BANK OF BARODA
ANNUAL REPORT 2011-2012
DIRECTOR`S REPORT
Performance Highlights:
* Total Business (Deposit+Advances) increased to Rs 6,72,248 crore
reflecting a growth of 25.86%.
* Gross Profit and Net Profit were Rs 8,580.62 crore and Rs 5,006.96 crore
respectively. Net Profit registered a growth of 18.04% over previous year.
* Credit-Deposit Ratio stood at 86.86% as against 86.77% last year.
* Retail Credit posted a growth of 9.97% constituting 17.36% of your Bank`s
Gross Domestic Credit in FY12.
* Net Interest Margin (NIM) as per cent of interest earning assets in
global operations was at the level of 2.97% and in domestic operations at
3.51%.
* Net NPAs to Net Advances stood at 0.54% this year against 0.35% last
year.
* Capital Adequacy Ratio (CAR) as per Basel II stood at 14.67%.
* Net Worth improved to Rs 26,203.67 crore registering a rise of 32.67%.
* Book Value improved from Rs 504.43 to Rs 637.37 on year.
* Business per Employee moved up from Rs 1,229 lakh to Rs 1,466 lakh on
year.
Segment-Wise Performance:
The Segment Results for the year FY12 reveal that the contribution of
Treasury Operations was Rs 887.72 crore, that of Corporate/Wholesale
Banking was Rs 965.87 crore, that of Retail Banking was Rs 2,782.37 crore,
and of Other Banking Operations was Rs 2,959.73 crore. Your Bank earned a
Profit after Tax (PAT) of Rs 5,006.96 crore after deducting Rs 1,569.89
crore of unallocated expenditure and Rs 1,018.84 crore towards provision
for tax.
Dividend:
Your Bank`s Directors have proposed a dividend of Rs 17 per share (on the
face value of Rs 10/-per share) for the year ended March 31st, 2012. The
total outgo in the form of dividend, including taxes, will be Rs 812.29
crore.
Capital Adequacy Ratio (CAR):
Your Bank`s Capital Adequacy Ratio (CAR) was comfortable at 14.67% under
Basel II as on 31st March 2012.
Your Bank`s Net Worth as at 31st March 2012 was Rs 26,203.67 crore
comprising paid-up equity capital of Rs 412.38 crore and reserves
(excluding revaluation reserves) of Rs 25,791.29 crore. An amount of
Rs.4,194.67 crore was transferred to reserves from the profits earned.
Provisions towards Retirement and Other Benefits:
During the year FY12, your Bank made provision towards contribution to
gratuity (Rs 145.63 crore), pension funds (Rs 671.88 crore), leave
encashment (Rs 93.46 crore) and additional retirement benefits (Rs 80.97
crore) on actuarial basis. Total provisions under these four categories
amounted to Rs 991.94 crore during the year FY12, against Rs 1,160.42 crore
during FY11. Total corpus available with your Bank at the end of March 2012
under these heads was: Rs 1,416.85 crore (gratuity), Rs 5,935.62 crore
(pension funds), Rs 566.01 crore (leave encashment), and Rs 446.62 crore
(additional retirement benefits).
Key Financial Ratios:
Particulars FY12 FY11
Return on Average Assets (ROAA) (%) 1.24 1.33
Average Cost of Funds (%) 5.64 4.67
Average Yield (%) 8.55 7.76
Average Interest Earning Assets (Rs crore) 3,47,223.21 2,82,109.79
Average Interest Bearing Liabilities
(Rs crore) 3,43,397.26 2,80,098.94
Net Interest Margin (%) 2.97 3.12
Cost-Income Ratio (%) 37.55 39.87
Book Value per Share (Rs) 637.37 504.43
EPS (Rs) 127.84 116.37
BANK OF BARODA
ANNUAL REPORT 2011-2012
MANAGEMENT DISCUSSION AND ANALYSIS
Economic Scene in FY12 and Outlook for FY13:
The Central Statistical Organization, Government of India has placed
India`s economic growth during FY12 at 6.9% much lower than the growth of
8.4% witnessed during the previous two fiscal years. During FY12, while the
economy could draw support from relatively robust agriculture and services,
the slowdown was quite acute in industrial sector. The growth in industrial
production significantly decelerated from 8.2% in FY11 to 2.8% in FY12.
Within the industrial sector, maximum stresses were seen in mining, capital
goods & intermediate goods sectors, which posted negative growth rates
during the year FY12. Factors like sustained input cost pressures,
shortages of important intermediates like coal and iron ore, uncertainty in
land acquisition and environment clearances, sharp depreciation in rupee of
19.0% against the US dollar between end-Dec, 2010 and end-Dec, 2011
substantially depressed the investment sentiment during FY12.
Both investment and savings rates declined significantly between FY10 and
FY12. As per the International Monetary Fund`s (IMF) calculation, India`s
savings rate declined from 33.5% in FY10 to 31.3% in FY12 and investment
rate from 36.3% in FY10 to 34.0% in FY12. According to RBI, the
deceleration in capital formation is apparent in the sharp moderation in
the number/outlay of projects sanctioned by major banks and financial
institutions during FY12. The decline in financial assistance was
particularly acute for `metal & metal products` and power industries.
Inflationary risks persisted throughout FY12 with headline (WPI) inflation
averaging around 8.8% for the full year. Headline inflation, which was at
10.0% in Sept, 2011, however eased to 6.69% in Mar, 2012 on account of a
seasonal decline in certain food prices and favourable base effect. After
raising the policy rate by 375 bps during Mar, 2010 to Oct, 2011 to contain
inflation and anchor inflation expectations, the RBI paused in its policy
review in Dec, 2011. The emerging growth-inflation dynamics prompted the
central bank to indicate that no further tightening was required and that
future actions would be towards lowering the rates.
India`s balance of payments (BoP) came under stress during FY12 due to
deterioration of the trade balance and moderation in capital inflows. While
exports grew at the modest pace of 21.0% (y-o-y) to US$ 304 billion in
FY12, imports grew by 32.2% to US$ 489 billion, widening India`s trade
deficit from US$ 119 billion in FY11 to US$ 185 billion in FY12.
Notwithstanding the rupee depreciation, the trade deficit increased in FY12
primarily due to a slowdown in global demand, inadequate passthrough of
higher global oil prices and the relatively price inelastic nature of some
of India`s imports like gold and silver. India`s current account deficit is
expected to touch 4.0% of GDP in FY12. After the boom in FII inflows in
FY11, rising global risk aversion and domestic policy concerns reduced the
FII inflows by 43.0% (y-o-y) in FY12 to US$ 16.8 billion. This was the
lowest FII investment in the last three years. Investment in Indian ADRs
and GDRs too declined in FY12 to US$ 597 million.
Foreign Direct Investment (FDI) in India, however, spiked 34.0% (y-o-y) in
FY12 to a record US$ 46.8 billion thanks to a spate of some big ticket
deals like Vedanta or British BP, etc.
In nominal terms, India`s rupee depreciated by 18.3% against the US dollar
from the last week of Aug, 2011 to mid-Dec, 2011 after being largely range-
bound during the first four months of FY12. Subsequently, the exchange rate
stabilized in response to the measures taken by the RBI and the Government
aimed at improving dollar supply in the foreign exchange market as also to
curb speculation.
Lower tax revenues, poor disinvestment receipts and higher spending on
subsidies pushed up the central government`s fiscal deficit to 5.9% of GDP
in FY12 as against the target of 4.6%.
Going forward into FY13, assuming a normal monsoon, the baseline GDP growth
is projected at 7.3% by the RBI in its Annual Monetary Policy Statement for
FY13 on the back of marginally improved global outlook and expected revival
in domestic investment sentiment. Inflation, however, is forecast to remain
above the RBI`s comfort zone and placed at 6.5%. The fiscal correction, as
indicated in the Union Budget for FY13, along with other policy measures to
address supply-side bottlenecks in agriculture, energy and transport
sectors, are expected to create conditions for revival of investment
activity in India during FY13.
Performance of Indian Banking Sector in FY12 and Outlook for FY13:
Credit growth of Indian commercial banks had been showing a decelerating
trend from Dec, 2010 on the back of elevated inflation, interest rates and
intensification of supply-side constraints. The year FY12 ended with bank
credit growth of 19.3% and aggregate deposit growth of 17.4%. Even though
the divergence between credit and deposit growth rates had narrowed during
the first three quarters of FY12, it widened during the fourth quarter due
to a sharper deceleration in deposit growth in Q4, FY12. This resulted in
increased dependence of commercial banks on non-deposit sources of finance
(i.e., borrowings) during Q4, FY12.
While the deceleration in bank credit growth was contributed by all the
sectors, i.e., agriculture, industry, services and personal loans, the RBI
data showed that the deceleration was particularly sharp in agriculture,
real estate, hotels & restaurants, professional services,
telecommunication, power, cement, textiles, iron & steel and personal
vehicle loans.
Increasing stress in the corporate sector was reflected in the quantum jump
in the corporate debt that came up for restructuring before the Corporate
Debt Restructuring Cell during FY12. According to RBI, the Indian banking
sector, in general became risk averse during FY12 to avoid the possibility
of adverse selection in the given economic environment. As per the RBI`s
report, the Gross NPA ratio of the Indian banking industry worsened by 59
basis points (bps) between end-Mar, 2011 to end-Dec, 2011 due to continued
economic stresses and capital to risk-weighted asset ratio (CRAR) of
Banking industry deteriorated by 91 bps during the said period. These
factors appear to have negatively impacted the Banking sector`s capacity to
extend credit during FY12. As a result, there was a compositional shift in
Banks` asset portfolio in favour of investments in government securities.
Liquidity conditions remained in a deficit mode throughout FY12. However,
beginning Nov, 2011, the liquidity deficit went beyond the comfort level of
(+)/(-) one per cent of net demand and time liabilities (NDTL) of banks. As
a result, the RBI took steps to inject primary liquidity of a more durable
nature in the form of open market operations and the aggressive cuts in the
cash reserve ratio (by 125 bps during Jan - Mar, 2012), which helped ease
the liquidity tightness to a great extent.
Going forward into FY13, the RBI has projected aggregate deposits of
commercial banks to grow by 16.0% and non-food credit by 17.0% in line with
the overall GDP growth of 7.3% and broad money supply growth of 15.0%.
Banks with good capital strength, a balanced loan-mix, stable net interest
margins (NIMs) and lower incremental delinquency ratios are likely to see
decent earnings growth in FY13 also, despite subdued economic environment.
Risk Management:
Risk is an exposure to a transaction which may result in a loss with some
probability. In financial institutions, risk results from variations and
fluctuations in assets, liabilities, incomes and outflows & inflows of cash
etc. While the types and degree of risks an organization may be exposed to,
depend upon a number of factors, it is believed that generally Banks face
Credit, Market, Liquidity, Operational, Compliance, Legal, Regulatory and
Reputation risks.
Your Bank has set up a sound Risk Management architecture wherein the risks
are assumed within the risk appetites defined by your Bank`s Board.
Risk Management Structure:
The Board of Directors of your Bank has the authority and responsibility to
implement Risk Management Architecture of your Bank. Risk Management
Committee of Executives and Risk Management Committee of the Board are
looking after the implementation of integrated risk management systems in
your Bank.
The Sub Committee of the Board on ALM (Asset Liability Management) and Risk
Management Division assist the Board on financial risk related issues. Your
Bank has a full-fledged Risk Management Department headed by a General
Manager and consisting of a team of qualified, trained and experienced
employees. Your Bank has set up separate committees, of Top Executives of
your Bank to supervise the respective risk management functions as under.
Asset Liability Management Committee (ALCO) is a decision making unit
responsible for balance sheet planning from a risk-return perspective
including the strategic management of interest rate and liquidity risks.
The business issues that an ALCO would consider, inter alia, typically
include product pricing for both deposits and advances, desired maturity
profiles of the incremental assets and liabilities, etc. It also plans out
strategies to meet asset-liability mismatches.
Credit Policy Committee (CPC) has the responsibility to formulate and
implement various enterprise-wide credit risk strategies including lending
policies and also to monitor your Bank`s credit risk management functions
on a regular basis.
Operational Risk Management Committee (ORMC) has the responsibility of
evaluating and taking necessary steps for mitigation of operational risk by
designing and maintaining an explicit operational risk management process.
It also ensures that the norms, policies and guidelines laid down in
Operational Risk Management Policy are strictly adhered to.
Risk Management Policy:
Your Bank has Board-approved policies and procedures in place to measure,
manage and mitigate various risks that it is exposed to. In order to
provide ready reference and guidance to various functionaries of the Risk
Management System in your Bank, it has in place Asset Liability Management
and Group Risk Policy, Domestic Loan Policy, Mid Office Policy, Off Balance
Sheet Exposure Policy (domestic), Business Continuity Planning Policy,
Pillar III Disclosure Policy, Operational Risk Management Policy, Internal
Capital Adequacy Assessment Process (ICAAP), Stress Test, Credit Risk
Mitigation and Collateral Management Policy duly approved by its Board.
Risk Management - Implementation and Monitoring System:
The monitoring mechanism of major risks like Liquidity Risk, Credit Risk,
Market Risk and Operational Risk are as under.
Liquidity Risk:
Liquidity risk is the current and prospective risk to earnings or capital
arising from a bank`s inability to meet its obligations when they become
due without incurring unacceptable losses. Liquidity risk includes the
inability to manage unplanned decreases or changes in funding sources.
Liquidity risk also arises from the failure to recognize or address changes
in market conditions that affect the ability to liquidate assets quickly
and with minimal loss in value.
During the year under review, Indian banking system exhibited a stiff
systemic liquidity position with some adjustments done by the central
monetary authority to balance credit growth and control inflation. In your
Bank, the liquidity risk is measured by its flow approach on a daily basis
through Structural Liquidity Gap reports and on a dynamic basis by Dynamic
Gap reports prepared every fortnight for the subsequent three months. Under
Stock Approach, your Bank has established a series of caps on activities
such as daily call lending, daily call borrowings, net short term
borrowings and net credit to customer deposit ratio and prime asset ratio,
etc. The Asset Liability Management (ALM) Cell, working in the Risk
Management Department reviews the liquidity position on a daily basis to
ensure that the negative liquidity gap does not exceed the tolerance limit
in the respective time buckets. Your Bank`s specialized Integrated Treasury
Branch, Mumbai assesses the domestic liquidity in respect of all foreign
currency exposures. In respect of overseas operations, each territory
assesses its currency wise liquidity position at prescribed intervals. The
funding requirements in case of contingencies are also examined at regular
intervals to prepare your Bank to meet any exigencies of a shortfall in
funds` position. Your Bank has managed its liquidity by prudent
diversification of the overall deposit base, control on the level of bulk
deposits, and ready access to wholesale funds under normal market
conditions. Your Bank has significant level of marketable securities, which
can be sold, used for repo borrowings or as collaterals, if required.
Credit Risk:
Credit risk is defined as the possibility of losses associated with
decrease in the credit quality of the borrower or the counter parties. In
any bank`s portfolio, losses stem from outside defaults due to inability or
unwillingness of the customer or the counter party to meet their
commitments. Losses may also result from reduction in the portfolio value
arising from actual or perceived deterioration in credit quality. In
general, credit risk management processes involve identification,
measurement, monitoring and control of credit exposures.
In your Bank, the Credit Risk management ensures that your Bank`s risk
identification and reporting controls in credit processes are adequate and
functional. Top management regularly gauges your Bank`s economic standing
and loss-prevention strategy by reviewing risk controls.
Your Bank has various policies in place such as Domestic Loan Policy,
Investment Policy, Off-Balance Sheet Exposure Policy, etc. to guide its
operating units. It has specified various prudential caps for credit risk
exposures. Your Bank also conducts industry studies to assess the risk
prevalent in industries where your Bank has sizable exposure and also for
identification of sunrise industries. The industry reports are communicated
to the operating functionaries to consider the same while lending to these
industries.
Your Bank has adopted various credit rating models to measure the level of
credit risk in a specific loan transaction. Your Bank uses a robust rating
model developed to measure credit risk for majority of the business loans.
Apart from estimating PD (probability of defaults), the credit rating model
would also help your Bank in several other ways as under.
* To migrate to internal rating based approaches (advanced approaches) of
computation of Risk Weighted Assets.
* To price a specific credit facility considering the inherent credit risk.
* To measure and assess the overall credit risk and to evolve a desired
profile of credit risk.
Apart from assessing credit risk at the counterparty level, your Bank has
appropriate processes and systems to assess credit risk at the portfolio
level. Your Bank undertakes portfolio reviews at regular intervals to
improve the quality of the portfolio or to mitigate the adverse impact of
concentration of exposures to certain borrowers, sectors or industries.
