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DIRECTORS’ REPORT

"Your Directors have pleasure in presenting the One Hundred and Fourth Annual Report of Your Bank with the audited Balance Sheet, Profit & Loss Account and the Report on Business and Operations for the year ended March 31, 2013 (FY13)."

Performance Highlights

  • Total Business (Deposit+Advances) increased to Rs 8,02,069 crore reflecting a growth of 19.3% (y-o-y).

  • Gross Profit and Net Profit were Rs 8,999.15 crore and Rs 4,480.72 crore respectively. Net Profit registered a growth of -10.5% over previous year.

  • Credit-Deposit Ratio stood at 82.03% as against 86.86% last year.

  • Retail Credit posted a growth of 6.7% constituting 16.6% of your Bank’s Gross Domestic Credit in FY13.

  • MSME Credit posted a growth of 30.3% constituting 19.7% Gross Domestic Credit in FY13.

  • Net Interest Margin (NIM) as per cent of interest earning assets in global operations was at the level of 2.66% and in domestic operations at 3.11% during FY13.

  • Net NPAs to Net Advances stood at 1.28% this year against 0.54% last year.

  • Capital Adequacy Ratio (CAR) as per Basel II stood at 13.30%.

  • Net Worth improved to Rs 30,714.19 crore registering a rise of 17.2%.

  • Book Value improved from Rs 637.37 to Rs 729.11 on year.

  • Business per Employee moved up from Rs 1,466 lakh to Rs 1,689 lakh on year.

Key Financial Ratios

Particulars

FY13

FY12

Return on Average Assets (ROAA) (%)

0.90

1.24

Average Cost of Funds (%)

5.75

5.64

Average Yield (%)

8.29

8.55

Average Interest Earning Assets (Rs crore)

4,24,761.33

3,47,223.21

Average Interest Bearing Liabilities (Rs crore)

4,15,246.10

3,43,397.26

Net Interest Margin (%)

2.66

2.97

Cost-Income Ratio (%)

39.79

37.55

Book Value per Share (Rs)

729.11

637.37

EPS (Rs)

108.84

127.84

Segment-Wise Performance

The Segment Results for the year FY13 reveal that the contribution of Treasury Operations was Rs 1,070.13 crore, that of Corporate/Wholesale Banking was minus Rs 103.95 crore, that of Retail Banking was Rs 3,085.71 crore, and of Other Banking Operations was Rs 2,221.71 crore. Your Bank earned a Profit after Tax (PAT) of Rs 4,480.72 crore after deducting Rs 1,442.37 crore of unallocated expenditure and Rs 350.51 crore towards provision for tax.

Dividend

Your Bank’s Directors have proposed a dividend of Rs 21.50 per share (on the face value of Rs 10/-per share) for the year ended March 31st, 2013. The total outgo in the form of dividend, including taxes, will be Rs 1,059.62 crore.

Capital Adequacy Ratio (CAR)

Your Bank’s Capital Adequacy Ratio (CAR) was comfortable at 13.30% under Basel II as on 31st March 2013.

Your Bank’s Net Worth as at 31st March 2013 was Rs 30,714.19 crore comprising paid-up equity capital of Rs 422.52 crore and reserves (excluding revaluation reserves) of Rs 30,291.67 crore. An amount of Rs 3,421.10 crore was transferred to reserves from the profits earned.

Provisions towards Retirement and Other Benefits

During the year FY13, your Bank made provision towards contribution to gratuity (Rs 133.00 crore), pension funds (Rs 683.96 crore), leave encashment (Rs 204.38 crore) and additional retirement benefits (Rs 184.29 crore) on actuarial basis. Total provisions under these four categories amounted to Rs 1,205.63 crore during the year FY13, against Rs 991.94 crore during FY12. Total corpus available with your Bank at the end of March 2013 under these heads was: Rs 1,506.13 crore (gratuity), Rs 6,770.08 crore (pension funds), Rs 709.73 crore (leave encashment), and Rs 592.45 crore (additional retirement benefits).

Management Discussion and Analysis

Economic Scene in FY13 and Outlook for FY14

The projection of India’s real GDP growth for FY13 by the Central Statistical Organisation (CSO) at 5.0% is the lowest growth registered in this decade and even weaker than the growth posted during the first year of global financial crisis. The weakening of Indian economy during FY13 was broad based and primarily driven by sub-optimal monsoon rains, stagnant infrastructure, declining exports, subdued corporate investments and weak consumption demand. Due to sluggish global growth, the hitherto resilient services sector also weakened considerably during FY13.

