15)

9.1. The bank operates a defined benefit plan for its employees, viz. gratuity liability. The cost of providing benefits under these plans is determined on the basis of an independent actuarial valuation at each year-end.

9.2.The bank maintains the fund under trust deed and requisite insurance arrangements with Life Insurance Corporation of India (LIC) as Employees Group Gratuity Scheme. The shortfall, if any, between the present value of the benefit obligation and the fair value of plan assets as on 31 March is paid/provided for and recognized as expenses in the profit and loss account.

9.3.Bank’s Contribution and Employees’ contribution towards provident fund is paid every month to Commissioner of Provident Fund in accordance with the provisions of Employees Provident Fund and Misc Provision Act 1952. Provident Fund contributions are made for each individual and the scheme is administered by Regional Provident Fund Commissioner (RPFC), as applicable. The rate at which the annual interest is payable to the beneficiaries by the trusts is being administered by the government.

9.4.The Bank’s contribution to provident fund is accounted for in Profit and Loss account on the basis of contribution to the scheme.

9.5.All earned leaves which are due are paid by the end of the financial year.

10. Reserve Fund and Other Reserves

10.1.Dividend remaining unclaimed over 3 years is transferred to Statutory Reserve Fund account.

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

11. Income Tax (AS 22) 11.1.Provision for current tax is made on the basis of

estimated taxable income for the year.

11.2.Deferred tax is recognized, subject to consideration of prudence, on timing difference, representing the difference between taxable incomes and accounting income that originated in one period and is capable of reversal in one or more subsequent periods. Deferred tax assets and liabilities are measured using tax rates and tax laws that have been enacted or substantially enacted by the Balance Sheet date.

12. Goods and Services Tax (GST)12.1.The Bank has implemented the Goods and Services Tax

(GST) regime since its implementation on 1 July 2017. The bank has collected GST on eligible transactions from the customers and has made adequate entries for reverse charge eligible transactions.

12.2.The bank is claiming 50% input tax credit (ITC) on all applicable purchases as per the relevant taxation guidelines. The remaining 50% is booked as expenditure.


S.No. Particulars 31.03.2018 31.03.2017

ii) AVAILABLE FOR SALE

(a) Face Value 2,710.00 4,210.00

(b) Book Value 2,715.29 4,324.44

(c) Market Value 2,627.14 4,304.46

iii) HELD FOR TRADING

(a) Face Value - -

(b) Book Value - -

(c) Market Value - -

2) Other Investments (Non-SLR)

i) Shares of Co-operative Institution - 0.02

ii) Others (Book Value) 24.72 24.74

iii) Others (Market Value) 29.17 28.66

1.4. Advances against Shares and Debenture NIL NIL

1.5. Advances of `6,11,61.10 Lacs (Previous year `5,59,50.64 Lacs) shown in the Balance Sheet include:(Amount in `/Lacs)

Particulars FUND BASED NON- FUND BASED

31.03.18 31.03.17 31.03.18 31.03.17

i) Advances against Real Estate, Construction Business, Housing 14,543.20 12,283.76 Nil Nil

ii) Advance to Directors Nil Nil Nil Nil

iii) Advances to Relatives of Directors & Companies/ firms in which they are interested Nil Nil Nil Nil

iv) Advances to Chairman Nil Nil Nil Nil

(Amount in `/Lacs)