Market Risk:
Market risk implies possibility of loss arising out of adverse movements of
market determined rates and prices. The objective of market risk management
is to avoid excessive exposure of your Bank`s earnings and equity to such
losses and to reduce your Bank`s exposure to the volatility inherent in
financial instruments such as securities, foreign exchange contracts,
equity and derivative instruments, as well as balance sheet or structural
positions. The primary risk that arises for your Bank as a financial
intermediary is interest rate risk due to your Bank`s asset-liability
management activities.
Other market related risks to which any bank is exposed are foreign
exchange risk on foreign currency positions, liquidity, or funding risk,
and price risk on trading portfolios.
Your Bank has clearly articulated policies to control and monitor its
treasury functions. These policies comprise management practices,
procedures, prudential risk limits, review mechanisms and reporting
systems. These policies are revised regularly at fixed intervals in line
with changes in financial and market conditions.
The Interest rate risk in your Bank is measured through interest rate
sensitivity gap reports and Earning at Risk. Furthermore, your Bank
calculates duration, modified duration, Value at Risk for its investment
portfolio consisting of fixed income securities, equities and forex
positions on monthly basis. It monitors the short-term Interest rate risk
by NII (Net Interest Income) perspective and long-term interest rate risk
by EVE (Economic Value of Equity) perspective. The Value at Risk for the
treasury positions is calculated for ten days holding period at 99.0%
confidence level. The stress testing of fixed interest investment portfolio
through sensitivity analysis and equities through scenario analysis is
regularly conducted. Based on the RBI directions, your Bank is also
estimating the Economic Value of Equity impact on a quarterly basis.
Operational Risk:
Operational risk is the risk of loss on account of inadequate or failed
internal process, people and systems or external factors. As stated above,
your Bank`s Operational Risk Management Committee (ORMC) has the
responsibility of monitoring the operational risk of your Bank. Your Bank
monitors operational risk by reviewing whether its internal systems and
procedures are duly complied with. It collects and analyses loss and near
miss data on operational risk based on different parameters on a half
yearly basis and, wherever necessary, corrective steps are taken without
much loss of time.
Bank`s Compliance with Basel II:
Your Bank, with a very large overseas presence amongst the Indian banks has
implemented the Basel-II Guidelines effective 31st March 2008. In keeping
with the guidelines of the RBI, your Bank has adopted Standardized Approach
for Credit Risk, Basic Indicator Approach for Operational Risk and
Standardized Duration Approach for Market Risk for computing its Capital
Adequacy Ratio. Your Bank has been computing the Capital to Risk Weighted
Assets Ratio (CRAR) on parallel basis under Basel-I and Basel-II
Guidelines. Your Bank is also providing additional capital towards
Operational Risk under the Basel II guidelines.
The CRAR of your Bank is summarized as follows:-
Date Basel I Basel II
31.03.2010 12.84% 14.36%
31.03.2011 13.02% 14.52%
31.03.2012 12.95% 14.67%
In compliance with the Pillar-II guidelines of the RBI under Basel II
framework, your Bank has formulated a Policy of Internal Capital Adequacy
Assessment Process (ICAAP) to assess internal capital in relation to
various risks that it is exposed to. Stress Testing and scenario analysis
are used to assess the financial and management capability of your Bank to
continue to operate effectively under exceptional but plausible conditions.
Your Bank has a Board-approved Stress Testing Policy describing various
techniques used to gauge their potential vulnerability and its capacity to
sustain such vulnerability. Your Bank has been conducting its ICAAP tests
on quarterly basis along with stress tests as per its ICAAP Policy.
The Pillar 3 of Basel II, (i.e. market discipline) aims to encourage market
discipline by developing a set of disclosure requirements which will allow
market participants to assess key pieces of information on the scope of
application, capital, risk exposures, risk assessment processes, and hence
the capital adequacy of your Bank.
The Pillar-3 Disclosures are published on quarterly and half yearly basis
on your Bank`s website plus a year-end disclosure as on March of every
year. The year-end exposure is also published in your Bank`s Annual report
apart from being available on your Bank`s website.
Preparedness for Basel III:
The RBI has issued final Guidelines on Basel III on May 2, 2011. A
comparison of minimum capital requirement, under Basel- II vis-a-vis Basel-
III, is given below.
Parameter Basel - II Basel - III
Common Equity Capital NA 5.5%
Tier I Capital 6% 7%
Total Capital 9% 9%
Capital Conservation Buffer
(a buffer of capital that can
be used to absorb losses during
periods of financial and
economic stress.) (in the form
of Common Equity) NA 2.5%
Basel III guidelines of RBI have also introduced (i) a minimum Leverage
Ratio of 4.5% as an additional standard of riskiness of a banks` balance
sheet. (ii) Liquidity standards by way of two liquidity ratios namely
Liquidity Coverage Ratio (LCR) and Net Stable Funding Ratio (NSFR).
During the parallel run between January, 2013 and January, 2017, banks will
strive to maintain a minimum Leverage Ratio of 4.5%. The regulatory
leverage ratio requirements would be prescribed by RBI after a parallel
becomes effective from Jan 1, 2018.
The LCR requires a bank to hold sufficient high-quality liquid assets to
cover its total stressed net cash outflows over 30 days. The NSFR requires
a bank to hold available amount of stable funding to exceed the required
amount of stable funding over a one-year period of extended stress.
With the quantum and quality of capital that your Bank is having in its
books, with common equity constituting 93.05% of Tier I Capital as on March
2012, it is hoped that your Bank`s transition to Basel III regime would be
met without much difficulty up to FY14. But moving ahead your Bank may have
to supplement capital funds, especially common equity funds, for FY15 and
onwards.
Credit Monitoring Function:
A continuous monitoring of credit is one of the most important tools for
ensuring the quality of advances assets for any bank. Your Bank too has a
well-established system of monthly monitoring of its advances accounts at
various levels to prevent asset quality slippages and to take timely
corrective steps to improve the quality of its overall loan-book.
In your Bank, a separate department for Credit Monitoring function at the
Corporate level, headed by a General Manager, and one at the Regional/Zonal
level, has been functional since September 2008. The Slippage Prevention
Task Force formed at all Zonal/Regional offices in terms of your Bank`s
Domestic Loan Policy was activated for the purpose of arresting slippages
and also for initiating necessary restructuring in potentially sick
accounts at an early stage in conformity with the laid down norms and
guidelines. Your Bank has placed special focus on sharpening of the credit
monitoring process for improving the asset quality, identifying the areas
of concern and the branches requiring special attention. It has also worked
out strategies to ensure implementation in a time-bound manner.
The primary objectives of your Bank`s Credit Monitoring Department at the
Corporate level are fixed as under:
* Identification of weakness/Potential default/incipient sickness in the
account at an early stage;
* Initiation of suitable and timely corrective actions for preventing
impairment in credit quality, whenever signals are noticed in any account,
e.g. decline in credit rating, delay in meeting liabilities in LC/Guarantee
and delay in servicing of interest/ installments etc.;
* Prevention of slippage in the Asset Classification and relegation in
Credit Ratings through a vigorous follow up;
* Identification of suitable cases for restructuring/ rescheduling/
rephasement as well as further financing in deserving and genuine cases
with matching contribution from the borrower; Liaison with CDR Cell and
Zonal/ Regional Offices.
* Taking necessary steps/regular follow up, for review of accounts and
compliance of terms and conditions, thereby improving the quality of your
Bank`s credit portfolio;
* Endeavoring for upward migration of Credit Ratings.
* Monitoring progress of accounts under BIFR.
Restructuring of Advances Accounts:
As a part of an on-going business strategy to improve upon the quality of
assets, your Bank has reaffirmed the need to look into the advance
portfolio on a continuous basis, industry-wise as well as borrower-wise, to
analyze the present position and the problems foreseen in near future and
to identify weaknesses/ potential default/incipient sickness in the advance
accounts at an early stage so as to initiate suitable and timely corrective
measures for preventing impairment in credit quality.
Your Bank`s Credit Monitoring department at Corporate Office has taken
several initiatives in identifying the incipient sickness/ potential
default/weaknesses in the advance accounts for taking corrective actions
including restructuring in deserving cases, for prevention of slippage and
maintaining asset quality. The department had called for suggestions from
Zonal and Regional Offices for modification of Monthly Monitoring Report
(MMR) format. The MMR was modified, incorporating suggestions of these
operational units to make it more effective.
Your Bank has also initiated follow up actions for ensuring expeditious
review of accounts, compliance of terms and conditions, up-gradation in
credit rating etc. in high value advance accounts for improving the asset
quality of its credit portfolio.
Total Outstanding of the accounts restructured during the course of FY12
was as follows as on 31st Mar, 2012.
Outstanding of Restructured Loans in FY12 (Domestic) (Position as on 31st
March, 2012):
(Rs. crore)
Particulars CDR SME Others Total
Mechanism Restructuring
Standard Advances
Restructured
No. of Borrowers 16 274 9,596 9,886
Amt. Outstanding 1,534.03 435.31 6,276.61 8,245.95
Sub-standard
Advances
Restructured
No. of Borrowers 0 5 2,042 2,047
Amount Outstanding 0 10.38 5.09 15.47
Doubtful Advances
Restructured
No. of Borrowers 0 2 40 42
Amount Outstanding 0 1.93 2.06 3.99
Total
No. of Borrowers 16 281 11,678 11,975
Amount Outstanding 1,534.03 447.62 6,283.76 8,265.41
Besides the domestic restructuring given above, your Bankrestructured in
its international operations during FY12 the accounts involving an
outstanding balance of Rs 613.78 crore (as on 31st Mar, 2012).
Your Bank also initiated major follow-up actions for ensuring expeditious
review of accounts, compliance of terms and conditions, up-gradation in
credit rating etc. in high value advance accounts for improving the asset
quality of its credit portfolio.
Economic Intelligence Unit:
At the Corporate Office of your Bank, a specialized Economic Intelligence
Unit (EIU) supports the Top Management in several critical areas like
Macroeconomic Forecasting, Business Strategy Formulation, Investor
Relations, Asset-Liability Management and in discussions/deliberations with
the Regulators (both domestic & international) and Rating Agencies. The
Unit regularly provides the Top Management as well as various operational
units a periodic outlook on key macro variables like industrial and
infrastructural growth, inflation, interest rates, stocks` movement, credit
deployment & resource mobilization of Banking industry, liquidity
conditions and exchange rates.
By providing better understanding of macroeconomic aspects, corporate
sector health and banking sector policies, the EIU of Bank of Baroda
supports Bank`s efforts in tapping business opportunities and swiftly
responding to market dynamics.
The EIU brings out a weekly e-publication on macro-economic, policy and
regulatory developments to share its perspective with Bankers, investors,
regulators and other industry leaders. The division works as an
intellectual arm of your Bank in comprehending developments that eventually
helps develop rightly aligned strategies.
Internal Control Systems:
Your Bank has continued to register excellent business results year after
year and maintained the record of doubling its business in three years
without compromising on asset quality.
It may be noted that your Bank`s Central Inspection & Audit Division has
played an important role in protecting the standards of control and
compliance for your Bank without hurting its business growth.
Your Bank`s Central Inspection & Audit Division located at its Head Office
in Baroda functions with extended arms of ten zonal Inspection Centres at
Zonal Head Quarters and oversees the internal control system through Risk
Based Internal Audit of all the branches. The Information Systems Audit
(I.S. Audit), Concurrent Audit, Credit Audit and Management Audit keep a
check that quality compliance is maintained by the operating units.
The Regular Branch Inspection Report is the most comprehensive feed-back to
the Management about the degree of compliance of your Bank`s systems and
procedures and guidelines at the operational level and hence, the most
important tool for exercising control. The compliance is monitored through
submission of Rectification Certificate by the auditee units duly
countersigned by the Reporting Authorities.
All the branches are covered under your Bank`s Risk Based Internal Audit
(RBIA). The assessment of the level of risk and its direction is as per the
Risk Matrix prescribed by the RBI, which helps the Management in
identifying areas of high risk requiring attention on priority basis. The
position of the risk categorization of the branches is reviewed by Audit
Committee of the Board on quarterly basis. During the year FY12, 2,769
branches were inspected under RBIA. Around 1,893 branches (68.36%) were in
the Low Risk, 748 branches (27%) were in the Medium Risk and 128 branches
(4.63%) were in the High Risk category.
With 100.0% migration of your Bank`s branches to Core Banking platform, the
I.S. Audits are being conducted to ensure that IT related Risk Management
Systems and processes are strengthened as per the I.S. Audit policy of your
Bank. The I.S. Audit cell of your Bank also undertakes offsite surveillance
through generations of various reports.
As against the RBI`s requirement of coverage of 50.0% of business, 682
branches were subjected to Concurrent Audit during the year FY12 covering
Total Deposits of 62.0% and Advances of 81.0%,and Overall Business of
70.0%.
As per the RBI directives, Credit Audit was conducted in 3,708 accounts
covering total exposure of Fund & Non-fun based facilities of Rs.2,33,802
crore to improve the quality of credit assessment and compliance level of
large loans.
During the year FY12, about 2,892 staff members were imparted training at
your Bank`s Staff College, Regional Training Centres and other external
training institutes of repute on the matters relating to Risk Management.
The Inspections and Audits are carried out in your Bank under the
supervision and guidance of the Audit Committee of Board and it is ensured
that compliance is in focus all the time along with your Bank`s business
growth and interest.
Operations and Services:
Customer-Centric Initiatives:
As always, efficient customer service and customer satisfaction are the
primary objectives of your Bank in its day to day operations. Your Bank is
highly responsive to the needs and satisfaction of its customers, and is
committed to the belief that all technology, processes, products and skills
of its people must be leveraged for delivering superior banking experience
to its customers without fail.
Recently, your Bank has taken several measures to improve customer service
at the branches and at the same time, strengthened the customer complaint
redressal machinery for fast disposal of customer complaints. Your Bank has
implemented On-line Complaint Tracking Module (OCTM) so that the customers
may also have a view on the status of their complaint.
Some of the other major initiatives are as under:
* Implemented Intra-Bank Saving Bank Account Portability.
* The automatic payment of compensation for delay in collection of
outstation cheques/instruments has been configured in the system.
* Creation of On line Fixed Deposit account through Baroda Connect.
* Registration of nomination in all the existing accounts in Finacle
system. It has also been advised that nomination should be offered in all
new accounts to be opened and to record the nomination made / denied by the
customer.
* The SMS alert facility in respect of transactions where the amount is
greater than or equal to Rs. 50,000 has been enabled to all resident SB/CA
and OD customers of your Bank whose mobile numbers are registered in your
Bank`s record (CBS system).
* Branches were advised to send notices to customers having inoperative
accounts requesting them to reactivate the account.
Efforts to Improve Customer Service at Branches:
The feedback on quality of customer service at branches is obtained through
the Branch Level Customer Service Committee meetings that are held every
month in which customers from various cross sections of the society are
invited including Senior Citizens and Pensioners. The suggestions/ views
generated during the meeting are collated and appropriate follow up action
is taken to examine the feasibility to implement the suggestions for
improving the quality of customer service rendered at the branches.
Your Bank is focused towards providing excellent customer service through
all delivery channels and has been making continuous efforts for enhancing
the level of customers` satisfaction by leveraging technology to provide e-
products and alternative delivery channels e.g. ATM / DEBIT CARD, POS,
Internet Banking, Mobile Banking, etc., best suited to the diverse needs of
different customers. The varied interests and expectations of customers are
taken care of by improving upon various processes and procedures.
Compliance:
Your Bank is a member of Banking Codes and Standards Board of India (BCSBI)
and has adopted the Code of Commitment to the Customers prescribed by the
BCSBI in August 2009 and also, Code of Bank`s Commitment to MICRO and Small
Enterprises. The Code has been placed on your Bank`s website and also made
available to customers at the branches.
While announcing the Annual Monetary & Credit Policy for the year FY11, the
Governor, RBI had proposed that banks should devote exclusive time in their
Board Meetings once in every six months to review and deliberate on issues
concerning customer service/customer care. To comply with this, two such
six monthly reviews were undertaken by your Bank`s Board for the sub-
periods January-June 2011 and July-December 2011, in meetings dated 27th
August 2011 and 13th April 2012, respectively.
Customer Service Committee of the Board:
Your Bank has a Sub-Committee of Board for Customer Service which is headed
by your Bank`s Chairman and Managing Director with the following members as
on 31st March 2012.
1. Shri M. D. Mallya - Chairman and Managing Director
2. Shri Rajiv Kumar Bakshi - Executive Director
3. Shri N. S. Srinath - Executive Director
4. Dr. Masarrat Shahid - Director
5. Shri Maulin Vaishnav - Director
This Sub-Committee addresses the issues relating to the formulation of
policies and assessment of its compliances which brings about consistent
improvement in the quality of customer service. It also monitors the status
of the number of deceased claims pending for settlement beyond 15 days
pertaining to Depositors/Locker Hirers/Depositors of safe custody articles,
and reviews the status of implementation of Awards passed by Banking
Ombudsman.
