Annual Report

2011-12

BANKING CODES AND STANDARDS BOARD OF INDIA

www.bcsbi.org.in

Published by

Narayanan Raja

Chief Executive Officer Banking Codes and Standards Board of India C-7, Reserve Bank of India Building Bandra Kurla Complex Mumbai- 400051

Banking Codes and Standards Board of India Governing Council

Chairman

A C Mahajan Members

M. M. Chitale

C Krishnan

H N Sinor

Rama Bijapurkar

Narayanan Raja Chief Executive Officer Banking Codes and Standards Board of India

Banking Codes and Standards Board of India

Annual Report 2010-11

Annual Report of the Banking Codes and Standards Board of India (BCSBI) 2011-12
The objective of setting up the Banking Codes and Standards Board of India (BCSBI) as an independent and autonomous body to ensure fair treatment to customers will be achieved only when the provisions of the Codes are adhered to in letter and spirit by member banks. BCSBI continued to spread awareness of the organisation and the codes among the public by carrying out publicity campaigns through TV, Radio and posters on bus panels. In addition, BCSBI officials addressed gatherings of customers and bankers in town hall meetings, outreach programmes of Banking Ombudsmen, seminars of Micro and Small Enterprises (MSE) borrowers and MSE Trade and Industry Associations. These initiatives were in addition to the normal activities of monitoring of compliance of the Codes and dealing with systemic issues noticed in specific member banks. Findings of the branch visits and interactions with frontline staff of banks clearly point to the need for concerted efforts by member banks to educate and sensitize staff members about the provisions of the Codes and also spread awareness among their customers about their rights. Governing Council The last meeting of the previous Governing Council was held on December 14, 2011. Smt K J Udeshi, the outgoing Chairman placed on record the contribution of Members of the Governing Council over the years in evolving the Codes and their suggestions on spreading awareness of provisions of the Codes both among member banks and customers which has brought about improvement in customer service in the banking sector. The Governing Council Members had also expressed appreciation for the signal role played by the outgoing Chairman, Smt K J Udeshi, in founding of BCSBI and nurturing it to its present state. They noted that BCSBI under her stewardship has helped improve customer service by bringing about transparency and fair practices in banks. On expiry of the term of the First Governing Council, it has been reconstituted on December 14, 2011 in terms of Rule 7 (1) of Rules and Regulations of BCSBI. The Members of the newly constituted Governing Council are: Nominated by RBI in terms of Rule 7 (2) (i) ibid: 1) Shri M M Chitale 2) Shri C Krishnan 3) Smt Rama Bijapurpurkar Nominated by the member banks in consultation with the Reserve Bank in terms of Rule 7 (2) (ii) ibid. 4) Shri A C Mahajan 5) Shri H N Sinor

Banking Codes and Standards Board of India

Annual Report 2010-11

The newly constituted Governing Council elected Shri A C Mahajan as Chairman of the Banking Codes and Standards Board of India. Shri N Raja has been appointed as Chief Executive Officer and ex-officio Member of the Governing Council with effect from June 2, 2011 vice Shri B M Mittal who has relinquished his position on the expiry of the term of appointment on February 17, 2012. The Governing Council, which is vested with the general supervision, direction and control of the working of the BCSBI, held eleven meetings during the year 2011-12. Membership During the year, one scheduled commercial bank and five Regional Rural Banks (RRBs) were admitted as members, taking the total number of members to 115 as at the end of March 2012 (SBI Commercial and International Bank ceased to be a member owing to its merger with State Bank of India). BCSBI will continue its efforts to enlist eligible banks as members so that all bank customers benefit from the fair practice codes. Names of member banks are listed in Annex I. Survey of branches to assess implementation of the Codes Compliance with the provisions of the Codes is a continuous process and as part of our monitoring, apart from obtaining an Annual Statement of Compliance (ASC) from banks, we also conduct periodical visits to select branches of banks to examine implementation of the provisions of the Codes at the grassroot level. Bank-wise findings are analysed and compared with the self certifications contained in Annual Statement of Compliance (ASC). Inconsistencies, if any, and other observations are taken up with the banks concerned. In select cases, the Top Management of the concerned banks are also invited for a meeting with the Governing Council and/or CEO for discussion on the banks action plan to improve adherence to the provisions of the Codes. During the current year, our personnel / authorized representatives visited 2000 branches, selected at random, of 40 member banks, which is twice the number of branches visited in the previous year. In addition, 83 hubs / processing centres, attending to retail and MSE loans, were also visited for the purpose. These branches and hubs were located in 47 cities spread over different parts of India. The survey findings are being shared with the concerned banks as in the past so that effective measures to improve adherence to the Codes can be taken by the banks. Salient findings of the visits are attached (Annex II). Resolution of Systemic Issues Member banks have their own grievance redressal machinery to deal with complaints from customers. Where the complaints are not redressed or not resolved to their satisfaction, the customers have recourse to the machinery of Banking Ombudsmen. BCSBI also receives
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Banking Codes and Standards Board of India

