SB MY

Private and Confidential
Information Memorandum
STATE BANK OF MYSORE

(Associate of the State Bank of India)
Head Office: K. G. Road, Bangalore – 560 009, Karnataka.

Tel No: 080 2235 3901 3909 Fax: 080 2228 3684
Contact Person: Mr. S. Shiva Kumar
Email: cmshares@sbm.co.in Website: www.mysorebank.com
PRIVATE PLACEMENT OF UNSECURED, REDEEMABLE, NON-CONVERTIBLE, SUBORDINATED

BONDS AGGREGATING TO Rs. 250 CRORES
GENERAL RISKS
Investors are advised to read the Risk factors carefully before taking an investment decision in this offering. For
taking an investment decision the investor must rely on their examination of the offeror and the offer including the
risks involved. The securities have not been recommended or approved by Securities and Exchange Board of India
(SEBI) nor does SEBI guarantee the accuracy or adequacy of this document. Specific attention of investors is
invited to the Risk Factors on page 9 of the Information Memorandum of Private Placement.
OFFEROR’S ABSOLUTE RESPONSIBILITY

The Offeror, having made all reasonable inquiries, accepts responsibility for, and confirms that this Information
Memorandum contains all information with regard to the Offeror and the Offer, which is material in the context of
the Offer, that the information contained in this Information Memorandum is true and correct in all material
aspects and is not misleading in any material respect, that the opinions and intentions expressed herein are
honestly held and that there are no other facts, the omission of which makes this document as a whole or any of
such information or the expression of any such opinions or intentions misleading in any material respect.
The Arranger is not required to file this document with SEBI/ROC as it is on private placement and not an Offer to
the general Public.
CREDIT RATING
ICRA Ltd. has assigned a LAAA (pronounced L Triple A) rating to the captioned debt programme of the Bank.
This rating indicates highest credit quality rating assigned by ICRA. The rated instrument carries the lowest
credit risk. Also, CRISIL Limited has assigned a ‘AAA/Stable’ (Pronounced ‘Triple A with stable outlook’) rating
to the captioned Bond issue. This rating indicates highest degree of safety with regard to timely payment of
interest and principal on the instrument. The ratings are not recommendations to buy, sell or hold Securities and
investors should take their own decision. The ratings may be subject to revision or withdrawal at any time by the
assigning rating agencies and each rating should be evaluated independently of any other rating. The ratings
obtained are subject to revision at any point of time in the future. The rating agencies have a right to suspend,
withdraw the rating at any time on the basis of new information, etc.
LISTING
The Unsecured Redeemable Non-Convertible Subordinated Bonds are proposed for listing on the Debt Market
Segment of The Stock Exchange, Mumbai. (‘BSE’)
Lead Arrangers to the Private Placement Registrars to the Placement
IDBI Capital Market Services Limited SBI Capital Markets Limited Canbank Computer Services Limited
8th Floor, Bakhtawar, 229, Nariman Point, 202, Maker Tower ‘E’, R&T Centre, Naveen Complex,
Mumbai – 400 021. Cuffe Parade, 4th Floor, # 14, M. G. Road,
Tel: (022) – 56371212 Mumbai – 400 005. Bangalore – 560 001
Fax: (022) – 22885848 Tel: 022 2218 9166 Tel: 080 2532 0541/42/43.
www.idbicapital.com Fax: 022 2218 8332 Fax: 080 2532 0544
Email: info@idbicapital.net www.sbicaps.com Email: ccsirnt@vsnl.com
Offer Opens on: 22nd November, 2005 Offer Closes on: 28th November, 2005
TABLE OF CONTENTS
Definitions and Abbreviations 3

Disclaimer 7
Risk Factors and Management Perception 9
Part I
I. Introduction 18
II. General Information 18
III. Capital Structure of the Bank 21
IV. Object of the Offering 23
V. Terms of the Present Placement 24
VI. Tax Benefits 36
VII. Bank and Management 40
VIII. Promoters, Group Companies, Joint Ventures and Associates 58
IX. Financial Statements 65
X. Management Discussion and Analysis 80
XI. Outstanding Litigation, Defaults and Material Developments 82
XII. Other Regulatory and Statutory Disclosures 84
XIII. Investor Grievances and Redressal System 89
XIV. Main Provisions of the SBI (SB) Act 90
XV. Material Contracts and Documents for Inspection 100
Part II
Declaration 103
2
DEFINITIONS AND ABBREVIATIONS
DEFINITIONS
Term(s) Description
Board/Board of The Board of Directors of State Bank of Mysore or a committee thereof

Directors
Book Closure/ The date of closure of register of Bond for payment of interest.
Record Date
Bonds Unsecured Redeemable Non-Convertible Subordinate Bonds
SBM/Offeror/Bank State Bank of Mysore constituted under the State Bank of India
(Subsidiary Banks) Act, 1959
Depository A depository registered with SEBI under the SEBI (Depositories and
Participant) Regulations, 1996, as amended from time to time
Depositories Act The Depositories Act, 1996, as amended from time to time
Depository Participant A depository participant as defined under the Depositories Act
Director(s) Director(s) of State Bank of Mysore unless otherwise specified
Financial Period of twelve months ended March 31 of that particular year

Year/Fiscal/FY
FIPB Foreign Investment Promotion Board
Head Office of the K. G. Road, Bangalore – 560 009, Karnataka.

Bank
ITSL/Trustee IDBI Trusteeship Services Ltd.
Issue/Offer/ Private Placement of the Bonds

Private Placement
Issuer/Offeror State Bank of Mysore
Information
Memorandum/ The Offer Document for the Private Placement of Bonds
Memorandum/
Offer Document
I.T. Act The Income-Tax Act, 1961, as amended from time to time
Offer Size 2500 Unsecured Redeemable Non-Convertible Subordinate Bonds of

Face Value Rs. 10,00,000/- Each Aggregating Rs. 250 Crores.
3
RBI The Reserve Bank of India
Registrar Registrar to the Offer, in this case being Canbank Computer Services
Limited.
SEBI The Securities and Exchange Board of India constituted under the
SEBI Act, 1992
SEBI Act Securities and Exchange Board of India Act, 1992, as amended from
time to time
SEBI Guidelines SEBI (Guidelines for Disclosure and Investor Protection) 2000 issued
by SEBI on January 27, 2000, as amended, including instructions and
clarifications issued by SEBI from time to time
4
ABBREVIATIONS
ALCO Asset-Liability Management Committee

ALM Asset Liability Management
AGL Aggregate Gap Limits
ARC Asset Reconstruction Companies
AS Accounting Standard
BSE The Stock Exchange, Mumbai
CAR Capital Adequacy Ratio
CDR Corporate Debt Restructured
CDSL Central Depository Services (India) Ltd.
CRISIL CRISIL Ltd.
CRAR Capital to Risk-weighted Assets Ratio
CRR Cash Reserve Ratio
DICGC Deposit Insurance and Credit Guarantee Corporation of India Ltd.
DP Depository Participant
ECGC Export Credit Guarantee Corporation of India Ltd.
FDI Foreign Direct Investment
FEDAI Foreign Exchange Dealers Association of India
GoI Government of India/Central Government
GDP Gross Domestic Product
ICAI Institute of Chartered Accountants of India
ICRA ICRA Ltd.
IGL Individual Gap Limits
MoF Ministry of Finance
NDTL Net Demand and Time Liabilities
NPA Non-Performing Assets
NRI Non Resident Indians
NSDL National Securities Depository Ltd.
RBI Reserve Bank of India
RRBs Regional Rural Banks
SARFAESI Act Securitisation and Reconstruction of Financial Assets and Enforcement of
Security Interest Act
SBI State Bank of India
SBI (SB) Act State Bank of India (Subsidiary Banks) Act, 1959
SBM State Bank of Mysore
SEBI Securities and Exchange Board of India
SLR Statutory Liquidity Ratio
The Bank State Bank of Mysore
The Board The Board of Directors of the Bank
The Companies Act The Companies Act, 1956
VRS Voluntary Retirement Scheme
5
PRIVATE PLACEMENT OF BONDS ISSUED BY STATE BANK OF MYSORE
Dear Sir/ Madam,
State Bank of Mysore (“the Bank”) is proposing to issue Bonds on a private placement basis as
described in this Memorandum.
Investors are required to make payment through demand draft(s) / cheque(s) payable in favour
of “State Bank of Mysore A/c-Bonds Issue” and crossed “Account Payee only”. The full
face value of the Bonds has to be paid up on application.
The Bank reserves the right to reject in full or part any or all of the offers received by them to
invest in these Bonds without assigning any reason for such rejections.
You are requested to confirm your acceptance to the terms and conditions outlined in this
Memorandum of Private Placement by sending the Application Form along with the cheque(s) /
demand draft(s) to the Sole Arrangers/Bank’s branches.
Your acceptance of the terms and conditions outlined in this Memorandum will constitute an
offer to invest in the above – referred Private placement and will be subject to acceptance by
the Bank. Please note that this Private Placement Memorandum is restricted for circulation only
to the investors to whom the above has been addressed personally and this Memorandum
cannot be transferred/circulated to others. The information contained herein is to be retained in
strict confidence.
Should you require any further clarifications regarding the above-mentioned Private placement,
we request you to contact the undersigned.
Yours Faithfully,
For State Bank of Mysore
Sd/-
Authorised Signatory
Place: Mumbai
Date: 22nd November 2005
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DISCLAIMER
This Memorandum of Private Placement (“Memorandum”) is neither a prospectus nor a statement in lieu of
prospectus and does not constitute an offer to the public to subscribe for or otherwise acquire the Bonds issued by
State Bank of Mysore (the Bank/the Offeror). The document is for the exclusive use of the Person(s)/Institution(s)
to whom it is delivered and it should not be circulated or distributed to third party (ies). Apart from this
Information Memorandum, no Offer Document or Prospectus has been prepared in connection with this Bond
Offer and that no Prospectus in relation to the Issuer or the Bonds relating to this Offer has been delivered for
registration nor such a document is required to be registered under the applicable laws. The Arranger is not
required to file this document with SEBI/ROC/RBI as it is on private placement and not an Offer to the general
Public.
This Memorandum is issued by the Bank. The views contained in this Memorandum do not necessarily reflect the
views of its directors, employees, affiliates, subsidiaries or representatives and should not be taken as such. The
Memorandum has been prepared by the Bank to provide general information on the Bank and does not purport to
contain all the information a potential investor may require. Where this Memorandum summarizes the provisions
of any other document, that summary should not be relied upon and the relevant document should be referred to
for the full effect of the provisions. The information relating to the Bank contained in the Memorandum is
believed by the Bank to be accurate in all respects as of the date hereof.
The Memorandum shall not be considered as a recommendation to purchase the bonds and recipients are urged to
determine, investigate and evaluate for themselves, the authenticity, origin, validity, accuracy, completeness,
adequacy or otherwise the relevance of information contained in this Memorandum. The recipients are required to
make their own independent valuation and judgment of the Bank and the Bonds. It is the responsibility of potential
investors to also ensure that they will sell these bonds in strict accordance with this Information Memorandum and
other applicable laws, so that the sale does not constitute an offer to the public, within the meaning of the
Companies Act 1956.The potential investors should also consult their own tax advisors on the tax implications
relating to acquisition, ownership, sale or redemption of Bonds and in respect of income arising thereon. Investors
are also required to make their own assessment regarding their eligibility for making investment(s) in the Bonds of
the Bank. The Bank or any of its Directors, employees, advisors, affiliates, subsidiaries or representatives do not
accept any responsibility and/ or liability for any loss or damage however arising and of whatever nature and
extent in connection with the said information.
Neither the Arranger nor any of their respective affiliates or subsidiaries have independently verified the
information set out in this Memorandum or any other information (written or oral) transmitted or made to any
prospective lender in the course of its evaluation of the Offeror.
The Arranger make no representation or warranty, express or implied, as to the accuracy or completeness of the
Information Memorandum, and the Arranger do not accept any responsibility for the legality, validity,
effectiveness, adequacy or enforceability of any documentation executed or which may be executed in relation to
this Offer.
The recipients of this Memorandum agree that unless and until the definitive written agreements between the Bank
and any such recipient with respect to a possible transaction have been executed and delivered and have become
legally effective, and then only to the extent of the specified terms and provision of such definitive agreements,
neither the Bank nor any of its Directors, employees, advisors, affiliates, subsidiaries or representatives shall be
under any legal obligation of any kind what so ever with respect to any such transaction by virtue of the delivery
of this Memorandum or its content or of any other written or oral expression by any of the Directors, employees,
advisors, affiliates, subsidiaries or representatives of the Bank.
Force Majeure
The Bank reserves the right to withdraw the Offer prior to the earliest closing date in the event of any unforeseen
development adversely affecting the economic and regulatory environment or otherwise. In such an event, the
Bank will refund the application money, if any, along with interest payable on such application money, if any,
without assigning any reason.
This Information Memorandum is issued by the Bank and signed by its authorized signatory.
Sd/-
Date:22nd November 2005 Authorised Signatory
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FORWARD-LOOKING STATEMENTS
This Information Memorandum may contain certain “forward-looking statements”. These

forward-looking statements generally can be identified by words or phrases such as we
“believe”, “expect”, “estimate”, “anticipate”, “intend”, “plan” or other words or phrases of
similar import. Similarly, statements that describe our objectives, plans or goals are also
forward-looking statements. All forward-looking statements are subject to risks, uncertainties
and assumptions about us that could cause actual results to differ materially from those
contemplated by the relevant forward-looking statement. Important factors that could cause
actual results to differ materially from our expectations include, among others:
a) General economic and business conditions in India;
b) Our ability to successfully implement our strategy, our growth and expansion plans and
technological changes;
c) Changes in the value of the Indian rupee and other currency changes;
d) Changes in the Indian and international interest rates;
e) Changes in laws and regulations that apply to the Indian Banking Industry;
f) Increasing competition in, and the conditions of, the Indian Banking Industry;
g) Changes in political conditions in India; and
h) Changes in the foreign exchange control regulations in India.
By their nature, certain market risk disclosures are only estimates and could be materially
different from what actually occurs in the future. As a result, actual future gains or losses could
materially differ from those that have been estimated. In accordance with SEBI requirements,
our bank will ensure that investors in India are informed of material developments until such
time as the grant of listing and trading permission by the Stock Exchanges.
8
RISK FACTORS AND MANAGEMENT PERCEPTION THEREOF
The Investors should carefully consider the following risk factors as well as the other details
and information contained in this Information Memorandum in evaluating the Bank and its
business before investing the Bonds offered by this Information Memorandum.
INTERNAL RISK FACTORS
1. Contingent Liabilities
As on March 31, 2005 the contingent liabilities of the Bank were at Rs.4776.85 crores
comprising claims against the Bank not acknowledged as debts (Rs.16.02 crores), liability on
account of outstanding forward exchange contracts (Rs. 3367.30 crores), guarantees on behalf
of constituents (Rs.486.74crores), acceptances, endorsements and other obligations (Rs. 748.80
crores) and others (Rs. 1.06 crores).
Management Perception
The contingent liabilities have arisen in the normal course of business of the Bank and are
according to the prudential norms prescribed by RBI.
2. Income Tax Proceedings
Various proceedings against the Bank relating to Income Tax amounting to Rs. 13.91 crores
are pending in appeal with the Income Tax authorities as on 30/09/2005. The Bank has not
made any provision in this regard and adverse ruling, if any, shall affect the financials of the
Bank, to the extent of the impact of the ruling.
Appeals have been referred to concerned Tax authorities in respect of the above.
3. Profits of the Bank
The growth in net profits of the Bank from Rs. 176.38 crores in FY 2003-04 to Rs. 206.26
crores in FY 2004-05 (growth of 16.94%) can be mainly attributed to treasury profits. The net
profit for the half-year ended 30th September 2005 stood at Rs 98.24 crores. The Bank made a
profit of Rs. 151.02 crores from sale of investments (treasury income) during FY05 (Rs 98.24
crores for the HY 30th September 2005)
The operating profit of the Bank has come from diversified income comprising of net interest
income, profit on Sale of Securities and other income, which account for 120.61%, 33.48% and
85.47% of the total operating profit respectively for the FY2004-2005. For the half year 30th
September 2005 also, the above percentages were 136.36 %, 28.81% and 84.12% respectively
of the total operating profit.
4. Non-Performing Assets (NPAs)
As on 31.03.2004, 31.03.2005 and 30.09.2005, the net NPAs of the Bank stood at Rs 186.38
crores, Rs 80.99 crores and Rs 102.51crores i.e. 2.96% ,0.92% and 1.03% of its net advances
amounting to Rs 6304.08 crores, Rs 8777.34 crores and Rs 9999.52 crores respectively in
9
absolute terms. In the event of non-recovery of these assets, the Bank may have to provide for
these NPAs, which might affect the profitability of the Bank in future.
The Net NPAs of the Bank have consistently been declining in percentage terms, from 2.96%
as on 31.03.2004 to 0.92% as on 31.03.2005 and the Bank has provided for its NPAs in
conformity with RBI guidelines. The Bank is taking steps to reduce the proportion of non-
performing assets through aggressive recovery drives combined with improved risk
management practices. Further, there have been substantial changes in the legislative and
operating environment enabling FIs and Banks to pursue recovery of overdues. Besides Debt
Recovery Tribunal (DRT) set up for faster settlement of recovery litigation, GoI has enacted
‘The Securitisation and Reconstruction of Financial Assets and Enforcement of Security
Interest Act, 2002’ enabling FIs and Banks to securitise and reconstruct financial assets and
enforce security more effectively. Reserve Bank of India has formulated detailed guidelines for
operation of the scheme. The Bank is invoking the provisions of the Securitization Act to
enhance recovery. Thus, the Bank has been taking recourse to all the available methods to
recover its over dues from the borrowers.The Bank has also taken steps for the implementation
of the RBI guidelines for speedy recovery of NPAs under SME.
5. Regional Concentration of the Bank
State Bank of Mysore has a regional concentration in Karnataka accounting for approximately
82% of all branches in terms of numbers. The regional presence of the Bank may compromise
its competitive position vis-à-vis its national level competitors.
The total Deposits of the Bank have grown by 104.92% to reach a level of Rs.13584.98 crores
and Advances have grownup by 130.46% to a level of Rs.9124.51 crores during the past 5
years. The Bank has 637 branches and 21 extension counters as on 30.09.2005.
6. Decline in Return Ratios
The Average Yield on Advances of the Bank has decreased from 9.52% in FY04 to 8.64% in
FY05 (8.46% as on 30th September 2005. during the same period.
Interest rates on advances to the corporate sector and personal segment have been under
extreme pressure due to severe competition. A demand for level playing field from the
Agricultural and Small Industries and Businesses is exerting greater downward pressure on
Yield on Advances.
However, with the recent hike in repo and reverse repo rates announced by RBI, the downward
pressure on yields will abate and yields on advances are expected to improve.
7. Depreciation charge to P& L account due to Transfer of Securities from AFS to HTM
The Bank has considered and provided depreciation on investments upto 30.09.2005 as per RBI
guidelines. However consequent upon transfer of certain Government Securities on 02.04.2005
from Available for Sale (AFS) category to Held to Maturity (HTM) as permissible, depreciation
amounting to Rs 41.13 crores has risen
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The above-referred securities were transferred from AFS to HTM to insulate the Bank from
further decline in prices. While improvement in prices, will enable selling the securities with
the permission of the top management of the Bank, in case of price fall, no further provisioning
is necessary as HTM category is exempted from mark to market. .As on the date of .transfer 10
year 10-year G-Sec yield of 6.68% and as on 30.09.05 10 year yield was 7.11% thus the
Bank’s position was comfortable on valuing the investments as on 30.09.05..
8. Adverse affect of the revised RBI policy on the Capital Adequacy of the Bank
The upward revision of the risk weight on exposures to sensitive sector to 125% will adversely
affect the Capital Adequacy Ratio of the Bank for the Quarter ended December 2005
The Bank has already initiated steps to improve the capital funds and has decided to raise the
current issue of Tier II capital of Rs. 250 crores to shore up the Capital Adequacy Ratio.
Further, the bank exposure to sensitive sector is marginal, compared to total advances
portfolio.
9. Asset Liability Position
As per the statement of structural liquidity as on the last reporting Friday in March 2005, the
negative mismatches in the first two time buckets are well within the tolerance levels stipulated
by RBI and ALM policy of our Bank. Further all the negative gaps in the other time buckets are
also within the tolerance limits fixed by the bank. Further, as on the last reporting Friday of
September 2005, the mismatches in all the time horizons are well within the tolerance levels
stipulated by RBI and ALM policy. A large portion of the funding of the Bank is in the form of
short and medium term deposits. The asset liability position of the Bank could be affected if the
depositors do not roll over the deposits. A comprehensive contingency plan is put in place to
address fully any problems relating to liquidity.
As per the normal behavioral pattern and past experience, a large portion of the deposits gets
rolled over. The Bank feels that in the event of these deposits not being rolled over, the fresh
accretion of deposits would take care of the Asset Liability mismatches. In addition, as on
31.03.2005, the Bank had excess SLR securities to the tune of Rs.1481.51 crores, while the
investments of Rs.3158.30 crores are in the long-term (over 5 years) category, which can be
utilized to correct any medium term mismatches. As on the last reporting Friday of September
2005, the amounts were Rs 963.45 crores and Rs.3506.99 crores respectively. Moreover, the
Bank has an Asset Liability Management system in place to actively monitor and manage
liquidity mismatches.
10. Credit Risk
The Bank’s main business of lending carries an inherent credit risk, which involves inability or
unwillingness of a customer or counterparty to meet commitments in relation to lending,
trading, hedging, settlement and other financial transactions.
11
The Bank has a rigorous and well-defined credit appraisal system. Prudential exposure norms
and various internal exposure norms are followed to avoid credit concentration and to minimize
and mitigate credit risk. Credit risk assessment is in place for capturing the risk profiles of the
accounts. The Bank ensures that Risk Management Department is independent of the
operational department. Bank has a comprehensive loan policy document covering areas of
credit and credit risk.
11. Asset Concentration
Top five industries amount for 29.70% and 29.90% of non-food credit of the bank as on
31.3.2004 and 31.3.2005 respectively. Top five borrowers account for 11.65% and 7.88% of
non-food credit as on 31.3.2004 and as on 31.3.2005 respectively.
Exposure norms are in place to avoid asset concentration. Portfolio reviews and reviews of
implementation of exposure management norms are undertaken at regular intervals to check
asset concentration. Except for infrastructure and Textiles, exposure limits for individual
industry is capped at 10 percent to avoid concentration of assets in a few industries.
12. Outstanding Litigations against the Bank
There are outstanding litigations (563 cases) as on 31.03.2005 the financial implication of
which cannot be estimated. For details, please refer to the para on Litigation on page 82 of the
Information Memorandum.
These claims are not likely to affect the operations and finances of the Bank.
13. Litigation against the Bank sponsored RRB’s
There are 18 cases of claims/suits filed against Kalpatharu Grameena Bank and Cauvery
Grameena Bank respectively. These Grameena Banks are sponsored by State Bank of Mysore.
For details, please refer to the para on Litigation on page 55 of the Information Memorandum.
These claims against Kalpatharu Grameena Bank and Cauvery Grameena Bank are not likely to
affect the operations and finances of State Bank of Mysore.
14. RBI’s Annual Financial Inspection Report
The Annual Inspection Report of RBI on the financial position of the Bank as on 31.03.2005
has identified certain weaknesses in the system, operational and other deficiencies.
The bank has taken the necessary action to rectify the various deficiencies pointed out in the
Annual Financial Inspection which is a regular supervisory exercise carried out by RBI in
respect of all banks and financial institutions. A comprehensive compliance report has already
been submitted to the regulatory authorities furnishing details of corrective action initiated by
the bank.
12
15. Utilization of Funds
The utilization of the funds proposed to be raised through this private placement is entirely at
the discretion of the Bank and no monitoring agency has been appointed to monitor the
deployment of funds.
The funds raised through this private placement are not meant for any specific project and
hence a monitoring agency may not be required. The Bank is managed by professionals under
the supervision of its Board of Directors. Further, the Bank is subject to a number of regulatory
checks and balances as stipulated in its regulatory environment. Therefore, the management
believes that the funds raised via this private placement would be utilised only towards
satisfactory fulfillment of the Objects of the Offer.
16. Credit Decisions
The credit decisions of the Bank are subjected to various risk parameters.
In a dynamic environment, all the credit decisions are subjected to various risk parameters. As
such the Bank is following a prudent policy marked by in built checks and balances, where
identification and mitigation of risk are the key objectives. Prudential limits are fixed on
various financial parameters to implement risk management guidelines. Bank has implemented
various Credit Risk Management guidelines given by the Reserve Bank of India. Bank has
fixed internal exposure ceilings based on credit rating of the borrowal account to mitigate
concentration risk. Portfolio/Industry wise exposure limit is fixed as a risk mitigation tool. As
part of the credit risk management system, the Bank has also confined, by and large, the high
value credit exposures of Rs.1 crore and above to specially designated branches which are
equipped to handle such exposures. Bank has also stipulated criteria for taking exposures in a
particular industry. Maximum industry wise stipulated exposure is 10 per cent of total advances
except infrastructure in the aggregate. The Due Diligence in respect of the retail assets has been
strengthened to protect the quality of this portfolio.
17. Credit Policy of the Bank
The credit policy followed by the Bank may materially influence its credit portfolio.
The Bank has a comprehensive loan policy document. The loan policy is regularly updated in
the light of market changes and revision in RBI guidelines. Loan policy aims at continued
growth of assets while endeavoring to ensure that they remain performing and standard
EXTERNAL RISK FACTOTRS
1. Regulatory restrictions on the Bank and limitations of the powers of bondholders of

the Bank
There are a number of restrictions as per the State Bank of India (Subsidiary Banks) Act, 1959,
which impede the flexibility of the Bank's operations and affect/restrict investor's right.
13
i. The Banks can carry on business/activities as specified in the Act. There is no flexibility to
pursue profitable avenues if they arise, in contrast with companies under the Companies
act, where shareholders can amend the Object clause by a Special Resolution Act.
ii. There are restrictions in the Banking regulation Act regarding:
a) Setting up of subsidiaries by a bank
b) Management of the Bank including appointment of directors
c) Borrowings and creation of floating charge thereby hampering leverage.
d) Expansion of business as the branches need to be licensed
e) Opening of new place of business and transfer of existing place of business
f) Disclosures in the profit & loss account and Balance sheet
g) Production of documents and availability of records for inspection by shareholders
h) Reconstruction of banks through amalgamation etc
i) Further issues of capital including issue of rights share for which prior SBI/RBI
approval is needed
j) The Bank is prohibited from trading activity. This may act as operational constraint.
iii. Every Banking Company is required to create a Reserve fund by transfer of a sum
equivalent to not less than twenty percent of profit as disclosed in the Profit & Loss
account before any dividend is declared.
iv. Every Bank has to maintain assets in India, which would be not less than 75% of the
Bank's demand and time liabilities in India, which in turn may prohibit the Bank from
creating overseas assets and exploiting overseas business opportunities.
v. The financial disclosures in the Information Memorandum may not be available to
investors after listing, on a continuous basis.
vi. Various rights/powers of shareholders available under the Companies Act in this behalf
are not available to shareholders of Banks as the provisions of the Companies Act are
not applicable to the Bank. Rights like calling for general meetings, inspection of minutes
and other material records, application by members for investigation of affairs of a
company, application for a relief in case of oppression and mismanagement, voluntary
winding up are not available to shareholders of a Bank.
vii. As per section 19(2) of State Bank of India (Subsidiary Bank's) Act, 1959, no person
other than the State Bank, shall be entitled to exercise voting rights in respect of any
shares held by such person in excess of one percent of the issued capital of the
subsidiary bank concerned.
viii. No banking company shall pay dividend on its shares until all its capitalised expenses
(including preliminary, organisational expenses, share selling commission, brokerage,
amounts of losses incurred and any other item of expenditure not represented by tangible
assets) have been completely written off. The Bank has received an exemption from GOI
vide letter ref. from this provision relating to the payment of dividend, up to 31.03.04.
ix. As per Section 9 (1) of the State Bank of India Act,1959 no person shall be registered as
a shareholder in respect of any shares in a subsidiary bank held by him, whether in his
own name or jointly with any other person, in excess of two hundred shares, or be
entitled to payment of any dividend on the excess shares held by him, or to exercise any
of the rights of a shareholder in respect of such excess shares otherwise than for the
purpose of selling them:
Provided that nothing contained in this sub-section shall apply to-

a) the State Bank;
b) a State Government;
c) a Corporation;
d) an insurer as defined in the Insurance Act, 1938;
14
e) a local authority;
f) a Co-operative society;
g) a trustee of a public or private religious or charitable trust;
Increase in regional hostilities, terrorist attacks and other acts of violence and war could
adversely affect the country's economic growth and development thereby the financial
markets including the Bank's business and its future financial performance.
The performance, quality, and growth of the Bank are dependent on the health of the overall
Indian economy. Slowdown in economic growth in India could affect the business of the
Bank.
The bank has been functioning well with all these constraints and is expected to continue to
grow as hitherto. The Bank is expanding its product and services offered to diversify its
income streams. The Bank's thrust on retail products is envisaged to provide growth. Risk
management systems, credit supervision, special emphasis on recovery of NPAs and close
monitoring will enable the Bank to closely monitor the health of its credit portfolio. The
slowdown witnessed in the Indian and global economy in the past few years has not
materially affected the Bank's profitability.
2. Sensitivity to the Economy and Extraneous Factors
The Bank’s performance is highly correlated to the performance of the economy and the
financial markets. The health of the economy and the financial markets in turn depends on the
domestic economic growth, state of the global economy and business and consumer confidence,
among other factors. Any event disturbing the dynamic balance of these diverse factors would
directly or indirectly affect the performance of the Bank including the quality and growth of its
assets.
3. Competition from Existing and New Commercial Banks
Competition in the financial sector has increased with the entry of new players and is likely to
increase further as a result of further deregulation in the financial sector. The Bank may face
competition both in raising resources and in deploying them.
The Bank has an established broad-based presence and has been taking steps to enhance
customer satisfaction by upgrading skills, systems and technology to meet such challenges. The
Bank is attempting to add quality assets on competitive terms. The Bank is also taking steps to
broad base its product bouquet with a special emphasis on enhancement in the non-fund based
income. On the resource-raising front, the Bank is actively endeavouring to broaden its reach
and raise resources through its wide distribution network of 629 branches, 20 extension
counters.
4. Changes in Regulatory Policies
The operations of the Banking Industry are subject to regulations by the Government/RBI.
Major changes in Government/ RBI policies relating to banking sector may have an impact on
the operations of the Bank.
15
The policy changes may provide both opportunities and challenges for the Bank. The Bank has
a long presence in the banking sector, for more than 90 years and does not perceive policy
changes to be a major threat.
5. Disintermediation in the Financial Markets
As the financial markets mature and with growing developments in the capital markets, the
trend towards disintermediation may be increasingly in evidence. In such a scenario, many
companies including the current and potential borrowers of the Bank may access capital
markets directly for their financing needs and reduce their dependence on the banking system.
This may have an adverse impact on the level of deposits and also on the level and mix of
advances portfolio and the profitability of the Banks.
The Bank has, in recent years, launched several retail lending schemes and value added
products so as to broaden its borrower base. Further, disintermediation brings with it the
opportunity for the Bank to expand its fee-based activities. The Bank has been endeavouring to
develop a presence in several financial services to earn fee based income by focusing on
businesses such as foreign exchange, treasury, investments, cash management, insurance,
depository, debenture trustee etc., thus taking advantage of the disintermediation phenomenon.
6. Forex Risk
Exchange Rate fluctuations may have an impact on the Bank’s financial performance.
As per RBI guidelines, banks are not allowed to keep open position on their foreign exchange
transactions beyond prescribed limits on a daily basis. Foreign exchange transactions beyond
such limits, if any, must be squared off at the end of each day. Hence, the risk from exchange
rate fluctuations is minimised. The Board of Directors of the Bank has also prescribed limits for
gaps or mismatches in maturities of Bank’s foreign currency assets and liabilities and forward
transactions in foreign exchange. The Bank operates within the limits fixed for gaps or
mismatches in maturities of Bank’s foreign currency assets and liabilities and forward
transactions in foreign exchange, thus minimising the risks of mismatches in maturities and
interest rates.
7. Interest Rate Risk
Present interest rates on deposits and advances are based on many micro and macro economic
factors including the directives of the Reserve Bank of India which are likely to be market
driven due to deregulation and thereby may result in increasing pressure on spreads and affect
profitability. Interest rate volatility exposes the Bank to an interest rate risk or market risk. Such
interest rate risk has a potential impact on net interest income or net interest margin as well as
on the market value of the fixed income securities held by the Bank in its investment portfolio.
These risks are inherent in the banking business. However, the Bank has put in place a system
of regular review of lending and deposit rates in order to minimise the interest rate risk. The
16
Asset Liability Management Committees of the Bank reviews the risk on a regular basis.
Continuous Risk Management measures are initiated depending upon the movement in the
market interest rates. The movement in the interest rates is closely monitored for appropriate
action.
8. Operational Risk
Operational risk is a result of failure of operating system in a bank due to certain reasons like
computer break-ins, power disruptions, fraudulent activities, natural disaster, human error or
omission or sabotage.
For managing operational risk, the Bank has laid down well-defined systems and procedures.
The Bank has set up a separate department to improve the systems and procedures to suit the
changing environment. The Bank has also in place a strong internal inspection and audit
system. For managing IT related risks, the Information Systems Security Policy is in place. The
Bank has an effective OPD department, which formulates and monitors delegation of duties and
responsibilities at different level.
Note to Risk Factors