So far as the agriculture was concerned, its modest growth at 1.8% was mainly supported by the Rabi (winter) crop, as the delayed monsoon affected the Kharif (summer) output.

Industrial growth (including manufacturing, mining & quarrying, electricity, gas, water supply & construction) too declined significantly to 3.1% during FY13. A slew of factors responsible for this weak performance were poor global demand, weak supply linkages, high input costs, sluggish investment activity, regulatory and environmental bottlenecks, and lack of reliable power supply. Furthermore, the slowdown in consumption demand affected the growth of industrial sector, in general and of motor vehicles, food products and apparel industries, in particular.

Weaknesses in domestic industrial activity and fragile global environment dragged down the services sector growth to 6.6% in FY13.

While the overall growth slipped rather rapidly, the inflation, however, remained rather sticky during the year suggesting a stagflationary state of the economy. Though both the WPI and CPI based inflation rates slipped from their peak levels, they remained way above the RBI’s comfort zone.

However, the WPI-based inflation consistently eased since October, 2012. From a high of 8.06% in Sept, 2012 it fell to 5.96% in Mar, 2013. With rising demand deficit in the manufacturing sector, the core inflation too declined steadily from 5.56% in Aug, 2012 to 3.48% in Mar, 2013. In contrast, the retail (CPI-based) inflation stayed at 10.39% in Mar, 2013.

In view of the sharp deceleration in growth, the government has been introducing several corrective measures and reforms since mid-Sept, 2012 to help revive the economy. The reform measures pertained to Fiscal Sector (upward adjustment in the administered prices of fuels to curb energy subsidies, expenditure control, medium-term fiscal consolidation plan, launching of direct cash transfer programme, etc); to Balance of Payments sector (Liberalisation of FDI in multi-brand retail, domestic airlines, power exchanges, insurance & pension companies, etc., liberalization of ECBs & a reduction in the withholding tax on interest payments from 20.0% to 5.0% for three years, increase in import duty on gold from 4.0% to 6.0% and hike in the limit of foreign holdings of domestic government & non-infrastructure corporate bonds, etc.); to Investment (Creation of Cabinet Committee on Investment to fast track major infrastructure and other projects, deferment in the implementation of GAAR by two years to Apr 1, 2016); to Financial Sector (Encouragement to Mutual Fund industry outside of top 15 cities by allowing higher commissions and passing of Banking Bill raising voting caps & allowing new banking licenses to be issued while strengthening the RBI’s role). Furthermore, in the Union Budget for FY14, the government was successful in containing the fiscal deficit as a percentage of GDP at 5.2% and set a target of 4.8% for FY14.

India’s situation became more vulnerable on the external front during FY13. The widening of the Current Account Deficit (CAD) to a historically high level of 6.7% in Q3 of FY13 heightened concerns about the sustainability and financing of CAD. Worsening trade deficit and slower growth in services exports were the major factors behind the sharp rise in CAD. Weak external demand, which affected merchandise exports adversely, combined with continued high imports of POL and gold, resulted in deterioration of the trade balance. During FY13, India’s merchandise exports contracted by 1.76% to US$ 300.6 billion, while imports rose by 0.44% to US$ 491.48 billion leaving a huge trade deficit of US$ 190.88 billion in FY13. According to the commodity-wise data released by the DGCI&S, merchandise export decline was mainly observed in items like engineering goods, petroleum products, textiles and iron ore.

Wider trade and current account deficits have a tendency to weaken the currency, raising domestic prices of imported commodities, further fuelling India’s already high inflation rate. Thanks to the decent capital inflows during FY13, India’s rupee depreciated by 6.7% against the greenback during FY13 despite a record high level of current account deficit. During the year under review, India received US$ 18 billion in the form of FDI (net term), US$ 24 billion in Portfolio Inflows (net terms), US$ 30 billion in the form of External Commercial Borrowings & Short-term Loans and US$ 24 billion as the total banking capital.

Going forward into FY14, as per the projections of the Economic Advisory Council to Prime Minister, India’s economic growth is expected to rise to 6.4% in FY14 from 5.0% in the previous year on the back of recently introduced structural measures and an expected normal monsoon. Moreover, steady easing of headline inflation (WPI-based) will provide more space for monetary policy to support growth. While the government has shown its determination to contain the fiscal deficit, the current account deficit remains a source of concern. However, the nation can manage it by taking actions that are necessary to encourage capital flows and by further streamlining the procedures.

