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Chairman and ManagingDirectors Message

Dear Shareholders,

It gives me immense pleasure in presentingbefore you the Annual Report of your Bank forthe financial year 2009-10. As the Chairman& Managing Director of this prestigiousinstitution with a rich heritage and glorioustradition, I am extremely delighted to have theopportunity to address you all. I would humblybegin with the assertion that the financial year,

which passed by, has seen the toughest turbulences in theglobal as well as domestic markets, the genesis of whichdates back to the last part of 2008 in the US mortgage financingmarket. Indian economy, though more or less insulated fromthe crisis at the beginning, could not escape the world wideeconomic slowdown and banks, too, had to bear the brunt. Itbecame a crucial task before us to sustain business growth& profitability of the Bank. However, with diversified creditpattern, a very large customer base and very cautious andwell thought out policy strategies we have been able toovercome the impending crisis and I am sure, you willappreciate that your Bank has, not only shown commendableperformance in all key operational parameters during 2009-10 but also added values and strengthened the Balance Sheetof the Bank for a better and resilient future. Presently, with theeconomy out of the slowdown process and steadily gainingmomentum we, too, have paced forward which has beenreflected in our balance sheet. In this address, I am, mostcandidly trying to place before you an analysis of performanceof your Bank during 2009-10 along with a brief account of theIndian economic and banking scenario.

A well-balanced and reliant growth, proper and steadyimplementation of financial sector reform measures andabsorption of latest technological innovations haveunequivocally contributed towards Indian economys journeytowards a higher growth path and helped India emerge asworlds second fastest growing economy with a growth of7.2-7.5% (estimated) during 2009-10. The sustained growthmay as well be attributed to dynamic commercial sector, activecapital market, acceleration in GDP growth, turnaround inexports, strong recovery in industrial production especially inmanufacturing, services sectors, revival of stock marketactivities, revival in capital inflows and indications of positivecorporate sales leading to signs of improved profitability andcredit growth etc.

The year 2009-10 is characterized by soft interest ratescenario, abundant liquidity and rising inflationary pressure.As domestic inflation and the global trend in commodityprices, both are on upward swing, net capital inflows pickingup and input costs rising, it is likely that interest rates maystart hardening by the year-end. But, banks are very cautiousnow because any hike in policy rates could affect credit offtake. The non-performing asset management has becomea constant area of concern and has got rigorous efforts frombanks. Adoption of information technology gained further

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momentum during the year. In line with Basel II guidelines,Indian banks are adopting international standards of riskmanagement. Notably, your Bank is Basel II compliant. Indianbanks have enhanced financial strength and are geared upto become institutions of international standard.

Your Bank has depicted a commendable performance notonly in the areas of sustained business growth with profitabilitybut also in the key areas of increased productivity,stakeholders value, enhanced visibility and image, fasteradoption of technology, among others. All these have helpedin increasing market perception manifold for your Bank.

Business of the Bank went up by 23.60% to reach the level ofRs.1,78,493 crores as on 31.3.2010 from Rs.1,44,415 croresas on 31.3.2009. Total Deposits grew by 24.81% toRs.1,06,056 crores as on 31.3.2010 from Rs.84,972 croresas on 31.3.2009. Gross credit of the Bank went up by 21.86%to Rs.72,437 crores as on 31.3.2010 from Rs.59,443 croresas on 31.3.09. Credit-deposit ratio stood at 68.93% as on31.3.2010 as against 70.93% as on 31.3.2009. The bankconsciously decided to be refrained from raising high costdeposit and rebalancing portfolio in favour of high yieldingadvances. Thus, core deposit went up by 32.96% during2009-10.

Savings bank deposits of the Bank went up by 24.14% toRs.28,271 crores as on 31.3.2010. Current account depositsof the Bank reached to Rs.8316 crores as on 31.3.10 fromRs.6,623 crores as on 31.3.09 showing a growth of 25.55%.The share of CASA deposits in Aggregate deposits was at34.82%.

Priority sector credit of the Bank grew by 18.81% to Rs.24,279crores as on 31.3.2010 while agriculture credit went up by20.90% to Rs.11,567 crores. The priority sector credit andagriculture credit formed 41.29% and 18.68% of Adjusted NetBank Credit (ANBC) respectively as on 31.3.2010. Fresh KisanCredit Cards (KCC) involving an amount of Rs.1336 crore wereissued to farmers during 2009-10 taking total card base to9.12 lacs involving Rs.4848 crores. Credit to weaker sectionwas 10.46% of ANBC as against stipulated norms of 10%.Cost of deposits of the Bank decreased to 5.97 % during 2009-10 from 6.62% during 2008-09, reducing the overall cost offund of the Bank to 5.99% from 6.67% during the period.

Yield on advances decreased to 10.57% during 2009-10 from10.88% during 2008-09 the yield on funds decreased to 8.68%during 2009-10 from 9.62% of previous corresponding year.Thus cost of deposits reduced by 65 basis points and theyield on advances reduced by 31 basis points.Market share of deposits and advances improved to 2.24%and 2.15% respectively as on 31.3.2010 from 2.11% and2.10% as on 31.3.2009 as a result of object-oriented growthtarget of deposit and credit mentioned above.

Business per Employee augmented to Rs.8.45 crores as on31.3.2010 from Rs.7.06 crores as on 31.3.2009 whilebusiness per branch went up to Rs.77.62 crores fromRs.63.90 crores.Operating profit of the Bank went up to Rs.2548.55 croresduring 2009-10 from Rs.1901.15 crores in the previous year,showing a growth of 34.05%. Operating profit for the quarterJan-Mar10 increased by 7.13% to Rs.657.95 crores. The

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treasury (trading) profit increased to Rs.576.55 crores fromRs.572.70 crores during the year. The net profit of the Bankshowed a growth of 56.95% to reach Rs.1206.33 croresduring 2009-10 from Rs.768.60 crores in the preceeding year.Earnings per share went up to Rs.27.01 during 2009-10 fromRs.17.21 during 2008-09 while book value per shareimproved to Rs.151.17 from Rs.131.00 during the period.

Return on Assets went up to 1.16% as on 31.03.2010 from0.90% as on 31.03.2009. Profit per Employee improved toRs.5.76 lacs during 2009-10 from Rs.3.76 lacs during2008-09.

With cautious credit growth along with rebalancing of portfolioin favour of high yielding loans in 2009-10, the Bank maintainedNIM at 2.94% as against 2.88% in the previous year.

The Bank has shown marked improvement in expenditureside parameters. Exhibiting higher operational efficiency, thecost to income ratio declined to 38.83% in 2009-10 from42.40% in 2008-09. The ratios of establishment expenses tototal expenses increased to 13.79% in 2009-10 from 13.23%in 2008-09 while the ratio of other operating expenses to totalexpenses increased to 8.27% from 7.96% during the period.The ratio of operating expenses to average working fundsimproved to 1.55% from 1.65%.

Capital adequacy ratio of the Bank stood at 13.62% as on31.3.2010 as against 13.11% as on 31.3.2009 as per Basel-II norms.

The gross non-performing assets of the Bank declined to1.69% of gross bank credit as on 31.3.2010 as compared to1.81% as on 31.3.2009. The net non-performing assetsreduced to 0.66% as on 31.03.2010 as compared to 0.72%as on 31.3.2009. The provision coverage ratio stood at78.95%. The slippage ratio increased to 1.98% as on31.3.2010 from 1.72% as on 31.3.2009. The cash recoveries(inclusive of compromise) and upgradation of NPAsamounted to Rs.241.44 crore and Rs.210.51 crorerespectively as on 31.3.2010. The Bank also recoveredRs.229.40 crore from written off debts.All Bank Finance Ltd., a fully owned subsidiary of the Bank isregistered with SEBI as category-I merchant bankers, earneda profit after tax (PAT) of Rs.7.15 crore in 2009-10 as comparedto Rs.9.41 crores in 2008-09.

In order to create a pan-India presence, the bank has opened27 new branches in 2009-10 with the total number of branchesmoving up to 2287 as on 31.3.2010 from 2260 as at31.3.2009. The Bank has also opened two zonal offices atBerhampore & Bhagalpur for effective Branch Management.The Bank has authorization for opening 69 new branches inthe potential centres of the country. The Bank is focusing onopening branches in the areas where we have lesspresence.To improve fee-based income, the Bank is having tie up forLife Insurance and General Insurance respectively with LICIand Universal Sompo General Insurance Company Ltd((USGICL). The Bank has also tied-up with M/S UAE Exchange& Financial Services Ltd. for Inward Money Transfer Systemthrough Xpress Money & MoneyGram Channels. Forpromotion of mutual-fund products the Bank has tied up withcountrys five leading AMCs namely UTI, Principal-PNB, KotakMahindra, Franklin Tempelton and Relaince Mutual Funds.Under Cash Management Services (CMS), new avenues haveemerged post migration to CBS with introduction of new

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Application Software (cash@will), the Bank has plans to fullyexploit the situation with varied new CMS products. CurrentlyBank is having six D.P.s and is in the process of expanding itat few more strategic locations. The Bank started sale of goldcoin business by tapping the opportunity and businesspotential. I am delighted to report that the Bank earned anincome of Rs.3.02 crore during 2009-10 from sale of goldcoins of various denominations.The Bank launched a number of structured products forpromoting seasonal business. Among the credit products theBank has launched schemes for traders, contractors, riceshellers and nurshing homes. To streamline the process ofspeedy sanction, the Bank has established 27 CentralisedRetail Banking Boutiques. The Bank has launched newschemes like ALLBANK COMMERCIAL VEHICLE FINANCEfor financing of commercial vehicles, HOUSING FINANCESCHEME FOR NRI/PIO for granting Housing Finance to NRI/PIO and schemes for financing IPO/FPO of reputed companies.The Bank has computerized all its branches and extensioncounters. The Bank has taken up the Centralized BankingSolution exercise on war footing and aims at implementing100% CBS by December 2010. Real Time Gross Settlement(RTGS) made live in 896 branches and Online Tax AccountingSystem (OLTAS) implemented in 167 designated branches.

