Central Bank of India

Dear Stakeholders,

I am delighted to present the Annual Report of your Bank for Financial Year (FY) 2022-23. This year has been a remarkable year for the Bank and Bank has come out from RBI's PCA framework in the month of September, 2022.

We emerged more resilient and reinvigorated, and our confidence in our capabilities is reflected not only in our numbers but also in the trust that our customers have placed in us. I am grateful to our customers, partners, team members, and other stakeholders for their relentless collaboration to make this happen. I am presenting here highlights of the performance of our Bank for FY 2022-23.

Economic Outlook

The year 2022-23 was full of volatility across the world with global economy experiencing several shocks. Central banks across advanced and emerging economies raised interest rates slowing down the global economy. Indian economy has remained resilient with robust domestic demand. Service sector continued to register strong growth while manufacturing suffered a setback due to global slowdown and high commodity prices prevalent during the year. Inflation remains still a

concern for most Advanced Countries (AEs). However, series of mid-size bank failures in US has signaled that central banks might shift their stance towards pause of policy rates.

The International Monetary Fund (IMF) Report released in April 2023, revised down the growth of the global economy to 2.8% in 2022 and 3.0 % in 2024. AEs have slowed down due to series of rate hikes to tackle sticky inflation. Global inflation is expected to moderate slowly to 7.0 % in 2023 from 8.7 % in 2022 and further to 4.9 % in 2024.

AEs as a whole are expected to grow by 1.3 % in the year 2023, 140 basis points lower than the growth recorded in the year 2022. The growth rate of Euro area is expected to be 0.8 % while UK economy will contract by 0.3 % in 2023. Japan is estimated to grow at 1.3 % in 2023 after rebounding from technical recession in the year 2022.

The Emerging Market and Developing Economies (EMDEs) share in the world GDP is 58.3% and among these, China and India accounts for 18.5 %and 7.3 % share, respectively, for the year 2022. Russia is expected to report 0.7 % growth in year 2023. India is identified as a "bright spot" in the world economy and a key contributor to global growth in the coming years. Indian economy is projected to grow at 5.9 % in 2023 by IMF

On Domestic front, NSO estimated GDP to expand by 7.2% in 2022-23. High credit growth continues to drive strong domestic demand amid slowing external demand. The Private Final Consumption Expenditure (PFCE) is an indicator of demand in the economy. PFCE increased by 7.5% in the year 2022-23 over 11.2% growth in 202122. Investment demand measured by Gross Fixed Capital Formation (GFCF) grew by 11.4% in 2022-23 from high base of 14.6% growth in 2021-22.

Union budget 2023-24, focuses on achieving vision for the Amrit Kaal through technology-driven and knowledge- based economy. It has identified 7 priorities for this year such as -Inclusive Development, Reaching the Last Mile, Infrastructure and Investment, Unleashing the Potential, Green Growth, Youth Power and Financial Sector. The finance ministry's Economic Survey has projected economic growth of India to be 6.5 % in the 2023-24.

Overall risks to the future outlook remain balanced, with after-effects of high interest rate evident more than ever anc fears of contagion have risen in the global economy. Strong domestic demand, stability in rupee and capital expenditure by government and private sector with inflation under targeted range are positive possibilities.

Business

During the Financial Year 2022-23, the Business of the Banl stood at '5,77,075 crore as compared to '5,32,404 crore ir the Financial Year 2021-22 on 8.39% growth on YoY basis. Bank's business growth has remained robust in FY 202223, with deposit growth of 4.85% and advances growth of 14.79%. The Deposit of the Bank stood at '3,59,296 crore on March 31,2023 as against '3,42,692 crore on March

31,2022 with a growth of '16,604 crore.

The CASA share as a %age of Total Deposits stood at 50.39% on March 31,2023 as against 50.58% on March

31,2022. Total Advances stood at '2,17,779 crore in March 31,2023 as against '1,89,712 crore in March 31, 2022 registering growth of 14.79% on YoY basis.

The Bank is always keen to maintain a well balanced assets mix, encompassing sectors such as Agriculture and Micro, Small & Medium Enterprises (MSMEs) as well as keeping a focus on other retail assets, including Housing, Education and Vehicle finance. Notable, Bank's MSME portfolio has shown growth of 16.87% with Retail loan portfolio growth

by 20.10% on YoY basis. Advances to MSMEs stood at '39,899 crore and Agriculture at '42,110 crore.

