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Business Overview

The Retail Banking segment continues to be a key driver of the Bank’s overall growth strategy. It encompasses a wide array of products and services across deposits, loans, investments and payment solutions which are delivered through multiple channels to the Bank’s customers. The Bank has over the years developed long-term relationships with its customers by being their preferred financial solutions partner on account of its excellent customer delivery through insights and superior services. The Bank has also succeeded in making banking simple for masses by smart use of technology. The Bank has always focused on meeting the financial needs of its customers by providing high quality products and services through regular customer engagement in convenient manner.

During the year, the Bank continued to focus on increasing its retail deposits base, particularly demand deposits. Savings Bank deposits crossed Rs. One lac crores and have grown at a Compounded Annual Growth Rate (CAGR) of 21% over the last five years. As on 31 March, 2016, the Bank had over 172 lac savings account customers, registering a growth of 15%. As on 31 March, 2016, the retail term deposits grew 14.42% and stood at Rs. 121,955 crores, constituting 64.69% of the total term deposits compared to 59.86% last year. The Retail Assets portfolio has grown at a Compounded Annual Growth Rate (CAGR) of 31% over the last five years. The Bank continued to increase its share of retail loans to total advances which stood at 41% compared to 29% in March 2012. Including SME loans that qualify as regulatory retail, the share of retail loans to total loans would be 46%. The retail loans portfolio continues to be focused on secured products, predominantly mortgages. Secured loan products accounted for 86% of retail loans, of which Home loans accounted for 45%, retail agricultural loans accounted for 17%, auto loans 9%, loans against property 8%, personal loans and credit cards were 11%, while non-schematic loans comprising loan against deposits and other securities accounted for 10%.

Despite a subdued property market in fiscal 2016, the Home Loan industry grew well at around 18%. The Bank’s Home Loan book size grew by 17%. During the year, Super Saver Home Loan was launched where customer can park his short term funds and save interest on his loan to the extent of excess funds parked. Rural agricultural lending was another focus area for the Bank. The Bank launched Rural & Semi Urban (RUSU) Home loans, a Home loan product specifically for Rural and Semi-Urban customer. As on 31 March, 2016, the Bank’s outstanding loans in the agricultural sector grew at a healthy 29% to Rs.23,218 crores from Rs.17,960 crores last year. Asha Home loans increased by 201% from Rs.628 crores as on 31 March, 2015 to Rs.1,891 crores as on 31 March, 2016. The Bank is one of the largest debit card issuers in the country, with a base of over 155 lacs. The Bank had over 24 lac credit cards in force as of 31 March, 2016, making it the 4th largest credit card issuer in the country. The credit cards portfolio saw a substantial increase in spends by 44%, to Rs.19,432 crores from Rs.13,535 crores last year. The Bank is also one of the largest acquirers of point-of-sale terminals in the country with an installed base of around 3 lacs. The Bank achieved 54% YoY growth in volumes from E-commerce merchants with Rs.6,927 crores spend in FY16 against Rs.4,504 crores in FY15.

The Bank offers a complete suite of banking and investment products under its NRI Services for Indians living and working overseas. As on 31 March, 2016, the Bank’s aggregate NRI deposits (Savings Bank + Term Deposits) stood at Rs.43,425 crores registering a year-on-year growth of 6%. The Bank offers a range of forex and remittances products to its retail customers, which include travel currency cards, inward and outward wire transfers, traveller’s cheques, and foreign currency notes, remittance facilities through online portal as well as through collaboration with correspondent banks, exchange houses and money transfer operators. The Bank continued to have a market leadership position in Travel Currency Cards with 16 currency options other than INR being offered. Additionally, the Bank offers a Multi-Currency Forex Card, aimed at frequent travellers to multiple countries. The aggregate load value on travel currency cards crossed USD 6.5 billion during the year. The Bank continues to increase the number of geographies from which NRIs can send money to India with the extension of AxisRemit Online to 3 new geographies in this fiscal year, bringing the total number of originating geographies to 10. The volumes of retail remittances also rose by 21% (excluding the volumes attributable to partner bank deposits) during the year and the Bank processed outward remittances of over USD 2 billion and inward remittances of around USD 6 billion.