Performance of Indian Banking Sector in FY13 and Outlook for FY14

During FY13, both the deposit and lending growth of the banking industry decelerated significantly on the back of overall economic slowdown and elevated inflationary pressures. On an average, the growth differential between deposit and credit kept hovering between 250 and 300 bps with deposit growth outpacing the credit growth. This kept liquidity persistently tight in the banking industry.

The cost of deposits and other funds remained high throughout the year on account of the various monetary tightening measures undertaken by the Reserve Bank of India (RBI). People preferred to park their funds in higher yielding fixed deposits rather than current or savings account (CASA). As a result, CASA accretion slowed for most banks which led to a high cost of funds for banks.

A broad-based industrial slowdown adversely impacted the asset quality of banks, especially of the state-owned banks as they were the ones who primarily supported productive sectors post the global crisis of FY09. Slowing loan growth weighed on the NIMs (net interest margins) of the banking industry. Low NIMs combined with higher credit costs (provisioning requirements) including the ones on restructured loans depressed the earnings of several banks during FY13.

A sharp drop in new project sanctions during FY12 and FY13 will be felt on the loan demand during FY14, as current sanctions exhaust. According to Standard & Poor’s (S&P) Ratings Agency, credit growth for Indian banks is likely to remain muted at 15.0% in FY14 due to several economic and political uncertainties. While the revival of power, roads, metals and mining sectors depends most on government action, the revival of construction and consumer durables is directly related to economic recovery and increased consumption. However, Indian banking industry’s core customer deposit base will continue to provide access to stable funds.

According to S&P, while non-performing assets of banks will surge to 3.9% of gross loans in FY14, the banks’ return on assets will remain depressed, at about 0.9%. Moreover, the Indian banking industry would face a capital shortfall of US$ 3-4 billion if it immediately tried to attain common equity Tier-1 ratio of 8.0% to comply with Basel III guidelines, which kicked in on April 1, 2013.


Risk Management

In order to ensure sustainable and consistent growth performance, your Bank has developed a sound risk management framework so that the risks assumed by the Bank are properly assessed and monitored continuously. It may be noted that the ultimate responsibility for setting up the risk management framework lies with the Board of the Bank. It includes setting up risk appetite, framing policies and effective monitoring. Your Bank’s Board has put in place a robust Enterprise-wide Risk Management architecture so that the risks remain within the risk appetite defined by the Board.

A brief outline of the mechanism for identifying, evaluating and managing various risks is as follows.

Liquidity Risk

Liquidity risk implies the “risk” when the Bank either does not have sufficient financial resources available to meet its financial obligations, as and when they are due, or can only access these financial resources at excessive and unsustainable cost. Liquidity risk may arise from the failure to recognize or address changes in market conditions that affect the ability to liquidate assets quickly and with minimal loss in value. In your Bank, the liquidity risk is measured and monitored by flow approach on a daily basis against prudential caps fixed for liquidity gap positions. Moreover, liquidity position is projected every fortnight, for the subsequent three months on a dynamic basis through Dynamic Gap Reports. The quality of liquidity is further tested by working out various ratios under Stock Approach, wherein a series of prudential caps such as daily call lending, daily call borrowings, net short-term borrowings and net credit to customer deposit ratio and prime asset ratio, etc. are tested on a daily basis. The compliance to Stock Approach caps ensures that the Bank has managed its liquidity through appropriate diversification and remained within the sustainable limit.

The monitoring of liquidity risk, cost of liquidity, opportunities and return from deployment, available contingencies, etc is done by the Asset Liability Committee (ALCO) which comprises of General Managers and Executive Directors and is headed by the Chairman and Managing Director. The prudential caps are monitored by ALCO by way of various regular and special reports.

Credit Risk

Credit risk implies potential loss to the Bank on account of either lack of capacity or unwillingness of a counterparty to meet its obligations as per the agreed terms. Credit risk is managed in your Bank through a clearly articulated framework that sets out policies, procedures and reporting. In line with international best practices, there is a clear segregation between risk takers and policy framers. Furthermore, the Bank has adopted risk-based delegated lending power where higher discretionary lending powers have been delegated for low credit risk proposals. Your Bank also conducts industry studies to assess the risk prevalent in industries where the Bank has sizable exposure and also for identification of sunrise industries. The industry reports are communicated to the Bank’s field-level people to consider the same while lending to these industries. However, to avoid imprudent concentration, your Bank has put in place prudential caps across industries, sectors and borrowers.

