BANK OF INDIA
ANNUAL REPORT 2011-2012
The Board of Directors have pleasure in presenting the Bank`s Annual Report
along with the audited statement of accounts and the cash flow statement
for the year ended 31st March, 2012.
* Operating profit Rs.6,694 crore, with 24.33% growth over the previous
* Net Profit Rs. 2,678 crore, recording 7.59% growth over previous year.
* Capital Adequacy Ratio at 11.95% as against 12.17% in previous year
* Net Worth at Rs. 18,759 crore grew by 21.03% over March, 2011.
* Book Value per share Rs. 326.52 (Rs. 283.24 previous year)
* Gross NPA ratio at 2.34% as on 31.03.2012.
* Net NPA ratio at 1.47% as on 31.03.2012.
* Total business (Deposit + Advances) reached Rs. 5,69,710 crore
recording a growth of Rs. 54,670crore (10.61%).
* Total deposits increased by Rs. 19,330 crore reached the level of
Rs.3,18,216 crore, a growth of 6.47%. Share of low cost deposits in the
domestic deposits is 34.25% as on 31.03.2012 as against 29.18% as on
* Gross credit touched Rs. 2,51,494 crore, recording a growth of 16.35%.
* Priority Sector lending constituted 36.67% of Net Adjusted Bank Credit
and the share of Agricultural Credit to Net Adjusted Bank Credit was
* Credit to SME sector grew from Rs. 30,045 crore to Rs. 32,270 crore
recording a growth of 7.41%.
* Schematic Retail credit grew by 14.82% from Rs. 16,649 crore to
* Export Credit registered a growth of Rs. 791 crore, i.e., 10.50%
growth over previous year to reach Rs. 8,128 crore as on 31.03.2012.
NEW PRODUCTS & SERVICES
* Welcome Kits introduced for NRI Customers opening NRE/NRO accounts at
* Calculation of interest on Savings Bank account from 1st April 2010 has
been changed from monthly product basis to daily product basis.
* As per Finance Ministry guidelines and recommendations, the Bank`s
corporate web-site (English) has been enabled for differently abled
* The Bank has introduced a new format of Savings Bank Passbook
(Horizontal Format) which will print all details of the transaction on the
same page as against the existing format (Vertical Format) where the
details are printed on two pages.
* As per Banking Codes and Standards Board of India (BCSBI) requirements,
the Bank is printing helpline number on the passbook & statement of
* The Bank introduced issuance of insta-pin for Debit-cum-ATM Card. This
will resolve the customer grievance for non-receipt of Re-pin and also save
the effort and expenses in generating and mailing Re-pins.
* Quarterly consolidated Statement of a/c is sent to the Diamond customers
in PDF format via email.
* As a fraud prevention measure, SMS alerts - Star Sandesh are generated
and provided to all customers who have registered their mobile numbers with
the Bank for all Debit transactions from delivery channels (Internet
banking/ ATM/POS); all Debit clearing transactions of Rs.25,000/- and
above; all Customer induced debit transfer & cash payments of Rs.10,000/-
and above; all Debit ECS transactions of Rs.10,000/- and above; all Debit
RTGS / NEFT transactions and acknowledgment on accepting the cheque book
* Enabling internet banking customers to make online Fixed Deposit with
* Hot Listing/Reset/Unblock/Change of Debit Cum ATM card PIN using
Internet Banking password.
* Viewing of Annual Tax Statement (Form 26AS).
* Star Trade - Online share trading - Integration with Gupta Equities.
* Extended the facility of online e-Payment to the customers holding
Bank`s Debit-cum-ATM card. This will enable the customers to use their
Debit-cum-ATM cards for e-payments in addition to credit card Internet
* Mobile Banking facility is introduced as the latest alternate delivery
channel which allows customers to do banking activities virtually from the
convenience of the Mobile phone at any time and from anywhere. This
facility is extended to all Retail internet banking customers and includes
features like Balance enquiry, last five transactions, Cheque status, Funds
Transfer & Mobile Payments.
* Online Interbank Fund Transfer across banks, through Star Connect
Internet Banking Services, using RTGS/NEFT.
* BOI Star e-Pay for Auto-pay or on-line payment of various utility
services / bills.
* e-Payment for Direct & Indirect, Central Excise & Service Tax.
* Star e-Share Trade to trade in shares.
* e-Freight Payment.
* Online Payment of Directorate General of Foreign Trade (DGFT) license
* Online Booking of Railway & Airlines Ticket.
* Online Application for Education loan.
* Provision to make online bid-cum-application for Application Supported
by Blocked Amount (ASBA) IPO issues by Retail Internet Banking Customers
having account with any DPO.
* BOI-BTM (Banking through Mobile launched).
* DHAN-AADHAR CARD Launched with micro ATM & Biometric pin authentication
* Introduction of Personal Accident Insurance Cover for all No Frill
* Bank has launched BOI Star Pension Aadhar Card, BOI Privilege
International Credit & Debit Cards and RuPay Card as alternate delivery
* For International Travellers BOI Star International Travel Card in US
Currency with Visa Affiliation has been introduced.
* The National Banking and Wholesale & International Banking Group
segments distinctly headed by the two Executive directors are functioning
independently in an organised manner.
* National Banking group at Head Office level comprising of Retail, Rural
including Financial Inclusion and SME Banking business units are
concentrating in customer acquisition in a big way.
* Wholesale & International Banking group at Head Office level comprising
of Large, Mid Corporate Banking, Project Finance including Syndication
Services, International Banking and Treasury operations are catering to
bulk business opportunities.
* The mapping of Large and Mid-Corporate accounts to the respective
branches has been completed. This process of updation is undertaken on
yearly intervals on 31st March.
* Presently 52 Rural Processing Centres are operational across 35 zones.
* Product Innovative Cells have been planned to be opened to explore new
territories for penetration in agricultural business.
* All RRBs of the Bank have migrated to Core Banking Solution and are RTGS
/ NEFT enabled.
* Cash & Fidelity Insurance has been introduced for business correspondent
* 21 Retail Business Centres are operational for quick delivery of Credit.
* Bank has introduced Star Vidhya Education Loan, BOI Star Loan against
Property and Star Diamond Home Loan Schemes.
* A total of 21 SME City Centres are functioning in 20 zones. These
centres have been instrumental in reduced Turn Around Time (TAT) for credit
* The 41 Mid-Corporate branches are monitored by Seven Divisional
* Bank has introduced Diamond / Platinum / Gold Customer concept for
encouraging SME customers with good track record.
* Bank has launched Composite Loan Product and Demand / Term Loan Products
for Medium & Small Enterprises. For SME Entrepreneurs, Star SME Contractor
Credit Line, Star SME Liquid Plus, Star SME Auto Express & Star SME
Education Plus Loans Schemes have been introduced.
* The 10 Large Corporate branches are directly monitored by the General
Manager from Head Office.
* Lead Management System (Sales Force Automation), to generate, track and
monitor leads, is stabilized and functioning satisfactorily.
* A scheme for extending financial assistance at concessional rate of 4%
to select low income groups for productive endeavours under the
Differential Rate of Interest (DRI) Scheme is being implemented by the
Bank. The Bank has extended financial assistance to 11665 beneficiaries
during the year.
* The Bank has been actively involved in implementation of the Golden
Jubilee Rural Housing Finance Scheme (GJRHFS) and has achieved the target
allocated by National Housing Bank for the year. During the year, Bank has
sanctioned 1443 cases under GJRHFS.
* The Bank is very active in implementing programme of Financial Inclusion
as a movement extending all banking products and services to all who are
currently deprived from these services. So far, first step towards
achievement of Financial Inclusion was opening of No-Frill Accounts and
accordingly, the Bank has opened 12.63 lakh No-Frill Accounts during FY
* The Bank is also implementing IT solutions on end to end basis using
hand held devices and smart cards. The Bank has issued/ enrolled 7.65 lakh
* Project Finance And Syndications Group: It takes up assignments of
technical appraisal, underwriting and syndication of loans. During FY 12
financial closures were done with a project cost of Rs. 13,119 Crore and
syndicated debt of Rs. 20,957 Crore. Bank of India achieved fifth
position in syndication space as per the Bloomberg Lead tables for the
calendar year 2011.
* The Bank has created a new SME vertical headed by a General Manager to
cater to the specific business needs of the segment. A more inclusive
definition has been given for SME business to include all business
activities with a turnover of upto Rs. 100 crore. The vertical will look
for growth not only on credit, but CASA, retail business, fee based income
and third party products in the SME segment.
* Mobile Banking facility is introduced as the latest alternate delivery
channel which allows customers to do banking activities virtually from the
convenience of the Mobile phone at any time and from anywhere. This
facility is extended to all Retail internet banking customers and includes
features like Balance enquiry, last five transactions, Cheque status, Funds
Transfer & Mobile Payments.
* Established Global Remittance Centre for centralizing some of the
activities related to NRI Customers which would hasten turnaround time and
product delivery and also enable proactive marketing strategies & grievance
AWARDS & ACCOLADES
* Bank of India has been rated by The Economic Times/ The Nielsen company
* The most Trusted Brand(MTB) 2011
* Under PSU Banking Category-2nd next to SBI
* Under Top Service Brands-11th
* Government of India has also acknowledged Bank`s performance in lending
Micro & Small Enterprises sector conferring second best performance award
(next to SBI). The Bank has also recognized as "Best Performing Bank" for
covering maximum number of Micro & Small accounts under collateral free
lending scheme of CGTMSE.
* CIO Green IT Award.
* Bank of India, Mumbai North Zone received Third Prize for use of
Official Language Hindi in Bank from Government of India, Ministry of Home
Affairs, Official Language Department.
The Bank recorded an Operating Profit of Rs.6,693.95 crore, (previous year
Rs.5,384.23 crore). Net Profit stood at Rs. 2677.52 crore (previous year
Net interest income grew by 6.44% due to rise in volumes of business mix by
10.61% (from Rs.5,15,040.06 crore to Rs.5,69,710.32 crore). Non-interest
income increased by 25.74% and covered 67.23% of Operating Expenses as
against 52.12% in the previous year.
The Financial performance of the Bank for the year 2011-12 is summarised
(Amount in Rs. crore)
Particulars 2010-11 2011-12 Growth (%)
Net Interest Income 7,810.69 8,313.43 6.44
Non-Interest Income 2,641.77 3,321.77 25.74
Operating Expenses 5,068.24 4,940.66 -2.52
Operating Profit 5,384.23 6,693.95 24.33
Provisions / Contingencies 2,895.52 4.016.43 38.71
Net Profit 2,488.71 2,677.52 7.59
Earnings per share (Rs.) 47.35 48.98 3.44
Book value per share (Rs.) 283.24 326.52 15.28
Return on Average Networth (%) 17.80 15.63 -
Return on Average Assets (%) 0.82 0.72 -
Some of the Key Financial Ratios are presented below:
Parameters 2010-11 2011-12
Yield on Advances 8.62 9.38
Yield on Investment 7.59 7.69
Yield on Funds 7.14 7.88
Cost of Deposits 5.03 6.01
Cost of Funds 4.57 5.58
Net Interest Margin 2.92 2.52
Non Interest Income to Operating Expenses 52.12 67.22
Other Income to Average Working Fund 0.87 0.92
Operating Expenses to Average Working Fund 1.66 1.37
Staff Expenses to Average Working Fund 1.14 0.84
Other operating Exp. to Average Working Fund 0.52 0.52
Asset Utilisation Ratio 1.77 1.85
Non-Interest Income to Total Income 10.83 10.44
Non-Interest Income to Net Income 25.27 28.55
Cost to Net Income 48.49 42.47
SEGMENT- WISE PERFORMANCE
The Bank earned an Operating Profit of Rs.6,693.95 crore during the year
2011-12. The contribution made through Treasury operations was Rs.5,909.00
crore and other banking operation earned a profit of Rs.784.95 crore. The
unallocable expenditure net of unallocable income was Rs.152.98 crore
during the year 2011-12.
A Dividend at the rate of Rs.7/- per share (70%) for the year, has been
recommended. The total dividend payment amounts to Rs. 465.98 crore
(including dividend distribution tax).
Net worth of the Bank has increased to Rs. 18,759.40 crore from Rs.
15,499.50 crore during the financial year ending 201112. During the year,
the Bank has increased its equity capital through Preferential Issue of
Equity Shares to the Insurance Corporation of India.
As per Basel II framework, the Bank`s Capital Adequacy Ratio of 11.95%
which was higher than the regulatory requirement of 10%.
Details of Capital Adequacy (BASEL II) are shown as under:
(Rs. in crore)
Particulars 31.03.2011 31.03.2012
(Under BASEL - II) Amount CRAR (%) Amount CRAR (%)
Tier I Capital 17,047 8.33 20,230 8.59
Tier II Capital 7,867 3.84 7,916 3.36
Total Capital 24,914 12.17 28,147 11.95
Risk Weighted Assets 2,04,762 - 2,35,466 -
MANAGEMENT DISCUSSION AND ANALYSIS
Global Economic Scenario
The global economic condition during 2011 was shaped, to a marked extent,
by the continued and protracted sovereign debt crisis in European
countries. The recovery of advanced economies was stalled with euro area
entering into a mild recession. On the other hand, the improved growth and
employment conditions in the US, especially towards the second half of
2011, was one of the redeeming features during the year. The world output
dropped to 3.9% in 2011 from 5.3% during 2010. The GDP growth in advanced
economies declined to 1.6% in 2011 compared to 3.2% in 2010. The emerging
and developing economies, impacted by the adverse developments of advanced
counties, witnessed slow down in growth from 7.5% in 2010 to 6.2% in 2011.
On the commodity prices front, there was some respite in 2011, as prices of
major commodities, barring crude oil, softened primarily due to the
weakened economic activities. The geopolitical tensions in the Middle-East
and North Africa (MENA) region and consequent supply disruptions kept
international oil prices at higher levels, even at a time when the demand
had diminished because of weaker global activities. As the banking and
government bonds markets in Euro area came increasingly under stress, with
deleveraging by the banks, global financial market remained volatile.
However, with the bold and unprecedented policy actions including those by
the European Central Bank`s infusion of liquidity, the Global market
sentiments started improving towards the year end,
Global Economic Outlook
The world economy is expected to continue on the path of recovery, albeit,
at a slower pace. With the completion of Greek debt restructuring program
and continued support from the European Central Bank (ECB), the financial
crisis in Europe seems to be easing out. In spite of this, the euro area is
expected undergo a mild recession in 2012 on account of several spill over
effects of sovereign debt crisis such as deleveraging by banks, impact of
fiscal consolidation. The current pace of recovery in US is expected to
continue in 2012. The U.S. economic indicators have maintained the strong
performance, although supply-side indicators seem much stronger at the
moment than the demand-side indicators. Japan has also getting benefited
from the short-term fiscal stimulus injected in response to the
earthquakes. China has reduced its growth forecast for 2012 to 7.5% from
9.2% in 2011. Growth in emerging and developing economies, in general, is
expected to slow down on account of decline in external demand from
advanced economies and China. The global growth, as projected by IMF, is
expected to drop from 3.9% in 2011 to about 3.5% in 2012 because of weak
activity during second half of 2011 and first half of 2012. The advanced
economies are expected to grow by 1.4% in 2012 with a slightly improved
performance in 2013 and growth in emerging economies to be around 5.7% in
2012 against 6.2% in 2011. However, downside risks to these growth
projections looms large from such issues like crude oil prices, lingering
de-leveraging pressures in developed economies and political and policy
Domestic Economic Scenario
Global economic and business scenario had an impact on Indian economy too
as the growth rate decelerated each quarter during FY 2011-12. From 7.7% in
Q1, GDP growth rate dropped down successively to 6.9% in Q2 and 6.1% in Q3.