Standing Committee on Customer Service:
Your Bank has also set up a Standing Committee on Procedures and
Performance Audit on Customer Services, comprising of three eminent public
personalities as members along with both the Executive Directors and four
General Managers of your Bank. This Committee oversees timely and effective
compliance of the RBI instructions on Customer Service and also reviews the
practices and procedures prevalent in your Bank and takes necessary
corrective steps on an on-going basis.
The suggestions emanating in the Branch Level Customer Service Committee
meetings are obtained by the Head Office on quarterly basis from Regional
Offices and placed before the Standing Committee on Procedure and
Performance Audit on Customer Services. The feedback of the Committee
meetings is then put up to the Customer Service Committee of the Board of
Directors.
Customer-Centric Initiatives and Redressal of Complaints:
* Your Bank has put in place a Customer Grievance Redressal Policy,
approved by the Board, and a well structured Customer Grievance Redressal
Mechanism. The General Manager in charge of Operations & Services is
designated as Nodal Officer for customer complaints regarding your Bank. At
Zonal and Regional levels, Zonal Heads and Regional Heads are designated as
Nodal Officers for their respective Zones and Regions. The names of all
Nodal Officers along with their contact numbers are displayed in all the
branches.
* A note on Review of Customer Services & Grievances Redressal Machinery is
placed before the Board of Directors every quarter giving position of
customers complaints received at your Bank`s Regional Offices and Head
office and the follow up measures with important initiatives taken by your
Bank for improving the quality of customer service.
* To eradicate customer complaints fully and to ensure hassle free customer
service, a regular analysis is done on the complaints received from the
customers and a suitable action is taken on time so that there is no
repetition of such complaints in future.
* Your Bank has Board-approved policies on customer services and the same
are placed on your Bank`s website.
To facilitate customers, an in-house "On-line Complaint Tracking Module"
has been developed in consultation with Project Office, BCC, Mumbai. In
Phase-I, the user-id and password generation for all the branches and your
Bank`s regional/zonal officesplus functional departments was completed. All
the regional offices and functional departments were able to access the
complaint Module successfully. The on-line complaint icon was then
activated on the home page of your Bank`s web site for quick access to the
customer.
The salient features of "On-line Complaint Tracking Module" are as
follows:-
* It allows tracking of the complaint both by the complainant as well as
the concerned Branch/ Region/ Zone and Head Office concurrently.
* It provides for generation of relevant MIS reports at all levels.
* It provides for quicker transmission of complaint to the respective
authority i.e. Branch /Region/Zone, thus increasing the time efficiency in
redressal of a complaint.
* It provides for automatic escalation of the complaint in case action is
not taken within the stipulated period by the respective authority, thus
facilitating the controlling offices to follow up with the concerned branch
for early resolution of the grievances.
* The module provides for generation of instantaneous "Tracker ID" along
with an acknowledgment message of successful registration of complaint to
the customer.
Based on the feedback and suggestions from the grass root level customer
committees and various studies/surveys, a slew of customer centric
initiatives and measures were taken by your Bank during the year under
review to improve customer service at its branches.
KYC-AML-CFT:
Know Your Customer (KYC) norms/Anti-Money Laundering (AML) standards/
Combating of Financing of Terrorism (CFT) measures and obligation of Bank
under PMLA, 2002.
Your Bank has Board approved KYC-AML-CFT Policy in place. The said Policy
is the foundation on which your Bank`s implementation of KYC norms, AML
standards, CFT measures and obligation of your Bank under Prevention of
Money Laundering Act (PMLA) 2002 is based.
The major highlights of KYC-AML-CFT implementation across your Bank are as
under.
* Generation of Cash Transaction Reports (CTRs) electronically for
submission to Financial Intelligence Unit (FIU), through the electronic
medium.
* Installation / Implementation of "AML Solution" for generating System
based alerts.
* System-based detection and submission of Suspicious Transaction Reports
(STRs) to the Financial Intelligence Unit (FIU).
* System based Risk Categorization (from AML Measure) of Bank`s customers`
accounts every half year.
* Filing of Counterfeit Currency Reports (CCRs) to FIU-IND, New Delhi.
* Filing of Non Profit Organizations Transaction Reports (NTRs) to FIU-IND.
The full KYC compliance entails staff education as well as customer
education for which the following measures have been taken by your Bank.
* A comprehensive list of KYC documents is uploaded on your Bank`s website
(www.bankofbaroda.com) for the benefit of customers.
* Similarly for internal usage, a KYC-AML page is created at your Bank`s
INTRANET for posting reference material on KYC-AML-CFT education.
* Regular Training Sessions are conducted on KYC-AML-CFT Guidelines at your
Bank`s Training establishments.
* Training is being arranged for your Bank`s Senior Officials / Executives
at RBI, IBA and National Institute of Bank Management (NIBM).
* Sustained efforts are made to create expertise at your Bank`s Head Office
for corporate oversight and also KYC Audit of branches.
Back Office Operations:
Regional Back Offices and City Back Offices:
Two types of Back Offices have been conceptualized by your Bank - Regional
Back Office (RBO) and City Back Office (CBO).The RBO deals with centralized
processing of account opening forms (AOF) and centralized processing of
issuance of Personalized Cheque Books (PCB). Your Bank has ten RBOs -one
each at Baroda, Bhopal, Delhi, Coimbatore, Mumbai, Lucknow, Jaipur,
Kolkata, Pune, Jamshedpur. The RBOs are opening accounts for 1,298
branches. Up to 31st Mar, 2012, the RBOs have opened more than 11 lakh
accounts. The RBOs issue PCBs for 2,115 branches and have so far issued
more than 36 lakh PCBs.
The CBOs deal with centralized upload of clearing transactions - both
inward and outward - as well as government collections and ECS
transactions. Your Bank has 21 CBOs (Service branches) where clearing and
ECS are centralized for branches in each city centre. The centralization of
clearing has also been introduced in 59 main branches (which handles
clearing for local branches). The CBO concept has so far covered 1,308
branches.
Currency Chest and Government Business New Business Avenues opened during
the year FY12:
* Your Bank has implemented payment of Custom Duties at 116 Custom House
locations through e-payment across the country.
* Two new branches authorized for physical payment of Custom Duties taking
the total toten custom locations interfaced with ICES 1.5 Software.
* Additional 267 branches have been authorized for undertaking PPF/SCSS
Business.
* Utility for enabling e-freight payment for Railways has been
commissioned.
* Conclusion of Agreement with Stock Holding Corporation of India (SCHIL)
for sale of e-stamps. This business has been commenced in the state of
Gujarat, Rajasthan and Delhi.
* Development under way for (i) Maharashtra State Government (ii) Rajasthan
State Government.
* Implementation of e-payment of State Taxes during the year at (1)
Karnataka, (2) Andhra Pradesh (3) West Bengal, (4) Delhi & (5) Bihar.
* Authorization of e-payment of State Taxes obtained for Daman &Diu.
* Additional authority for the payment of pension in the state of Madhya
Pradesh, Chhatisgarh, Punjab and Haryana has been obtained.
* Implementation of Swavalamban Scheme under New Pension Scheme.
* Your Bank is selected as Implementing Agency Bank for Pension & Life
Insurance Fund.
* E-payment of Professional Tax in Maharashtra started with effect from 1st
Jan, 2012.
* Your Bank has identified its Service branch, New Delhi as Nodal Branch
for e-payment of Ministry of Health & Family Welfare and the facility has
been made operational for all the 11 Pay & Accounts Offices of the
Ministry.
* Your Bank has identified its International Business Branch in New Delhi
as a Nodal branch for settlement of funds in respect of Banking arrangement
with Ministry of External Affairs for Foreign Exchange Remittances between
Mission/ Posts abroad.
* Establishment of Centralized Pension Processing Centre for processing and
payment of pension to the State Government Pensioners of Rajasthan state is
under process.
* Salary accounts of staff/student accounts of Reliable college, Ghaziabad
canvassed.
* A MOU with Kandla Port executed after permission from Indian Ports
Association, Delhi.
* Implementation of e-scroll on Postal Business.
Strategic Plan on Currency Management (2011-14):
As a customer-centric initiative to improve payment system, your Bank has
identified 26 new centers (given below) for opening New Currency Chests
under its Strategic Plan on Currency Management 2011-14, thereby increasing
the total number of Currency Chests from 84, at present, to 110.
Sr. Name of the Zone New Currency Chest Proposed
No. over three years
1. Bihar Orissa & Jharkhand Zone 3
2. Eastern Zone 2
3. Greater Mumbai Zone 0
4. Gujarat Operations 1
5. Maharashtra & Goa Zone 2
6. MP & Chhatisgarh Zone 4
7. Northern Zone 1
8. Rajasthan Zone 4
9. Southern Zone 2
10. UP & Uttarakhand Zone 7
TOTAL 26
Vigilance:
It has been the endeavor of Vigilance department of your Bank to encourage
and enable the operating level staff as also those at controlling offices
to exercise due care and caution to take preventive and detective measures.
This helps in increasing the efficiency and creating an environment of
security for the honest work force.
A careful distinction is made between the cases of gross negligence which
put your Bank`s funds into avoidable jeopardy and the cases where business
decisions have gone awry. Periodical monitoring of individual cases is
carried out to ensure that inquiries are quickly concluded and are
perceived as fair by all concerned. The endeavour is made towards ensuring
that penalties, where necessary, are timely and just.
Coordination is maintained with the zones/functional authorities of your
Bank to locate specific cases of irregularities in your Bank`s operations.
The complaints from the public/customers as also the cases of frauds and
other irregularities are investigated promptly and followed up for
corrective action, wherever necessary.
A study of fraud prone areas indicating loopholes/ obsolescence of the
systems and procedures in vogue, is undertaken on an on-going basis to
improve the controls and update operational procedures. On occurrence of
such instances, detailed examination of the associated systems and
procedures is carried out with the help of respective functional
departments with a view to eliminate or minimize factors and processes
likely to adversely affect your Bank`s interest.
We are pleased to note that with the awareness, alertness and diligence
exhibited by the operating staff, during the year April 2011 to March 2012,
45 fraudulent attempts by unscrupulous elements were thwarted that saved
your Bank from substantial financial loss.
Business Performance:
Given below are the details of your Bank`s major achievements on business
front during the year FY12.
Resource Mobilization and Asset Expansion:
The share of Bank`s Deposits in total resources stood at 86.04% as of 31st
March 2012. The Total Deposits grew from Rs 3,05,439.48 crore to
Rs.3,84,871.11 crore, reflecting a growth of 26.01% over the previous year.
Of this, Savings Bank Deposits - an important constituent of low cost
deposits - grew by 15.71% from Rs 64,454.04 crore to Rs 74,579.53 crore.
The share of low cost deposits (Current + Savings) in Total Deposits was at
26.90% and in Domestic Deposits at 33.18%.
Your Bank`s Total Advances expanded by 25.67% during FY12 led by 19.28%
expansion in Domestic Advances and 43.92% expansion in Overseas Advances.
Composition of Funds - Global:
Particulars End End Growth
March 2011 March 2012 (%)
(Rs crore) (Rs crore)
Deposits 3,05,439.48 3,84,871.11 26.01
- Domestic 2,33,323.30 2,80,135.26 20.06
- Overseas 72,116.18 1,04,735.85 45.23
Borrowings 22,307.85 23,573.05 5.67
Global Advances:
Particulars End End Growth
March 2011 March 2012 (%)
(Rs crore) (Rs crore)
Advances 2,28,676.36 2,87,377.29 25.67
- Domestic 1,69,407.86 2,02,075.39 19.28
- Overseas 59,268.50 85,301.90 43.92
Wholesale Banking:
A strong corporate credit culture and healthy growth in credit - moderately
above Banking industry average have been the consistent differentiators of
Bank of Baroda for the past four years.
In fact, your Bank`s Wholesale Banking Division offers a full range of loan
products and services such as Term Loans, Short-Term Loans, Demand Loans,
Working Capital Facilities, Trade Finance Products, Treasury Products,
Bridge Loans, Syndicated Loans, Infrastructure Loans, Cross Currency/
Interest Rate Swaps, Foreign Currency Loans, Loan Against Future Rent
Receivables and many more to its large and mid corporate clients depending
upon their needs. The product offerings are flexible and suitably
structured taking into account the customers` risk profiles and specific
needs.
Based on the superior product delivery, passionate service orientation,
timely and speedier sanctions with a customer-centric approach, your Bank
has made significant achievements in providing an array of Wholesale
Banking products and services to several multinationals, domestic business
houses and prime public sector companies.
The Department places major thrust on faster delivery through efficient
channels and adoption of better practices in credit administration. During
FY12, the efforts were also made to improve the speed of decision making
without compromising the quality of decision.
During FY12, the non-food credit growth, in general, remained low in the
Indian banking industry. However, even during this phase, your Bank`s
Wholesale Banking Division created 130 new relationships through its Fast
Track Desk. The department sanctioned fresh/increased credit facilities to
the tune of Rs 60,955 crore during the year to various sectors /industries
with projects /units spread across the country.
Under Wholesale Banking, the corporate customers are identified as large
and mid corporates. Those having annual sales turnover of between Rs 150
crore to Rs 500 crore are classified as mid-corporates, and those with
sales turnover over Rs 500 crore are classified as large corporates.
Sensing the need to focus and serve the potential mid corporate segment,
your Bank took an important initiative of opening specialized Mid Corporate
Branches in various potential locations throughout the country. These
branches are equipped with mix of experienced and professionally qualified
staff. Attaching high importance to the segment, your Bank arranged for
training in soft skills plus domain-expertise knowledge for its staff
identified for these specialized branches through an International
Management Consultancy firm.
Your Bank also opened one more specialized CFS (Corporate Financial
Services) Branch taking total number of CFS Branches to eleven.
Your Bank`s Wholesale Banking Department also has a full-fledged `Project
Finance Division` (PFD). The PFD is well equipped with professionals from
various disciplines and undertakes TEV (i.e. Technical Evaluation &
Viability) studies for clients of your Bank as well as that of other banks.
The Department is also equipped with Syndication Desk to syndicate domestic
funding requirement of the clients. The Department earns significant fee-
based income by carrying out TEV studies, vetting of projects and through
syndication deals.
Your Bank attaches higher degree of importance to the quality of appraisal
and efficient processing of credit proposals at all levels to maintain the
asset quality and realizes the importance of skilled and motivated
employees to achieve the same. Keeping this in view, your Bank continued
its thrust on regular grooming of Credit and Forex Officers. Your Bank also
continued to recruit specialized officers from campuses and lateral
recruitment of professionals cum experienced staff.
Retail Business:
As in the past, Retail Business continued to be one of the important
segments of overall business during FY12. Your Bank`s performance under its
Retail Banking Segment during the year under consideration is as under.
Growth under Retail Lending:
Your Bank`s Retail Loan Book consisted of five key products (namely Home
Loan, Auto Loan, Education Loan, Traders Loan and Mortgage Loan) which
together constituted 74.0% of total retail loans and other products namely
LABOD/ ODBOD that constituted 21.0% of total retail loans during FY12.
Besides, the products like Baroda Personal Loan and other miscellaneous
product viz. Doctors Loan, Loan against Government securities etc.
contributed around 5.0% to total retail loans.
Total Retail Loan outstanding as on 31st Mar, 2012 was Rs 35,668 crore as
against the level of Rs 32,435 crore as on 31st Mar, 2011. A growth of
Rs.3,233 crore (9.97%) was registered under total retail loans during FY12
as against a growth of 33.76% (Rs 8,187 crore) registered during FY11. The
growth in retail business of your Bank during FY12 was in line with the
overall segmental business trend witnessed by the Indian banking industry.
Growth under Five Key Retail Products:
Under five key products which constituted 74.0% of total retail loans, an
absolute growth of Rs 3,102 crore (13.43%) was registered during the year
FY12 as against a growth of Rs 4,095 crore (21.56%) during the previous
financial year.
Under Home Loans, an absolute growth of Rs 1,594 crore (12.71%) was
registered during the year FY12 as against a growth of Rs 2,227 crore
(21.59%) during the previous year.
Under Auto Loans, an absolute growth of Rs 384 crore (18.76%) was
registered in FY12 as against a growth of Rs 612 crore (42.58%) during
FY11.
Under Baroda Traders Loans, an absolute growth of Rs 876 crore (18.63%) was
registered in FY12 as against a growth of Rs 852 crore (22.15%) during
FY11.