1. Net worth (excluding revaluation reserves) of the Bank as on 31.03.2004 and 31.03.2005
and was Rs. 581.97 crores, and Rs. 750.79 crores respectively.
2. The Private Placement size is Rs. 250 crores.
3. The Book Value of the share as on March 31, 2004 and March 31, 2005 was at Rs. 1616.58
and Rs.2085.53 respectively (face value of Rs. 100/-).
4. State Bank of Mysore would like to clarify that inspection by RBI is a regular exercise and
is carried out periodically by RBI for all banks and financial institutions. The reports of
RBI are strictly confidential. The Bank has informed the RBI the actions already taken and
measures that are under implementation in respect of observations made by RBI.
5. As per the provisions of Section 15(1) of the Banking Regulation Act, 1949 no banking
company shall pay any dividend on its shares until all its capitalised expenses (including
preliminary expenses, organisational expenses, share selling commission, brokerage,
amounts of losses incurred and any other item of expenditure not represented by tangible
assets) have been completely written off.
6. No person holding shares in the Bank in respect of any shares held by him/her can exercise
voting rights on a poll in excess of 1% of the total voting rights of all the shareholders of
the Bank.
7. Transactions between State Bank of Mysore and its Associates w.r.t. related party
transactions are given under the head Financial Information.
17

Tel No: 080 2235 3901 3909 Fax: 080 2228 3684
Contact Person: Mr. S. Shiva Kumar
PART I
I. INTRODUCTION
State Bank of Mysore (herein after referred to as “the Bank”) has been constituted under the
State Bank of India (Subsidiary Banks) Act, 1959 herein after referred to as the SBI (SB) Act.
The Bank is privately placing to Qualified Institutional Buyers and High Net Worth Individuals
and other eligible applicants as mentioned else where in this Information Memorandum, 2500
Unsecured, Redeemable, Non-Convertible Subordinated Bonds of Rs.10 lakh each, at par and
aggregating to Rs. 250 crores.
HIGHLIGHTS OF THE BANK
• Bank with 92 years of existence.

• The Bank is professionally managed with a track record of profitability
• The Bank has a large network of branches spread throughout the country that may enable it
to raise funds competitively. The Bank 637 branches and 21 extension counters as on
30.09.2005.
• The Bank has also opened 17 specialised branches to cater to the needs of industrial finance,
trade finance, personal banking, international banking and small-scale industries.
• Capital Adequacy Ratio of 11.26%, as at the HY SEP 2005 respectively, which is above
minimum of 9% prescribed by RBI.
• Product portfolio includes Trade finance, Consumer Loans, Agri-Business Services,
Insurance Marketing Services, Kisan Cards etc.
• Consistent Deposits growth: Consistent Advances growth: As on 31.3.05 deposits have
grown by Rs.6955.70 crs (104.93% over the last 5 years and advances have grown by
Rs.5165.21 crs (130.46%).
Core Banking Solution is being implemented in all branches of the Bank by 31.12.2005.
II. GENERAL INFORMATION
State Bank of Mysore (herein after referred to as “the Bank”) has been constituted under the
State Bank of India (Subsidiary Banks) Act, 1959 herein after referred to as the SBI (SB) Act.
The Head Office of the Bank is situated at K. G. Road, Bangalore – 560 009, Karnataka, India.
Authority for the Placement
This private placement of Bonds is being made pursuant to the resolution passed by the
Executive Committee of the Board of Directors of the Bank at its meeting held on November
18
19, 2005 permitting to raise Subordinated Debts of Rs. 250 crores. Further, State Bank of India,
Central Office, has approved the issue of subordinated bonds vide their letter SBD/BNJ/002332
dated November 21, 2005.
The Bank can carry on its existing activities and future activities planned by it in view of the
existing approvals, and no further approvals from any Government authority are required by
the Bank to carry on its said activities.
BOARD OF DIRECTORS OF THE BANK
The composition of the Board of Directors of the Bank as on September 30, 2005 is as under:
Name & Address of Director Appointed/ Co- No. of other

opted to the BOD/Board
Qualifications/
Board Since Committees he is
Specialisations a
member/director
A.K. Purwar
Chairman, SBI Representing SBI, 32
13.11.2002 M. Com., CAIIB
Corporate Office,
Mumbai – 400 031
S.K.Hariharan
Dy. Managing Director & Group
Representing SBI, 25(i) © 15
Executive (CB&AS), SBI 16.05.05 B.Sc., CAIIB
Corporate Centre,
Mumbai – 400 021
Y. Vijayanand Managing Director, SBM,
Managing Director, SBM, Head 01.03.2004 MA (Economics), B.L.,
Office, Bangalore - 560 009 CAIIB
Vanitha Venugopal Representing RBI, 25 (i) (b)
18.03.2005 M. A.(Economics)
DGM, RBI, Bangalore-560001.
M.N. Rao
General Manager (A&S),
Representing SBI, 7
SBI Associate Banks’ Deptt, 01.01.2001 M. A.
Corporate Centre, Mumbai – 400
021
Yashovardana Sinha
Dy. GM, Associate Banks’ Deptt., Representing SBI, 6
01.01.2004 M. Sc.
SBI, Corporate Centre, Mumbai –
400 021
N. Venugopal, Representing Workmen
No. 52, 10th A Main, 1st Block, 21.10.2002 Employees,
Jayanagar, Bangalore 560 011. B. Com.
T.S. Nagaraja, Secretary ABOA, Representing Non-
Mysore Unit, SBM, 16.06.2003 Workmen Employees,
Bangalore - 560 009. B. Sc., CAIIB
R. Umachander, 28 K R Road,
Representing Shareholders,
Basavangudi, 15.02.2004 P. U. C.
Bangalore – 560 004.
K. Sundaram, 35, IInd Main Road,
Representing Shareholders,
Gandhi Nagar, 15.02.2004 B. A.
Chennai – 600 020.
G.B. Singh, Under Secretary, GoI, Representing GoI.
25.03.2004 Diploma in Mech. Engg.
Ministry of Finance, Jeevan Deep,
19
Parliament Street,
New Delhi 110 001.
Nanu R Mallya, 28, Sirur Park Representing Chartered
Road, Malleswaram, 20.06.2003 Accountants,
Bangalore – 560 003. B. Com., FCA.
M Mahadeva, Associate Professor,
Representing SC/ST,
Institute of Social & Economic 20.06.2003 M. A. PhD.
Change, Bangalore – 560 072
Chairman and Managing Director

Shri A.K.Purwar, Chaiman, State Bank of India is the Chairman of the Bank. Shri Y.
Vijayanand is the Managing Director.
Private Placement Management Team

Lead Arranger Lead Arranger
IDBI Capital Markets Services Limited SBI Capital Markets Limited
8th Floor, Bakhtawar, 229, Nariman Point 202, Maker Tower ‘E’,
Mumbai – 400 021 Cuffe Parade, Mumbai – 400 005.
Tel: 022 5637 1212 Fax: 022 2288 5848/50 Tel: 022 2218 9166 Fax: 022 2218 8332
www.idbicapital.com www.sbicaps.com
Legal Advisor to the Offer Registrar to the Offer

Mr. K. R. Keerthi Canbank Computer Services Limited
Asst. Geneneral Manager (Law) R&T Centre, Naveen Complex,
State Bank of Mysore 4th Floor, # 14, M. G. Road, Bangalore – 560 001
Head Office Tel: 080 2532 0541/ 42 / 43. Fax: 080 2532 0544
K.G. Road, Bangalore – 560 009 Email: ccsirnt@vsnl.com
Trustees Bankers to the Bank

IDBI Trusteeship Services Ltd. State Bank of Mysore
10th Floor, Nariman Bhavan, 227 Vinay K Shah Marg
Nariman Point, Mumbai – 400 023.
Tel: 022 5631 1771 / 2 / 3; Fax: 022 5631 1776
Email: itsl@idbitrustee.co.in
www.idbitrustee.com
Auditors to the Offer Compliance Officer

Sonde, Srinivas & Co. Shri S. Shivanna
Chartered Accountants Asstt. General Manager (Compliance)
105, II Floor, J. C. Road, State Bank of Mysore
Shahzad Buildings, Bangalore – 560 002 Head Office
Tel: 080 2223 2717 K.G. Road, Bangalore – 560 009
E-mail: sondesrinivas@vsnl.net
The investors can contact the Compliance Officer for Bonds in case of any pre-issue/post-issue
related problems such as non-credit of letter(s) of allotment/bond certificate(s) in the demat
account, non-receipt of refund order(s), interest warrant(s)/cheque(s) etc.
Credit Rating
ICRA Ltd. has assigned a ‘LAAA’ (pronounced L Triple A) rating to the captioned debt
programme of the Bank. This rating indicates highest credit quality rating assigned by ICRA.
The rated instrument carries the lowest credit risk. Also, CRISIL Limited has assigned a
‘AAA/Stable’ (Pronounced ‘Triple A with stable outlook’) rating to the captioned Bond issue.
This rating indicates highest degree of safety with regard to timely payment of interest and
20
principal on the instrument. There may be circumstances adversely affecting the degree of
safety but such circumstances, as may be visualised, are not likely to affect the timely payment
of principal and interest as per terms.
The rating is not recommended to buy, sell or hold Securities and investors should take their
own decision. The rating may be subject to revision or withdrawal at any time by the assigning
rating agency and each rating should be evaluated independently of any other rating. The rating
obtained is subject to revision at any point of time in the future. The rating agencies have a
right to suspend, withdraw the rating at any time on the basis of new information etc.
Credit Rating (Previous Three Years)

The bonds issued by the bank in the past three years were assigned “LAAA” rating by ICRA.
Underwriting
The Bonds offer is not underwritten.
III. CAPITAL STRUCTURE OF THE BANK (As On September 30, 2005)
No. of Shares Face Value Issue Value

(Rs.) (Rs.)
A. Authorised Capital
5,000,000 Equity Shares of Rs. 100/- each 500,000,000 500,000,000
B. Issued, Subscribed and Paid-up Capital
C. Paid Up Capital after the Present Offer
D. Share Premium Account
Before the Offer 600,004,000
After the Offer 600,004,000
Notes to Capital Structure:
1) Following is the capital history since 1985:

(No. of Shares)
Year ended Increase (Decrease) Mode Cumulative Paid-
March 31 in capital up capital
Pre 1985 - Opening Balance 104,421
16/06/1986 195,579 Issue of Shares at Face Value 300,000
24/09/1988 900,000 Issue of Shares at Face Value 1,200,000
18/03/1996 2,400,000 Issue of Shares at premium of 3,600,000
Rs. 250/- per share
2) The list of top 10 shareholders of the bank and the number of equity shares held by them:
a) Top ten shareholders as on date of filing the Information Memorandum with Stock
Exchange is as follows:
Sr. No. Name of the Shareholders Number of Equity Shares

1. State Bank of India 3,324,016
2. Life Insurance Corporation of India 53,991
21
3. Lalitha Kalyan Trustees 4,850
4. United India Insurance Company Limited 4,485
5. Gowri Shankar Kalyan Trustee 3,705
6. Pavan & Co.Pvt.Ltd., 3,550
7. Ajaykumar Kayan Trustees 3,000
8. Deep Fin.Consultants Pvt.Ltd 2,590
9. Wall Fort Fin.Services Ltd. 2,125
10. Indian Bank 1,919
b) Top ten shareholders ten days prior to the date filing the Information Memorandum with
Stock Exchange is as follows:

3. Lalitha Kalyan Trustees 4,850
5. Gowri Shankar Kalyan Trustee 3,705
6. Pavan & Co.Pvt.Ltd., 3,550
7. Ajaykumar Kayan Trustees 3,000
8. Deep Fin.Consultants Pvt.Ltd 2,590
9. Wall Fort Fin.Services Ltd. 2,125
c) Top ten shareholders two years prior to the filing the Information Memorandum with
Stock Exchange is as follows:

3. Unit Trust of India 14,911
4. New India Assurance 10,800
6. Lalita Kayan 4,450
7. Pavan & Co. 3,350
8. Gauri Shankar 2,580
10. Gauri Shankar Kayan Trust 1,125
3) Shareholding Pattern (as on September 30, 2005):
Sr. No. Category Number of Shares Held % Shareholding

A. Promoter's Holding
1. Promoters*
- Indian Directors/Relatives 3,324,006 92.33
- Foreign Promoters Nil Nil
2. Persons acting in Concert - -
Sub Total 3,324,006 92.93
B. Non-Promoters Holding
3. Institutional Investors -
a. Mutual Funds & UTI 256 0.01
22
b. Banks, Financial Institutions, Insurance Companies
(Central/ State Govt. Institutions/ Non Government 60,462 1.68
Institutions)
c. Foreign Institutional Investors 215 0.01
Sub Total 60,933 1.70
4. Others
a. Private Corporate Bodies 17,857 0.48
b. Indian Public 197,150 5.49
c. NRIs/ OCBs 54 -
d. Trade Union/ Trusts/Clearing Members - -
Sub Total 2,15,061 5.97
Grand Total 3,600,000 100.00
*The Promoter Group of the company comprises of the State Bank of India.
4) The Bank has not raised any bridge loan against the proceeds of this Private Placement.
5) The Bank has not issued any Equity Shares out of revaluation reserves or for consideration
other than cash other than that stated in point 1 above.
IV. OBJECT OF THE OFFERING
The present Issue of Bonds is being made to −

• Augment the long-term resources of the Bank
• Augment the capital base of the Bank to meet its future capital adequacy requirements
Capital Adequacy Position of the Bank
The Capital Adequacy Ratio (‘CAR’) of the Bank was 11.53% as on 31st March 2004, 12.08%
as on 31st March 2005 and 11.26% as on 30th September 2005 as against the RBI stipulation of
9.00%. Details of capital vis-à-vis risk weighted assets are as under:
(Rs crores)
Year ended March 31 2001 2002 2003 2004 2005 Sep 05
Eligible Tier I Capital 284.96 312.81 350.93 420.90 585.69 678.99
Eligible Tier II Capital 185.54 238.04 212.93 255.13 407.73 386.53
Total Capital 470.50 550.85 563.86 676.03 993.42 1065.52
Total Risk-Adjusted Assets 4217.57 4665.82 4853.50 5864.18 8222.42 9465.75
Capital Adequacy Ratio (%) 11.16% 11.81% 11.62% 11.53% 12.08 11.26
Requirement of Capital Enhancement
The Bank expects substantial growth in its business activities and operations in the coming
years. The risk-weighted assets of the Bank are also expected to increase. The main areas of
focus for the Bank in this regard are retail advances, housing loans, loans to traders and self
employed businessmen, SSI/Priority sector lending. Increase in Tier I capital through plough
back of profits alone may not be enough to enable the Bank to maintain sufficient capital
adequacy ratio. In view of the likely expansion of risk-weighted assets, the Bank proposes to
augment its Net worth in order to sustain a healthy CAR.
Use of Offer Proceeds
23
The proceeds of this offer will be utilised for the regular business activities of the Bank. The
Bank has to increase the Capital to match the growth in Assets and maintain level of CAR
higher than the minimum prescribed level. The requirement of Capital has increased on account
of increase risk weight on housing loans and personal loans and growth in credit.
V. TERMS OF THE PRESENT PLACEMENT
The Bank is intending to raise an aggregate amount of Rs 250 crores (through the issue of
Unsecured Redeemable Non-Convertible Subordinated Bonds of face value of Rs.10 lakhs each
for cash at par (hereinafter referred to as ‘the Bonds’) by way of private placement.
Instrument at a Glance:
Issue Size Rs. 250 crores.
Instrument Unsecured, Redeemable Non-Convertible, Subordinated Bonds in the nature
of Promissory Notes.
Credit Rating LAAA by ICRA & AAA/stable by CRISIL
Face Value/ Issue Price Rs. 10,00,000/- per Bond
Minimum Application Size 1 Bonds and multiples of 1 bond thereafter
Tenor 113 months from the Deemed Date of Allotment
Redemption Bulleted Redemption at par at the end of 113 months from the Deemed Date
of Allotment
Coupon Rate 7.45% p.a. subject to TDS as applicable
Interest Payment Annual

Interest on Application Interest on application money will be paid to Investors at the Coupon Rate
Money (subject to deduction of tax at source, as applicable) from the date of
realisation of cheque(s)/demand draft(s), upto but not including the Deemed
Date of Allotment
Put & Call option None
Listing Proposed listing at BSE Debt Segment
Depository NSDL and CDSL
Issuance & Trading Demat mode
Private Placement Programme
Opening date 22nd November, 2005

Closing Date 28th November, 2005
Deemed Date of Allotment 1st December, 2005
Note: The Bank reserves the right to vary (pre-pone/postpone) any of the above date(s) at its
sole and absolute discretion without giving any reasons or prior notice. In such a case,
investors will be intimated about the revised time schedule by the Bank. The Bank also reserves
the right to announce closure of the issue before the scheduled closing date in the event of
receipt of subscriptions to the extent of the issue size.
Unsecured Redeemable Non-Convertible Subordinated Bonds:
24
The bonds will constitute direct, unsecured and subordinated obligations of the Bank,
subordinate to the claims of all other creditors and depositors of the Bank as regards repayment
of principal and interest by the Bank out of its own funds.
The Bonds will be negotiable instruments in the nature of Promissory Notes, transferable by
endorsement and delivery.
Key Terms:
Tenor
The Bonds will mature on the expiry of 113 months from the Deemed Date of Allotment.
Coupon
The investors will receive interest at 7.45% p.a. subject to TDS as applicable.
Face Value Per Bond

Each Bond has a face value of Rs.10,00,000/- and is issued at par at Rs.10,00,000/-.
Minimum Application Size

The minimum investment shall be 1(one) bond i.e. Rs.10,00,000/- and in multiples of 1(one)
Bonds i.e. Rs.10,00,000 thereafter.
Credit Rating
ICRA Ltd. has assigned a ‘LAAA’ (pronounced L Triple A) rating to the captioned debt
programme of the Bank. This rating indicates highest credit quality rating assigned by ICRA.
The rated instrument carries lowest credit risk. Also, CRISIL Limited has assigned a
‘AAA/Stable’ (Pronounced ‘Triple A with stable outlook’) rating to the captioned Bond issue.
This rating indicates highest degree of safety with regard to timely payment of interest and
principal on the instrument There may be circumstances adversely affecting the degree of
safety but such circumstances, as may be visualised, are not likely to affect the timely payment
of principal and interest as per terms.
The rating is not recommended to buy, sell or hold Securities and investors should take their
own decision. The rating may be subject to revision or withdrawal at any time by the assigning
rating agency and each rating should be evaluated independently of any other rating. The rating
obtained is subject to revision at any point of time in the future. The rating agencies have a
right to suspend, withdraw the rating at any time on the basis of new information etc.
Listing
Application shall be made to The Stock Exchange, Mumbai to list the bonds of the Bank now
being offered through this Information Memorandum and for permission to deal in such Bonds.
If the permissions to deal in and for an official quotation of the Bonds is not granted by BSE
the Bank shall forthwith repay, without interest all such moneys received from the applicants in
pursuance of this Information Memorandum. If such monies are not repaid within eight days
after the Bank becomes liable to repay them (i.e. from the date of refusal or within 70 days
from the date of the closing of the subscription list, whichever is earlier), then the Bank will be
25
liable to repay the monies, with interest, as prescribed under Section 73 of the Companies Act,
1956.
Book Closure Date

The Bank’s Register of Bondholders will be closed for the purposes of payment of interest or
redemption of Bonds, as the case may be, 30 days prior to the respective due date.
Interest on Application Money
Interest at the coupon rate (subject to deduction of tax at source) will be paid in respect of all
valid applications including the refunds. Such interest shall be paid from the date of realisation
of the Cheques/demand drafts upto the date immediately preceding the Deemed Date of
Allotment. Refund cheques/Warrants/Demand Drafts will be mailed within seven days of
Deemed Date of Allotment.
Interest on the Bonds

The Bonds will carry interest at the rate of 7.45% p.a. for a tenure of 113 months from the
deemed date of allotment. The first interest will be paid on April 1, 2006 from the Deemed
Date of Allotment (subject to deduction of tax at source at the rates prevailing from time to
time under the Income Tax Act, 1961 or any other statutory modification or re-enactment
thereof) upto 31st March, 2006. Thereafter it is payable annually on 1st April during the tenure
of the Bonds except for the last interest payment which will be paid along with the redemption
dues on the date of redemption of the bonds.
If any interest payment date falls on a day, which is not a business day in Bangalore, Karnataka
("Business Day" being a day on which Commercial Bank are open for business in the city of
Bangalore , Karnataka), then payment of interest will be made on the next business day but
without liability for making payment of interest for the delayed period. The interest payable
shall be calculated by multiplying the coupon rate by the principal amount, multiplying such
product by actual number of days in the interest period concerned dividing by 365 (a leap year
would be considered as 366 days for the purpose of interest calculation).
Interest Period
The first interest period is defined as the actual number of days falling between the
Deemed Date of Allotment to 31st March, 2006 including both the first date and the last
date. The first interest payment would be made on 1st April, 2006
The second and subsequent interest period (except the last interest period) is defined as
the actual number of days, taking the number of days in a year as 365 days (366 days in
case of a leap year) between April 1 and March 31 including both the dates and so on.
The last interest period is defined as the actual number of days falling between 1st April,
2014 and redemption date including both the first date and the last date. The last interest
payment would be made on the redemption date along with the redemption of principal
amount.
Payment of Interest
The interest payment would be made by Electronic Clearing System or by means of

cheques/demand drafts/(Interest warrants payable at par at specified branches of the Bank) and
will be mailed to the Bondholders. Payment of interest will be made to the holders of the Bonds
26
whose names appear in the list of beneficiaries given by NSDL/CDSL to the Bank on Record
Date.
Tax Deduction at Source
Tax as applicable under the Income Tax Act, 1961, or any other statutory modification or re-
enactment thereof will be deducted at source. The investor(s) desirous of claiming exemption
from deduction of income tax at source on the interest on application money are required to
submit the necessary certificate(s), in duplicate, along with the application form in terms of
Income Tax rules.
Interest payable subsequent to the Deemed Date of Allotment of Bonds will be treated as
“Interest on Securities” as per Income Tax Rules. Bondholders desirous of claiming exemption
from deduction of income tax at source on the interest payable on Bonds should submit tax
exemption certificate/ document, under Section 193 of the Income Tax Act, 1961, if any, at the
office of the Bank, at least 45 days before the payment becoming due.
Redemption
The face value of the Bond will be redeemed at par, on expiry of 113 months from the deemed
date of allotment. The Bond will not carry any obligation, for interest or otherwise, after the
date of redemption. The Bonds held in the Dematerialised Form shall be taken as discharged on
payment of the redemption amount by the Bank on maturity to the registered Bondholders
whose name appear in the Register of Bondholders on the record date. Such payment will be a
legal discharge of the liability of the Bank towards the Bondholders. On such payment being
made, the Bank will inform NSDL/CDSL and accordingly the account of the Bondholders with
NSDL/CDSL will be adjusted. No Put/Call option is available on the bonds. However, the
consent of Reserve Bank of India will be taken before redemption of bonds on due date as
required in terms of their guidelines addressed to all commercial banks vide their
communication DBOD.BP.BC 5/21.01.002/98.99 dated 08.02.99.
Issue of Bonds in dematerialized form
The Bank will be issuing the Bonds in dematerialized form. The Bank will be opening the
accounts with NSDL and CDSL for issuing these Bonds. Applicant should mention their
Depository Participant’s name, DP-ID and Beneficiary Account Number in the appropriate
place in the Application Form. The Bank will take necessary steps to credit the Depository
Account of the allottee(s) with the number of bonds allotted. Responsibility for correctness of
applicant's demographic details given in the application form vis-a-vis his/her depository
participant would rest with the applicant and the bank would not be liable with regard to the
above in any manner whatsoever.
Transfer of Bonds
The transfer of bonds in dematerialized form would be in accordance with the rules/procedures
as prescribed by Depository/Depository Participant.
Terms of Payment
Applications should be for a minimum of 1 Bond. All cheques/drafts should be in favour of
27
“State Bank of Mysore A/c-Bonds Issue “ and crossed Account Payee only. The entire amount
of Rs. 10 lakhs (Rs. Ten Lakhs only) per bond is payable on application. Applicants can
alternatively, remit the application amount through RTGS. State Bank of Mysore’s RTGS
details are as under:
IFSC : SBMY 0 TREA 00 A/C SBM F & A Tier II Bonds
Procedure for Application and Mode of Payment
This being a Private Placement Offer, Investors who are established/Resident in India and who
have been addressed through this Communication directly, only are eligible to apply.
Applications for the Bonds must be in the prescribed form (enclosed) and completed in
BLOCK LETTERS in English and as per the instructions contained therein.
Applications complete in all respects (along with all necessary documents as detailed in the
memorandum of information) must be submitted before the last date indicated in the issue time
table or such extended time as decided by the Bank, at any of the designated collection centres,
accompanied by the subscription amount by way of cheque(s)/draft(s) drawn on any bank
including a co-operative bank which is situated at and is a member of the Bankers’ clearing
house located at a place where the application form is submitted.
Outstation cheque(s)/Bank draft(s) drawn on Bank(s) not participating in the clearing process at
the designated clearing centres will not be accepted. Money orders/postal orders will also not
be accepted. The Bank assumes no responsibility for any applications/cheques/ DDs lost in
mail. All cheques /drafts should be in favour of “State Bank of Mysore– Bonds Issue “ and
crossed Account Payee only. The entire amount of Rs. 10 lakhs (Rs. Ten Lakhs only) per
bond is payable on application.
No separate receipt will be issued for the Application money. However, the Bank’s designated
collection branches or arrangers receiving the duly completed Application Form will
acknowledge receipt of the application by stamping and returning to the applicant the
Acknowledgment Slip at the bottom of the each Application Form.
As a matter of precaution against possible fraudulent encashment of Interest Warrants/Cheques

due to loss/misplacement, the applicant should furnish the full particulars of his or her bank
account (i.e. Account Number, name of the bank and branch) at the appropriate place in the
Application Form. Interest warrants will then be made out in favour of the bank for credit to
his/her account so specified and despatched to the investors, who may deposit the same in the
said bank.
Applications may be made by:
i) Provident/Superannuation/Gratuity/Pension Funds.
ii)Commercial Banks, Financial Institutions and Insurance Companies, societies
registered under the applicable laws in India and authorised to invest in bonds.
iii)State/Central Co-operative Banks, Development Co-operative Banks, Land
Development Banks, RRBs, Primary Co-operative Banks.
28
iv)Mutual Funds, Companies, Bodies Corporate, Trusts and Association of Persons and
Individuals.
v) Port Trusts.
vi)Scientific and/or Industrial Research Organisations, authorised to invest in bonds.
viii)Other Government and Non-government agencies authorised to invest in these
bonds as per present and relevant government guidelines.
Please note that only those to whom this memorandum is addressed by name can apply.
Application by Provident Funds, Superannuation Funds and Gratuity Funds
The Government of India has, vide its Gazette notification dated 06.03.2003, in partial
modification of notification no. F.11 (3-PD/98) dated March 31, 1999 has permitted Provident,
Superannuation and Gratuity Funds to invest up to 30% of incremental accretions in the
bonds/securities of “public sector companies” as defined under Section 2 (36-A) of the Income
Tax Act, 1961. Also, an additional amount of 30% of the incremental accretions, can be
invested at the discretion of the Board of Trustees in any of the remaining three prescribed
categories of investments. The Bank is a “public sector bank” within the meaning of the said
section, and hence Provident Funds, Superannuation Funds and Gratuity Funds can invest in
the Bonds.
The applications must be accompanied by certified true copies of (i) Trust Deed/Bye
Laws/Resolutions, (ii) Resolution authorising investment and (iii) specimen signatures of the
authorised signatories. Those desirous of claiming tax exemptions on interest on application
money are compulsorily required to submit a certificate issued by the Income Tax Officer
along with the Application Form. For subsequent interest payments, such certificates have to be
submitted periodically.
Applications by Commercial Banks
Investment by commercial banks in subordinated debt issues of other banks would attract 100%
risk weights for the investing bank. The applications must be in conformity with extant RBI
guidelines and accompanied by certified true copies of i) Board Resolution authorising
investment, ii) Power of Attorney and iii) specimen signatures of authorised signatories.
Application by Regional Rural Banks
Reserve Bank of India, vide circular No.RPCDNB.BC.98/03.05.34/94/95 dated January 2,