Emphasizing on developing the human capital capable offostering business expansion, handling internationalbusiness & quick decision making with adequate successionplan, the Bank exposed 13,383 employees/officers to varioustraining programmes during 2009-10. A training programmeJagruti was imparted to all the employees of the Bank duringthe year. To supplement Banks efforts for speedyimplementation of CBS at its branches, thrust has been givenfor imparting training on CBS-end users programme to itsentire workforce in collaboration with TCS, the systemintegrator. As a new initiative the Bank has been conducting afocused programme on managerial effectiveness includingBasel-II awareness among executives in Scale-IV grade. Withan objective of providing training, credit and facilities ofbackward and forward linkage to farmers and ruralentrepreneurs, the Bank has established two more Farmersand Entrepreneurs Training Institutes at Banda (U.P.) andDumka (Jharkhand) in addition to those existing at Hazaribagh(Ranchi), Rae Bareilly (UP), Bolpur (WB) and Debra (WestMidnapore). The Bank has opened Financial Literacy and CreditCounselling Centres christened Samadhan at Kolkata andBanda (UP) to provide financial education and credit counsellingto people having limited resources and skills.As your Bank is celebrating it's 146th year of successful andmeaningful existence, I salute the visionary founders andacknowledge the services rendered by many unsung heroesin building this edifice. I would be failing in my duty if I do notexpress my gratitude to my predecessor Shri K. R. Kamathfor his valued contribution.

Finally, on behalf of the Bank and on my personal behalf, Iwould like to thank all share holders, customers, staffmembers, Board of Directors, Government of India and ReserveBank of India for their continued support and concouragementat all times. I am confident that with patronage of well wishers,your Bank will continue to take strides on the profitable growthpath and scale newer heights in future.

With warm regards,

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ALLAHABAD BANKHead Office : 2, N.S.Road, Kolkata-700 001

NOTICE

Notice is hereby given that the Eighth Annual General Meetingof the shareholders of the Bank will be held on Thursday, the10th June, 2010 at 10.30 A.M. at Purbashree Auditorium,Eastern Zonal Cultural Center, Bharatiyam Cultural Multiplex,IB-201, Sector-III, Salt Lake City, Kolkata-700106 to transactthe following business (es) :-

1. To discuss, approve and adopt the Balance Sheet, Profit& Loss Account of the Bank as at and for the year ended31st March, 2010, the Report of the Board of Directors onthe working and activities of the Bank for the periodcovered by the Accounts and the Auditors Report on theBalance Sheet and Accounts.

2. To Declare Dividend on Equity Shares.

3. To elect one Shareholders Director to fill the casualvacancy caused by the ceasation of directorship of ShriAshok Kumar Mohapatra, from amongst the shareholdersof the Bank (other than Central Government) in terms ofSection 9(3)(i) of The Banking Companies (Acquisition andTransfer of Undertakings) Act, 1970 (hereinafter referredto as the Act) read with The Banking Regulation Act,1949 and Nationalised Banks (Management AndMiscellaneous Provisions) Scheme 1970 (hereinafterreferred to as the Scheme) and Allahabad Bank (Shares& Meetings) Regulations, 1999 (hereinafter referred to asthe Regulations) made pursuant to Section 19 of the Actand to pass the following resolution with or withoutmodification(s):-

RESOLVED THAT Shri _________________ be and ishereby elected as director of the Bank from amongstshareholders (other than Central Government) of the Bankagainst the casual vacancy caused by the ceasation ofdirectorship of Shri Ashok Kumar Mohapatra and toassume office from the date following the date of thismeeting i.e. Friday ,11th June,2010 and to hold office until29th June 2011.

By order of the Board

Place : Kolkata ( J. P. Dua)

Date : 30-04-2010 Chairman & Managing Director

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Explanatory Statements setting out the material facts(Item No. 3)

Item No. 3

The Banking Companies Acquisition and Transfer ofUndertaking and Financial Institutions (Amendment) Laws2006, which came into force w.e.f. 25th September 2006, interalia provides that in case of Banks where the capital held byShareholders (other than Central Government) is more than32 per cent of the paid up capital, the shareholders of theBank (other than the Central Government) would elect threeDirectors from amongst the shareholders. Accordingly, in termsof the Scheme, three vacancies in the post of ShareholdersDirectors were filled effective from 30th June, 2008 by electingShri. Deveshwar Kumar Kapila, Shri Ashok Kumar Mohapatraand Shri Yash Paul Mahajan as shareholders directors for aterm of three years i.e. upto 29 June 2011. SubsequentlyShri Yash Paul Mahajan cease to be director of the Bank interms of Banking Regulation Act, 1949 and Dr. Vasant BaburaoKaujalgi deemed to be elected director of the Bank in thecasual vacancy caused by the ceassation of directorship ofShri Yash Paul Mahajan. Consequent upon his appointmentas member Appellate Authority for Industrial & FinancialReconstruction (A.A.I.F.R), Ministry of Finance, Govt. of India,Shri A.K.Mohapatra resigned from the directorship of the Bankand ceased to be director of the Bank with effect from26.6.2009. A casual vacancy of the shareholders director hasbeen caused due to ceassation of directorship of Shri AshokKumar Mohapatra.

As the holding of the shareholders other than the CentralGovernment, in the total paid up share capital of the Bankcontinues to be 44.77 percent (i.e. above 32%), the Board ofDirectors of the Bank at its meeting held on 23rd March ,2010has decided to fill up the aforesaid casual vacancy ofshareholders director.

A Director so elected in the casual vacancy shall be deemedto have assumed office from the date following the date of thisAnnual General Meeting i.e. from Friday, 11th June, 2010 andshall hold office until 29th June 2011.

NOTES:

1. APPOINTMENT OF PROXY

A Shareholder entitled to attend and vote at the meeting, isalso entitled to appoint a proxy to attend and vote instead ofhimself/ herself, and such a proxy need not be a Shareholderof the Bank. The proxy form in order to be effective must bereceived by the Bank at its Share Department, Head Office, 2,Netaji Subhas Road, Kolkata-700 001 not later than FOURDAYS before the date of the Meeting i.e on or before the closingbusiness hours of Saturday, 5th June, 2010. Please note thatany employee or officer of Allahabad Bank cannot be appointedas proxy as per provisions of Allahabad Bank (Shares &Meetings) Regulations, 1999.

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2. APPOINTMENT OF AN AUTHORISEDREPRESENTATIVES

No person shall be entitled to attend or vote at the meeting asa duly authorized representative of any body corporate whichis a shareholder of the Bank, unless a copy of the resolutionappointing him/her as a duly authorized representative, certifiedto be a true copy by the Chairman of the meeting at which itwas passed had been deposited at the Head Office of theBank with Share Department, Allahabad Bank, 2, Netaji SubhasRoad, Kolkata-700 001 not later than FOUR DAYS before thedate of the Meeting i.e on or before the close of business hourson Saturday, 5th June, 2010. Please note that an employee orofficer of Allahabad Bank cannot be appointed as authorizedrepresentative as per provisions of Allahabad Bank (Shares &Meetings) Regulations, 1999.

3. ATTENDANCE SLIP-CUM ENTRY PASS

For the convenience of the shareholders, attendance slip-cumentry pass is annexed to the Annual Report; Shareholders/Proxy holders/Authorised Representatives are requested tofill in and affix their signature(s) at the space provided thereinand surrender the same at the venue. Proxy/AuthorisedRepresentatives of shareholders should state on theirattendance slip-cum entry pass as Proxy or AuthorisedRepresentatives as the case may be.

4. (a) CLOSURE OF REGISTER OF SHAREHOLDERS

The Register of Shareholders and the Share Transfer Booksof the Bank will remain close from Saturday, 15th May, 2010 toThursday, 10th June, 2010 (both days inclusive) in connectionwith the Eighth Annual General Meeting and for the purposeof determining the eligibility of the shareholders entitled toreceive the dividend, declared by the Bank.

(b) RECORD DATE FOR THE PURPOSE OFASCERTAINMENT OF SHAREHOLDERS ENTITLED TOPARTICIPATE IN THE ELECTION

Those shareholders whose names appear on the BanksRegister of Shareholders/Beneficial owners as furnished byNSDL/CDSL at the close of business hours on Friday 14th May,2010 shall be entitled to participate in the election of Directorsfrom amongst the shareholders (other than the CentralGovernment).

5. PAYMENT OF DIVIDEND

Payment of dividend, if declared by the Shareholders in theAnnual General Meeting, will be paid to those shareholderswhose names appear:

a) as Beneficial Owners as at the close of business hourson Friday, 14th May, 2010 as per the lists to be furnishedby NSDL/CDSL in respect of the Shares held in electronicform, or

b) in the Register of shareholders as on Friday, 14th May,2010 after giving effect to the valid transfer requestsreceived from the shareholders holding shares in physicalform, before close of business hour as on 14-05-2010.

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Dividend warrants to such shareholders would be sent by theBank through the Registrar and Share Transfer Agents viz.M/s. MCS Limited, within 30 days from the date of declarationof dividend on their registered addresses.

6. UNPAID/UNCLAIMED DIVIDEND

As per section 10B of Banking Companies (Acquisition andTransfer of Undertaking) Act,1970 any money which istransferred to unpaid dividend account and remains unpaid/unclaimed for a period of seven years from the date of suchtransfer shall be transferred to Investor Education andProtection Fund established under section 205C (1) of theCompanies Act,1956.

Accordingly, the dividend for the year 2002-03 and onwardwill be transferred to Investor Education and Protection Fundafter seven years from the date on which it has been transferredto unpaid dividend account.

Shareholders who have not claimed their dividend upto thefinancial year 2008-09 are requested to lodge valid claim(s)with Registrar and Share Transfer Agent M/s MCS Ltd.

7. BANK MANDATE FOR DIVIDEND OR NATIONALELECTRONIC CLEARING SERVICE (NECS)

7.1 In order to protect the investors from fraudulentencashment of warrants, the members are requested tofurnish their Bank Account Number (Current /Savings),the name of the Bank and Branch where they would liketo deposit the dividend warrants for encashment, wheneverdividend is declared by the Bank.

These particulars will be printed on the cheque portion of theDividend Warrant besides the name of the shareholders, sothat these warrants cannot be encashed by anyone other thanthe shareholder.

The above mentioned details should be furnished by the first/sole holder, directly to the Share Transfer Agents at Kolkata,quoting the folio number, number of Shares held, details ofthe holdings etc.

7.2 The Bank is offering the facility of NECS to theshareholders of the Bank for payment of dividend throughelectronic mode. For credit of dividend directly to the Bankaccount of the shareholders through NECS the BankAccount of the shareholder should be with a CentralizedBanking Solution (CBS) and NECS enabled Branch ofBank.

The shareholders holding shares in electronic form aretherefore requested to get their Bank Account updatedwith their Depository Participants (DPs) for receiving thedividend by direct credit in their Bank Account.

The shareholders holding shares in Physical form maysubmit the ECS mandate duly signed by the First/Soleholder for receiving the dividend by direct credit in theirBank Account.