Annual Report 2010-11

complaints from customers. However, such complaints, as also Awards issued by Banking Ombudsmen and decisions of the Appellate Authority under B.O. Scheme, are studied to find out whether there is any breach of provisions of the Codes or an underlying systemic issue which gave rise to the complaints. Complaints received during the year, grouped naturewise, are given in Annex III. A few systemic issues identified during the year under review relate to the bank concerned revamping the procedure followed in handling cheques deposited in cheque drop box for collection, encouraging customers to register for SMS facility to get instantaneous message alerts covering transactions in accounts as a measure of fraud prevention / containment in ATM withdrawals, formulating a policy to compensate customers for wrongful deduction of tax at source despite submission of Form 15G/H by customers due to delay in uploading the tax exemption status, acceptance of cheques from customers of non-home branches for collection, implementation of One Time Pass Word for fund transfer, restriction on number of transactions to five per day, instantaneous SMS alert for all transactions, 24x7 monitoring of sites for phishing Malware and Trojans, etc. for making internet transactions safe. Code of Banks Commitment to Micro and Small Enterprises The Code of Banks Commitment to Micro and Small Enterprises (MSE Code), came into effect in May 2008 and is, therefore, due for review. The review is under way in collaboration with the Indian Banks Association (IBA). A Working Group, headed by CEO, comprising of representatives from RBI, IBA and some member banks has been constituted to take the review process forward. The objective of the review is to bring about an enhancement in the minimum standards of banking practices / services relating to MSEs, keeping in view the regulatory framework, growing expectations, market developments and the imperative need to support the sector which plays a very important role in the economy. During the process of review, suggestions were invited from Reserve Bank of India, member banks and industry associations. Suggestions were also invited from members of the public through a notice on the BCSBI website. Interactions have also been had with members of industry associations and trade bodies to get their views in the matter. The Working Group has suggested several improvements to the MSE Code. Suggestions received from various sources were also examined by the Working Group for inclusion in the MSE Code. The draft of the revised MSE Code has since been forwarded to the Reserve Bank of India as also the Indian Banks Association for their views and suggestions. Financial Inclusion Incorporation into Codes Access to formal banking services and bank finance by the hitherto excluded segment of the population is a prerequisite for equitable economic development. As vast majority of
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Banking Codes and Standards Board of India

Annual Report 2011-12

At the conference of Principal Code Compliance Officers of member banks (L to R) Shri N Raja, Shri M M Chitale, Shri A C Mahajan, Dr. K C Chakrabarty, Deputy Governor, RBI, Shri C Krishnan, Shri H N Sinor

Dr. K C Chakrabarty, Deputy Governor, RBI addressing the participants at the conference of Principal Code Compliance Officers of member banks

Banking Codes and Standards Board of India

Annual Report 2011-12

A section of the participants at the conference of Principal Code Compliance Officers

At the conference of Principal Code Compliance Officers of member Regional Rural Banks and Urban Co-operative Banks

Banking Codes and Standards Board of India

Annual Report 2011-12

A section of the participants at the conference of Principal Code Compliance Officers of member Regional Rural Banks and Urban Co-operative Banks

At the Town Hall Meeting organized by ICICI Bank in association with RBI Shri N Raja, CEO, BCSBI (second from right) interacting with the participants

Banking Codes and Standards Board of India

Annual Report 2011-12

Shri A C Mahajan, Chairman, BCSBI addressing the participants at the seminar at New Delhi

Shri A C Mahajan addressing the participants at the seminar on Customer Service organized by the Indian Institute of Banking and Finance at Ahmedabad

Banking Codes and Standards Board of India

Annual Report 2011-12

Shri N Raja, CEO (second from right) at the seminar on Customer Service organized by the Indian Institute of Banking and Finance at Chennai