The Bank distributes investment products such as mutual funds, Bancassurance products (Life, Health and General Insurance) and online trading products through its branches. For the Life Insurance distribution, the Bank distributes products of Max Life Insurance Company. Since the Bank’s strategic bancassurance tie-up with Max Life Insurance Company in 2010, the Bank has successfully helped insure over 8 lac lives through its distribution channels. In General Insurance, the Bank has a tie-up with Tata AIG (American International Group) and during the year sold more than 3 lac policies and collected Rs.219 crores of premiums which is 7% over last year. The Bank offers online trading services to its customers in collaboration with Axis Securities Ltd. (a 100% subsidiary of the Bank) under the name Axis Direct - an enhanced and simplified online trading platform. During the year, the Bank opened more than 3 lac online trading accounts, and in the process crossed 1 million total customers count.

The Bank regards Financial Inclusion (FI) as an integral component of its rural strategy to further extend its reach in the rural market. The Bank’s FI initiatives maintained momentum this year with the Bank opening around 6 lac basic savings bank accounts through its branches and Business Correspondents (BC) network. As of 31 March, 2016, Bank’s FI customer base is being serviced through a network of 587 rural branches and more than 31,300 BC agents spread over 3,272 villages.

During the year, the Bank added 315 branches and its geographical reach extends to 29 states and 6 Union Territories, covering 1,855 centres and 608 districts. As on 31 March, 2016, the Bank had a network 2,904 branches/ECs as compared to 2,589 last year. Around 20% of the Bank’s branches are in rural areas and 74% of the Bank’s rural branches are in unbanked locations. As on 31 March, 2016, the Bank had 12,743 ATMs. The Bank has also deployed 1,181 Automated Deposit Machines (for cash deposits into customer accounts) and has extended this facility for 24x7 availability in certain branches, which have integrated self-service lobbies. Axis Bank was the first private sector Bank to introduce recyclers and first bank in India to have 1000+ recyclers which can accept and dispense cash. As on 31 March, 2016, the Bank had deployed 1,148 recyclers. The Bank continues to see strong momentum towards the adoption of digital channels by customers. Electronic channels now contribute 87% of all customer induced transactions in the Bank’s retail base. The Bank’s Internet Banking user base is growing at 23% and transaction volumes are growing at 17% YoY. The Mobile Application further continued its growth with close to 25 lac users generating a monthly transaction value of over Rs.54,932 crores. The transaction volumes on Axis Mobile have increased almost 4.35 times over last year, outpacing every other channel by a wide margin.

Source: Annual Report 2015-2016

The corporate banking space in India is recovering from its own set of challenges. The issues at hand on the corporate side range from excess capacities in many sectors to increase in leverage on corporate balance sheets. Resolving the asset quality issues remain a top priority for the Government and the Regulator to get back to a sustainable economic growth path. Asset quality recovery is linked to how the economy turns around and it will happen gradually but the silver lining stems from the fact that, while the high debt is concentrated in only a few sectors, the balance sheets of the other segments and sectors remain relatively robust. However, despite these challenges the private sector banks have continued to gain market share by delivering above industry growth rates. This trend is likely to continue in the near future; however the preference is for a much healthier and well capitalized banking sector for overall swifter revival in the country’s economic growth.

Certain policy initiatives taken by the Government during the year has resulted in a minor uptick in the execution of the existing projects which were stalled due to various policy and regulatory constraints. Reserve Bank of India also introduced certain guidelines more popularly known as 5/25 which enables long term financing of projects by Banks. However, the results of these initiatives are yet to materialize fully and the demand and delivery of credit is yet to witness a healthy uptrend.

Now, focusing on the Bank’s strategies, the corporate client relationship model introduced in earlier years has been further entrenched. The Bank continued its focus on transactional business comprising of trade finance, cash management, remittances etc. and has further strengthened its processes and controls apart from investing in technology platforms to enable seamless transaction experience on digital channels introduced by the Bank for its corporate clients. This has enabled an increase in the Bank’s wallet share in a wide range of banking products with its corporate customers.