Under Baroda Mortgage Loans, an absolute growth of only Rs 97 crore (4.68%)
was registered during FY12 as against a growth of Rs 176 crore (9.40%)
during FY11.
Under Education Loans, an absolute growth of Rs 150 crore (8.72%) was
registered during FY12 versus a growth of Rs 226 crore (15.11%) during
FY11.
Under LABOD /ODBOD, a growth of Rs 2,307 crore was registered. Under Baroda
Personal Loans, a negative growth of Rs 2,183 crore was posted over the
level of 31st Mar, 2011 due to repayment of Loan for Earnest Money Deposits
during the year FY12. The repayments of short term loans primarily led to
low growth under the total retail loans during the year under
consideration.
NPA under the Retail Loan:
The amount of Non Performing Assets as on 31st Mar, 2012 under Retail Loan
was Rs 682 crore (1.91%) versus the level of Rs. 662 crore (2.13%) as on
31st Dec, 2011 and Rs 649 crore (2.17%) as on 30th Sept, 2011. As on 31st
Mar, 2011, the NPA was at the level of Rs 580 crore(1.79%).
Savings Bank Deposits:
Your Bank`s overall Saving Deposits stood at a level of Rs 72,570 crore as
on 31.03.2012 registering a growth of Rs 9,611 crore (15.27%) over the
level of Rs 62,959 crore as on 31.03.11. During the last FY 2010-11, a
growth of Rs11,717 crore i.e. 22.87% was registered over the level of
31.03.2010.
Retail Term Deposits:
Retail Term Deposit of your Bank stood at the level of Rs 1,18,727 crore as
on 31st Mar, 2012 as against the level of Rs 95,325 crore as on 31st Mar,
2011 registering a growth of Rs 23,402 crore i.e. 24.55% versus the growth
of Rs 12,295 crore i.e. 14.80% registered during the last financial year.
Under Total Retail Deposits i.e. Retail Term Deposit plus Savings Deposits,
an absolute growth of Rs 33,013 crore i.e. 20.85% was posted during FY12 as
against the growth of Rs 24,012 crore i.e.17.88.% registered during FY11.
Initiatives in Retail Banking during FY12:
New Products Launched:
* BarodaFirst Wealth Pack, a combo of two products namely BarodaFirst
Savings Bank and BarodaFirst Regular Deposit jointly with two Insurance
Products namely ULIP & Term Insurance Plan was launched on 2nd Jan, 2012.
Until end-Mar, 2012, a total of 53,516 Packs were sold by your Bank.
* Baroda Samriddhi Quarterly Recurring Deposit & Baroda Samriddhi Half
yearly Recurring Deposit Schemes were launched on 6th March 2012 primarily
to facilitate Agriculturists, Self Employed & Professionals etc.
* Sales Operating Model was launched at 163 Baroda Navnirman Branches for
developing Sales & Service culture to generate Business Leads.
Product Modification:
* During FY12, a proposal was approved for increasing the maximum limit
under Baroda Home Loan to Resident Indians and NRIs/PIOs at all Metro and
Urban Centers from the existing Rs100 lakh to Rs.300 lakh.
* Prepayment charges for foreclosure of Home Loan Accounts were completely
waived with effect from 15th Dec, 2011.
Business Initiatives:
* Savings Bank Deposit Campaigns: For mobilizing low cost deposits, a
Savings Bank Deposit Campaign was launched on 1st Jun, 2011 for two months.
The period of this campaign was later extended upto 31st Aug, 2011
foreseeing the challenge of mobilizing savings bank deposits in a rising
interest rate scenario. To accelerate the pace of Savings Bank accretion,
Savings Bank campaign was reintroduced during 2nd Jan, 2012 to 31st Mar,
2012, besides the launch of a special incentive scheme i.e. "Evening with
CMD & Picnic with staff" for the award winning branches & regional offices.
* Retail Loan campaign: With a view to harness the potential of ongoing
festive season and to augment your Bank`s Retail Loan Book with a special
focus on Home Loans and Car Loans, a Retail Loan Festival Campaign was
launched during 26th Sept to 30th Nov, 2011. Going by the success of Retail
Loan Campaign, it was further extended till 31st Mar, 2012, with a
modification by increasing ROI concession from 0.25% to 0.50% in Auto
Loans. Both the SB Deposit Campaign and the Retail Loan Campaigns yielded
good results.
* Opening of New City Sales Offices: Nine City Sales Offices were opened at
Haldwani, Raebareilly, Faizabad, Raipur, Bhopal, Indore, Bengaluru,
Ghaziabad & Rajkot during FY12.
* Opening of New Retail Loan factories: Three new Retail Loan factories
were opened at Haldwani , Dehradun and Nasik during FY12.
* Delegation of Additional Discretionary Powers for Concessions: All Zonal
Heads of your Bank were delegated with powers for considering concession to
the extent of 100bps in the applicable interest rate on Baroda Trader Loan
for mobilizing fresh business & to augment Retail Loan Book during FY12.
* Providing Group Life Insurance Cover: The Facility of Group Credit Life
Insurance cover was approved for Auto Loans and Personal Loan Borrowers, in
addition to facility presently available for Home Loans & Education Loans.
During FY12, a total of 18 death claims were settled by the insurers.
* Strategies adopted for Prevention of Frauds: A system of verification of
various steps undertaken by the branches for fraud prevention under Retail
Loans through a checklist was also introduced.
* Under the Home Loan Suraksha Beema Scheme (A Tie-up Arrangement with
National Insurance Co. Ltd) a total of ten Accidental Death Insurance
claims were settled by the insurer during the year under consideration.
Wealth Management Services:
As a part of its customer centric measures, your Bank has been providing
Wealth Management Services for its HNI & affluent customers since June
2004. At present, your Bank provides various 3rd party products in Life
Insurance, Non Life Insurance including Health Insurance, Mutual Funds &
Equity Trading under tie-up arrangements with different partners. Moving
ahead further in the segment, your Bank also formed two joint ventures with
leading international brands in Mutual Fund and Life Insurance.
The Baroda Pioneer Asset Management Co. Ltd., your Bank`s joint venture in
mutual fund in association with Pioneer Investments of Italy and the
IndiaFirst Life Insurance Co., a joint venture in life insurance with
Andhra Bankand L&G of U.K. have successfully positioned themselves in the
Indian marketplace with consistently improving performance since their
inception.
The year FY12 was destabilizing for Indian equities with wild fluctuations
impacting the overall sentiment of investors. In these testing times, your
Bank changed its strategies by focusing on mutual fund investments through
a SIP route to safeguard the customers from the unpredicted movement in the
market. The strategies were successful with a large number of customers
yielding benefits and your Bank`s business performance in the format being
intact while nurturing a disciplined saving/ investing habit amongst its
customers. During the last two years, your Bank has been endeavoring to
widen the scope of ASBA (application supported by Blocked Amount) facility
by extending it to a number of designated branches and enabling an on-line
ASBA Facility for its net banking customers. During FY12, your Bank
introduced Syndicate ASBA Facility for those customers who wish to make
IPO/FPO/NFO application through other intermediaries such as brokers.
It is heartening to note that the initiatives of your Bank under its Wealth
Management segment have been encouragingly contributing to its overall non-
interest income.
MSME Business:
The Micro, Small and Medium Enterprises (MSME) segment is a vital component
of Indian economy. This sector accounts for around 40.0% of the nation`s
total industrial production, 34.0% of industrial exports, 95.0% of
industrial units and 35.0% of total employment in manufacturing and
services sectors. The contribution of Services Sector within the SME
segment is quite significant; especially the IT enabled services,
hospitality services, tourism, couriering, transportation, etc.
To give a focused attention to emerging SMEs in India, your Bank has been
considering other commercial units with a turnover up to Rs 150 crore at
par with the SMEs. To promote the growth of SME Sector, your Bank has
launched a special and novel delivery model, viz. SME Loan Factory, which
at present, is operational in 46 centres of your Bank and well accepted in
the market place. The SME Loan Factory is an innovative model for
streamlining processes and for timely sanctions of SME loan proposals. The
model comprises of the Central Processing Cell for speedy appraisal and
sanctioning of proposals within the stipulated deadline and a sales team to
follow up on leads generated by branches. Given its success, your Bank has
plans to open more such loan factories in the ensuing year. Your Bank has
SME Loan Factories at all major business centres across the country, viz.
Agra, Ahmedabad, Allahabad, Bangalore, Bareilly, Baroda, Bhilwara,
Bhubhaneshwar, Bulsar, Bharuch, Chandigarh, Chennai, Coimbatore, Dehradun,
two Factories in Delhi, Ernakulam,Gandhidham,Gorakhpur Hyderabad,
Haldwani,Indore, Jaipur, Jamshedpur, Jamnagar, Jodhpur, Kanpur, Kolhapur,
Kolkata, Lucknow, Ludhiana, 3 Factories in Mumbai, Meerut, Mehsana, Nagpur,
Nashik, Pune,Patna, Rajkot, Raipur, Surat, Shahajahanpur, Varanasi and
Vishakhapatnam. These SME Loan Factories sanctioned loans aggregating
Rs.18,619 crore during FY12 as against Rs 14,530 crore in the previous
year.
Growth of Business:
The total outstanding in MSME Sector works out to Rs 34,512 crore as on
31st March 2012. The growth in lending to MSME Sector during the last three
years is given in the table below.
Year Growth (%, YoY)
2009-10 43.98%
2010-11 29.63%
2011-12 26.11%
The percentage growth of MSME credit during FY10 was relatively high as the
advances up to Rs 20 lakh to Retail Trade were classified for the first
time under the "Micro & Small Enterprises Sector" during this year in line
with the RBI`s revised guidelines issued during September, 2009. The growth
rate was normalized during the year FY11.
Major Achievements in FY12:
The Bank took the following initiatives in its SME business segment during
the year under review.
* The SME advances of Rs 34,512 crore as of end-Mar 2012 reflected a growth
of Rs 7,147 crore (26.11%) over the SME advances of Rs 27,365 crore in the
previous year.
* The advances of Rs15,455 crore to Micro Enterprises in total credit of
Rs.28,047 crore to MSE sector stood at 55.10% in FY12 comfortably reaching
the mandatory target fixed by the RBI.
* The SME advances as on 31st Mar, 2012 contributed 16.8% to the gross
domestic advances of your Bank.
* The advances to Micro & Small enterprises reached the level of Rs 28,047
crore as against the government set mandatory target of Rs 27,000 crore by
end-Mar, 2012.
* In FY12, your Bank opened ten New SME Loan Factories and eight New SME
Specialized Branches.
* Your Bank introduced a New Product named as "Baroda Channel Financing" on
pilot basis during FY12 to further promote its MSME business.
* Your Bank also introduced "Baroda Entrepreneur Awards" for Micro & Small
Enterprises.
Initiatives in MSME Financing During FY12:
1. Your Bank introduced five new customer-centric area-specific products to
suit the local cluster needs during FY12 while renewing the existing ten
customer-centric area specific products.
2. Your Bank sponsored a Workshop on "Management Skills to source financing
and Management of Technology by SMEs" for entrepreneurs arranged by AIMA at
Hyedrabad, Ahemedabad, Jaipur.
3. Your Bank introduced "Protrack"{an e-tracking system for SME credit
proposals} with a view to have a firm control over turnaround time.
4. Your Bank celebrated SME Festival from 1st January 2012 to 31st March,
2012 in order to give boost to SME advances. Some concessions in rate of
interest and service charges were also announced for loans sanctioned
during the festival period.
5. Your Bank participated in the Workshops arranged by the CGTMSE on Bank
Credit to Micro & Small Enterprises and the Role of Credit Guarantee.
6. Your Bank focused on collateral free credit under the CGTMSE scheme
through special campaign.
7. To achieve total customer relationship through enhanced cross selling,
several meetings at different locations were conducted and various trade
bodies were involved at the national and the state level.
8. Your Bank undertook continuous knowledge updating and skill building of
processing/ marketing officers attached to its SME factories through
external training and special courses at the training centers and staff
college.
9. Your Bank introduced monthly performance ranking to share performance of
SME Loan Factories amongst all and to recognize/ felicitate/ award the best
performing SME Loan Factory on Half yearly/annual basis.
10. The MOU was entered by your Bank with the NSIC for sourcing
applications of MSME borrowers from it.
11. Your Bank released a booklet called Practical Guide to help
entrepreneurs by giving them information on Your Bank`s SME products and
also on the CGTMSE scheme.
12. Your Bank also signed a MOU with four credit rating agencies for rating
of the SME accounts.
Rural and Agricultural Lending:
As you all are aware, your Bank has always been a frontrunner in the area
of Priority Sector and Agriculture lending. It has been harnessing the vast
potential of the rural market through its wide network of 1,270 rural
branches and 1,045 semi-urban branches.
Even during FY12, your Banks opened 314 new branches in rural and semi-
urban areas.
Your Bank is the proud Convener of State Level Banker`s Committee (SLBC)in
the states of Uttar Pradesh and Rajasthan. Your Bank shoulders the Lead
Bank Responsibility in 45 districts in the states of Gujarat (12),Rajasthan
(12), Uttar Pradesh (15), Uttaranchal (2), Madhya Pradesh (2) and Bihar
(2).
Your Bank has also sponsored five Regional Rural Banks (RRBs) in various
states with a network of 1,300 branches and total business of Rs 21,700
crore as of end-March, 2012.
Performance of Priority Sector Lending in FY12:
Priority Sector Advances of your Bank surged from Rs 57,364 crore as at the
end-March 2011 to Rs 68,527 crore as at the end-March 2012 and formed
43.37% of the Adjusted Net Bank Credit (ANBC) against the mandated target
of 40.00%.
Agriculture Advances: The Direct Agriculture advances of your Bank rose to
Rs 21,423 crore with a rise of 24.86% over the previous year with an
absolute growth of Rs 4,266 crore during the year. The total agriculture
advances of your Bank recorded a growth of 18.38% over the previous year
and rose to Rs 29,036 crore as at end-March 2012. Your Bank`s Direct
Agricultural advances formed 13.56% of ANBC as at end-March 2012 against
the mandated target of 13.50%. Even the Total Agricultural Advances were at
18.06% of ANBC against the mandated target of 18.00%.
Under its flagship agriculture loan product "Baroda Kisan Credit Card",
your Bank issued as many as 3,09,685 Credit Cards during FY12 to provide
credit to farmers.Your Bank financed as many as 3,73,283 new farmers during
FY12. As a part of its microfinance initiatives, your Bank credit linked
19,455 Self Help Groups with an amount of Rs 214 crore during FY12 thereby
taking the total number of SHGs credit linked to 1,54,397 amounting to
Rs.1,171 crore.
Business and Social Initiatives:
Your Bank introduced various initiatives/strategies during FY12 to harness
the emerging opportunities for rural and agriculture lending. Some of them
are mentioned below.
1. To augment the Agriculture advances, your Bank conducted special
campaigns viz. Kharif and Rabi campaign for crop loans under which the
disbursements of Rs 3,676 crore and Rs 2,013 crore were made respectively.
Another Campaign for Investment Credit was also launched under which
disbursements of Rs 1,178 crore were made.
2. Your Bank organized 5,944 Village Level Credit Camps and disbursed
Rs.3,338 crore to 2,84,062 borrowers during FY12.
3. Your Bank identified 450 Thrust Branches across India to enhance
Agriculture lending which constituted 33% of total Agriculture lending as
at end-March 2012.
4. Your Bank formulated various area-specific schemes tailor made to the
needs of local requirements, particularly where there is a concentration of
industries like Rice Mills, Cold storages, cotton ginning units, Poultry
units, etc. Suitable concessions in rate of interest, charges, etc. were
allowed under these schemes to garner maximum possible business. As many as
22 area specific schemes were formulated to increase your Bank`s
agricultural lending.
Baroda Grameen Paramarsh Kendra (BGPK) is another initiative undertaken by
your Bank to help the rural community by providing credit counseling,
financial literacy and other services like information on the prices of
agricultural produces,scientific farming, etc. Your Bank had 52 BGPKs as on
31st March, 2012.
About ten more Baroda Swarojgar Vikas Sansthan (BSVS),Baroda R-SETI Centers
were opened during FY12. With this, the total number of BSVS has gone up to
46. Thus, each of your Bank`s Lead Districts now has a R-SETI as per the
GOI guidelines. Ajmer BSVS centre is exclusively for women entrepreneurs.
The BSVS are primarily the institutes for training the youth and imparting
knowledge and skills required for taking up self-employment ventures.
During FY12, 42,786 youth beneficiaries were trained out of which 25,791
have established self-employment ventures. Out of the total 1,22,228
beneficiaries trained by these centers so far, 75,050 have established
their self employment ventures.