Shri N Raja, CEO handing over surplus computers to the Zilla Parishad Prathamik Shala, Satara

Banking Codes and Standards Board of India

Annual Report 2011-12

population in the rural, semi-urban and urban areas of the country as also migrant labour have serious issues in accessing services from the banking channel, a chapter on Financial Inclusion is proposed to be included in the Code of Banks Commitment to Customers. Work on this has been undertaken by BCSBI. BCSBI at a glance 2010-11 Members of BCSBI Banks admitted as members during the year Applications in process for membership Workshops / Conferences / seminars held / participated in Town Hall Meetings participated in Participation in Customer Awareness Programmes SLBCs addressed Branches / processing centres visited to assess Code implementation Credit Counselling cases handled Complaints received and dealt with Meeting of the Deputy Governor with the Governing Council Dr. K C Chakrabarty, Deputy Governor, Reserve Bank of India met the newly constituted Governing Council to share his expectations with them. Dr. Chakrabarty emphasized the need to enhance customer service in banks. Some of the key issues highlighted by the Deputy Governor at the meeting, that he felt needed to be addressed, were promotion of safe and secure electronic banking, prevention of one sided agreements obtained by banks which may not provide protection to the customer, need to refrain from levying unreasonable charges for products and services, increased transparency, inclusion of lenders liability in the Codes, selling of inappropriate products by banks, etc. The Deputy Governor mentioned that BCSBI could play an important role in promoting customer service by ensuring that fair and ethical practices are adopted by the banking industry when serving their customers. BCSBI has since taken up the issues raised by the Deputy Governor with a view to ensure fair treatment of consumers of banking services. Conference of Principal Code Compliance Officers To facilitate sharing of views and issues amongst member banks and BCSBI, a Conference of Principal Code Compliance Officers (PCCOs) of member scheduled commercial banks was organized in February 2012. The Conference was inaugurated by Dr K C Chakrabarty,
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2011-12 115 6 16 12 3 12 2 2083 212 484

110 20 16 4 -3 23 1135 283 573

Banking Codes and Standards Board of India

Annual Report 2011-12

Deputy Governor, Reserve Bank of India. Dr Chakrabarty, in his keynote address shared his views and concerns regarding the quality of customer care and service in the banking industry. He emphasised the importance of extending protection to the consumer of banking services by adopting fair and non-discriminatory practices when dealing with customers. The Chairman, BCSBI and Members of Governing Council present at the Conference interacted with the participants. Several issues raised during the discussions were debated and clarified. The issues raised by PCCOs along with BCSBIs comments have been placed on the BCSBI website for the guidance of all concerned. A separate Conference of PCCOs of member Regional Rural Banks (RRBs) and Urban Cooperative Banks (UCBs) was held in March 2012 for sharing views on Code implementation and discussing issues which are of particular relevance to RRBs and UCBs. Spreading Awareness of the Codes BCSBI has taken several measures to increase awareness of bank officials, their staff and customers about the provisions of the Codes so that these are implemented in true spirit. It has participated in the Town Hall meetings organised by RBI and propagated the role of BCSBI and rights of customers contained in the Codes. Apart from these, BCSBI officials have also addressed meeting of State Level Bankers Committee of West Bengal in June 2011 to highlight how banks can contribute to the growth of MSEs through proper implementation of the MSE Code. BCSBI officials have also participated in the outreach programmes organized by Banking Ombudsmen at six centres and other on-location workshops and seminars.. BCSBI has also stressed upon member banks the pro-active role the banks training system can play in spreading awareness of the Codes and the willingness of BCSBI to assist in conducting programmes by making available presentation material and faculty support when requested. BCSBI officials also participated in the seminars / meetings organized by Industry Associations / Trade bodies of Micro and Small Enterprises at Kolkata, Mumbai, Delhi and Bengaluru. As part of the campaign to increase awareness about the Codes, TV Ad on Doordarshans National News and certain regional channels and broadcast of radio jingle on the Vividh Bharati network of All India Radio were continued for two more quarters of April-June 2011 and October-December 2011. Posters in Marathi were also displayed on 400 buses of Maharashtra State Roadways Transport Corporation in 27 cities of Maharashtra State for two months. Visits by delegations from abroad A delegation from IMF-World Bank Financial Stability Assessment Programme (FSAP) Mission visited BCSBI in October 2011 to discuss matters relating to protection available to consumers of financial products in the country. The delegation was briefed about the
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Banking Codes and Standards Board of India