The Bank’s corporate advances portfolio grew by 22% during the fiscal year 2016. The growth has been on account of cost efficient financing provided to highly rated corporates, with strong group financials, that are new relationship additions to the Bank’s franchise. Given that the focus remains on highly rated corporates, approximately 79% of new sanctions in the corporate book are to companies rated ‘A’ and above. Presently, 63% of outstanding corporate loans are to companies rated ‘A’ and above. Also, the Bank’s strategy of sectoral approach to credit continued where the focus was on identifying sector-specific opportunities and risks. Industry, group and company specific exposure limits have been defined by the Bank and continuous monitoring is undertaken with a view to identify risk and take proactive decisions to mitigate them. Portfolio diversification is also ensured through the sectoral credit approach.

The Bank has disclosed a watch list of `22,628 crores which is assessed to be the key pool of potential future stress in the corporate lending book over the next two years. Iron and Steel and Power sectors comprise 47% of this list. The Bank would maintain adequate provision coverage levels and also build up its contingent provision buffers.

The Bank has been cautious in its lending practices, especially in the last three years by focussing on higher rated corporates. However, due to the significant price and demand correction witnessed globally in the metal and minerals sector, the outlook for the sector remains cautious. A major proportion of the Bank’s these exposures relate to large integrated players with stronger balance sheets that are better equipped to meet the challenges currently witnessed by the sector. More recently price volatility across commodities appears to have stabilized and suggests mild recovery prospects.

The bank has maintained its leadership position in the loan syndication market and syndicated an aggregate amount of `22,613 crores (previous year `15,930 crores) by way of rupee loans and USD 1.93 billion (previous year USD 1.55 billion) of foreign currency loan during the year 2015-16.

Source: Annual Report 2015-2016

The Bank’s Treasury business comprises Asset Liability Management (ALM), Correspondent banking activitiy, Foreign exchange and derivatives trading, bullion business, Investments in SLR and Non-SLR securities, and arranger ship business.

The ALM group manages the regulatory requirements of CRR, SLR and Liquidity Coverage Ratio (LCR). The group also manages the liquidity, interest rate and currency risks in the Bank’s portfolio, under the guidance of the Asset Liability Committee (ALCO) of the Bank. ALM is responsible for overall liquidity management of the domestic book and longer term liquidity management of the overseas branches across geographies.

The Global Financial Institutions Division (GFID) within Treasury focuses on developing and maintaining business relationships with Financial Institutions (FIs) across the globe and holds the primary responsibility for developing various business opportunities emanating from such relationship. The Group facilitates institutional fund raising and cross-border trade finance business with specific focus on inbound trade and payments flows into India. GFID forges long term strategic ties with identified Banks/ FIs in areas ranging from corporate referrals, payments, trade finance to lending solutions. The Bank has taken steps to enhance the overall FI Proposition including Vostro and ACU Accounts, and Client Experience through initiatives like transaction automation, dedicated operations support and customer service support.

Forex Trading Group - Global Markets, is a major participant in the Foreign Exchange and Derivatives market. The Bank has established itself as one of the leading banks providing foreign exchange and derivative solutions to its clients. The Bank has been awarded the First Rank Amongst Asian Corporate Respondents” in eleven categories by Euromoney in their FX Survey 2015. The Bank is amongst the leading bullion banks in India and has been awarded the “Best Bank for Gold Dealings” by Indian Bullion and Jewellers Association Limited. Customer Derivative Business of the Bank has emerged as a key business group providing risk management and hedging solutions to the Bank’s wide range of Corporate Customers and Financial Institutions. The Bank is a key market player in providing Currency Options, Swaps and Interest Rate Derivative Products to corporates.

Investment, ALM & Capital Market (IAC) group within Treasury plays an important role of participating in primary auctions of RBI, proprietary trading in Govt. securities, Corporate bonds, Money market instruments and Equity.

The Bank continues to remain a dominant player in the Debt Capital Market (DCM) Segment. During the year, the Bank arranged `124,136 crores of bonds and debentures for various PSUs and corporates. The Bank has been ranked number one in the Bloomberg Official League Table for domestic bonds in India for calendar year 2015 and also ranked number one arranger as per Prime Database for the nine months ended December 2015. During the year, the Bank was awarded “Best Debt House in India” by Euromoney, “Best DCM House – India” by Finance Asia, “Best Domestic Debt House – India” and “Best Domestic Bank – India” by Asiamoney. Also, during the year the Bank was awarded by The Asset Benchmark Research as “Top Bank in the secondary market, Corporate Bonds, Rank 1” and “Investors Choice for primary issues in Asian currency bonds”