1995 and amended vide Circular No. RPCD.RRB.BC.882/03.05.34/96-97 dated December 13,
1996 has permitted RRBs to invest their surplus non-SLR funds in Bonds of public sector
undertakings. However, the investments are subject to the prudential and single exposure
norms of RBI.
The applications must be accompanied by certified true copies of (i) Government

Notification/Certificate of Incorporation/Articles and Memorandum of Association/Other deed
governing the constitution, (ii) resolution authorising investment, (iii) Power of Attorney (iv)
specimen signatures of authorised signatories and (v) income tax recognition certificate/Form
15 AA.
29
Application by Primary/District/State/Central Co-Operative Banks/Land Development
Banks
Any State Co-operative Bank (SCB)/District Central Co-operative Bank (DCCB)/Primary Co-
operative Bank (PCB)/Land Development Banks (LDBs) in any State would be eligible to
invest in these Bonds with necessary approval. Reserve Bank of India vide notification NO.
BR.CIR.72/16.20.00/93-94 dated 16th May 1994 have clarified that the primary co-operative
banks can invest their surplus funds upto 10% of their deposits in Bonds of public sector
undertakings, provided inter-alia that a provision exists for such investments in the respective
state Co-operative Societies Act/Multi State Co-operative Societies Act and the Banks should
take permission from the Registrar of Co-operative Societies of the State, for such investments.
Further, Reserve Bank of India vide notification no. BR.12/16.20.00/95-96 dated Jan 6, 1996
has requested the Registrar of Co-operative Societies of all States to grant general permission
to the primary co-operative banks for such investments, subject to their complying with other
conditions and safety measures laid down by Reserve Bank of India from time to time.
As per RBI circular no. PPF.ROC.9/07.02.03/98-99 dated June 23, 1999; Central/State Co-
operative Banks can invest in PSU bonds an amount not exceeding 10% of their deposits and
5% of their average non-SLR surplus funds after obtaining requisite permission. The
applications must be accompanied by certified true copies of i) Resolution authorising
investment/Power of Attorney and ii) specimen signatures of authorised signatories.
Application by Trusts
Trusts, whose Trust Deeds provide for investment in Bonds may apply to this issue of bonds,
subject to the approval of the Charity Commissioner or other appropriate authority as the case
may be. The application must be accompanied by certified true copies of i) Trust Deed/Bye
Laws, ii) Certificate of Registration, iii) Resolution authorising investment and containing
operating instructions, iv) Specimen signatures of authorised signatories and v) Income
exemption certificate (including interest on application money) / Form 15 AA (if applicable).
Applications by Corporate Bodies/Companies/FIs/Statutory Corporations
The applications must be accompanied by certified true copies of (i) Memorandum and Articles
of Association/Constitution/Bye-laws, (ii) resolution authorising investment and containing
operating instructions, (iii) specimen signatures of authorised signatories and (iv) Form 15 AA
for claiming exemption from deduction of tax on the interest income (including interest on
application money), if applicable.
Applications under Power of Attorney
In case of applications under Power of Attorney by limited companies or other bodies

corporates or commercial banks or regional rural banks/primary/district/central co-operative
banks or, individuals, a certified copy of Power of Attorney with a copy of the relevant
authority/resolution (other than individuals) must be deposited along with the Application
Form.
Individuals
Individuals are also entitled to apply to the bond issue subject to the application qualifying for
30
the minimum application amount and is valid in all other respects. Those desirous of claiming
tax exemptions on interest on application money are compulsorily required to submit relevant
declaration Form (as per I.T. Act 1961) along with the Application Form. For subsequent
interest payments, such Forms have to be submitted periodically.
In the case of joint applications, the number of such applicants should not be more than three.
All communications and cheques for interest/redemption will be addressed to the applicant
whose name appears first, at the address stated in the application form/register of Bondholders
PAN/GIR Number
All Applicants should mention their Permanent Account Number or the GIR Number allotted
under Income Tax Act, 1961 and the Income Tax Circle / Ward / District. In case where neither
the PAN nor the GIR Number has been allotted, the fact of such a non-allotment should be
mentioned in the Application Form in the space provided.
Signatures
Signatures should be made in English or in any of the Indian Languages. Thumb impressions
must be attested by an authorized official of a Bank or by a Magistrate/Notary Public under
his/her official seal.
Nomination Facility
As per Section 109 A of the Companies Act, 1956, only individuals applying as sole
applicant/Joint Applicant can nominate, in the prescribed manner, a person to whom his Bonds
shall vest in the event of his death. Non-individuals including holders of Power of Attorney
cannot nominate.
Disposal of Applications and Application Money
The Bank reserves, in its own, absolute and uncontrolled discretion and without assigning any
reason, the right to accept in whole or in part or reject any application. If an application is
rejected in full, the entire application money received will be refunded to the applicant. If the
application is rejected in part, excess of the application money received will be refunded to the
applicant within one week from the date of allotment of the bonds. No interest will be payable
on the application money so refunded. Refund will be made by cheques or demand drafts
drawn in favour of the sole/first applicant (including the details of his savings/ current account
number and the name of the bank with whom the account is held) and will be dispatched by
registered post/courier. Such refund orders Demand Drafts/Cheques will be payable at par at
specified centres.
The Bank has undertaken to make adequate funds available to the Registrar to the Offer for
complying with the requirements of dispatch of Allotment Letters/Refund Orders by registered
post/courier.
Disputes & Governing Law
31
The Bonds are governed by and shall be construed in accordance with the Indian Laws. The
High Court of Karnataka, Bangalore alone shall have the jurisdiction in connection with any
matter arising under these precincts.
Trading of Bonds
The trading of privately placed Debt securities would be permitted in standard denomination of
Rs. 10 lakhs in the anonymous, order driven system of the Stock Exchange in a separate trading
segment. The marketable lot would be Rs. 10 lakhs. All class of investors would be permitted
to trade subject to the standard denomination/marketable lot. The trades executed on spot basis
shall be required to be reported to the Stock Exchange.
Succession
In the event of the demise of the sole/first holder of the Bond(s) or the last survivor, in case of
joint holders for the time being, the Bank will recognise the executor or administrator of the
deceased Bondholder, or the holder of succession certificate or other legal representative as
having title to the Bond(s). The Bank shall not be bound to recognise such executor or
administrator, unless such executor or administrator obtains probate, wherever it is necessary,
or letter of administration or such holder is the holder of succession certificate or other legal
representation, as the case may be, from a Court in India having jurisdiction over the matter.
The Bank may, in its absolute discretion, where it thinks fit, dispense with production of
probate or letter of administration or succession certificate or other legal representation, in
order to recognise such holder as being entitled to the Bond(s) standing in the name of the
deceased Bondholder on production of sufficient documentary proof or indemnity or on such
other terms and conditions as acceptable to the Bank.
Notices
Notice required to be given by the Bank to the Bondholders shall be Deemed to have been
given if sent by ordinary post/courier to the First Bondholder or if published in one All India
English daily newspaper and one regional language Kannada newspaper. Any notice required
to be given by the Bondholders shall be sent by registered post/courier/by hand delivery to the
Bank or to such persons at such address as may be notified by the Bank from time to time.
Future Borrowings
The Bank will be entitled to borrow/raise loans or avail finance in whatever form as also issue
bonds / other securities in any manner having such ranking in priority, pari passu or otherwise
and change the capital structure, including issue of shares of any class, on such terms and
conditions as the Bank may think appropriate, without the consent of or intimation to the
Bondholder(s) in this connection.
Miscellaneous
A Register of Bondholders shall be maintained at the Head Office of the Bank. Such Register
shall be closed thirty (30) business days prior to each interest payment date.
In case of dissolution/bankruptcy/insolvency/winding up of Bondholders, the Bond certificates

shall be transmittable to the Legal Representative(s)/Successor(s) or the Liquidator, in
32
accordance with the law on such terms as may be deemed appropriate by the Bank.
Registrars
Canbank Computer Services Limited, R&T Centre, Naveen Complex, 4th Floor, # 14, M. G.
Road, Bangalore - 560 001 are acting as Registrar and Transfer agents for the Bank.
Trustees
The Bank has appointed IDBI Trusteeship Services Limited, 10th Floor, Nariman Bhavan, 227,
Vinay K Shah Marg, Nariman Point, Mumbai – 400 021 as Bond Trustees registered with
SEBI, for the holders of the Bonds (hereinafter referred to as ‘Trustees’). The Bank will enter
into a Trustee Agreement/Trust Deed, inter-alia, specifying the powers, authorities and
obligations of the Bank and the Trustees in respect of the Bonds.
The Bondholders shall, without any further act or deed, be deemed to have irrevocably given
their consent to and authorised the Trustees or any of their Agents or authorised officials to do,
all incidental acts, deeds and things necessary in terms of this Memorandum of Private
Placement. All rights and remedies under the Trust Deed/Trust Agreement and/or other security
documents shall rest in and be exercised by the Trustees without having it referred to the
Bondholders. Any payment made by the Bank to the Trustees on behalf of the Bondholder(s)
shall discharge the Bank pro tanto to the Bondholder(s).
The Trustees will protect the interest of the Bondholders in the event of default by the Bank in
regard to timely payment of interest and repayment of principal and they will take necessary
action at the cost of the Bank. The Trustees may appoint a nominee director on the Board of the
Bank in consultation with other institutional Bondholders in the event of default. The major
events of default which happen and continue without being remedied for a period of 30 days
after the dates on which the monies specified in (i) and (ii) below become due and will
necessitate repayment before stated maturity are as follows:
(i) Default in payment of monies due in respect of interest/principal owing upon the Bonds;
(ii) Default in payment of any other monies including costs, charges and expenses incurred by
the Trustees.
Other events of default are:
i. Default is committed in the performance or observance of any covenant, condition or
provision contained in these presents and/or the financial Covenants and Conditions (other than
the obligation to pay principal and interest) and, except where the Trustees certify that such
default is in their opinion incapable of remedy (in which case no notice shall be required), such
default continues for 30 days after written notice has been given thereof by the Trustees to the
Bank requiring the same to be remedied.
ii. Any information given by the Bank in its applications to the Bondholders, in the reports and
other information furnished by the Bank and the warranties given/deemed to have been given
by it to the Bondholders/trustees is misleading or incorrect in any material respect.
iii. The Bank is unable to or has admitted in writing its inability to pay its debt as they mature.
iv. A Receiver or a Liquidator has been appointed or allowed to be appointed of all or any part
of the undertaking of the Bank and such appointment is not dismissed within 60 days of
appointment.
v. The Bank ceases to carry on its business.
33
Rights, Powers and Discretion of the Trustees
General Rights, Powers and Discretions - In addition to the other powers conferred on the
Trustees and provisions for their protection and not by way of limitation or derogation of
anything contained in this Agreement nor of any statute limiting the liability of the Trustees, it
is expressly stated as follows:
a) The Trustees shall not be bound to give notice to any person of the execution hereof or to see
to the performance or observance of any of the obligations hereby imposed on the Bank or in
any way to interfere with the conduct of the Bank’s business unless and until the rights under
the Bonds shall have become enforceable and the Trustees shall have determined to enforce the
same;
b) Save as herein otherwise expressly provided the Trustees shall, as regards all trusts, powers,
authorities and discretions, have absolute and uncontrolled discretion as to the exercise thereof
and to the mode and time of exercise thereof and in the absence of fraud shall not be
responsible for any loss, costs, charges, expenses or inconvenience that may result from the
exercise or non- exercise thereof and in particular they shall not be bound to act at the request
or direction of the Bondholders under any provisions of these presents unless sufficient monies
shall have been provided or provision to the satisfaction of the Trustees made for providing the
same and the Trustees are indemnified to their satisfaction against all further costs, charges,
expenses and liability which may be incurred in complying with such request or direction;
c) With a view to facilitate any dealing under any provision of these presents the Trustees shall
have full power to consent (where such consent is required) to a specified transaction or class
of transactions conditionally;
d) The Trustees shall not be responsible for the monies paid by applicants for the Bonds;
e) The Trustees shall not be responsible for acting upon any resolution purporting to have been
passed at any meeting of the Bondholders in respect whereof minutes have been made and
signed even though it may subsequently be found that there was some defect in the constitution
of the meeting or the passing of the resolution or that for any reason the resolution was not
valid or binding upon the Bondholders;
f) The Trustees shall have full power to determine all questions and doubts arising in relation to
any of the provisions hereof and every such determination bonafide made (whether or not the
same shall relate wholly or partially to the acts or proceedings of the Trustees) shall be
conclusive and binding upon all persons interested hereunder;
g) The Trustees shall not be liable for anything whatsoever except a breach of trust knowingly
and intentionally committed by the Trustees;
h) The Trustees shall not be liable for any default, omission or delay in performing or
exercising any of the powers or trusts herein expressed or contained or any of them or in
enforcing the covenants herein contained or any of them or in giving notice to any person or
persons of the execution hereof or in taking any other steps which may be necessary, expedient
or desirable for any loss or injury which may be occasioned by reason thereof unless the
Trustees shall have been previously requested by notice in writing to perform, exercise or do
any of such steps as aforesaid by the holders representing not less than three-fourths of the
nominal amount of the Bonds for the time being outstanding or by a Special Resolution duly
passed at a meeting of the Bondholders and the Trustees shall not be bound to perform,
exercise or do any such acts, powers or things or to take any such steps unless and until
sufficient monies shall have been provided or provision to the satisfaction of the Trustees made
for providing the same by or on behalf of the Bondholders or some of them in order to provide
for any costs, charges and expenses which the Trustees may incur or may have to pay in
connection with the same and the Trustees are indemnified to their satisfaction against all
34
further costs, charges, expenses and liabilities which may be incurred in complying with such
request.
Provided Nevertheless that nothing contained in this clause shall exempt the Trustees from or
indemnify them against any liability for breach of trust nor any liability which by virtue of any
rule or law would otherwise attach to them in respect of any negligence, default or breach of
trust which they may be guilty of in relation to their duties hereunder.
Bondholder not a Shareholder
The Bondholders will not be entitled to any of the rights and privileges available to the
Shareholders.
Rights of Bondholders
1. The Bonds shall not, except as provided in the Act, confer upon the holders thereof any
rights or privileges available to the members of the Bank including the right to receive Notices
or Annual Reports of, or to attend and/or vote, at the General Meeting of the Bank . However,
if any resolution affecting the rights attached to the Bonds is to be placed before the
shareholders, the said resolution will first be placed before the concerned registered
Bondholders for their consideration. In terms of Section 219(2) of the Act, holders of Bonds
shall be entitled to a copy of the Balance Sheet on a specific request made to the Bank .
2. The rights, privileges and conditions attached to the Bonds may be varied, modified and/or
abrogated with the consent in writing of the holders of at least three-fourths of the outstanding
amount of the Bonds or with the sanction of Special Resolution passed at a meeting of the
concerned Bondholders, provided that nothing in such consent or resolution shall be operative
against the Bank, where such consent or resolution modifies or varies the terms and conditions
governing the Bonds, if the same are not acceptable to the Bank.
3. The registered Bondholder or in case of joint-holders, the one whose name stands first in the
Register of Bondholders shall be entitled to vote in respect of such Bonds, either in person or
by proxy, at any meeting of the concerned Bondholders and every such holder shall be entitled
to one vote on a show of hands and on a poll, his/her voting rights shall be in proportion to the
outstanding nominal value of Bonds held by him/her on every resolution placed before such
meeting of the Bondholders. The quorum for such meetings shall be at least five Bondholders
present in person.
4. The Bonds are subject to the provisions of the Companies Act, 1956, the Memorandum and
Articles, the terms of this Information Memorandum and Application Form. Over and above
such terms and conditions, the Bonds shall also be subject to other terms and conditions as may
be incorporated in the Trustee Agreement/ Letters of Allotment/ Bond Certificates, guidelines,
notifications and regulations relating to the issue of capital and listing of securities issued from
time to time by the Government of India and/or other authorities and other documents that may
be executed in respect of the Bonds.
5. Save as otherwise provided in this Prospectus, the provisions contained in Annexure C
and/or Annexure D to the Companies (Central Government’s) General Rules and Forms, 1956
as prevailing and to the extent applicable, will apply to any meeting of the Bondholders, in
relation to matters not otherwise provided for in terms of the Issue of the Bonds.
6. A register of Bondholders will be maintained in accordance with Section 152 of the Act and
all interest and principal sums becoming due and payable in respect of the Bonds will be paid
to the registered holder thereof for the time being or in the case of joint-holders, to the person
whose name stands first in the Register of Bondholders.
35
7. The Bondholders will be entitled to their Bonds free from equities and/or cross claims by the
Bank against the original or any intermediate holders thereof.
8. Bonds can be rolled over only with the positive consent of the Bondholders.
Modification of Rights
The rights, privileges, terms and conditions attached to the Bond may be varied, modified or
abrogated with the consent, in writing, of those holders of the Bond who hold at least three
fourth of the outstanding amount of the Bond or with the sanction accorded pursuant to a
resolution passed at a meeting of the Bondholders, provided that nothing in such consent or
resolution shall be operative against the Bank where such consent or resolution modifies or
varies the terms and conditions of the Bond, if the same are not acceptable to the Bank.
Bond Redemption Reserve (BRR)
Ministry of Company Affairs has vide General Circular No. 9/2002 No. 6/3/2001-CL.V dated
18th April 2002 clarified that banks need not create Debenture Redemption Reserve as specified
under section 117C of the Companies Act, 1956.
VI. TAX BENEFITS
M/s Fraser & Ross, Chartered Accountants, vide their letter dated 07th January 2004 have
advised the following tax benefits under the Current Tax Laws:
A. TO THE BANK
1. Under Section 10(23G) of the Income Tax Act, 1961 any income by way of
dividends, interest or long term capital gains of the Bank arising from
Investments made on or after the first day of June 1998, by way of
Bonds/securities or long term finance in any enterprise wholly engaged in the
business of:
i. developing or
ii. maintaining and operating or
iii. developing, maintaining and operating
any infrastructure facility which has been approved by the Central Government
and which satisfied the prescribed conditions as per rule 2E of the Income Tax
Rules, 1962, is exempt from tax.
2. Under Section 36(1)(viia) of the Income Tax Act in respect of any provision
made for bad and doubtful debts, the Bank is entitled to a deduction not
exceeding:
i. 7.5% of the total income (computed before making any deductions under this
clause and Chapter VIA) and
ii. 10% of the aggregate average advances made by the rural branches of the Bank
computed in the prescribed manner.
36
However, the Bank, at its option, instead of deduction referred to in para 2(i)
and 2(ii) above, can claim in the assessment of any of the five consecutive years,
commencing on or after 01.04.2003 and ending before 01.04.2005, a deduction
in respect of any provision made by it for any assets classified as doubtful assets
or loss assets in accordance with the guidelines issued by Reserve Bank of India
in this behalf, of an amount not exceeding 10% of the amount of such assets
shown in the books of the Bank on the last day of previous year. Also the Bank
shall, at its option, be allowed a further deduction in excess of the limit specified
above, for an amount not exceeding the income derived from redemption of
securities in accordance with a scheme framed by the Central Government
provided such income has been disclosed in its return of income under the head
“Profits and gains of business or profession”.
3. In addition to the deduction available under Section 36(1)(viia) of the Income

Tax Act, the Bank is entitled to claim a deduction under Section 36(1)(vii) of the
Income Tax Act for the amount of bad debts written off as irrecoverable in the
accounts. The deduction shall be limited to the amount by which such debt or
part thereof, which exceeds the credit balance in the provision for bad and
doubtful debts account made under Section 36(1)(viia) and subject to the
compliance of provisions of Section 36(2)(v).
4. Under the provisions of Section 43D of the Income Tax Act interest income on
certain categories of bad or doubtful debts as specified in Rule 6EA of the
Income Tax Rules having regard to the guidelines issued by Reserve Bank of
India in relation to such debts shall be chargeable to tax, only in the year in
which it is actually received or the year in which it is credited to the Profit and
Loss Account by the Bank, whichever is earlier.
5. Under Second Proviso to Section 48 of the Income Tax Act, the long term
capital gains of the Bank arising on transfer of capital assets other than bonds
and debentures (not being capital indexed bonds) will be computed after
indexing the cost of acquisition, improvement and would be charged at a
concessional rate of 20% as per Section 112 of the Income Tax Act plus
applicable surcharge and education cess. Alternatively, at the option of the bank,
where the tax payable in respect of any such long term capital gains exceeds
10% of the amount of capital gains arrived at without indexing the cost, the
capital gains is charged at 10% plus applicable surcharge and education cess.
6. Under the provisions of 54EC of the Income Tax Act and subject to conditions
specified therein, the Bank is eligible to claim exemption from the tax arising on
long-term capital gains, on investment of capital gains in certain notified bonds,
within six months from the date of transfer of capital asset. If only a portion of
the capital gains is invested, then the exemption is proportionately available.
If the specified asset is transferred or converted into money at any time within a
period of three years from the date of acquisition, the amount of capital gains on
which tax was not charged earlier shall be deemed to be income chargeable
under the head “Capital Gains” of the year in which the specified asset is
transferred.
37
7. Under Section 54ED of the Income Tax Act, capital gains arising from the
transfer of investment held as long term capital asset, being listed securities or
unit is exempt fully from tax if the Bank invests within a period six months from
the date of such transfer, the whole of the capital gains in acquiring equity
Bonds/securities forming part of an eligible issue of capital as defined in clause
(i) to explanation in the above section. Where only a part of the capital gains is
so invested then the exemption is proportionately available. The exemption is
available subject to other conditions specified in that Section.
If the specified equity shares are sold or otherwise transferred within a period of
three years from the date of acquisition, the amount of capital gains on which
tax was not charged earlier shall be deemed to be income chargeable under the
head “Capital Gains” of the year in which the specified equity shares are
transferred.
8. In accordance with Section 10(34) of the Income Tax Act, dividend income as
referred to in Section 115-O of the Act which is declared, distributed or paid on
or after April 1, 2003 is exempt from tax in the hands of the Bank.
9. In accordance with Section 10(35) of the Income Tax Act, the following income
shall be exempt in the hands of the Bank:
a) Income received in respect of the units of a Mutual Fund specified under
clause (23D); or
b) Income received in respect of units from the Administrator of the specified
undertaking; or
c) Income received in respect of units from the specified company;
Provided that this exemption does not apply to any income arising from transfer
of units of the Administrator of the specified undertaking or of the specified
company or of a mutual fund, as the case may be.
II. TO THE RESIDENT BONDHOLDERS OF THE BANK:
1. Under Section 54EC of the Income Tax Act, exemption from capital gain tax is
available in respect of long term capital gains arising on transfer of the
Bonds/securities of the Bank if the assessee at any time within a period of six
months from the date of such transfer, invests the whole of the capital gains in
certain notified bonds. If only a portion of capital gains is so invested, then the
exemption is proportionately available.
If the specified asset is transferred or converted into money at any time within a
period of three years from the date of acquisition, the amount of capital gains on
which tax was not charged earlier shall be deemed to be income chargeable
under the head “Capital Gains” of the year in which the specified asset is
transferred.
2. As per Section 54ED of the Income Tax Act, long term capital gains arising
from transfer of Bonds/securities of the Bank on its Bonds/securities being
listed, is fully exempt from tax if the assessee invests within a period of six
months from the date of transfer, the whole of the capital gains in acquiring
equity Bonds/securities forming part of an eligible issue of capital as defined in
clause (i) to explanation in the above section. Where only a part of the capital
38
gains is so invested, then the exemption is proportionately available. The
exemption is available subject to conditions specified in that Section.
If the specified equity shares are sold or otherwise transferred within a period of
three years from the date of acquisition, the amount of capital gains on which
tax was not charged earlier shall be deemed to be income chargeable under the
head “Capital Gains” of the year in which the specified equity shares are
transferred.
3. As per the provisions of Section 54F of the Income Tax Act, 1961, long term
capital gains arising in the hands of an individual or HUF on transfer of
Bonds/securities of the Bank shall be exempt if the net consideration is invested
in purchase of residential house within a period of one year before or two years
from the date of transfer or constructs a residential house within a period of
three years from the date of transfer. The exemption is available proportionately
if only a portion of the net consideration is invested as above. The exemption is
subject to other conditions specified in that Section.
If the new residential house is transferred within a period of three years from the
date of purchase or construction, the amount of capital gains on which tax was
not charged earlier, shall be deemed to be income chargeable under the head
“Capital Gains” of the year in which the residential house is transferred.
4. Under Section 112 of the Income Tax Act, where the Total Income of any
assessee includes any long term capital gains on transfer of Bonds/securities of
the Bank, same is subject to concessional rate of tax at 20% plus applicable
surcharge and education cess, after indexing the cost as per the second proviso
to Section 48 of the Income Tax Act. Alternatively, at the option of the assessee,
where the tax payable in respect of any such long term capital gains exceeds
10% of the amount of capital gains arrived at without indexing the cost, the
capital gains is charged at 10% plus applicable surcharge.
5. No Wealth Tax is payable in respect of investments in Bonds/securities of the

Bank.
III. BENEFITS AVAILABLE TO MUTUAL FUNDS
As per the provisions of Section 10(23D) of the Act, dividend income from
Investments in Bonds/securities of the Bank or income by way of short term or long
term capital gains arising from transfer of such Bonds/securities earned by Mutual
Funds registered under the Securities and Exchange Board of India Act, 1992 or
Regulations made there under, mutual funds set up by the Public Sector Banks or
Public Financial Institutions and Mutual Funds authorized by the Reserve Bank of
India would be exempt from Income tax subject to the conditions as the Central
Government may by notification in the Official Gazette specify in this behalf.
For Fraser & Ross

Chartered Accountants
Sd/-
(K. R. Sekar)
Partner
Date: 19.11.2005, Bangalore
39
VII. BANK AND MANAGEMENT
Business and Industry overview

For details, investor may refer Management Discussion and Analysis on page no.80 of this
Offer document.
History & Background Of The Bank
Established in October 1913 under the aegis of the Government of Mysore on the
recommendation of the Banking Committee headed by Sir M. Visvesvaraya, the great
engineering statesman. It became the subsidiary of State Bank of India in March 1960 under
the SBI (Subsidiary Banks) Act, 1959. State Bank of India holds 92.33% of shares and the rest
is held by private shareholders/other institutions. The bank’s shares are listed in Bangalore,
Chennai and Mumbai Stock Exchanges.
The bank is playing a very proactive and dynamic role in the economic development of
Karnataka state. It has pioneered in financing of coffee and silk industries and has taken early
lead in financing agriculture and small scale industries in the state even before nationalisation
of banks. It enjoys an excellent brand equity in the state and is well known for the excellent
quality of its customer service. The bank has followed prudent banking policies and has the
enviable record of earning uninterrupted profits and declaring dividends since inception
without any break. The bank has stood up to the challenges of financial sector reforms in this
decade. Our bank has been awarded with the first prize in state level for best performance
under SHG – bank linkage programme for the year 2002-2003.
Mission Statement of the Bank
A premier commercial bank in Karnataka, with all India presence, committed to provide
consistently superior and personalised customer service backed by employee pride and will to
excel, earn progressively high returns for its shareholders and be a responsible corporate citizen
contributing to the well being of the society.
Organisational Set-up
HEAD OFFICE
AT BANGALORE
ZONAL OFFICE ZONAL OFFICE ZONAL OFFICE ZONAL OFFICE