Annual Report 2011-12

role of BCSBI, important provisions of the Codes including key commitments of banks, grievance redressal mechanism, etc. A delegation of senior officials from Bangladesh Bank also visited BCSBI in February 2012 to familiarize themselves about banking consumer protection system in vogue in India and BCSBIs role. Publication of BCSBI Newsletter Customer Matters The newsletter Customer Matters launched in April, 2009, continues to highlight contemporary banking issues and practices; initiatives by RBI in the field of customer service and exemplary decisions taken under the Banking Ombudsman Scheme and various Consumer Fora. All issues of our newsletter are available on our website. www.bcsbi.org.in A soft copy of each issue is being forwarded to member banks to be placed on their intranet for easy access by all members of staff. Funds Position As per the funding arrangement agreed with Reserve Bank of India upto 2015-16, BCSBI would be utilizing its entire interest income towards meeting its expenditure and RBI has agreed to fund the expenditure gap. Accordingly, during the year, BCSBI has expended an amount of Rs.104.36 lakh out of its interest income. Unspent interest income amounting to Rs.48.84 lakh has been transferred to the Public Awareness Fund to be spent for the purpose during the next five years. Entire contribution made by the member banks in the form of registration fees and membership fees has been credited to the Corpus as desired by them. As on March 31, 2012, the investment of Corpus Fund and Public Awareness made in accordance with the Investment Policy, aggregated Rs.1690.31 lakh comprising of Rs.358.35 lakh in Government Securities and Rs.1331.96 lakh in term deposits with member banks. Way Ahead A separate cell has been created in BCSBI to do research on global best practices on fair treatment of banking customers. It is proposed to undertake studies on practices adopted by banks in the field of levy of charges, selling of products appropriate to customers, safe and secure banking through electronic platforms and lenders liability towards small borrowers on an on-going basis. While doing so, best practices both in India and abroad will be studied as also the consumer protection available elsewhere. BCSBI will also undertake branch visits / mystery shopping on select themes on customer interest based on Code provisions. Recognising the need to spread awareness of the Codes amongst staff of banks and customers, BCSBI will make increased efforts towards this end. BCSBI will participate in customer meets organized by member banks as also training programmes arranged for members of staff.

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Banking Codes and Standards Board of India

Annual Report 2011-12

Acknowledgements BCSBI is thankful to Reserve Bank of India for their continued support both financial and by providing us with opportunity to participate in Town Hall Meetings and Awareness Programmes of Banking Ombudsmen. BCSBI also wishes to thank IBA and all member banks for their support and cooperation. BCSBI wishes to place on record sincere thanks and appreciation to the members of the erstwhile Governing Council for their able guidance and valuable contributions to the BCSBI cause. Special thanks are due to Smt K J Udeshi, former Chairman for the role that she played in creating BCSBI and nurturing it during its formative years.

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Banking Codes and Standards Board of India