Financial Literacy and Credit Counseling Centres (FLCC)-"SARATHEE":
Based on the guidelines issued by the RBI, your Bank has established 39
FLCCs, christened as "SARATHEE" to impart financial literacy and credit
counseling services to the needy to help them avail financial services from
Banking system and also to provide counseling services to those who are
under financial distress due to debt burden.
Your Bank has opened these centers under its BSVS trust and counseling
services are provided to the concerned free of cost.
Your Bank has opened 21 new FLCCs during FY 12, taking the total number of
FLCCs to 39 by end-Mar, 2012.Your Bank will be opening FLCCs in each of its
lead district in due course.
Business Facilitators Model:
This model has been implemented across the country to accelerate Financial
Inclusion of the excluded segment as well as to augment agriculture
portfolio. Business Facilitators will mainly canvass loan applications for
your Bank for which Bank will pay them compensation. Individuals including
retired Bank and Government staff, NGOs, Farmers clubs and SHGs are engaged
as agents to greatly improve your Bank`s outreach in the rural/semi-urban
areas.
Micro Loan Factory:
Your Bank has a opened Micro Loan Factoryat Rae Bareilly and Sultanpur in
U.P. The Micro Finance Loan Factory has a mobile van with facilities and
all related stationeries/ documents on SHG financing. It is manned by
officers who are duly authorized to sanction and disburse loans upto
Rs.25,000 to SHGs on the spot and at their door steps.
Performance of RRBs Sponsored by the Bank:
Your Bank has sponsored five RRBs as under.
* Baroda Uttar Pradesh Gramin Bank, Head Office: Raebareli.
* Baroda Rajasthan Gramin Bank, Head Office: Ajmer.
* Baroda Gujarat Gramin Bank, Head Office: Bharuch.
* Nainital-Almora Kshetriya Gramin Bank, Head Office: Haldwani.
* Jhabua-Dhar Kshetriya Gramin Bank, Head Office: Jhabua.
The aggregate business of these five RRBs rose to Rs 21,693 crore as of
March, 2012 from Rs 18,803 crore as at end-March, 2011, registering a
growth of 15.37%.
The five RRBs together posted a Net Profit of Rs 120 crore during FY12 as
against Rs 117 crore earned during FY11.
The "Net Worth" and the "Reserves and Surplus" of all these RRBs put
together improved from Rs 730 crore at end-March, 2011 to Rs 883 crore at
end-March, 2012 and from Rs 453 crore at end-March, 2011 to Rs 566 crore at
end-March, 2012, respectively.
Bank`s Efforts towards Financial Inclusion (FI):
Targeted villages and models adopted:
* As per the original communication received from RBI in January 2010, your
Bank prepared a Financial Inclusion (FI) plan to cover 20,000 villages
under Financial Inclusion within a span of three years commencing from
2010-11 to 2013-14.
* However, the Finance Minister in his speech on Union Budget for FY11 gave
emphasis on the coverage of villages having population of more than 2,000
under FI by March 2012.
* Accordingly, 2,864 villages having population of more than 2,000 were
allocated to your Bank through SLBCs for provision of basic banking
services by March 2012.
* Out of the above, 1,200 villages were targeted to be covered in FY11 and
the rest in FY12.
* Your Bank has adopted ICT based Business Correspondent (BC) model and
Mobile Banking van model for coverage of the allotted villages. Wherever
feasible, new branches are also being opened.
Service Providers:
* Your Bank has selected M/s TCS and M/s HCL Info systems as the service
providers for end to end solution under the BC model. The service area has
been allocated to these service providers.
* Out of 2,864 villages allocated to your Bank by SLBCs, 1,979 villages are
allotted to M/s TCS and 885 villages to M/s HCL.
Technology and Data Security:
* The FI data and transactions are integrated to your Bank`s CBS (Core
Banking Solution) through an FI server/ Gateway of the service provider.
The FI server is kept in the Data Centre of your Bank for which the vendor
will have only limited access to the application software for the purpose
of maintenance. The data will be under the control of your Bank. Hence the
data security is well taken care of.
* Smart cards are issued to the customers after uploading the accounts in
CBS and KYC verification by the link branches.
Business Correspondents (BC):
* The service provider has appointed corporate BCs at the state/zonal
level. The field level business agents are selected in consultation with
your Bank`s link branches following the BC selection policy approved by the
Board.
* The technical training to BCs is provided by the service provider as and
when BCs are appointed. Your Bank`s R-SETI, Training Centres and Baroda
Grameen Paramarsh Kendras (BGPK) have been providing training on banking
products and customer service. The BCs are also encouraged to take up the
BC certificate program of IIBF {Indian Institute of Banking & Finance,
Mumbai} through accredited training establishments. All your Bank`s BSVS
centres are accredited by IIBF for this purpose.
Training of Your Bank Staff in Financial Inclusion:
* Training to about 1,079 Branch Managers involved in FI activity was
completed by Your Bank`s training centres during FY12.
* Your Bank has tied-up with National Institute of Rural Development
(NIRD), Hyderbad for designing and conducting special training program for
its officers on FI.
* Your Bank has also introduced e-learning module on FI on your Bank`s
intranet portal for educating the staff.
Monitoring the Implementation under Financial Inclusion:
* Your Bank has a clear structure for implementation and monitoring of
Financial Inclusion.
* In order to have an effective supervision of the BCs, retired bank
officials are appointed as BC supervisors for every 10-15 BC agents.
* Your Bank`s Chairman & Managing Director (CMD), Executive Directors (EDs)
and General Managers (GMs) at the Corporate Office are visiting villages in
different states.
* Besides, all the regional heads and zonal heads are also visiting the
villages in their respective regions/ zones and monitoring the activities
regularly.
* Your Bank`s Board reviews the implementation of Financial Inclusion in
your Bank every month on various parameters suggested by the Ministry of
Finance, Government of India.
Publicity:
* Specially designed banners/posters/leaflets are being used by your Bank`s
Zones/Regions/Branches at various stages of FI.
* Leaflets/posters have been prepared in regional languages and distributed
in the villages.
* Usage of publicity material has helped to keep the people updated with
the FI concept and also to remain informed about the FI enrollment dates,
venue etc.
* Your Bank`s Swabhiman logo is being used in village sign boards, BC ID
cards, T- shirts, Caps etc.
Financial Literacy Efforts:
* Your Bank has opened 39 Financial Literacy and counseling Centres (FLCC)
out of 45 lead districts of the Bank.
* Your Bank has also established 46 R-SETIs (Baroda Swarojgar Vikas
Sansthan) of which 42 are in its lead districts which will also facilitate
financial literacy efforts.
* Village level meetings are organized by your Bank in all the identified
villages to create awareness on the banking products and services.
* Camps are also organized in the villages at the time of enrollment.
Mobile Banking Vans:
* Your Bank has introduced Mobile Banking vans for increasing the pace of
Financial Inclusion.
* These vans will have connectivity to CBS through CDMA technology and they
visit the villages on specified dates and time. The services are provided
by your Bank`s own staff traveling in the van.
* Five such Vans have been made operational and they cover around 41
villages. (One in Gujarat, two in UP,one in Bihar and one in Goa.)
Performance:
* Your Bank has completed coverage of 100% villages allotted under
financial inclusion well before the dead line of end-Mar, 2012. More than
7.61 lakh FI accounts have been opened in these villages as against the
target of 7.10 lakh.
Ultra Small Branches (USBs):
The technology based BC model is an evolving concept and various issues
were encountered by your Bank in implementation of FI through this model.
The Ministry of Finance, Government of India as well as the RBI were
issuing various guidelines from time to time to make implementation of
financial inclusion more effective. In the strategy and guidelines on
financial inclusion issued by Ministry of Finance in Oct, 2011, there was a
suggestion to open brick and mortar branches in larger habitations with
population of 5,000 and above in the under-banked districts. However,
keeping the viability of brick and mortar branches in such villages, they
further issued guidelines on opening of thin structures called Ultra Small
Branches in all the villages allotted for financial inclusion.
USB Model Adopted by the Bank:
* A BC is appointed in a village and provided with POS machine/ hand held
terminal to provide banking services in the village through USB.
* The place for USB is identified preferably in Gram Panchayat or Common
Service Centre in village.
* The board is displayed inside each USB indicating various banking
services being provided by your Bank at USB. There is also a board giving
details of BC, his contact number, name/contact number of link branch,
fixed day/ time of visit by officer etc. for the convenience of villagers.
* The business correspondent is providing services like cash deposits,
payments up to certain limit, remittances, account balance enquiry, mini-
statement etc.
* A bank officer from the link branch visits the USB once in week at pre-
fixed time and day for financial inclusion activities in village, as
specified by the Ministry of Finance.
* Minimum furniture such as table, three to four chairs etc. have been
provided in an ultra small branch.
Initiatives Taken for Effectiveness of USBs:
* The village level publicity campaign has been conducted to create
awareness amongst the villagers, with the help of Gram Panchayats as well
as in some cases block development offices.
* The signboard along with swabhimaan logo is displayed at a prominent
place in the village indicating details of the BC and link branch along
with working hours.
* The BCs are provided with a brief profile of the villages including
population of village, number of households in village, number of KCCs/
GCCs issued in respective village and other details, so that they can
perform with better focus on village needs.
* All USBs are mapped for weekly visits by the officers of respective link
branch. We have also devised a proper reporting system for monitoring these
visits by the respective regional offices and corporate office.
* All the BCs are provided with the uniform T-Shirts, Caps and Identity
cards in all the villages.
* The uniform posters about the services available at USBs are provided to
all the zones and regions in local languages for displaying at the USBs.
* In order to overcome shortages and cater to the requirement of manpower
in officer cadre, we are starting capacity building programs to train other
cadres to perform the job role of officers in the same spirit as desired by
the MoF from visiting officer. The preference would be given to local staff
as far as possible so that they can converse in the local language and get
appropriately connected with villagers. This will also facilitate a
confidence building amongst the villagers about the FI initiatives of your
Bank/ Govt. of India. The pilot project of such capacity building
initiative would be started in Gujarat and rolled out in other states upon
success of said pilot project.
Advances to SC/ST Communities during FY12:
The outstanding advances granted by your Bank to SC/ST communities have
been growing year after year. This is evident from the fact that the
outstanding advances granted to these beneficiaries went up from Rs 3,760
crore as at end-March, 2011 to Rs 4,336.02 crore as at end-March, 2012. In
fact, the SC/ST communities accounted for a share of 27.0% in the total
advances granted to weaker sections by the Bank during the year under
review. Furthermore, a special thrust is laid by your Bank in financing
SC/ST under various government sponsored schemes namely Swaranjayanti Gram
Swarojgar Yojana (SGSY),Swarna Jayanti Shahari Rojgar Yojana (SJSRY), Prime
Minister Employment Generation Program (PMEGP), etc. Baroda Swarojgar Vikas
Sansthans (BSVS) have been giving due preference to SC/ST communities while
selecting the trainees. It is heartening to indicate that so far, these
centres have trained 55,761 youths under the SC/ST category.
International Business:
The global economy has not fully come out of the turmoil witnessed
following the global financial crisis in 2008 in spite of the prompt
measures taken by several countries around the world. Even in such
challenging scenario, the International Operations of your Bank could
achieve excellent results during FY12 and again proved the Bank`s
resilience to global shocks.
In order to achieve the stated goals, it was necessary to continuously
understand the economic and banking environment in which your Bank
operates, take lessons and make suitable changes in the business approach
and actions. Your Bank kept a continuous watch on the trends emerging in
the economic/financial sectors of the countries of its operation by
factoring in the impact of global events.
Your Bank is in an advantageous position having large network of overseas
branches and strong customer base built over the years. Your Bank has taken
various technological and other initiatives at its overseas centres to
garner a larger share of the business.
The excellent performance was possible during FY12 due to the Bank`s
focused attention and persistent efforts to stretch and improve upon its
own capabilities and the support that it received from all its
stakeholders.
The International Operations of your Bank are keeping pace with the fast
changing environment to become increasingly more competitive in global
terms and aiming for higher growth with profitability.
The Branch Expansion plan was continued during the year to take advantage
of the business opportunities. During the year FY12, five new
branches/offices were opened, including four branches of the subsidiaries.
Your Bank primarily concentrated on expanding the network in countries
where it is already present to tap the opportunities offered by the
upcoming centres and enhance the market share in the country of operation.
Business and Profit Performance:
During FY12, the total business (Deposits + Advances) of your Bank`s
overseas branches registered a growth of 44.64%. The Customer Deposits
increased by 40.41%, Total Deposits by 45.23 % and Advances by 43.92%. The
growth numbers look slightly aggressive because of the depreciation of
rupee to the tune of 14.11% between end-March, 2011 and end-March, 2012.
During FY12, the International Operations contributed a sizable 28.27% to
the Bank`s global business in line with its business aspirations.
Total Assets:
Total Assets of your Bank`s International Operations increased from
Rs.91,273 crore as of March 2011 to Rs 1,28,398 crore as on March 2012
registering a growth of 40.67% during the year.
Profit:
The Gross Profit for the year FY12 registered a healthy growth of 48.51%
over the level of previous year. The Net Profit too recorded commensurate
growth of 45.19% during the year. Your Bank was able to improve the spreads
and also show good increase in Other Income.
Contribution of international operations to your Bank`s global Net Profit
is 23.35%.
Asset Quality:
In the current scenario of economic downturn and uncertainties, there was a
stringent monitoring of assets by the Bank`s Top Management to safeguard
your Bank`s interest. Your Bank has put in place an efficient loan
processing, credit audit and credit monitoring mechanism.
Borrowal accounts experiencing liquidity mismatch/crunch due to
recessionary trends prevailing in the global economy/delay in projects for
reasons beyond their control were restructured during the year FY12 based
on their future cash flows and keeping the RBI guidelines in the matter in
focus. These accounts as well as the accounts restructured in previous
years were monitored regularly to maintain the asset quality and avoid any
slip back.
Gross Advances during the year increased by 43.73% over the level of
Mar`11, which means your Bank could maintain the healthy growth trend even
during the challenging times. There were a few slippages and the Gross NPAs
of your Bank as percentage to Total Advances marginally increased from
0.62% as of Mar`11 to 0.68% as on Mar`12.
International Presence:
Your Bank`s international presence covered 24 countries through its 89
offices during FY12 as under.
Bank`s Overseas Branches/Offices 55
Bank`s Representative Offices 2
Branches of Bank`s Overseas Subsidiaries 32
Total 89
In addition to the above, your Bank`s associate in Zambia has 14 branches.
Overseas Expansion:
During the year FY12,your Bank opened five new branches/ offices (including
that of the subsidiaries). An Electronic Banking Service Unit (EBSU) was
opened at Hamriya Free Zone, Sharjah (UAE) and four branches of the
subsidiaries were opened at Ovino Market (Uganda), Kakamega (Kenya), Nyali
(Kenya) and Mon Repos (Guyana). The Representative Office in Malaysia was
closed during the year as the Joint Venture Bank, namely, `India
International Bank (Malaysia) Bhd.` is expected to commence operations
during the year FY13.
Future Plans in Overseas Business:
Your Bank has initiated steps for further expanding its overseas network to
tap the opportunities for canvassing business and enhancing the
profitability. Necessary infrastructure is being created for further
expanding the network in UAE, Oman, Mauritius, Uganda, New Zealand,
Tanzania, Botswana and Ghana.
Your Bank has received `In Principle` approval for upgradation of its
Representative Office in Australia to a branch. An approval of RBI is
awaited for opening of two additional branches in U.K. New centres are
being identified in countries where your Bank is already present and also
in new territories for further expanding the branch network.
Syndication Centre:
Your Bank has Global Syndication Centres at London and Dubai which focus on
the business of Syndication Loans in International Market. The Offshore
Banking Unit in Singapore has been further strengthened to play a more
active role in canvassing the business. The International Merchant Banking
Cell (IMBC) set up at the Bank`s Corporate Office, Mumbai plays a
supportive role to the Regional Syndication Centres and also canvasses
substantial business as there was increased demand from Indian Corporates
for Foreign Currency resources.
The Bank`s IMBC also actively participates in loan origination.]
Products and Services:
Your Bank has taken several steps to leverage the technology for
introduction of products and services to meet the requirements of customers
in the area of operation.
Your Bank`s products and services are compatible with those offered by
multi-national banks and local banks. These are being popularized through
marketing campaigns in electronic and print media.
Technology:
* The number of ATMs at overseas territories and subsidiaries increased to
76 (45 onsite and 31 offsite) as on 31st March, 2012 from 68 (42 onsite and
26 offsite) as on 31st March, 2011.
* The Global Treasury Solution is implemented by your Bank at UK, UAE,
Bahamas, Bahrain, Hong Kong, Singapore and Belgium.
* The Centralized SWIFT activity is operating from the Data Centre of your
Bank.