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8. ELECTION OF SHAREHOLDERS DIRECTOR

8.1 QUALIFICATIONS REQUIRED FOR BEING ELECTEDAS A DIRECTOR OF THE BANK

In terms of Section 9(3A) of the Act, a candidate, being ashareholder of the Bank and who desires to be a Director ofthe Bank shall:-

(A) have special knowledge or practical experience in respectof the one or more of the following matters namely:-

agriculture and rural economy, Banking, Co-operation,Economics, Finance, Law, Small Scale Industry, any othermatter the special knowledge and practical experience ofwhich would, in the opinion of the Reserve Bank of Indiais useful to the Bank.

(B) represents the interest of depositors; or

(C) represents the interest of farmers, workers and artisans

In terms of Section 9(3AA) of the Act, a candidate being ashareholder of the Bank and who desires to be a Director ofthe Bank should possess fit and proper status based upontrack record, integrity and such other criteria as the ReserveBank may notify from time to time in this regard. Further theelected Director should execute the deed of covenants and isrequired to furnish annual declarations as prescribed by theReserve Bank of India in this regard.

8.2 DISQUALIFICATIONS FROM BEING ELECTED AS ADIRECTOR OF THE BANK

In terms of Clause 10 of the Nationalised Banks (Management &Miscellaneous Provisions) Scheme 1970, a person shall bedisqualified for being appointed, as and for being a Director :

a) if he has at any time being adjudicated an insolvent orhas suspended payment or has compounded withcreditors; or

b) if he has been found to be of unsound mind and standsso declared by a competent court; or

c) if he has been convicted by criminal court of an offencewhich involves moral turpitude; or

d) if he holds any office of profit under any Nationalized Bankor State Bank of India constituted under sub-section (1) ofSection 3 of the State Bank of India Act 1955 or anysubsidiary Bank as defined in Section 3 of the State Bankof India (Subsidiary Bank) Act 1959 except for holding thepost of whole time Director, including the ManagingDirector and Directors nominated under clauses (e) and(f) of sub-section (3) of Section 9 of the Act from amongthe employees of the Bank and,

If he is not found to be fit and proper person in terms ofNotification of Reserve Bank of India-DPOD. No. BC. No. 46/29.39.001/2007-08 and DBOD No. 47/29.39.001/2007-08dated 1.11.2007.

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8.3 TENURE OF DIRECTOR

Pursuant to Clause 11B(2) of the Scheme, a Director electedto fill the casual vacancy shall hold office for the unexpiredportion of the term of his predecessor and accordingly thedirector elected in this meeting shall hold office upto 29th June2011 and shall be eligible for re-election.

Provided that such Directors shall not hold office continuouslyfor a period exceeding six years.

Attention of shareholders is invited to Section 9(3B) ofthe Act, on the right of Reserve Bank of India to removea Director so elected under Section 9(3)(i) of the said Act,who does not fulfill the requirements of Section 9 (3A)and 9 (3AA)of the said Act.

8.4 NOMINATION OF CANDIDATES FOR ELECTION

(i) No nomination of a candidate for election as a Directorshall be valid unless:

(a) He is a shareholder holding not less than 100 Shares ofthe Bank as on Friday, 14

th May, 2010 being the cut off

Date for participating in the election.

(b) As on Friday, 14th May, 2010 he is not disqualified to be

Director under the Banking Companies (Acquisition andTransfer of Undertakings) Act 1970 or under theNationalised Banks (Management & MiscellaneousProvisions) Scheme 1970;

(c) The nomination is in writing signed by at least one hundredshareholders entitled to elect Directors under the Act orby their duly constituted attorneys, provided that anomination by shareholder who is a company may bemade by a resolution of the Directors of the said Companyand where it is so made, a copy of the resolution certifiedto be true copy by the Chairman of the meeting at which itwas passed shall be dispatched/ deposited to the HeadOffice of the Bank addressed to the General Manager(F&A), Allahabad Bank, Share Department & InvestorsGrievance Cell, Head Office 2, Netaji Subhas Road,Kolkata 700 001 and such copy shall be deemed to bea nomination on behalf of such Company.

(d) The nomination is accompanied or contains a declarationsigned by the candidate before a Judge, Magistrate,Registrar or Sub-Registrar of Assurances or otherGazetted Officer or an officer of the Reserve Bank of Indiaor any other Nationalized Bank, that he accepts thenomination and is willing to stand for election and that heis not disqualified under the said act or the said schemeor the said regulation from being a director. His/Herpersonal details (bio data) duly signed and affirming thatdetails furnished are true to the best of his knowledgeand belief and also his/her undertaking to keep the Bankfully informed as soon as possible of such events whichare relevant to the information, subsequent to thedeclaration.

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8.5 LIST OF SHAREHOLDERS

To enable the Shareholders to contest the election, a copy ofthe List of Shareholders (in electronic form i.e., C.D.) asmentioned in Regulation 64 of the Allahabad Bank (Shares &Meetings) Regulations 1999 will be available at ShareDepartment & Investors Grievance Cell, Head Office, AllahabadBank 2, Netaji Subhas Road, Kolkata 700 001 from Tuesday,18th May, 2010 onwards for purchase by Shareholders onpayment of Rs. 50,000/- by demand draft in favour of AllahabadBank payable at Kolkata.

The Register of Shareholders will remain open for inspectionat the Allahabad Bank, Share Department & InvestorsGrievance Cell, Head Office 2, Netaji Subhas Road Kolkata 700 001 on all working days commencing from Tuesday, 18th

May, 2010. If any shareholder requires a copy or computerprints of the register or part thereof, the same shall be suppliedto him on pre-payment of Rs. 5/- for every 1000 words or partthereof required to be copied/printed.

8.6 SUBMISSION OF NOMINATION FORMS

Shareholders desirous of contesting the election of theDirectors of the Bank from amongst the shareholders, (otherthan the Central Government) should submit their NominationForms (a minimum of 100) in the format annexed to this Noticealong with the declaration form and connected documentssuch as testimonials viz., Bio data, certificates etc., to theGeneral Manager (F&A), Allahabad Bank, Share Department& Investors Grievance Cell, Head Office, at 2, Netaji SubhasRoad, Kolkata 700 001 on any working day but not less thanfourteen days before the date fixed for the Annual GeneralMeeting i.e., on or before the close of Business hours of theBank on Wednesday, 26th May, 2010. The said nominationforms should be complete in all respects and should be dulyfilled in by a minimum of 100 shareholders in the formatannexed to this notice, failing which, the nominations are liableto be rejected.

8.7 SCRUTINY OF NOMINATIONS

(i) Nominations shall be scrutinized on Thursday, 27th May,2010 the first working day following the last date fixed forthe receipt of the nominations and in case any nominationis not found to be valid, the same shall be rejected afterrecording the reasons there for.

(ii) Nominations shall also be subjected to scrutiny by theNomination Committee of the Board in terms of the Fitand Proper Guidelines dated 1

st November 2007 issued

by the Reserve Bank of India.

(iii) If there is only one (1) valid nomination for the casualvacancy to be filled by the election, the candidate sonominated shall be deemed to be elected forthwithprovided he does not withdraw his nomination upto thelast date fixed for withdrawal of the nomination. In such acase his name and address shall be published as soelected and there shall not be any election at the meeting.

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(iv) In the event of an election being held or if valid nominationsare more than the number of Director to be elected, thenames of the candidates shall be published in thenewspapers and the candidate polling the majority of thevotes at the meeting shall be elected.

(v) Director so elected shall be deemed to have assumedoffice from Friday, 11th June, 2010.

(vi) If there is any dispute, the same will be settled as perRegulation 67 of the Allahabad Bank (Shares & Meetings)Regulations 1999.

8.8 WITHDRAWAL OF NOMINATIONS

If any candidate desires to withdraw his nomination, he wouldbe entitled to do so, at any time prior to close of Businesshours of the Bank on Wednesday, 2nd June, 2010.

8.9. VOTING RIGHTS

In terms of sub-section (2E) of Section 3 of the Act, noshareholder of the Bank, other than the Central Government,shall be entitled to exercise voting rights in respect of anyshares held by him/her in excess of one per cent of the totalvoting rights of all the shareholders of the Bank.

8.10 EXTRACT OF RELEVANT ACTS, SCHEME ANDREGULATIONS

The extract of relevant Acts, Scheme, and Regulations areannexed to and form part of this Notice.

9. COMPULSORY TRADING OF SHARES OF THE BANK INDEMATERIALISED (DEMAT) FORM

Pursuant to the directive given by SEBI, trading of our Bankshares in Dematerialized form has been made compulsory forall investors.

The bank has entered into an agreement with NationalSecurities Depository Ltd. (NSDL) and Central DepositoryServices (India) Ltd. (CDSL) as an issuer Company fordematerialization of Banks shares.

Request for dematerialization may be sent through respectivedepository participants to our Registrars and Share TransferAgent.

10. UNCLAIMED SHARES

The details of unclaimed shares are as under:

i) Shares outstanding/unclaimed as

on 01-04-2009 - 6686

ii) Shares claimed and transferred to Beneficiary

account during the year 2009-10 - 2225

iii) Shares outstanding/unclaimed ason 31-03-2010 - 4461

The voting rights in respect of the unclaimed/outstandingshares will remain frozen till the claim by the rightful owner.

(iv) E

15

11. COPIES OF BALANCE SHEET

Shareholders are advised that copies of the Annual Reportwill not be distributed at the venue of the Annual GeneralMeeting and hence shareholders are requested to bring theircopies of the Annual Report, which are mailed by the Bank tothem at their registered addresses.

12. SHAREHOLDERS QUERIES

It will be appreciated if shareholders submit their queries, ifany, sufficiently in advance to facilitate effective response fromthe Bank.

13. COMMUNICATION WITH SHARE TRANSFER AGENT

Shareholders are requested to approach the Registrar andShare Transfer Agent of the Bank, to intimate changes, if any,in their registered address, lodge transfer/transmission request(s) and the matters related to payment of dividends at thefollowing address:-

M/s. MCS Limited (Unit : Allahabad Bank)77/2A, Hazra RoadKolkata-700 029Tel : 033-2454-1892, 033-2454-1893Fax: 033-2454-1961E-mail: allahabadbank.grievance@yahoo.co.in

14. For on line queries/grievance, shareholders of the Bankmay login on the website of M/s. MCS Limited i.ewww.mcsdel.com and click on investor services to registertheir queries/grievance, if any.