Annual Report 2011-12

Annex I BCSBI members Sl. Name of the bank Sl. Name of the bank No No. Scheduled Commercial Banks Scheduled Commercial Banks 41 Standard Chartered Bank 1 AB Bank Ltd. 42 State Bank of Bikaner and Jaipur 2 Allahabad Bank 43 State Bank of Hyderabad 3 Andhra Bank 44 State Bank of India 4 Axis Bank Ltd. 45 State Bank of Mauritius 5 Bank of America N.A. 46 State Bank of Mysore 6 Bank of Baroda 47 State Bank of Patiala 7 Bank of Ceylon 48 State Bank of Travancore 8 Bank of India 49 Syndicate Bank 9 Bank of Maharashtra 50 The Catholic Syrian Bank Ltd. 10 Bank of Nova Scotia 51 The Dhanlaxmi Bank Ltd. 11 Barclays Bank PLC 52 The Federal Bank Ltd. 12 BNP Paribas 53 The HDFC Bank Ltd. 13 Canara Bank 54 The Hongkong and Shanghai Banking 14 Central Bank of India Corporation Ltd. 15 Citibank N.A . 55 The Jammu & Kashmir Bank Ltd 16 City Union Bank Ltd. 56 The Karur Vysya Bank Ltd. 17 Commonwealth Bank of Australia 57 The Laxmi Vilas Bank Ltd. 18 Corporation Bank 58 The Nainital Bank Ltd. 19 Credit Agricole Corporate and Investment Bank 59 The Ratnakar Bank Ltd. 60 The Royal Bank of Scotland 20 DBS Bank Ltd. 61 The South Indian Bank Ltd 21 Dena Bank 62 Tamilnad Mercantile Bank Ltd. 22 Deutsche Bank AG 63 UCO Bank 23 Development Credit Bank Ltd. 64 Union Bank 24 ICICI Bank Ltd. 65 United Bank 25 IDBI Bank Ltd 66 Vijaya Bank 26 Indian Bank 67 Yes Bank Ltd. 27 Indian Overseas Bank 28 IndusInd Bank Ltd. Scheduled Urban Co-operative Banks 29 ING Vysya Bank 1 Bharat Cooperative Bank (Mumbai) Ltd. 30 JP Morgan Chase Bank N.A. 2 Citizen Credit Cooperative Bank Ltd. 31 Karnataka Bank 3 Cosmos Co-operative Urban Bank Ltd. 32 Krung Thai Bank PLC 4 Karad Urban Co-operative Bank Ltd. 33 Kotak Mahindra Bank 5 Nagar Urban Co-operative Bank Ltd. 34 Mashreq Bank 6 Nagpur Nagrik Sahakari Bank Ltd. 35 Oman International Bank S.A.O.G 7 Nutan Nagrik Sahakari Bank Ltd. 36 Oriental Bank of Commerce 8 Punjab and Maharashtra Co-operative 37 Punjab National Bank Bank 38 Shinhan Bank 9 Saraswat Co-operative Bank Ltd. 39 Societe Generale 10 Shamrao Vittal Cooperative Bank Ltd. 40 Sonali Bank 11 Thane Bharat Sahakari Bank Ltd.

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Banking Codes and Standards Board of India

Annual Report 2011-12

Annex I BCSBI members (Concld.) Sl. Name of the bank Sl. Name of the bank No. No. Regional Rural Banks Regional Rural Banks 1 Allahabad UP Gramin Bank 20 Meghalaya Rural Bank 2 Andhra Pragathi Grameena Bank 21 Nainital-Almora Kshretriya Gramin Bank 3 Aryavart Gramin Bank Lucknow 22 Pallavan Grama Bank Salem 4 Baroda Gujarat Gramin Bank 23 Pandyan Grama Bank 5 Baroda Rajasthan Gramin Bank 24 Prathama Bank 6 Baroda Uttar Pradesh Gramin Bank 25 Puduvai Bharathiar Grama Bank 7 Chaitanya Godavari Grameena Bank 26 Purvanchal Gramin Bank 8 Deccan Grameena Bank 27 Rajasthan Gramin Bank 9 Hadoti Kshetriya gramin Bank 28 Rewa Sidhi Gramin Bank 10 Haryana Gramin Bank 29 Rushikulya Gramya Bank 11 Himachal Gramin Bank 30 Saptgiri Grameena Bank 12 Jaipur Thar Gramin Bank 31 Saruashtra Gramin Bank 13 Jammu & Kashmir Gramin Bank 32 Sarva UP Gramin Bank 14 Jhabua- Dhar Kshetriya Gramin Bank 33 Sharda Gramin Bank 15 Karnataka Vikas Grameena Bank 34 Shreyas Gramin Bank 16 Kashi Gomti Samyut Gramin Bank 35 Surguja kshetriya Gramin Bank 17 Krishna Grameena Bank 36 Uttar Bihar Gramin Bank 18 Madhya Bharat Gramin Bank 37 Wainganga Krishna Gramin Bank 19 Maharahstra Gramin Bank

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Banking Codes and Standards Board of India

Annual Report 2011-12

Annex II Findings of the Survey of branches conducted during December 2011-February 2012 to assess the level of compliance with the Codes of Banks Commitment to Customers and MSEs Select findings of Survey Percentage of Branches responding YES 82 94 99