BANGALORE ZONE CENTRAL ZONE MYSORE ZONE HUBLI ZONE
Controls 6 Regions Controls 5 Regions Controls 4 Regions Controls 4 Regions
The Managing Director at the top is assisted by the Chief General Manager and 6 General
Managers in the areas of operations, commercial and international banking, planning and
development, finance and services, inspection and vigilance and information and technology.
40
The bank has 4 Zonal offices headed by Deputy General Managers. While two zonal offices are
situated in Bangalore, other two zonal offices are situated at Mysore and Hubli.
Top executives of the bank at head office
Shri Y Vijayananad
Managing Director
Shri R Gopalan
Chief General Manager
Shri S K Mishra Sri B N Ramaiah Shri Dinesh Bhatia Shri C K Mishra Shri R D Naidu Shri Ashok Bhattacharya
General Manager (O) General Manager General Manager GeneralManager General Manager General Manager
(P&D) (C&IB) (F&S) (V&I) (Tech)
Business Profile
The aggregate deposits of the bank as at the end of October, 2005 was Rs. 14,218.00 crores and
the total advances stood at Rs. 10,688.00 crores. The bank's advances to priority sector stood at
Rs. 3,860.00 crores and constituted 39.47% of the net bank credit. While advances to
agriculture stood at Rs. 1,365.00 crores, advances to export credit stood at Rs. 709.00 crores.
Advances to SSI sector stood at Rs. 733.00 crores.
The gross NPA ratio is 4.26% and net NPA ratio is 0.98%. The bank’s aggregate deposits and
total advances in Karnataka State was Rs. 9,574.00 crores and Rs. 5,886.00 crores respectively
and constitute 62.07% of the bank’s total business.
The bank has made a Gross Profit of Rs. 248.59 crores as at the end of October 2005,
registering a growth of Rs. 10.94 crores..
New Products launched by the Bank
The following new products were launched by the bank to cater to the needs of the present day
demands in the market:
Deposits Schemes:
a. MyBank Akshaya (linked to deposit scheme; revolving recurring deposit type)
b. MOD (multi optional deposit) for public.
c. MOD (multi optional deposit) for corporates.
Developments in Retail Banking

Bank has actively introduced the following new products covering various segments:
Personal Segment
a. Site purchase loan - housing loan for purchase of residential site / plot
b. Housing loan to agriculturists
41
c. Housing loan against charge
d. MyBank Adhyapak – finance to non-teaching & teaching staff
e. MyBank Arakshak exclusively designed for helping the policemen
f. MyBank Utsav
g. MyBank Sanchari Suvidha for financing renovation and alteration of hotels, restaurants at
tourist places
h. MyBank Samachar – to cater to the needs of journalists
i. Varshavahini – scheme for rainwater harvest
j. Sanjeevini – scheme for high cost medical treatment
k. Annapurna scheme for financing women beneficiaries for establishing food-catering units
l. Tie-up arrangements with Maruti Udyog Ltd., for promoting car finance
m. Tie-up arrangements with Bajaj Auto for promoting two wheeler products.
Agriculture Segment
a. Grameena Bhandaran Yojana
b. Development of Vanilla crop
c. Produce marketing loan scheme
d. Advances to bio-fertilizer units
e. Financing for combine harvestors
f. Financing farmers for purchase of agricultural lands
g. Financing for setting-up of agricultural clinics
h. My Krishigen Scheme – financing diesel generator sets to agricultural borrowers
i. Financing cultivation of gherkins under contract farming
j. Swarnamitra Scheme – financing against gold ornaments
k. Tie-up arrangements with major tractor dealers for promoting tractor finance
Small Industries and Business Segment
a. MyBank doctor
b. MyBank professional plus
c. SME credit plus
d. Swarojgar credit cards (scc)
e. Artisan credit card (acc) scheme
f. Flexi (SSI) term loan
g. Green Auto – financing auto rickshaw owners for purchase of LPG/CNG kits
h. Surya Deep – for solar power
Cross Selling
All branches are authorised to do SBI Life and General Insurance Business. Accredition is
obtained from IRDA to impart bancassurance (life) training. Referral arrangements with
National Insurance Company Ltd., has been entered for non-life insurance activities.
Future plans:
The bank has set itself an ambitious target of increasing the market share in deposit and
advances. Accordingly, a target of Rs. 2,700 crores under deposits, Rs. 2500 crores under
advances, an Operating Profit of Rs. 554 crores and a net profit of Rs. 256 crores has been
budgetted for the year 2005-2006.
42
Main Objects of the Bank
The SBI (SB) Act was enacted, providing for formation of seven subsidaries to SBI inculding
SET and for the constitution, management and control of the subsidiary banks so formed
and for matters connected there with or incidental thereto. Chapter II Section 4(3) of the
SBI(SB) Act provides that the Bank shall carry on the business of banking and other business
in accordance with the provisions of the ACT and shall have the power to acquire and hold
property whether moveable or immoveable for the purpose of its business and to dispose off
the same.
Business of the Bank
Sections 36, 36(A), 37 and 38 of Chapter VI of the SBI (SB) Act provide that:
Subsidiary Bank to Act as Agent of State Bank: 36 (1)

A Subsidiary Bank shall, if so required by the State Bank, act as Agent of the State Bank at any
place in India for
a) Paying, receiving, collecting and remitting money, bullion and securities on behalf of
any government in
India; and
b) Undertaking and transacting any other business which the Reserve Bank may, from time
to time, entrust
to State Bank.
Subsidiary Bank to Act as Agent of Reserve Bank: Section 36(A)

A Subsidiary Bank shall, if so required by the Reserve Bank, act as Agent of the Reserve bank
at all places in India where it has a branch for:
a) Paying, receiving, collecting and remitting money, bullion and securities on behalf of
any government in
India; and
b) Undertaking and transacting any other business which the Reserve Bank may, from time
to time, entrust
to it.
Section 36A(4)
A subsidiary bank may transact any business or perform any functions entrusted to it under
sub-section (1) by itself or through any agency approved by the Reserve Bank.
Other business, which the Bank may undertake
Section 37(1): Subject to the other provisions contained in this Act, a subsidiary bank may
carry on and transact the business of banking as defined in clause (b) of section 5 of the
Banking Regulation Act, 1949, and may engage in one or more of the other forms of business
specified in sub-section (1) of section 6 of that Act.
Clause (b) of Section 5 of the Banking Regulation Act, 1949, states-"Banking" means the
accepting for the purpose of lending or investment, deposits of money from the public, repayable on
demand or otherwise, and withdrawable by cheque, draft or otherwise.
43
Section 37(2): The Central Government may, after consultation with Reserve Bank and the
State Bank, by order in Writing:
(a) Authorise a subsidiary bank to do such other forms of business as the Central Government
may consider necessary or expedient;
(b) Direct as any form of business as is mentioned in the order, shall be carried on subject to
such restrictions, conditions and safeguards as may be specified therein; or
(c) Prohibit a subsidiary bank from carrying on or transacting any form of business which, but
for this clause, it is lawful for the subsidiary bank to engage in.
Business, which the Bank may not transact: Section 37 (3)

Save as otherwise provided under sub-section (2) of section 37 of the SBI (SB) Act a
subsidiary bank shall not engage in any form of business other than referred to in sub-section
(1) of Section 37 of the said Act.
Bank may acquire the Business of Other Banks: Section 38 (1)

A subsidiary bank may, with the approval of the State bank, and shall, if the Reserve Bank, in
consultation with State Bank, so direct, enter into negotiations for acquiring the business,
including the assets and liabilities of any other banking institutions.
BRANCH NETWORK OF THE BANK
The Bank has 20 Regional Offices, controlling 637 branches and 21 extension counters as on
September 30, 2005, including 17 specialized branches.
Distribution of Branch Network
The population groups’ wise break up of branches in India is as follows:

Population Group Number of Branches % share to Total
Rural 212 33.28%
Semi-Urban 150 23.55%
Urban 124 19.47%
Metropolitan /Port Town 151 23.70%
Total 637 100.00%
Geographical Distribution of Branches is as under:
State/ Union Territory Number of Branches % Share of Total

Andhra Pradesh 19 3.05%
Delhi 11 1.77%
Goa 3 0.48%
Gujarat 3 0.48%
Karnataka 522 82.02%
Kerala 10 1.61%
Madhya Pradesh 2 0.32%
Maharashtra 19 2.89%
Orissa 1 0.16%
Rajasthan 1 0.16%
Tamilnadu 34 5.46%
Uttar Pradesh 2 0.32%
West Bengal 8 1.12%
44
Pondicherry 1 0.16%
Total 637 100.00%
Specialised Branches
For customer satisfaction and to increase the business, the Bank has given thrust to single
window service by opening the specialized branches. The Bank has 17 specialized branches
(excluding currency chest branches numbering to 110) as on September 30, 2005 that are
engaged in financing our corporate borrowers, small-scale industries, specialized trading etc.
The details are as given below:
Specialized Branches Number of Branches

Asset Recovery Branch 1
Spl. Banking Branches 4
Industrial Finance 4
SSI Branch 5
Treasury 3
Total 17
BUSINESS OF THE BANK & ITS PRODUCTS AND SERVICES

DEPOSITS
(Rs. in crores)
As on 31-Mar-01 31-Mar-02 31-Mar-03 31-Mar-04 31-Mar-05 30-Sep-05
Deposits (Global) 7335.00 8207.00 8793.00 10860.0013342.98 14280.92
Annual Growth – Amount 940 872 586 2067 2483 938
Annual Growth – Percent 14.69 11.89 7.14 23.51 22.86 14.06
Cost of Deposits (Global) (%) 8.00 7.71 6.89 5.71 4.96 4.74
Total global deposits of the Bank as on September 2005, touched a level of Rs. 14281 crores.
The same was Rs. 13343 crore on March 2005 adding Rs. 938 crores.
The category-wise break-up of total Global deposits during last 5 years is presented below:
(Rs. in crores)
As on March March March March Mar 31, Sept 30,
31, 2001 31, 2002 31, 2003 31, 2004 2005 2005
Current Deposits 702.37 815.91 759.09 1028.02 1163.76 1147.93
Savings Bank Deposits 1795.36 1986.01 2289.76 2821.31 3494.53 3812.32
Term Deposits 4836.96 5405.32 5743.86 7011.13 8684.69 9320.67
Bank Deposits 268.40 307.86 195.54 204.23 242.00 248.29
Total 7603.09 8515.10 8988.25 11064.69 13584.98 14529.21
Distribution of Deposits
The population group-wise break-up of aggregate Domestic deposits (excl. Bank) for the last
five years is as given in the table below: (in %)
As on March March March March March Sep 30,

31, 2001 31, 2002 31, 2003 31, 2004 31,2005 2005
Rural 1081.33 859.43 952.89 1075.78 1330.71 1365.79
Semi-Urban 1300.87 1763.90 1944.37 2171.08 2564.16 2588.76
45
Urban 1521.30 1904.68 1903.57 2167.96 2459.74 2623.41
Metropolitan 3699.59 3987.09 4187.42 5649.87 7230.37 7951.25
Total 7603.09 8515.10 8988.25 11064.69 13584.98 14529.21
ADVANCES
Population group wise classification of Gross Advances
The population group-wise classification of the Bank’s Gross Advances is as under:

(Rs. in crores)
As on March 31, March 31, March 31, March 31, March 31 Sept 30,
2001 2002 2003 2004 2005 2005
Rural 750.62 735.02 854.44 982.24 1187.42 1294.39
Semi-Urban 619.64 925.30 1062.82 1223.80 1491.19 1592.44
Urban 871.49 877.36 895.03 1040.34 1374.68 1470.30
Metropolitan 2287.29 2636.29 2740.35 3385.96 5071.22 6010.28
Total 4529.04 5173.97 5552.64 6632.34 9124.51 10367.41
Growth of Advances
The growth of the Bank’s Gross advances during the past five years, both in India and Overseas
is as follows:
(Rs. in crores)
Year ended March 31, March 31, March 31, March 31, March 31 Sept 30
2001 2002 2003 2004 2005 2005
Gross Credit 4529.04 5173.97 5552.64 6632.34 9124.51 10367.41
Annual Increase (%) 14.39 14.24 7.32 19.44 37.57 27.24
Loan Policy
State Bank of Mysore (SBM) Loan Policy (hereinafter referred to as “The Loan Policy” or
“The Policy”) is aimed at accomplishing its mission of all-round growth with maximum profits,
a position of pre-eminence in banking, committed to excellence in customer, shareholder and
employee satisfaction, with continuing emphasis on its Development Banking role, achieved
through a skilled and committed workforce and technological upgradation.
The Loan Policy of the bank has successfully withstood the test of time and with in-built
flexibilities, has been able to meet the challenges in the market place. The policy exists and
operates at both formal and informal levels. The formal policy is well documented in the form
of circular instructions, periodic guidelines and codified instructions, apart from the Book of
Instructions, where procedural aspects are highlighted.
The policy, at the holistic level is an embodiment of the bank's approach to sanctioning,
managing and monitoring credit risk and aims at making the systems and controls effective.
The Loan Policy also aims at striking a balance between underwriting assets of high quality,
and customer oriented selling.
The basic tenets of SBM's Loan Policy are as follows:

a. The Policy applies to all domestic lendings, subject to the general or special directives of
RBI/Government of India, as also the prudential guidelines applicable to all corporate credit
exposures of the Bank.
46
b. It aims at spotting and seizing opportunities and revamping our products and delivery
mechanism as well as innovating new products ahead of competition.
c. The Policy establishes a commonality of approach regarding credit basics, appraisal skills,
documentation standards and awareness of institutional concerns and strategies, while
leaving enough room for flexibility and innovation.
d. It envisages an effective training system in all areas of "Credit Management" which reflects
SBM's commitment to upgrade skills of all members of staff on a continuous basis.
e. Computerisation, management information system based on a reliable database and
development of faster communication as tools for better overall credit risk management are
accorded due priority in the policy.
f. Optimum exposure levels are set out in the Policy to different sectors in order to ensure
growth of assets in an orderly manner.
g. The Policy sets out minimum scores / hurdle rates (in terms of Credit Risk Assessment
parameters) for new/ additional exposures.
h. Bank's general approach to Export Credit and Priority Sector Advances is set out in the
Policy.
i. The Policy lays down norms for take over of advances from other banks/FIs.
j. Bank's stand on granting credit facilities to companies whose directors is in the defaulter's
list of RBI is covered in the Policy.
k. The Policy aims of continued growth of assets while endeavoring to ensure that these
remain performing and standard. To this end, as a matter of policy the bank does not take
over any Non-Performing Asset (NPA) from other banks.
The Board of the bank is the apex authority in formulating all matters of policy in the bank. A
Credit Policy Committee (CPC) has been set up, duly approved by Executive Committee of the
Board, of which the Top Management are members, to deal with issues relating to credit policy
and procedures on a bank-wide basis. The CPC and/or the Management Committee (MC) sets
broad policies for managing credit risk including industrial rehabilitation, sets parameters for
credit portfolio in terms of exposure limits, reviews credit appraisal systems, approves policies
for compromises, write offs, etc. and general management of NPAs besides dealing with the
issues relating to Delegation of Powers.
ASSET CLASSIFICATION, INCOME RECOGNITION & PROVISIONING
Asset Classification
The Bank classifies its assets in compliance with RBI guidelines. Under these guidelines, an
asset is classified as non-performing if any amount of interest/ principal remains overdue for
more than 90 days in respect of term loans. In respect of overdraft/ cash credit, an asset is
classified as non-performing if the account remains out of order for a period of more than 90
days and in respect of bills, if the account remains overdue for more than 90 days. In case of
retail assets, the Bank classifies an asset as non-performing where any amount of interest/
principal remains overdue for more than 90 days, in respect of all loans.
NPAs are further categorized into three groups i.e. Substandard, Doubtful and Loss Asset
depending upon the period of delinquency and availability of tangible security. The table below
gives the criteria for asset classification viz. Standard, sub-standard, doubtful and loss asset-
Category Classification
1. Performing
47
Standard Assets An Asset which has not posed any problem and which does not carry
more than the normal business risk
2. Non-Performing
a)Sub-Standard Assets An asset which has been non-performing for a period less than or equal
to eighteen months
b) Doubtful Assets An asset, which has been non-performing for a period exceeding
eighteen months
c) Loss Assets Asset where loss has been identified by the Bank or auditors/ RBI. The
value of security is less than 10%
For this purpose, all advances are segregated into performing assets (standard assets) and non-
performing assets. A borrowal account is classified as Non Performing Asset (NPA) when
interest and/or instalment is overdue for more than 90 days. Borrowal accounts treated as NPA
for not exceeding 18 months are classified as sub standard assets and borrowal accounts treated
as NPA for more than 18 months are treated as doubtful assets. NPAs where securities are less
than 10% and which are considered as irrecoverable are treated as loss assets.
When an account is classified as NPA, interest already debited to the account but not realised,
is de-recognised and further interest accrued is recognised on cash basis.
Provisioning and Write-Offs
As per RBI guidelines, provisions are arrived on all outstanding NPAs, as under:
Sub-Standard A general provision of 10 percent on total outstanding without making any

Assets allowance for DICGC/ECGC guarantee cover and securities available. Additional
provision of 10 per cent, i.e., a total of 20 per cent on the outstanding balance for
‘unsecured exposures’, which are identified as ‘substandard’.
Doubtful Assets 20%, 30%, 50% or 100% for secured portion of Doubtful assets upto one year
(DA 1), one to three years (DA 2), more than three years (DA 3) slipped to DA 3
on or before 31.3.2004 and more than three years (DA 3) slipped to DA 3 after
31.03.2004 respectively and at 100% for the unsecured portion of the outstanding
after netting retainable or realisable amount of the guarantee claims already
received/ lodged with DICGC/ECGC, if any.
Loss Assets 100% of the outstanding after netting retainable amount of the guarantee claims
already received/lodged with DICGC/ECGC, if any
Standard Assets A general provision of 0.25%
Asset Classification of Performing and Non-Performing Assets for the last 5 years is given
below:
(Rs. in crore)
Classification of assets March 31, March 31, March 31, March 31, March 31,
as on 2001 2002 2003 2004 2005
Standard Assets 3948.12 4549.36 4987.82 6117.70 8696.35
Sub Standard Assets 167.17 179.61 146.97 147.35 73.73
Doubtful Assets 352.85 377.89 382.39 341.17 316.10
Loss Assets 60.99 67.11 32.75 26.01 25.54
Gross NPAs 581.01 624.61 562.01 514.53 415.37
Gross Advances 4529.13 5173.97 5549.83 6632.23 9111.72
48
Advances given above are Gross Advances while the Balance Sheet indicates Net Advances
after setting off provisions, interest suspense etc: Gross Advances – (Provisions, Interest
Suspense and DICGC & ECGC claims) = Net Advances.
Asset Classification of Performing and Non-Performing Assets for the last 5 years is given
below:
(As a % of Gross Advances)

Classification of assets March 31, March 31, March 31, March 31, March 31,
(%) as on 2001 2002 2003 2004 2005
Standard Assets 87.17 87.92 89.87 92.24 95.44
Sub Standard Assets 3.69 3.47 2.65 2.22 0.81
Doubtful Assets 7.79 7.30 6.89 5.14 3.47
Loss Assets 1.35 1.29 0.60 0.40 0.28
NPA 12.83 12.08 10.13 7.76 4.56
Total 100.00 100.00 100.00 100.00 100
NPA Management Strategy
Several proactive measures, initiated by the Bank, have resulted in reduction of Gross NPA
level from Rs. Rs. 514.53 crores to Rs.415.37crores as of March, 2005 thus registering a net
reduction of Rs. 59.16 crores during the year. The Gross NPA ratio declined from 7.76%
March 2004 to 4.56% in March 2005.
With the aim of improving asset quality, the following measures have been initiated:
* Constant review of large borrowal accounts to ensure proper end use of funds
* Measurement of risk through credit rating / scoring
* Benchmarking of financial and performance ratios
* Effective loan review mechanism and portfolio management
* Fixing prudential exposure limits in consonance with RBI guidelines
* Constant review of economic scenario to identify systemic sector-wise risks
* System of timely detection of sickness
* Extending the ambit of Credit Audit for covering advances of Rs.2 crores and above
* Adherence to various terms and conditions stipulated in the sanction letter
* Monitoring of advances by constant on-site and off-site inspection
* Review of Special Mention Accounts above Rs. 10 lacs on a monthly basis by the Top
Management
* Intensive training of officers for improvement of credit assessment skills
* Utilization of Securitization Act for recovery of impaired assets
* Restructuring / Rehabilitation through CDR / normal route
* Some proposals have been sent to ARCIL and have been approved by them but the
relative formalities have to be completed
TREASURY & INTERNATIONAL OPERATIONS:
Investments
The total investments of the Bank in Government, approved and other securities increased from
Rs. 5490.70 crores as at the end of March, 2004 to Rs. 5,800.87 crores as at the end of March,
2005 recording a growth rate of 5.65%(Rs.310.17 crores).
49
Trading Profit on Investments
2003-04 - Rs.155.03 Crores
2004-05 - Rs.151.20 Cores
Interest Income on Investments
2003-04 Rs.480.11 Crs

2004-05 Rs.477.12 Crs
Yield on Investments
2003-2004 - 9.69%
2004-2005 - 8.46%
The modified duration of the investments improved from 4.64 to 3.79.
International Banking
The merchant turnover increased from Rs.8924.87 Crores during 2003-2004 to Rs.10111.64
Crores during 2004-2005 registering a growth of Rs.1186.77 crores (13.30%). The profit
increased from Rs.18.18 Crores to Rs.21.46 Crores registering a growth of Rs.3.28 crores
(18.04%). The purchase transaction constituted 57.70% of the turnover while sales transaction
accounted for 42.30%.
Risk Management
The Bank has achieved substantial progress in the implementation of risk management systems,
envisaged in RBI guidelines. An integrated Risk Management approach is followed, with a
well-designed organizational structure, and comprehensive policies and procedures laid down
to manage credit, market & operational risks. The Bank has constituted:
i) Risk Management Committee (RMC), which monitors the overall risks assumed by the
Bank,
ii) Asset Liability Management Committee (ALCO), which monitors the liquidity and
interest rate risks,
iii) Credit Policy Committee (CPC), which deals with issues relating to credit policy and
procedures on a bank-wide basis,
iv) Investment Committee, which deals with investment decisions, and
v) Operational Risk Management Committee (ORMC) that monitors and manages the
Operational Risks. These committees meet at periodic intervals.
The Bank has a well-established credit approval process, including comprehensive credit
appraisal and established procedures for application forms, documents, etc. A comprehensive
system of risk assessment is in place whereby credit rating is assigned to every borrower. An
independent review group is also established to vet the risk-assessed credit rating of individual
borrower accounts. A comprehensive Loan Policy document that encompasses the various
facets of credit risk management is in place. This is reviewed at regular intervals, and
modifications to suit the bank’s needs are carried out. The Bank has a loan review mechanism,
50
which undertakes review of the pre and post sanction process of all borrowal accounts with
sanctioned limits of Rs. 200 lakh and above.
The Bank carries out portfolio analysis of all borrowal accounts with sanctioned limits of Rs.
50 lakh and above at half-yearly intervals, which enables it to assess the distribution of
standard assets and non-performing assets industry/sector-wise, distribution of standard assets
risk rating-wise, extent of non-performing assets in every industry as a percentage of total
exposure within the industry and overall credit, and also undertake a constant review of
economic scenario to recognize sector-wise risks. The analysis enables the Bank to carry out
redressal measures and initiate suitable steps to address the identified credit risks.
The process of review/renewal of borrowal accounts is carried out in a systematic manner to

assist in assessing the health of the borrowal account and timely detection of sickness.
The Bank has laid down counter-party bank exposure limits for various operating departments,
which is integrated and monitored on a monthly basis. Country Risk Management Policy has
been drawn up, duly approved by the Board. These are reviewed at periodic intervals.
In respect of Market Risk Management, including Liquidity and Interest Rate Risk
Management, the Bank has introduced a scientific system of Asset-Liability Management. The
market risk management policy is adequately spelt out in the ALM policy of the Bank, and is
managed within the overall risk framework laid down by the Asset Liability Management
Committee. The ALCO monitors market risk on an ongoing basis. Tolerance limits in
accordance with RBI guidelines are fixed, and the Bank has always ensured adequate liquidity
at all times. The investment policy has been laid down, which embraces the preferred mix of
securities, sector-wise ceilings, limits for purchase and buyback transactions, etc., which is
monitored by the Investment Committee.
Operational Risk covers the whole gamut of residual risks not covered under either Credit or
Market Risk. In order to mitigate operational risks, the Bank ensures a comprehensive internal
control system, effective systems & procedures, recovery mechanisms and contingency plans,
and regular and comprehensive audit of all its business units and administrative offices at
regular intervals. The Bank has also introduced Risk Focused Internal Audit, as part of its
attempt at introducing improved system of internal audit.
Asset Liability Management (ALM)
The ALM system was implemented in the Bank in 1999. An integrated Asset Liability
Management Policy has been put in place for the purpose of identifying and measuring of
Liquidity and Interest Rate Risks and for the formulation of appropriate strategies to manage
such risks. The data collection from Branches has since stabilized consequent upon
computerization of all the Branches. This has helped in timely decision- making by Asset
Liability Management Committee (ALCO).
The ALCO is the top operational unit for managing Balance Sheet within the risk parameters
laid down by the Board. The ALCO met 14 times during the year to monitor and review risks
and returns, raising and deployment of resources, setting Bank’s lending and deposit rates and
directing the investment activities of the Bank.
Oracle Financial Services Application (OFSA) is the common ALM solution provider for the
entire State Bank Group. The Credit Information System (CIS), which is a single source of data
51
relating to most information requirements on advances, is being implemented in the
Bankmaster branches. This information is being used by IT-ALM Project and Core Banking
Project.
Technological Upgradation
ATMs: As at the end of September 2005, the bank has installed 215 ATMs at 99 centres
located in major cities like Bangalore, Mumbai, Chennai, New Delhi, Kolkata and Hyderabad
and at important centers in Karnataka like Mysore Chickmagalur, Bellary, Shimoga
Mangalore, Hubli, Davangere, Bhadravati, Chitradurga,Belgaum, Hassan etc.
Value-added services: The following value-added services are provided to the customers:
Sr. No. Particulars No. of branches

1. CBDT Module 230
2. Clearing Module 272
3. Customer Signature 493
4. DD/Banker’s Cheque Printing 629
5. E-mail 375
6. Customer Enquiry Terminal 360
7. Steps (data transmission) 262
8. Forex Module 13
9. Govt. module 256
10. Internet Banking 336
11. Officers’ Signature scanning-own Bank 637
12. OLTAS 230
13. PPF 273
14. Remote Customer Terminal 24
15. SFMS (SWIFT) 41
16. Single Window Services 493
17. TDR/RID Printing 514
Core Banking Solution (CBS): Core Banking Solution has been implemented at 153 Branches
as on Sep.2005. Link Office has also been brought under CBS thus bringing the total number
to 154 branches/offices in CBS.
Video conferencing: Video conferencing facility is functional at 9 locations. The foreign

department and Specialised Treasury Branch, Mumbai are using the facility for conferencing
with SBI for treasury operations.
Automated stamp duty collection machine: The bank has commissioned ‘stamp duty
collecting machine’ for collection of stamp duty at our Bangalore branch, which is the first of
its kind in the country. The machine facilitates stamp paper vending without human
interference. We propose to install 4 more machine during the year.
Internet banking: The facility has been enabled at 336 branches . The transaction based
Internet Banking facility is available at all Core Banking Branches.
52
Steps (State Bank electronic payment systems): Steps is a messaging software for electronic
funds transfer, e-realisation, message transmission, etc. Transmission of non-financial
messages is launched in the first phase. 95 branches are using steps for transmission of non-
financial messages. The bank will start financial messaging on steps on receipt of steps office
software from SBI.
Realtime Gross Settlement System (RTGS): Real time gross settlement (RTGS) wherein
payment instructions to RBI are processed online on gross basis through the operating day in
contrast to the existing net settlement system has been commissioned and in operation.
Oltas (Online tax accounting system): Oltas was implemented based on recommendations of
tax reforms committee. Oltas has been implemented at 213 designated branches of the bank
Human Resource Development
Human Resource
Manpower Profile
The total strength of the Bank as at the end of March 2005. stood at 9,564 as against 9,693 as at
the end of March 2004. The staff strength comprised of 2,796 Officers, 4865 Clerks / Cashiers
and 1,903 Subordinate Staff. Of these 861 are ex-defence Personnel, 110 belong to Physically
Handicapped category and 509employees belong to minority communities.
Women’s Representation
As at the end of March 2005, there were 2,021 women employees in the Bank compared to
2,061 as at the end of March 2004. The Bank continued to provide equal opportunity to women
in their career progression.
Scheduled Castes / Scheduled Tribes - Representation

As at the end of March 2005, there were 1,605 Scheduled Caste employees comprising of 444
Officers, 684 Clerks/Cashiers and 477 Sub-ordinate Staff. There were 464 Scheduled Tribe
employees comprising of 185 Officers, 200 Clerks/Cashiers and 79 Subordinate Staff as at the
end of March 2005. All guidelines of the Government of India for safeguarding the interests of
SC/ST employees have been complied with.
Training
During the year 2004-05, 204 training programmes were organized at the Bank’s Staff Training
Centres at Bangalore and Mysore, imparting training to 4091 employees of all cadres (2208
Officers, 1,520 Clerks and 363 Sub-staff).
With a view to equip our officials in specialized areas, the Bank conducted several programmes
in credit management, international banking, information technology, marketing and customer
service, managing change, personal/retail segment advances, agricultural finance, speedy
disposal of loan applications, recovery, profitability, NPA management, risk based supervision,
cross-selling of products, preventive vigilance, planning & budgeting, training for internal
auditors of Inspection Department, functional/orientation programmes and organizational
development programmes. Besides, pre-promotional training programmes for SC/ST officers /
employees were also conducted during the year.
53
During the year, 641 officials were deputed to outside training institutions such as State Bank
Staff College, Hyderabad, State Bank Academy, Gurgaon, State Bank Institute for Rural
Development, Hyderabad, State Bank Institute for Information and Communication
Management, Hyderabad, NIBM Pune, BTC, Mumbai, etc. Besides, officials of the Bank were
deputed to various seminars/workshops/conferences.
Management Of The Bank
The Bank is managed by a Board of Directors comprising of 13 directors. The details of the
Directors on the Board of the Bank are provided on page no. 19 of this Offer Document.
Terms of Appointment of Managing Director