S. No. Particular 31.03.2018 31.03.2017

1.6. Average Cost of Deposits 6.45% 7.02%1.7. a. Gross NPAs 1,307.91 1,281.51

b. Net NPAs 884.82 751.51

1.8. Movement in NPA

Opening Balance 1281.51 761.68

Add: Additions during the year 2,091.83 2,246.67

Less: Closed/ Recovered /Written off 2,065.43 1,726.84

Closing Balance 1,307.91 1,281.51

1.9. a. Interest income as a percentage of working funds 9.73% 10.49%

b. Non-Interest income as percentage of working funds 0.71% 0.84%

c. Operating profit as a percentage of working funds 0.53% 1.83%

d. Return on Assets 0.31% 1.04%

e. Business (Deposits + Advances) per employee 322.68 430.15

f. Profit per employee (Before Tax) 1.12 5.14

g. Profit per employee (After Tax) 0.65 2.92

1.10. a. Provision on NPAs required to be made 423.09 349.16

b. Provision on NPAs actually made 423.09 530.00

c. Provisions on depreciation in investments required to be made 83.70 19.98

d. Provisions on depreciation in investments actually made 83.70 19.98

e. Provision on Standard Assets required to be made 208.31 173.68

f. Provision on Standard Assets actually made 208.44 173.68

1.11 Payment of DICGC Premium 99.75 90.61

1.12 Arrear in DICGC Premium Nil Nil

1.13.A total of 88 loans and advances amounting to `70.51 Lacs were restructured during the financial year ended 31 March 2018 (Prior Year: `7.58 Lacs).



2. Related Party Disclosure (Accounting Standard AS-18)2.1. List of the related parties and their relationship

Name of the party Relationship

a. Key Managerial Personnel

1. Shri Yashvir Kumar Gupta Chairman

2. Shri Suveer Kumar Gupta MD & CEO

b. Relatives of the Key Managerial Personnel

1. Shri Suveer Kumar Gupta Son of Shri Yashvir Kumar Gupta

2. Smt. Swarn Lata Gupta Wife of Shri Yashvir Kumar Gupta

3. M/s Yashvir Kumar Gupta HUF HUF of Shri Yashvir Kumar Gupta

4. Smt. Shilpa Gupta Wife of Shri Suveer Kumar Gupta

5. Shri Dinesh Kumar Mittal Brother of Shri Yashvir Kumar Gupta

2.2. Details of transactions with the related parties carried out on an arm’s length basis.

S. No. Nature of the transactionsRelatives of Key Managerial Personnel

31st March 2018 31st March 2017

1. Salary paid 32,95,160 24,78,964

2. Rent paid 63,34,783 62,04,892

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

3.1. Lease rent payments of `381.24 Lacs have been recognized in the statement of profit and loss for the year ended March, 2018 (Previous Year: `200.94 Lacs).

3.2. The lease agreements entered into, pertain to use of premises and electricity generator by the bank. The lease agreements do not have any undue restrictive or onerous clauses other than those normally prevalent in similar such agreements.

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

are as under: (Amount in `/Lacs)

Particular 31.03.2018

Opening balance as on 01.04.2017 15.31

Additions during the year 46.72

Less: Amortization/Depreciation (14.26)

Closing balance as on 31.03.2018 47.77

5. Impairment of Assets (Accounting Standard AS-28) The bank has written off a sum of ‘NIL’ (last year ‘NIL’) to its profit and loss account on account of Impairment of assets.

6. Provisions, Contingent Liabilities and Contingent Assets (Accounting Standard AS-29)6.1. Provisions

(a) As on 31st March 2018, the Bank had an excess provision of `106.91 Lacs on account of Bad Debts and Doubtful Reserve (BDDR).



(b) The Bank opted to utilize an amount of `34.76 Lacs out of this for the general provision on standard assets.

6.2. Contingent Assets and Liabilities

(a) Details of contingent liabilities are provided below(Amount in `/Lacs)

Particulars 31/03/2018 31/03/2017

Bank Guarantees 93.99 44.34

DEAF (Depositor Education and Awareness Fund) 28.25 11.75

(b) Bank Guarantees are 100% secured against tangible securities. (c) Amount related to DEAF has been directly deposited in the specific account with RBI Mumbai.(d) Amount transferred to DEAF:

(Amount in `/Lacs)

Particulars 2017-18 2016-17

Opening balance of amounts transferred to DEAF 11.74 3.95

Add: Amounts transferred to DEAF during the year 16.88 7.79

Less: Amounts reimbursed by DEAF towards claims (0.37) 0

Closing balance of amounts transferred to DEAF 28.25 11.74

7. Segment reporting (Accounting Standard AS-17):

7.1. Bancassurance: Bank is engaged in selling of insurance policies as an authorized corporate agent, as permitted by RBI, for the following insurance companies:

• General Insurance – Oriental Insurance Co. Ltd. and ICICI Lombard General Insurance Co. Ltd.