As per the advanced estimate by CSO, the GDP is expected to register a
growth rate of 6.9% during 2011-12 against 8.4% in 2010-11. The slow down
in GDP growth is attributed to the dip in the manufacturing sector growth
rate to 3.9% vis a vis 7.6% during 2010-11, lower agriculture growth rate
of 2.5% against 7.0% during 2010-11 and negative growth rate in mining (-
2.2%) and deceleration in construction activities.
Inflation, as measured by the wholesale price index (WPI), almost touched
double digit till November,2011 on the impact of both food and non-food
inflation. Since December, it started sobering down and inflation for
March, 2012 stood at 6.89%. The food inflation came down substantially, but
fuel group inflation remained high due to spurt in crude oil prices and
depreciation of rupee.
During 2011-12, exports crossed USD 300 billion mark with a growth rate of
20.9% and imports grew by 32.2% to USD 488.6 billion. As a result, trade
deficit widened to USD 184.9 billion in 2011-12 from 118.6 billion in 2010-
11. The current account deficit (CAD) also widened both in absolute terms
as well as a proportion of GDP. The CAD in April-December 2011 period at
US$ 53.7 billion was 4.0 per cent of GDP as compared with US$ 39.6 billion
forming 3.3 per cent of GDP in April-December 2010. The foreign exchange
reserves which reached an all-time high of US$ 322.0 billion at end August
2011 declined to US$ 294.4 billion at end March 2012, partly due to
intervention by the RBI to stem the slide of the rupee against the US
During 2011-12, rupee came under strain towards the last week of August,
2011 under the impact of outflow of funds by FIIs and remained continuously
under pressure till December, 2011. From a peak of Rs. 43.94 on 27th July
2011 rupee touched a low of Rs. 54.23 per USD on 15th December 2011,
indicating a depreciation of 19%. To contain the situation, RBI had to
intervene in the forex market and tighten the regulatory measures such as
narrowing open position limit and other measures to discourage speculation
in the forex market. By March 2012, the Indian Rupee has shown annual
depreciation of 12.5% and 7.8% against the US$ and Euro, respectively.
Performance of various financial markets during the year 2011-12 was also
affected by the fallout of European sovereign debt crisis, which gave rise
to risk aversion and flight of capital to safer heaven. The equity market
turned bearish during the 2011-12 and sensex nosedived to 17404 as on
31.3.2012 from 19445 as on 31.3.2011, losing by 10.5%. Rates in money
market and G-Sec market remained high due to tight liquidity situation,
high inflation, increase in policy rates by RBI and higher borrowing by the
Government. Call rate went up from around 6.5% in April to about 9.09.50%
in March,2012 and yield on bench mark 10 year government bonds also moved
up from 7.98% as of March 31, 2011 to 8.53% as of March 30, 2012.
Liquidity conditions worsened during 2011-12, which remained on deficit
mode and RBI had to resort to open market operation and lowered the CRR
twice from 6.0% to 5.50% and again to 4.75%. Interest rate hardened during
the year 2011-12 on account of persistent high inflation and increase in
repo rates by RBI five times during the year.
The year 2011-12 was also marked by the high fiscal slippages on account of
lower growth in tax revenue and increase in higher non-plan expenditure.
With the result, fiscal deficit widened to 5.9% of the GDP against budgeted
level of 4.6%.
Domestic Economic Outlook
The macroeconomic outlook for the fiscal year 2012-13 looks positive with
modest recovery in GDP growth rate to 7.3% from 6.9% during 2011-12. Though
the inflationary pressures have receded in recent months; upside risks to
inflation may be there due to further surge in crude oil prices, fiscal
slippage and rupee depreciation. The overall inflation scenario is likely
to remain moderate with March,2013 end WPI inflation expected at 6.5%. With
expected decline in cost of domestic funds, consumption sentiments and
interest rate sensitive sectors would get a boost. Manufacturing and mining
sectors are likely to display some improvement given the base effect.
Service sector will again support overall economic growth. Despite the
diversification of exports to newer geographies, the growth of Indian
exports is likely to be subdued in FY 2012-13.
Banking Industry - Developments and Outlook
The Money Supply (M3) growth during the year remained subdued at 13.0%,
lower than the RBI`s indicative trajectory of 15.5% on account of slow down
in deposits growth and currency growth.
The deposits growth of the Banking System remained robust upto December,
2011, but subsequently it lost pace. However, with large deposit accretion
during the last month of the year, deposits growth during 2011-12 stood at
17.4% against 15.9% during 2010-11. The credit growth remained muted,
reflecting the deceleration in industrial and investment activity, which
registered a growth rate of 19.3% against 21.5% growth during 2010-11.
The monetary policy stance by the RBI during 201112 continued to remain
tight till January 2012, aimed at controlling inflation and containing
inflationary expectation. Subsequently, following moderation in demand side
pressure and inflation rate and recognizing risk to growth, RBI followed a
neutral policy stance. The RBI also undertook certain proactive measures to
address liquidity deficit situation such as open market operation and
reduction in CRR.
Among the changes in the regulatory measures during the 2011-12 by RBI,
interest rate on savings deposits was initially raised from 3.50% to 4.0%
and later it was deregulated. Provisioning norms for NPA and restructured
accounts were tightened. Among others, notable measures were advising banks
to reduce their exposure to debt oriented mutual funds, permitting banks to
open branches in Tier-2 Centres, regulations on micro finance and NBFCs.
One of the important developments for banks during FY 2011-12 was the
introduction of system-driven identification of NPAs resulting in increase
in banks` NPAs and consequent provisioning, which impacted the
The increase in savings deposits rate and deregulation of savings deposits
rate coupled with increase in term deposits rate by banks as a result of
rise in policy rates by RBI added to the cost pressure affecting NIM.
Profitability of banks was severely impacted on account of lower NIM and
higher NPA provisioning. In spite of capital infusion by the Government,
most of the public sector banks faced challenges on capital front during
Going forward, with higher GDP growth and improved industrial performance
expected during FY 2012-13, banks are expected to show a better performance
during 2012-13. However, the following issues will prove to be challenges
for banks in near future:
* Huge capital requirement in view of implementation of Basel-III.
* Human resources issues in view of superannuation of large number of
experienced people and attrition in respect of new recruits.
* Managing MIS to facilitate Automated Data flow to RBI
* Improving NIM in the context of deregulation of interest rate on saving
deposits and NRI deposits.
Continuous monitoring of assets health and NPA management
BUSINESS REVIEW DEPOSITS
Bank`s total Deposits increased by Rs.19,330.22 crore to Rs.3,18,216.03
crore during the year recording a growth of 6.47%. The domestic deposits
stood at Rs.2,48,475.30 crore and overseas deposits at Rs.69,741 crore.
Non-Resident Deposits of the Bank stood at Rs.13,778 crore which
constituted 5.60% of aggregate domestic deposits.
Savings Bank deposits grew by 13.05% and Current deposits logged a growth
of 3.81%. The share of low cost deposits comprising of savings and current
deposits to total domestic deposits (excluding Inter Bank deposit) is
The Bank has a well diversified deposit base with 12% of domestic deposits
coming from rural areas, 13% from semi urban, 18% from urban and 57% from
metro areas. The bank`s total clientele base of 54.09 million consisted of
49.90 million depositors and 4.19 million borrowers as on 31st of March,
The Gross Advances of the Bank increased from Rs.2,16,154 crore as on
31.03.2011 to Rs.2,51,494 crore as on 31.03.2012, recording a growth rate
Under Large Corporate portfolio, the Bank added 88 new customers and
accounts, 13 Large Corporate Banking Branches, 41 Mid Corporate Branches
and 9 Overseas NRI branches continue to cater exclusively to the
specialised credit requirement of the Corporate borrowers/exporters.
During the year, the Bank sanctioned fund based limits of Rs. 4,654 crore
and Non Fund Based limits Rs. 336 crore under infrastructure projects
covering power generation, telecommunications, ports, roads, construction
The Bank is active in meeting the importers and exporters clients`
financial requirements both in domestic and in foreign currency as well.
Bank`s 208 branches across the country are authorized to handle foreign
exchange business and cater to the credit/ foreign exchange needs of
importers & exporters. The Bank`s export credit registered a growth of Rs.
739 Crore i.e. 10% increase over March 2011 and reached a level of Rs.
8,128 Crore as on 31st March, 2012. The share of export credit to net
adjusted bank credit as at March 2012 was 5.04%.
Financial requirements of both exporters and non-exporters are met through
ECB at the Bank`s overseas branches and Foreign Currency loans at domestic
branches. The total amount of such advances as at 31.03.2012 was USD
1405.84 million (Comprising of ECBs USD 652.12 Mn. and Foreign Currency
Loan of USD 753.72 Mn.) equivalent to Rs. 7,152.21 crore. The bank also
extended pre-shipment and post-shipment export credit in foreign currency
and the amount outstanding as at 31.03.2012 was USD 244.75 Mn. (equivalent
to Rs.1,245.17 crore).
Wholesale and International Banking Group: LARGE CORPORATE
The Large Corporate segment constitutes 47% share in total advances as on
31.03.2012. Advances to this important segment has increased from Rs.
80,821 crore as on 31.03.2011 to Rs. 86,703 crore as on 31.03.2012. It
has been decided that large corporate share in total advances needs to be
pruned gradually to around 42%, so that funds may be deployed in segments
where yield is comparatively better.
With implementation of "SANKALP 10,000", Large Corporate Credit set-up has
been re-designed for:.
* Separate Large Corporate Vertical has been created to cater to the large
corporates having sales turnover above Rs. 500 Crore. In order to have
more focused attention and to reduce turnaround time, eight additional LCBs
were opened during the year 2010-11 and two in the year 2011-12 taking the
total LCBs to ten.
* Accounts at Large Corporate branches have been mapped with RSMs who
would look after all corporate needs of the customer for cash management,
forex, treasury products, trade finance, deposits, retail banking and third
party products and customer will have one point contact through the
Relationship Manager for all banking needs.
* Credit business at Large Corporate Branches have been segregated between
Relationship Managers reporting to Branch Head and Credit Appraisal
Officers reporting to Credit Team Leader as measure of Risk Management.
Credit proposals processed at Large Corporate Branch are now sent directly
to General Manager, Head Office, Large Corporate. This has resulted in
reduction of turnaround time.
* Bank has put system in place to monitor pending Proposals / references
at Large Corporate branches as well as at Head Office level. This has
helped in reducing turn around time.
- The Bank, for reducing turn around time, has developed CAPS module for
- Large Corporate branches, apart from meeting the credit needs of
borrowers, are now taking care of entire banking needs of the corporate
customers. The Relationship Managers (RSMs) have been posted at Large
Corporate branches who serve as a focal point for corporate clients and
canvass new business.
Mid Corporate vertical was established in October, 2010 with the sole
purpose of meeting all banking related requirements of the customer under a
single roof. The purpose of setting up of separate Mid Corporate vertical
is to harness the large potential in the segment which offers higher yields
with wider risk spread.
Mid Corporate covers new companies with project cost of Rs. 10 crore -
Rs. 100 crore. For existing units sales turn over criteria of Rs. 100
crore - Rs. 500 crore applies. Mid Corporate vertical operates through 7
(Seven) Divisional Offices and 41 Mid Corporate branches. There are 12
(Twelve ) Credit Processing Centres (CPC) established exclusively for
processing of the proposals.
During the FY 2011-12, the Credit business under Mid Corporate vertical
grew from Rs. 18,483 crore to Rs. 22,234 Crore registering a growth of
20.30%. Similarly, Deposit business grew from Rs. 8,360 crore to
Rs.9,483 crore registering a growth of 13.40%. Mid Corporate vertical
contributes 12.04% of the total domestic Credit and 4.08% of domestic
Deposit business of the Bank.
PROJECT FINANCE AND SYNDICATIONS GROUP
Project Finance and Syndications Group of the bank is manned by highly
experienced and qualified professionals. It undertakes appraisals of
infrastructure and industrial projects.
It takes up assignments of technical appraisal, underwriting and
syndication of loans. During the Year 2011-12 financial closures were done
with a project cost of Rs. 13,119 crore and syndicated debt of Rs.
20,957 crore. Bank of India improved All India Rankings in Domestic
Syndication from 6th to 5th in the Bloomberg Lead Tables for the calendar
The bank has recruited Engineers and MBA`s from the Industry with diverse
experience to strengthen the technical appraisal and syndication team of
Bank is also acting as Mandated Lead Arranger (MLA) and Joint Book Runner
(JBR) for Multicurrency International Syndication loans and arranged loan
in USD, JPY, EURO and GBP currencies for Indian Corporate for their
expansion/ acquisition and Joint Ventures, covering a wide range of
The technical appraisal department, which supports the syndication team,
continued appraisal of industrial credit apart from that for syndicated
loans. The team comprising of professional engineers, evaluated technology
related risks for a business worth Rs. 4,300 Crore for the year, enabling
the bank to improve quality of industrial assets. The operations of the
Technical Appraisal Department, translated into a fee based income of Rs.
21.46 Crore for the Bank during the year.
Transaction Banking department is focusing on 4 business lines, with an
intention to make them major revenue drivers for the Bank. They are:
* Cash Management Services,
* Channel Finance,
* Trade Finance, and
* Garnering Government Business
In the year 2011-12 Bank has made significant strides in Cash Management
Services (CMS) space by adding 50 new clients and increasing the revenue
from this business segment manifold.
The process for acquiring the new software system has been initiated. The
system will take care of CMS, Channel Finance and centralization of trade
finance. The direct customer interface through a portal will be made
available through the new system. The first module of the new system is
likely to be rolled out by August-September 2012. The installation will be
in phases and is expected to be completed by March 2013. The new software
will have integration with Bank`s core system finacle with Host to Host
connectivity, web access to the clients with capabilities to integrate with
client ERP software. This will result in better targeting of clientele and
will enhance the business volume and fee based income in addition to the
sizable float balances. On standalone basis, small banks have been targeted
for correspondent banking arrangements and deposit heavy clients for float.
For Bank`s corporate and HNW clients, cash pick up facility (Door Step
Banking) has been put in place at all NBG offices. The initiative has
received positive response from target clientele who have been relieved
from the worries and risks of handling and carrying huge amount of cash to
During the year 2011-12 Bank has made specific marketing efforts and has
made liaison with the State Government Departments of Chhattisgarh (Raipur
Zone), Jharkhand (Ranchi Zone), Uttaranchal (Ghaziabad Zone), Assam &
Meghalaya (Siliguri Zone) which has yielded good results.
The Bank has presence across 5 continents and 19 countries covering all the
major financial centres such as London, New York, Paris, Tokyo, Singapore
and Hong Kong. As on 31.03.2012, bank has a network of 49 branches and
offices abroad, including 5 representative offices. It also has 3
subsidiaries and 1 Joint Venture abroad.