15. In order to facilitate quick and efficient service to theshareholders, Allahabad Bank has set up InvestorsGrievances Cell at its Head Office, Kolkata. Shareholdersand investors may contact this Cell at the under mentionedaddresses for any assistance:

|vE (k B J)

16

EXTRACTS OF RELEVANT ACTS, SCHEMEAND REGULATIONS ETC

In terms of Sections 9(3)(i) of the Banking Companies(Acquisition and Transfer of Undertakings) Act 1970,shareholder Directors shall have to be appointed dependingupon the extent of capital issued under clause (c) of sub-section(2B) of Section 3. The relevant Sections of the BankingRegulations Act 1949, the Banking Companies (Acquisitionand Transfer of Undertaking) Act 1970, Nationalised Banks(Management & Miscellaneous Provisions) Scheme 1970 andthe relevant Regulations of Allahabad Bank (Shares &Meetings) Regulations 1999 respectively in this regard, arereproduced below for the information of the shareholders.

RELEVENT SECTIONS OF THE BANKING REGULATIONACT 1949

Prohibition of Common DirectorsSection 16(1)

No Banking Company incorporated in India shall have as aDirector on its Board of Directors any person who is a Directorof any other Banking Company.Restrictions on Loans and AdvancesSection 201) Notwithstanding anything to the contrary contained in

Section 77 of the Companies Act 1956 (1 of 1956), noBanking Company shall (a) grant any loans or advances on the security of its own

share, or(b) enter into any commitment for granting any loan or

advance or advance to or on behalf of (i) any of its Directors(ii) any firm in which any of its Directors is interested

as partner, manager, employee or guarantor or(iii) any company not being a subsidiary of the Banking

Company or a Company registered under Section25 of the Companies Act 1956 (1 of 1956), or aGovernment Company of which (or the subsidiaryof the holding company of which) any of theDirectors of the Banking Company is a Director,Manager, Employee or guarantor or in which heholds substantial interest, or

(iv) any individual in respect of whom any of its Directorsis a partner or guarantor

2) Where any loan or advance granted by a Banking Companyis such that a commitment for granting it could not be havebeen made if Clause (b) of sub-section (1) had been inforce on the date on which the loan or advance was made(or is granted by Banking Company after thecommencement of Section 5 of the Banking Laws(Amendment) Act 1968 (58 of 1968), but in pursuance of acommitment entered into before such commencement,steps shall be taken to recover the amounts due to theBanking Company on account of the loan or advancetogether with interest, if any, due thereon within the periodstipulated at the time of the grant of loan or advance orwhere no such period has been stipulated, before the expiryof one year from the commencement of the said Section5; Provided that the Reserve Bank of India may, in anycase on application made in writing made to it by the

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17

Banking Company in this behalf, extend the period of therecovery of the loan or advance until such date, not beinga date beyond the period of three years from thecommencement of the said Section 5 and subject to suchterms and conditions, as the Reserve Bank of India maydeem fit :Provided further that this sub-section shall not apply if andwhen the Director concerned vacates the office of theDirector of the Banking Company, whether by death,retirement, resignation or otherwise.

3) No loan or advance, referred to in sub-section (2), or anypart thereof shall be remitted without the previous approvalof the Reserve Bank of India, and any remission withoutsuch approval shall be void and of no effect.

4) Where any loan or advance referred to in sub-section (2),payable by any person, has not been repaid to the BankingCompany within the period specified in that sub-section,then such period shall, if he is a Director of such BankingCompany on the date of the expiry of the said period, bedeemed to have vacated his office as such on the saiddate.

Explanation in this Section (a) Loan or advance shall not include any transaction

which the Reserve Bank of India may, having regard tothe nature of the transaction, the period within which,and the manner and circumstances in which, anyamount due on account of the transaction is likely tobe realized, the interest of the depositors and otherrelevant considerations, specify by general or specialorder as not being a loan or advance for the purpose ofthis Section;

(b) Director includes a member of any Board orCommittee in India constituted by a Banking Companyfor the purpose of managing, or for the purpose ofadvising it in regard to the management of, all or any ofits affairs.

5) If any question arises whether any transaction is a loan oradvance for the purpose of this Section, it shall be referredto the Reserve Bank of India, whose decision thereon shallbe final.

2. RELEVENT SECTIONS OF THE BANKING COMPANIES(ACQUISITION AND TRANSFER OF UNDERTAKINGS)ACT 1970

Restrictions on voting rightsSection 3(2E)No shareholder of the corresponding new Bank other than theCentral Government shall be entitled to exercise voting rightsin respect of any shares held by him in excess of one per centof the total voting rights of all the shareholders of thecorresponding new Bank.

Composition of the Board of DirectorsSection 9(3)Where the capital issued under clause (c ) of sub-section (2B)of Section 3 is :-

(i) not more than sixteen per cent of the total paid upcapital, not more than one Director,

(ii) more than sixteen per cent of the total paid up capitalbut not more than thirty two per cent of the total paid upcapital, not more than two Directors,

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18

(iii) more than thirty two per cent of the total paid-up capital,not more than three Directors,

to be elected by the shareholders other than the CentralGovernment from amongst themselves.

Provided that in case the number of directors elected,on or before the commencement of the Bankingcompanies (Acquisition and Transfer of Undertaking)& Financial institutions Laws (Amendmant) Act 2006,in corresponding new Bank exceed the number ofdirectors specified in sub clause (I) or sub clause (II),or sub clause (III), as the case may be, such excessnumber of directors elected before suchcommencement shall retire in such manner as may bespecified in the scheme and such directors shall notbe entitled to claim any compensation for prematureretirement of their term of office.

Section 9(3A)

The Directors to be elected under the said clause(i) shall

(A) have special knowledge or practical experience inrespect of the one or more of the following namely -agriculture and rural economy, Banking, Co-operation,Economics, Finance, Law, Small scale industry, Anyother matter the special knowledge of, and practicalexperience of which would, in the opinion of the ReserveBank of India is useful to the corresponding new Bank.

(B) represents the interest of depositors; or

(C )represent the interest of farmers, workers and artisans

Section 9 (3AA)

Without prejudice to the provision of sub-section 3(A) andnotwithstanding anything to the contrary contained in the Actor in other laws for the time being in force, no person shall beeligible to be elected as a Director under Clause (i) of Sub-Section (3) unless he is a person having fit and proper statusbased upon the track record, integrity and such other criteriaas Reserve Bank of India may notify from time to time in thisregard.

Section 9 (3AB)

The Reserve Bank may also specify in the notification issuedunder sub section (3AA), the authority to determine the fit andproper status , the manner of such determination , theprocedure to be followed for such determination and such othermatters as may be considered necessary or incidental thereto.

Section 9 (3B)

Where the Reserve Bank is of the opinion that any Director ofa corresponding new Bank elected under clause (i) of sub-section (3) of section (9) does not fulfill the requirements ofsub-section (3A) it may after giving to such Director and theBank a reasonable opportunity of being heard, by order,remove such Directors and on such removal, the Board ofDirectors shall co-opt any other person fulfilling the requirementof sub-section (3A) as a Director in place of the person soremoved till a Director is duly elected by the shareholders ofthe corresponding new Bank in the next annual generalmeeting and the person so co-opted shall be deemed to havebeen duly elected by the shareholders of the correspondingnew Bank as a Director.

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19

Obligation as to Fidelity and Secrecy

Section 13(2)

Every Director, member of a local Board or a Committee, orAuditor, Adviser, Officer or other Employee of a correspondingnew Bank shall before entering upon his duties, make adeclaration of fidelity and secrecy in the form set out in theThird Schedule.

3. RELEVENT CLAUSES OF THE NATIONALISED BANKS(MANAGEMENT AND MISCELLANEOUS PROVISIONS)SCHEME 1970

Terms of office of elected Director

Clause 9 (4) :

An elected Director shall hold office for three years and shallbe eligible for re-election Provided no such Director shall holdoffice continuously for a period exceeding six years

Disqualification of Directors

Clause 10

A person shall be disqualified for being appointed as, and forbeing a Director :-

(a) if he has at any time being adjudicated an insolvent orhas suspended payment or has compounded with hiscreditors or

(b) if he has been found to be of unsound mind and standsso declared by a competent court; or

(c) if he has been convicted by criminal court of an offencewhich involves moral turpitude; or

(d) if he holds any office of profit under any nationalizedBank or State Bank of India constituted under sub-section (1) of Section 3 of the State Bank of India Act1955 or any subsidiary Bank as defined in Section 3 ofthe State Bank of India (Subsidiary Banks) Act 1959,except for holding the post of a whole-time Director,including the Managing Director and Directorsnominated under clauses (e) and (f) of sub-section (3)of Section 9 of the Act from amongst the employees ofthe Bank.

Vacation of office of Directors

Clause 11

1. If a Director becomes subject to any of disqualificationspecified in clause 10 or is absent without leave of theboard for more than three consecutive meetings thereof,he shall deemed to have vacated his office as such andthereupon his office shall become vacant.

2. The Chairman or a whole-time Director including theManaging Director or a Director referred to in clause (b) orclause (c) or clause (d) of sub section 3 of Section 9 of theAct may resign his office by giving notice thereof in writingto the Central Government and on such resignation beingaccepted by that Government shall be deemed to havevacated his office; and any other Director may resign hisoffice by giving notice thereof in writing to the CentralGovernment and such resignation shall take effect on thereceipt of the communication of the resignation by theCentral Government.

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20

3. Where any vacancy occurs in the office of a Director otherthan an elected Director, it shall be filled in accordancewith sub-section (3) of Section 9 of the Act.

Removal from office of an elected Director

Clause 11A :

The shareholders, other than the Central Government, may,by a resolution passed by a majority of the votes of suchshareholders holding in the aggregate, not less than one halfof the share capital held by all such shareholders, remove anyDirector elected under Clause (i) of the sub-section (3) ofSection 9 and elect in his stead another person to fill thevacancy.

Filling of vacancy in the office of elected Director

Clause 11B

(1) Where any vacancy occurs before the expiry of the termof office of an elected Director, the vacancy shall be filledby election

Provided that where the duration of vacancy is likely tobe less than six months, the vacancy may be filled in bythe remaining Directors

(2) A person elected or co-opted, as the case may be, undersub clause (1) shall hold office for the unexpired portionof the term of his predecessor.