Source: Annual Report 2015-2016

The International Banking strategy of the Bank continues to revolve around leveraging its relations with corporates in India and Non-resident Indians, while providing banking solutions at overseas centres. The Bank, through its international operations, leverages the skills and strengths built in its domestic operations. It also widens the horizon of the product offerings covering a varied spectrum of corporate and retail banking solutions across client segments in various geographies. The Bank has established its presence at strategic international financial hubs in seven countries. The global landscape of the Bank consists of five branches at Singapore, Hong Kong, Dubai International Financial Centre (DIFC) – UAE, Colombo (Sri Lanka) and Shanghai (China); three representative offices at Dubai, Abu Dhabi (both in UAE) and Dhaka (Bangladesh); and an overseas banking subsidiary in the United Kingdom. The representative office at Dhaka was inaugurated during the current financial year.

The Bank continues to offer corporate banking, trade finance, treasury and risk management solutions through the branches at Singapore, Hong Kong, DIFC, Shanghai and Colombo, and also retail liability products from its branches at Hong Kong and Colombo. Further, the Bank’s Gulf Co-operation Council (GCC) initiatives in the form of representative offices in Dubai and Abu Dhabi, and alliances with banks and exchange houses in the Middle East provide support for leveraging the business opportunities emanating from the large NRI diaspora present in these countries. Through the Representative Office at Dhaka, the Bank aims to promote its trade finance business arising between Bangladesh and India & other Asian financial markets where Bank has presence. Secondary market risk participations, pertaining to Bangladeshi banks, being presently done by the foreign branches of the Bank, will also be captured at the primary level itself enabling the Bank to move up the value chain and enhance its risk return.

Given the uncertainties in global economies coupled with decline in Indian international trade, the Bank focussed on consolidating the operations at overseas branches and managing the risks in international operations. Emphasis continued towards trade finance business and value added services. As on 31 March, 2016, the total assets at overseas branches stood at USD 8.06 billion as compared to USD 7.86 billion last year. Axis Bank UK Limited, the Bank’s overseas banking subsidiary, completed its third year of operations during the year under review and its total assets stood at USD 662 million as against USD 431 million as on 31 March, 2015.

Source: Annual Report 2015-2016

The IT team of the Bank in partnership with its trusted and experienced vendors has been instrumental in making the innovations and aspirations of high quality digital products and services from the various businesses and other operations teams a reality. The sheer quality and quantity of awards received by the Bank in this space substantiates the consistent improvement in performance. The Bank has launched some unique products and processes this year like LIME, 24X7 instant Personal Loan, new tablet based Loan Origination System, various branch automation projects, FxConnect Mobile for its corporate customers.

Harnessing the technology wave in Banking, Axis Bank has undertaken various technology driven business initiatives that reinforce the Bank’s commitment to making banking simple and hassle-free for its customers. The Bank has focused on providing customers a seamless digital payment and banking experience. LIME’s digital platform has been at the forefront of the digital innovation initiatives from Axis Bank. The inception phase of LIME focuses on easy peer-to-peer payments, seamless shopping and payments experience, end-to-end digital banking platform and simple personal finance management tools with tailored insights. LIME has helped the bank to capture a huge customer base outside its existing customer base.

A new tablet based Loan Origination system has been developed to digitize the entire lending process of MicroFinance business. The application includes different modules for on-boarding of villages by conducting village surveys, on-boarding of applicants, conducting group trainings and tests, and complete the disbursement. The tablet application is integrated with the bank's underwriting hub for real time approvals/rejections based on bureau checks and underwriting rules. Tablet and desktop based new workflow has been designed as a part of the mobility initiatives for Rural Lending.

Various branch automation projects have helped the Bank maximize utilization of the branch footprint with improved staff productivity, reduced errors, and improved customer experience. The Bank has centralized its account opening process to achieve economies of scale and reduce logistics costs and time taken in shipping documents to a central location. Single uniform imaging based workflow solution for CASA account opening was implemented.

The Bank launched FxConnect Mobile to provide constant connectivity to forex market to its corporate customers enabling them to track the market and cover transactions on the go. The app consumes Reuters API to provide seamless live rate streaming and instant deal booking. The Bank has also implemented Credit Processing System (CPS), a complete Loan Management System designed to assist the Bank in automating its lending process from loan origination, verification, sanctioning to pre & post-disbursement activities. CPS provides immense operational advantages of automating a high volume credit origination and appraisal segment such as retail and small and medium enterprises (SME) as well as the corporate segment. The web based platform allows Axis Bank users to keep a close watch on the overall quality of the portfolio.