In cognito verification Does the branch exchange soiled notes? Does the branch start operations at the appointed time? Whether all customers who enter the branch before the close of business hours are attended to? Through verification / interaction with branch officials Display of information about availability of nomination facility in deposit accounts Availability of Folder / Booklet containing detailed information Name and address of the Regional / Zonal Manager whom the customer may approach if his grievance is not redressed at the branch Time norms for common transactions Whether the charges applicable to the deposit products are explained? Whether Form 15 G / H obtained from customers exempt from TDS on FD Interest Intimating the customer before an account is classified as inoperative Recording fact of nomination in pass book Providing address of the branch in the passbook Display of cut-off time for deposit of cheques in drop box for same day clearing Whether the branch records complaints received? Whether the complaints are redressed within 30 days? Whether the loan sanction letter contains all terms and conditions? Whether the bank gives written receipt for the documents taken as security / collateral? Lending to MSEs: Whether simplified loan application form is used? Are MSE loan applications disposed of within the prescribed time frame? Whether the loans are generally disbursed within the prescribed days?

72 54 75 74 96 94 27 73 92 47 73 84 95 61 74 88 87

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Banking Codes and Standards Board of India Annex-II (Contd.)

Annual Report 2011-12

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Banking Codes and Standards Board of India Annex-II (Contd.)

Annual Report 2011-12

Banking Codes and Standards Board of India

Annual Report 2011-12

Annex II (Contd.)
City-wise and bank group-wise break up of sample of branches & hubs visited for the survey Centres SBI & Associates Mumbai Delhi Kolkata Chennai Agartala Agra Ahmedabad Amritsar Aurangabad Bengaluru Bhopal Bhubaneswar Chandigarh Coimbatore Cuttack Dehradun Faridabad Guwahati Gurgaon Hubli Hyderabad Indore Jabalpur Jaipur Jalandhar Kanpur Kochi Lucknow Ludhiana Madurai Mangalore Mysore Nagpur 40 14 31 33 5 6 16 8 4 19 8 4 13 7 6 3 7 4 7 7 24 5 7 10 6 7 9 6 11 8 6 5 5 16 Bank Groups Other public sector banks 80 65 70 66 12 16 35 14 17 49 14 20 16 17 19 8 16 21 14 16 36 19 16 19 18 17 14 15 12 16 17 17 20 Private Sector banks 64 52 41 43 3 8 30 7 9 36 10 6 10 6 5 3 7 5 9 7 23 7 6 10 6 6 7 9 9 6 6 8 5 Foreign banks 11 6 7 7 4 4 1 1 4 1 City-wise total of branches / hubs visited 195 137 149 149 20 30 85 29 30 108 32 30 40 30 30 14 30 30 31 30 87 31 29 40 30 30 30 30 32 30 29 30 30

Banking Codes and Standards Board of India

Annual Report 2011-12

Annex II (Contd.) City-wise and bank group-wise break up of sample of branches & hubs visited for the survey Centres SBI & Associates Pune Raipur Rajkot Ranchi Shillong Surat Thiruvananthapuram Udaipur Vadodara Vijayawada Visakhapatnam Total (47 Cities) 7 5 6 5 4 4 8 8 3 9 8 428 Bank Groups Other public sector banks 27 11 18 11 11 21 16 17 21 18 19 1061 Private Sector banks 5 9 6 4 5 5 8 5 6 3 5 546 Foreign banks 2 48 City-wise total of branches / hubs visited 41 25 30 20 20 30 32 30 30 30 32 2083

Sr. No. 1 2 3 4 5 6 7 8 9 10 11 12

Annex III Profile of Complaints Nature of Complaints Deposit Accounts Credit/Debit Cards Pension Tariff Schedule & Service Charges Cheque Collection/Clearing Cycle Foreign Exchange Service ATM Related Compensation Policy Do-mot-call (unsolicited Telemarketing) Loans & Advances Collection of Dues- Security Repossession Grievance Redressal Mechanism Miscellaneous Total

2010-11 100 133 31 21 1 16 111 7 153 573

2011-12 112 80 3 7 8 1 3 64 1 205 484

Banking Codes and Standards Board of India

Annual Report 2011-12

Statement of Accounts for the year 2011-12

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

Annual Report 2011-12 8-Dhun Mahal, Garden Road Colaba, Mumbai 400 039 Tel : 2282 5580; 2285 6740 Mobile: 93246 14750.

Auditors Report We have audited the Balance Sheet of Banking Codes and Standards Board of India as at 31st March 2012 and the Income and Expenditure account for the year ended on that date annexed thereto. These financial statements are the responsibility of the trustees of the Board. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. We report that: i) ii) iii) iv) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purpose of the audit. In our opinion, proper books of account as required by the law have been kept by the Trust so far as it appears from our examination of such books. The Balance Sheet and Income & Expenditure Account dealt with by this report are in agreement with the books of account. In our opinion and to the best of our information and according to the explanations given to us, the said accounts give a true and fair view in conformity with the accounting principles generally accepted in India:- in the case of Balance Sheet of the state of affairs of the above named trust as at 31st March 2012 and - in the case of Income & Expenditure Account of the trust for the accounting year ended on that date. For M/s. Loonker & Co Chartered Accountants

Place: Mumbai Date: May 8, 2012

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

Banking Codes and Standards Board of India

Annual Report 2011-12

BANKING CODES AND STANDARDS BOARD OF INDIA Balance Sheet as on March 31, 2012
As on March 31, 2011 ( As per Schedule VIII of Bombay Public Trusts Act, 1950) FUNDS AND LIABILITES As on March 31, 2012 116,092,000 35,098,000 151,190,000 As on March 31, 2011 PROPERTY & ASSETS (Amount in Rupees) As on March 31, 2011 35,835,312

Trust Funds or Corpus 116,092,000 Balance as per last Balance Sheet Add: Contribution received during the year Other earmarked funds Public Awareness Fund 25,397,721 500,000

Immovable properties Investments 35,835,312 Govt.securities (cost)-Annex-I Furniture and fixtures Loans (Secured or unsecured) Advances 180,867 - Tax Deducted at Source 8,770 - Premium on GOI Securities 141,710 7,412

25,397,721 Balance as per last Balance Sheet Less: Transferred to Income and Exp. Account

To others149,122

Add: Transferred from Income & 4,884,291 29,782,012 Exp. A/c 229,390 For advances from RBI

29,836 Income Outstanding 6,075,034 - Interest 133,938,192 258 133,938,450 11,078,964 Cash and Bank Balances 99,618,818 - In current account or fixed deposit account- Annex II 310 - Stamps

141,719,111 Total 818,001,848 141,719,111 Total Notes on Accounts - Schedule A As per our report of even date

141,719,111

Sd/- (A C Mahajan) Chairman M/s.Loonker & Co. Chartered Accountants

Sd/- Sd/- (N Raja) Chief Executive Officer Partner Auditors

Banking Codes and Standards Board of India Place: Mumbai Date: May 8, 2012 Place: Mumbai Date: May 8, 2012

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Banking Codes and Standards Board of India

Annual Report 2011-12 Annex-I

BANKING CODES AND STANDARDS BOARD OF INDIA Schedule of Investments belonging to the Trust as on March 31, 2012
( As per Part III - Schedule VIII of Bombay Public Trusts Act, 1950) (Amount in Rupees) Date and year Kind of investments Full description such as name of the Face Value Cost Rate of Remarks of preparation company, distinctive Nos. of shares interest and certificates, type of shares, etc. borne by Date of redemption or repayment investments 1 2 3 4 5 6 7 At the (i) Shares beginning of (ii) Bonds and Debentures the year (as on (iii) Deposits April 1, 2011) (iv) Others (v) Public Securities a) 7.37% GOI Securities 2014 14,500,000 14,118,650 b) 8.07% GOI Securities 2017 1,480,000 1,480,000 c) 7.49% GOI Securities 2017 12,000,000 11,470,414 d) 7.99% GOI Securities 2017 2,800,000 2,800,000 e) 7.59% GOI Securities 2016 2,500,000 2,466,248 f) 8.24% GOI Securities 2018 3,500,000 3,500,000 36,780,000 35,835,312 Increase during the year (2011-12) Decrease during the year (2011-12) Total at the end of the year (as on March 31, 2012) 36,780,000 35,835,312

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

Annex-II BANKING CODES AND STANDARDS BOARD OF INDIA Annexure to Balance Sheet as on March 31, 2012
(Amount in Rupees)

As on Bank Accounts March 31, 2010 In Savings Account 2,115,012 - ICICI Bank 212,489 2,909,213 2,.993,916 6,522,051 20,999,598 9,361,151 19,504,928 2,595,000 2,990,000 20,l43,082 9,272,378 In Current Account - Central Bank of India In Fixed Deposits - Karnataka Bank - Karur Vysya Bank - Yes Bank - City Union Bank - Laxmi Vilas Bank - State Bank of Mysore - UCO Bank - Vijaya Bank - State Bank of Tranvancore - Central Bank of India [All accounts in the name of Banking Codes and Standards Board of India]