In terms of Section 29 (1) of State Bank of India (Subsidiary Banks) Act, 1959, the State Bank
of India, after consulting the Board of Directors of State Bank of Mysore and with the approval
of Reserve Bank of India, appointed Shri Y. Vijayanand as Managing Director of State Bank of
Mysore for a period of two years from the date of his assuming charge of the position, vide
notification no. SBD NO. 18/2003-04 dated February 26, 2004. The details of the terms/
contract of the appointment of Managing Director are available for verification at the Head
Office of the bank.
Directors’ Shareholding
The share holding by the directors in the share capital of the bank is not material and is
insignificant as compared to the overall paid up share capital of the bank.
Payment or Benefit to Promoters or Officers of the Company
Except as stated otherwise in this Information Memorandum, no amount or benefit has been
paid or given since the inception of the Bank.
Payment or Benefit to the Directors and Officers of the Bank
No amount or benefit has been paid or given or is intended to be paid or given to any Director
or Officer of the Bank except their normal remuneration and/or reimbursement for the services
rendered to the Bank to which they are entitled to or may become entitled to under the
provisions of the Bank Nationalisation Act or otherwise in accordance with the Law.
Nature and Interest of Directors
54
No Director of the Bank is interested in the appointment of any of the Managers, Registrars and
Bankers to the Issue. No Director of the Bank is interested in any property acquired by the
Bank within two years of the date of the Offer Document or proposed to be acquired by it.
The Bank has not purchased any property in which any of its Directors had or have any direct
or indirect interest or in respect of any payment thereof. The Bank has no plans, at present, to
acquire any running business out of the proceeds of the Issue. The Directors have no interest in
any loan or advance given by the Bank to any person(s)/ Company (ies) nor is any beneficiary
of such loan or advance related to any of the Directors.
Changes in Directors during the last three years
The changes that took place in the Board of Directors since September 1st, 2002 are as follows:
Sr. No. Name Date of change Reason for change

Date of Ceased from
Appointment
1. Shri Janaki Ballabh 01.11.2000 31.10.2002 Retired
2. Shri A. R. Samajdar 23.02.2000 30.09.2003 Retired
3. Shri K. S. V. Krishnamachari 12.06.2002 31.07.2003 Retired
4. Shri C. Bhattacharya 08.10.2003 31.05.2004 Promoted
5. Shri B. D. Berwal 05.01.2001 24.03.2004 GoI Nominee -
Term completed
6. Shri A. S. Shetty 26.04.2001 31.01.2004 RBI Nominee –
Retired
7. Dr. K. P. Ramaprasanna 16.09.1996 15.09.2002 Term Completed
8. Shri H. S. Nanjundaswamy 02.05.1997 20.10.2002 Term Completed
9. Shri B. P. Rao 24.03.1997 23.03.2003 Term Completed
10. Shri M. Sitarama Murty 06.10.2000 31.12.2003 Retired
11. Shri A.G.Kalmankar 31.05.2004 15.05.2005
12. Shri V.S.Paliwal 04.02.2004 17.03.2005
Key Managerial Personnel
Name & Designation Date of Qualifications Experience (with Functional

Joining Issuer Bank) responsibility
Sri Y Vijayanand, 01.03.2004 MA (Economics)
Managing Director BL, CAIIB
Sri. R.Gopalan 28.01.05 M.Sc.
Chief General
Manager
Sri B N Ramaiah, 10.08.1967 BA, CAIIB 37 years P&D
General Manager
Sri S.K.Misra, 15.09.05 B.Tech Operations
General Manager
Sri C K Mishra, 06.01.2004 MA (Economics), 1 year F&S
General Manager LLB
Sri R D Naidu, 04.08.2003 B.Sc., LLB, 1 year V&I
General Manager CAIIB, PGDBM
Sri Ashok 31.07.2004 ME (Mech), MBA Technology
Bhattacharya, (USA), CAIIB
General Manager
55
Sri Dinesh Batia, 08.12.2004 B. Tech. (Hons), C&I
General Manager Diploma in
Management,
CAIIB
The key managerial personnel are permanent employees and on the rolls of the Bank.
Changes in Key Managerial Personnel during the last one year (otherwise than by way of
retirement):
Shri. Niranjan Bardalai CGM, was transferred to State Bank of Indore

Shri. Ashok Nayar was appointed as CVO, Bank of India
Shareholding by Bank’s Key Managerial Personnel

The share holding by the key managerial personnel in the share capital of the bank is not
material and is insignificant as compared to the overall paid up share capital of the bank.
Corporate Governance
State Bank of Mysore is an organization driven by values is committed to enhancing the long
term shareholder value and simultaneously protecting the interests of all stake holders, viz
customers, employees, investors, partners, RBI, the Government and the society at large, in
consonance with best practices. The Bank believes that Corporate Governance facilitates
effective management and control of operations.
The primary objectives of Corporate Governance are:
i) To ensure maximization of long term shareholder value in a legal and ethical manner.
ii) To act in the best interest of all stakeholders like customers, employees, government
and the society.
iii) To ensure transparency and fairness in all transactions within and outside the Bank
which form the hallmark of good governance.
iv) To ensure accountability for performance and to achieve excellence/benchmarks at all
levels and in key operational areas.
v) Focus on core competence areas, planned expansions and sustained growth.
The Bank is committed to:
i) Ensure that the Bank’s Board of Directors meet regularly, provide effective leadership,
exercise control over the management and monitor executive performance with their
blend of expertise and professionalism.
ii) Establish a frame work of strategic control and continuously review its efficacy to
promote integrity, openness and accountability. Better disclosures and transparency
will bolster investor/share/stakeholder confidence.
iii) Establish clearly documented and transparent management processes for policy
planning and development, coherent business strategies, implementation and review,
decision-making, monitoring control and reporting.
iv) Ensure adherence to good business ethics and principles while carrying out banking
transactions and be responsive to the needs and interests of wide range of
constituencies.
56
v) Practice sound financial and accounting procedures to ensure statutory and regulatory
compliances and constantly review organisational structure and control systems to
respond to new challenges.
Sub-Committees of the Board, Composition, Role and Functions
In line with the Corporate Governance Policy of the Bank and for effective functioning, the
following Sub-Committees of the Board have been formed with delegated powers and
responsibilities: -
1. Executive Committee of the Board
In terms of Section 35(1) of the State Bank of India (Subsidiary Banks) Act, 1959, the
Executive Committee of the Board of Directors has been constituted to consider various
business matters namely sanctioning of credit proposals, approval of capital and revenue
expenditure, investments, administrative matters and all other issues, falling beyond the powers
of the executives of the Bank.
The Committee comprises of the Managing Director, two Directors nominated by State Bank
of India and one elected Director. One other Director (Non Executive) nominated by State
Bank of India shall constitute the fifth member of the Executive Committee. The committee
meets at least once in an month and has met fourteen times between 1st April, 2003 to 31st
March, 2004.
2. Committee of Directors to oversee the implementation of Asset Liability Management

System
As per the ALM guidelines issued by Reserve Bank of India, a Committee of Directors of the
Board has been constituted. The Committee comprises four Directors, the Managing Director
as Chairman of the Committee and three other nominee Directors.
The Committee, besides providing directions and overseeing the implementation of the ALM
system, also reviews the position of the Ban with regard to measurement and management of
liquidity and interest rate risks. The Committee met 3 times during the year.
3. Audit Committee of the Board
In terms of the directives from RBI, the audit committee of the Board has been constituted.
The Committee comprises of two non-official Directors, nominee director of the RBI and the
nominee director from the SBI. One of the non-officials directors who is a Chartered
Accountant chairs the meetings of the ACB. The quorum for the ACB meeting is 3 directors.
The Audit Committee of the Board provides directions and also oversees the operations of the
total audit function in the bank with special focus and follows up on
a. Reconciliation of Inter-Branch account (SBM General Account)

b. Reconciliation of Inter-Bank NOSTRO accounts
c. Balancing of books at various branches
d. Frauds
e. Review of internal audit / concurrent audit of branches
57
f. Review of inspection reports of specialized and large branches and branches rated as
“unsatisfactory” in the internal audit.
g. Review/compliance of Long Form Audit Reports
h. Review/compliance of Annual Financial Inspection by RBI
i. All other major areas of housekeeping
The committee interacts with external auditors before finalisation of the annual auditors before
finalisation of the annual/half yearly financial accounts and reports. The committee meets
atleast once in a quarter and not less than six times in a year. During the current financial year
the Committee met eight times.
Shareholders’/Investors’ Grievance Committee (SIGC)
Investor grievances are given utmost importance and grievances received are dealt
expeditiously.
Pursuant Clause 49 para VIC of the Listing Agreement a shareholder/investor grievance

committee has been formed under the chairmanship of a non-executive director.
The Committee specifically looks into redressing of shareholder/investor complaints in matters

like transfer of shares, non-receipt of annual reports, non-receipt of dividends etc. This
Committee is designated ‘Shareholder/Investor Grievance Committee’ and meets every quarter.
VIII. PROMOTERS, GROUP COMPANIES, JOINT VENTURES AND ASSOCIATES
Promoters and their Background
State Bank of India
The State Bank of India was constituted on 1st July 1955, pursuant to the State Bank of India
Act, 1955 (the "SBI Act") for the purpose of creating a state-partnered and state-sponsored
bank integrating the former Imperial Bank of India. In 1959, the State Bank of India
(Subsidiary Banks) Act was passed, enabling the Bank to take over eight former state-
associated banks as its subsidiaries.
The Bank is India's largest bank, with approximately 9,000 branches in India and 54
international offices. Its Associate Banks have a domestic network of around 4,600 branches,
with strong regional ties. The Bank also has subsidiaries and joint ventures outside India,
including Europe, the United States, Canada, Mauritius, Nigeria, Nepal, and Bhutan. The Bank
has the largest retail banking customer base in India.
The Bank is engaged in corporate banking for many of India's most significant corporates and
institutions, including State-owned enterprises, as well as providing banking services to
commercial, agricultural, industrial and retail customers throughout India. The Bank services
its most important corporate customers, including certain state-owned enterprises, through its
Corporate Banking Group, and its other customers, including other large corporations and
State-owned enterprises, small scale industries, agriculture and personal banking customers
through its National Banking Group. The National Banking Group also provides financial
services to the Government and the state governments, including tax collection and payment
58
services. The Bank is engaged in international banking and has foreign operations in 28
countries with a global network of 54 branches.
The Bank has a presence in diverse segments of the Indian financial sector, including asset
management, factoring and commercial services, insurance, credit cards and payment services.
As at 31st March, 2004, calculated based on RBI data, the Bank's estimated market share in
aggregate deposits of all scheduled commercial banks in India equalled 18.75 percent including
India Millennium Deposits, a deposit scheme denominated in foreign currencies launched by
the Bank for non-resident Indians. The Bank's estimated market share in domestic advances
was 16.87 percent as on the last reporting Friday of March 2004, calculated based on RBI data
for "All Scheduled Commercial Banks" ("ASCB") in India. As at 31st March 2004, the Bank
had an estimated 35.63 percent share of the Indian foreign exchange market, calculated based
on the trade data of DGCIS. The assets of the Bank are diversified across business segments,
industries, and groups.
The Bank's corporate headquarters ("Corporate Centre") is located at State Bank Bhavan,
Madame Cama Road, Mumbai - 400 021.
The bank is committed to using its effort to adopt technology to achieve efficiency in its
business operations. The bank is moving towards centralised database using enhanced
technology to credit it "CBS". The CBS will enable on time, real time transaction processing
and provide live interface to a multitude of technology delivery channels.
SBI FINANCIAL HIGHLIGHTS: PAST 5 YEARS

TABLE I
STATE BANK OF INDIA -FINANCIAL HIGHLIGHTS-2001-2005
Rs. in Billion FY2001 FY2002 FY2003 FY2004 FY2005

Deposits 2428.28 2705.6 2961.24 3186.19 3670.48
Advances 1135.90 1208.06 1377.58 1579.34 2023.74
Investments 1228.76 1451.42 1723.48 1856.76 1970.98
Total Assets 3156.44 3482.28 3758.76 4078.15 4598.83
Interest Income 261.38 298.10 310.87 304.60 324.28
Interest Expenses 177.56 207.29 211.09 192.74 184.83
Net Interest Income 83.82 90.81 99.78 111.86 139.45
Non-Interest Income 38.83 41.74 57.40 76.12 71.20
Total Operating Income 122.65 132.55 157.18 187.98 210.65
Staff Expenses 60.12 51.53 56.89 64.48 69.07
Overhead Expenses 22.87 20.58 22.53 27.97 31.67
Total Operating Expenses 82.99 72.11 79.42 92.45 100.74
Operating Profit 39.66 60.44 77.76 95.53 109.91
Total Provisions 23.63 36.14 46.70 58.72 66.86
Net Profit 216.03 24.30 31.06 36.81 43.05
TABLE II
STATE BANK OF INDIA -FINANCIAL HIGHLIGHTS-2000-2004 (IN US $)
In US$ Billion FY2001 FY2002 FY2003 FY2004 FY2005

Deposits 52.09 55.44 62.35 72.88 83.91
Advances 24.37 24.76 29.01 36.13 46.26
59
Investments 26.36 29.74 36.29 42.47 45.06
Total Assets 67.71 71.36 79.15 93.28 105.13
Interest Income 5.58 6.11 6.55 6.97 7.41
Interest Expenses 3.81 4.25 4.45 4.41 4.23
Net Interest Income 1.77 1.86 2.10 2.56 3.18
Non-Interest Income 0.86 0.86 1.21 1.74 1.63
Total Operating Income 2.63 2.72 3.31 4.30 4.81
Staff Expenses 1.29 1.06 1.20 1.47 1.58
Overhead Expenses 0.49 0.42 0.47 0.64 0.72
Total Operating Expenses 1.78 1.48 1.67 2.11 2.30
Operating Profit 0.85 1.24 1.64 2.19 2.51
Total Provisions 0.51 0.74 0.98 1.34 1.53
Net Profit 0.34 0.50 0.66 0.85 0.98
TABLE III
STATE BANK OF INDIA
KEY FINANCIAL INDICATORS(%) FY2001 FY2002 FY2003 FY2004 FY2005

ROA 0.57 0.73 0.86 0.94 0.99
ROE 11.92 15.97 18.05 18.19 18.10
EPS(Rs.) 30.48 46.20 59.00 69.94 81.79
BVS(Rs.) 256 289 327 384 450
Dividend Pay out Ratio 16.40 12.98 14.40 15.73 15.29
Cost/Income Ratio 67.66 54.40 50.53 49.18 47.83
Capital Adequacy Ratio 12.79 13.35 13.50 13.53 12.45
Cost of Deposits 7.80 7.60 7.11 6.02 5.11
Yield on Advances 10.17 9.66 8.97 8.17 7.68
Yield on Resources Deployed 10.12 10.06 9.53 8.62 7.94
Net Interest Margin 3.23 2.91 2.95 3.04 3.39
Gross NPA Ratio 12.93 11.95 9.33 7.75 5.96
Net NPA Ratio 6.03 5.63 4.50 3.48 2.65
Provision Coverage 57 56 54 57 57
TABLE IV
SUMMARY OF STATE BANK OF INDIA’S BALANCE SHEET
(Rs. in billion) MARCH 2003 MARCH 2004 MARCH 2005

CAPITAL & LIABILITIES
Capital 5.26 5.26 5.26
Reserves & Surplus 166.77 197.05 235.46
Deposits 2961.23 3186.19 3670.48
Borrowings 93.04 134.31 191.84
Other Liabilities & Provisions 532.46 555.34 495.79
Total 3758.76 4078.15 4598.83
ASSETS
Cash & balances with
127.38 190.41 168.10
Reserve Bank of India
Balances with banks and
324.43 245.25 225.12
money at call & short notice
Investments 1723.48 1856.76 1970.98
60
Advances 1377.58 1579.34 2023.74
Fixed Assets 23.89 26.45 26.98
Other Assets 182.01 179.94 183.91
Total 3758.77 4078.15 4598.83
Contingent Liabilities 1061.06 1118.92 1593.97
Bills for Collection 75.71 101.94 167.77
TABLE V
SUMMARY OF STATE BANK OF INDIA’S BALANCE SHEET
(In US $ billion) MARCH 2003 MARCH 2004 MARCH 2005

CAPITAL & LIABILITIES
Capital 0.11 0.12 0.12
Reserves & Surplus 3.51 4.51 5.38
Deposits 62.35 72.88 83.91
Borrowings 1.96 3.07 4.39
Other Liabilities & Provisions 11.21 12.70 11.33
Total 79.14 93.28 105.13
ASSETS
Cash & balances with
2.68 4.35 3.84
Reserve Bank of India
Balances with banks and
6.83 5.61 5.15
money at call & short notice
Investments 36.29 42.47 45.06
Advances 29.01 36.13 46.26
Fixed Assets 0.50 0.61 0.62
Other Assets 3.83 4.11 4.20
Total 79.14 93.28 105.13
Contingent Liabilities 22.34 25.59 36.44
Bills for Collection 1.59 2.33 3.83
ASSOCIATES
FINANCIALS OF GROUP COMPANIES
Name of the Nature of Date of Year Equity Re- Sales PAT EPS
Company activity incorporation Capital serves (in Rs.)
SBI DFHI Ltd Primary 2002 200 414.76 557.94 184.48 92.24
Dealer 2003 200 502.77 300.13 129.89 64.94
08.03.1998
2004 290.91 761.45 379.08 177.57 61.04
2005 290.91 667.17 42.80 94.80 --
SBI Capital Offers 2002 58.03 223.98 103.07 18.81 3.24
Markets Ltd invest-ment 2003 58.03 232.02 120.62 28.35 4.89
02.02.1988
banking 2004 58.03 245.93 142.75 63.23 10.9
services 2005 58.03 284.42 175.06 88.12 15.18
SBI Factors Factoring 2002 25 11.57 13.04 0.46 1.85
& Commer- Company 2003 25 13.79 14.1 2.22 8.88
26.02.1991
cial Services 2004 25 13.97 14.44 1.59 6.32
Pvt. Ltd 2005 25 17.80 23.83 6.12 24.48
SBI Funds Mutual 2002 50 7.27 27.22 0.55 1.11
Management Fund 2003 50 10.38 29.49 6.2 12.23
07.02.1992
Pvt Ltd Company 2004 50 14.83 36.10 10.09 20.18
2005 50 20.75 49.75 15.05 30.10
61
CIBIL Credit 2002 8.75 NIL 0.02 -0.47 N.A
Information 2003 18.75 NIL 1.82 -0.52 N.A
21.08.2000
Bureau 2004 25.00 NIL 2.31 -3.71 N.A
2005 25.00 NIL 0.63 -6.59 N.A
SBI Card Credit card 2002 100 NIL 165.79 1.56 N.A
company 2003 100 NIL 250.48 16.57 1.66
2004 100 24.98 313.11 59.92 3.8
GE Capital Business 2002 27 NIL 45.8 2.95 1.09

Process & Management 2003 27 NIL 56.25 8.68 3.21
Services Pvt. Ltd. 2004 27 15.33 78.95 19.6 7.26
SBI Life 2002 125.00 NIL 27.49 -0.29 NIL

2003 125.00 NIL 112.36 -7.49 NIL
11.10.2000
2004 175.00 NIL 275.11 -16.41 NIL
2005 175.00 NIL 652.07 11.50 NIL
UTI Trustee Trustee of
Co. Pvt. Ltd UTI MF 14.11.2002 2004 0.10 0.0029 0.0057 0.0029 0.29
UTI Asset Investment
Mgt. Co. Pvt. Mgt. 14.11.2002 2004 10 124.94 380.14 124.94 124.93
Ltd. Services
Name of the Nature of Date of Year Equity Reserves Sales PAT EPS
company activity Incorpor ation Capital (inRs.)
SBBJ Banking SBI (Subsidiary 2002 50.00 702.11 164.5 329
Banks) Act, 2003 50.00 853.45 203.28 406.55
1959
2004 50.00 1098.57 301.52 603.04
2005 50.00 1247.68 205.65 411.30
SBH Banking 2002 17.25 981.16 226.49 1312.99
2003 17.25 1233.69 301.4 1747.22
2004 17.25 1556.52 381.2 2209.86
2005 17.25 1748.40 250.90 1454.49
SBIR Banking 2002 17.50 395.1 125.1 714.86
2003 17.50 566.16 200.32 1144.69
2004 17.50 772.67 226.26 1292.91
2005 17.50 886.06 133.18 761.03
SBP Banking 2002 24.75 1117.25 232.94 941.17
2003 24.75 1387.43 322.02 1301.09
2004 24.75 1706.1 430.36 1738.83
2005 24.75 2019.63 287.07 1159.88
SBS Banking 2002 314.00 253.6 82.01 26.12
2003 314.00 311.44 92.55 29.47
2004 314.00 453.41 177.39 56.49
2005 314.00 480.25 41.16 13.11
SBT Banking 2002 50.00 560.14 120.93 241.86
2003 50.00 672.8 171.04 342.08
2004 50.00 875.26 244.6 489.2
2005 50.00 1079.98 247.13 494.26
62
The following table sets out details of the SBI's International Subsidiaries, Joint Ventures
and Associates outside India as at 31st March, 2004.
Subsidiaries, Joint Ventures and Associates Outside India (As at 31st March 2004)
(Rs millions)
Name Date of Total Owned Bank's Net
Establishment Assets Funds Shareholding Profit
(%)
SBI (Canada) 5th May, 1982 6,739.4 976.5 100 (22.2)
SBI (California) 3rd September, 1982 6,617.0 697.5 100 33.7
SBI International 12th October, 1989 3 7,679.1 834.7 98 49.7
(Mauritius) Ltd. 27th March, 1994 4
th
INMB Bank Ltd., Lagos 26 November, 1981 1,378.3 496.4 51 47.9
1 th
Nepal SBI Bank Limited 7 My, 1993 4,531.3 341.3 50 29 2
Bank of Bhutan 2 28th May, 1968 12,351.4 917.3 20 164.2
Commercial Bank of 5th December, 2003 868.7 868.7 60 (40.8)

India LLC, Moscow
1. Data as on 16th July 2003.
2. Data as on 31st December 2003.
3. As a joint venture.
4. As a subsidiary.
The following tables set out certain performance highlights of the Associate Banks as at 31st March 2004.
Operating Return on
Name of the Bank Equity
Ownership Deposits Advances Profit
(per cent) (Rs .in (Rs .in (Rs .in (per cent)
Millions) Millions) Millions)
State Bank of Bikaner and Jaipur (SBBJ) 75.07 156420 85,970 6,813.5 26.25
State Bank of Hyderabad (SBH) 100.00 242,580 118.14 10,142.1 24.22
State Bank of Indore (SBIR) 98.05 104,190 64,060 5,322.4 28.63
State Bank of Mysore (SBM) 92.33 110,840 63,070 4,249.2 30.31
State Bank of Patiala (SBP) 100.00 224,730 130,860 10,037.5 24.86
State Bank of Saurashtra (SBS) 100.00 106,750 52,400 4,527.6 23.12
State Bank of Travancore (SET) 75.01 197,210 111.320 7,008.3 26.44
Total 1,142,720 625,820 48, 100.6 25.77
Non-Banking Subsidiaries and Joint Ventures of the Promoter:

In addition to the Associate Banks, SBI also has a network of non-banking
subsidiaries and joint ventures in India engaged in business other than commercial
banking. At 31st March, 2004, total assets. In SBI's financial statements, investments in
subsidiaries and joint ventures (both in India and abroad) are valued at historical cost
after provisions, if any.
SBI's
Ownership Investment Assets Net profit
Non-Banking Subsidiaries (per cent) (Rs. in (Rs. in (Rs. in
millions) millions) millions)
63
SBI Funds Management Pvt. Ltd 100.00 500.0 738. 1 100.9
SBI Factors and Commercial Services P. 69.88 135.0 1878.6 15.9
Ltd
SBIDFHI Ltd 66.00 1657. 1 28599.5 1740.9
SBI Capital Market Ltd. 86.16 108.0 4815.4 632.3
Non- Banking Joint Ventures
SBI Life Insurance Company Ltd 7400 12950 48665 1641
SBI Cards and Payment Services Pvt. 60.00 600.0 8297.6 599.2
Ltd Credit Information Bureau of India 40.00 100.0 2546 37. 1
GE Capital Business Process
Management Services Pvt Ltd 4000 1080 7207 3097
Regional Rural Banks promoted by State Bank of India
SBI, along with the Government, including respective state governments, has promoted 30
Regional Rural Banks ("RRBs") spread over 102 districts in 16 States with a network of
approximately 2,350 branches. The aggregate deposits and advances of the sponsored
RRBs stood at Rs.78,137.8 million and Rs.34,019.0 million respectively at 31st March, 2004.
The net profit of the combined RRBs in fiscal year 2004 was Rs. 184.4 million. SBI had, as of
March 2004, contributed Rs.1,349.7 million for the recapitalisation of 29 RRBs, which were
in the process of financial restructuring
Contingent Liabilities/Legal Proceedings/Disputes
SBI and its Banking Subsidiaries have contingent liabilities, which pertain to their
normal banking activities. A major portion of these contingent liabilities are a source of
income for them. Most of these contingent liabilities are adequately covered through
individual security mechanisms as also duly counted for maintaining Capital
Adequacy in line with RBI guidelines. SBI and its Associates, Subsidiaries and Affiliates
are also party to various legal proceedings / disputes in the ordinary course of business
of banking / other business. However, none of such proceedings / disputes, even if
determined adversely to SBI and its Associates, Subsidiaries and Affiliates would
have, by law, any material adverse effect on the business or financial condition of SET
since each subsidiary bank is a separate statutory corporation, constituted and governed
by the SBI (SB) Act.
Sponsored RRBs
The bank has sponsored two regional rural banks, viz., Cauvery Grameena Bank covering
Mysore, Hassan and Chamarajanagar districts and Kalpatharu Grameena Bank covering
Bangalore urban, Bangalore rural and Tumkur districts. As on September 2005, these two
RRBs Collectively have a net work of 203 Branches and total deposits and advances of
Rs.660.78 and Rs.564.35 crores respectively. Both the RRB’s are profit making.
Related Party transactions as per the financial statements

For details, investors may refer to page no.74of this offer document.
Currency
64
Amounts expressed in this offer document may be construed in INR (Indian Rupee) unless
mentioned otherwise.
DIVIDENDS DECLARED IN RESPECT OF LAST FIVE FINANCIAL YEARS ENDED 31ST MARCH
Rs.cr
31/3/01 31/3/02 31/3/03 31/3/04 31/03/2005
Dividend (Excl. Tax) 9.00 9.00 14.40 21.60 27.00
Tax 0.92 1.85 2.77 3.79
Dividend Rate (%) 25% 25% 40% 60% 75%
IX. FINANCIAL STATEMENTS
Financial Summary
The Financial Summary has been taken from the Audited results provided by the auditors.
Year ended March 31st 2003 2004 2005 % of change from % of change from
2003 to 2004 2004 to 2005
Total Income 1,330.99 1,397.47 1553.79 4.99 11.81
Interest Income 1,037.13 1,057.05 1167.77 1.92 10.47
Other Income 293.86 340.42 386.01 15.84 13.39
Expenditure
Interest Expenditure 650.52 602.65 623.02 (7.36) 3.38
Operating Expenditure 327.72 369.90 479.10 12.87 29.52
Profit before Provisions & 352.75 424.92 451.65 20.46 6.29
Contingencies
Provisions & Contingencies 236.83 248.54 245.40 4.94 -1.28
Net Profit 115.92 176.38 206.26 52.16 16.94
FINANCIAL INFORMATION
AUDITORS’ REPORT
The Board of Directors

State Bank of Mysore,
Corporate Office
Bangalore: 560 009.
Dear Sirs,
In terms of our appointment for the purpose of certification of the statement of accounts, to be
incorporated in the offer document to be issued by the Bank, in connection with the Private
Placement of Sub-ordinated Tier II Debts, we state as follows:
1. We have examined the Audited Accounts of the Bank for the five consecutive
financial years ended on 31st March, 2005 and unaudited (reviewed) financial
results for the half year ended as on 30.09.2005, being the last date upto which the
accounts of the Bank have been made up and audited by the Auditors of the Bank of
those respective years.
65
2. The aforesaid financial statements have been prepared in accordance with the
guidelines issued by the Reserve Bank of India from time to time and subject to the
limitation of disclosures required under the Banking Companies (Acquisitions and
Transfer of Undertakings) Act 1980.
3. In accordance with the requirements of clause B of Part II to schedule II of the

Companies Act 1956 and SEBI (Disclosures and Investor Protection) Guidelines
2000, we report as under:
a. The Statement of Profit & Loss of Bank for the five consecutive financial years
ended on 31st March .2005 along with the half yearly unaudited (reviewed)
accounts as on 30.09.2005, the statement of assets and liabilities of Bank , the
Significant Accounting Policies , Notes and Accounts , Auditors Report ,
Significant changes in Accounting Policies and subject to Auditor's
Qualifications in respect of which no adjustments could be carried out as
consequential effects could not be ascertained, are prepared from the aforesaid
accounts after making such adjustments and regroupings as were feasible and in
our opinion, considered appropriate.
b. We further report that the dividends declared by Bank in respect of five

consecutive financial years ended on 31st March 2005 are set out in annexure
enclosed.
c. We have also examined the accompanying statements of Key Accounting Ratios

for the five consecutive years ended on 31st March 2005 and also for the half
year ended 30.09.2005, details of unsecured loans, details of other income,
details of investments, statement of capitalisation, Tax shelter statements,
contingent liabilities statement and report that in our opinion these have been
correctly computed subject to the consequential effects for non adjustment of
qualifications as detailed in the annexure.
For and on behalf of
Sonde, Srinivas & Co.