Bank`s subsidiary in New Zealand was opened on 6th October, 2011. Opening
of subsidiaries at Uganda, Canada, Botswana and Brazil, upgradation of
Representative Office to Branch in Johannesburg and Ho Chi Minh City and
localisation of Kenya operations have reached an advanced stage. The Bank
has a Global Processing Centre (GPC) at Singapore, thereby improving the
Management Information system and the customer service. The integration of
systems of overseas branches to Indian Operations will be completed by
December 2012, bringing them under Finacle Core Banking platform.
Bank is acting as Mandated Lead Arranger (MLA) and Joint Book Runner (JBR)
for Multicurrency International Syndication loans and has arranged loans in
EURO and GBP currencies for Indian Corporates for their expansion /
acquisition and Joint Ventures, covering a wide range of industries.
Bank has opened Global Remittance Centre (GRC) in Mumbai. The inward
remittances, NRE/NRO Account opening of NRI customers have been centralized
at GRC. For service to non resident customers in Deposits and remittances,
SMS alerts for remitter as well as beneficiary for remittance from Gulf
Countries have been introduced. Straight through processing (STP) for Speed
Remittances has been put in place and viewing facility has been set up for
offsite account details. The bank has introduced BOI Premium NR Deposit
Scheme, Star e-Remit for UK based customers.
As at 31st March, 2012, total deposits at foreign branches stood at Rs.
69,741 crore, registering a rise of Rs. 23,818 crore (51.97%) over
previous year. Total advances stood at Rs. 73,544 crore recording a rise
of Rs. 22,537 crore (44.2%) over previous year. Investments were at Rs.
Operating profit of foreign branches for the year ended March 2012 at Rs.
1,088 crore has shown a rise of Rs. 332 crore over previous year.
Correspondingly, Net profit at Rs. 628 crore has also increased by Rs.
133 crore over March 2011.
In terms of contribution to global business and profit, foreign branches
contributed 25.1% towards global business, 16.2% and 23.5% towards
Operating profit and Net profit respectively for the year ended 31.03.12.
The forex business handled by the bank has shown good growth. During the
year 2011-12, Export and Import turnover was Rs. 52,546 crore and Rs.
46,460 crore respectively. The Bank continues to be a leading player in
forex market. The aggregate turnover of Bank`s Treasury Branch during the
year was Rs. 26,60,625 crore.
The yield on benchmark 10 year G-Sec which was 8.01% as on 31st march, 2011
has since hardened to 8.57% as on 31.03.2012. However, movement of G-Sec
yields was highly volatile and the same moved within a wide range between
8.15% to 8.98% during the year. The Bank had maintained a higher level of
investments keeping a balance between interest income and market risk. The
Bank had maintained SLR investments at higher level in excess of the
regulatory requirement of 24% of Net Demand & Time Liabilities so that the
excess SLR can be utilised for borrowing from Repo/CBLO window. The gross
SLR investments were Rs. 80,271 crore, (87.42% of total investments) and
Non-SLR investments stood at Rs. 11,554 crore, (12.58% of total
The Investments are made in accordance with the comprehensive policy in
this regard approved by the Board.
The policy is reviewed periodically to respond to market developments/
The Bank continued to play an active role in all segments of the market -
Funds, Forex and Bonds during the year 2011-12. Taking advantage of G-sec
rate movements, bank also churned its investment portfolio and earned
profits from trading and sale of securities. The Bank has taken advantage
of arbitrage opportunity within various market segments and could place the
excess rupee funds in Certificate of Deposits (CD), Buy/Sell Foreign
Exchange swaps, term money market thereof earning a spread of 1% to 1.5%.
The Bank has built up a portfolio of Rs. 2,592 crore in CDs, lent Rs.
850 Crore in Term Money, by borrowing in CBLO/Repo against `T` Bills and
surplus securities thereby earning a spread of approximately 1% to 1.5%.
National Banking Group (Head Office):
1. Priority Sector Advances:
The bank has always been one of the leaders in servicing to the priority
and agriculture sectors, with its vast network of rural and semi-urban
branches and committed personnel. Priority sector advances, apart from
presenting a big business opportunity, have wide social ramifications.
The Bank has registered an outstanding level of Rs.59,245 crore under
Priority Sector which is 36.67% of Adjusted Net
Bank Credit (ANBC).
Under Special Agricultural Credit Plan, Bank could disbursed Rs. 13,067
crore upto March 2012.
The position of priority sector advances under various segments is as
(Rs. in Crore)
As on 31st March Growth
2011 2012 Amount Percentage
1. Agriculture 17,632 23,468 5,836 33.09
2. Small Enterprise 23,705 27,128 3,423 14.44
3. Education 1,927 2,193 266 13.80
4. Housing 5,616 6,416 800 14.25
Total Priority Sector 48,880 59,205 10,325 21.12
2. Centralized Processing Centres in focused districts:
As a part of implementation of Sankalp 10000 initiatives, Centralized
Processing Centres have been established in select zones with the objective
of augmenting agriculture credit. So far, 52 CPCs have been opened.
3. Kisan Credit Cards:
Kisan Credit Card Scheme aims at providing need based and timely credit
support to the farmers for their cultivation needs as well as non-farm
activities with an objective to bring about flexible and operational
freedom in credit utilization. During the year Bank has issued 167440 new
Kisan Credit Cards with aggregate limit of Rs. 7,005 crore. The Bank has
so far issued 1145162 Kisan Credit Cards (cumulative) involving financial
outlay of Rs. 8,179 crore.
4. Debt Swap :
Bank has designed `Debt Swap` Scheme with an objective to help the indebted
farmers to redeem their outstanding dues to money lenders and to mitigate
acute distress faced by the farmers due to heavy burden of debt from non-
institutional Total Priority Crore)
Agriculture Rs. 717632 (36.07%)
Small Enterprises Rs. 23705 (48.50%)
Education Rs. 1927 (3.94%)
Housing Rs. 5616 (11.49%)
Small Enterprises Rs. 27128 (45.82%)
Agriculture Rs. 23468 (39.64%)
Education Rs. 2193 (3.70%)
Housing Rs. 6416 (10.84%)
lenders at unrealistic interest rates. Bank has made more than 146 villages
as money lender free villages and also financed more than 13000
5. Differential Rate of Interest :
A scheme for extending financial assistance at concessional interest rate
of 4% to selected low income groups for productive endeavors under the name
Differential Rate of Interest (DRI) Scheme is being implemented by the
Bank. The Bank has sanctioned 11665 cases under DRI Scheme during the year.
6. Prime Minister`s New 15 Point Programme for the welfare of Minority
With the focused attention for the welfare of minority communities, Bank
has been extending finance to the minority communities of Sikhs, Muslims,
Christians, Zoroastrians and Buddhists. During the year 2011-12, Bank has
financed Rs. 275.49 crore to the various minority communities and
registered an outstanding level of Rs. 8,184 crore as on March 2012.
7. Golden Jubilee Rural Housing Finance Scheme :
The Bank has been actively involved in implementation of the Golden Jubilee
Rural Housing Finance Scheme (GJRHFS) and has achieved the target of Rs.
72.73 crore allocated by National Housing Bank for the year. During the
year, Bank has sanctioned 1443 cases under GJRHFS.
8. Micro Finance / Micro Credit :
The Scheme of Micro Credit has been found to be an effective instrument for
lifting the poor above the level of poverty by providing them increased
self employment opportunities and making them credit worthy.
Bank is having more than 99984 SHGs credit linked with Financial Outlay of
Rs. 1,631 crore. Out of this, more than 80328 women Self Help Groups are
credit linked to the Bank having financial outlay of Rs. 1,480 crore.
9. Solar Energy Home Lighting System :
To address the issues of electricity paucity the Bank has prepared and
launched a scheme on Solar Energy Home Lighting System. The Bank extends
financial assistance to the prospective borrowers for purchase and
installation of Solar Energy Home Lighting System. The Bank has so far
sanctioned 1072 units with financial outlay of Rs. 6.17 crore.
10. Mega project - 140 villages :
The main objective of the scheme is to create awareness and bring urban
amenities to rural areas including technology to rural households as
available to urban clientele. So far,
140 villages spread over in 17 States and 78 districts have been covered
under the Scheme. The Bank has financed to the tune of Rs. 492 crore
under the scheme through 51000 beneficiary accounts.
11. Lead Bank Responsibility:
The Bank has been assigned with Lead Bank responsibility in 48 districts
spread over five states of Jharkhand (15), Maharashtra (12), Madhya Pradesh
(12), Uttar Pradesh (7) and Orissa (2). The Bank has been successfully
discharging its duties of Lead Bank in all these districts. The Annual
Credit Plan (ACP) for the year 2011-12 was launched in all the Lead
Districts involving credit outlay of Rs. 7,483 crore for the Bank. The
achievement of the Bank is Rs.7,495 crore which is 100.16% of ACP.
Financial Inclusion is integral to the inclusive growth process and
sustainable development of the country. There has been a strategic shift in
sustainable financial inclusion to the adoption of market oriented approach
viewing financial inclusion as a viable business proposition. The paradigm
has decidedly shifted from "CSR" to "economic viability". It has been made
possible with the availability of ICT based solution to support secured and
sufficiently low cost transactions required by the financial sector. The
Bank is viewing these prospective banking service users through a prism of
opportunity rather than obligation.
The Bank has carved out Financial Inclusion as a new Business Unit headed
by General Manager to drive board approved Financial Inclusion Plan (2010-
13). Bank is committed to provide banking services through Business
Correspondents and ICT based hand held devices (micro ATMs) to 29000
villages, connect 125 lakh people through no frill accounts with inbuilt
overdraft facilities to take care of their urgent consumption needs, extend
entrepreneurship credit to eligible people to earn their sustainable
livelihood, offer mobile based remittance facility to help mainly the
migrant labour/ self employed to remit money to their family members and
facilitate access to Bank`s third party products including Micro Insurance
amongst other services.
The progress under Financial Inclusion Plan (FIP) in 2011-12 is summarized
* No. of No frill accounts opened : 62.69 lakh (50.07 lakh in 2010-11)
* No. of Smart Cards issued : 7.65 lakh
* GCC/KCC issued : Rs. 8,423 crore
(12.44 lakh accounts)
* Business Correspondents engaged : 3813 Corporate BCs
* Channel Management Partners engaged : 81
* No. of Villages where 100% FI
achieved : 10008
The Bank has achieved 100% Financial Inclusion in all 2992 allotted
villages with population above 2000 as on 31.03.2011, ahead of targeted
date of 31.03.2012 by GOI/ RBI. Robust operational systems with adequate
risk mitigants and best practices have been built up and are being pursued.
Star Swarojgar Prashikshan Sansthan (RSETIs)
With the aim of mitigating the unemployment problem among the rural youth,
the Bank took initiative to form a dedicated trust named "STAR SWAROJGAR
PRASHIKSHAN SANSTHAN (SSPS)" in 2005. Two SSPS (RSETIs) were established at
Bhopal and Kolhapur immediately after formation of the trust. Ministry of
Rural Development, Government of India found value in the initiative and
proposed to support establishment of such Institute in each district of the
country to tap the rural BPL youth from the rural hinterland. The
formation, nomenclature, sponsorship, management, programme structure,
staffing and administration, MIS were defined. Bank was allotted 42 centres
to establish institutes. Bank has established 41 such institutes in
Jharkhand, Orissa, Uttar Pradesh, Madhya Pradesh, Maharashtra and West
Bengal. 24968 participants have been trained and 9626 have been provided
with credit inputs from these centres till date.
Bank has planned to upgrade/establish five integrated SSPS (RSETIs) at
Ranchi (Jharkhand), Barabanki (Uttar Pradesh), Bhopal (Madhya Pradesh), Pen
(Maharashtra) and Belgaum (Karnataka) for extending the scope of SSPS
(RSETIs) to primary health care, adult literacy, comprehensive financial
access and planning for growth, strengthening civil society organization,
environmental sustainability. Bank would like to collaborate with and
foster strategic partnership aiming at bringing diverse resources from the
public, private and social sectors to bear on the challenges surrounding
Financial literacy and Credit Counseling Centres (ABHAY)
Bank has recognized the need of a common person for financial education to
appreciate the complexities of financial dealing with financial
intermediaries on matters relating to personal finances on a day to day
basis. Further, those who suffer from financial problems due to
unmanageable debts also need credit counseling to come out of the repayment
obligations outside bankruptcy and also learn credit usages and improve
their financial management. It is in this background that Bank has opened 5
(five) Credit counseling centres named ABHAY at Mumbai, Wardha, Gumla,
Kolkata and Chennai and they are manned by senior and experienced bankers.
In addition to remedial counseling on case to case basis for the distressed
borrowers, preventive counseling through media, workshops and seminars are
also given. So far 9370 cases of counseling were taken up and disposed off
quickly bringing smile on the faces of the distressed people.
Regional Rural Banks
Bank has sponsored 5 (five) Regional Rural Banks (RRBs) namely Jharkhand
Gramin Bank (Jharkhand State), Aryavart Gramin Bank (Uttar Pradesh State),
Baitarani Gramya Bank (Orissa State), Narmada Malwa Gramin Bank (Madhya
Pradesh State) and Wainganga Krishna Gramin Bank (Maharashtra State). All
RRBs are profit making. All Branches and administrative offices of the
Gramin Banks are now on CBS platform. These banks are also going to start
RTGS and ATM services shortly. All RRBs taken together have a branch
network of 1085 outlets and have garnered a business mix of Rs.1,17,685
The Bank during the year 2011-12, perused the policy of building up healthy
retail credit portfolio. In the post recessionary period of FY 2011-12 the
spring buds of reviving economy gave ample opportunity for retail credit.
The Bank`s retail credit portfolio increased from Rs. 16,649 crore to
Rs.19,116 crore as on 31st March, 2012. During this period the contours of
retail credit were also redefined.
The bank has established 21 RBC`s across major cities of the country to
expedite the processing of retail Home Loans/ Loan Against Property and
also processing of Vehicle Loans and Education Loans proposals- in case of
tie-up arrangement. Home Loan segment recorded a growth of Rs.
1,312(18.65%) crore from Rs. 7,033crore (March, 2011) to Rs. 8,345
crore (March, 2012). The Bank has formulated basic guidelines for entering
in to tie-up with builders. In order to ensure that the tie-ups are
encouraged only with builders with proven track record, the Zonal Managers
have been empowered to scout and enter into tie-ups with builders of repute
locally. The Bank is participating in the Central Govt. sponsored special
Interest Subvention scheme to stimulate demand for credit to Housing in the
middle and lower income segment as announced in the Union Budget.
Education loan portfolio recorded growth of 12.69% increasing from Rs.
1,946 crore to Rs. 2,193 crore during the year. The Bank has embraced the
Interest subsidy scheme, wherein borrowers who have availed education loans
during academic year 2010-11 and hailing from Economically Weaker Section
are eligible for education loan interest subsidy from Government of India,
Ministry of HRD, through Nodal Bank. The Bank continues to give top
priority for extending credit for pursuing higher education under the Star
Education Loan scheme. Towards this end, the Zonal Manager marketing teams
are constantly entering into tie-up arrangements with local Institutions so
that the students` requirements are speedily attended to by the Branches.