Disclosure of interest by Directors

Clause 12(8)

A Director who is directly or indirectly concerned or interestedin any contract, loan, arrangement of proposal entered into orproposed to be entered into by or on behalf of the nationalizedBank, shall, as soon as possible after the relevantcircumstances have come to his knowledge, disclose thenature of his interest to the Board and shall not be present atthe meeting of the Board when any such contract, loan,arrangement or proposal is discussed unless his presence isrequired by the other Directors for the purpose of elicitinginformation and no Director so required to be present shallvote on any such contract, loan, arrangement or proposal :

Provided that nothing contained in this sub-clause shall applyto such Director by reason only of his being :

(i) a shareholder (other than a Director) holding not more thantwo percent of the paid up capital in any public Companyas defined in the Companies Act 1956 (1 of 1956), or anycorporation established by or under any law for the timebeing in force in India or any co-operative society, withwhich or to which the nationalized Bank has entered intoor made, or proposed to enter into or make, a contract,loan, arrangement or proposal; or

(ii) an officer or other employee of the nationalized Bank, if heis a Director (referred to in clause (e) or clause (f) of sub-section (3) of Section 9 of the Act)

RELEVENT REGULATIONS OF ALLAHABAD BANK(SHARES & MEETINGS) REGULATIONS 1999

Exercise of rights of joint holders / Voting at generalmeetings

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21

Regulation 10 :

If any share stands in the names of two or more persons, thefirst named in the register shall as regards voting, receipt ofdividend, service of notices and all or any other mattersconnected with the Bank except the transfer of shares bedeemed to be the sole holder thereof.

Directors to be elected at General meeting

Regulation 63

(i) A Director under clause (i) of sub-section 3 of Section 9shall be elected by the shareholders on the register, otherthan the Central Government from amongst themselves inthe general meeting of the Bank.

(ii) Where any election of Directors to be held at any generalmeeting, the notice thereof shall be included in the noticeconvening the meeting. Every such notice shall specifythe number of Directors to be elected and the particularsof vacancies in respect of which the election is to be held.

List of shareholders

Regulation 64

(i) For the purpose of election of a Director under sub-regulation (i) of Regulation 63 of these regulations, a listshall be prepared of shareholders on the register by whomthe Director is to be elected.

(ii) The list shall contain the names of the shareholders, theirregistered addresses, the number and denoting numbersof shares held by them with the dates on which the shareare registered and the number of votes to which they willbe entitled on the date fixed for the meeting at which theelection will take place and copies of the list shall beavailable for purchase at lease three weeks before the datefixed for the meeting at a price to be fixed by the Board orthe Management Committee, on application at the HeadOffice.

Nomination of candidates for election

Regulation 65 :

(i) No nomination of a candidate for election as a Directorshall be valid unless,

(a) he is a shareholder holding not less than 100 shares inthe Bank

(b) he is on the last date for receipt of nomination, notdisqualified to be a Director under the Act or under theScheme

(c) he has paid all calls in respect of the shares of theBank held by him, whether alone or jointly with others,on or before the last date fixed for the payment of thecall;

(d) the nomination is in writing signed by at least onehundred shareholders entitled to elect the Directorsunder the Act or by their duly constituted attorney,provided that a nomination by shareholder who is aCompany may be made by a resolution of the Directorsof the said Company and where it is so made, a copyof the resolution certified to be true copy by theChairman of the meeting at which it was passed shall

xx 10 :

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rJrlgbl 65 &i) rl=uNfU fuU rlJtoal nu;w rfUme Wbe=Jth fUt ltbtkfUl ;c ;fU

Ji" ln ntudt sc ;fU rfU -

(fU) Jn cfU fuU 100 Nugh "trh; fUhlu Jttt fUtuRo Nugh"thfUl ntu,

(F) Jn ltbtkfUl fUe tr; fUe ykr;b ;theF fUtu Rmyr"rlgb gt Rm gtuslt fuU y"el rl=uNfU ntulu fuUrtY rlhrno; l ntu;t ntu &

(d) Wmlu Nugh btkd fUe htrN fuU Cwd;tl fuU rtY rlg; ykr;b;theF fUtu gt Wmmu vqJo yvlu tht "trh; cfU fuU NughtfUe ctc; Nugh btkd fUe mCe htrN fUt Cwd;tl yfuUtu gtyg fuU mt: mkgwU v mu ln fUh r=gt ni &

(D) ltbtkfUl rtrF; v mu ln ni ytih Wm vh Rmyr"rlgb fuU y"el rl=uNfUt fUtu rlJtora; fUhlu fuU rtYnfU=th fUb mu fUb YfU mti Nugh"thfUt gt WlfuU thtmgfU v mu rlg; yxleo fuU n;tGh ln ni & vhk;wgn rfU gr= Nugh "thfU fUtuRo fUkvle ntu ;tu WU fUkvlefuU rl=uNfUt fuU mkfUv tht ltbtkfUl rfUgt st mfU;tni ytih snt Yumt rfUgt st;t ni Jnt rsm ciXfU b gnvtrh; rfUgt dgt ni WmfuU ygG tht btrK; mkfUv

22

be dispatched to the Head Office of the Bank and suchcopy shall be deemed to be a nomination on behalf ofsuch Company.

(e) the nomination accompanied or contains adeclaration signed by the candidate before a Judge,Magistrate, Registrar or Sub-Registrar or Assuranceor other Gazetted Officer or an Officer of the ReserveBank of India or any other nationalized Bank, that heaccepts the nomination and is willing to stand forelection, and that he is not disqualified either underthe Act or the Scheme or these regulations from beinga Director.

(ii) No nomination shall be valid unless it is received withall the connected documents complete in all respectsand received, at the Head office of the Bank on aworking day not less than fourteen days before the datefixed for the meeting.

Scrutiny of nominations

Regulation 66 :

(i) Nominations shall be scrutinized on the first workingday following the date fixed for the receipt of nominationand in case any information is not found to be valid,the same shall be rejected after recording the reasonthereof. If there is only one valid nomination for anyparticular vacancy to be filled by election, the candidateso nominated shall be deemed to be elected forthwithand his name and address shall be published as soelected. In such an event there shall not be any electionat the meeting convened for the purpose and if themeeting had been called solely for the purpose of theaforesaid election it shall stand cancelled.

(ii) In the event of an election being held, if validnominations are more than the number of Directors tobe elected, the candidate polling the majority of votesshall be deemed to have been elected.

(iii) A Director elected to fill an existing vacancy shall bedeemed to have assumed office from the date followingthat on which he is or is deemed to be elected.

Election disputesRegulation 67

(i) if any doubt or dispute shall arise as to thequalification or disqualification of a person deemed ordeclared to be elected, or as to the validity of theelection of a Director, any person interested, being acandidate or shareholder entitled to vote at suchelection, may, within seven days of the date of thedeclaration of the result of such election, give intimationin writing thereof to the Chairman and ManagingDirector of the Bank and shall in the said intimationgive full particulars of the grounds upon which he/shedoubts or disputes the validity of the election.

(ii) On receipt of an intimation under sub-regulation (i) theChairman and Managing Director or in his absence,the Executive Director of the Bank shall forthwith refersuch doubt or dispute for the decision of a committeeconsisting of the Chairman and Managing Director or

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(E) rfUme gtgt"eN, =kztr"fUthe, cebt hrsx[th gt Wv-hrsx[th gt yg ht[egf]U; cfU fuU rfUme yr"fUthe y:JtCth;eg rhsJo cfU gt rfUme yg ht[egf]U; cfU fuU rfUmeyr"fUthe fuU mbG Wbe=Jth tht n;tGrh; Rm ytNgfUt fUtuRo DtuMKt-vt ltbtkfUl fuU mt: mktl ln rfUgtst;t ni gt Wmb yk;rJo ln hn;t ni rfU Wmu ltbtkfUlJefUth ni ytih Jn rlJtoal fuU rtY F\zt ntulu fUt RAwfUni ;:t gt ;tu Rm yr"rlgb fuU y"el gt Rm gtuslt gtRl rJrlgbt fuU y"el rl=uNfU ntulu mu ylno ln ni>

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ltbtkfUl fUe mkJeGt

rJrlgbl 66

i) ltbtkfUl fUe mkJeGt tr; fuU rtY rlg; ;theF fuU :bfUtgor=Jm fUtu fUe stYde ytih gr= fUtuRo mqalt Ji" ln vtRost;e ni ;tu fUthK yrCrtrF; fUh;u nwY Wmu yJefUth fUhr=gt stYdt> gr= rlJtoal tht Che stlu Jtte rfUme rJNuMrhrU fuU rtY fuUJt YfU ne Ji" ltbtkfUl ntu ;tu Rm fUthltbtkrfU; Wbe=Jth ;f tt rlJtora; btlt stYdt ytih RmfUth rlJtora; grU fUt ltb YJk v;t fUtrN; rfUgtstYdt> Yume =Nt b Rm gtuslt:o cwttRo dRo ciXfU b fUtuRorlJtoal ln ntudt ytih gr= ciXfU YfU btt WvgwoU rlJtoalfuU gtuslt:o cwttRo dRo ntu ;tu Jn h ntu stYde>

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ii) Wv rJrlgb (i) fuU y"el mqalt t; ntulu vh cfU fUtygG YJk ck" rl=uNfU gt WmfUe ylwvr:r; b fUtgovttfUrl=uNfU Yumu mk=un gt rJJt= fUtu YfU Yume mrbr; fUtuWmfuU rJrlag fuU rtY rlr=o fUhudt stu ygG YJk ck"

23

in his absence, the Executive Director and any two ofthe Directors nominated under clauses (b) and (c) ofsub-section 3 of section 9 of the Act.

(iii) The committee referred to in sub-regulation (ii) shallmake such enquiry as it deems necessary and if it findsthat the election was valid election, it shall confirm thedeclared results of the election, or if it finds that theelection was not valid election, it shall, within thirty daysof the commencement of the enquiry make such orderand given such directions including the holding of afresh election as shall in the circumstances appear justto the committee.

(iv) An order and direction of such committee in pursuanceof this regulation shall be conclusive.

Chapter VI

Voting Rights of Shareholders

Determination of voting rights

Regulation 68 :

(i) Subject to the provisions contained in Section 3 (2E)of the Act, each shareholder who has been registeredas a shareholder on the date of the closure of theregister prior to the date of a general meeting shall, atsuch meeting, have one vote on show of hands and incase of a poll shall have one vote for each share heldby him.

(ii) Subject to the provision in Section 3 (2E) of the Act,every shareholder entitled to vote as aforesaid who notbeing a Company is present in person or by proxy orwho being a Company is present by a duly authorizedrepresentative, or by proxy shall have one vote on ashow of hands and in case of a poll shall have onevote for each share held by him as stated hereinabovein sub-regulation (i)

Explanation for this chapter, Company means anybody corporate

(iii) Shareholders of the Bank entitled to attend and voteat a general meeting shall be entitled to appoint anotherperson (whether a shareholder or not) as his proxy toattend and vote instead of himself; but a proxy soappointed shall not have any right to speak at themeeting.