Chartered Accountants
Sd/-
Partner
Date: November 19, 2005

Place: Bangalore
66
STATEMENT OF PROFIT AND LOSS FOR FIVE YEARS
Rs. in crores
Year ended Year ended Year ended Year ended Year ended Half-year
31.03.2001 31.03.2002 31.03.2003 31.03.2004 31.03.2005 Sept. 2005
I INCOME
Interest Earned 915.35 971.12 1037.13 1057.05 1167.77 638.83
Other Income 171.07 233.26 293.86 340.42 386.01 176.02
TOTAL 1086.42 1204.38 1330.99 1397.47 1553.78 814.86
II EXPENDITURE
Interest Expended 601.74 655.88 650.52 602.65 623.03 353.45
Operating Expenses 346.75 313.72 327.72 369.90 479.10 240.94
Provisions and
Contingencies 112.22 168.89 236.82 248.54 245.40 122.23
TOTAL 1060.71 1138.49 1215.06 1221.09 1347.53 716.62
III PROFIT/LOSS
C/f loss - - - - -
Net Profit for the year 25.72 65.90 115.92 176.38 206.26 98.24
Capital Reserve (Investment
appreciation)
TOTAL 25.72 65.90 115.92 176.38 206.26 98.24
IV APPROPRIATIONS
Transfer to
- Statutory Reserves 8.37 23.40 49.51 59.21 97.35 -
Investment Fluctuation
Reserve (excess / short - 32.00 41.24
- provision towards depn. on
Investments net of taxes and
Statutory Reserves) 76.00 9.10 -
Transfer to Capital Reserves 3.93
- (Profit on sale of Inv. under -
"HTM" Category 1.50 8.43 15.81 68.02
Redemption Reserve for
- Bonds 3.50 - - - -
- Dividend 9.92 9.00 16.24 24.37 30.79 -
(inclusive of Dividend Tax
where applicable)
Balance carried over to
Balance Sheet - - 0.50 1.00 1.00 -
TOTAL 25.72 65.90 115.92 176.39 206.26 -
Earnings per share
(Basic/Diluted) 71.44 183.05 322.00 489.94 573.00 273.00
67
(Rupees in crores)
2000-01 2001-02 2002-03 2003-04 2004-05 Sept. 2005
INTEREST INCOME
Interest/Discount on Advances/Bills 478.53 496.99 528.01 557.92 656.26 404.74
Income on investments 400.53 436.80 477.91 480.11 477.12 217.49
Interest on balances with Reserve Bank of India
and other inter bank funds 16.88 23.02 15.88 10.58 12.06 9.80
Others 19.41 14.31 15.32 8.44 22.33 6.80
TOTAL 915.35 971.32 1037.12 1057.05 1167.77 638.83
OTHER INCOME
Commission, Exchange and Brokerage 104.37 111.45 118.41 131.66 162.71 82.38
Profit/Loss on sale of investments (Net) 28.06 75.78 102.30 155.02 151.20 60.30
Profit (-loss) on Revaluation of Investments (Net) - - 3.03 - - -
Profit on sale of land, buildings and other assets
(Net) 0.14 0.58 0.13 0.10 -0.03 -
Profit on exchange transactions (Net) 12.52 20.80 22.68 18.19 21.60 13.33
Miscellaneous Income 25.98 24.65 53.37 35.45 50.53 20.02
TOTAL 171.07 233.26 293.86 340.42 386.01 176.03
INTEREST EXPENDED
Interest on Deposits 566.03 618.68 616.75 566.30 588.91 331.16
Interest on Reserve Bank of India/Inter Bank
borrowings 9.92 5.25 1.23 2.47 6.78 0.30
Others 25.79 31.95 32.54 33.87 27.34 21.99
TOTAL 601.74 655.88 650.52 602.64 623.03 353.45
OPERATING EXPENSES
Payments to and provisions for Employees 280.77 241.53 248.25 265.14 330.67 139.89
Rent, Taxes and Lighting 19.95 20.92 23.59 24.69 32.18 18.96
Printing and Stationery 3.30 3.48 3.88 4.80 5.80 3.48
Advertisement and Publicity 0.25 0.32 0.42 0.47 1.12 0.52
Depreciation on Bank's Property 9.67 10.88 11.73 20.72 31.87 21.54
Directors' Fees, Allowances and Expenses 0.07 0.07 0.09 0.07 0.17 0.07
Auditors' Fees and Expenses (including Branch
Auditors) 1.78 2.43 1.91 2.67 3.09 1.50
Law Charges 0.22 0.62 1.47 2.10 2.11 0.87
Postage, Telegrams, Telephones etc. 1.21 0.63 0.36 0.42 0.72 1.99
Repairs and Maintenance 2.10 1.57 1.79 2.54 3.04 1.90
Insurance 0.95 0.47 0.35 0.29 1.11 1.56
Other Expenditure 26.48 30.79 33.87 46.29 67.23 48.66
TOTAL 346.75 313.71 327.71 369.90 479.10 240.94
68
STATEMENT OF ASSETS AND LIABILITIES
Financial Year Ended as on March
2001 2002 2003 2004 2005 Sept. 2005
A. ASSETS
1. Cash in hand 35.94 40.34 40.58 75.42 58.53 69.28
2. Balances with RBI 631.07 533.11 424.66 635.54 883.00 953.56
3. Balances with Banks in India 67.52 90.43 289.60 27.39 55.14 62.95
4. Balances with Banks outside India 1309.22 255.30 201.02 86.06 94.00 85.95
5. Money at Call and Short Notice 75.00 - - 551.00 475.00 165.00
6. Investments in India 3550.32 4158.83 4760.57 5486.69 5796.19 5528.48
7. Investments Outside India
8. Advances in India 4286.71 4914.50 5260.67 6306.72 8781.26 10017.66
9. Advances outside India
10.Fixed Assets (Net of Rev. Reserve) 33.50 36.18 38.29 75.48 92.24 152.81
11.Other Assets 424.21 324.97 320.36 513.75 317.25 281.93
A. TOTAL OF (A) 9413.49 10353.66 11335.75 13758.05 16552.61 17317.62
B. LIABILITIES
1. Demand Deposits
From Banks 132.05 177.69 172.83 166.76 189.62 175.04
From Others 712.62 833.93 820.55 1028.03 1163.76 1214.21
2. Savings Deposits 1793.67 1987.72 2292.28 2821.31 3494.53 3810.56
3. Term Deposits
From Banks 141.55 139.92 47.57 56.47 52.57 40.77
From Others 4828.40 5385.59 5679.88 7011.12 8684.69 9361.51
4. Borrowings
In India 112.06 65.29 170.22 2.68 60.84 1.33
Outside India 67.02 14.22 165.19 214.66 258.73 426.73
5. Other Liabilities and Provisions 1129.40 1132.73 1366.27 1695.05 1526.43 1137.79
6. Subordinated Debts 205.00 265.00 190.00 190.00 365.00 295.00
B. TOTAL OF (B) 9121.77 10002.09 10904.79 13176.08 15796.17 16462.94
C. NET ASSETS (C=A-B) 291.72 351.57 430.96 581.97 756.44 854.68
Represented by:
D. SHARE CAPITAL 36.00 36.00 36.00 36.00 36.00 36.00
E. RESERVES AND SURPLUS 255.72 315.57 394.96 545.97 720.44 818.68
1. Statutory Reserve 77.70 101.10 150.61 209.82 307.17 307.17
2. Capital Reserve 11.75 13.25 21.68 37.49 105.51 105.51
3. Investment Fluctuation Reserve 6.76 38.76 80.00 156.00 165.10 165.10
4. Revenue and Other Reserve 159.51 162.46 142.67 142.66 142.66 142.66
5. Balance of Profit and Loss Account - - - - - 98.24
TOTAL (E) 255.72 315.57 394.96 545.97 720.44 818.68
F. TOTAL (D+E) 291.72 351.57 430.96 581.97 756.44 854.68
69
CONTINGENT LIABILITIES
Rs. in crores
FINANCIAL YEAR 2000-01 2001-02 2002-03 2003-04 2004-05 Sept. 2005
Claims against the Bank not acknowledged

as debts 45.03 64.45 85.10 1.75 16.02 16.02
Liability for partly paid Investment 1.62 0.12 0.12 0.12 0.12 0.12
Liability on account of outstanding forward
exchange contracts 2411.09 2219.06 3743.57 3903.19 3367.30 3278.43
Guarantees given on behalf of constituents
(Net of Margin) 351.61 399.24 392.04 376.68 486.74 368.93
Acceptances, endorsements and other
obligations (Net of Margin) 514.37 632.74 695.72 748.80 905.60 860.57
Other Items for which the Bank is
contingently liable 4.97 3.63 4.69 1.04 1.06
TOTAL 3328.69 3319.24 4921.24 5031.58 4776.84 4524.07
BILLS FOR COLLECTION 125.07 180.20 275.16 64.01 67.55 NA
BREAK UP OF UNSECURED LOANS AS ON 31.03.2005 AND 30.09.05 (Rs. in crores)

I. Borrowings in India 31.03.2005 30.09.2005
i) Reserve Bank of India - -
ii) Other Banks 60.00
iii) Other Institutions and Agencies 0.84 - 1.33
II. Borrowings outside India 258.73 426.73
III. Tier II Bonds - -

(a) Subordinated Debt (12 yr maturity) - -
(b) 7 Yr Unsecured Redeemable Bonds 365.00 295.00
TOTAL (I+II+III) 684.57 723.06
DETAILS REGARDING LOANS AND ADVANCES TO PERSONS/COMPANIES IN WHICH DIRECTORS

ARE INTERESTED
Name of The Director Type of Bank's Amount in Lakhs Asset Classification

Exposure as on 31.03.05
Nil Nil Nil Nil
70
STATEMENT OF FACE VALUE, BOOK VALUE AND MARKET VALUE OF INVESTMENTS AS ON
30th SEPTEMBER 2005 (Rs. in crores)
Sr. No. Investments Face Value Book Value Market Value
A Govt. Securities
Held to Maturity 2835.10 2939.90 2939.90
Available for sale 1913.60 1988.29 2015.40
Held for trading 10.00 10.25 10.21
Total of A 4758.70 4938.44 4965.51
B Other App Securities

Available for Sale 74.58 74.26 87.47
HTM 90.14 90.17 90.17
Total of B 164.72 164.43 177.64
C Shares
Available for sale 5.56 13.83 30.34
NPA 1.05 1.09
HFT/HTM 2.71 3.23 3.24
Total of C 9.32 18.15 33.58
D Bonds/Debentures
Held to maturity 48.42 48.35 51.92
Available for sale--performing 233.45 233.07 235.99
NPA 3.58 3.58
Total of D 285.45 285.00 287.91
E Others
Mutual Funds 110.59 114.92 124.70
Asset Security Receipts 12.41 12.41 12.41
Total of E 123.00 127.33 137.11
GRAND TOTAL 5341.19 5533.35 5601.75
AGEING SCHEDULE OF SUNDRY DEBTORS/LOANS AND ADVANCES AS ON 31.03.2005

(Rs. in crore)
Residual 1-14 15-28 29 days Over 3 Over 6 Over 1 Over 3 Over 5 Total
Maturity days days 3 mths mths mths year upto years years
upto 6 upto 1 3 years upto 5
mths year years
Maturity Pattern 429.72 69.26 562.50 582.23 650.31 4268.51 1035.38 1183.35 8781.26
of Loans and
Advances
71
SIGNIFICANT ACCOUNTING POLICIES 2004-2005
1. RECONCILIATION
a. The initial matching of entries for the purpose of reconciliation under various Inter-Branch, Inter-
Bank accounts have been completed upto March 31,2005. The final reconciliation is in progress.
b. Uploading differences noticed in a few branches between subsidiary and general ledger balances at
the time of computerisation are in the process of reconciliation.
c. Reconciliation of balances with other banks/institutions is in progress.
The impact of the above, if any, on the Profit and Loss Account and Balance Sheet, though not
quantifiable, in the opinion of the Management, will not be material.
2. RETIREMENT BENEFITS/VOLUNTARY RETIREMENT SCHEME
i. During the year, the following amounts have been provided to meet the liabilities for various
retirement benefits as per actuarial valuation:
Item Amount (Rs. In lacs)
Current year Previous year
Pension 3138 3224

Leave Encashment - 310
* Gratuity 1614 2151
* (Including Gratuity for Janata Deposit Collectors Rs.165 lacs) -
ii. Rs.2985.15 lakhs written off during the year unamartoised balance on account of VRS- NIL
3. PROVISIONS FOR NON-PERFORMING ASSETS
a. Provision has been made for standard assets at the rate of 0.25% in accordance with guidelines
issued by the Reserve Bank of India and an amount of Rs lacs (Previous year Rs.1548.34 lacs)
has been shown under “Other liabilities and Provisions-Others” in the Balance Sheet.
b. The Bank has made an accelerated provision of Rs.14665 lacs (Previous Year Rs13007 lacs)
towards non-performing assets, as per RBI guidelines/directives, which has been deducted from
Loans and Advances.
c. In terms of RBI IRAC norms /guidelines the delinquency norm for Non Performing Assets has been
reduced to 90 days from the previous norm of 180 days. The bank has identified and made
provision on NPAs accordingly.
d. The provision for Non-performing assets for the year is net off Rs.1267 lacs earned by participating
in the Govt. of India buy-back of securities scheme.
4. INCOME TAX PROVISION
Provision for income tax is arrived at after due consideration of past assessments, decisions of the
appellate authorities and advice of counsels.
5. INVESTMENTS
i. The Bank holds 36.77%(Previous year 18.76%) of its total investments under the “Held to maturity”
category as against the ceiling of 25% specified by the Reserve Bank of India.
ii. The Bank has appropriated Rs910 lacs towards the Investment Fluctuation Reserve .The amount in
Investment Fluctuation Reserve of Rs. 16510 Lacs as on 31st March, 2005 is 4.50 % of the book
value of Investments other than investments held under the “Held to Maturity” category.
72
iii. In respect of assets held under “Held to maturity “ category as stated in Principal Accounting
Policies (No.4 (iii)) the excess of acquisition cost over face value of the securities amortised during
the year amounted to Rs.472 lacs (Previous Year Rs. 82.35 lacs).
iv. As per RBI guidelines an amount of Rs.6802 lacs (Previous year Rs.1581 lacs) being the balance
amount of Profit on Sale of securities [net of taxes and transfer to Statutory Reserve] in “Held to
Maturity” category is transferred to Capital Reserve.
6. CHANGE IN ACCOUNTING POLICY
There is no change in the accounting policy during the year.
7. CAPITAL ADEQUACY RATIO
Particulars 2004 2005

A Capital to Risk Weighted Assets Ratio [CRAR] 11.53% 12.08%
B Tier I Capital to Risk Weighted Assets Ratio 7.18% 7.12%
C Tier II Capital to Risk Weighted Assets Ratio 4.35% 4.96%
VRS dues deferred have not been considered in computation of [A] and [B] above as per RBI
directives
8. ADDITIONAL DISCLOSURES
In terms of the Reserve Bank of India guidelines, the following additional disclosures have been made
and the data as computed by the management is relied upon by the auditors:
[Rs. in lacs]
Particulars 2004-05 2003-04
A Percentage of share holding of the Government of India. -- --
B Percentage of Net NPA to Net Advances 0.92 2.96
C Details of “Provisions and Contingencies” debited to the Profit and
Loss Account of the year:
Provisions made towards NPAs 12783.37 16618.58
Provision for depreciation in the value of investments (710.54)
iii. Provision for income tax(including deferred tax) 2966.06 8644.98
iv. Provision for Wealth Tax 1.00 1.00
v. Provision for Standard Assets 650.00 300.00
Total 16394.43 24854.02
D Subordinate debt raised as Tier II Capital
i. During the year 1999-00 7000 7000
ii. During the year 2000-01 6000 6000
iii. During the year 2001-02 6000 6000
iv. Duri ng the year 2004-05 17500 -
Total 36500 19000
Particulars 2003-04 2004-05

E Business Ratios:
i. Interest income as a percentage to average working funds 7.94% 8.15%
ii. Non-interest income as a percentage to average working funds 2.56% 2.69%
iii. Operating profit as a percentage to average working funds 3.19% 3.15%
iv. Return on assets (net profit as a percentage to total assets at the 1.28% 1.25%
end of the year)
v. Business (Deposits plus Advances) per employee (Rs. in lacs) 162.81 203.54
vi. Profit per employee (Rs. In lacs) 1.82 2.16
73
9. COUNTRY RISK EXPOSURE AND PROVISIONS THERE AGAINST
In terms of RBI guidelines on Country Risk Management, there is no exposure to any country where the
banks’ net funded exposure is 2% or more of its total assets. Accordingly no provision has been made as
required by Reserve Bank of India circular DBOD.BP.BC.71/21.04.103/2002-03 dated 19/2/2003.
10. COMPLIANCE WITH ACCOUNTING STANDARDS
The following disclosures are being made in accordance with the provisions of the applicable
mandatory Accounting Standards issued by the Institute of Chartered Accountants of India (ICAI):
(a) Prior period items (AS 5)

The amount of prior period items not being material have not ben separately disclosed.
(b) Foreign Exchange Translation (AS 11)

During the quarter ended 30.9.05, the Bank has changed its accounting policy by implementing A S 11
(revised 2003) (The Effects of Changes in Foreign Exchange Rates) issued by the ICAI, as per
guidelines of RBI on compliance with AS 11 (revised 2003) in place of FEDAI guidelines regarding
translation/conversion of foreign exchange transactions. As a result of the change , the profit for the
quarter/half year ended 30th September,2005 has increased by Rs.224.81 lacs.
(c) Related party transactions (AS 18)
In accordance with AS 18 issued by the ICAI and the RBI guidelines, details relating to Related Party
transactions are disclosed hereunder:
Key Management Personnel

Sr. No Name Designation Particulars Period Amount (Rs.)
1. Mr. Y. Vijayanand Managing Salary and 1-4-04 to 4,90,074.75
Director Allowances 31-3-05
The credit exposure to the above key managerial personnel and their relatives during the year is NIL.
All the other related parties are State Controlled enterprises as defined in AS 18 issued by the Institute
of Chartered Accountants of India. Transactions with them are not required to be disclosed.
(d) Leases (AS 19)

i. The Bank has taken premises only on rental basis and has no long-term operating leases taken/given
and hence reporting under AS 19 is not considered necessary.
ii. No financial lease has been executed after April 1.2001.
(e) Accounting for deferred taxes assets/liabilities (AS 22)

In compliance with AS 22 “Accounting for taxes on income” issued by the Institute of Chartered
Accountants of India the Bank has recognised deferred tax assets and liabilities. Deferred tax asset (net)
of Rs.565.13 lacs has been recognised till March 31,2005 ,the major components of which are as under:
(Amount in Rs. lacs)

Current year Previous year
Leave Encashment 371.13 220.26

Depreciation on assets 72.68 225.20
Amortisation premium on investment 110.99 61.59
Provision for Gratuity for JD Collectors 10.33 -
TOTAL 565.13 507.05
74
(f) Segmental Reporting (AS 17)
(i) Primary Segment (Business segment):
Treasury Operations
Other Banking Operations
(ii)Geographic Segment:
There is only one Geographic segment i.e., Domestic Segment.
(Rs. in Crores)
Business Segment Treasury Other Banking Operations Total
Particulars Year ended Year ended Year ended Year ended Year ended Year ended
31.03.2005 31.03.2004 31.03.2005 31.03.2004 31.03.2005 31.03.2004
Total Revenue 659.16 672.11 1307.82 1137.81 1966.98 1809.91
Inter Segment Revenue - - 413.19 412.45 413.19 412.45
Net Revenue 659.16 672.11 894.63 725.36 1553.79 1397.47
Result 232.64 253.43 241.57 202.99 474.21 456.42
Unallocated Expenses - - - - 22.55 31.49
Operating Profit - - - - 451.66 424.92
Provision and - - - - 215.73 162.08
Contingencies
Income Taxes - - - - 29.67 86.46
Net Profit - - - - 206.26 176.38
Segment Assets 7419.05 6786.68 9059.04 6940.47 16478.09 13727.15
Unallocated Assets - - - - 74.53 30.91
Total Assets 7419.05 6786.68 9059.04 6940.47 16552.62 13758.06
Segment Liabilities 813.88 368.88 15071.59 13379.42 15885.47 13748.30
Unallocated Liabilities - - - - 667.15 9.76
Total Liabilities 16552.62 13758.06
Capital Employed 166.99 156.00 589.45 401.19 756.44 557.19
12. ADDITIONAL DISCLOSURES:

In terms of the guidelines issued by the RBI, the following additional disclosures are made:
31.03.2005 31.03.2004
i) Shareholding
Percentage of shareholding of Govt. of India - -
ii) Non-Performing Assets
The Percentage of Net NPAs to Net Advances 0.92% 2.96%
iii) Tier II Capital
Amount of subordinated debts - -
Unsecured Redeemable Bonds 365.00 190.00
(iv) Issuer composition of Non SLR investments

(Amounts reported under Columns 4, 5, 6 & 7 are not mutually exclusive)
(Rs. in Crores)
No. Issuer Amount Extent of Extent of below Extent of Extent of
(Rs. In private “investment unrated unlisted
crores) placement grade” securities securities
securities
1 2 3 4 5 6 7
1 PSUs 176.08 176.08 27.00 5.00 71.50
2 FIs 74.23 74.23 10.65 - 20.65
3 Banks 23.50 23.50 - - 3.00
4 Private 13.90 13.90 - - 1.40
Corporates
5 Subsidiaries/Jo -
75
int ventures
6 Others 148.82 35.82 - 136.82 7.00
7 Provision held 4.67 - -
towards
depreciation
Total 441.20 323.53 37.65 141.82 103.55
v) Non-performing non-SLR investments:
Particulars Amount (Rs. crores)

Opening balance as on 01.04.2004 4.57
Additions during the year 0.37
Reduction during the year 0.27
Closing balance as on 31.03.2005 4.67
Total provisions held 4.67
vi) Securities sold under repos and purchased under reverse repos, under Liquidity
Adjustment Facility of RBI (Rs. in Crores)
Outstanding during 2004 -05 Minimum Maximum Daily average Closing as on
31.03.2005
Securities sold under Repos Nil 500.00 9.40 Nil
Securities purchased under reverse Nil 750.00 276.55 400.00
repos
(vii) Capital Adequacy Ratio

The capital to weighted risks assets ratio (CRAR) assessed by the Bank on the basis of the
guidelines issued by RBI, is as under:
31.03.2005 31.03.2004
Capital Adequacy Ratio 12.08% 11.53%
Tier I Capital 7.12% 7.18%
Tier II Capital 4.96% 4.35%
(viii) Business Ratios
Interest income as percentage to average working funds 8.15% 7.94%

Non-interest income as percentage to Average working funds 2.69% 2.56%
Operating Profit as percentage to average working funds 3.15% 3.19%
Return on Assets (at the end of the year) 1.25% 1.28%
ix) Movement of NPAs for the year 2004-2005 (Rs. In Crores)
31.03.2005 31.03.2004
1. NPAs at the beginning of the year 514.53 562.01

2. Less: Reduction in NPAs 227.39 226.59
a) By recoveries
b) By write off
c) Up gradation
d) Exchange fluctuation
Add: 128.23 179.03
a) Fresh NPAs during the year
b) Increase in the existing NPAs due
to operations
c) Exchange Difference
d) Interest Suspense
Gross NPA at the end of the year 415.37 514.53
76
x) (a) Movement of Provisions held towards NPAs
(Rs. in Crores)
2004-05 2003-04
Opening balance 325.51 282.51

Add: Provisions made during the year 127.83 163.29
Total 453.34 445.80
Less: Amount transferred to interest sacrifice in restructured account, 122.88 120.29
write back of excess provisions and exchange difference
Closing balance 330.46 325.51
(b) Movement of Provisions for NPI/Depreciation on investments

(Rs in Cr.)
a) Opening balance (as on 01.04.2004) 2.97
b) Add: Provisions made during the year 1.97
c) Less: Write back of excess provisions during the year 0.27
d) Closing balance (as on March 31,2005) 4.67
xi) Maturity patterns as on 31.03.2005
The Maturity Pattern of Loans & Advances, Investments & Securities, Deposits and Borrowings (under
various Maturity Buckets prescribed by the Reserve Bank of India) are as follows:
(Rs. in crores)
Residual 1-14 days 15-28 29 days 3 to 6 6 mths 1 year to 3 year to Over 5 Total
Maturity days 3 mths mths to 1 year 3 years 5 years years
Maturity 429.72 69.26 562.50 582.23 650.31 4268.51 1035.38 1183.35 8781.26
Pattern of
Loans &
Advances
Maturity 188.94 119.26 752.52 200.56 342.15 1616.81 784.05 1791.90 5796.19
Pattern of
Investment &
Securities
Maturity 373.73 71.28 679.60 210.90 1065.43 5731.29 2842.33 2610.58 13585.17
Pattern of
Deposits
Maturity 116.23 90.00 103.56 9.19 0.17 0.16 0.17 0.10 319.58
Pattern of
Borrowings
Foreign 287.81 189.93 166.54 109.80 4.62 10.22 1.50 3.96 774.38
Currency
Asset
Foreign 78.81 122.26 127.80 60.26 62.47 28.26 - - 480.26
Currency
Liabilities
The above maturity pattern has been compiled based on information received from branches, rates
prescribed by RBI for determining core and volatile portion and adjustment/ apportionment made
at Head Office on the basis of behavioural maturity, and has been relied upon by the auditors.
xii) Lending to Sensitive Sectors (Rs. in Crores)

31.03.2004 31.03.2005
A Advances to Capital Market Sector 0.39 0.09
B Advances to Real Estate Sector 45.41 79.44
C Advances to Commodity Sector 280.50 165.04
77
D Exposure to Capital Market 20.09 58.96
i) Investment in
a) Shares
b) Convertible Debentures /Bonds
c) Equity Oriented Mutual Funds
ii) Aggregate advances against security/collateral of shares
E Finance extended to Margin Trading 5.25
xiii) Corporate Debt Restructuring (Rs. in Crores)

Sr. No. Particulars 31.03.2004 31.03.2005
a) Total amount of loan assets 126.98 45.23
b) The amount of standard assets 114.94 45.23
c) The amount of sub-standard assets 12.04 -
d) The amount of doubtful assets -
xiv) Restructured Advances (Industrial advances excluding those under CDR)

(Rs. in Crores)
Particulars Total Total
31.03.2005 31.03.2004
Total amount of loan assets 113.18 40.36
Amount of Standard assets 91.73 21.46
Amount of Sub-standard assets 14.49 17.64
Amount of Doubtful assets 6.96 1.26
Statement of Dividend for the last five years

31/3/01 31/3/02 31/3/03 31/3/04 31/03/2005
Dividend (Excl. Tax) 9.00 9.00 14.40 21.60 27.00
Tax 0.92 1.85 2.77 3.79
Dividend Rate (%) 25% 25% 40% 60% 75%
KEY ACCOUNTING RATIOS FOR LAST 5 YAERS

For the Year
March 31, March 31, March 31, March 31, March 31
2001 2002 2003 2004 2005
3arnings per Share (EPS) 71.44 183.05 322.00 489.94 573.00
(Rs.)
Book Value per Share / 810.33 976.58 1197.11 1616.58 2086.00
(Tangible Net Worth/No. of
shares.)
Return on Net worth (%) 7.42% 21.01% 35.37% 47.68% 27.47%
(Net Profit/Tangible Net
Worth)
CAPITALISATION STATEMENT AS ON March 31, 2005 March 31, 2004
Amount Amount
Rs. in Crores Rs. in Crores
Borrowings
Short -Term Debts - -
Long - Term Debts (incl. Sub-ordinated Debt) 365.00 190.00
Total
78
Shareholders Funds
Equity 36.00 36.00
Reserves & Surplus (excluding Revaluation Reserve) 720.44 439.31
Total 756.44 475.31
Long Term Debt/Equity Ratio 0.48:1 0.40:1
NETWORTH STATEMENT
Rs. in crores
For the Year March 31, March 31, March 31, March 31, March 31,
2001 2002 2003 2004 2005
Share Capital 36.00 36.00 36.00 36.00 36.00
Reserve & Surplus

Statutory Reserve 77.70 101.10 150.61 209.82 307.17
Capital Reserve 11.75 13.25 21.68 37.49 105.51
Investment Fluctuation 165.10
Reserve 6.76 38.76 80.00 156.00
Revenue & Other Reserves 159.51 162.46 142.67 142.66 142.66
Revaluation Reserve - - - -
Balance of Profit and Loss
Account (Adjusted) - - - -
Total Reserves 255.72 315.57 394.96 545.97 720.44
Total (Capital & Reserves) 291.72 351.57 430.96 581.97 756.44
NETWORTH 291.72 351.57 430.96 581.97 756.44
Networth Excluding
Revaluation Reserve 291.72 351.57 430.96 581.97 756.44
Net Profit 25.72 65.90 115.92 176.38 206.26

Income Tax 46.05 46.06 77.00 86.48 29.67
Return 8.82% 18.74% 28.90% 30.31% 27.26%
Average Net Worth 291.72 351.57 430.96 581.97 756.44
Return on Average Net

Worth (PAT Basis) 8.82% 18.74% 28.90% 3031% 27.26
Return on Average Net
Worth (PBT Basis) 24.60% 31.85% 44.77% 45.17% 31.18
TAX SHELTER STATEMENT

(Rs. in crores)
Details 2001 2002 2003 2004 2005
Tax Rate 39.55% 35.70% 36.75% 35.875% 36.59%

Provision For Tax In Books 21.90 46.05 77.00 86.45 29.66
Net Profit (As Per Book) 25.72 65.90 115.92 176.38 206.26
Adjustments
79
Add:
Depreciation As Per Books 10.04 11.26 12.11 20.8 31.87
Provisions 112.22 168.89 236.83 248.54 245.40
Provision For Bonus 0.16 0.15 0.15 0.13 0.17
Interest Recd On Investments 398.74 407.97 467.49 474.10 505.44
Donations Made 0.08 0.17 0.02 0.53 0.31
Amortisation On Investments 1.96 0.16 0.87 0.82 4.72
Others 0.53 0.84 3.4 10.25 4.44
Total 549.45 655.34 836.79 931.55 998.61
Less
Depreciation As Per It Schedule 6.24 9.6 12.96 25 36.75
Payment Of Interest Tax 0 0 0 0 0
Dividend Income Exempt 6.04 12.98 2.25 19.81 6.10
Interest Eligible For Deduction u/s 23(G) 1.23 1.04 1.48 2.11 13.31
Provision For Standard Assets 1.35 1.5 1.11 3 6.50
Bonus Paid 0.15 0.15 0.14 0.1 --
Interest On Invst. On Due Basis 400.53 436.8 477.91 480.11 477.12
Profit On Sale Of Permanent Category 5.23 2.02 12.56 23.49 100.53
Deduction U/S 36(1)(Viia) 62.65 75.74 100.31 134.46 124.36
Deduction U/S 80g 0.01 0.16 0.01 0.42 0.28
Provision For Depn On Investments 0 5.9 2.99 0 128.14
Others 11.45 11.6 49.72 19.96 96.25
Total 494.88 557.49 661.44 708.46 989.34
Business Income After Adjustments 54.57 97.85 175.35 223.09 9.27
Tax On Longterm Capital Gains 0.00 0.20 1.26 2.56 10.05
Total Tax 21.58 35.13 65.70 82.59 17.80
Tax Savings 0.32 10.92 11.30 3.86 11.86
X. MANAGEMENT DISCUSSION AND ANALYSIS