• Life Insurance – Life Insurance Corporation of India and Bajaj Allianz Life Insurance Co. Ltd.

• Health Insurance – Star Health and Allied Insurance Co. Ltd.

7.2. The details of the commission income received is shown below: (Amount in `/Lacs)

S. No. Types of Insurance Name of Insurer Commission Income for FY 2017-18

1. Life Life Insurance Corporation of India 47.26

2. Life Bajaj Allianz Life Insurance Co. Ltd 38.96

3. Health Star Health and allied Insurance Co. Ltd. 22.74

4. General ICICI Lombard General Insurance Co. Ltd. 1.30

5. General Oriental Insurance Co. Ltd. 9.70

6. General Bajaj Allianz General Insurance Co. Ltd. 0.85

TOTAL 120.81

The commission earned from insurance business during the year is `120.81 Lacs.

8. Taxation 8.1. Income Tax Bank has filed income tax returns since inception and all assessments have been completed till date. Other than the

refund for current year, refunds of `11.74 Lacs pertaining to past years are due from the Income Tax Department. Out of this amount, an amount of `8.60 Lacs is yet to be reflected in Form 26AS as TDS deducted on certain items of income.

8.2. Service Tax and GST Service tax audit for the period 1st April 2016 to 30th June 2017 has been conducted by the Central Excise and

Custom Department Meerut and Bank has undertaken all required actions arising from this audit.

The bank has complied with the norms with respect to display of GSTN information at various customer access points such as website, branches and others. All requisite return filings for GST have been completed for the financial year ending 31 March 2018.



8.3. Deferred Tax Liability Details pertaining to the movement of deferred tax liability in the current financial year are presented below

(Amount in `/Lacs)

Deferred Tax Liability Due to DepreciationDue to creation of Reserve U/s

36(1)(viii) of IT ActDue to Gratuity excess payment

Total

For period up to 31st March, 2017 26.50 54.14 - 80.64

For the year 2017-18 6.39 4.27 12.52 23.18

As on 31st March, 2018 32.90 58.41 12.52 103.83

9. Investments Related Disclosures: 9.1. Details of Non-SLR investments as at 31 March 2018:

(Amount in `/Lacs)

S. No.

Issuer AmountExtant of ‘below investment

grade securities’Extant of ‘unrated

securities’Extant of ‘unlisted

securities’

1. PSUs (NHAI) 24.72 - - -

2. FIs - - - -

3. Public Sector Banks - - - -

4. Mutual Funds - - - -

5. Others - - - -

6. Provision held towards Depreciation - - - -

9.2. Non-SLR Investments of the bank comprise of the following items as at 31 March 2018:(Amount in `/Lacs)

Particulars FY 17-18 FY 16-17

1. 8.30% Tax-free Bonds issued by NHAI. 24.72 24.72

2. Shares of District Co-operative Bank Ltd., Saharanpur - 0.01

3. Shares of Indore Premier Central Co-op. Bank Ltd., Indore - 0.01

TOTAL 24.72 24.74

(a) All the investments under this head are within limits defined as per the extant instructions of RBI.(b) Investments under this head have been valued at the lower of book value and market value.(c) Non-performing non-SLR investments are Nil.

9.3. As on 31st March, 2018, Mark to Market loss of `83.70 Lacs had been calculated during the valuation of investments held under the AFS category. As on March 31, 2018 the bank had made an additional provision of `63.72 Lacs for Investment Depreciation Reserve. The remaining amount of `19.98 Lacs was already provided by the bank as at the end of the previous financial year.