Bank has also introduced a new product under Education Loan viz. BOI Star
Vidya Loan to cater to students seeking admission to Premier Educational
Institutions in the country such as
Autofinance segment also recorded reasonable growth of 28.92% increasing
from Rs. 1,408 crore to Rs. 1,815 crore during the year. The strategy
of tie-up arrangement with diverse reputed Auto manufacturers like Maruti
Suzuki, Tata Motors, Hyundai Motors, TVS, Hero Honda.continues to provide
healthy retail leads to augment Autofin portfolio.
The growth in respect of major Retail loan schemes was as under:
O/s as O/s as Growth & Scheme
31.03.2011 31.03.2012 % growth
(Rs. Crore) (Rs. Crore) (Rs. Crore)
Star Home Loan Scheme 7,033 8,345 1,312(18.65)
Star Education Loan Scheme 1,946 2,193 247(12.69)
Star Autofin Loan Scheme 1,408 1,815 407(28.92)
Star Personal Loan Scheme 649 692 30(04.53)
Star Mortgage Loan Scheme 1,495 1,632 137(09.57)
The Bank has created a new SME vertical headed by a General Manager to
cater to the specific business needs of the segment. A more inclusive
definition has been given for SME business to include all business
activities with a turnover of upto Rs. 100 crore. The vertical will look
for growth not only on credit, but CASA, retail business, fee based income
and third party products in the SME segment.
Strategies for SME business growth, as enunciated by the Bank are:
* SME City Centres being rolled out to act as processing hubs for all SME
credit business of limits above Rs. 1 crore.
* 21 SME City Centres are presently operating across 20 zones.
* Credit origination and processing segregated in the City Centres as a
risk management measure.
* Dedicated team for credit processing and outbound sales team for lead
generation and follow up for business acquisition put in place.
* Credit processes de-layered and delegation revised upward to ensure
* 4 new products launched to customize Bank`s offering to SME customers.
* Pre-disbursement risk mitigation processes simplified to ensure faster
* Simplified Application Form introduced for all SME customers
irrespective of the quantum of finance.
* Master Check List formulated for obtaining information required for
processing customer requests in one go.
* Tracking and Performance Management Systems introduced in the SME City
Centres to bring about greater transparency in business processes.
Performance of the Bank under MSME
* Advances to Micro & Small Sector as on 31.03.2012 is Rs.27,128 Crore
* Growth over FY-2011-12 is 14.43%
* Advances to MSME (including Medium Industries) is Rs.32,270 crore
* This represents a growth of about 7.40% over FY 2010-11.
* Growth has mainly been in Micro & Small segments in the MSME space
* NPA at 8.05% as compared to overall NPA of 2.34% of the Bank continues
to be an area of concern
* Bank has put in place an OTS scheme and exhort the zones/branches to
make effective use of the scheme to reduce the NPA in the current year
Strategies for achieving growth under MSME
* Formation of clusters for cluster based lending. Each Zone to identify
at least 2 clusters and formulate cluster specific schemes to increase
credit flow to MSME sector
* Sensitising Branches with high potential for MSME lending in order to
boost credit flow, especially Micro and Small sectors
* Sensitising Branches about availability of CGTMSE insurance cover
* Conducting workshops for sales officers of SME City Centres
REORGANISATION OF THE BANK
Keeping its growth aspirations in mind, the Bank had in the year 2010
embarked upon a new bold vision Sankalp 10,000. This was a mammoth
transformational exercise aiming at reviewing the structure, orientation,
processes and the business focus. For this exercise Mckinsey and Co., the
top-rated international consultants had been engaged to help identify
proper growth opportunities, strategies, processes, manage the risks and
above all, suggest an efficient and vibrant organisational structure which
will ensure Bank`s sustained and continued growth for quite some time to
come Sankalp 10,000 rests on the three pillars:
* Customer First
* Building Winning Teams
* High performance Driven Culture
The organizational structure of the Bank was redesigned in two distinctly
separate groups of businesses i.e (a) National Banking Group and (b)
Wholesale and International Banking Group, in order to have a more focused
attention to each business segment, the two groups are headed by the two
Executive Directors of the Bank.
National Banking Group (Head Office) - The National Banking Group is
comprised of the following Business Units:
* Rural Banking
* Financial Inclusion
* Retail Banking
* SME Banking
National Banking Group General Managers - There are 5 GMs, National Banking
who head the five geographies that the country is divided into - Central,
North, East, West and South. These five National Banking Group General
Managers lead their respective geographies covering Rural, Retail and SME
business of the Bank in the Branches/Zones.
Wholesale and International Banking Group (Head Office) - The Wholesale and
International Banking Groups are comprised of the following Business Units.
* Large Corporate Banking
* Mid-Corporate Banking
* Project Finance
* Transaction Banking
* International Banking
Verticals have been designed for Large Corporate and Mid-Corporate
businesses to reduce Turn-Around-Time (TAT) effectively and to maximize the
relationship for greater resource mobilization and augmenting fee based
income also. Sourcing of Credit has been segregated from Credit appraisal
and sanction to better manage risk management.
The Business Units are responsible for the entire business (end to end) and
not only for credit to the respective customer/business segments. The
responsibility extends to profitability of the business units and comprises
of all type of banking businesses i.e Deposits, Advances, Fee Income and
sale of other/third party products.
Creating Branch of the future model
Bank`s Branch network remains one of the most important `touch point` with
the customer & driver of growth. To fully tap into the potential of branch
network, Bank has embarked upon the plan of creating "Branch of the Future"
model. The objective of the new model will be to bring about significant
improvement in both customer experience and business performance. Creating
a new model will also help institutionalizing the "new way of working"
through the Bank.
In the Pilot phase, 5 branches, one each from NBG, have been selected vis-
a-vis Chembur (NBG West), Navrangpura
(NBG Central), Karol Bagh (NBG North), Bow Bazar (NBG
East) and Mylapore Branch (NBG South) and converted with the new branch
layout specification. The model has started yielding positive results and
the bank aspires to increase number of branches manifold under this model.
The main objective of the branch of future are:
1. Redesign branch processes for account opening, passbook update, cash
2. Drive and enable customer migration to alternate channels such as ATMs,
Self Service Passbook printer etc.
3. Redesign branch roles and responsibilities, staffing to have specialized
sales and service roles.
4. Adopt a best-in-class activity schedule in branches.
5. New branch layout with large customer area, in-branch back office,
physically separated from the customer area.
6. Automate key customer interactions (i.e., QMS, self-service passbook
7. Implement new branch sales and service training.
REVIEW OF OTHER PRODUCTS & SERVICES
The Bank is offering Five types of Credit Cards to select from to the
customers. The Bank also has Two affiliate banks viz. Bank of Maharashtra
and Tamilnadu Mercantile bank Ltd issuing Credit Cards under the brand name
"India Card". During the year Issuing turnover witnessed a growth of -
13.24% and stood at about Rs. 351.45 Crore and acquiring turnover
witnessed an increase of 2.2% and stood at Rs. 309.27 Crore.
The Bank is also offering Five types of Debit cum ATM cards. Total Debit
Cards issued as on 31.03.2012 stood at 101.42 lakh comprising of 36.41 lakh
Starlinks International ATM cum Debit Cards (Visa Electron), 63.66 lakh BOI
Global Debit cum ATM cards (MasterCard), 0.02 lakh Platinum Debit
Cards (MasterCard), 0.15 lakh Gift Cards (Visa Electron) and 1.33 lakh
Bingo Cards. Debit cards registered a growth 31.91% during the year 2011-
The Bank has in place bilateral and multilateral agreements with cross-
section of Banks for sharing of ATMs. Thus Bank`s cardholders have the
privilege of accessing around 50,000 ATMs throughout the country. The Bank
continues to be the settlement bank for MasterCard in India, Cash tree and
Bullion banking was introduced by the Bank in November 1997. Initially the
scheme was introduced at SEEPZ and Ahmedabad branches and was subsequently
introduced at other branches. As on date although 9 branches are authorized
to undertake bullion business only 5 branches are undertaking bullion
The gold is procured of consignment basis for catering to the need of
Jewellery exporters and domestic jewellers. The Bank sold 11,717 kg of gold
in the year 2011-12, with a turnover of Rs.2,773 crore, thereby earning an
income of Rs.16.74 crore. The increase in the earning during the year was
STAR CASH MANAGEMENT SERVICES (STAR CMS)
The Bank has active presence in CMS space but the CMS operations have been
revamped by adopting latest state of the art WEB based technology. The Bank
has also entered into Correspondent banking arrangement with other Banks.
Due to switch over to the WEB based software on ORACLE platform the Bank is
well positioned to handle any number of transactions.
The Bank has a separate department for CMS at Head Office which monitors
and controls the overall functioning of CMS. It is under the direct control
of the General Manager (Transaction Banking). The CMS HUB located at
M.G.Road, Mumbai takes care of the operational side of the initiative.
The Bank has over 4000 branches which are operating on CBS platform across
more than 1000 cities and towns. All these branches can canvass for CMS
clients for availing various CMS services.
Product-wise Capabilities a. Local Collections:
The STAR CMS has the capability to provide location-wise daily MIS for
realizations and returns. The Bank can also provide detailed listing of
returns by encrypted e-mail and if required hard copy can also be mailed to
b. Bulk Collections:
Bulk collections are offered at all locations covered under local
collections, but with prior approval since modalities/ systems are to be
enabled. Soft copy of the details is needed for direct data upload for all
c. Outstation Collections:
Day arrangements range from Day 0 - Day 21; which are always centre
specific. These vary for local and upcountry cheque collection centres.
d. Physical Cash:
Physical cash can be absorbed at all locations being offered for cash
management, this facility is being rolled out under Door Step banking
initiative. Day arrangement will be T+1 day.
Positive pay facility is available across all locations for drafts drawn on
the Bank. The Bank has the facility for bulk printing of drafts/cheques and
the locations can be fixed as per requirements.
f. Electronic Settlements:
The Bank has system capabilities to offer Direct Credit and Direct Debit
facility. In case of Direct Debits, mandate verification is mandatory. TAT
will depend upon the location of the beneficiary account.
g. Other additional services:
The Bank is open to offer services at its branches for collection of
application forms for NFOs and Right Issues.
THIRD PARTY PRODUCTS Tie-up for Life Insurance:
The Bank continued its Corporate Agency arrangement with its Joint Venture
Life Insurance Company Star Union Dai-ichi Life Insurance Co Ltd. for sale
of life insurance products. The Bank has around 897 employees to act as
`Specified Person` for sale of insurance products at various centres.
During the current financial year, the Bank collected premium of Rs. 548
crore (Number of Policies - over 86,000) and contributed to more than 43%
of the Joint Venture business.
The Bank continues to offer optional life insurance cover to its Star Home
Loan and Star Education Loan borrowers under Group Policy wherein the
borrowers pay subsidized premium for life cover.
Tie-up for General Insurance (Non-life) with National Insurance Co Ltd.
The existing tie-up arrangement with NICL was converted into Corporate
Agency Distribution Model in compliance with IRDA`s revised guidelines
covering Bancassurance Business with Distributors like Banks. The Bank has
a co-branded health insurance product - BOI National Swasthya Bima Policy,
which is a Family Floater Mediclaim Insurance Cover Policy available for
Bank of India account holders, at a very low premium. The coverage is
available for the main Account holder, Spouse and maximum of 2 Dependent
Children. Entire family (Account holder, spouse and two dependent children)
is covered to the extent of sum insured in as much as part of the sum
insured can be availed at different times by family members individually.
It has been a popular product and as on 31.03.2012 over 1.3 lakh Bank of
India Account holders have taken this policy.
The total premium collected by the Bank for NICL during the financial year
2011-12 has been Rs. 138 crore which earned a commission of Rs. 14.51
Mutual Funds Products:
The Bank continues to be a shop for all financial needs to the customers as
much as distributes various Mutual Fund products of the 9 Asset Management
Companies, viz., Birla Sun Life Mutual Fund, DSP BlakhkRock Mutual Fund,
Franklin Templeton Investments, HDFC Mutual Fund, IDFC Mutual Fund, ING
Mutual Fund, Kotak Mutual Fund, Reliance Mutual Fund and UTI Mutual Fund.
The Bank has entered into joint venture with Bharti AXA IM to re-enter
mutual fund business.
ASSET RECOVERY & NPA MANAGEMENT
The Bank continued its drive and focuss in improving its performance in the
area of NPA management in the
year 2011-12 as well. Reduction of NPAs is given utmost priority at the
Bank and this function has steadily grown in importance. Substantial
measures were initiated to augment recovery and contain NPAs. Efforts were
also made to maximize recovery in written off accounts and uncharged /
unrealised interest in NPA accounts which contributes to the Bank`s profits
Bank has appointed Senior Executives as Nodal Officers at Five National
Banking Group offices encompassing the entire Branch network for better
control and recovery of NPAs.
The Bank has migrated to the identification of System Driven NPA during
this year as per RBI notification.
The following table shows management of NPAs during last 3 years:
(Rs. in crore)
Item 31.03.10 31.03.11 31.03.12
(Actual) (Actual) (Actual)
GROSS NPA (Opening) 2,471 4,883 4,882
Cash-Recovery 622 895 1,205
Upgradations 204 1,038 487
Write-off 743 881 2,415
Agr.Debt Waiver/Debt Relief
Scheme 2008 0 0 0
Total Reduction 1,569 2,814 4,107
Slippages 4,162 2,908 5,401
Less Unrealised Interest (URI)
(introduced from F.Y 2009-10) 181 166 212
GROSS NPA (Closing) 4,883 4,811 5,894
Recovery in W/Off A/cs,
UCI/URI 300 383 672
Net NPA 2,207 1,945 3,656
% of Gross NPA to
Gross Advances 2.85 2.23 2.34
% of Net NPA to Net Advances 1.31 0.91 1.47
To boost recovery in small and soft impaired (NPA) accounts, two existing
schemes have been modified as under:-
i) Star Sanjeevani Incentive Scheme for NPAs upto Rs. 50 lakhs
ii) Incentive Scheme for Upgradation of accounts upto Rs. 100 lakhs in
The above Schemes have been introduced with intention to motivate the field
level staff and reduce the dependence on Professional Enforcement Agents.
This has paid rich dividends in the form of involvement of staff at every
Performance under Star-Sanjeevani Incentive schemes was as below:
(Rs. in Crore)
Recovery during 2011-12 Amount
Recovery in LIVE NPAs 557.95
Recovery in written-off A/cs 29.58
Total Recovery 557.95
Recovery Camps and participation in LOK ADALAT for speedy resolution of
small NPAs has also been undertaken in a big way at the Zones. The Bank has
made recovery of Rs. 142.38 Crore through LOK-ADALAT and Recovery Camps.
This is a critical area for the bank and it`s importance has steadily
grown, as retention of `Asset quality` is the buzzword with rising interest
rates, slowdown in the economy, high input cost squeezing profitability of
various industries, besides, switching over to the system based
identification and collation of NPAs form September 2011.
* The health of the advance accounts with exposure of Rs. 100 lakhs and
above is being monitored by the Credit Monitoring Department at Head
Office, which covers approximately 70% of the domestic credit portfolio of
the Bank. The monitoring is being done from various reports generated
centrally from system giving alerts and fortnightly Flash Reports. These
reports are being used effectively by Head Office/Zones/Branches to track
and avoid delinquency. The out of order position with break-up of 30 to 60
days, 61 to 75 days & above 75 days overdue is made available to Branches
for follow up & regularization. ZO/HO also monitor the progress to maintain
* With migration of identification of NPAs by the system, slippages in
small accounts with o/s below Rs. 10 lakh are showing rising trend, It is
a major challenge. Bank has addressed this challenge in a big way through
effective follow up at all levels. The recovery culture at rural and semi
urban branches has been revisited.
* Extra precautions and strict compliance in letter and spirit is ensured
while take over accounts from other Banks. In deserving cases take over is
approved on case to case basis after ensuring quality and comprehensive due
diligence. While approving take over business, it is ensured that advances
of sound and remunerative nature, with favourable financial ratios in line
with entry level norms and Credit Rating of `AAA` & `AA` are taken over.
* To address the issues of 90 days default, the repayment schedule is
fixed after making thorough study of Cash
Flows which are achievable and realistic. Adequate moratorium is also
reckoned on merit of the case while considering fresh term loan for new
* Due diligence in respect of promoters is carried out before sanction of
advance and antecedents of the applicants are ascertained through CIBIL
Reports, RBI Defaulters List and ECGC Caution list and other means.
* Inspection of the securities charged to the Bank is of immense
importance for ensuring end use of funds and is undertaken at regular
intervals. Insurance of charged assets is given due importance for safe
guarding the Bank`s exposure. Timely renewal of insurance policies with
adequacy of cover is not lost sight of. Renewal documents are obtained on
yearly basis instead of waiting for 3 years time.
* Before parting with Bank`s funds, the process of CPA is completed in all
respect. Timely closure of CPA helps the bank in taking swift remedial
measures wherever applicable.
* `Stock & Receivable Audit`, another important tool, is used to monitor
the account. Branches undertake periodical stock & receivable audit by firm
of approved Chartered Accountants so that deficiencies are known and
remedial measures are undertaken in time. Closure of report is done within
a reasonable time period.
* Credit Monitoring at Large Corporate/Mid Corporate Branches assumes
added significance. One officer in such branches is exclusively monitoring
the performance of projected Sales/Inventory/Profits of the accounts based
on MSOD/QIS/Stock & Book Debt Statements and timely review of the advance
accounts. The quarterly financial performance of associate companies having
Large exposure is studied & remedial action taken.
* Conducting of monthly Zonal Credit Monitoring Committee meeting (ZCMC)
is undertaken wherein out of order/problem accounts and items like
* Closure of CPA
* Closure of stock audit reports
* Closure of CALRM
* Account due for review
* Watch list accounts (AC 12) & Restructured accounts
* Devolvement of L/C & Invocation of Guarantee not regularized
* Pending SAR & Quick Mortality cases
are discussed which will help in proper monitoring and control. Similarly,
meeting with GMs of SBU at H.O. with Credit Monitoring Department, HO is
convened at fortnightly interval for discussing out of order/stressed
accounts for desired results.
* Extensive use of Video Conference facility at HO/ZO/ NBG level is used
for follow up of out of order /stressed accounts which helps in arresting
* The marking of NPA through CBS system has been put in place w.e.f.
30.09.2011.The NPA so marked by the system are soft NPAs which attract
immediate attention for recovery/ up gradation thereof so that slippages
are reduced to bare minimal level.
BRANCH NETWORK & EXPANSION
The Bank has a geographically well spread branch network in India and
abroad. The Bank had 4000 branches in India as on 31.03.2012. In the
foreign countries, 44 branches and 5 representative offices keep Bank`s
presence felt in all time zones and important financial centers of the
During the year 2011-12, Bank opened 510 new branches including 07
Extension Counters converted into full fledged branches.
Composition of Bank`s branch network is as follows:
Category 31.03.2011 31.03.2012
No. of Brs. % to Total No. of Brs. % to Total
Metropolitan 660 18.91 722 18.05
Urban 645 18.49 709 17.72
Semi-Urban 841 24.09 1078 26.95
Rural 1344 38.51 1491 37.28
Total Branches 3490 100 4000 100
Falling in line with RBI liberalized policy of branch authorization, some
branches were shifted to alternate sites and extension counters showing
good performance and those with locational advantage were converted into
full fledged branches. It is intended to continue this policy for the
coming year as well.
RBI has further liberalized its branch authorization policy w.e.f.
29.11.2011 allowing Bank`s to open branches in centers having population
below 1,00,000 (enhanced from 50,000 to below 1,00,000) without obtaining
prior approval from them. The Bank availed the opportunity and authorized
zones to open branches under this category in 322 centers.
POSITION AT A GLANCE
At the year end 31.03.2011 31.03.2012
Number of Branches 3519 4029
Foreign 29 49
Indian 3490 4000
Metropolitan 660 722
Urban 645 709
Semi-Urban 841 1078
Rural 1344 1491
Fully Computerised 3490 4000
Partially Computerised - -
Specialised Branches 279 270
Extention Counter 55 43
The Bank has 271 specialised branches catering to the specific financial
requirements of various categories of customers in the domestic market.
Break-up of such branches is given in the following table:
Categories of Specialised Branches 31.03.2011 31.03.2012
1. SME Branches 100 100
2. Overseas Branches 03 03
3. Corporate Banking Branches - -
4. Large Corporate Banking Branches 10 13
5. Mid-Corporate Branches 40 41
6. N.R.I. Branches 04 06
7. Recovery Branches 15 13
8. Commercial & Personal Banking Brs. 30 26
9. Treasury Branch 01 01
10. Housing & Personal Finance Brs.@ 33 25
11. Government Business Branch 01 01
12. Bullion Banking Branch 01 -
13. Service Branches 40 41
14. Centralised Pension Processing Branch 01 01
15. TOTAL 279 271
@ - Including Retail Business Centers (RBC`s)
The RBI liberalised policy of Branch Authorisation policy has paved way to
shift some branches to alternate sites and extension counters showing good
performance and those with locational advantage, were converted into full-
fledged branches. The Bank availed the opportunity and authorized Zones to
open branches at centres having population below 50 thousand. It is
intended to continue this policy for the coming year as well.
Marketing has been an important focus in the Bank for acquisition of new
customers and create a set of customer centric processes for enhancing
value for them.
The Bank has placed Marketing Team in all the zones for mobilizing
Deposits, Retail & SME advances, Demat, Card Products, IT Enabled Products
and Services, sale of TPP and Gold Coins to name a few. The marketing staff
are placed /attached to the branches /ZO and are working under the Head
Marketing placed at Zonal Office.
The Bank has also placed separate Marketing Teams at 21 Retail Business
Centers (RBCs) for mobilizing retail loans, 20 SME City Centers for
mobilizing SME loans and 8 TASC Teams for mobilizing TASC business.
To strengthen the Marketing Team, the Bank has recruited 208 Marketing
Executives during the last two years. During the current year the bank has
recruited 266 Marketing Executives and they are expected to join the Bank
shortly on completion of pre-recruitment formalities. As on 31st March,
2012, Bank has over 590 proactive and trained marketing personnel for
focused marketing efforts.
Major Initiatives during 2011-12:
* Training: Arranged workshop at MDI Belapur for the Heads of Marketing
from all the zones. We have also initiated conducting workshop for the
newly recruited Marketing Executives to sensitize them on their roles and
responsibilities and provide them inputs on marketing. Four workshops have
been conducted at STC Noida, MDI Belapur, STC Chennai and STC Kolkata
covering all the Marketing Executives from five
* Lead Management System: Launched IT enabled software package called Lead
Management System. The system effectively captures, monitors, tracks,
closed and analyzes the leads generated at various levels. The system will
also be used for administering the incentive scheme as well. Workshops have
been conducted for the key officials from select zones.
* Quick Wins Campaign: Massive Contact Programme to meet Diamond Customers
was launched in 10 zones for contacting of Diamond Customers, updating
their data, KYC compliance, opening of new value accounts, cross selling of
various Bank`s products and Third party Products.
* TASC: Teams are formed on Pilot basis in July, 2011 at 8 Centers namely
Mumbai South, Mumbai North, Navi Mumbai, New Delhi, Chandigarh,
Ghaziabad and Bangalore. The objective of forming the TASC Teams is to
mobilize the business of Trusts, Associations, Societies and Clubs.
* Campaign / Initiatives: Various campaigns / initiatives and Incentive
Schemes have been launched for CASA, Gold Coins, Retail Loans and Third
Party Products etc.
* IBPS Fee Collection: IBPS is regularly conducting Common Written
Examination for Clerks / Officers for RBI / Nationalized Banks. Our Bank is
one of the authorized Banks for collection of Fee. During the year, The
Bank collected Fee amounting to Rs. 96 cr. there by adding to CASA base
Publicity & Public Relation
With a view to enhance Corporate image and identity, Bank has initiated
media campaigns on the existing theme "Relationship Beyond Banking". As
part of corporate campaign on `Relationship beyond banking`, Bank had
initially run two highly acclaimed ad commercials - `The Piggy Bank` and
`The Banker and the Pensioner (Shastri)` - on leading television channels
in the year 2007-08. Bank had followed up these campaigns with two more ad
commercials - `The Banker and the Customer` in a Calcutta - Tram` and it`s
sequel `The Banker and Customer in a Kolkata Coffee Shop` - to highlight
Bank`s status as a modern, tech-savvy bank. Bank had also produced 3 TVCs
on `Education Loan`, `Closing Time` and `Birthday` to strengthen our
Relationship Theme. During March 2010- April 2010 we had telecast 3 TVCs
viz. Bus, Pills and Friends on Relationship theme.
Along with Bank Relationship theme, Bank had produced some more TVCs on
Bank`s products, viz. SME, Education, Home Loan and Auto Loan and the same
were aired widely in major TV channels including national, regional, sports
channels etc. to have wide publicity and brand image for the Bank during
March 2011 - June 2011. The TV campaign was highly appreciated by the
customers and staff and also by non customers as per feedback received.
Bank has also been advertising various products in newspapers, magazines,
hoardings, banners, bus panels, trains, glow signs at railway stations,
events and sponsorships, leaflets and brochures. Bank`s endeavour is
focused on building brand image, increasing the visibility and better
marketing of various products through effective publicity.
Commitment towards Customers
The Bank reiterates its commitment to customer service through customer
centric approach to achieve the goals set under SANKALP 10,000.
The Bank has been a voluntary member of the Banking Codes and Standards
Board of India (BCSBI) since its inception in 2006, to emphasise its
customer orientation and commitment to provide service of a high order in a
transparent manner, supplying the customer with the necessary information
to take an informed decision. BCSBI revised Code 2009 was also adopted by
the Bank and displayed on website. Copies of the revised code are
distributed among customers for their information.
The Bank has adopted various customer centric policies formulated by IBA -
like Deposit Policy, Cheque Collection Policy, Grievance Redressal Policy,
Compensation Policy, Recovery of Dues and Security Repossession Policy,
Simplified Procedure for Settlement of Dues in Deceased Depositors Accounts
and Delivery of Contents from Safe Custody and SDV Lockers in case of
The Bank took the following initiatives during the year to enhance customer
service at branches :
* A short film on desired staff behaviour shot entirely within the Bank
premises is being shown to the participants attending training courses
conducted at Staff Training Centres all over India.
* Root cause analysis of complaints is being done at half yearly intervals
to identify problem areas and initiate corrective steps.
* Zonal Offices have been authorized to carry out root cause analysis and
to reduce the grievance redressal time, identify critical areas, take
prompt corrective steps and thus help enhance customer satisfaction.
* With the increased emphasis on use of electronic mode of communication,
the turn - around time for complaints is being compressed to 10 days in
majority of the cases.
* Web based Customer Complaint Management System (CCMS) is revamped to
generate analytical reports to help reduce turn around time in grievance
redressal and initiate remedial steps in time.
* Customer service and grievance redressal week has been celebrated twice
during the year to draw the customers and staff closer and bring about
changes, if any, for improved customer service.
* Compliance with various customer friendly measures by branches is being
periodically assessed through the visits of officers from Zonal Audit
Offices and necessary corrective steps are being taken promptly thereafter.
* Clean note policy of RBI is being implemented through introduction of
latest note sorting machines/note authentication machines.
* All customer centric information mandatorily required, is displayed on
the website for the benefit of customers and is made available at the
* Various channels are offered to customers for airing their grievances,
including e-mail, phone.
* Bank is issuing personalized Cheque books in 3500 branches and it is
proposed to cover the remaining branches before 30.06.2012.
* Bank has covered 2250 branches where WELCOME Kits are provided to Bank
customers for making available ATM cards and Internet Facility at the time
of opening of the accounts without ant wait period.
RISK MANAGEMENT & CONTROL
Risk is an integral element of the activities of any bank. Accordingly, the
purpose of the risk control function is not only to minimize risks but also
to ensure that the institution properly identifies measures and handles
risks and prepares adequate reports on all these efforts so that the extent
of risks, which have occurred, should not endanger the continuity of
operations. With this in mind the bank has established and operates
mechanisms, which ensures the ongoing assessment of relevant risk types on
an individual basis and of the overall risk position of the bank
Risk Management is a Board driven function in the Bank with the Risk
Management Committee of the Board at the apex level supported by
operational level committees of top executives for managing various risks.
The process of risk management consisting of various stages i.e.
identification, measurement, monitoring and control, is covered in the
policies for Enterprise Wide Risk Management, Credit Risk Management,
Operational Risk Management, Market Risk Management, Derivatives, ALM,
Foreign Exchange and Dealing room operations. These stages constitute a
control cycle, which also involves feedback and feed forward loops.
The identification, definition and recording of all potential risks, in all
activities and products is done through detailed analysis and vetting the
same by the operational level risk committees and task forces. Risk
profiling of the bank is also done on a quarterly basis. Various tools and
systems like prudential limits, new Basel Compliant credit Rating Models,
Credit Audit, VaR models for market risks, Risk control and Self assessment
exercise coupled with tracking of Key Risk Indicators for operational risk
have been introduced for assessing/measuring the identified risks. Data
warehousing project to provide comprehensive data for analysis is
implemented. The Bank is implementing Credit Risk Management Software which
will help the bank in improving the data quality and completeness and
upgrading its Risk Management systems.
The Bank has migrated to computation of capital adequacy under New Capital
Adequacy Framework (Basel II) based on Standardised Approach for Credit and
Market Risk and Basic Indicator Approach for Operational Risk as per RBI
guidelines effective 31.03.2008.
The Bank undertakes Internal Capital Adequacy Assessment Process (ICAAP) on
a yearly basis for assessment/ measurement of various risks, the limits of
its risk-bearing capacity and appropriate level of internal capital in
relation to the risks and the Risk Appetite. Stress Testing Process is in
place for enhancing risk assessment by providing the bank a better
understanding of the likely impact even in extreme circumstances. Going
forward, this exercise is expected to render an objective basis for
decision making both to the risk control function and to the entire
institution and also for assessing the performance of the independent
As per the roadmap prepared the Bank is also preparing for migration to
more sophisticated approaches for enhancing the effectiveness and
robustness of risk management systems.
All branches of the Bank are on Core Banking Solution (CBS) and new
branches are directly opened under the CBS platform. All these branches are
RTGS/NEFT enabled. Bank opened 141 new branches directly in CBS and also
installed 117 new ATMs on Bank`s Foundation day i.e. 07.09.2011.
Besides the regular banking modules your Bank has ensured that even
ancillary portfolios viz. Government Business, Safe Deposit Vault, PPF,
SCSS, (Senior Citizen Savings Scheme) Government bonds are seamlessly
integrated under CBS platform ensuring one-stop-shop for everyone avoiding
hopping between various systems. Bank has implemented Straight Through
Processing (STP) between CBS and various Payments Systems/other
applications to eliminate the need for data entry at multiple systems &
hence ensuring integrity & reliability of data. This has also ensured auto
reconciliation of these entries within the system itself.
The following customer centric enhancements have been implemented:
* Online Nomination facility while creating online Term Deposit Receipt.
Online Nomination facility has also been extended to existing term deposit
* Statement of Account for HNI customers by password protected e-mail in
* Launched "Banking Through Mobile" (BTM) Service.
* Implementation of School fee module.
* Implementation of Bullion Module.
* Viewing of PPF Account with Bank of India through Internet Banking
* Self Service Kiosk - Barcode enabled Passbook Printing
* Launched Aadhar (UID) based Dhanaadhar Rupay card
Data Centre, certified with ISO 27001:2005 standard with 1:1 redundancy of
physical hardware Infrastructure between primary site to secondary site
with the Recovery Time Objective (RTO) of 15 minutes has been successfully
established by the Bank. The primary site is situated at Mumbai and
Disaster Recover site (DR) situated at Bangalore. The Near Site (NR) has
been established with primary site storage replication for zero data loss.
All offices, branches and data centres are connected in WAN network with 24
hours dual power supply from two DG-Sets through
The Data Centre deploys three tier architecture i.e. database, application
and web, which are deployed in different high-end servers with latest
version of operating systems, RDBMS and applications for better management
Bank`s security and network infrastructure is designed considering
availability/capacity requirements. The data centre also has a strong
physical security control with Bio metric authentication for critical areas
of server and network farms. Dedicated resources working on 24X7X365 days
equipped with latest Building Management Systems to control and optimize
management of power cooling, Fire protection and data centre infrastructure
system is in place. The entire premises is covered with surveillance
cameras to monitor 24 Rs. 7 Rs. 365.
The Bank has a fully functional Disaster Recovery Site and Disaster
Recovery Drills are planned and executed once every quarter to ensure
readiness. The Bank has RTO of 15 minutes to switch over from Primary to DR
site operations. One of the innovative ideas of Bank of India was to use
the Disaster Recovery set-up for MIS and Report generation purposes. This
not only results in optimum utilization of both the DC and DR resources,
but also ensures that all these resources also get constantly tested in the
Bank of India also has a Global Processing Centre (GPC) at Singapore to
connect all its overseas Branches to a central hub and enable processing
for all its foreign branches. It is a 24 X 7 central hub catering IT
related requirements of 24 foreign branches from Japan in the east to USA
in the West. Disaster Recovery Hot Sites with identical hardware and
suitable software that do online replication of data from Data Centre to DR
Site have been setup. One disaster Recovery setup is in Singapore and the
other at Mumbai. The transactions are being replicated on real time basis
at both DR sites. DR drills to ensure high availability of the system are
being conducted on regular basis.
SMS Alerts - Star Sandesh
As a fraud prevention measure, SMS alerts are generated and provided to all
customers who have registered their mobile number with the Bank for
* All Debit transactions from delivery channels (Internet
* All Customer induced debit & credit transactions of Rs. 10,000/- and
* All Debit ECS transactions of Rs. 10,000/- and above.
* All Debit RTGS transactions.
* Acknowledgment on accepting the cheque book issue request.
* Alerts for installment due in Star Autofin & Housing Accounts.
A fast and secure internet banking facility is available to customers for
utility bill payments, air & rail ticket booking, on-line shopping, inter-
bank and intra bank fund transfers.
Bank of India is the first PSU Bank in India to implement Two-factor
Authentication (2FA) - Star Token for both Retail and Corporate internet
banking customers as an additional security measure. Bank`s customers enjoy
the convenience of "secured" Anytime, Anywhere, Anyhow hassle free Banking
from the comfort of their homes and offices with a click of a mouse.
Some of the features available are:
* Online Interbank Fund Transfer across banks, through Star Connect
Internet Banking Services, using RTGS/
* BOI Star e-Pay for Auto-pay or on-line payment of various utility
services / bills
* e-Payment of Direct & Indirect, Central Excise & Service Tax
* Star e-Share Trade to trade in shares.
* e-Freight Payment
* Directorate General of Foreign Trade (DGFT) license fee Online e-Payment
* Online Booking of Railway & Airlines Ticket
* Online Application for Education loan
* On Line facility available to View and Apply Application Supported by
Blocked Amount (ASBA) for IPOs from Internet Banking
* Enabling internet banking customers to make online Fixed Deposit.
* Hot Listing/Reset/Unblock/Change of Debit Cum ATM card PIN using
Internet Banking password.
* Viewing of Annual Tax Statement (Form 26AS).
* Extended the facility of online e-Payment to the customers holding our
Debit-cum-ATM card. This will enable the customers to use their Debit-cum-
ATM cards for e-payments in addition to credit card & Internet banking
* Online Nomination facility while creating online Term Deposit Receipt as
well as for existing Term Deposit Receipts.
Automated Teller Machines (ATMs):
The Bank has joined National Financial Switch (NFS) which enables Customers
to access more than 85,000+ ATMs across the country. Bank is also part of
CashTree, BANCS & SBI Group networks. As on 31.03.2012 Bank has 1680
Implementation of CBS in Bank sponsored Regional Rural Banks (RRBs):
Bank initiated the process of implementation of CBS in Bank sponsored 5
RRBs during the year to provide "Anytime, Anywhere, Anyhow" banking service
to the rural clientele. 100% CBS achieved in all the branches of all the 5
Regional Rural Banks(RRBs). All the branches of 5 RRBs are RTGS / NEFT
enabled using BOI infrastructure.
Other New Initiatives:
Technology is being leveraged in some important projects viz.
* Financial Inclusion Project - Banking the unbanked sector.
* Solar Power Project - Eco-friendly - Technology Power for Rural Areas.
* V-sat Connectivity Project - Networking / connecting the Rural / Remote
* Collaborative Communication - Virtual classroom sessions / Installation
of High definition Audio / Video equipments.
* Installation of Biometric ATMs and ATMs with easy accessibility for the
* Credit Application Processing Systems (CAPS).
* Human Resources Management Systems.
* Digital Signages - reforming Bank`s Photo & Video advertisements.
* Best Bank Award for Technologies for Financial Inclusion among Large
Banks for the year 2010-2011 conferred by
* C-Change Enterprise Awards 2011- Recognising Excellence among CIOs -
Best Security Implementation Award awarded by CIOL & DATAQUEST.
* Outstanding Innovation Award conferred on Bank of India by Hughes -
Network Service Provider.
MANAGEMENT INFORMATION SYSTEM
To further reap the benefit of CBS, Bank has also set up the Data Warehouse
(DWH) with Data mining solution to enable Decision Support / Management
Information System for the Bank & for achieving its Business Intelligence
goals more quickly and effectively. With the implementation of this
solution, Bank`s Data Warehouse is storing daily transactional data from
Core Banking System. Bank has simultaneously taken initiatives for refining
the quality of the data & with this bank`s MIS has become more refined and
precise. Bank is generating most of RBI returns, reports to Government of
India, MIS reports for internal purpose based on the data in the DWH
database. The Dashboard provided to the Top Management is effectively used
for monitoring business growth & taking timely corrective actions wherever
necessary. Bank has also implemented business analytical tools for
achieving business intelligence goals.
IT Enabled Services:
The ambitious growth plan unveiled by the Bank, under Sankalp 10,000
initiatives, aspires to a high trajectory of growth and profits.
The bold vision has been defined with emphasis on customer centricity,
building winning teams by developing superior skills and capabilities and a
high performance driven culture, using IT enabled efficient systems and
The Bank possesses the high end technology and has launched a number of IT
To intensively harness the immense potential of IT enabled products and
market them effectively so as not only to retain the existing customers,
but also to acquire new ones, especially the tech savvy young generation a
separate IT Enabled Services - ITES Department at HO has been established
and include following areas of work:
All IT Enabled Services (ITES)
i. Internet Banking
ii. Mobile Banking
BOI BTM - Interbank Mobile Payment services (IMPS)
iv. Card Products
Debit Cards, Credit Cards, Bingo Cards, Gift Cards and Rewards points
E-Service and Products have not only become a part of our lives but is
increasingly driving our personal and business paths.
* (Banking Through Mobile) facility has being introduced by Bank of India
on 19th June, 2011, as an emerging alternate delivery channel for fund
transfer. This facility allows Bank of India customers to transfer funds
between accounts of Bank of India and also other IMPS registered member
banks with National Payment Corporation of India (NPCI) through Mobile
phone at any time and from anywhere. The customers can also receive funds
in their accounts from other IMPS member banks registered with National
Payment Corporation of India. Internatiom
* Mobile Banking facility can be availed by all Retail Banking customers.
The customers can transfer funds upto Rs. 5000/- per day via SMS
(unencrypted transactions) and upto Rs. 50,000/- per day through Mobile
application (From Java enabled Mobile -end to end encrypted transactions).
* INTERNATIONAL TRAVEL CARD - has been launched which can be issued in
various denominations subject to the purpose of travel. This is the best
alternative and substitute of Traveller cheque. It is available in US
Dollars currency (at present) with minimum loading of US$ 250.00, backed by
extensive VISA Network. It is valid upto the expiry period mentioned on the
* PENSION AADHAAR CARD - it is for pensioners of all categories of Central
Civil, Defense, Railways and various State Government pensioners and also
pensioners of PSUs. It is an ATM cum Debit Card with free issuance of Card
(Global Debit Card affiliated to VISA). There are no renewal Charges. There
are no charges for using the Card at other Banks` ATMs. There is also a
Personal Accidental Death Insurance Cover - Accidental Death Insurance of
Rs. 1.00 lakh for pensioner having maximum age 70 years who have availed
this product. The Card holders can avail overdraft facility for maximum
amount equal to 1 month of the pension amount in their SB account.
* PLATINUM PRIVILEGE INTERNATIONAL DEBIT/CREDIT CARD - It is a card having
photo and signature and hence it can also be used as ID Card. The Card
Holder can withdraw cash upto Rs. 50,000/-per day in BOI ATM and at Point
Of Sale the limit is Rs. 1,00,000/- per day. It is a Global Debit-cum ATM
Card valid internationally. Since it is issued to High Net worth
Individuals it is free of charge and there will not be any annual or
renewal charges. Debit Card is valid for 5 years, while Credit Card is
valid for 3 years.
* LOYALTY REWARDS PROGRAMME. This programme was launched for Debit Card
users to encourage them to divert from ATM Cash withdrawal to POS use. Card
holder using debit cards at POS will earn 1 point for every Rs. 100/-
spent. Each point earned by the customer will be valued at Rs. 0.25 and
calculated at the end of the month. The points so earned can be redeemed at
any point of time upto next 36 months from the month of purchase. The
redemption of these reward points can be done after threshold limit of 100
points in exchange for various Gift items including over 2 million
merchandise and Movie Tickets/Bus Tickets/Air Tickets/ Gift Vouchers.
Benefit to the customers: Against withdrawal of cash from ATM, which
attracts some cost after limited transactions, customer will be rewarded
with points which can be redeemed for exchange of numerous GIFT items.
HUMAN RESOURCES DEVELOPMENT
Human Resources plays an important role in the growth of an organization as
it is the human face which is the driving force behind all achievements of
Management of people begins with recruitment process and sails through
various movements, such as, training, placement, performance reviews,
promotions etc. In Bank of India, we have nurtured a mutually beneficial
relationship with our employees. The employees are being groomed to accept
the challenges and come up to the expectations of the Bank.
Bank has added in its workforce 4651 staff in various cadres and scales
during the year 2011-12. This includes 2428 Officers, 1682 Clerks and 541
Sub-staff. Out of 2428 Officers recruited, 1657 are General Banking
Officers and rest 771 Officers belong to Specialist Cadre. This year, Bank
has taken a bold initiative by recruiting General Banking Offices in JMG
Scale-I directly from the Campus of IITs. 154 such Officers have been
selected in this process. Bank has already started the process for
recruitment of another 1800 General Banking Officers in Scale-I and 3149
staff in Clerical Cadre.
Promotion exercise for all the Scales for the year 2011-12 which was
initiated on 19.11.2011, concluded on 31.03.2012. 945 General Banking
Officers and 131 Specialist Offices from Scale I to Scale II, 896 General
Banking Officers and 46 Specialist Officers from Scale II to Scale III, 252
General Banking Officers and 14 Specialist Officers from Scale III to Scale
IV, 77 Officers from Scale IV to Scale V, 38 Officers from Scale V to Scale
VI and 13 Officers from Scale VI to Scale VII got promoted in this
exercise. Besides, 678 staff in Clerical cadre got promoted to Officer
Cadre during the year.
Training and grooming is an important step in creating a vibrant
organizational culture in which employees are encouraged and motivated to
perform their best. It helps in augmenting the competencies of employees
and equips them with right skills and knowledge for meeting ever changing
business needs of customers in different segments.
The Bank has six training colleges across the country. While the Management
Development Institute (MDI), CBD Belapur, Navi Mumbai is Apex level
training establishment, four Staff Training Colleges (STCs) are at
strategic locations at Bhopal, Chennai, Noida and Kolkata besides one
Information Technology Training Centre (ITTC) at Pune. During the year in
all 18746 employees of the Bank and 1068 employees from other organizations
were imparted training in 963 programmes organized at these colleges.
During the last year 1430 Clerks and 2243 direct recruit officers joined
the Bank for whom exclusive Induction training programmes were held at all
the Training Colleges. Further Training programmes were also organized for
Agriculture Officers, Chartered Accountants, Marketing Executives, and
Finance Executives recruited from campus. Each such batch was addressed by
General Manager (HR) either at Bank`s BKC Auditorium or through Video
Conferencing. Two outside Agencies viz. `M/s Creation of Future` and `M/s
Buyoancee` were engaged for soft skill Development for new Recruits. Pre-
recruitment and pre-promotion training programmes were held for eligible
persons. Special programmes for lady officers and retiring clerks, officers
etc. were also held. A five days programme for newly promoted DGMs was held
at IIM Bangalore. For newly promoted AGMs Leadership Development programme
was held in 4 batches at our STC-Noida organized outsource agency `Creation
Of Future`. Programmes for other institutions were also conducted at Bank`s
training facilities. In bourse programme at MDI, Belapur, there was good
participation from other Banks. On the job Training was imparted to 64
officers deputed to foreign branches for exposure in International Banking.
481 officers were nominated for training at outside institutions in India
and 58 were deputed abroad to attend trainings, conferences and seminars.20
new faculty members and 3 old faculty members were nominated for `Train the
Trainers` Programme at BIRD,Lucknow.
290 students of different management institutions from Jan,2012 till date
have been approved to do Summer Internship in the Bank. The Bank sponsored
41 candidates for two years full time Postgraduate Programmes in Banking &
Finance at NIBM, Pune. M/s Prism Learning Centre Pvt. Ltd was engaged for
conducting a `Leadership Development Programme under Drucker Management
Path Module. Intensive Trainings in Credit & Forex are planned for 500
officers. Till date 90 officers are trained under this scheme. The Bank has
introduced e-learning which is expected to gain ground in the coming
months.194 DROs have been enrolled for e-learning through IIBF portal. For
in house E-learning module, vendor is finalized for 3 years and programme
is expected to commence from April, 2012 and will be made available to
Employees under Stardesk.
7 retired officers have been assigned role of mentors to cover 10 centers
(3LCBs+5 SME CC+2 CPCs) on pilot basis. Special Programmes/workshops have
been conducted for sub-staff in all the Zones. Workshops on BCSBI, High
Risk rated branches and Boot Camps for staff of RBCs, SMECCs, MCBs and LCBs
were also organized.
All the major activities of the Bank related to Human Resources
Development, have been made live under Human Resources Management System.
This includes salary processing, leave management, reimbursement of bills,
training, terminal benefits, APA, submission of Annual Asset Liabilities
returns, application for transfer, promotion etc. This has helped in saving
a lot of time and providing the facilities to our staff members in a better
Some of the innovative steps, taken by the Human Resources Department
during the year are as given below:> Preparation of Succession Plan.
- Introduction of Fast track Promotion from Clerical cadre to Officer cade
with the facility of retention at the Zone of their choice.
- Preparation of new Promotion Policy especially designed to take care of
filling the gaps at the middle and top management level.
- Setting up a Complaint Committee for Women employees as per the
directives of Supreme Court and holding their regular meetings.
- Sanction of 200 additional posts of Special Assistants and increasing the
total post from 1000 to 1200.
- Elevation of Category C Head Cashier to Head Cashier Category II.
- Many new modules included in the HRMS and made live during the period
including on line submission of APR and Statement of Assets & Liabiliities.
- Review of centre-specific policies for 6 overseas centres.
- Provision of Furniture-Fixture to all Officers on long term ownership
Bank`s quarterly House Journal `Taarangan` is published from HR Department,
Head Office. It carries news, views with photographs from inside the
Institution along with the write-ups of our staff members, Ex-staff members
and their families. We give due publicity to the achievements of Bank`s
valued Customers in our house journal. We are covering every aspect in
general and banking in particular with the information on our new products
along with news from financial and general world at large.
During 2011-12, we have carried out many changes in Taarangan in line to
our organizational restructuring. We are doing best possible efforts to
make it contentwise richer and more readable. We are applauded at many
platforms and also are constantly receiving appreciation in the form of
Accolades and Certificates from all top organisations such as Rotary Club
of Cochin Midtown and Association of Business Communicators of India
Learning and Development
Learning & Development Department (L&DD) is instrumental in creating a
vibrant organizational culture where in employees are encouraged and
motivated to perform their best through its continuous training and
development programmes and modules, acts as a catalyst in augmenting the
competencies of employees and equip them with right skills and knowledge
for meeting ever changing business needs of customers in different
The Bank`s training system module is live under Human Resource Management
system (hrms). This has facilitated on line nomination to various training
programmes in the Bank. Incentive schemes are also in place to encourage
staff members to upgrade their knowledge and sharpen skills for passing
various examinations conducted by the Indian Institute of Banking & Finance
(IIBF) and other reputed institutions.
Compliance with Reservation Policy
The Bank is complying fully with the reservation policy of the Government
of India. Special Recruitment and SC/ST Cells at Head Office / Zonal
Offices are functioning to monitor the implementation of the reservation
policy and redressal of grievances relating to SC/ST/OBC Employees.
Pre-Recruitment Training and Pre-Promotion Training from clerical cadre to
General Banking Officers cadre and within the Officer cadre from Scale - I
to Scale - II, Scale II to Scale III are imparted to SC/ST candidates /
staff. Details of such pre-recruitment and pre-promotion trainings imparted
to SC/ST employees during the year, 2011-12 are as under:
Sr. Cadre Pre-Recruitment
No. of Pro- Duration No. of
grammes period of Persons
conducted Programme Trained
a) Officers 6 6 days 185 53
b) Clerks - - - -
c) Sub-Staff - - - -
Sr. Cadre Pre-Promotion
No. of Pro- Duration No. of
grammes period of Persons
conducted Programme Trained
a) Officers 29 6 days 530 234
b) Clerks 8 6 days 194 59
c) Sub-Staff 13 6 days 145 52
The Bank has designated officers of the rank of General Managers as Chief
Liaison Officers for OBCs and SCs/STs respectively at Head Office. Officers
belonging to SC/ST/OBC categories are designated as Liaison Officers / Cell
Officers at Zonal Offices. In terms of the Government guidelines, Post-
based Reservation Rosters maintained at Head Office/ Zonal Offices are
inspected annually. SC/ST Cells established at Head Office and Zonal
Offices are also associated with implementation of reservations in respect
of other categories like Ex-servicemen / Persons with disability etc.
Representation of SC/ST/OBCs in Total Staff Strength (Indian)
March 2012 Officers Clerks Sub-Staff Total
SC 2817 2703 2874 8394
% to total Staff in
Indian Offices 16.86 16.06 36.59 20.53
ST 1196 1411 814 3421
% to total Staff in
Indian Offices 7.16 8.38 10.36 8.37
OBC 1544 1310 1088 3942
% to total Staff
in Indian Offices 9.24 7.78 13.85 9.64
The Legal Department of Bank guides the various offices/ branches and
subsidiaries/foreign centres of the Bank on the legal issues upon reference
being made by them. The Department also does drafting and vetting of
various documents in respect of lending and other contracts entered into by
the Bank. The Department also assists the various offices/branches in
connection with recovery in suit filed matters and/or through action under
the SARFAESI Act.
In addition to the same, the Department also guides the Zones and other
offices for proper implementation of the Right to Information Act. Bank
also has a Central Public Information Officer and Appellate Authority at
the Head Office and also at the various NBGs/DM offices/LCBs and Zones to
attend to requests received under the RTI Act. The vital information about
Bank required under the Right to Information Act is placed on Bank`s
Premises department is entrusted with the work of creating immovable assets
both commercial buildings & residential bungalows and flats and furnishing
of Bank`s branches and offices for better customer service and working
environment. The department is also dealing with matters of branch / office
premises taken on lease basis.
* Purchase of 139 flats at Navi Mumbai for transferee officers
* Purchase of a plot of land for Zonal Office & residential quarters at
* Purchase of 24 residential flats at Keonjhar (Odisha)
* Purchase of premises for Ponda branch (Goa)
* Completion of construction of Zonal Office building at Goa
* Completion of construction of Ramdas Nayak Marg (Hill Road) branch
* Completion of construction of Parur branch premises.
* Furnishing of 650 branches as per Uniform Furnishing Pattern.
The construction work of 2nd Corporate Building at Bandra - Kurla Complex,
Mumbai, Mumbai North Zonal Office & Andheri branch premises, Hazaribagh
Zonal Office and Amritsar Zonal Office building are in full swing and
likely to be completed in the year 2012-13. The construction of Chandigarh
Zonal Office building is also ready to be occupied in the year 2012.
The department has also initiated steps for construction of Zonal office
buildings and residential flats at Agra, Indore and Ujjain and purchase of
flats at New Delhi. Bank has also entered in a Memorandum of understanding
(MOU) with Oriental Bank of Commerce (OBC) for joint development of plot of
land at Bandra Kurla Complex, Mumbai.
The department is dealing with matters related to 3683 premises taken on
lease basis by Bank.
Bank of India being a part of the financial world, the guidelines,
specifications and standards are set by the Reserve Bank of India. A
Compliance Function Policy for the Bank was adopted by the Board on
21.01.2008 as per Reserve Bank of India guidelines. The Policy was further
reviewed by Board on 25.5.2011. The reviewed Compliance Policy is displayed
on the Bank`s website (Staff Portal). An independent Compliance department,
headed by a Chief Compliance Officer (of the rank of General Manager), is
in operation in the Bank. Compliance of statutory, regulatory and internal
guidelines of the Bank is the scope of operation of the compliance function
of the Bank.
The department has prepared Compliance Rules in the following areas of
Return Frequency No. of Rules
Know Your Customer/Anti-Money
Financing of Terrorism Monthly 51
Deposits & Services Quarterly 62
Advances Quarterly 63
FEMA Quarterly 119
At each Zonal Office, Compliance Officer has been identified for monitoring
the compliance function of the respective Zone. In respect of foreign
Branches, Compliance Officer for each cluster of the foreign centre has
been identified for monitoring the compliance function of all the Branches
in the centre.
Compliance department, inter-alia, submits the following to the Board/Top
Management/Head Office departments:
* quarterly report on the compliance function of the bank to the Board;
* instances of compliance failures to H.O. departments for follow-
up/rectification with the respective zones;
* monthly note to Top Management, on the compliance risk faced by the
* gist of the circulars issued by RBI to the Board on a monthly basis;
* compliance of the bank to the various circulars/ instructions issued by
RBI, to the Audit committee of the Board on a quarterly basis;
* monitors the Calendar of Reviews stipulated by RBI and submits a report
to the Board on a quarterly basis on the same;
* in terms of Para 12 (xii) of the Compliance Function Policy, the
department is to put up to the Board an Annual Report on its functioning;
* monthly Memorandum to the Board on the State of Preparedness in respect
of Major initiatives and the bank`s preparedness in areas i.e. KYC/AML/CFT;
* Quarterly Review of implementation of KYC/AML/CFL guidelines is placed
to Audit Committee of the Board.
* a half yearly report on the Compliance testing being carried out at
selected branches in the bank is put up to the Top Management;
The department handles the Annual Financial Inspection (AFI) of RBI by co-
coordinating with Head Office departments. The AFI reports are scrutinised
and compliance is submitted to the RBI. The AFI for the year 2010-11
concluded on 27.07.2011 and the replies/compliance to
the Action Points the departments was put up to the Audit Committee of the
Board and was submitted to the RBI on 15.11.2011.
The department is also vested with the responsibility of
implementing/monitoring Know Your Customer (KYC)/Anti Money Laundering
(AML) Measures / CFT Guidelines in the Bank. A full fledged and
comprehensive KYC/AML/CFT Policy was approved by Board on 25.5.2011 and the
same was then circulated to all zones/branches. The reviewed KYC/AML/CFT
Policy is displayed on the Bank`s website (Staff Portal). The department
has taken up earnestly the task of ensuring compliance with KYC norms in
all the existing accounts, as directed by RBI. A suitable notice has been
published in leading newspapers in various languages throughout the
country, to draw the attention of the KYC non-compliant customers. A
separate mandatory field is provided in the Finacle system to facilitate
noting of KYC status in each account. Branches are in the process of
identifying KYC non-compliant accounts, obtaining KYC documents and
suitably updating the Finacle system.
Bank is complying with all the applicable provisions of Prevention of Money
Laundering Act, 2002 (PML Act) and the Rules made there under as well as
the guidelines issued by the Reserve Bank of India (RBI) on KYC. Opening of
accounts of persons of low income group with simplified KYC norms have been
introduced. All the customers have been classified into High, Medium or Low
Risk category based on the Risk perception.
Review meeting was conducted by the Financial Intelligence Unit-India (FIU-
IND) on 9.11.2011 to assess the compliance of PML Act provisions by the
bank. The FIU-IND expressed satisfaction at Compliance level of your Bank.
Initiatives taken by the department during the year 2011-12:
- One session on KYC/AML/CFT is devoted in each training programme at all
the training centers;
- A one day workshop was conducted at MDI for the Compliance Officers
appointed in Zonal Offices;
- A meeting of General Managers, Compliance Officers and Principle Officers
of Regional Rural Banks was held to sensitize them on Compliance and
- To spread awareness among the staff and to sensitise them about the
importance of prompt reporting of suspicious transactions and counterfeit
currency transactions and meticulous adherence to KYC/AML/CFT guidelines
and other Compliance issues, meetings at various Zones where held. Branch
heads, currency chest officers, cashiers-in charge of cash intensive
branches attended the meetings and constructive inter-actions took place.
Due to the efforts, considerable awareness is being created among the staff
regarding importance of adherence to KYC/AML/CFT guidelines. The position
of KYC compliance has improved due to these efforts;
The department is the single point of contact for all the regulatory
agencies when they want to communicate with the bank.
The Vigilance machinery of the Bank is headed by the Chief Vigilance
Officer (CVO) of the rank of General Manager appointed with concurrence of
the Ministry of Finance and the Central Vigilance Commission. The CVO is
assisted by committed officers having knowledge/ background of
investigation and disciplinary action matters as well as banking, for
tendering advice to Disciplinary Authorities/ Controlling Authorities in
all vigilance cases. The Vigilance Department also focuses on initiation
and dissemination of preventive vigilance measures. In this regard, the
Bank has now created five separate "Vigilance Units" and also a Separate
Fraud Risk Management Department under Risk Management Department to deal
effectively with the Operational Risk.
FRAUD RISK MANAGEMENT
In terms of Board directions, the Fraud Risk Management Department at Head
Office is established on 1.11.2011 with a view to handle all matters
relating to perpetrated and attempted frauds. The most critical activity of
the department is Fraud prevention by way of on line monitoring of alerts
with reference to typical transactions conducted in fraud prone areas. The
department is presently involved in fraud analysis, fraud reporting to
different internal authorities/ committees including Reserve Bank of India
and Ministry Of Finance.
The department procures from Data warehouse data on CBS transactions with
reference to different pre decided parameters viz. high value transactions
in newly opened SB/ CD accounts, transactions in office accounts/ staff
accounts for the purpose of analysis and monitoring. On the basis of this
data we seek details/ clarifications from the Branches / Zones. This
exercise has created awareness amongst the branches/ zones that some
department at Head Office is monitoring typical/ abnormal transactions.
For on line alert monitoring, software to facilitate alerts generation and
its monitoring on real time basis is being tested in the department. Bank
has assigned around 36 scenarios for the purpose of testing the software
and after its final approval the monitoring system shall be put in place.
It is expected that this system will help in fraud prevention and also
create some awareness amongst operating staff for adherence to laid down
system and procedures.
INSPECTION & AUDIT
During the year 2011-12, the department carried out Risk Based Internal
Audit, Information System Audit & Revenue Audit at domestic as well as all
foreign branches, Currency Chests & Depository Participant Office and Risk
Based Management Audit at HO Departments, Zonal Offices, Zonal Audit
Offices, Staff Training Centres, MDI, LDM Offices and RRBs. Concurrent
Audit was being carried out at 718 domestic branches (including Treasury
Branch) & Estate Department, H.O. (for Centralized Payments) by FCAs and at
24 Foreign Branches, Card Products Department, Finance Department, Data
Centre and Estate Department, H.O. (for Other Matters) by in-house
officers. The total coverage of concurrent audit is 65.64% of total global
advances and 52.47% of total global deposits of the Bank against the
stipulated level of 50% each. During conduct of various audits at branches,
the department detected revenue leakage to the extent of Rs. 6,522.74 crore
of which Rs. 6,073.88 crore has already been recovered.
Under the project STARBOOST, Audit Exception Reports (AERs) of 2688
branches were generated and sent to the branches that are subject to RBIA.
These reports are sent to the concerned branches 2 months in advance so as
to enable the branches to initiate necessary corrective measures before
commencement of audit.
Policy of Risk Based Internal Audit of Domestic branches is under revision,
and Policies of Risk Based Management Audit (Domestic) and Concurrent Audit
were reviewed/revised suitably to a) cover/elaborate the areas that were
pointed out in the previous AFI by RBI; b) to fine tune the Policy as per
the reorganization of the bank subsequent to SANKALP 10000. Long Form Audit
Report of the Bank for the year 2010-11 was attended in time and compliance
was reported to Board & ACB. Compliance of Action Points emanated at the
meetings of Board/ACB was submitted to ACB/Board in time.
Apart from the routine audit exercise conducted under the auspices of the
department the following special assignments were undertaken to meet the
special requirements of the bank under the instructions/guidance of the top
- Discretionary Audit was conducted at branches that were rated under `High
Risk and above` to ensure conclusive compliance of observations/
- Revenue Audit of non-concurrent audit branches was conducted (yearly in
case of small/medium branches and half-yearly in case of large and above
branches) and a revenue leakage of Rs. 794.56 Crore was detected.
- Snap Audit of accounts migrated to LCC/MCC branches consequent to
implementation of SANKALP 10,000 was conducted to ensure proper transfer of
- Assessment of impact of preventive vigilance measures was undertaken at
branches that were audited (this is being carried out on an ongoing basis).
- Credit Audit & Loan Review Mechanism was conducted in 3890 accounts
spread over to 792 branches.
- As per RBI-AFI directives, to reconfirm the quality and accuracy of
master data in the system, data cleaning exercise was undertaken in 1462
branches covering 83% of the Credit Portfolio resulting in a massive clean-
up operation of erroneous data to strengthen the revenue leakage plugging
and MIS issues.
- Snap Audit of accounts involving fraud of more than Rs. 1 Crore was
conducted to report on the process and system failures and to suggest
remedial measures to prevent recurrence of such frauds.
- Quality Audit of sanctions by the Zonal Manager was conducted in all
zones to assess the quality of appraisal of ZM sanctions and to suggest
remedial measures to prevent sanction of weak accounts and quick mortality.
The General Manager and Dy. General Manager attended various Zonal Audit
Committee meetings and also with the Chief Incumbent of High risk Rated
Branches and render suitable guidance in the matter of ensuing timely
compliance/ closure of audit reports and improving audit rating. Meeting of
concurrent auditors/internal auditors at Zones were conducted periodically
wherein GM & DGM emphasized the need for quality and timely reporting of
Full time in-house concurrent auditor was appointed for Data Centre and is
assigned, among other duties, the job of verification of interest
parameters, application of interest process and checking of interest in
sample accounts. The observations of the concurrent auditor are forwarded
to IT Department, for compliance. The compliance received from them is put
up to Head Office (Audit) Sub-Committee for their noting and further
direction, if any.
Regular reporting on all important Audit findings are being made to Top
Management, HO (Audit) Sub Committee and ACB as prescribed and the
directions thereof are being complied.
In Order to ensure progressive use of Hindi, your Bank has continued its
endeavor to achieve the targets as envisaged in the Annual Implementation
Programme 2011-12 issued by Government Of India, Ministry Of Home Affairs,
Official Language Department., New Delhi. The efforts made in this regard
include annual review meet of all Official Language Officers, wherein the
performance of Official Language
Officers posted at various zones/offices of the Bank was reviewed.
Necessary training was imparted to the staff members through 149 Hindi
workshops organized across the country in order to enable them to carry out
their day- to-day Official work in Hindi. A total of 2874 Officers/Clerks
were trained in Hindi workshops during the year.
A national seminar on "International Financial Crisis Vs. Indian Economy"
in Hindi was conducted at New Delhi on 10th February, 2012 in which papers
were presented by employees of various Banks.
As a result of Bank`s good performance in the field of Official Language
Implementation our following zones received awards :
Awards from Town Official language Implementation Committee (TOLIC)
Puducherry Branch - First prize Patna - First prize
Kolhapur Zone - First Prize Bokaro Zone - First prize
Bhubaneshwar Zone - Second Prize Chennai Zone - First prize
Ahmedabad Zone - Second Prize Khandwa Zone - Second prize
Ludhiana Zone - Second Prize Lucknow Zone - Second prize
Raipur Zone - Consolation prize Agra Zone - Third prize
Government of India, Official Language Department awards.
TOLIC Patna - Convenor - Bank of India - First, Bhubaneshwar Zone - Second
Circulars & Circular letters are being displayed in bilingual in Bank`s
Staff portal - Star desk.
Hindi magazine "Sankalpana" is published every quarter which provides a
forum to the staff members to express their creative writing in Hindi.
Bank`s advertisements, press release etc. were published in bilingual in
various newspapers and magazines.
BANK`S SUBSIDIARY / ASSOCIATES Indo Zambia Bank Ltd (IZB)
IZB is a joint venture of three Indian Banks viz. Bank of India, Bank of
Baroda, Central Bank of India and Government of Zambia. Each of the Indian
Banks hold 20% of the share capital, whereas Government of Zambia holds 40%
of the share capital. Indo-Zambia Bank Ltd is fine example successful joint
venture. It enjoys the patronage of two friendly republics, the Government
of Republic of Zambia and Government of India.
Bank of India (Indonesia) Tbk
Bank of India (Indonesia) Tbk is a wholly owned subsidiary of the Bank with
Bank of India (Tanzania) Ltd.
Bank of India (Tanzania) Ltd. is wholly owned subsidiary of the Bank and
commenced operations on 16th June 2008 with first branch at Dar-Es-Saleam.
Bank of India (New Zealand) Ltd
Bank of India (New-Zealand) Ltd. is wholly owned subsidiary of the Bank
with Rs. 176.95 crore paid up capital started operations this year.
BOI Shareholding Ltd. (BOISL)
Bank`s association with the Capital Market spans a period of nine decades.
The clearing and settlement function of Bombay Stock Exchange (BSE) was
being handled by the Bank since 1921.In 1989, Bank set-up "BOI Shareholding
Ltd. (BOISL)", joint venture with BSE, to manage the clearing house
activities of the Stock Exchange. The Bank has holding 51% of its paid up
capital of Rs. 2 crore,
The company has been carrying out the rolling and weekly settlements of
trades executed by member brokers operating on the Exchange, BOISL is also
a Depository Participant (DP) of both the Depositories viz. the National
Securities Depository Ltd. (NSDL) and the Central Depository Services
(India) Ltd. (CDSL) and provides depository services to the clearing
members and investors. BOISL is the first Securities Clearing House in the
country to have been awarded the ISO 9001-2000 ISO Certification.
BOISL earned a net profit of Rs. 268 lakh (unaudited) during 2011-12 as
against Rs. 428 lakh earned during 2010-11. The reduction in profit is due
to payment of notional sick leave accumulations. R 385 changes relating to
transactions (APC) reduced by the company at the request of BSE.
STCI FINANCE LTD.
STCI Ltd. is one of the leading Primary Dealers in the country. It was
established in 1999 with the objectives of widening the gilt and other debt
security market through development of a vibrant secondary market. Bank of
India with 29.96% holding is the single largest stakeholder in STCI having
Paidup Capital of Rs. 380 crore. The Company is an associate company of the
Bank in terms of Accounting Standards 21 (AS-21) of the Institute of
Chartered Accountants of India. With a view to ensure the name of the
company reflects core business of lending, financing etc. The name of the
company from "Securities Trading Corporation of India" has been changed to
"STCI Finance Ltd." w.e.f. 24.10.2011.
With growing perception that Primary Dealership by itself is no longer an
attractive business, STCI decided to hive off the Primary Dealership
business to its new subsidiary namely STCI Primary Dealer Ltd. which
commenced its operations from 25th June 2007. The Subsidiary which started
on a cautious note has made steady progress since then.
After formation of subsidiary, STCI took up activities of IPO funding,
margin funding, commodity future trading, Asset Management, investments in
short term corporate loans / CP, equity trading etc.
During the FY 2011-12 the PAT was at Rs. 39.83 crore as compared to a PAT
of Rs. 46.68 crore for the FY 2010-11.
Star Union Dai-ichi Life Insurance Company Ltd. (SUDLife)
Bank of India, Union Bank of India and Dai-ichi Mutual Life Insurance
Company, Japan have formed "Star Union Dai-ichi Life Insurance Company" to
take advantage of the growing insurance market and to provide quality
assured insurance to its clients spread across the length and breadth of
the country. The company has commenced insurance business since February
2009. BOI holds 48% in the Company`s paid up Capital of Rs. 250.00 crore.
Union Bank holds 26% stake and Dai-ichi Mutual Life Insurance Company,
Japan holds 26% in addition to the Bank`s stake. In terms of the Joint
Venture Agreement the Bank had earlier transferred it`s 3% stake in favour
of Union Bank.
STRATEGIC INVESTMENT / ALLANCES
Central Depository Services (India) Ltd. (CDSL)
The Company was promoted in 1997 by the Bombay Stock Exchange, Mumbai and
Bank of India along with other Banks. The main objective of promoting CDSL,
was to accelerate the pace of dematerialization of scrips, bring wide
participation of investors in the capital market and to create a
competitive environment as country`s second depository. Bank now holds
5.56% stake in the paid -up capital of Rs. 104.50 crore of CDSL. CDSL has
paid 10% dividend in FY 2007-08 & 200809 and 10% dividend for the year
ASREC (India) Ltd.
The Company was floated by the Specified Undertaking of the Unit Trust of
India to undertake securitization and asset reconstruction activities. The
company was granted Certificate of Registration by RBI under the SARFAESI
Act, 2002 in the second half of FY 2004-05 and has since commenced full-
fledged operation. Currently the Bank has holding 26.02% stake, in the
equity capital of the company which is Rs. 27.60 crore.
Credit Information Bureau (India) Ltd.(CIBIL)
CIBIL is the first credit information bureau in the country, incorporated
in August, 2000 for providing credit information and risk analysis services
to the Banking and Financial services sectors. The company launched its
consumer bureau operations in FY 2004-05 and commercial bureau operations
during 2006-07. Bank holds a stake of 5% in the equity share capital of the
Multi Commodity Exchange of India Ltd. (MCX)
MCX is a new generation multi commodity exchange undertaking future trading
in multi commodities at the national level. The Exchange commenced
operation during FY 2004-05 and within a short span has come up as India`s
No. 1 Commodity Exchange. It now figures in the world`s Top Bullion and
Base Metal Exchange. Bank has a nominal stake of 2% by way of equity
participation in the capital of MCX with a view to be associated with one
of the major commodity exchanges. Bank also handles clearing bank functions
of the exchange through Bullion Exchange Branch.
National Collateral Management Services Ltd. (NCMSL)
National Collateral Managements Services Ltd. is promoted by the National
Commodity and Derivates Exchange Ltd. (NCDEX). It was incorporated on
28.09.2004 to promote and provide collateral management services for
securing, managing and controlling securities and commodities. It offers
various services for the development of trades on commodity exchange such
as valuation, grading, insuring, securing, storing, distributing, clearing
and forwarding of securities and commodities etc. Bank holds a stake of
10.17% 3 crore) in the equity capital of the company, thus providing
opportunities to the bank to harness its association with NCMSL for credit
lines to its members and clients.
SME Rating Agency of India Ltd. (SMERA)
SMERA was set up during FY 2005-06 by SIDBI in association with Dun &
Bradstreet, one of the leading credit rating agencies. SMERA`s primary
objective is to provide comprehensive, transparent and reliable ratings
which would facilitate greater and easier flow of credit to SME sector.
Bank has a nominal stake of 4% in the equity capital of the company.
Other Strategic Investments
Apart from the above listed major Strategic Investments Bank also has
strategic investments in MCX Stock Exchange Ltd 25 crore), United Stock
Exchange Ltd. 7.50 crore), Equifax Credit Information Services Ltd. (Rs.
1.75 crore), U.V. Asset Reconstruction co. ltd 15 lakh) Clearing
Corporation of India 50 lakh), Agricultural Finance Corporation Ltd. (Rs.
12.60 crore), SIDBI (Rs. 45.30 crore), Tourism Finance Corporation Limited
2.67 crore), Central Ware Housing Corporation Ltd (Rs. 1.11 crore)., MPCON
(Rs. 1 lakh) etc.
Bank`s Depository Services
Bank has been offering Depository Services to its customers from all the
Branches by leveraging Core Banking Solutions. With a view to adding value
to the banking services and making available the numerous benefits
depository services, the Bank is offering the services of both the
depositories i.e. NSDL and CDSL. In order to offer better services the DP
operations are centralised at Mumbai. To achieve synergies and better
utilization of Human resources, Bank`s CDSL DPO which was earlier situated
at Andheri (West) has been shifted to a spacious premises of Mumbai (Main)
Branch during the year and both the DPOs are functioning from the Mumbai
Main Branch premises.
The number of active Demat Accounts with the DPOs were 91145 as on
31.03.2012. During the year 2011-12 the Bank earned a gross Income of 293
Star Share Trade (Online Share Trading)
During the recent years Online Share Trading (OLST) has been gaining
popularity among Investors in the Stock Markets and the volumes traded has
been on an increase. With a view to meet the growing needs of Bank`s
customers and in order to provide them the comfort of trading in securities
on a mouse click, over phone, the Bank had launched Star Share Trade
(Online Share Trading) facility by integrating Bank Account, Demat Account
and Trading Account of the customers under Tie up arrangement with leading
Stock Brokers M/s. Asit C Mehta Investement Interrmediates Limited
(ACMIIL), the OLST facility is being offered since 2005. This facility has
also been made available to the NRI clients and for filing of IPOs.
In order to offer wider choice to the customers and to reach the customers
spread across wide geographical area, tie up arrangement with following
three more Broking Companies has been launched. Several products are being
offered through this Tie up arrangement:
* Ajcon Global Services Limited (AGSL)
* GEPL Capital Private Limited (GCPL)
* Karvy Stock Broking Limited (KSBL)
Application supported by Blocked Amount (ASBA)
The Bank has been registered with SEBI as a Self Certified Syndicate Bank
(SCSB) and IPO applications received under ASBA (physical application) are
processed through these designated Branches. The number of designated
Branches has increased to 368 as on 31.03.2012, from 361 as on 31.03.2011.
Bank`s Stock Exchange Branch is the nodal Branch for ASBA. In addition to
the above designated Branches. Customers of all other branches who have
availed the Internet Banking facility can enjoy the facility of making
Online Bid cum Application to ASBA IPO from Star connect Retail Internet
The following Investors are eligible to apply for IPOs through ASBA:
i) In Public Issues: All Investors except Qualified Institutional Buyers
(QIBs) are eligible to apply through ASBA in Public Issues
ii) In Rights Issues: All shareholders of the Issuer company Issues as on
date provided :
a) Are holding share in Demat form and have applied for entitlements and/or
additional shares in the Issue in Demat form
b) Have not renounced entitlements in full or in part
c) Are not a renounce to the Issue
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
Reserve Bank of India, were consistently applied;
* Reasonable and prudent judgement and estimates were made so as to give a
true and fair view of the state of affairs of the Bank at the end of the
financial year and of the profit of the Bank for the year ended on March
* Proper and sufficient care was taken for the maintenance of adequate
accounting records in accordance with the provisions of applicable laws
governing banks in India, and
* The accounts have been prepared on a "going concern" basis.