The Bank has implemented all the recommendations of the RBI Working Group issued on 29 April, 2011 as applicable, related to Information Security, Electronic Banking, Technology Risk Management and Cyber Frauds. The Bank is committed to implementing the recommendations in letter and spirit to strengthen the security posture of the Bank and to provide safe and secure banking services to its customers. As a part of this, various security solutions have been deployed to protect customer data and prevent external and internal attacks. In addition to compliance with the ISO 27001 standards of information security management, the Bank has also complied with the Payment Card industry Data Security Standards (PCI DSS) for card acquiring infrastructure to protect card related data.

Source: Annual Report 2015-2016

Axis Bank believes that building and nurturing the Bank’s people capabilities should be at the core of all initiatives to drive business excellence in a service driven banking business like ours. Thus, the key to a successful journey in achieving the Bank’s Vision 2020 is to be prepared for future challenges by developing these people capabilities.

Developing leadership skills across various levels in the Bank is one of the key focus areas for capability building in the Bank. The Bank follows an institutionalized approach in identifying individuals with potential to become future leaders. A multi-tiered leadership development program has been created to develop leaders at various levels in the Bank. Academic tie-ups have been put in place to ensure access to world class content, faculty and premier institutions across the globe. The top 100 leaders of the Bank have been put through a one year program, co-facilitated by premier B-schools, with a focus to provide the requisite knowledge and leadership skill sets to prepare them for the changing times.

This year, the touch points of learning went beyond the conventional classroom through migration to alternate channels of delivery. The Bank endeavours to reinforce the status of compliance and standards as an important element of how the Bankruns its business and all its trainings are focused to ensure that its employees understand and meet their responsibilities.

Change in business strategy & creation of new verticals saw the Bank shift substantially from talent acquisition to strategic resourcing. Academic tie-ups and campus hiring based on the ‘train, test and absorb’ model yielded rich dividends to the Bank in creation of a pipeline of expertise in different businesses and support verticals. Speed to productivity was increased by training the employees in related subjects before they took on their responsibilities.

Axis Champions, the Bank’s premier awards platform, is an initiative to drive alignment of culture across the organisation and recognize champions for their role model behaviours. This year, Axis Blitz was launched as a circle level platform to reinforce these behaviours through storytelling and experience sharing with Senior Leaders of the Bank.

The strength of the workforce was 50,135 at the end of the year. A young and engaged workforce with an average age of 30 years and the Bank’s policy on being an equal opportunity employer continue to significantly contribute towards the Axis Bank brand.

The Bank promotes a healthy and safe work environment and condemns any kind of unfair treatment at the workplace. The Bank offers an emergency helpline service to the women employees to provide immediate safety response during any emergency situation. This year, the Bank launched “With You” - an initiative to provide confidential counselling services to employees and their families for anything, at any time.

The Bank has shifted to an integrated Performance Management & Capability Development system – called ACElerate. ACElerate stands for Axis Capability Enhancement Program. While retaining the tenets of Meritocracy, Transparency & Fairness, ACElerate, endeavours to drive changes across following principles:

  • Greater alignment to the Bank’s performance
  • More Inclusive approach to career growth
  • Investing in Capability Development and
  • Leaders at every level.

Through the fulfilment of its HR agenda, the Bank continues to strive towards realization of its vision of being the preferred financial service provider excelling in customer delivery through insight, enhanced capabilities and empowered employees. The recent award received by the Bank for being amongst the top 25 best Companies to work for in India by Business Today further substantiates the successful journey towards accomplishing the Bank’s vision.

Source: Annual Report 2015-2016

The Bank’s primary CSR philosophy rests on a purpose-driven approach to create a meaningful and measurable positive impact on the lives of economically, physically and socially challenged communities of the country by supporting initiatives aimed at creating conditions suitable for sustainable livelihood in these communities. A multi-pronged approach is adopted by the Bank for its CSR agenda, which is also intertwined with the Bank’s sustainability agenda of creating enduring value for all its stakeholders. The Bank, through Axis Bank Foundation, supports the sustainable livelihoods program. Financial Inclusion and Literacy is one of the key national priorities and the Bank leverages its pan India presence to reduce inequalities faced by socially and economically backward groups. The Bank supports MSME sector development through knowledge sharing programs and undertakes skill development programs for youth to equip them with employable skills for better opportunities. Environmental sustainability is another key focus area for the Bank’s CSR agenda and the Bank undertakes various environmental sustainability projects and community engagement programs.