9.4. Investment Fluctuation Reserve (IFR) is being created as per the instructions of the RBI. The bank is required to maintain an IFR for an amount representing 5% of the book value of investments held under AFS and HFT categories as at the end of the financial year. The bank held an IFR of `217.46 Lacs as on 31 March 2018 which was in excess of the required amount by `80.46 Lacs.

9.5. Since the Bank had excess IFR funds available for use, an amount of `31.25 Lacs has been utilized from this to fulfill a part of the IDR requirement of `63.72 Lacs as per the guidelines of the RBI. This adjustment is disclosed



as an adjustment to net profit (below the line) after deductions for statutory, contingency and other reserves. The position of the IFR as on 31 March 2018 is as follows:

(Amount in `/Lacs)

Particulars FY 17-18

1. Investment Fluctuation Reserve as on 31 March, 2018 217.46

2. Investment Fluctuation Reserve required 137.00

3. Excess Investment Fluctuation Reserve 80.46

4. IFR Utilized for creation of IDR 31.25

5. Excess IFR as on 31 March, 2018 49.21

9.6. Shifting of Investments between categories: The Bank had transferred investment securities between HTM and AFS categories (and vice versa) once in FY 2017-2018 which is in line with the guidelines prescribed by the RBI. The amount of securities transferred were `61.45 Crores from HTM to AFS (Prior Year: `24.19 Crores).

10. Borrowings (Against Fixed Deposit) The Bank has taken overdraft limits from other banks, against the security of its Fixed Deposits in these banks, to meet

short term liquidity requirements during the year. The details of the limits sanctioned are as under:(Amount in `/Lacs)

S.No. Name of Bank from which limit has been availed Limit AmountAmount of FDRs pledged to

secure the limit

1. IDBI Bank 9.79 10.89

11. Statutory Liability

11.1. The Bank had a statutory liability of `10,02,577/- on account of appropriations made during the year towards Education Fund, which had to be paid to The National Co-operative Union of India Ltd., New Delhi, under The Multi-State Co-operative Societies Act, 2002. The payment was made on 19th September 2017.

11.2. DICGC Premium has been paid up-to-date and the next payment due date will fall in May, 2018.

11.3. No penalty has been imposed on the bank by RBI till date.

12. Priority Sector and PSLC Sale

12.1. The Priority Sector and Weaker Section lending ratios along with the details of the PSLC traded of the bank for the year are as follows:

(Amount in `/Lacs)

Particulars Amount Percentage (%)

Total Amount lent under Priority Sector 31,131.42 -

Less: PSLC Sold (Category) (5,700.00) -

Net Priority Sector Lending of the Bank 25,431.42 45.45%

Weaker Section Lending of the Bank 8,164.25 14.59%

12.2. During the financial year 2017-18, the bank has sold Priority Sector Lending certificate of `57.00 Crores and on which bank has earned profit of `14.65 Lacs. Category wise details are given hereunder.

(Amount in `/Crores)

S.No. Category of PSLC Amount

1 Micro Enterprises 46.00

2 Small and Marginal Farmer 1.00

3 Agriculture 10.00

As per the RBI guidelines, this amount has been excluded from the amount of Priority Sector Lending as on 31st March 2018.



13. Appropriation of profit for the year (Appropriation Details) Bank is following the practice of appropriation of profit towards statutory and other mandatory reserves/funds as on

date of balance sheet i.e. 31st March of each year. The appropriation towards dividend is made as approved in the AGM, after the meeting is held.