* All Territories/Subsidiaries except UK and USA are routing their Swift
operations through SWIFT Cell, Data Centre.
* The Payment Messaging System implemented is a middleware between Core
Banking Solution (Finacle) and SWIFT, which help in "Straight Through
Processing of Incoming and Outgoing SWIFT Messages" with Anti Money
Laundering check. It is implemented in all Territories/ Subsidiaries,
except in UK and USA.
* The Anti Money laundering Erase (Batch mode) is implemented in all the
overseas centres of your Bank except in Belgium and USA.
* An "Anti Money Laundering On-line List Matching Solution" is also
implemented in all the overseas centres with the exception of USA.
E-Banking in Overseas Operations:
Your Bank is gradually implementing and popularizing the e-banking services
at its overseas centres.
Transaction based e-banking has been implemented in UAE, UK, Mauritius,
Fiji, Seychelles, Uganda, Kenya, Botswana and New Zealand. It is in the
process of being implemented in Oman and Tanzania. (At present, a view
based e-banking is available at both these centres).
In T&T, Guyana and South Africa, it will be introduced in the next phase
which will start shortly.
The transaction based e-banking is being implemented gradually at the
Overseas Centres looking to their retail base and the cost effectiveness.
Risk Management in Overseas Operations:
Your Bank implemented Basel II guidelines at all its overseas territories
with effect from 31st March 2008 and has already adopted Standardized
Approach for Credit Risk, Standardized Duration Method for Market Risk and
Basic Indicator Approach for Operational Risk.
The Risk Management Systems and their implementation are being continuously
strengthened. A separate Risk Management Department has been set up at all
centres to effectively deal with the credit, market and operational risk.
Risk Managers are posted at all the overseas territories and subsidiaries
of your Bank.
During the year under review, BOB RAM Model was implemented at all the
overseas centres for capturing vital information related to advances
accounts and their pricing.
An ASCROM Model for Asset Classification and Credit Monitoring is also in
the advanced stage for implementation at your Bank`s overseas centres.
Regulatory Compliance:
Your Bank is well known for its regulatory compliance and has always
followed home country regulations rigorously.
Your Bank has a dedicated compliance team at major overseas centres for
ensuring regulatory compliance across all the businesses and operations.
They are responsible for identification and assessment and compliance
related matters from a regulatory compliance perspective and monitoring and
reporting.
All the overseas centres have prudential policies in place as per the local
regulatory requirements. The territories/subsidiaries ensure that these are
periodically reviewed in line with the type of business undertaken,
changing scenario and taking into account modifications if any in the
regulatory guidelines.
Treasury Operations:
Your Bank operates a State of the Art Dealing Room at Baroda Sun Tower at
its Corporate Office in Mumbai. Through this dealing room your Bank is well
positioned to scale up its Treasury Operations. The Treasury handles your
Bank`s domestic treasury operations and covers activities in various
markets i.e. Foreign Exchange, Interest Rates, Fixed Income, Derivatives,
Equity and other alternative asset classes. The advanced technology
platforms are used by your Bank to offer a basket of financial products to
its clients including Interest rate swaps, currency swaps, forwards and
options.
Your Bank has also put in place a sophisticated Automated Dealing system to
offer auto generated real time foreign exchange rates to the clients of its
authorized branches spread across the country. As a customer friendly
initiative, during the year FY12, enhancements were made in the "Global
Treasury Solution" facilitating instant flow of information about credits
received by your Bank in favor of its customers through its foreign
correspondents.
Under the Business Process Re-engineering, your Bank has successfully
implemented Global Treasury solution across major financial centres. The
Global Treasury Platform is running smoothly in Mumbai, London, Bahamas,
Brussels, Dubai, Bahrain, Singapore, Hongkong and New York.
During the year FY12, managing growth and price stability emerged as the
key challenges against the backdrop of a slowing economy weighed down by
the impact of tight monetary policy and slower economic growth. The advance
estimates of Indian economy suggest a growth of approximately 6.9% in FY12,
after having grown at the rate of 8.4% in each of the two preceding years.
This indicates a slowdown compared not just to the previous two years but
2003 to 2011 (except FY09 a year of global financial crisis). During FY12,
the RBI hiked interest rates by 125 bps taking repo rate to 8.50% before
signaling a pause in Dec, 2011. To infuse liquidity into the system, the
RBI reduced CRR [Cash Reserve Ratio] by a cumulative 125 bps in the last
quarter of FY12 and conducted open market operations to the extent of
Rs.1,29,252 crore.
Your Bank`s Treasury offers customized solutions using available products
viz IRS, CIRS, Forwards and Options to meet the Interest rate and Foreign
Exchange risk mitigation requirements of the corporate clients. During
FY12, your Bank`s Treasury Division was active in taking benefit of the
arbitrage opportunities available between various Treasury market asset
classes including Money Market CBLO, Call, Market Repo, Government
Securities and Forex markets. The Treasury actively utilized the market
movements and used Overnight Indexed swaps, INBMK swaps for harnessing
available hedging and trading opportunities.
Tight monetary policy coupled with a higher than announced borrowing
program resulted in the benchmark 10 year Government security touching a
high level of 9.0% in Nov, 2011. Against this backdrop, the Treasury
focused on maintaining appropriate duration of portfolio, keeping minimal
adverse impact on valuation and maintaining a good average yield on
investment portfolio. The average yield on Domestic SLR investments was
7.87%. During FY12, the Treasury earned Rs 6,032 crore as Interest/Discount
earnings, while the Profit on Sale of Investment and Exchange Earnings were
Rs 622 and 412 crore, respectively.
The Indian Equity markets were subdued for most part of FY12. This was due
to the cumulative impact of weaker recovery of the US economy, European
sovereign debt crisis and muted FII inflows into the emerging markets
including India. The FII inflows picked up during the last quarter
resulting in the market moving to higher levels. The Equity Desk of the
Treasury actively churned its portfolio and booked profits at regular
intervals whenever an opportunity emerged in the markets.
The unfolding of the euro zone crisis and uncertainty surrounding the
global economy have impacted the Indian economy causing drop in growth,
higher current account deficit (CAD) and declining capital inflows. As in
2008, the transmission of the crisis has been mainly through the Balance-
of-payments (BoP) channel. Export growth too decelerated in the third
quarter of FY12, while imports remained high, primarily because of very
high international oil prices. At the same time, foreign institutional
investment flows declined, straining the capital account and the rupee
exchange rate that touched an all-time low of Rs 54.23 per US dollar on 15
December 2011 during intra-day trading.
The Foreign exchange desk of the Treasury retained its position as one of
the premier market players in the Forex desks of the Public Sector Banks.
The Proprietary trading desk was active in cashing in of available
arbitrages, using volatility in the markets and mobilized resources in a
tight liquidity position impacting the Indian markets. The turnover of the
Foreign Exchange desk of your Bank`s Treasury increased by nearly 14.0% on
y-o-y basis during FY12.
Your Bank`s Treasury Mid-Office monitors market exposures and limits fixed
by the Board of Directors, on a real time basis. The Risk Management
parameters, including Value-at-risk (VaR) are used to measure Market Risk
on all portfolios. These measures are backed up by the Back Testing on risk
numbers and Stress Testing of various investment and currency portfolios.
Corporate Social Responsibility (CSR):
As a responsible corporate citizen, it has been the vision of your Bank to
empower the community through socio-economic development of underprivileged
and weaker sections. In its continued efforts to make a difference to the
society at large, your Bank intensified its efforts further in this
direction in FY12.
Your Bank has established Baroda Swarozgar Vikas Sansthan (Baroda R-SETI)
for imparting training to unemployed youth, free of cost for gainful self
employment and entrepreneurship skill development which help them improve
their family economic status and also gives a boost to various regional
economies within these locations. All the Lead Districts of your Bank have
R-SETI each. About 46 such Sansthans have been established by your Bank in
which more than 1,22,000 youth have been trained and around 75,000 have
been gainfully self employed.
Your Bank has established 52 Baroda Gramin Paramarsh Kendra for knowledge
sharing, problem solving and credit counseling for rural masses across the
country. In order to spread awareness among the rural mass on various
financial and banking services and to speed up the process of financial
inclusion, your Bank has also established 21 Financial Literacy and Credit
counseling Centres (FLCC)during FY12 making the total number of FLCCs to
39.
Asset Quality Management:
The year FY12 has been a challenging year for the banking industry to
maintain the Asset Quality due to a fragile economic environment. However,
your Bank has continued its practice of rigorous monitoring and recovery of
the NPA portfolio besides preventive mechanism for restricting slippages at
the minimum level. Your Bank has continued its leadership position in the
NPA management area in the Indian banking sector.
Indian banks, in general, witnessed heavy incidence of slippages in FY12
due to volatile financial markets both within and outside India, higher
inflation and higher interest rate regime throughout the year FY12. In
spite of various depressed economic parameters impacting the Bank, fresh
slippages, during the year,were kept under control at 1.44% of the opening
Standard Advances of your Bank. Against the backdrop of high slippages, the
ratio of Gross NPA to Gross Advances was at 1.53% as on 31st Mar, 2012.
Consequently, the ratio of Net NPA to Net Advances marginally increased to
0.54% by end-Mar, 2012.
Your Bank continued to maintain the Loan Loss Provisioning ratio at higher
level than the mandated norms set by the RBI during FY11. Its Loan Loss
Provisioning ratio was higher at 80.05% as on 31st Mar, 2012 after taking
into account the Prudential/ Technically Written-off advances.
During the year under review, your Bank laid down a comprehensive structure
of recovery and credit monitoring function at the Branch, Region, Zone and
Corporate levels. Besides this, the Nodal officers at each DRT centre were
assigned the role of a follow-up of legal cases on day to day basis so as
to minimize the delay in obtaining decrees and execution thereof in order
to expedite and maximize recoveries. Additionally, Lok Adalats, Recovery
Camps and Village Chaupal Meets were regularly conducted by your Bank`s
branches to reduce long pending cases and expedite recoveries in small
accounts.
Your Bank continued its emphasis on follow-up mechanism to explore recovery
prospects of NPA accounts. The system of monitoring of large value NPA
accounts of say Rs 25 lakh and above directly from the corporate office has
ensured proactive action by branches, advocates, recovery agents, etc.
Therefore, the cash recovery in NPA accounts during FY12 was Rs 580 crore,
much higher than the cash recovery of Rs 455 crore during FY11. The
upgradation was substantially higher at Rs 336 crore during FY12 compared
to Rs 189 crore during FY11.
During the year FY12, your Bank laid specific focus on recovery of small
accounts by organizing Lok Adalats and Recovery Camps at village/town
level. Your Bank also launched an incentive- linked recovery scheme called
"Sankalp - IV" to enlist personalized attention of each and every staff
member in pursuing recovery efforts of small value accounts with an
outstanding up to Rs 15 lakh. The cash recovery made during the year FY12
under the scheme was very impressive at Rs 191 crore.
The asset classification wise breakup of advances portfolio of your Bank is
as under.
(Rs. crore)
Asset Category (Gross) 31st March 2012 31st March 2011
Standard 2,86,542.59 2,28,173.03
Gross NPA 4,464.75 3,152.50
Total 2,91,007.34 2,31,325.53
Gross NPA is comprising of:
Sub-standard 2,661.82 1,097.23
Doubtful 1,318.71 1,336.64
Loss 484.22 718.63
Total Gross NPA 4,464.75 3,152.50
Information Technology:
Your Bank has undertaken a total end-to-end business and IT strategy
project covering your Bank`s domestic, overseas and subsidiary operations.
* Your Bank has built the best of technology infrastructure by implementing
a state-of-the-art Data Centre conforming to Uptime Institute Tier-3
standard and also a Disaster Recovery Site in different seismic zone with
redundancy built in every single point of failure to ensure uninterrupted
banking service delivery to customers. After successfully migrating Data
Centre to new Data Centre in the Bank`s own premises during previous
financial year, your Bank had undertaken Disaster Recovery Centre expansion
during the year to support its business growth and technology expansion.
* Your Bank has also undertaken various other technology initiatives like
windows server virtualization, desktop virtualisation and backup
consolidation as green initiatives and also to improve Data Centre
operational efficiency. Bank wide network was migrated to new technology
based on MPLS for improving uptime and on demand upgrade. Enterprise
Management System was upgraded and new modules deployed to effectively
manage and monitor Bank`s growing IT infrastructure.
* The Core Banking System was migrated to higher version with enhanced
features. Various new modules like Fixed Assets maintenance, sales tracker
module, centralized service tax, eBRC (Bank Realization Certificate)
module, account number portability, workflow automation for New Pension
Scheme - Swavalamban were implemented during the year.
* I n order to enhance security and confidence in Internet Banking, your
Bank introduced enhanced security features by deploying Fraud Management
Solution, including two factor authentications. Your Bank continued to add
more facilities under its Internet Banking channels. Internet Banking,
viz., Baroda Connect, now provides speedy and secured facility to transfer
funds to self, third party (within BOB) and inter-bank. Other facilities
available are online opening of Fixed Deposits, Railways Freight Payment,
on-line payment of Direct and Indirect Taxes and certain State Government
Taxes, utility bills, rail tickets, on-line shopping, donation to temples
and institutional fee payment. Corporates also have the facility of direct
salary uploads, trade finance. Various State Tax payments have been enabled
during the year. The SMS Alerts, RTGS/ NEFT transactions are also provided
in internet banking portal. ASBA (Application Supported by Blocked Amount)
functionality has been provided in Baroda Connect for On-line subscription
to Initial Public Offers and Follow-on Public Offers for applying for
Equity Shares. Transaction based Internet Banking has also been implemented
in Uganda, Botswana, New Zealand, UAE, Kenya, Mauritius, Seychelles, Fiji
and UK providing facilities such as fund transfer to self and third party,
bill payments, corporate salary upload and on-line shopping. View based
internet banking has been implemented overseas in Oman and Tanzania.
* Mobile Banking - BARODA M-CONNECT - one more alternate delivery channel
was added to provide various facilities to customers, viz., Balance
Enquiry, Mini Statement, Linking of Multiple Accounts, Fund Transfer,
Request to the Bank, Bill Payments, Ticket Booking,
Shopping, Feedback/ Complaints etc. The IMPS was also enabled through
Mobile Banking for interbank fund transfer.
* The ATM Switch was upgraded during the year to support increasing volume
of transactions and ATMs. The ATM switch is operational in India, UAE,
Oman, Mauritius, Fiji, Tanzania, Botswana, T&T and New Zealand. ATM switch
is integrated with seven interchanges viz. National Switch NFS(NPCI), Visa,
MasterCard, CBUAE (UAE), CBOMAN (Oman), Link (T&T), Paymark (New Zealand)
to provide convenience to customers by increasing delivery points through
ATMs covered under these switches. As a customer centric initiative, Bank
has implemented self-linked fund transfer, Institution fees payment, mobile
banking registration, mobile number updation, biometric authentication
enabled ATMs, tax payment, multiple accounts being linked to a single Debit
Card, Verified by VISA, CVV2, Visa Platinum, Maestro Debit Card, Biometric
Card, PIN change and mini statement through other Bank ATMs. Mobile ATMs
have been launched in Ahmedabad, Pune, Lucknow and New Delhi. Some value
added features like on-line cash deposit and cheque deposit, cheque book
request, statement request, envelope cash and cheque deposits services are
introduced in UAE.
* Internet Payment Gateway services for debit cards/credit cards are
increasingly offered to merchants and internet shopper as a safe and secure
channel for on-line purchases.
* The SMS Alerts delivery gateway was upgraded to extend the facility to
all customers of your Bank.
* During the year, customers are provided with one more service delivery
channels with the launch of Contact Centres in Lucknow and Baroda.
* The Retail Depository Services are made available to your Bank`s
customers. With a centralized depository application, branches are equipped
to provide depository services for both NSDL as well as CDSL. With On-line
Trading System, your Bank will be able to provide complete suite of on-line
services to the customers for trading in instruments like equities, mutual
funds, bonds and initial public offering (IPOs).
* Cash Management System is a full-function web enabled cash management
solution offered to your Bank`s customers, covering services like Receipt
Management (Collections), Payment Management and Invoice Management
(Receivable and Payable Management).
* New Credit Card Management System has been implemented to provide
comprehensive management and support for your Bank`s Credit Card
operations.
* All CBS branches are enabled for interbank remittances through RTGS and
NEFT. RTGS and NEFT have also been interfaced with our internet banking
portal. The Straight Through Processing (STP) of NEFT Inward Messages have
been implemented for the Bank as well as RRBs.
* The SWIFT facility for worldwide inter-bank financial communication is
provided at Foreign Exchange Authorized Branches in India as also in
overseas territories.
* The Payment Messaging Solution (PMS) is implemented in 20 overseas
territories & all authorized branches in India. PMS facilitates validation
and formatting of SWIFT messages generated from CBS as per SWIFT standards,
and also goes through AML check.
* During the year, a grid based Cheque Truncation System (CTS) was
implemented in Chennai, Coimbatore and Banglore.
* For improving your Bank`s service delivery, the Back Office functions
have been centralized at City Back Offices and Regional Back Offices.
During the year, your Bank added five more Regional Back Offices. Your Bank
now has 70 City Back Offices and 10 Regional Bank Offices. The personalized
cheque books issuance has been centralized. Your Bank has also started
centralized FCNR operations.
* Automated Cheque Processing Centre (Inward & Outward) was implemented in
Mumbai. Your Bank has also initiated the process of implementation in
Surat, Ahmedabad, as a part of Business Process Re-engineering under its
Project Navnirmaan.
* The Integrated Global Treasury Solution has been implemented in UK, UAE,
Bahamas, Bahrain, Hongkong, Singapore, Belgium and in India, reducing the
cost of operations and better fund management.
* For regulatory compliance, the Anti Money Laundering (AML) has been
implemented in India and 20 overseas territories. Your Bank has also
implemented Risk Management solution.
* Enterprise wide GL Solution has been implemented. This provides variety
of inputs to your Bank for strategic decision making in business
development and also generates enterprise wide consolidated reports.
* The Centralized Payroll, Salary module, e-TDS module and Leave Module
have been implemented for all your Bank`s offices in India.
* The Human Resource Networking for Employees Service has been implemented
with the objective of creating a central database of the Bank employees for
facilitating decision-making, promotion and selection exercise as also for
automating other HR process.
* Your Bank had also undertaken as a part of its business strategy, Data
Warehouse for providing flexible and interactive source of strategic
information, Customer Relationship Management for better customer insight
and uniform customer view across channels.
* The IT setup has been developed for account opening process and
transactions, both on-line and off-line, to be carried out through Business
Correspondent thus enabling Financial Inclusion. The Mobile Van Banking is
launched in Gujarat, UP & Bihar on a pilot basis as the Bank`s Financial
Inclusion initiative.
* The Solar Power Generation System (SPGS) was implemented during the year
in additional rural branches to ensure uninterrupted banking services to
the Bank`s rural customers. The SPGS will provide an alternate source of
energy through UPS at branches that face acute power shortage or have large
load shedding.
* A robust Information Security Management System was put in place during
the year under review to protect the technology against security threat.
Future Plans in IT:
* Various IT initiatives under Financial Inclusion are being proposed like
- Aadhaar Enabled Payment System (AEPS), Aadhaar Payment Bridge (APB),
Ultra Small branches, etc.
* Some more Customer Centric initiatives are proposed like Interbank Mobile
Payment Service (IMPS) through ATM, Internet Banking, RuPay Card - ATM &
Point of Sale (POS) implementation, European Master Visa (EMV)
implementation, Chipbased card, more facilities through Interactive Voice
Response System (IVRS), NEFT through ATM, utility bill payment through ATM,
etc.
* The advanced phases of Customer Relationship Management and Data
Warehouse are also being planned.
* Your Bank has plans to upgrade existing applications like Exchange,
eBusiness suite with enhanced features.
* It also proposes implementation of Business Analytics, Employee
Performance Management System, Employee Incentives and Manpower Planning.
* It further proposes implementation of Security Operation Centre for
enhanced IT security.
* It has planned technology projects like optimal utilization of IT
infrastructure, archival project, IPV6 implementation, Biometric
authentication for internal users, IT infrastructure for growth, etc.
E-business:
Your Bank`s e-business department provides different types of Alternate
Delivery Channels (ADC) such as ATMs, Internet Banking (Baroda Connect),
RTGS/NEFT, Phone Banking, Internet Payment Gateway (IPG) etc. In addition
to this, the e-banking department of your Bank looks after Depository
Services, Cash Management Services & Sale of Gold Coins. This year, the
Bank successfully launched Contact Centers from Lucknow & Baroda, mobile
banking and pre-paid gift card etc. Given below is the performance of
various segments under the e-Business activity, during FY12.
ATM/DEBIT Card Operations:
Particulars 31/03/2011 31/03/2012
No. of ATMs operationalised 1,561 2,012
No. of Debit Cards Issued 62.71 lakh 80.44 lakh
During FY12, your Bank received NFS Operational Excellence Award for ATMs
from National Payments Corporation of India (NPCI) - Best Bank in Public
Sector category.
Baroda Connect (Internet Banking):
Particulars 31/03/2011 31/03/2012
No. of Users 5,73,575 8,10,430
No. of A/cs. Linked 21,90,700 32,49,216
New Initiatives in FY12:
a) Fraud Management Solution (FMS) was implemented in August 2011 to make
internet banking system foolproof/ secured. No Phishing induced
transactions were reported in the previous two months.
b) On-line FDR through Baroda Connect was launched in January 2012.
Baroda RTGS/NEFT:
Particulars 2010-11 2011-12
RTGS NEFT RTGS NEFT
No. of Inward 13,98,612 34,24,515 16,62,070 61,37,139
Transactions
No. of Outward 19,25,969 14,88,661 21,47,527 29,48,252
Transactions
Avg. Transactions per 5,793 17,035 7,720 28,376
day (Inward)
Avg. Transactions per 7,235 8,015 9,338 13,211
day (Outward)
Baroda Cash Management Services:
* During financial year FY12, the total number of transactions in BCMS was
14.19 lakh with total turnover of Rs 10,355 crore. A profit of Rs1.39 crore
was earned.
* The number of customers has increased from 92 as on 31st March 2011 to
206 as on 31st March 2012.
* It is proposed to extend these services to 100 more centers in a phased
manner.
Baroda e-Gateway (Internet Payment Gateway):
* As on 31st March 2012, 124 Merchants were registered as against 52 as on
31st March 2011 and total turnover during FY12 was Rs 26.49 crore. A Profit
of Rs 27.94 lakh was earned during FY12.
Sale of Gold Coins:
* Your Bank started selling the gold coins since October 2007.
* At present, gold coins in denomination of 2gm, 4gm, 5gm, 8gm, 10gm, 20gm
and 50gm are sold. During the year FY12, 80,958 gold coins weighing
668.45kg were sold.
* A profit of Rs11.20 crore was earned from this activity during the year
FY12.
New Products Launched during FY12:
1. Mobile Banking
2. Pre-paid Cards
3. Contact Centres at Lucknow & Baroda
4. Different variants of Debit Cards:
a) Visa Platinum Debit Card
b) Mastercard "Combi" Gold Debit Card
5. Maestro PIN Debit Card
New Products to be Launched Shortly:
1. Launch of Foreign currency international travel card.
2. Value added services like top-up, DTH recharge, utility payment,
ticketing etc. through multiple delivery channels like internet banking,
mobile banking, ATM, website etc.
3. Introduction of corporate business solutions including web based Cash
Management, e-commerce portal, reimbursement/payroll for their staff etc.
to garner new/ additional business through e-products/services.
4. Structured loyalty and rewards program to increase debit card usage and
associated earnings.
Human Resources:
Human Resource strategies have been a key component of your Bank`s overall
efforts for business transformation and augmenting performance of its
operational units. The prime objective of the HR function is to harness the
employee potential for serving the customers better. Your Bank is endowed
with a competent and highly motivated employee base of around 42,175 people
who are engaged in handling the mammoth business operations of your Bank.
Your Bank took some major HR initiatives during the year FY12 in order to
cement its position in the top league of banks. Some of these initiatives,
as described below, are unique and path-breaking for the entire Public
banking sector as a whole.
Opening of "Baroda Manipal School of Banking":
Your Bank initiated this innovative resourcing channel during the year
FY12, in tie-up with Manipal Global Education Services. The Baroda Manipal
School of Banking will provide a batch of around 180 fully trained officers
per quarter with effect from Sept, 2012 onwards who shall be deployed
against your Bank`s requirement of specific profiles of officers. The
students undergo a focused grooming which is tailored to BOB`s
requirements, while undertaking a one-year full-time PG course in Banking &
Finance in Baroda Manipal School of Banking, before being absorbed in your
Bank with first-day, first hour productivity as the main objective.
Launch of HR transformation project - `SPARSH`:
This focused project was initiated by your Bank during this year to revamp
its existing HR processes, structures and policies in order to support the
technology and business transformation of your Bank. Various initiatives
like Talent management, Succession planning, creating a scientific staffing
model & manpower planning, development and capability building, performance
management, etc. were started under this project.
Implementation of HR Technology:
Your Bank has created a very comprehensive HR technology platform covering
HRM, Training, Payroll & Leave modules christened the Human Resources
Network for Employee Services (HRNes). This technology platform has enabled
automation of various HR functionalities and various modules under this
system were continued to be implemented during the year.
HR Initiatives in Capability Building:
Substantial training and developmental activities were carried out during
FY12, which included comprehensive grooming programs in the area of Credit,
Forex, Dealings, Branch Management, Planning, Risk Management, etc. besides
soft skills programs and ensuring all-round development and grooming of
young officers and new recruits through a structured six-month long new
joinee induction program.
Your Bank conducted 2,334 training programs in-house (through its network
of 12 Training Centres across the country, one IT training center and an
Apex Training College at Ahmedabad) and thereby trained 48,090 people
during the year. Besides, your Bank also sent around 1,221 employees for
undergoing training in various reputed external training institutes of the
country and even abroad. All General Managers and Dy. General Managers of
your Bank were sent to undergo a Top Management program at one of India`s
best B-Schools viz. ISB, Hyderabad whereas in another initiative, your Bank
trained more than 400 especially identified people across your Bank to
undergo a focused Mentoring program in order to act as `mentors` to newly
recruited officers.
Leadership Development:
Taking into account the critical need for building leadership competencies
in people, your Bank has launched a comprehensive leadership development
program `Project UDAAN` covering Branch Heads of all Urban and Metro
Branches and all the Assistant General Managers and Deputy General Managers
with the objective of creating leaders for the future. Such a massive and
comprehensive leadership development effort is unparalleled in the industry
and first of its kind for an Indian state-owned Bank.
The program has been structured around three modules of leadership viz.
`Leading Self`, `Leading Others` and `Leading Business` and each of the
three modules are being addressed through a combination of off-site Forum
events and Coaching clinics. The program covered around 960 participants in
seven batches (waves) across seven zones of your Bank during the year FY12
and around 460 more participants shall be covered in another three batches
in the next year.
Recruitment Drive:
Your Bank has been undertaking focused hiring efforts on a sustained basis
year on year, to cater to superannuation, sustained business growth and
rapid Branch expansion. Various recruitment exercises were undertaken
during the year to address the emerging manpower requirements in your Bank.
Recruitment of Specialist officers, probationary officers, recruitment of
young MBAs directly from the campuses of renowned Business Schools were
initiated in large numbers to meet the needs of your Bank, both in terms of
replacements for normal attrition and factoring in the business growth
needs. Your Bank recruited 1,726 Officers in various Grades/Scales (both
Generalists & Specialists), 1,395 Clerks and 629 Subordinate staff members.
With another 125 new hires in the process of joining,your Bank has thereby
inducted a total of 3,875 new employees during the period FY12. The
recruitment process is continued in the year 2012-13 also with various
recruitment projects underway for filling up almost 1,000 posts of officers
and 2,000 posts of clerks.
Framework for Career Progression:
Special efforts were made during the year under review to fulfill the
growing aspirations of the employees for faster career progression,
thereby, motivating employees for higher productivity. Your Bank has been
regularly promoting people in all grades / scales, year after year, without
a break, in order to keep on continuously rewarding its top performers and
make them assume higher responsibilities faster. In keeping with this
trend, a large number of promotion exercises were undertaken during the
year FY12 also, the results of which are given below.
Sub-Staff to Clerk : 207
Clerk to Officer : 450
JM-I to MM-II (Officer to Manager) : In progress for filling up 600
vacancies
MM-II to MM-III (Manager to Sr Manager) : In progress for filling up 500
vacancies
MM-III to SM-IV (Sr. Manager to : In progress for filling up 275
Chief Manager) vacancies
SM-IV to SM-V (Chief Manager to
Asstt. Gen. Manager) : 85
SM-V to TEG-VI (Asstt. Gen. Manager
to Dy. Gen. Manager) : 28
TEG-VI to TEG-VII (Dy. Gen. Manager
to General Manager) : 11
Special Thrust on Development of SC/ST/Other Backward Communities:
Your Bank is committed to the constitutional safeguards and social
objectives for development and welfare of persons belonging to SCs, STs and
other backward classes in society. Your Bank is one of those banks in the
entire banking industry that have the highest number of employees belonging
to SCs and STs, which itself shows the commitment of the Bank towards their
development and upliftment. Some of the highlights of your Bank`s efforts
for development and welfare of people belonging to SCs and STs are
enumerated as under.
Reservation in Employment:
Your Bank observes all guidelines stipulated by the Government of India for
reservation of posts in employment in All India recruitment and local
recruitment. Around 15.0% posts are reserved for SCs and 7.5% posts are
reserved for STs in all India recruitments. For other recruitments made on
regional basis, appropriate percentage prescribed for various States is
being observed.
Special efforts are made like offering pre-recruitment orientation training
to SC/ST applicants for recruitment in your Bank. Relaxation in age limit
and qualifications are given and interviews of SC/ST candidates are taken
on relaxed standards in order to ensure that appointment of candidates to
the reserved posts happens. In the Interview Panel for recruitment, a
member belonging to SC/ST is invariably associated. Candidates belonging to
SC/ST, who are called for interview, are reimbursed traveling expenses. In
addition to providing reservation in employment, your Bank is also
providing reservation and other enabling mechanisms in career growth and
promotions for SC and ST employees as per the guidelines in vogue. Pre-
promotion training before participating in promotion exercises is also
provided. Around 10.0% of the available residential accommodation of your
Bank is also reserved for SC/ST candidates.
The staff strength and representation of SCs and STs as of 31st March 2012
is as under.
Cadre Total SC SC % ST ST %
Officers 16,953 2,936 14.76 1,159 6.84
Clerks 16,448 2,428 17.32 1,070 6.51
Substaff 8,046 2,845 35.36 733 9.11
Total 41,447 8,209 19.81 2,962 7.15
SC/ST Cell:
An exclusive SC/ST Cell in your Bank has been set up to monitor the
reservation and other enabling provisions for SC/ ST employees. An
executive in the rank of General Manager is appointed as Chief Liaison
Officer for SC/ST employees who ensures compliance of various guidelines
pertaining to the SC/ ST employees. A Liaison Officer for SC/ST has been
appointed in each Zone of the Bank who takes care of all matters and
grievance redressal of SC/ST employees of that Zone.
Meeting with SC/ST Welfare Association:
With a view to have direct dialogue and review of reservation and other
special provisions for SC and ST, your Bank holds quarterly meetings with
the representatives of SC/ST Welfare Association of the Bank. Your Bank`s
Chairman and Managing Director and Senior Executives including the Chief
Liaison Officer for SC/ST participate in the meeting.
Bharat Ratna Dr. Babasaheb Ambedkar Memorial Trust:
Your Bank has established the "Bharat Ratna Dr. Babasaheb Ambedkar Memorial
Trust" in 1991 for promoting welfare activities for the benefit of SC/ST
employees and their family members. Apart from scholarships to children of
employees belonging to SC/ST, the Trust also provides scholarship to needy
students belonging to SC/ST community, in general, in major centres of the
country.
Visit of National Commission for Scheduled Castes:
The National Commission for Scheduled Castes visited your Bank at various
places during the year viz. at Ahmedabad (09.09.2011), Rajkot (16.09.2011),
Surat (08.10.2011), Anand (09.11.2011), Bulsar (11.11.2011), Jamnagar
(23.12.2011), Bharuch (05.12.2011), Udaipur (29.12.2011), Mehsana
(27.01.2012), Godhra (17.03.2012), Kolkata (21.02.2012) and Jodhpur
(29.03.2012) to review the implementation of the reservation policy of the
Government of India for SCs in your Bank, had discussions and interactions
and examined the level of implementation of the policies and programs. It
may be noted that the suggestions and guidance of the Commission are being
scrupulously observed by your Bank.
Marketing:
The breakthrough marketing communication path with the introduction of the
animated mascot "Stickman" by Bank in the year FY11 had enhanced the Bank`s
branding and set the pace for different branding initiatives.
Taking forward this brand rejuvenation journey, the Bank had introduced the
brand in Sonic Medium by launching its "Signature Tune" on the occasion of
its Foundation Day on 20th July, 2011. Your Bank`s marketing communication
continued to focus on enhancing the recall value of the brand and thereby
providing absolute support to the field staff.