The Bank has put in place a ‘Policy on Corporate Social Responsibility’ to strategically guide its efforts in the area of CSR and the same is hosted on the Bank’s website www.axisbank.com. The CSR activities are pursued through various initiatives undertaken by the Bank or through Axis Bank Foundation (ABF) or through any other Trust or agencies and entities as deemed suitable. The Bank leverages its geographical spread to undertake such initiatives.

The prescribed CSR expenditure for the Bank for 2015-16 in terms of the Section 135 of the Companies Act, 2013 and Rules framed thereunder was `163.03 crores, against which the Bank has spent `137.41 crores towards various CSR initiatives compared to actual CSR expenditure of `123.22 crores for 2014-15. The details of initiatives taken by the Bank on CSR during the year as per annexure attached to the Companies (Corporate Social Responsibility Policy) Rules, 2014 are given in Annexure V of the Directors’ Report.

Set up as a Public Charitable Trust in 2006, Axis Bank Foundation (ABF) is the Corporate Social Responsibility (CSR) arm of Axis Bank Ltd. It complements the activities being carried out by the Bank under CSR with sharper focus on areas responsible for creating sustainable Livelihood. Partnering with close to 100 NGOs across the length and breadth of the country, ABF has impacted over 8 lac beneficiaries till March 2016. ABF’s programs are currently spread across 26 states and 241 districts of India. During 2015-16, ABF has disbursed an amount of more than `76 crores towards various CSR activities.

In the area of Livelihoods, ABF has partnered with NGOs that primarily work in the areas of Watershed Management and Agriculture Productivity, Livestock Enhancement, Vocational Training, and Livelihood for the Disabled. These initiatives help in enhancing the agricultural output through improved farm practices leading to increased income, watershed management activities ensure the availability of water by adopting irrigation facilities for multiple cropping, encouraging involvement into non-farm handicraft activities like embroidery work, bamboo work, etc. that further supplements the farm income and improves the overall income.

Financial Inclusion activities are conducted to help the beneficiaries gain access to banking facilities. 25,033 Self Help Groups (SHGs) have been formed with a membership of 316,792 women. Formation and promotion of SHGs is carried out that helps the women to gain gender justice as well as access to affordable credit. The SHGs have recorded a savings of `93.90 crores while they have borrowed an amount of `141.16 crores from the Banks.

The Livelihood programs also seek to train unemployed youth both abled and disabled in various vocations leading to their employability. 79,619 youth have been trained of which 33,810 have been placed and 19,278 youth are self-employed. A cadre of Community Health Workers has been created which conducted 186,578 health education sessions for the community thereby impacting more than 5 lac families.

ABF has a mission to create one million sustainable livelihoods by December 2017, which is expected to empower at least 60% women, from an economic and social perspective. A 50% increase in income is expected to be achieved through these livelihood enhancement programs. Till March 2016, over 6 lac beneficiaries have been touched by this program.

Besides CSR activities, ABF encourages employee engagement through a gamut of activities. Regular blood donation campaigns as well as Thalassemia screening camps are conducted under the “Gift of Life” initiative. The “Basket of Hope” initiative is aimed at collection drives for clothes, toys, books etc that are then re-directed to needy people. ABF is involved in Disaster Management activities in conjunction with NGOs like Americares and GOONJ. Employees of the Bank in the vicinity of the disaster area are mobilized to volunteer during medical camps and other relief work. The Foundation along with its NGO partners had actively participated in the relief and rehabilitation work to help victims impacted by the Chennai Floods by providing food, water, clothes and financial aid. ABF ran a campaign for collecting funds from officers of the Bank towards contribution for the Nepal Earthquake and collected over ` 38 lacs which was contributed to The Prime Minister’s Relief Fund for relief operations in Nepal.