14. Employee Benefits14.1. The actuarial valuation of the defined benefit obligation and details of surplus/ deficit contributions are shown

below:(Amount in `/Lacs)

Particulars 31 March 2018

Defined Benefit Obligation 130.31

Fair value of Plan Assets 168.35

Funded Status - (Surplus)/Deficit (38.04)

Past Service Cost not yet Recognised -

Unrecognised Asset due to Limit in Para 58(B) -

(Asset)/Liability Recognised in the Balance Sheet (38.04)

14.2. Bank contribution to provident fund is `91.48 Lacs in current Financial Year (Prior Year: `60.83 Lacs).

15. Others An amount of `1,57,92,350/- is outstanding as on the date of the Balance sheet, from Janhit Foundation, an NGO,

against advance given by bank to support them in carrying out Microfinance activity. The advance is being adjusted each month from the monthly consultancy fees paid to Janhit Foundation by the bank. The total adjustment (net reduction) made during the year was `19,00,000/-.

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





Sd/- Sd/- Sd/- Sd/-






Opening Balance Amount (in `) Closing Balance Remarks

Accumulated Profit of previous year 2,72,33,029.33

Add: Adjustments during the year 31,25,216.00

Profit for the year 2017-18 3,16,49,325.63

Total Profit available 6,20,07,570.96

Proposed Appropriation:

Statutory Reserve* 11,08,35,618.00 79,12,331.00 11,87,47,949.00 25% of current year's Profit (Mandatory as per Multi-State Co-operative Societies Act, 2002)

Education Fund* - 3,16,493.00 3,16,493.00 1% of current year's Profit (Mandatory as per Multi-State Co-operative Societies Act, 2002)

Contingency Reserve* 3,42,05,595.00 31,64,933.00 3,73,70,528.00 10% of current year's Profit (Mandatory as per Multi-State Co-operative Societies Act, 2002)

Total Statutory Appropriation 1,13,93,757.00

Proposed Dividend @ 8% 3,62,72,348.00 3,62,72,348.00 Last year's dividend amount was `4,02,78,888.00 @ 9%

Total Appropriation 4,76,66,105.00

Accumulated Profit C/F to next year 1,43,41,465.96

* Being statutory in nature, these appropriations have already been effected in the Balance-sheet as on 31st March, 2018.

Appropriation of profit

Annual Operation Plan 2019-20Description Proposed Targets for the year 2019-20

Branches 35

Deposits `1,500 Crore

Loans & Advances ` `972 Crore

Share capital `66 Crore

Net Profit `12 Crore

Membership 39,600

New Schemes Expansion in branch network to Delhi & Uttarakhand, Greater push onDigital Banking and increase in productivity per employee.

Budget 2019-20(Amount in ` Crore)

Income Amount Expenditure Amount

Interest on loans 108 Interest on Deposits & Borrowings 91.2

Interest on Investments 48 Operating Expenses 38.4

Miscellaneous Income 9.6 Depreciation & Repairs 4.8

Miscellaneous Expenses 4.8

Tax & Provisions 14.4

Net profit 12

Total 165.6 Total 165.6


A. Business Plan:1. Expansion of Branch Network and Area of Operation As on March 31, 2018, the bank had 29 branches of

which 8 were opened in the current financial year. The bank will also open 2 more branches in the year ending March 31, 2019 taking the total number of branches to 31. As a result, the bank will focus on stabilizing the newly opened branches and driving them towards profitability. Post stabilization of the new branches, the bank intends to open branches in Delhi and Uttarakhand where it received approvals to expand area of operations.

2. Customer Experience The bank has delivered on its strategic priorities to

centralise certain operational procedures such as account opening, loan appraisal and cheque clearing. In future, the bank aims to fully utilise these processes to increase efficiency in the branches, reduce response times and deliver an unparalleled customer experience. The bank aims to implement a CRM system and open newer avenues for customer interaction such as outbound call centre, online chat facility and email helplines.

In addition, the bank aims to provide a seamless customer experience on all channels - branch banking or one of the digital channels. This requires many initiatives such as long term, large scale technological improvements and staff training.