Significant items of Income and Expenditure during 2004 –05
(Comparison of Financials for the year ended March 2005 with March 2004)
Net Profit: The net profit has increased by 16.94% due to an increase in other income and
reduction in interest expenses.
Interest Income: The Interest income had increased marginally by 10.47%. Though the
average advances have grown by 37.58% during the year, the average yield on advances had
declined from 9.52% in 2004 to 8.64% in 2005.
Other Income: The other income had increased by 13.39% supported by increase in profit on
sale of investments.
Interest Expenses: The interest expenses marginally increased by 3.38% in spite of reduction
in average cost of deposits from 5.71% in 2003-04 to 4.96% in 2004-05 due to increase in
Bond interest.
Operating Expenses: The operating expenses increased by 29.52% as bank has factored the
revision in wage structure during the year..
Significant items of Income and Expenditure during 2004 -05

(Comparison of Financials for the year ended March 2005 with March 2004)
80
Net Profit: The net profit has increased by 16.94% primarily due to an increase in other
income.
Interest Income: The Interest income had increased by 10.47% aided by increase in advances
by 37.58% (i.e. Rs. 2492.27 crores).
Other Income: The other income had increased by 14.63% supported by increase in profit on
sale of investments.
Other matters relating to the Operations of the Bank
Unusual or Infrequent events and transactions: No unusual or infrequent events and

transactions occurred in the last three years.
Significant economic changes that materially affected or are likely to affect income from
continuing operations: Changes in the interest rate structure that is any upward movement in
interest rate, is going to reduce the value of the investment portfolio.
Future relationship between costs and revenue: The freedom to determine interest rates and
the keen competition has resulted in narrowing of spreads and reduction in profitability.
However the bank has a tradition of mobilising low cost deposits and keeping its cost of
deposits low. The bank has also succeeded in increasing its 'Other income', thus improving
profitability.
Extent of seasonality in the business: Bank’s business is not likely to be affected by

seasonality.
Non-dependence on a few customers: The operations of the bank are well spread out. The
bank has over 20 million customers. The Bank has a diversified credit portfolio to prevent any
concentration in exposures both industry-wise and clientwise. This insulates the bank to a large
extent from any possible adverse conditions effecting any particular industry segment. The
Bank has an adequately designed credit risk policy to ensure the prevention of excess exposure
to few customers.
Competitive Conditions: The Bank has 644 rural branches where it has monopoly in business.
The large network of rural and semi-urban branches (numbering 1062 ) ensures that a huge
captive business automatically flows in to the bank. In metro centres, the Bank faces a stiff
competition from other Banks, including private sector banks and foreign banks. In spite of
this, the bank has succeeded in registering improved performances over the last few years.
Servicing Behavior: The Bank has been servicing all its principal and interest liabilities on
time and there have been no defaults.
Material Developments: In the opinion of the Directors of the Bank, there have been no
material developments after the date of the last financial statements as disclosed in the
Information Memorandum, which would materially and adversely affect or are likely to affect
the trading or profitability of the Bank or the value of its assets, or its ability to pay its
liabilities within the next twelve months, other than what has been already set out elsewhere in
this Information Memorandum.
81
XI. OUTSTANDING LITIGATION, DEFAULTS & MATERIAL DEVELOPMENTS
Save as stated herein:

• There is no outstanding or pending litigation, suit, criminal or civil prosecution,
proceeding initiated for offence (irrespective of whether specified in paragraph (I) of
Part 1 of Schedule XIII of the companies Act) or litigation for tax liabilities against the
Bank, its Promoters, Directors or Promoter Group companies.
• There are no defaults, non payments or overdues of statutory dues, institutional or bank
dues or dues towards holders of debentures, bonds and fixed deposits and arrears of
preference shares, other than unclaimed liabilities of the Bank, its Promoters or
Promoter Group companies.
• No disciplinary action has been taken by SEBI or any stock exchanges against the
Bank, its Promoters or Directors.
• There are no outstanding litigations against the directors of the Bank.
• There are no other litigations except the following, mentioned below:
Cases filed against the Bank

The summary of litigations outstanding as on March 31st 2005 is as follows:
Sr. Particulars No. of Cases Amount involved

No. (Rs. in crores)
A. Cases pending in various Civil/High Courts 19 2.21
filed by customers and others
B. Suits/Writs filed by employees/ex-employees 528 Financial Implication
in various Civil / High Courts and other courts cannot be estimated
as of now
C. Consumer Cases filed against the Bank 14 0.75
D. Premises Cases 2 0.02
Total 563 -
Disputed Tax Liabilities

Rs. in Crores
Sr. A.Y. Appeal Pending Major grounds of Appeal Disputed Tax amount
No. before Amount incl. interest
1 1979-80 High Court Interest on Sticky Loan 0.15 0.054
2 1987-88 High Court Broken period Interest and Interest on Sticky Loans 0.80 0.287
3 1988-89 High Court Accrued Interest on Securities. Broken Period 12.48 4.477
Interest and Interest on Sticky Loans
4 1989-90 High Court Bad Debts 0.27 0.097
5 1993-94 High Court Accrued Interest on Investments 1.58 0.567
Interest on Securities subject to Income Tax 83.40 7.700
6 1994-95 High Court Accrued Interest on Investments 11.59 4.158
Bad Debts 8.78 3.150
7 1995-96 High Court Bad Debts 16.65 5.973
8 1999-2000 ITAT Broken Period Interest on purchase of securities 7.87 2.823
9 2000-01 ITAT Broken Period Interest on purchase of securities 47.66 17.098
Provision for Standard Assets 8.52 3.057
10 2001-02 ITAT Provision for Standard Assets 13.50 4.843
11 2002-03 ITAT Provision for Standard Assets 1.50 0.538
Total 443.38 72.33
82
Cases filed against the RRBs sponsored by the Bank as on March 31, 2005
The summary of litigations outstanding as on March 31st 2005 is as follows:
Sr. Particulars No. of Cases Amount involved

No. (Rs. in crores)
A. Cases pending in various Civil/High Courts 1 0.0022
filed by customers and others
B. Suits/Writs filed by employees/ex-employees 22 Financial Implication
in various Civil / High Courts and other courts cannot be estimated
as of now
C. Consumer Cases filed against the Bank 1 0.048
D. Premises Cases Nil Nil
Total 24 -
Against the Directors of the Bank
There are no outstanding litigations, disputes or penalities against the Directors of the Bank,
including tax liabilities, economic offences, criminal or civil prosecution for any offence,
irrespective of whether specified under any enactment in Paragraph 1 of Part 1 of Schedule
XIII, of the Companies Act, 1956 or any other liability in their personal capacities or as
Director/Partner/Sole Proprietor in the Bank or any other company/firm.
There are no litigations against the Directors involving violation of statutory regulations or
criminal offences. No discipliniary action has ever been taken by the Securities and Exchange
Board of India or Stock Exchanges and no penalty has been imposed by any authority.
Other than as stated above, there are no disputes/litigations towards tax liabilities or any
criminal or civil prsecutions against the Bank, its subsidiaries and sponsored associations for
any offence – economic or otherwise. No criminal proceedings have been launched against the
Bank under any of the enactment irrespective of whether specified in paragraph 1 of part 1 of
Schedule XIII of the Companies Act, 1956.
Defaults
Besides the above, the Bank, its subsidiaries and sponsored institutions have not defaulted in
meeting any of its statutory or institutional dues and have made all payments/refunds on fixed
deposits.
Further, no proceedings have been initiated against the Bank, its subsidiaries and sponsored
institutions for any of the offences specified in paragraph 1 of Part I of Schedule XIII of the
Companies Act, 1956.
Further, there are no disputes/litigations towards tax liabilities or criminal prosecutions against
the Bank and its Directors for any offence, economic or otherwise. As regards civil litigations
against the Bank and its Directors, there are no material disputes/legal actions other than those
disclosed above
There are no pending proceedings initiated for economic offences against the Bank, its
83
subsidiaries and sponsored institutions. Besides the above, no disciplinary action/ investigation
has been taken by the SEBI against the Bank, its subsidiaries and sponsored institutions and its
respective directors.
Material Developments
In the opinion of the Directors of the Bank, there have been no material developments after the
date of the last financial statements as disclosed in the Information Memorandum, which would
materially and adversely affect or are likely to affect the trading or profitability of the Bank or
the value of its assets, or its ability to pay its liabilities within the next twelve months, other
than what has been already set out elsewhere in this Information Memorandum.
Against SBI
SBI is party to various legal proceedings / disputes in the ordinary course of business of
banking / other business. However, none of such proceedings / disputes, even if determined
adversely to SBI will have, by law, any material adverse effect on the business or financial
condition of SBI. SBI also has contingent liabilities, which pertain to their normal banking
activities. A major portion of these contingent liabilities are a source of income for them. Most
of these contingent liabilities are adequately covered through individual security mechanisms
as also duly counted for maintaining Capital Adequacy in line with RBI guidelines.
XII. OTHER REGULATORY AND STATUTORY DISCLOSURES
Prohibition by SEBI / Issuer Eligibility to enter Capital Market
The Bank, its associates and companies with which the directors of the Bank are associated as
directors or promoters are not prohibited from accessing the capital market/ Debt Securities
Market under any order or directions passed by SEBI.
Disclaimer in respect of Jurisdiction
This offer of bonds is made in India to persons resident in India. This Information
Memorandum does not constitute an offer to sell or an invitation to subscribe to the Bonds
herein, in any other jurisdiction to any person to whom it is unlawful to make an offer or
invitation in such jurisdiction.
Disclaimer Clause of The Stock Exchange, Mumbai.
84
A copy of this Information Memorandum has been submitted to The Stock Exchange, Mumbai
(hereinafter referred to as ‘BSE’) where Bank’s securities are proposed to be listed in terms of
the extant Guidelines.
BSE does not in any manner:
1. warrant, certify or endorse the correctness or completeness of any of the contents of this
Information Memorandum; or
2. warrant that the Bank’s securities will be listed or will continue to be listed on the
Exchange; or
3. take any responsibility for the financial or other soundness of the Bank, its promoters, its
management or any scheme or project of the Bank.
Every person who desires to apply for or otherwise acquire any securities of the Bank may do
so pursuant to independent inquiry, investigation and analysis and shall not have any claim
against BSE whatsoever by reason of any loss which may be suffered by such person
consequent to or in connection with such subscription/ acquisition whether by reason of
anything stated or omitted to be stated herein or for any other reason whatsoever.
The delivery of this Information Memorandum hereunder shall not under any circumstances
create any implication that there has been no change in the affairs of the Bank since the date
thereof or that the information contained herein is correct as of any time subsequent to this
date.
General Disclaimer
This Offer Document is neither a Prospectus nor a statement in lieu of Prospectus. It does not
constitute an offer or an invitation to the Public at large to subscribe to Unsecured Redeemable
Non-Convertible Subordinated Bonds (“Bonds”) issued by the Bank. This Offer Document is
not intended for distribution and is for the consideration of the person to whom it is addressed
and should not be reproduced by the recipient. It cannot be acted upon by any person other than
to whom it has been specifically addressed. Multiple copies hereof given to the same entity
shall be deemed to be offered to the same investor. Apart from this Offer Document, no other
document has been prepared in connection with this Bond Issue and that no document in
relation to the Issuer or this Bond Issue has been delivered for registration to any authority.
This Offer Document has been prepared in accordance with Schedule II of the Companies Act
1956, Chapter VI of the SEBI (DIP) Guidelines to give information regarding the Bank to
investors proposing to invest in this issue of Bonds and it does not purport to contain all the
information that any such party may require. The Issuer, having made all reasonable inquiries,
accepts responsibility for, and confirms that this Offer Document contains all information with
regard to the Issuer which is material in the context of the Issue, that the information contained
in this Offer Document is true and correct in all material aspects and is not misleading in any
material respect, that the opinions and intentions expressed herein are honestly held and that
there are no other facts, the omission of which makes this document or any of such information
or the expression of any such opinions or intentions misleading in any material respect.
Potential investors are required to make their own independent evaluation and judgment before
making the investment and they are believed to be experienced in investing in debt markets and
are able to bear the economic risk of investing in the Bonds. It is the responsibility of potential
85
investors to have obtained all consents, approvals or authorizations required by them to make
an offer to subscribe for, and purchase of the Bonds. Potential investors have not relied on any
advice given by the Lead Manager/ Lead Arranger in connection with their offer to subscribe
for and purchase the Bonds and acknowledge that the Lead Manager/ Lead Arranger does not
owe them any duty of care in respect of their offer to subscribe for and purchase of the Bonds.
It is the responsibility of potential investors to ensure that any transfer of the Bonds is in
accordance with this Offer Document and the applicable laws, and ensure that the same does
not constitute an offer to the public. Potential investors should also consult their own tax
advisors on the tax implications of the acquisition, ownership, sale and redemption of Bonds
and income arising thereon.
The Lead Manager does not take any responsibility either for the financial soundness of the
Bonds offered or for the correctness of the statement made in this Offer Document. The Lead
Manager has relied exclusively upon the information provided by the Bank and has neither
verified independently, nor assumes responsibility for the accuracy and completeness of this
Offer Document, or any other information or documents supplied or approved by the Bank.
The Lead Manager holds no responsibility for any misstatement in or omission by the Bank,
publicly available information or any other information about the Bank available in the market.
Neither the Lead Manager nor any officer or employee of the Lead Manager accept any
liability whatsoever for any direct or consequential loss arising from any use of this document
or its contents.
Listing
Application shall be made to The Stock Exchange, Mumbai to list the bonds of the Bank now
being offered through this Information Memorandum and for permission to deal in such Bonds.
If the permissions to deal in and for an official quotation of the Bonds is not granted by BSE
the Bank shall forthwith repay, without interest all such moneys received from the applicants in
pursuance of this Information Memorandum. If such monies are not repaid within eight days
after the Bank becomes liable to repay them (i.e. from the date of refusal or within 70 days
from the date of the closing of the subscription list, whichever is earlier), then the Bank will be
liable to repay the monies, with interest, as prescribed under Section 73 of the Companies Act,
1956.
Caution
Though the provisions of Sub-section (1) of Section 68-A of the Companies Act, 1956 do not
apply to an issue of Bonds, attention of the investors is drawn to the provisions as a matter of
abundant precaution:
“Any person who -

a) makes in a fictitious name, an application to a company for acquiring, or subscribing
for, any shares therein, or
otherwise induces a company to allot, or register any transfer of shares therein to him, or any
other person in fictitious name, shall be punishable with imprisonment for a term which may
extend to five years”
Consents
86
Consents in writing of the Arrangers to the Issue, Directors, Trustees, Registrars, Legal
Advisors and Compliance Officer to act in their respective capacities have been obtained.
Expert Opinion
Save as stated elsewhere in the Information Memorandum, the Bank has not obtained any other
expert opinion.
Expenses of the Offer
The expenses of the Offer payable by the Bank inclusive of brokerage, fees payable to the
Arrangers, fees of Legal Advisors, stamp duty, fees payable to trustees, fees payable to the
Registrars to the Offer, listing fees and other miscellaneous expenses is estimated not to exceed
1.00% of the offer size and will be met out of the proceeds of the Offer.
Outstanding Debenture or Bond Offers

As of September 30, 2005, the Bank has outstanding Bonds of Rs 295 crores.
Outstanding Preference Shares

As of date, the Bank does not have any outstanding preference shares.
Capitalisation of Reserves or Profits

The bank has not capitalised any reserves or profits during the last five financial years.
Issue Otherwise than for Cash

There has not been any issue of equity shares for consideration other than cash, otherwise than
as mentioned in point 1 of Capital Structure on Page 21.
Previous Commission and Brokerage

Commission or brokerage has been paid by the Bank for earlier issues as per guidelines and
within the stipulated limit.
Previous Placement by the Bank
The Bank has raised Tier II Capital by way of Private Placement of unsecured, redeemable
bonds in the nature of Promissory Notes to augment capital adequacy as under:
Year of Size Tenor Credit Coupon Redemption

Placement (Rs crore) (Months) Rating (% p.a) Date
2000-2001 60.00 63 Unrated 11.60 22.04.2006
2001-2002 60.00 63 LAAA 9.70 28.04.2007
2004-2005 175.00 111 LAAA 7.10 01.05.2014
Option to Subscribe
The Bank has not given any person nor does it propose to give any person any option to
subscribe to the bonds of the bank.
Undertaking Regarding Purchase of Property
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There is no property which the Bank has purchased or acquired or proposes to purchase or
acquire, which is to be paid for wholly or partly out of the proceeds of the present issue or the
purchase or acquisition of which has not been completed on the date of this Offer Document,
other than property as given hereunder:
a) The contracts for the purchase or acquisition whereof were entered into, or may be entered
into, in the ordinary course of the Bank’s business, such contracts not being made in
contemplation of the offer nor the offer in consequence of the contract or
b) In respect of which the amount of the purchase money is not material.
The Bank has not purchased any property in which any of its directors had or have any direct or
indirect interest or in respect of any payment thereof.
Revaluation of Assets
The bank has not revalued its assets in the last 5 years
Classes of Shares
The authorised capital of the Bank is Rs 50 crores divided into 50,00,000 Equity Shares of
Rs.100 each.
Stock Market Data
The Bank’s shares are listed with The Stock Exchange, Mumbai, Bangalore and Chennai Stock
Exchanges after the initial public offer. The equity shares of the Bank are actively traded at all
the Stock Exchanges where they are listed.
(i) The following table shows the high and low of daily closing share prices of the Bank on The
Stock Exchange, Mumbai (BSE) for the periods indicated:
Period BSE
High (Rs.) Low (Rs.) Average (Rs.)
2001-2002 339.45 192.00 265.73
2002-2003 560.00 245.00 402.50
2003-2004 2198.10 429.95 1314.03
2004-2005 2749.00 1199.00 1857.99
May 2005 2450.00 1995.00 2231.98
June 2005 2739.00 2300.00 2519.50
July 2005 2720.00 2364.00 2542.00
August 2005 2780.00 2425.00 2602.50
September 2005 5288.00 2510.00 3899.00
October 2005 5570.00 3407.00 4488.50
(ii) The following table shows the number of shares traded on the days High and Low prices of
the Bank’s shares recorded on The Stock Exchange, Mumbai (BSE) for the last six months:
Period BSE
High Low
Date Number of Date Number of
shares traded shares traded
May 2005 25/05/05 60 02/05/05 10
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June, 2005 14/06/05 150 03/06/05 90
July, 2005 04/07/05 40 27/07/05 100
August 2005 16/08/05 220 08/08/05 125
September 2005 15/09/05 590 01/09/05 100
October 2005 05/10/05 385 25/10/05 55
XIII. INVESTOR GRIEVANCE & REDRESSAL SYSTEM
Investor grievances are given utmost importance and grievances received are dealt
expeditiously.
Pursuant Clause 49 para VIC of the Listing Agreement a shareholder/investor grievance

committee has been formed under the chairmanship of a non-executive director.
The Committee specifically looks into redressing of shareholder/investor complaints in matters

like transfer of shares, non-receipt of annual reports, non-receipt of dividends etc. This
Committee is designated ‘Shareholder/Investor Grievance Committee’ and meets every quarter.
The investors can contact the Compliance Officer in case of any pre-issue/ post-issue related
problems such as non-credit of letter(s) of allotment/ bond certificate(s) in the demat account,
non-receipt of refund order(s), interest warrant(s)/ cheque(s) etc.
Changes in Auditors during the last three years
Since the RBI appoints the Auditors each year, the changes have been effected as per RBI’s
Approval. The details of the same can be availed from the bank.
OFFERING INFORMATION
Minimum Subscription
Minimum subscription is not applicable for private placement of bonds.
Terms of the Issue

For details, investors may kindly refer page no.24 of this offer document.
Undertaking by the Bank
The Bank undertakes:

a)to attend to the complaints received in respect of the Issue expeditiously and
satisfactorily;
b)to take all steps for completion of necessary formalities for listing and commencement
of trading at the Stock Exchange where the securities are to be listed are taken within 7
working days of finalisation of basis of allotment
c)to apply in advance for the listing of the securities;
d)that the funds required for despatch of refund orders/allotment letters by registered post shall
be made available.
e)that the Allotment Letters/Refund Orders to the applicants shall be despatched within
specified time;
89
f)that no further issue of securities shall be made till the securities offered through this
Offer Document are listed or till the application monies are refunded on account of non-
listing.
g)that necessary Cooperation with Credit Rating Agency (ies) shall be extended in
providing true and adequate information till the debt obligations in respect of the
instrument are outstanding.
h)to forward the details of utilisation of the funds raised through the Bonds duly certified by the
statutory auditors, to the bond trustees at the end of each half-year.
i)to disclose the complete name and address of the bond trustees in the annual report.
j)to provide a compliance certificate to the bond holders on a yearly basis in respect of
compliance with the terms and conditions of placement of Bonds as contained in the
memorandum, duly certified by the bond trustee.
UTILISATION OF OFFER PROCEEDS
The Bank undertakes that details of all monies utilised/ unutilised out of the Offer shall be
disclosed under an appropriate separate head in the Balance Sheet of the Bank.
XIV. MAIN PROVISIONS OF THE STATE BANK OF INDIA (SUBSIDIARY

BANKS) ACT, 1959 AND THE SUBSIDIARY BANKS GENERAL
REGULATIONS, 1959.
The General Regulations extracted in this document are as existing now.

The relevant provisions of the SBI (Subsidiary Banks) Act 1959 (THE ACT) / Subsidiary
Banks General Regulations (G.R.) Framed under the Act inter alia are as under:
AUTHORISED CAPITAL
Section 6 of Chapter II of the SBI (SB) Act provides that the authorised capital of the Bank
shall be Rs. Two crore and shall be divided into shares of one hundred rupees each. The
authorised capital of the Bank may be increased or reduced by the State Bank with the approval
of the Reserve Bank.
Subsequently increased to Rs 50 Crores
ISSUED CAPITAL
Section 7 (sub sections 4 & 5) of Chapter II of the SBI (SB) Act provides as under:
A Subsidiary Bank may, with the approval of SBI and RBI, increase from time to time, its
issued capital but no increase in the issued capital shall be made in such a manner that the State
Bank holds at any time less than fifty-five per cent of the issued capital of the Bank.
DISPOSAL OF PROFITS
Sec. 40 (1): After making provision for bad and doubtful debts, depreciation in assets,
equalization of dividends, contribution to staff and superannuation funds and for all other
matters for which provision is necessary by or under this Act or which are usually provided for
by banking companies, a Subsidiary bank may, out of its net profits, declare a dividend.
Sec. 40 (2): The rate of dividend shall be determined by the Board of Directors of the
Subsidiary bank concerned.
VOTING RIGHTS
Chapter IV of the Subsidiary Banks General Regulations 1959 provides that :
90
G.R. 25 (1): Subject to the provisions contained in section 19 of the Act, each shareholder of a
subsidiary Bank who has been registered as a shareholder for a period of not less than three
months prior to the date of a general meeting of that subsidiary bank shall be entitled to vote on
every resolution placed before the meeting.
G.R. 25 (2): Every shareholder entitled to vote as aforesaid who, not being a company, is
present in person or by proxy or who being a company is present by a duly authorised
representative, or by proxy shall have one vote on a show of hands and in case of a poll shall
have one vote for each share held by him.
G.R. 26 (1): A shareholder, of a subsidiary bank, being a company, may by a resolution or a
power of attorney authorise any of its officials or any other person to act as its representative at
any general meeting of the shareholders of the subsidiary bank and the person so authorised
(referred to as a “duly authorised representative” in these Regulations) shall be entitled to
exercise the same powers on behalf of the company which he represents, as if he were an
individual shareholder of the subsidiary bank. The authorisation so given may be in favour of
two persons in the alternative and in such a case any one of such persons (but not both) may act
as the duly authorised representative of the company.
G.R. 29: No person who is an officer or an employee of a subsidiary bank may be appointed a
duly authorised representative or a proxy in respect of a general meeting of that bank.
MEETING OF SHAREHOLDERS
NOTICE CONVENING A GENERAL MEETING
G.R. 17(1): A notice convening a General Meeting of the shareholders of a subsidiary bank
signed by the Chairman or the Managing Director of that bank shall be published at least
twenty-eight days before the date of the meeting in the Gazette of India and also in at least two
principal daily newspapers circulating at the place where the head office of the subsidiary bank
is situated.
G.R.17 (2): Every such notice shall state the time, date and location of such meeting, and also
the business that shall be transacted at the meeting.
SPECIAL GENERAL MEETING

G.R. 18 (1): The Board may, at any time and shall, if a requisition for such a meeting has been
received from either the State Bank or other shareholders holding shares carrying, in the
aggregate, not less than 20 per cent of the total voting rights of all the shareholders, convene or
cause to be convened, a Special General Meeting of shareholders.
BUSINESS AT GENERAL MEETINGS

G.R. 19(1): No business other than that specified in sub-section (2) of section 44 of the Act
shall be transacted or discussed at the Annual General Meeting, except with the consent of the
Chairman or other person presiding at the meeting, unless not less than six weeks’ notice of the
same has been given to the Chairman or the Managing Director or the subsidiary bank either by
the State Bank or by at least ten other shareholders qualified to vote at the meeting. Such notice
shall take the form of a definite resolution to be put to the meeting, and shall be included in the
notice of the meeting.
G.R. 19 (2): Except with the consent of the Chairman or other person presiding at the meeting,
no business shall be transacted or discussed at any special general meeting, except the business
for which the meeting has been specifically convened.
QUORUM AT GENERAL MEETINGS

G.R. 20: No business shall be transacted at any meeting of the shareholders whether it is the
Annual General meeting or any Special General Meeting, unless a quorum of at least five
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shareholders consisting of the State Bank represented by a proxy or by a duly authorised
representative and four other shareholders entitled to vote at such meeting in person or by
proxy or by duly authorised representatives is present at the commencement of such business,
and if within fifteen minutes from the time appointed for the meeting a quorum is not present
the Chairman or the person presiding at the general meeting may dissolve the meeting or
adjourn it to the same day in the following week at the same time and location, and if at such
adjourned meeting a quorum is not present, the shareholders who are present in person or by
proxy or by duly authorised representative shall form a quorum:
Provided that no annual general meeting shall be adjourned to a date later than three months
after the 31st December # and if adjournment of the meeting to the same day in the following
week would have this effect, the annual general meeting shall not be adjourned but the business
of the meeting shall be commenced either as soon within one hour from the time appointed for
the meetings as a quorum may be present, or immediately after the expiry of one hour from that
time and those shareholders who are present in person or by proxy or by duly authorised
representative at such time shall form a quorum.
# changed to March 31
CHAIRMAN AT GENERAL MEETINGS

G.R. 21(1): The Chairman or in his absence such one of the directors as may generally or in
relation to any particular meeting be authorised by the Chairman in this behalf shall preside at a
general meeting, and in the absence of the Chairman and the person so authorised and also
failing any such authorisation the shareholders who are present in person or by proxy or by
duly authorised representatives at the meeting may elect any other director to preside at the
meeting.
G.R. 21 (2): The person presiding at a general meeting shall regulate the procedure at the
general meeting, and, in particular, shall have power to decide the order in which shareholders
may address the meeting, to fix a time limit for speeches, to apply the closure when, in his
opinion, any matter has been sufficiently discussed and to adjourn the meeting.
PERSONS ENTITLED TO ATTEND THE GENERAL MEETINGS

G.R. 22 (1): All directors, the auditor for the time being and all shareholders of the Subsidiary
bank shall, subject to the provisions of sub-regulation (2), be entitled to attend a general
meeting.
VOTING AT GENERAL MEETINGS