The Foundation provides Axis Bank staff opportunities to volunteer and participate in its various initiatives and also runs a payroll program to collect contributions from the employees. During the year, 6,721employees of the Bank had enrolled for the payroll program and the annual collection amounted to `1.65 crores. Since 2006, the Bank and the group companies have contributed a grant of `334 crores. The total amount of grant disbursed up to March, 2016 was `274 crores.

Source: Annual Report 2015-2016

A new business unit ‘Transaction Banking’ was formed in April 2015 to focus on the flow businesses within Corporate Banking, i.e. current accounts, collection & payments solutions, forex, trade services and capital market solutions. This restructuring was done to enable the Bank to offer a seamless experience to its customers, for all their requirements through a dedicated relationship manager supported by a customer service team. The key financial deliverables of the business are current account float balances and fee income.

Current account balances grew from `56,108 crores as on 31 March, 2015 to `63,652 crores as on 31 March, 2016, a year on year growth of 13%. Daily average balances in current accounts grew 16%, from `34,634 crores in fiscal 2015 to `40,140 crores in fiscal 2016. The trade scenario for the economy remained depressed with decline in both imports and exports for several months in a row.

The key themes that the business has been focusing on are deepening share of wallet for existing clients, offer digital solutions to customers and enhance customer service. The relationship managers and branches are continuously equipped with analytical tools and learning interventions to help cross-sell the large suite of transaction banking products to customers. The Bank also launched mobile apps for the entire gamut of transaction banking requirements, including payments, forex rate bookings and trade finance transactions. A comprehensive capability enhancement programme was undertaken to enable the Bank to enhance the footprint of B Category branches (branches authorized to handle forex business) from 214 at the beginning of the year to 475 as at the end of the year. The Bank has also taken various steps to strengthen internal controls and adhere to emerging regulatory requirements.

Source: Annual Report 2015-2016

Axis Bank plays an important role in supporting the Small and Medium Enterprise (SME) businesses across the nation. The SME business of the Bank comprises of three business groups: Medium Enterprises (MEG), Small Enterprises (SEG) and Supply Chain Finance (SCF) which as on 31 March, 2016 comprised 40%, 46% and 14% of total SME advances respectively. The Bank extends working capital, term loan, trade finance and project finance facilities to SMEs for their various financing needs. The wide range of fast-track and customized products available in the Bank’s product suite ensure that customers get adequate finance best suited for their businesses. During FY16, various products and process changes were implemented. “SME Dealer Power” launched during FY16 offers comprehensive financing facility to the dealers of various companies in the country for efficient management of working capital and other business requirements. Another newly launched product “Exim Power” offers financing facilities to SMEs engaged in export/import activities and showcase Bank’s commitment towards “Make in India” initiative. The Bank has also adopted an industrial cluster based financing as an important strategy towards ensuring manufacturing credit flow in SME sector. As part of this initiative, important clusters have been identified across various sectors and awareness has been created within the Bank’s teams to focus more on these identified clusters in the coming years.

The Bank continues to support SMEs not only through innovative financial products but also by extending non-financial services to grow their business. Last year, the bank had initiated a road show series titled “Evolve” for capacity building of SMEs which attracted lot of appreciation from the participants. This year also, “Evolve” was conducted on a bigger platform covering more number of cities and thus educating larger audience in the SME segment. This capacity building initiative is also a unique step towards further facilitating and contributing to the ‘Make in India’ initiative.

The SME portfolio of the Bank constituted 13% of the Bank’s total advances as on 31 March, 2016 and grew by 8% to `44,869 crores from `41,507 crores last year. The SME asset quality trend remains healthy as the Bank’s strategy to focus on better rated customers has held up well. Around 84% of the outstanding loans continue to remain within the category SME 1 to SME 3. The Bank continues its emphasis on improving the capabilities to mitigate the risk in the existing and new loan portfolio by continuously upgrading and refining the various parameters and variables used to build the early warning risk models.

The SME Business continues to focus towards lending to the Priority sector (PSL) and is a significant contributor to the Bank’s overall PSL portfolio. Special initiatives have been undertaken during fiscal 2016 to promote lending to the Priority Sector which includes product and marketing initiatives. Currently Bank operates from 51 SME Centres and 9 SME Cells, across the country to service customers effectively covering around more than 1,500 branches.

As on 31 March, 2016, the Bank has achieved its overall priority sector lending requirements.

Source: Annual Report 2015-2016