Voting by duly authorized representative

Regulation 69

(i) A shareholder, being the Central Government or aCompany, may by a resolution, as the case may be,authorize any of its officers or any other person to actas its representative at any general meeting of theshareholders and the person so authorized (referredto as a duly authorized representatives in theseregulations) shall be entitled to exercise the samepowers on behalf of the Central Government of theCompany which he represents as if he was an individualshareholder of the Bank. The authorization so givenmay be in favour of two persons in the alternative andin such a case any one of such persons may act as a

rl=uNfU gt WmfUe ylwvr:r; b fUtgovttfU rl=uNfU ytihyr"rlgb fUe "tht 9 fUe Wv-"tht (3) fuU Fkz (F) YJk(d) fuU y"el ltrb; rfUnek =tu rl=uNfU mu rbtfUh clude>

iii) Wv rJrlgb (ii) b rlr=o mrbr; Yume stka fUhude simtJn ytJgfU mbSu ytih gr= Jn vt;e ni rfU rlJtoal Ji":t ;tu Jn rlJtoal fuU DturM; vrhKtb fUe vwr fUhude,y:Jt gr= Jn vt;e ni rfU rlJtoal Ji" ln :t ;tu Jnstka thkC ntulu fuU ;em r=l fuU Ce;h lgt rlJtoalfUhtlu mrn; Yumt yt=uN vtrh; fUhude YJk Yuumu rl=uN =udesimt Wl vrhr:r;gt b mrbr; fUtu Wra; tdu>

iv) Rm rJrlgbl fuU ylwmhK b Yume mrbr; fuU yt=uN YJkrl=uN rlatgfU ntdu>

ygtg VI

Nugh "thfUt fuU b; =ulu fuU yr"fUthb; =ulu fuU yr"fUth fUt rl"tohK

rJrlgbl 68 &

(i) yr"rlgb fUe "tht 3 (2z0) b yk;rJo Wvck"t fuU yg"elrfUme mtbtg ciXfU fUe ;theF fuU vqJo hrsxh ck= rfUY stlufUe ;theF fUtu Yumu Nugh"thfU fUtu, rsmfUt ltb hrsxh b=so rfUgt dgt ntu, Yume ciXfU b nt: WXtfUh YfU b; =ulufUt yr"fUth ntudt ytih b;=tl ntulu fUe r:r; b WmfuU tht"trh; rfUY stlu Jttu gufU Nugh fuU rtY Wmu YfU b; =ulufUt yr"fUth ntudt>

(ii) yr"rlgb fUe "tht 3 (2z0) r=l fuU Wvck"t fuU yg"elg:tvqJtuoU v b b;=tl fUhl fuU rtY nfU=th gufU YumuNugh"thfU fUtu, stu fUkvle l ntu ytih grUd; v mu gt vhtuGetht Wvr:; ntu gt stu fUkvle ntu ytih mgfU v mu tr"f]U;r;rlr" tht gt vhtuGe tht Wvr:; ntu, WvrJrlgbl (i)b simt RmfuU Wvh fUr:; ni, nt: WXtfUh YfU b; =ulu fUtyr"fUth ntudt ;:t b;=tl ntulu fUe r:r; b WmfuU tht "trh;rfUY stlu Jttu gufU Nugh fuU rtY Wmu YfU b; =ulu fUtyr"fUth ntudt>vefUhK - Rm ygtg b IIfUkvleOO mu ;tvgo rfUme rldrb;rlfUtg mu ni

(iii) rfUme mtbtg ciXfU b Wvr:; ntulu YJk b;=tl ntulu YJkb;=tl fUhlu fuU nfU=th cfU fuU Nugh"thfUt fUtu yvlu :tlvh yvlu vhtuGe fuU v b Wvr:; ntulu YJk b;=tl fUhlufuU rtY rfUme yg grU fUtu (atnu Jn fUtuRo Nugh"thfU ntugt lne) rlgwU fUhlu fUt nfU ntudt vhk;w Rm fUth rfUmevhtuGe fUtu ciXfU b ctutlu fUt fUtuRo yr"fUth ln ntudt>

mgfU v mu tr"f]U; r;rlr" tht b;=tl

rJrlgbl 69 &

(i) fUtuRo Nugh"thfU atnu Jn fuU mhfUth gt fUtuRo fUkvle ntu, mkfUvtht g:tr:r; yvlu rfUn yr"fUthe yg grU fUtu Nugh"thfUtfUe rfUme mtbtg ciXfU b yvlu r;rlr" fuU v b fUtgo fUhlufuU rtY tr"f]U; fUh mfuUdt ytih Rm fUth tr"f]U; grU fUtu(Rl rJrlgbt b IImgfU v mu tr"f]U; r;rlr"OO fuU v brJrlr=o) fuU mhfUth gt fUkvle fUe ytuh mu rsmfUt Jnr;rlr"J fUh;t ni, Rm fUth NrUgt fUt gtud fUhlu fUt nfU=thntudt btltu Jn cfU fUt grfU Nugh"thfU ntu> Rm fUth fUttr"fUth ylwfUv;& =tu grUgt fuU vG b r=gt st mfU;t ni

24

duly authorized representative of the CentralGovernment /Company.

(ii) No person shall attend or vote at any meeting of theshareholders of the Bank as the duly authorizedrepresentative of the Company unless a copy of theresolution appointing him as a duly authorizedrepresentative certified to be true copy by the Chairmanof the meeting at which it was passed shall have beendeposited at the Head Office of the Bank not less thanfour days before the date fixed for the meeting.

Notification of Reserve Bank of India-DBOD No. BC No.46/29.39.001/2007-08 and DBOD No. 47/29.39.001/2007-08dated 1st November 2007

The Reserve Bank of India has notified as under :-

No nomination shall be valid unless Fit and Proper status isaccorded by the Nomination Committee appointed by theBoard of Directors of the Bank for this purpose. TheNominations should accompany additional information aboutthe candidates to enable the Nomination Committee to decideon the Fit and Proper status with regard to educationalqualification, experience and field of expertise, track recordand integrity of the candidates. Adverse notice of any authority/ regulatory agency or insolvency or default of any loan fromany bank or financial institution would make the respectivecandidate unfit and improper to be elected as a director onthe Board.

ytih Yume =Nt b Wlb mu fUtuRo grU fuU mhfUth fUkvle fuUmgfU tr"f]U; r;rlr" fuU v b fUtgo fUh mfuUdt>

ii) fUtuRo grU cfU fuU Nugh"thfUt fUe rfUme ciXfU b fUkvle fuU mgfUv mu tr"f]U; r;rlr" fuU v b ;c ;fU Wvr:; ln ntudtgt b;=tl ln fUhudt sc ;fU mgfUT v mu tr"f]U; r;rlr"fuU v b WmfUe rlgwrU mkck"e mkfUv fUe YfU r;, stu WmciXfU fuU ygG tht btrK; mgr; ntu rsmb mkfUv vtrh;rfUgt dgt :t, cfU fuU "tl fUtgtotg fuU vtm ciXfU fuU rtYrlg; ;theF mu fUb ath r=l vqJo sbt l fUe dRo ntu>

i V E E +vSx b+b . 46/29.39.001/2007-08 B b+b . 47/29.39.001/2007-08 nxE 1 x 2007

i V E x xxi +vSi E :-

E E xnE b u

25

Rttntct= cfU"tl fUtgtotg & 2 Yl. Ym. htuz, fUtutfUt;t 700 001

DtuMKt

b...............................................................................vwt/vwte/vle, e/eb;e .................................................................................

rlJtme.................................................................................................................................Y;=Ttht vwr fUh;t nq/fUh;e nq rfU,

fU. b r=ltkfU 14 bRo, 2010 fUtu (E E {i {) gtle rlJtoal b Ctd tulu fUe yrCrtrF; ;theF fUtu cfU fuU................................................... RrJxe Nugh "trh; fUhlu Jttt/Jtte Nugh "thfU nq, ytih

F. bwSu (i) f]UrM YJk d{tbeK y:ogJ:t (ii) crfUkd (iii) mnfUtrh;t (iv) y:oNtt (v) rJt (vi) rJr" (vii) tDw Wtud, gt......................................................... fUt (rsmfUt rJNuM ttl YJk rsmb gtJntrhfU ylwCJ Cth;eg rhsJo cfU fUe htg b cfUfuU rtY Wvgtude ni) rJNuM ttl ni gt gtJntrhfU ylwCJ ni ytih b yr"rlgb fUe "tht 9 fUe Wv-"tht 3y fUe N;tu fuU ylwmthsbtfU;toyt gt f]UMfUtuk, fUtbdtht YJk rNrvgt fuU rn; fUt r;rlr"J fUh;t/fUh;e nq rsmfuU btK Jv Binu mkckr"; btKvt;w; fUh;t/fUh;e nqk ytih

d. b ..................................................(mkgt) ltbtkfUl JefUth fUh;t/fUh;e nq ;:tD. b Rttntct= cfU fuU rl=uNfU fuU rlJtoal fuU rtY RAwfU nq, YJkE. b cfUfUthe rJrlgbl yr"rlgb 1949, cfUfUthe fUkvle (Wvf{Ubt fUt ysol ytih yk;hK) yr"rlgb 1970, ht[egf]U; cfU (ck"

ytih rJrJ" Wvck") gtuslt 1970 Rttntct= cfU (Nugh ytih ciXfU) rJrlgb 1999 fuU Wvck"t fuU y"el cfU fUt rl=uNfU ntulu fuUrtY ylno ln nq

a. b rfUme ht[egf]U; cfU gt Cth;eg xux cfU yr"rlgb 1955 fUe "tht 3 fUe Wv-"tht (1) fuU y"el drX; Cth;eg xux cfUgt Cth;eg xux cfU (ylwMkde cfU) yr"rlgb 1959 fUe "tht 3 b g:tvrhCtrM; rfUme ylwMkde cfU b l ;tu fUtuRo ttC fUt v="trh; fUh;t/fUh;e nq ytih l ne WmfUt fUtuRo fUboathe nq>

A. b yvlt gr;d; rJJhK mktl fUh;t/fUh;e nq stu buhe yr"fU;b stlfUthe ytih rJJtm fuU ylwmth mg YJk vqKo n>s. b Jal =u;t/=u;e nq rfU b cfU fUtu =x Dxltyt mu, gr= fUtuRo ntu, stu Rm DtuMKt fuU ;=lk;h Drx; ntuk, stu gnt =e dRo mqaltyt

;:t cfU fuU rl=uNfU fuU v b buhu rlJtoal mkck"e r;tt-vt rJtuF fUtu rlvtr=; fUhlu nu;w mkd; nt, fuU cthu buk g:tNeD{ vqKo;gtmqra; fUh;t hnqdt / fUh;e hnqde>

* rfUme gtgt"eN, =kztr"fUthe, cebt hrsx[th gt Wv-hrsx[th gt rfUmeyg htsvrt; yr"fUthe gt Cth;eg rhsJo cfU gt Rttntct= cfU gt rfUmeht[egf]U; cfU fuU yr"fUthe fUe bwnh mrn; n;tGh(stu ttdq l ntu Wmu fUtx =>)

WvgwoU DtuMKt buhu mbG n;tGrh; fUe dRo>

* r=ltkfU mrn; n;tGh YJk bwnh

n;tGh

ltb

Nught fUe mkgt

vksef]U; VUturtgtu mk.(gr= Rtux[rlfU v b ln ntu)

ze ve ytRoze mk.(gr= Rtux[rlfU v b ntu)

C

26

*Signature with Seal of Judge, Magistrate, Registrar orSub-Registrar of Assurance, or other Gazetted Officer oran officer of the Reserve Bank of India or Allahabad Bank orany Nationalized Bank.(Delete whichever is not applicable.)