G.R. 23 (1): Save as otherwise provided in section 31 of the Act, every matter submitted to a
General Meeting of a subsidiary bank shall be decided by a majority of votes.
G.R. 23(2): A declaration by the person presiding at a general meeting of a subsidiary bank
that a resolution has been carried or rejected thereat upon a show of hands by those
shareholders present who are entitled to vote on the resolution shall be conclusive, and an entry
to that effect in the book of proceeding of the subsidiary bank shall be sufficient evidence of
that fact, without proof of the number or proportion of the votes recorded in favour of, or
against, such resolution, unless immediately on such declaration a poll be demanded in writing
on behalf of the State Bank of by at least four other shareholders present and entitled to vote at
the meeting.
G.R. 23 (4): The decision of the person presiding at the meeting as to the qualification of any
person to vote, and also in the case of a poll, as to the number of votes any person is competent
to exercise shall be final.
TRANSFER OF SHARES
92
Chapter IV of the State Bank of India (Subsidiary Banks) Act 1959 provides that-
Sec. 18 (1) : Save as otherwise provided in sub-section (2) the shares of a subsidiary bank shall
be freely transferable.
Sec. 18 (2) : Nothing contained in sub-section (1) shall entitle the State Bank to transfer any
shares held by it in any subsidiary bank if such transfer will result in reducing the shares held
by it to less than fifty five per cent of the issued capital of that subsidiary bank.
Sec. 19 (1) : No person shall be registered as a shareholder in respect of any shares in a
subsidiary bank held by him, whether in his own name or jointly with any other person, in
excess of two hundred shares, or be entitled to payment of any dividend on the excess shares
held by him, or to exercise any of the rights of a shareholder in respect of such excess shares
otherwise than for the purpose of selling them :
Provided that noting contained in this sub-section shall apply to –
(a) the State Bank;
(b) a State Government;
(c) a Corporation;
(d) an insurer as defined in the Insurance Act, 1938;
(e) a local authority;
(f) a co-operative society;
(g) a trustee of a public or private religious or charitable trust;
(h) a shareholder of an existing bank who is allotted any shares under sub-section (9) of Section
13.
Sec. 19 (2) : Notwithstanding anything contained in sub-section (1), No person referred to in
the proviso to that sub-section, other than the State Bank, shall be entitled to exercise voting
rights in respect of any shares held by such person in excess of one per cent of the issued
capital of the subsidiary bank concerned.
Sec. 20 : Notwithstanding anything contained in the Acts hereinafter mentioned in this section,
the shares of a subsidiary bank shall be deemed to be included among the securities enumerated
in section 20 of the Indian Trusts act, 1882, and also to be approved securities for the purposes
of the Insurance Act, 1938, and the Banking Companies Act, 1949.
Sec.21: Every subsidiary bank shall keep at its head office, a register, in one or more books, of
the shareholders, and shall enter therein the following particulars so far as they may be
available:-
a. the names, addresses and occupations, if any, of the shareholders and a statement of the
shares held by each shareholder, distinguishing each share by its denoting number;
b. the date on which each person is so entered as a shareholder;
c. the date on which any person ceases to be a shareholder; and
d. such other particulars as may be prescribed.
Sec. 22: Notwithstanding anything contained in section 19, no notice of any trust, express,
implied or constructive shall be entered on the register of shareholders of a subsidiary bank or
be receivable by it in respect of its shares. Chapter II of the Subsidiary Banks General
Regulations 1959 provides that-
G.R. 13 (1): Every transfer of the shares of a subsidiary bank shall be in writing in the form
contained there in or in any usual or common form which the subsidiary bank shall approve.
G.R. 13 (2): The instrument of transfer of any share shall be submitted to the Board or its
Executive Committee and shall be signed by or on behalf of the transferor and the transferee,
and the transferor shall be deemed to remain the holder of such shares until the name of the
transferee is entered in the share register. Each signature to such transfer shall be duly attested
by the signature of one witness who shall add his address and occupation.
G.R. 13 (3) : Upon receipt by the Board or its Executive Committee of an instrument of
transfer with the request to register the transfer, the Board or its Executive Committee shall,
93
unless it declines the registration under Regulation 14, within two months from the date on
which the instrument of transfer was delivered to the subsidiary bank for submission to the
Board or its Executive Committee, cause the transfer to be registered.
G.R. 14 (1) : The Board or its Executive Committee may decline to register any transfer of
shares unless:-
G.R. 14 (1) (b) : a proper instrument of transfer duly stamped and executed by or on behalf of
the transferor and the transferee has been submitted to the Board or its Executive Committee.
G.R. 14 (1) (c) : The instrument of transfer is accompanied by the certificate of the shares to
which it relates, and such other evidence as the subsidiary bank may reasonably require in
evidence of the right of the transferor to make the transfer.
G.R. 14 (1) (d) : It is satisfied after such enquiry as it may consider necessary that the
transferee is qualified to be registered as a shareholder in respect of the shares covered by the
instrument of transfer.
G.R. 14 (2) : The Board or its Executive Committee may suspend the registration of transfer
during any period in which the register is closed.
G.R. 16 (2) : The Board or its Executive Committee may at any time cause such enquiries to be
made as it shall deem fit for the purpose of ascertaining whether any person registered as a
shareholder of the subsidiary bank whether alone or jointly with another or others, is not or has
ceased to be, qualified to be so registered in respect of any share and upon being satisfied that
any such person is, contrary to the provision of subsection (1) of section 19 of the Act,
registered, by inadvertence or other wise, in respect of any shares held by him whether in his
own name or jointly with another person or persons so as to make such total holdings in excess
of the total nominal value of twenty thousand rupees, it shall determine which of such shares
shall be deemed to constitute such excess and shall inform the shareholder or, where such
excess is held jointly, each of the joint shareholders, that in accordance with section 19 of the
Act he is, and in the case of joint holders they are, not entitled to the payment of any dividend
on any such share not to exercise any of the rights of a shareholder otherwise than for the
purpose of the transfer of such share and shall make an entry in the register to that effect.
G.R. 17 : Subject to the provisions of sub-section (3) of section 44 of the Act.
G.R. 17 (1) : A Notice convening a general meeting of the shareholders of a subsidiary bank
signed by the chairman or the [managing director] of that bank shall be published at least
twenty-eight days before the date of the meeting in the Gazette of India and also in at least two
principal daily newspapers circulating at the place where the head office of the subsidiary bank
is situated.
G.R. 17 (2) : Every such notice shall state the time, date and location of such meeting, and also
the business that shall be transacted at the meeting.
G.R. 18 (1) : The Board may, at any time and shall, if a requisition for such a meeting has been
received from either the State Bank or other shareholders holding shares carrying, in the
aggregate, note less that 20 per cent of the total voting rights of all the shareholders convene or
cause to be convened, a special general meeting of shareholders.
G.R. 18 (2) : The requisition referred to in sub-regulation (1) shall state the purpose for which
the special general meeting is required to be convened, and may consist of several documents
in like form each signed by one or more of the requisitionists.
G.R. 18 (3) : The time, date and location of a general meeting shall be decided by the Board:
Provided that a special general meeting convened on requisition shall be convened not later
than three months of the receipt of the requisition.
G.R. 19 (1) : No business other than that specified in sub-section (2) of section 44 of the Act
shall be transacted or discussed at the annual general meeting, except with the consent of the
chairman or other person presiding at the meeting, unless not less than six weeks notice of the
same has been given to the chairman or the [Managing Director] of the subsidiary bank either
94
by the State Bank or by at least ten other shareholders qualified to vote at the meeting. Such
notice shall take the form of a definite resolution to be put to the meeting, and shall be included
in the notice of the meeting.
G.R. 19 (2) : Except with the consent of the Chairman or other person presiding at the meeting
no business shall be transacted or discussed at any special general meeting, except the business
for which the meeting has been specifically convened.
SHARES AND SHARE REGISTERS

Chapter II of the Subsidiary Banks General Regulations 1959 provides that –
G.R.3 : The shares of a subsidiary bank shall be moveable property.
G.R.4(1) : Subject to the provisions of the Act and these Regulations, the register of
shareholders of a subsidiary bank shall be maintained by, and be under the control of, the
Board or its Executive Committee and the decision of the Board or its Executive Committee as
to whether or not a person is entitled to be registered as a holder in respect of any share shall be
final.
G.R.4 (2) : In particular, and without prejudice to the foregoing provision, the Board or its
Executive Committee shall, as regards the entries in the register of shareholders of that bank,
have the power to examine and pass or refuse to pass transfers and transmissions and to
approve or refuse to approve transferees of shares and to give certificates of shares.
G.R.5(1) : Except as otherwise provided by these regulations, no minor or person who has
been found by a Court of competent jurisdiction to be of unsound mind shall be entitled to be
registered as a shareholder.
G.R.5(2) : In the case of firms, shares shall be registered in the names of the individual
partners, and no firm, as such, shall be entitled to be registered as a shareholder.
G.R.6(2) : In the case of joint holders of any shares, their names and other particulars required
by subregulation (1) shall be grouped under the name of the first of such joint holders.
G.R.6(3) : A shareholder resident outside India shall furnish to the subsidiary bank an address
in India, and such address shall be entered in the register and be deemed to be his registered
address for the purposes of the Act and these regulations.
G.R.7 : If any share stands in the name of two or more persons the person first named in the
register shall, as regards voting, receipt of dividends, service of notice and all or any other
matter connected with the subsidiary bank, except the transfer of the shares, be deemed the sole
holder thereof
SUCCESSION
G.R.15(1) : The executors or administrators of the estate of a deceased sole holder of a share of
subsidiary bank, or the holder of a succession certificate issued under Part X of the Indian
Succession Act, 1925 in respect of such share or a person in whose favour a valid instrument of
transfer of such share was executed by such person or by the deceased sole holder during the
latter’s life-time, shall be the only persons who may be recognized by the subsidiary bank as
having any title to the share of the deceased shareholder. In the case of a share of a subsidiary
bank registered in the names of two or more holders, the survivor or survivors and on the death
of the last survivor, the executors or administrators of his estate, or any person who is the
holder of a succession certificate in respect of such survivors interest in the share, or a person
in whose favour a valid instrument of transfer of the share was executed by such person or such
last survivor during the latter’s life-time shall be the only person who may be recognized by the
subsidiary bank as having any title to such share. The subsidiary bank shall not be bound to
recognize such executors or administrators unless they shall have obtained probate or letters of
administration or other legal representation as the case may be from a duly constituted Court in
India having effect at the place where the Head Office of the subsidiary bank is situated.
95
Provided nevertheless that in any case where the Board or its Executive Committee shall in its
absolute direction think fit, it shall be lawful for the Board or its Executive Committee to
dispense with the production of a succession certificate, letters of administration or such other
legal representation upon such terms as to
indemnity or other wise as it may think fit.
G.R.15(2) : Subject to the provisions of the Act and these regulations, any such person
becoming entitled to a share of a subsidiary bank in consequence of the death of a shareholder
and any person becoming entitled to a share in consequence of the insolvency, bankruptcy or
liquidation of a shareholder shall upon production of such evidence, as the Board or its
Executive Committee may require, be entitled:-
G.R.15(2) (a) : to be registered as a shareholder in respect of the share upon his satisfying the
Board or its Executive Committee in the same manner as if he were the proposed transferee
under regulation 14 that he is qualified to be registered as a shareholder; or
G.R. 15(2) (b) : to make such transfer of the share as the person from whom he derives his
title, could have made.
INCORPORATION AND SHARE CAPITAL OF STATE BANK OF MYSORE

Chapter II of the SBI (Subsidiary Banks) Act 1959 provides as under:
Sec 7 (1) : On the appointed day, the issued capital of a new bank shall consist of such amount
divided into fully paid up shares of hundred rupees each, as the State Bank may, with the
approval of the Reserve Bank fix.
Sec 7 (4) : Without prejudice to the provisions contained in sub-section (3), a new bank may,
with the approval of the State Bank and the Reserve Bank, increase from time to time, its
issued capital and the capital so increased shall consist of fully paid up shares to be issued in
such manner as the State Bank may, with the approval of the Reserve Bank, direct.
Sec 7 (5) : No increase or reduction in the issued capital of a new bank shall be made in such a
manner that the State Bank holds at any time less than 55 per cent of the issued capital of that
bank.
CONSTITUTION OF THE BOARD OF DIRECTORS, THEIR POWERS, THEIR

REMUNERATIONS
Chapter V of the SBI (Subsidiary Banks) Act 1959 provides as under :
Sec 24(1) : The State Bank may, from time to time, give directions and instructions to a
subsidiary bank in regard to any of its affairs and business, and that bank shall be bound to
comply with the directions and instructions so given.
Sec 24(2) : Subject to any such directions and instructions, the general superintendence and
conduct of the affairs and business of a subsidiary bank shall, as from the appointed day, vest in
a Board of Directors who may, with the assistance of the Managing Director, exercise all
powers and do all such acts and things as may be exercised or done by that bank.
Sec 25(1) : Subject to the provisions of sub-section (2), the Board of Directors of a subsidiary
bank shall consist of the following:
(a) the chairman for the time being of the State Bank, ex-officio;
(aa) the Managing Director appointed under sub- section (1) of section 29, or under section 32;
(b) an officer of the Reserve Bank, to be nominated by that bank;
(c) not more than five directors to be nominated by the State Bank of whom not more than
three shall be officers of that bank;
(ca) one director, from among the employees of the subsidiary bank, who are workmen, to be
appointed by the Central Government in the manner provided in the rules made under this Act.
96
(cb) one director, from among such of the employees of the subsidiary banks as are not
workmen, to be appointed by the Central Government in the manner provided in the rules made
under this Act;
(d) two directors to be elected in the prescribed manner by the shareholders, other than the
State Bank; provided that if the total amount of holdings of all such shareholders registered in
the books of the subsidiary bank three months before the date fixed for election is below five
per cent of the total issued capital, or if there are no shareholders other than the State Bank
registered on the books of the subsidiary
bank, the directors to be elected by the shareholders shall be nominated by the State Bank and
such directors shall, for the purposes of this Act, be deemed to be directors elected under this
clause;
(e) a director, if any, to be nominated by the Central Government.
Sec 26(1) : A director of a subsidiary bank nominated under clause (b) or clause (c) or clause
(e) of subsection (1) of Section 25 or appointed under clause (ca) or clause (cb) of that sub-
section shall hold office during the pleasure of the authority nominating or appointing him.
Sec 26 (2) : Subject to the provisions contained in Section 25, a director elected under clause
(d) of subsection (1) of that section shall hold office for three years and thereafter until his
successor is duly elected, and shall be eligible for re-election.
Provided that no such director shall hold office continuously for a period exceeding six years.
Sec 26 (2A) : Subject to the provisions contained in Section 25 and in sub-section (1), a
director nominated under clause (c) and not being an officer of the State Bank or a director
appointed under clause (ca) or clause (cb) or a director, not being an officer of the Central
Government, nominated under clause (e) of sub-section (1) of section 25, shall hold office for
such term not exceeding three years, as the central government may specify and thereafter until
his successor shall have been duly nominated or appointed, and shall be eligible for re-
nomination or re-appointment, as the case may be.
Provided that no such Director shall hold office continously for a period exceeding six years.
MANAGING DIRECTOR OF A SUBSIDIARY BANK

Sec.29(1) : The State Bank shall, after consulting the Board of Directors of a subsidiary bank,
and with the approval of the Reserve Bank, appoint a Managing Director for that subsidiary
bank;
Sec.29(3)(b) : The Managing Director of a subsidiary bank shall hold office for such term not
exceeding four years and subject to such conditions as the State Bank may, with the approval of
the Reserve Bank, specify at the time of his appointment;
Sec.29(4) : The Managing Director vacating his office shall be eligible for re-appointment.
Sec.29(5) : The State Bank may, with the approval of the Reserve Bank, for any sufficient
reason, remove from office the Managing Director of a subsidiary bank;
Provided that no such Managing Director shall be removed from office unless he has been
given an opportunity of showing cause against such removal.
CASUAL VACANCIES
CASUAL VACANCY OF MANAGING DIRECTOR
Sec. 32 : If the Managing Director of a subsidiary bank is rendered incapable of discharging his
duties by reason of infirmity or otherwise or is absent on leave or otherwise in circumstances
not involving the vacation of his office, the State Bank may appoint another person to officiate
for the managing director until the date on which the Managing Director resumes duty.
CASUAL VACANCIES AMONG DIRECTORS
97
Sec.33 (1) : Where any vacancy occurs before the expiry of the term of office of a director of a
subsidiary bank (other than the Managing Director or a director appointed under clause (ca) or
clause (cb) of subsection (1) of section 25, the vacancy shall be filled
a. in the case of a director nominated under clause (c) of sub-section (1) of section 25, not
being an officer of the State Bank, by nomination by the State Bank;
b. in the case of a director elected under clause (d) of sub-section (1) of section 25, by election
or where the proviso to that clause is applicable, by nomination by the State Bank;
Provided that where the duration of the vacancy in the office of an elected director is likely to
be less than six months, the vacancy may be filled by the remaining directors by co-opting a
person from among the shareholders entitled to elect a director under clause (d) of sub-section
(1) of section25 who is not disqualified under section 27;
c. in the case of a director nominated under clause (e) of sub-section (1) of section 25, not
being an officer of the Central Government, by nomination by that Government in consultation
with the State Bank.
Sec. 33 (2) : A person nominated or elected or co-opted as the case may be, [under sub-section
(1) shall hold office for the unexpired portion of the term of his predecessor.
Sec. 33 (3) : Where any vacancy occurs before the expiry of the term of office of a director
appointed under clause (ca) or clause (cb) of sub-section (1) of section 25, such vacancy shall
be filled in accordance with the said clause (ca) or, as the case may be, clause (cb) and the
director so appointed shall hold office for the period specified under sub-section (2A) of
Section 26.
REMUNERATION OF DIRECTORS
Sec.30 : A director of a subsidiary bank shall be paid for attending the meetings of the Board of
Directors or of any of its committees and for attending to any other business of the subsidiary
bank such fees and allowances as may be prescribed.
Provided that no fees shall be payable to the chairman of the State Bank (or the Managing
Director of the subsidiary bank) or any other director who is a whole time officer of the Central
Government or the Reserve Bank or the State Bank.
POWER AND REMUNERATION OF MANAGING DIRECTOR

Sec. 29 (2) : Subject to the general control of the Board of Directors, the day to day
administration and management of the affairs of a subsidiary bank shall vest in the managing
director, and the Managing Director shall exercise such other powers and perform such other
duties as may be delegated to him by the Board of Directors.
Sec.29(3) : The Managing Director of a subsidiary bank
shall devote his whole time to the affairs of that bank :Provided that the Managing Director of
the subsidiary bank may, with the approval of the State Bank and theReserve Bank be a
director of any other institution;
shall receive such salary and allowances as may be determined by the State Bank with the
approval of the Reserve Bank.
EXECUTIVE AND OTHER COMMITTEES OF THE BOARD OF DIRECTORS

Sec.35(1) : There shall be an executive committee in respect of a subsidiary bank consisting of
such directors as may be prescribed :
Provided that if any such director being an officer of the State Bank and nominated by that
bank under clause (c) of sub-section (1) of section 25, is for any reason unable to exercise his
functions or to discharge his duties in relation to the executive committee, the State Bank may
depute any of its officers to exercise all the functions and to discharge all the duties of such
director in relation to the executive committee whenever such director is so unable to exercise
98
his functions or discharge his duties; and the officer so deputed shall, for all purposes of this
Act, in so far as it applies to the executive committee, be deemed to be a director of the
subsidiary bank.
Sec.35(2) : Subject to any regulations made under this Act, the executive committee may deal
with any matter within the competence of the Board of Directors.
Sec.35(3) : A copy of the minutes of every meeting of the executive committee of a subsidiary
bank shall be forwarded to the State Bank and be laid before the Board of Directors of the
subsidiary bank as soon as possible after the meeting.
Sec.35(4) : Without prejudice to the powers of the executive committee, and subject to any
regulations made under this Act, the Board of Directors of a subsidiary bank may constitute
such and so many other committees, whether consisting wholly of the directors or wholly of
other persons, or partly of the directors and partly of other
persons, as it deems fit, to exercise such powers and perform such duties as may, subject to
such conditions, if any, as the Board of Directors may impose, be delegated to them by the
Board of Directors.
MEETINGS OF THE BOARD OF DIRECTORS

Sec.34(1) : The Board of Directors of a subsidiary bank shall meet at such time and place and
shall observe such rules of procedure in regard to the transaction of business at its meetings as
may be prescribed.
Sec.34(2) : The chairman of the State Bank shall preside at every meeting of the Board of
Directors of a subsidiary bank and, in his absence such one of the directors as may generally or
in relation to any particular meeting be authorised by the chairman in this behalf shall preside:
and in the absence of the chairman and also failing such authorisation, the directors of the
subsidiary bank present at the meeting shall elect one from among themselves to preside at the
meeting.
Explanation – For the purposes of this sub-section “absence from a meeting” means non-
attendance for any reason whatsoever at the meeting or any part of the meeting during which
any business is transacted.
Sec.34(3) : All questions at a meeting of the Board of Directors of a subsidiary bank shall be
decided by a majority of the votes of the directors present, and in case of equality of votes, the
person presiding at the meeting shall have a second or casting vote.
Sec.34(4) : Where any of the directors specified in clauses (a) and (b) of sub-section (1) of
section 25 or any of the directors, being an officer of the State Bank specified in clause (c) of
that sub-section is unable to attend any meeting of the Board of Directors of a subsidiary bank,
and the State Bank or any other such director as may be present at the meeting considers that
the State Bank would not be adequately or effectively represented at such meeting by reason of
the absence of any such director, the State Bank or the director present may give notice in
writing to that subsidiary bank
that the meeting should be adjourned to such date as may be indicated in the notice; or
that any matter, action, step or proceeding proposed to be considered, taken or carried out at
that meeting, should not be so considered, taken or carried out: or that no decision should be
taken at that meeting on any such matter, action step or proceeding; and that subsidiary bank
and its Board of Directors shall be bound to comply with such notice and act accordingly.
99
XV. MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION
Material Contracts and Documents
• State Bank of India (Subsidiary Banks) Act, 1959

• Credit Rating Letters for the current and previous Placements.
• Terms of Appointment of Managing Director.
• Original Documents of Property purchased and registered in the name of the Bank.
• Board Resolution approving the proposed Bond placement.
• Consent letters of the Registrars, the Trustees to the Bondholders, the Legal Advisors, and
the Directors of the Bank.
• Annual Reports of the Bank for the last five years.
• Letter from the Legal Advisor giving his legal opinion on the IM.
• Certificates in relation to the Placement.
• Principal terms of loans and assets charged as security.
• Agreements and approvals for floating of joint ventures and associates.
• Auditor’s Certificate in respect of the Financials of the Bank.
• Tax Benefit Certificate issued by the Auditors.
• Certificate form Trustees for concurrence with the Trustee Clauses
The above documents are available for the inspection by the investors with the Compliance
Officer to the Private Placement at the Head Office of the Bank between 10.00 a.m. to 2.00
p.m. on all working days during which the proposed private placement remains open.
100
PART II
DECLARATION
All the relevant provisions of the State Bank of India (Subsidiary Banks), 1959 as amended
from time to time and the legal requirements connected with this placement as also the
guidelines, instructions, etc. issued by SEBI, Government and any other competent authority in
this behalf have been complied with and no statement made in this Information Memorandum
is contrary to the provisions of the said Acts/Regulations/ Guidelines and rules thereunder.
Sd/-
Authorised Signatory
Place: Mumbai
Date: 22nd November 2005
101
Tel No: 080 2235 3901 3909 Fax: 080 2228 3684
Application Form Sr. No.

Dear Sirs,
Having read and understood the contents of the Memorandum of Private Placement, we apply for
allotment to us of the Unsecured, Redeemable Non-Convertible, Subordinated Bonds The amount
payable on application as shown below is remitted herewith On allotment, please place our name
on the Register of Bond holders. We bind ourselves to the terms and conditions as contained in
the Information Memorandum for Private Placement. We note that the Bank is entitled in its
absolute discretion to accept or reject this application whole or in part without assigning any
reason whatsoever.
(PLEASE READ THE INSTRUCTIONS CAREFULLY BEFORE FILLING THIS FORM)
Form in which certificate is to be issued
[ ] Demat
DP NAME: NSDL [ ] CDSL [ ]

DPID: CLIENT ID:
We understand that in case of allotment of Bonds to us / our Beneficiary Account as mentioned above would be
credited to the extent of Bonds allotted. In case the Bonds allotted to us cannot be credited to our Beneficiary
Account for any reason whatsoever, we will accept physical Bonds certificates.
The application shall be for a minimum of 1 (One) Bonds and in Multiples of 1 (One) Bonds thereafter
No. of Bonds applied for (In words)

No. of Bonds applied for (In figures)
Amount (Rs.) (in words)
Date
Cheque / Demand Draft drawn on Cheque /Demand Draft No.
We are applying as {Tick ( ) whichever is applicable}

1 Company Body Corporate 2 Commercial Bank 3 Regional Rural Bank
4 Co-operative Banks 5 Financial Institution 6 Insurance Companies
7 Mutual Fund 8 Provident/Superannuation/Gratuity Funds 9 Port Trusts
10 NBFC & Residuary NBFC 11 Association of Persons 12 Others (Please specify)
Application Details
First Applicant’s Name in Full (Block letters)
Second Applicant’s Name in Full
Third Applicant’s Name in Full
Mailing Address in Full (Do not repeat name. Post Box No. alone is not sufficient.)
Pin: Tel: Fax:

Tax Details PAN or GIR No. IT Circle / Ward / District Not Allotted
Details of Bank Account
Bank Name & Branch_______________________________________________________________________
Account No: ____________________________ Nature of Account _______________________________________________________
Tax Deduction Status: (Please tick one)

Fully Exempt (Please furnish exemption certificate): ____________________________________________________________________
Tax to be deducted at Source: __________________________________________________________________________________
Specimen Signature
Name of the Authorised Signatory Designation Signature
1.
2.
Acknowledgement Slip shall be given to the Investors as shown below the Instructions.
102
INSTRUCTIONS
1) Application Forms must be completed in BLOCK LETTERS IN ENGLISH. A blank space

must be between two or more parts of the name. For Example
A B C D E L I M I T E D
2) Application forms duly completed in all respect must be lodged at the collection centers
mentioned below, before the closing of the subscription. Cheques/Demand Drafts should
be in favour or ‘State Bank of Mysore– Bonds Issue’ and crossed ‘Accounts Payee only’.
Cheques / Demand drafts may be drawn on any bank including a co-operative bank, which
is situated at and is a member or sub-member of the Banker’s clearing house located at the
Designated Collection centers as mentioned elsewhere in the Information Memorandum.
3) Cash, outstation cheques, money orders, postal orders and stock invest will NOT be
accepted.
4) As a matter of precaution against possible fraudulent encashment of interest warrants due to loss /
misplacement, applicants are requested to mention the full particulars of their bank account as
specified in the Application Form. Interest warrants will then be made in favour of the bank for credit
to the applicant’s account. In case the full particulars are not given, cheques will be issued in the name
of the applicant at his own risk.
5) Receipt of application will be acknowledged by the Bank in the “Acknowledgement Slip”
appearing below the Application Form. No separate receipt will be issued.
6) All applicants should mention their permanent Account No. or the GIR number allotted
under the Income Tax Act, 1961 and the Income Tax Circle/Ward district. In case where
neither the PAN nor GIR is allotted, the fact of non-allotment should be mentioned in the
application form in the space provided.
7) The Application would be accepted as per the terms and conditions of the Bonds outlined in
the Memorandum of Private Placement.
8) Signatures should be made in English. Signatures made in any other Indian language must
be attested by an authorized official of a Bank or by a Magistrate/Notary Public under
his/her official seal.
9) Those desirous of claiming tax exemptions on interest on application money are
compulsorily required to submit a certificate issued by the Income Tax Officer / relevant
declaration forms as pr Income Tax Act, 1961 along with the application form. In case the
above documents are not enclosed with the application forms, TDS will be deducted on
interest on application money. For subsequent interest payments such certificates have to
be submitted periodically.
Application forms can be submitted to the offices of the Arrangers mentioned in the
Information Memorandum or at the branches of State Bank of Mysore as mentioned in
the Information Memorandum and shown below:
Designated Collection Centres

State Bank of Mysore IDBI Capital Market Services SBI Capital Markets Limited
Fort Branch, Ltd. 202, Maker Tower ‘E’,
Mumbai 8th Floor, Bakhtawar, Cuffe Parade,
Nariman Point, Mumbai – 400 005
Mumbai – 400 021.
103
----------------------------------------------------------------------------------Tear Here--------------------------------------------------------------------------
-----------

Tel No: 080 2235 3901 3909 Fax: 080 2228 3684
ACKNOWLEDGEMENT SLIP
Sr. No.:
Received from ____________________________________________ Address _______________________________________________
__________________________________________ an application for _________________ Bonds along with Cheque/Demand Draft
No. __________ Dated _________ Drawn on _____________ for Rs. __________
(Rupees________________________________________ ___________________________________________ only)
(Note: Cheques and Drafts are subject to realisation)
104
105
106
107

SB MY

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Private and Confidential

STATE BANK OF MYSORE

Head Office: K. G. Road, Bangalore – 560 009, Karnataka.

PRIVATE PLACEMENT OF UNSECURED, REDEEMABLE, NON-CONVERTIBLE, SUBORDINATED

OFFEROR’S ABSOLUTE RESPONSIBILITY

Lead Arrangers to the Private Placement Registrars to the Placement

Definitions and Abbreviations 3

Board/Board of The Board of Directors of State Bank of Mysore or a committee thereof

Bonds Unsecured Redeemable Non-Convertible Subordinate Bonds

Depository Participant A depository participant as defined under the Depositories Act

Director(s) Director(s) of State Bank of Mysore unless otherwise specified

Financial Period of twelve months ended March 31 of that particular year

FIPB Foreign Investment Promotion Board

Head Office of the K. G. Road, Bangalore – 560 009, Karnataka.

ITSL/Trustee IDBI Trusteeship Services Ltd.

Issue/Offer/ Private Placement of the Bonds

Issuer/Offeror State Bank of Mysore

Offer Size 2500 Unsecured Redeemable Non-Convertible Subordinate Bonds of

ALCO Asset-Liability Management Committee

Dear Sir/ Madam,

For State Bank of Mysore

This Information Memorandum may contain certain “forward-looking statements”. These

INTERNAL RISK FACTORS

2. Income Tax Proceedings

3. Profits of the Bank

4. Non-Performing Assets (NPAs)

5. Regional Concentration of the Bank

6. Decline in Return Ratios

9. Asset Liability Position

10. Credit Risk

11. Asset Concentration

12. Outstanding Litigations against the Bank

13. Litigation against the Bank sponsored RRB’s

14. RBI’s Annual Financial Inspection Report

16. Credit Decisions

17. Credit Policy of the Bank

EXTERNAL RISK FACTOTRS

1. Regulatory restrictions on the Bank and limitations of the powers of bondholders of

Provided that nothing contained in this sub-section shall apply to-

2. Sensitivity to the Economy and Extraneous Factors

3. Competition from Existing and New Commercial Banks

4. Changes in Regulatory Policies

5. Disintermediation in the Financial Markets

7. Interest Rate Risk

Note to Risk Factors

Head Office: K. G. Road, Bangalore – 560 009, Karnataka.

HIGHLIGHTS OF THE BANK

• Bank with 92 years of existence.

II. GENERAL INFORMATION

Authority for the Placement

BOARD OF DIRECTORS OF THE BANK

Name & Address of Director Appointed/ Co- No. of other

Chairman and Managing Director

Private Placement Management Team

Legal Advisor to the Offer Registrar to the Offer

Trustees Bankers to the Bank

Auditors to the Offer Compliance Officer

Credit Rating (Previous Three Years)

III. CAPITAL STRUCTURE OF THE BANK (As On September 30, 2005)

No. of Shares Face Value Issue Value

Notes to Capital Structure:

1) Following is the capital history since 1985: