It is gratifying to note that the global deposits registered a growth of 14.63% to Rs.1614 crores in 2000-2001 from Rs.1408 crores in 1999-2000. The gross advances has also increased from Rs.725.85 crores to Rs.807.71 crores registering a growth of 11.27%. However the growth in advance in India is 15.20% as against the industry level growth of 14.3%

The business volume increased to Rs.2446 crores as on 31.3.01 from Rs.2161 crores as on 31.3.2000 registering an increase of Rs.285 crores. The bank's advances to priority sector stood at 53.24% as against the stipulated requirement of 40%. The Bank continues to surpass the target of 12% fixed by RBI for export finance, which stands at 14.28%

The Net NPA of your bank has been curtailed at 4.14% from 6.39% last year. This has been possible on account of greater emphasis placed on recovery and settlement of bad debts assets and the proactive approach of the CRMD and Recovery Department.

The CRAR of the bank stands at 14.43% as against a minimum stipulation of 9%. The Networth of the Bank has crossed Rs.100.00 crores this year with the improved performance, a milestone.

Keeping in view the fierce competition in the banking sector, and in order to step up our operational efficiency, greater emphasis is being placed on the customer relationship at our branches. As a bank with a tradition of good customer service, we have introduced Customer Relationship Management desks in certain important branches. Stress is also being laid on marketing of our services and products. The traits of marketing are being internalised throughout the organisation and the field level functionaries have been redesignated as Customer Relations Manager and Marketing Manager as a pilot measure.

The bank has established a Credit Risk Management Department to review the credit policy, control and monitor the performing assets and to provide direction to the branches. All standard assets are being graded and monitored continuously to avoid slippage in the quality of assets.

The Thai economy has a strong bearing in our functioning owing to our presence in Bangkok. The political instability, American slowdown and the Japanese meltdown had its telling on the economy of Thailand. The Thai Bhat depreciated considerably in the year 2000-01 moving from around B.39 per USD to B.45 per USD. This has led to selective lending by the financial institutions, leading to lowered deposit rates, lower lending rates and thinning down of margins. Under such circumstances the deposits in Bangkok branch registered a growth of 9.75% while advances grew by 9.62%. The CD ratio of Bangkok branch stands at 87.47%. However with the restoration of political stability, the much projected economic resilience is expected to take concrete shape.

The government has introduced several reforms in the financial sector, introduced important laws like laws of bankruptcy and securitisation, anti-money laundering, and measures for strict control by Bank of Thailand. With these the economy in Thailand is poised for a bright future.

The importance of Corporate Governance is highlighted as an essential input if micro-governance is to be dispensed with. Your bank is committed to transparency in all dealings and enjoys the confidence of not only the shareholders but also public at large.

Gentlemen, competitiveness has become vital agenda for the banking sector in India. The task of transitioning business from a relatively protected environment to the rigor of a globalised market requires upgradation of capabilities to international standards. This implies major change in mindset, full computerisation and skill upgradation. Business portfolios are required to be rationalised and restricted so that resources are channelised to those areas that best match organisational capability with market opportunity. There are strains which have to be borne by the banking system associated with bringing in reforms and deregulation. This is manifested in the form of thinner lending margins and fierce competition among banks. The theory of natural selection will apply to banks too. Only the fittest will survive. Those who fail to overcome these challenges will succumb while those who succeed will be handsomely rewarded.

In line with such reasoning and with the objective of ensuring a sustained growth path, your bank has construed a vision; a vision of achieving of Rs.5000 crores business during the next 3 years and your bank is now poised to leverage its stature and expertise to exploit the emerging growth opportunities in the coming years. Keeping these in mind the bank has introduced various schemes. To name a few.

a) Shubha Labh - Specially tailored loan Scheme for traders.
b) Shanti - Special deposit scheme for senior citizens.
c) Shakti - Easy car loan and consumer durable loan
d) Shubham - Unit deposit scheme

Increasing assistance to various segments of the economy and thereby improving the loan portfolio is the key strategy being adopted. A number of initiatives are also underway, aimed at expanding and strengthening the Bank's operations.

Seeded with a vision and nurtured by sacrifice, the Bank owes its pride to those who have founded, guided, supported and served it. I thank the shareholding Banks for their continued and valuable support. To the members of the Board, I offer my gratitude for the enlightened counsel and guidance. I take this opportunity to thank Reserve Bank of India for their valuable guidance offered. I place on record my appreciation for the employees of the Bank, who undoubtedly are the pillars of the Bank and without whose support such achievement would not have been possible.

Most importantly, I express my gratitude to our customers in India and Bangkok whose loyalty, patronage, affection and faith have always remained a source of inspiration for the Bank's continued good performance.

I am sure your continued patronage will help the Bank to forge ahead with a vision of optimism, commitment and customer orientation and your confidence and trust reposed on the Bank, together with the far sight of the Board will build this institution into a stronger edifice.

The future offers us exciting opportunities and challenges. Growing customer expectations, changing preferences, shifting priorities, uncertain market behaviour will not only kindle the performative trait in banks, but will hone it for accomplishments. In the process, the fittest and strongest will not only survive but succeed. The Bank looks to the future with a strong sense of optimism and commitment to emerge as a highly profitable, technology driven, customer oriented and well capitalised bank.

Yours truly,

G. Krishna Murthy      Place : Chennai
Chairman Date : 20.6.2001