Financial Performance

The Operating Profit of the Bank stood at '6,884 crore in financial year 2022-23 as against '5,742 crore in financial year 2021-22. With improved performance, the Bank earned net profit of '1,582 crore as against '1,045 crore for financial year 2022-23 over financial year 2021-22 and from '310 crore profit to '571 crore profit during fourth quarter on YoY basis.

Net Interest Income of the Bank increased to '11,687 crore from '9,487 during 2022-23 whereas Non Interest Income stood at '4,084 crore from '2,968 crore during 2022-23. Net Interest Margin (NIM) improved to 3.64% during financial year 2022-23 as compared to 3.21% in the financial year 2021-22. The Bank's Cost of Deposits stood at 3.92% during the financial year 2022-23 as against 3.86% during the financial year 2021-22.

Asset Quality

The consistent effort of the Bank on NPA management and garnering high quality assets improved the asset quality. Thus, gross NPA %age reduced to 8.44% as of March

31,2023 compared to 14.84% as of March 31,2022 and also Net NPA %age was brought down to 1.77% as on March 31,2023 from 3.97% as of March 31,2022. The Bank's Provision Coverage Ratio improved to 92.48% as on 31.03.2023 from 86.69% as on 31.03.2022 which has strengthened the Balance Sheet. We are expecting resolution of certain big NPA accounts through NCLT under IBC and outside during 2023-24. We shall continue to have focused efforts to maximize NPA recovery, improve asset quality and earn net profit during the year 2023-24.

Capital

CRAR after adjustment for reckoning NPV of non-interest bearing recapitalization bond issued by Government of India is 14.12% as on March 31,2023 as compared to 13.84% as on March 31,2022.

Priority Sector and Financial Inclusion

Bank is continuously emphasizing on meeting various goals under national priorities. Under various national priorities, Bank has credibly achieved the mandated targets as follows :-

? Total Priority - 54.48% of ANBC against norm of 40%

? Agriculture - 21.98 % of ANBC against norm of 18%

? Small and Marginal Farmers - 11.57% of ANBC against norm of 9.50%

? Weaker Section - 16.83 % of ANBC against norm of 11.50%

During the year Bank sold PSLCs worth '4,650.00 crores under Priority Sector ('1,000 crores under General PS, '2,950 crores under Small and Marginal Farmers and '700 crores under Micro Enterprises). There is outstanding RIDF to the tune of '2,072.18 crores under Priority Sector of which '1,556.74 crores under Agriculture as on 31.03.2023.

These achievements indeed speak of the Bank's commitment to inclusive nation building.

Bank has been actively pursuing the agenda of Financial Inclusion with key interventions in offering appropriate financial products, making use of technology and enhancing financial literacy.

Bank also performed well under social security schemes launched by the Government of India. 21.21 Lakhs, 68.20 Lakhs and 19.40 Lakhs enrolments have been done under Pradhan Mantri Jeevan Jyoti Bima Yojana, Pradhan Mantri Suraksha Bima Yojana and Atal Pension Yojana, respectively.

Pan India Presence

As on 31^st March, 2023, Bank has a Pan India presence with 18,204 Customer Touch Points. This includes a network of 4,493 branches, 3,752 ATMs and 9,959 BC Outlets. The Pan India presence covers all 28 States, 7 out of 8 Union Territories and NCT Delhi. The Bank has a strong Rural and Semi Urban presence with 65.21% of total branches in Rural and Semi Urban Centers.

Digital Banking & Alternate Delivery Channels

In the age of information and technology, the Bank recognizes the changing needs of the customers and caters to the needs of the young demographic base of the country.

Accordingly, the Bank gives thrust on digital footprints and alternate delivery channels.

As a result of this, the share of digital transactions through alternate delivery channels increased from 78.05% for FY 2021-22 to 78.12% for FY 2022-23.

Human Resources

Bank is committed towards creating a productive work environment for its employees and departments so as to maximize individual potential and expand organizational capacity. In this regard bank had taken various steps towards Designing, Developing and Implementing Best HR Practices like Competency based Roles, Performance based promotions, incentivizing learning's etc. to facilitate the creation of an environment where each member of the organization is able to contribute their best for augmentation of Business Growth.

Employee Engagement Survey, Capacity Building Initiatives to enhance capabilities of staffs, Mentorship Program, Succession Planning (IDPs), HR Policies Reviewed and made contemporary as well as user friendly, Engagement of Retirees on contractual basis, Engagement of Apprentices in the Bank, etc were some of the HR Interventions initiated during the Year.

Bank will continue its efforts towards aligning the HRD role with the evolving environment and initiating practices benefiting employees with a view to leading the organization in advancing its corporate objectives.

Covid-19 Relief for MSMEs/Small Businesses/ Corporates

Bank has continued extending its support during 2022-23 through various Government schemes launched in 2020-21 to MSMEs / Small Businesses / Corporates and extension of Guaranteed Emergency Credit Line 01,02, 03, 04 to protect them from hardships caused due to the Covid-19 pandemic.

New Initiatives

"Success is not final; failure is not fatal: It is the courage to continue that counts." Bank has turned corner and came out from RBI's PCA framework during the FY 2022-23. This is due to vigorous engagement, commitment and new ideas implemented. Nevertheless, we will not be complacent and continue to thrive to envisage new and fresh ideas to keep the business flourish with new products and services besides fresh processes. With this impression, few of the new initiatives put forward are as follows:-

1. Technological Transformation:

Bank recognizes the need for technological transformation to leverage its customer base and drive future growth. On-going efforts in technology enhancement are expected to yield results starting from the third quarter of FY 2023-24. This initiative aims to improve operational efficiency, enhance customer experience, and support digital banking services.

Digital Initiatives - Bank has initiated Digital Transformation Project (Cent NEO) and the ambitious plans covers following Digital Transformation Journey:

i) Universal App (Cent NEO) - Various services shall be offered on Assets, Liabilities, Wealth Management, Market Place, Cards etc, through App and Web interfaces.

ii) Digital Lending Platform (DLP) - The DLP shall support lending in Straight Through Process (STP), Assisted and Semi-Assisted modes.

iii) Integrated Customer Care - Modern Customer Care for Customer Services, Grievance Handling, Marketing & Sales etc. on variety of channels Call, Chat/Voice BoTs, IVR, WhatsApp etc.

iv) Integrations Platform - Upgrading the middleware platform for seamless communication between internal and external systems. The components of this platform are Payment-hub, API Gateway, Middleware and Streaming.

v) Collections Management - Unified collections management system with Technology, Call Centre and Feet On Street (FOS) services.

2. Centralised SWIFT Cell:

For ensuring better compliance in handling the Cross Border Outward Transactions, Bank has set-up a cell for Centralised SWIFT operations at International Division in the financial year 2022-23. All the cross border transactions are authorized at AD branch

level in Trade Finance Module i.e FX24. The SWIFT messages generated after authorization of transaction in FX24 by branch are authorized at Centralised SWIFT Cell at International Division. The cell scrutinize the documents and ensure the compliance with the various guidelines viz. latest custom/ DGFT guidelines/ Ministry of commerce guidelines along with RBI directions/ FEMA regulations / ICC rules / FEDAI rules etc.

3. Bank has launched Green Fixed Deposits, proceeds of which will be utilized towards funding green projects.

4. SMS Based Customer Feedback Mechanism implemented for Deposit, Withdrawal and Transfer.

5. Enterprise Fraud Risk Management Solution (EFRMS) has been implemented for Real Time Analysis and Blocking of suspicious transactions initiated through Alternate Channels like ATM, Internet banking, Mobile Banking and UPI. It is implemented to prevent fraudulent transactions done through various delivery channels

6. Initiated Digital Customer On-boarding through Video KYC (online channel) as part of hassle free customer on-boarding without visiting Branches.

Way Forward

In light of our results for FY 2022-23, I must express my joy for meeting shareholders expectation. "I am confident that with our clear strategic focus, superior execution and top- notch work force, we will continue to deliver industry-leading results in the future''.

I would like to acknowledge and thank all the members of the Board for their valuable support, guidance and inputs to the management in our endeavors. I also thank the Government of India, Reserve Bank of India, SEBI, IBA, Stock Exchanges, Customers and all stakeholders for their support and guidance from time to time.

I am happy to present the Annual Report of the Bank for the Financial Year ended on March 31,2023.

With best wishes,

Yours sincerely,

M V Rao

Place: Mumbai

Date: May 24, 2023