The above declaration signed before me

*Signature & Seal with date

ALLAHABAD BANKHEAD OFFICE : 2 NETAJI SUBHAS ROAD , KOLKATA - 700 001

Declaration

I,............................................son/daughter/wife of Shri/Smt......................resident of __________________________ hereby confirm that :

a. I am a shareholder holdingequity shares of the Bank on 14th May, 2010 (close of Business Hours) i.e. thecut off date for participating in the elections, and

b. I have special knowledge or practical experience in (i) agriculture and rural economy, (ii) banking, (iii) co-operation, (iv)economics, (v) finance (vi) law, (vii) small scale industry, or.(special knowledge ofand practical experience of which in the opinion of Reserve Bank of India would be useful to the Bank) and I represent theinterest of the depositors or farmers, workers and artisans, in terms of sub-section 3A of Section 9 of the Act and as anevidence thereof, I submit herewith the relevant testimonials, and

c. I accept the nominations numbering.and

d. I am willing to contest for the election of Director of Allahabad Bank, and

e. I am not disqualified from being a director of the Bank under the provisions of the Banking Regulations Act, 1949, theBanking Companies (Acquisition and Transfer of Undertakings) Act 1970 Nationalised Banks (Management andMiscellaneous Provisions) Scheme 1970, the Allahabad Bank (Shares & Meetings) Regulations 1999.

f. I neither hold any office of profit nor on an employee of any Nationalised Bank or State Bank of India constituted under sub-section (1) of Section 3 of the State Bank of India Act 1955 or any subsidiary bank as defined in Section 3 of the State Bankof India (Subsidiary Banks) Act 1959.

g. I enclose my personal details which are to the best of my knowledge and belief true and complete; and

h. I undertake to keep the Bank fully informed, as soon as possible, of events, if any, which take place subsequent to thisdeclaration which are relevant to the information provided hereto and to execute the Deed of Covenants upon my electionas a Director of the Bank.

Signature

Name

No. of shares

Regd. Folio No.(if not dematerialized)

DP ID No. (if dematerialized)

Client ID No. (if dematerialized)

Place

Date

27

=n E Vxk i |{

G h.I =n E grUd; h1 =n E { x2 {i E { x3 Vx il4 l {i

5 i x {i

6 ]x B C x

28

FORMAT FOR BIODATA OF THE CANDIDATE

Sl.No.

I. Personal Details of the Candidate

1 Full Name of the Candidate

2 Fathers Name in Full

3 Date of Birth

4 Permanent Address

5 Present Address

6 Telephone & Fax Number Email id

7 Permanent Account Number (PAN) and name and address ofthe Income Tax Circle where personal tax returns are filed(Copy of PAN and acknowledged copy of the latest IT returnfiled to be attached).

8 Educational Qualifications (please attach self attested certifi-cates evidencing the qualification).

9 Relevant background and Experience (Please attach self at-tested certificates evidencing knowledge/and experience).

10 Relevant Knowledge and Experience ( Please refer section9(3-A) of the Banking Companies ( Acquisition & Transfer ofUndertaking Act, 1970) Please attach self attested certificatesevidencing knowledge/and experience).

11 Any other information which the candidate desires to furnish

II Relevant Relationships of the Candidate

12 List of relatives of the Candidate, if any, who are connectedwith the Bank (In terms of Section 6 and Schedule 1A of theCompanies Act, 1956).

13 List of entities in which the candidate is considered as beinginterested {Refer section 299(3)(a); Section 300 of the Com-panies Act, 1956 and Section 20 of the Banking RegulationsAct 1949.

14 List of entities in which the candidate is considered as hold-ing substantial interest within the meaning of section 5 (ne)of the Banking Regulation Act 1949.

15 Name of Bank(s) in which the candidate is or has been amember of the Board (provide details of period during whichsuch office was held).

16 Fund and Non Fund Facilities if any presently availed by thecandidate or any of the entities listed in 12 and 13 above fromthe Bank.

17 Cases, if any, where the candidate or entities listed in 12 and13 above are in default or have been in default in the past inrespect of credit facilities obtained from the Bank or any otherBank/Financial Institution.

Particulars

29

III E ={v E Eb

18 =n E E MiB

IV =n E r E M

30

Signature :

Note : All the coloumns must be filled in failing which the candidature may be rejected

III Records of professional achievements.

18 Professional achievements of the candidate, if any.

IV Proceedings, if any, against the Candidate.

19 If the candidate is a member of a professional associa-tion/body, details of disciplinary action, if any, pendingor commenced or resulting in conviction in the pastagainst the candidate or whether the candidate hasbeen banned from entry of any profession/occupationat any time.

20 Details of prosecution, if any, pending or commencedor resulting in conviction in the past against the candi-date and/or against any of the entities listed in 12 and13 above for violation of economic laws and regula-tions.

21 Details of criminal prosecution, if any, pending or com-menced resulting in conviction in the past against theDirector.

22 Whether the candidate attracts any of the disqualifica-tion envisaged under section 274 of the CompaniesAct 1956.

23 Has the candidate or any of the entities listed in 12 and13 above been subject to any investigation at the in-stance of Government Department or Agency?

24 Has the Candidate at any time been found guilty ofviolation of rules / regulations / legislative requirementsby customs / excise / income tax / foreign exchange /other revenue authorities? If so, please furnish particu-lars.

25 Whether the Candidate or entities listed in 12 and 13above has at any time come to the adverse notice of aregulator such as SEBI, RBI, IRDA, MCA FEMA etc.,

V Any other explanation / information in regard to items Ito III and other information considered relevant for judg-ing fit and proper.

Place:

Date:

31

Rttntct= cfU"tl fUtgtotg & 2 Yl. Ym. htuz, fUtutfUt;t 700 001

ltbtkfUl VUtbomuJt b,ygG YJk ck" rl=uNfU,Rttntct= cfU,2, Yl. Ym. htuz,fUtutfUt;t - 700 001

rg bntu=g,

rl=uNfUt fUt rlJtoal

ytvfUe mqalt r=ltkfU............................................................................fuU mk=Co b b, ..................................................................

Rttntct= cfU fUt YfU Nugh"thfU, stu G, r=ltkfU 14 bRo, 2010 gtle rlJtoal b Ctd tulu fuU rtY yrCrtrF; ;theF fUtuh. 10/-gufU .......................................fuU RrJxe Nugh "trh; fUh;t/fUh;e nq, Binu e/eb;e ................................................

vwt/vwte/vle................................................................................................................rlJtme ........................................................

fUtu r=ltkfU 10 sql 2010 fUtu ytgturs; ntuluJtte cfU fuU Nugh"thfUt fUe +] E mtbtg ciXfU b cfUfUthe fUkvle (Wvf{Ubt fUtysol ytih yk;hK) yr"rlgb, 1970 fUe "tht 9 (3) (i) b g:tWvckr"; cfU fuU Nugh"thfUt fUt r;rlr"J fUhlu Jttu Rttntct= cfUfuU rl=uNfU fuU v b rlJtora; rfUY stlu nu;w ltrb; fUh;t/fUh;e nq>

n;tGh

ltb

Nught fUe mkgt

vksef]U; VUturtgtu mk.(gr= Rtux[rlfU v b ln ntu)

zeve ytRo ze mk.(gr= Rtux[rlfU v b ntu)

C

2) Wbe=Jth fUt ltbtkfUl fUhlu Jttu Nugh"thfUt fuU n;tGh cfU fuU Nugh yk;hK Ysx fuU vtm Wvt" lbqlt n;tGh mu rbtluatrnY>

32

ALLAHABAD BANKHEAD OFFICE : 2 NETAJI SUBHAS ROAD , KOLKATA - 700 001

NOMINATION FORM

ToThe Chairman & Managing Director,Allahabad Bank,2, Netaji Subhas Road,Kolkata700 001

Dear Sir,ELECTION OF DIRECTORS

With reference to your Notice Dated ,I,........ a shareholder of Allahabad Bankholdingequity shares of Rs. 10/- each as on Friday, the 14th May, 2010 (Close of Business Hours)i.e., the cut off Date for participating in the election, do hereby nominate.

Shri/Smt...........................son/daughter./wife of ......................... Residing at. for being elected as a Director of Allahabad Bank repre-senting the shareholders of the Bank as provided in Section 9(3)(i) of The Banking Companies (Acquisition and Transfer ofUndertakings) Act 1970 at the Eighth Annual General Meeting of the Shareholders of the Bank to be held on 10th June 2010.

Signature

Name

No. of shares

Regd. Folio No.(if not dematerialized)

DP ID No. (if dematerialized)

Client ID No. (if dematerialized)

Place

Date

Notes :1) In case nomination is made by a body corporate, the Nomination Form should be accompanied by a certified

true copy of the resolution passed by the Board of Directors under the signature of the Chairman of the meetingat which it was passed.

2) Signature of the shareholders nominating the candidature should match with the specimensignature available with the Share Transfer Agent of the Bank.

33

34

Indian Exports reached $14.36 billion in January 2010,compared to $12.86 billion in January 2009 on a month-on-month basis, which is up by 11.5 %. This trend is most likely tocontinue and in 2010, Indian exports are likely to close roughlyabout $165 billion. Considering the situation across the worldIndian exporters are strategically finding new avenues.

The recovery process of global economic meltdown has startedand after a year of being downbeat, prospects for the globaleconomy is revised upwards from contracting by 1.1% in 2009to growing by 3.1% in 2010. However, world economy isexpected to return to its pre-crisis level, with an anticipatedaverage annual growth of little more than 4% after 2010.