Product Support:
During FY12, a number of product promotion campaigns were conducted to
promote Retail Loans, Current Deposits, Saving Deposits, SME products, NRI
products and sale of gold coins. A combination of all media vehicles
[print, electronic and OOH media] was used to support the sales effort of
field level units. Their efforts were also aided by suitable in-branch
publicity through display of banners, posters and leaflets and general
promotional events through the expanding branch network.
Marketing Initiatives:
* Your Bank introduced the brand in Sonic Medium by launching its
"Signature Tune" on the occasion of Bank`s Foundation Day on 20th July,
2011.
* Corporate branding initiatives like launch of signature tune,
advertisements about financial results and awards and various product
campaign promotions have aided.
* Increase of Bank`s Brand Value to $ 675 Million in 2012 from $ 585
Million in 2011.
* Improvement in Bank`s Brand Ranking to 166 in 2012 from 214 in 2011.
(Source: Brand Finance-Top Brands Banking 500, 2012 survey)
Signature Tune:
The year FY12 saw the launch of the `Signature Tune` of your Bank. The
signature tune is an audio piece which articulates brand personality,
enhancing and impressing the visual form of Bank`s logo to create a strong
association of the Bank`s brand with its customer and employees. It has
been envisaged that this signature tune will articulate the spirit of the
Bank as a vibrant, energetic, young organization complementing the Logo and
its introduction signifies the commencement of a new brand era which will
give a 360 degree recall value to the Bank`s brand.
Other Marketing Endeavors:
Various on-ground activities helped to broaden your Bank`s competitive edge
by improving visibility, image, prestige and credibility by supporting
events where your Bank could capture attention of prospective customers and
generate business. Your Bank organized and participated in many such
events. Some of the major events where your Bank`s branding was enhanced
included viz. Vadodara Marathon - 2012, President Fleet Review Nite - 2012,
Mint Annual Banking Conclave -2012 - "Opportunities and Challenges", 10th
Pravasi Bhartiya Divas - 2012, Jaipur, Mumbai Marathon - 2012, FICCI Series
of Seminars on MSME Financing - 2011, FICCI-IBA Banking Conference 2011,
28th Skoch Summit on Financial Inclusion and The Baroda Cup Polo
Tournament. The Out-of-Home media was also well leveraged to ensure
customer recall.
Awards and Industry Recognition for Bank of Baroda:
Your Bank received several awards during FY12, for its consistent
outstanding and all-round performance (both business and financial),
superior management, dedication to excellence and contribution to rural
economy and financial inclusion.
Given below are a few select awards won by Bank during the year FY12:
* T A Pai Memorial "Best Banker" award.
* Most Efficient Bank in Kenya
* Best Initiatives in Inclusive Banking - FIBAC Banking Awards
* Dun & Bradstreet (D&B) Leading Public Sector Bank in `Global Business
Development` category
* National Award for performance under implementation of PMEGP scheme.
* India Best Banks and Financial Institutions Awards: MCX and CNBC-TV18, -
a. Best Public Sector Bank
b. Outstanding Financial Professional - 2010 was conferred upon Shri M D
Mallya
* Commendation Certificate: Department of Official Language - Ministry of
Home Affairs.
* HR Excellence Award for Best Intellectual Human Resource Utilization
Practices" by Amity International Business School. New Delhi.
* Golden Peacock Award for Excellence in Corporate Governance.
* "Dainik Bhaskar India Pride Awards - Lifetime Achievement Award to M D
Mallya.
* ABCI Awards 2011.
a. Gold Trophy in Indian Language Publication- Akshayyam
b. Bronze Trophy in New Publication- Navnirmaan
c. Bronze Trophy in Special Column - Apni Baat
d. Gold Trophy in Web Communication on-line - Retail Product Campaign
* Business World Best Bank 2011 Awards:
a. Fastest Growing Bank- Large
b. Banker of the Year to Shri M D Mallya, CMD
* Best Public Sector Bank Award by State Forum of Bankers Club, Kerala.
* ICAI awards for Excellence in Financial Reporting
* Best Public Sector Bank by NDTV Profit
* My FM Stars of the Industry Brand Leadership Award
Premises Re-Engineering and Ambience Enhancement:
Your Bank, in a ceremony held at Baroda on 27th June, 2011 symbolically
handed an Auditorium "Sir Sayajirao Nagar Gruh" having 1,008 seats, to the
Vadodara Municipal Corporation, as a Centenary Year Gift to the city of
Baroda.
Maharaja Ranjitsinh ji Gaekwad, the heir of H.H. Sir Sayajirao Gaekwad III
and other dignitaries greatly appreciated your Bank`s gesture. The State-
of-the-Art building depicts all the rich cultural heritage of the town
using the talents of local artisans and artists. The beautiful building has
since become a landmark of Baroda City. Major Cultural events of the city
are since held there.
The administrative office cum residential complex at Ghod Dod Road Surat is
since completed. It is equipped with ultra modern gadgets and systems with
energy efficient equipments, rain water harvesting system, eco friendly
materials. Bank`s presence by this building in the Diamond City is admired
by one and all.
Other Initiatives in Estate Management:
* As per the directives from Ministry of Finance, your Bank linked its
Corporate Office and all Zonal and Regional offices through State-of-the-
Art Video Conferencing Systems with MPLS connectivity. Interaction of
functional heads through VC has expedited the decision making process in
more efficient and cost effective manner.
* Your Bank is also marching towards technology based initiatives in the
form of e-tendering, e-procurement, etc.
* All payments to vendors are being made through RTGS / NEFT or credited to
beneficiary account.
* Migrated all the assets, located at branches and calculation of
depreciation thereon, to CBS platform with the assistance of Projects & IT
Department.
* Looking to the changed scenario and available delivery channels,
furnishing of RBO, CBO, and Contact Center have been carried out in-house,
at various locations, to ensure efficient customer services.
* In tune with your Bank`s policy to have its administrative offices in
owned premises, your Bank has purchased land at Bangalore (Karnataka),
Hyderabad (A.P), Faizabad (U.P), Indore (MP), Udaipur, Kota, Jaipur
(Rajasthan) and New Raipur (Chhatisgarh) for construction of commercial
building.
* During the year, your Bank surrendered surplus/unutilised area of
approximately 30,000 sqft of branches/ offices thereby saving the rental
outgo.
* Looking to the ever increasing rentals, need is being felt to use every
nook and corner of the available premises. Layouts are being revisited
while renovation and furnishing of branches / offices is being done by
introducing eco friendly and ergonomically designed sleek furniture items.
* To have uniformity in systems and procedures pan-India, Premises Policy
Guidelines, Constructions Manual, Refurbishment Manual have been
formulated.
Projects under Implementation:
* Construction of commercial complex at Mylapore, Chennai is in the final
stage of completion to house Zonal Office, Branch and Currency Chest and is
expected to be occupied by the end of June 2012.
* Construction of residential complex at Cenotaph Road, Chennai is nearing
completion, to house the executives and VIP guests and is expected to be
occupied by the end of June 2012.
* Residential complex at East of Kailash, New Delhi is in the advanced
stage of completion.
* Construction of commercial cum residential complex at (Tata Nagar)
Jamshedpur is also nearing completion to house the RO, RBO, TC and 23
flats.
Future Plans for Estate Management:
* Face lifting of Bank`s building at Parliament Street New Delhi.
* Redevelopment of Ram Nagar Premises at Coimbatore, to have optimum
utilization of available space for Branch / officers flats.
* Construction of own building for Disaster Recovery Site at Hyderabad.
* Construction of training centre at Bangalore and Zonal Office building at
Jaipur.
* Renovation of Bank of Baroda Institute of Information Technology at
Gandhinagar (Gujarat).
* Redevelopment of Bhandup Staff Quarters building, Mumbai, thereby to
construct about 138 residential flats for transferee Officers/ Executives.
* Redevelopment of Jogeshwari Staff Quarters, Mumbai, to construct a
building for residential and commercial use.
* Construction of residential cum commercial complex at Indore (MP).
* Construction of BSVS at various centers across India as per the
directives from the Gov. of India.
Branch Network:
Given below is the information on your Bank`s brick and mortar distribution
channels as on 31st March, 2012, which are observed to be closer to common
customers as compared to the E-Banking channels, which are generally
preferred by the tech savvy urban masses.
Area Classification Number of % Share in
(India) Branches Total
Metro 871 22.31
Urban 718 18.39
Semi-urban 1045 26.77
Rural 1270 32.53
Total 3904 100.00
Overseas 55 -
Domestic Subsidiaries and Associates:
The performance of "Subsidiaries, Joint Venture & Associates" of Bank of
Baroda was satisfactory during FY12. The BOBCARDS Limited turned around
during FY11 and has made profit during FY12. The Company has focused on all
qualitative aspects of business development, which has resulted in better
profitability, quality card base and ME base.
The BOB Capital Markets Ltd. has been activated by appointing a
professional CEO and recruiting a professional team. The focus is on Debt
Syndication, Private Equity Syndication and Capital Market activities. The
Company commenced Institutional Broking business in October 2009 and will
be commencing retail broking shortly.
The Baroda Pioneer Asset Management Company Ltd. is in its fourth year of
operation. The Company focused on Systematic Investment Plans (SIPs).
During the year under review, the Company launched successful SIP campaigns
in your Bank`s network and has raised significant SIPs.
IndiaFirst Life Insurance Company Ltd., a joint venture company, commenced
its business operations on 16th November 2009 and has received an
overwhelming response from Your Bank`s customers across the country.
IndiaFirst has outperformed the industry by having maximum y-o-y growth of
40%. From 22nd entrant in FY10, the Company has become the 10th player
among private players by 31st March, 2012. IndiaFirst has launched embedded
products like BarodaFirst and Abhaya First, one of its kind in the
industry.
(Rs. lakh)
Entity (with Country Owned Total Net Offices Staff
date of Funds Assets Profit
registration)
BOB Capital
Markets Ltd.,
11 Mar, 1996 India 12994.38 14141.87 737.04 1 36
BOBCARDS Ltd.,
29 Sept, 1994 India 12623.72 14002.31 1280.07 34 124
Baroda Pioneer
Asset Mgmt Co.
Ltd., 5 Nov,
1992 India 36688.15 396009.32 6118.34 104 851
IndiaFirst Life
Insurance Co.
Ltd., 19 June,
2008 India 3621.44 4096.21 -1,312.36 1 69
Nainital Bank
Ltd., 31 July,
1922 India 41580.81 253516.84 -7,257.78 15 1457
Implementation of Official Language (OL) Policy:
During the period under review,your Bank made significant progress with
regard to implementation of Official Language Policy and ensured compliance
of various statutory requirements of Official Language Act/Official
Language Rules. Your Bank could achieve all major targets set by the
Government of India under its Annual Implementation Program and fulfilled
the assurance given to the committee of Parliament on Official Language.
In recognition of your Bank`s outstanding performance, the Bank was awarded
1st prize in Linguistic Region `A`, IInd prize in Linguistic Region `B` &
`C` under RBI Rajbhasha Shield Competition. Your Bank`s in-House magazine
BOBMAITRI also got 4th prize from RBI. The Town Official Language
Implementation Committees functioning at Jaipur and Baroda under our
convenorship were awarded 1st& 2nd prizes respectively for their
outstanding performance by Dept. of O.L., Government of India. Your Bank`s
Zonal Office, Ahmedabad & Zonal Office Jaipur got 1st& 2nd Prizes
respectively from Regional O.L. Implementation office of Government of
India.
Your Bank`s in House Hindi Magazine `Akshayyam` was awarded by the `ABCI`
with `Gold Prize` under Indian Language Publication category, `Apni Baat`
awarded with `Bronz prize` under special column (Language) category,
`Navnirman News letter` awarded with `Bronz prize` under new publication
category and your Bank`s website got `Silver prize` under the website
category by ABCI.
The Town Official Language Implementation Committees functioning at Jaipur
& Baroda under the convernorship of your Bank discharged their
responsibilities excellently. During the year, three newly constituted Town
Official Language Implementation Committees started functioning at Surat,
Rajkot & Jodhpur under your Bank`s Convenorship and now the Bank is the
Convener of a total of five Town Official Language Implementation
Committees.
Your Bank recruited 28 new specialist Hindi Officers at Regional Offices
for effective Implementation of Official Language Policy of Government of
India.
The Third Sub-Committee of Parliament on Official Language visited your
Bank`s Manali Branch and appreciated the efforts undertaken by the Bank in
the area of Official Language Implementation.
Your Bank introduced bilingual software namely `Script Magic` in the
finacle system across all its branches (which are already on the CBS) and
started generating and printing of Passbooks/ Account Statements and other
reports in Hindi in Region `A` & `B`. The publication of e-bulletin in
Hindi namely `Baroda Hindi. Com` is promoting the use of Hindi through
technology.
Board of Directors:
Shri Sudarshan Sen was nominated as a Director w.e.f. 30.05.2011 by the
Central Government u/s 9 (3) (c) of the Banking Companies (Acquisition and
Transfer of Undertakings) Act, 1970 to hold the post until further orders.
Shri Vinil Kumar Saxena was appointed as a Workmen Employee Director w.e.f.
25.07.2011 by the Central Government u/s 9 (3) (e) of the Banking Companies
(Acquisition and Transfer of Undertakings) Act, 1970 for a period of three
years or till he ceases to be workmen employee of Bank of Baroda or until
further orders, whichever is earlier.
Shri Maulin Arvind Vaishnav was re-elected as a Director by shareholders of
the Bank other than the Central Government u/s 9 (3) (i) of the Banking
Companies (Acquisition and Transfer of Undertakings) Act, 1970 at the Extra
Ordinary General Meeting held on 23.12.2011 for a period of three years
from 24.12.2011 to 23.12.2014.
Shri Surendra Singh Bhandari was elected as a Director by shareholders of
the Bank other than the Central Government u/s 9 ((3) (i) of the Banking
Companies (Acquisition and Transfer of Undertakings) Act, 1970 at the Extra
Ordinary General Meeting held on 23.12.2011 for a period of three years
from 24.12.2011 to 23.12.2014.
Shri Rajib Sekhar Sahoo was elected as a Director by shareholders of the
Bank other than the Central Government u/s 9 ((3) (i) of the Banking
Companies (Acquisition and Transfer of Undertakings) Act, 1970 at the Extra
Ordinary General Meeting held on 23.12.2011 for a period of three years
from 24.12.2011 to 23.12.2014.
Shri R. Gandhi, who was nominated as a Director w.e.f. 30.07.2010 by the
Central Government u/s 9 (3) (c) of the Banking Companies (Acquisition and
Transfer of Undertakings) Act, 1970, to hold the post until further orders,
ceased to be a Director w.e.f. 30.05.2011 upon nomination of Shri Sudarshan
Sen in his place.
Dr. Dharmendra Bhandari, elected as a Director by shareholders of the Bank
other than the Central Government u/s 9 ((3) (i) of the Banking Companies
(Acquisition and Transfer of Undertakings) Act, 1970 for a period of three
years from 24.12.2008 to 23.12.2011, ceased to be a Director w.e.f
24.12.2011 on completion of his tenure.
Dr. Deepak B. Phatak elected as a Director by shareholders of the Bank
other than the Central Government u/s 9 ((3) (i) of the Banking Companies
(Acquisition and Transfer of Undertakings) Act, 1970 for a period of three
years from 24.12.2008 to 23.12.2011, ceased to be Director w.e.f.
24.12.2011 on completion of his tenure.
Directors` Responsibility Statement:
The Directors confirm that in the preparation of the annual accounts for
the year ended March 31, 2012:-
* The applicable accounting standards have been followed along with proper
explanation relating to material departures, if any;
* The accounting policies framed in accordance with the guidelines of the
RBI, were consistently applied.
* Reasonable and prudent judgment and estimates were made so as to give
true and fair view of the state of affairs of your Bank at the end of
financial year and of the profit of your Bank for the year ended on March
31, 2012;
* Proper and sufficient care was taken for the maintenance of adequate
accounting records in accordance with the provisions of the applicable laws
governing Banks in India; and
* The accounts have been prepared on a going concern basis.
Acknowledgment:
The Directors express their sincere thanks to the Government of India,
Reserve Bank of India, Securities and Exchange Board of India, other
regulatory authorities, various financial institutions, banks and
correspondents in India and abroad for their valuable guidance and support.
The Directors acknowledge with appreciation the assistance and cooperation
extended by all stakeholders of your Bank like customers, shareholders and
well wishers in India and abroad.
The Directors place on record deep appreciation for the hard work and
dedication of the members of your Bank`s staff at different levels, which
enabled your Bank to record high quality, consistent growth year after year
despite economic challenges and consolidate its position as one of the
premier banks in the country.
For and on behalf of the Board of Directors,
M. D. Mallya
Chairman and Managing Director
Place: Mumbai
Date : 08th May 2012 |