CD Ratio Observation- All RRBs ideally should aim at CD ratio of 70% and above.

RRBs with CD ratio below 60% must chalk out strategies to achieve the same by March,2014. Strategy- We have fixed the targets for the growth of both deposit and advances so as to reach the desired CD ratio level. We are holding Branch Managers conference to sensitize and monitor the progress of branches. A special emphasis has been made on the retail loans like housing and renewal of KCC accounts. An ambitious target of renewing all KCC loan accounts where agricultural activity is being undertaken has been accepted as a challenge. Success in achieving this target will not only give required boost to advances outstanding level but will also lower down the NPA level in this sector. Ongoing Kharif season is expected to generate avenues for fresh lending. Moreover after addition of fertile districts of western Uttar Pradesh and with revised enhanced lending powers we expect a spurt in fresh lending in these new districts.

Per employee profit Observation- RRBs to aim at per employee profit of Rs. 5.00 lac. Strategy- To achieve this goal we will emphasize on all the observations mentioned in the letter. We will strive hard strategically for desired CD ratio, Increased Non- Interest Income, reduced nonperforming assets and controlled level of loss assets.

Non- Interest Income ObservationIt should be 15% of total Income

Strategy- Conventional sources of non interesi income i.e. commission on issue of DD and pay orders, are drying up with the introduction of RTGS/NEFT facilities. We will concentrate more on proposal processing fees on fresh SME and retail loan proposals, commission from third party products and recovery in write off accounts. A relook and restructuring of investment portfolio is likely to yield better returns

Non-Performing Assets Observation- Desired level of gross and net NPA should be below 1% and below 0.50% respectively. Strategy- We introduced system generated asset classification since July 2012, which resulted into huge number of accounts being classified as NPA. Uncontrollable slippages and expectation of political announcements regarding debt waiver during ensuing Lok Sabha elections are making this task more challenging, especially for the agriculture sector, which constitutes bulk of our NPA portfolio. WE have

introduced Divergent list on the pattern of Bank of India and expect to have good control over slippages by strictly monitoring the progress on the accounts mentioned in the list. WE successfully organized the recovery camp cum borrower awareness day on 9 th June, reducing NPA level by 26.61 crores in a single day. WE are holding region specific intensive recovery drives to support Regions with high NPA percentage. Fresh disbursement and renewal of KCC will play a key role in controlling the NPA level. WE are also going in a big way for SARFAESI actions, filing of RCs and compromises in eligible cases.