3. Risk Management Risk management represents a key area of management

focus especially as the bank continues to expand its geographical footprint. The current regulatory regime has also increased their focus on the bank’s risk measurement and management capabilities and Basel III implementation requires a number of enhancements in

our ability to manage internal and external risk factors. Whilst Basel III norms are not directly applicable for Co-operative banks, we at Shivalik believe that risk managed growth represents a secure future for all our stakeholders.

The bank aims to further automate its risk reporting mechanisms and prepare itself for future transition into a scheduled commercial bank. In addition, the bank is working on developing a robust framework on information and cyber security.

4. Technology & Digital Banking The technology evolution has continued to provide

greater customer experiences, stronger ability to manage risk and analyse the performance of the business to assist in strategic growth. The current government’s push towards Digital India and the efforts of institutions such as RBI, DFS and NITI Aayog has meant that the volume of digital transactions has continued to grow at an extraordinary pace across the country. Keeping this in mind, the bank always endeavors to implement and propose the latest digital trends and best practices. Its digital roadmap is built on the following 5 pillars:

• Employee Digital Enablement

• Internal Processes

• Customer Experience

• Compliance, Risk and Reporting

• Data and Analytics

During the financial year ending March 2018, the bank decided to change the core banking solution (CBS) to Finacle offered by Infosys to improve customer experience and productivity. Migration to the new CBS is expected to be completed in 2018 – 2019.

Long Term Perspective Plan


Notice is hereby given that the 21st Annual General Meeting (AGM) of the members of SHIVALIK MERCANTILE CO-OPERATIVE BANK LIMITED will be held on Sunday, September 16, 2018 at 11:00 hrs at Hotel Royal Residency, Ambala Road, Saharanpur - 247001, Uttar Pradesh, to transact the following business:

1. To confirm the quorum of the 21st Annual General Meeting (AGM).

2. To grant Leave of Absence to members of the Bank other than those whose names appear in the Attendance Register of this 21st Annual General Meeting.

3. To confirm the minutes of the 20th Annual General Meeting of the members of the Bank held on September 17, 2017.

4. To consider and approve the audited annual accounts, which consist of, the Report of the Statutory Auditors, audited Balance Sheet and Profit & Loss Account, and the report of the Board of Directors for the year ended 31st March, 2018 and Cash Flow Statement as on 31st March, 2018.

5. To appropriate net profit and to declare dividend as recommended by the Board of Directors for the financial year 2017-18.

6. To review actual utilization of reserve and other funds for the financial year 2017-18.

7. To take note of the Loans & Advances outstanding against the Directors and their relatives during the financial year 2017-18.

8. To appoint the Statutory Auditors for the financial year 2018-19 and to authorize the Board of Directors to fix their remuneration.

9. To consider and approve the annual budget for financial year 2019-20.

10. To consider and approve the Long-Term Perspective Plan and Annual Operation Plan of the Bank for financial year 2019-20.

11. To present the list of employees who are relatives of members of the Board of Directors and MD & CEO of the Bank.

12. To consider and approve the forfeiture of shares of the members who are disqualified from being or continuing as members of the bank as specified in the bye-laws.

13. To consider and approve the following amendments in the Bye-Laws of the Bank:

a. Modification of Clause 6.28, regarding forms of business which the bank can undertake.b. Deletion of the Clauses 28.3 and 58.2.2, regarding Share Transfer Fund.c. Modification of Clause 60.2, regarding Investment of Funds.

14. Any other items with the permission of Chair.

By Order of the Board of DirectorsSd/-

(Suveer Kumar Gupta)MD & CEO

Regd. Office: 13/1207, Ansari Road, Saharanpur – 247001, Uttar PradeshDate: 27th August, 2018.

NOTICE

Annual Report 2017-18 PBShivalik Mercantile Co-operative Bank Limited72

Shivalik Mercantile Co-operative Bank Ltd.Hakikat Nagar (Nr. Old Sales Tax Office),Saharanpur-247001Telefax : 0132-2726125; 2726147; 9927135550email : [email protected]

Documents

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