As on March 31, 2011 729,017 12,987 3,252,533 3,716,327 26,109,509 19,876,475 27,191,555 43,777,411 9,272,378 133,938,192

63,081,220

As per our report of even date Sd/- (A C Mahajan) M/s. Loonker & Co. Chairman Chartered Accountants Sd/- Sd/(N Raja) Partner Chief Executive Officer Auditors Banking Codes and Standards Board of India Place: Mumbai Date: May 8, 2012 Place: Mumbai Date: May 8, 2012

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Banking Codes and Standards Board of India

Annual Report 2011-12

BANKING CODES AND STANDARDS BOARD OF INDIA Income and Expenditure Account for the year ended March 31, 2012
Year ended March 31, 2011 EXPENDITURE [As per Schedule IX of Bombay Public Trusts Act, 1950] Year ended March 31, 2012 Year ended March 31, 2011 By Rent 2,788,756 12,028,331 5,120 14,822,207 500,00 INCOME (Amount in Rupees) Year ended March 31, 2012

To expenditure in respect of properties To establishment expenses To remuneration to trustees Legal expenses Audit fees To contribution and fees To amount written off 1,358 - Preimum on Govt. Sec. To Miscellaneous expenses To Depreciation

By Interest 2,788,756 - On securities 6,668,258 - On bank account 1,358 - On income tax refund

By Dividend By Donations in cash or kind By Grants

To Amounts transferred to Reserve 9,455,656 - Public Awareness Fund To Expenditure on objects of the Trust To surplus carried over to Balance Sheet 9,457,014 Total

By Transfer from Reserve-Public 440 Awareness Fund By Deficit carried over to Balance Sheet 4,884,291 9,457,014

9,457,014 Total 15,322,207

As per our report of even date Sd/- (A C Mahajan) M/s. Loonker & Co. Chairman Chartered Accountants Sd/- Sd/(N Raja) Partner Chief Executive Officer Auditors Banking Codes and Standards Board of India Place: Mumbai Date: May 8, 2012 Place: Mumbai Date: May 8, 2012

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Banking Codes and Standards Board of India

Annual Report 2011-12

Schedule A BANKING CODES AND STANDARDS BOARD OF INDIA

Notes forming part of accounts for the year ended 31 March 2012

1. The financial statements are prepared on accrual basis.

2. Expenses Borne by Reserve Bank of India The Income and Expenditure Account does not show any expenses since all the expenses have been borne by the Reserve Bank of India. The Reserve Bank has agreed to extend financial support to the Board by way of meeting its full expenses for the first five years of operation and providing furnished Office accommodation & Office equipments, etc. free of cost at the Reserve Bank of India Building, Bandra Kurla Complex, Mumbai-400 051. 3. Advance for Expenses from Reserve Bank of India Out of the amount advanced by Reserve Bank of India for meeting minor expenses, the unspent closing balance of Rs. 29,836/- is shown as advance from Reserve Bank of India on the liability side in Balance Sheet as against Rs. 2,29,390/- at the beginning of the year. 4. Corpus Fund While accepting the proposal to build up the Corpus from registration and membership fees so that when the RBI funding is phased out, the Board would become self-financing; the Reserve Bank of India has agreed to fund the gap in expenditure over interest income upto 2015-16. The member banks have also desired that the entire contribution made by them in the form of registration fees and membership fees be credited to the Corpus of the Banking Codes and Standards Board of India. Therefore, the registration fees and the membership fees are credited to the Corpus Fund during the year. 5. Public Awareness Fund The Board has spent an amount of Rs.5.00 lakh transferred to the Public Awareness Fund in 2006-07, as required. Board has transferred an amount of Rs. 48,84,291/- being unspent interest income to the Public Awareness Fund to be spent for this purpose within the next five years. 6. Previous Years figures The corresponding figures for the previous year are re-grouped / re-classified, wherever

necessary.
Sd./(A.C. Mahajan) Chairman As per our report of even date M/s. Loonker & Co Chartered Accountants

Sd./- Sd./(N. Raja) Partner Chief Executive Officer Auditors Banking Codes and Standards Board of India Place: Mumbai Date: May 8, 2012 21 Place: Mumbai Date: May 8, 2012