In this growth process, India, being one of the emerging anddeveloping countries of the world, second only to China, ismost likely to play the pivotal role. IMF has already revised upChinas growth forecast for 2009-2010 to 9% from a Julyestimate of 8.5% and Indias growth to touch 8% in 2009-2010.But the alarming feature for Indian economy, at present is risinginflation.

Hike in the food inflation to 17.7% for the week ended March27, 2010 and the overall inflation to 9.89% and inflation inmanufacturing to 7.4% in February, 2010 implies that inflationis fast becoming a demand-driven problem. The primaryarticles inflation in India has started spilling over tomanufacturing inflation and thus overall inflation is going up.So, it is apprehended that inflation may touch 10-11% in firstquarter of FY-11, much beyond the RBIs comfort factor of 8.5%.This may affect the market adversely.

Hence, at this juncture, the challenge before Indian economyis to adopt such policy measures which would strike a balancebetween controlling rising inflation and maintaining growth andstability. Keeping this in view, the Reserve Bank of India hashiked the repo, reverse repo to 5.25% and 3.75% respectively,while the CRR to 6% -raising the rates by 25 basis points inthe recent Annual Monetary and Credit policy for 2010-11.Thehike in CRR, which came into effect from April 24, 2010 isexpected to absorb Rs 12,500-crore excess cash from thebanking system and help lowering the rate of inflation. Inemerging markets, raising interest rates could happen soonerthan in advanced economies but still any immediate hike ininterest rates is being ruled out by the experts.

BANKING SCENE

In the Banking sector, with the industrial production growthlikely to stay, increased capacity utilization may attract higherinvestment by the corporate sector which is most likely tosupport public sector banks credit growth. But, banks shouldbe cautious now because any hike in policy rates could affectcredit offtake, which is still low. The RBI is most likely to allowbanks to keep their BPLR at low levels. But as domestic inflation

i xi Vx 2009 E 12.86 x b E ix -n- +v { Vx 2010 14.36 x b iE{S M V 11.5% +vE * |k V x E x + 2010 i xi MM 165 x b iE {SxE x * E i E vx Ji B ixiE hxiE { x

35

and the global trend in commodity prices, both are upwardrising, net capital inflows picking up and input costs rising, it islikely that RBI may start hiking interest rates by the year-endbecause by then there would be more pressure on interestrates.

In order to address the impending challenges of inflation andmaintaining growth with stability, the Annual Monetary andCredit policy for 2010-11 has focused on:

a) Shifting its policy priority to inflation from growth, at themoment and do away with the capacity constraints which arelikely to put additional pressure on prices.

b) taking cautious measures as regards raising interest rateskeeping in view macroeconomic and price stability.

c) As demand side pressures have clearly emerged in theeconomy, RBIs medium-term objective is to contain theinflation at 3% and the policy will be tuned in a calibratedmanner to support the recovery process.

On a year-on-year basis, bank credit grew by 16.7% or Rs 4,64, 849crore, in the fortnight ending March 26, 2010, which is exceedingRBIs projected non-food credit growth target of 16% for FY2010.While advances by public sector banks grew at 19.5%, private sectorbanks grew credit by only 11.7% and the loan portfolio of foreignbanks contracted by 1.5%. Non-food bank credit grew by Rs 4,73,819crore to Rs 32,49,369 crore. For the whole banking system, creditgrew by around 17% in 2009-10 as compared to the 17.5% growthin 2008-09 according to the report on macroeconomic and monetarydevelopments for 2009-10 released by the RBI on 19th April, 2010.There was an improvement in credit growth to major sectors suchas agriculture, industry, services and personal loans. However, afterRBI has increased the risk weights on loans to the real estate sectorin October, 2009, credit to the real estate has decelerated sharply.

Deposits also surged by Rs 83,630.57 crore to Rs 44,86,573.66crore. Investments by banks in government securities and otherapproved securities dipped marginally by Rs 4,253.29 croreto Rs 13,82,683.58 crore in the fortnight ending March 26,2010.

Bank credit is expected to grow at over 20% in FY11. Depositgrowth is also expected at around 20-22%.

Maintaining assets and liabilities are an important challengeahead of the Banks. RBI, in its bid to tame rising inflation, hashiked the CRR by 75 basis points from 5.0% to 5.75%, in twophases in the second quarter review of the Monetary Policyand hiked CRR by 25 bps in the annual monetary and creditpolicy. The former increase in CRR has sucked out Rs. 36,000crore of excess liquidity from the system and the second hikein CRR, which has come into effect from April 24, 2010 isexpected to absorb Rs 12,500-crore excess cash from the

{ Jx E +x i n Ei * Ei SE P pi + Vx EEi E |i nx >{ E + V , x {V +i iV + il x Mi g , B x E iV E E +i V n r + E Ei CE i iEV n { + +vE n M*

pi E +z Sxi x{]x + li E l rE xB Jx E =q 2010-11 i E pE + @hxi xxJi { vx Epi E M :

E) +{x xiMi |lEi r E lx { pi{ Epi Ex + Ii v v+ E {i Ex VEi { +iH n b Ei *

J) ] +ll + li E vx Ji B giV n E v vx{E ={ Ex*

M) SE +ll M {I E n {] { = ,..E. E vv =q pi E 3% iE i Jx + ilx |G E lx i xi E +vi { ME VBM*

-n- +v { E @h 26 S 2010 E {i {I 16.7% +li 4,64,849 Ec g, k 2010 i u M-Jt @h r E 16% E |I{i I +vE *VE VxE Ij E E u nB MB +O 19.5% Er

36

S 08 S 09 r (%) S 10 r (%)xnb/Parameter Mar08 Mar09 Growth (%) Mar10 Growth (%)x / Net Profit 974.74 768.60 -21.15 1206.33 56.95{SxMi / Operating Profit 1479.51 1901.15 28.50 2548.55 34.05]bM E UcE {Sx Operating Profit Ex. Trading Profit 1008.48 1328.45 31.73 1972.00 48.44|vx B +EEiBProvisions & Contingencies 504.77 1132.55 124.37 1342.22 18.51E +/Total Income 7135.97 8506.65 19.21 9885.10 16.20E (|vx E UcE)Total Expenditure (Excl. Prov.) 5656.46 6605.50 16.78 7336.55 11.07V |b /Interest Spread 1672.34 2158.67 29.08 2650.48 22.78E V/Total Deposits 71616.38 84971.79 18.65 106055.75 24.81E +O/Total Advances 50312.16 59443.40 18.15 72437.31 21.86E /Total Business 121928.54 144415.19 18.44 178493.06 23.60E x/Gross Investments 23722.28 30081.35 26.81 38680.43 28.59

(Rs. in crores)

Banks performance in key business parameters is presentedbelow.

OPERATING RESULTS

(h. Ec )

37

k {h / FINANCIALSE E i{h +x{i xS nB MB / Important ratios of the Bank are depicted below;

xnb / Parameters 31.3.08 31.3.09 31.3.10{V {{ii +x{i / Capital Adequacy Ratio (%) 11.99 13.11 13.62

V /Of which ] I (%) / Tier I (%) 7.71 8.01 8.12] II (%) / Tier II (%) 4.28 5.10 5.50

+i Et xv |b (%)

Spread to Average Working Fund (%) 2.26 2.54 2.54

V E +i Mi (%)Average Cost of Funds (%) 6.66 6.67 5.99

xv { +i + (%)Average Yield on Funds (%) 9.26 9.62 8.68

V E +i Mi (%)Average Cost of Deposits (%) 6.67 6.62 5.97

+O { +i + (%)Average Yield on Advances (%) 10.76 10.88 10.57

|i +Vx (.) / Earnings per Share (Rs.) 21.82 17.21 27.01

|i (.) / Book Value per Share (Rs.) 116.88 131.00 151.17

+i { |i (%) / Return on Assets (%) 1.32 0.90 1.16

+i x]l { |i (%)

Return on Average Net Worth (%) 24.56 16.49 22.21

|vx EV +x{i (%)Provision Coverage Ratio (%) 75.62 76.45 78.95

x Bx{B / Net NPAs (%) 0.80 0.72 0.66

|i ES (.J / Profit per Employee (Rs. in lacs) 4.85 3.76 5.76

|i ES =i{nEi (.J )Productivity per Employee (Rs. in lacs) 604 706 845

OFFICES & BRANCHES

The Bank opened 27 new branches during 2009-10, takingtotal branches to 2287 as on 31.3.2010, with 976 rural, 411semi-urban, 472 urban, 427 metropolitan branches and 1foreign branch. The specialized branches, numbering 76,including 7 Industrial Finance Branches, 5 InternationalBranches, 1 Industrial Finance-cum-International Branch, 1NRI Branch, 2 Specialized Personal Banking Branches, 18SME Finance Branches, 7 Recovery Branches, 1 CMS Hub, 1Specialized Savings Bank Branch, 2 Trading FinanceBranches, 1 Specialized Commercial Agricultural FinanceBranch, 4 Agriculture Finance Branches, 2 Agriculture

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cfU fuU rl=uNfU bkzt lu 2009-10 fuU =tihtl RrJxe fuU 55%fUe =h mu ttCtkN fUe ylwNkmt fUe ni> +li 10. |iE E |i { . 5.50 E *EEk ]E BCSV ]b (B

38

Development Branch, 3 Regional Processing Centres, 1 Forex-cum-Treasury Management Branch and 20 Service Branches.Extension Counters numbered 66 as on 31.3.2010. The Bankconstituted two more zonal offices- Berhampore & Bhagalpurfor effective management. Moreover, one of the zonal officeswas shifted from Jhansi to Agra.

DEPOSIT MOBILISATION

Total deposits of the Bank showed a significant growth of24.81% to Rs.106056 crores as on 31.3.2010. Low costdeposits grew by 24.45 % to Rs.36587 crores as on 31.3.2010,constituting 34.82 % of aggregate deposits as compared to35.08% a year ago. Cost of deposits decreased to 5.97 %from 6.62% during the period.

In line with the directions from Ministry of Finance, the Bankemphasized on low cost deposits mobilization and observedsaving deposits & current deposits mobilization campaignduring the year. During the SB mobilisation campaign (from17.08.09-31.12.09), over 10 million new saving accounts wereopened and saving deposit mobilized to the tune of Rs.424.86crores. During the Current Deposit Mobilisation campaign (from01.01.10-31.03.10), Current deposits of Rs.322.49 crores weremobilized in 20,393 accounts.

CRE