Your Bank has adopted a robust two dimensional credit rating system from 2007 onwards and has now built up six-year’s data on credit rating and borrowers’ rating migration. This preparation has enabled your Bank to make an application to the RBI to migrate to Foundation Internal rating based (FIRB) approach of credit risk under Basel II rules. The FIRB implementation will also prepare your Bank to drive its business in more systematic and sophisticated manner in terms of risk-based pricing, portfolio construction and fixation of risk appetite.

Market Risk

Market Risk implies the “risk” of loss of earnings or economic value due to adverse changes in market rates or prices. The sources of market risk may be enumerated as under.

• Interest rate risk: The risk that aries from changes in yield curves, credit spreads and volatility in interest rates.

• Currency exchange rate risk: The risk that arises from changes in exchange rates and their volatility.

• Equity price risk: The risk that arises from changes in the prices of equities, equity indices, equity baskets and volatility in stock market.

The market risk may also arise from changes in commodity prices and volatility. However, your Bank does not have any exposure to commodity related markets.

Your Bank has clearly articulated policies to control and monitor its treasury functions. These policies comprise management practices, procedures, prudential risk limits, review mechanisms and reporting systems. These policies are reviewed regularly in line with changes in financial and market conditions.

The Interest rate risk in your Bank is measured through Interest Rate Sensitivity Gap Reports and Earning at Risk. Furthermore, your Bank calculates duration, modified duration, Value at Risk for its investment portfolio consisting of fixed income securities, equities and forex positions on monthly basis. It monitors the short-term Interest rate risk from the NII (Net Interest Income) perspective and long-term interest rate risk from the EVE (Economic Value of Equity) perspective. The Value at Risk for the treasury positions is calculated for ten days holding period, at 99.0% confidence level. Moreover, the stress testing of fixed interest investment portfolio through sensitivity analysis and equities through scenario analysis is regularly conducted in your Bank.

Based on the RBI directions, your Bank has also been estimating the “Economic Value of Equity Impact” on a quarterly basis.

Operational Risk

Operational risk is the risk of loss on account of inadequate or failed internal processes, people and systems or external factors and also includes a legal risk. Operational Risk Management Committee (ORMC) of your Bank shoulders the responsibility of monitoring and controlling the operational risk by way of prescribing/amending processes, imposing controls and defining roles and responsibilities. Your Bank has a robust inspection and audit system to ensure that its internal guidelines, policies and procedures are complied with.

Your Bank is in the process of implementing a sophisticated system to capture, measure, monitor and manage its operational risk exposures by installing an enterprise-level automated web based solution of international standard. The solution is expected to be operational before the end of the current year. This will enable your Bank to meet the quantitative and qualitative requirements of the Standardized Approach (TSA) and Advanced Measurement Approach (AMA) of Basel II rules of Operational Risk Capital Measurement.

Bank’s Preparedness for Basel III

The Reserve Bank of India (RBI) has issued final Guidelines on Basel III on May 2, 2012. The international regulations on new liquidity standards – Liquidity Coverage Ratio and Net Stable Funding Ratio are currently subject to an observation period/ revision by the BCBS [Basel Committee on Banking supervision] with a view to addressing any unintended consequences that the standard may have for financial market, credit extension and economic growth. Hence, the framework has been put on hold for implementation.

A comparison of minimum capital requirement, under Basel- II vis-à-vis Basel- III, on full implementation of capital rules is given below.

Parameter

Basel - II

Basel - III

Common Equity Capital

-

5.50%

Tier I Capital

6%

7%

Total Capital

9%

9%

Capital Conservation Buffer (a buffer of capital that can be used to absorb losses during periods of financial and economic stress.) (in the form of Common Equity)

NA

2.50%

The RBI guidelines on capital rules have become effective from 1st April 2013. Apart from meeting the new capital rules, a risk insensitive Leverage Ratio will also be required to be implemented from 30th June 2013. With the preponderance of common equity in the tier I capital as well as total capital of the Bank, your Bank does not envisage any difficulty in implementing Basel III capital rules.

Credit Monitoring Function

Credit monitoring on a continuous basis is one of the most important tools for ensuring the quality of advance assets. Your Bank has the system of monthly monitoring of the advance accounts at various levels to prevent asset quality slippages and to take timely corrective steps to improve the quality of credit portfolio.

A separate department for Credit Monitoring functions at the Corporate level, headed by a General Manager, and one at the Regional/Zonal level, has been functioning in your Bank since September 2008. A Slippage Prevention Task Force was formed at all Zonal/Regional offices based on the Bank’s Domestic Loan Policy. This Task Force was activated for the purpose of arresting slippages and for initiating necessary restructuring in potentially sick accounts. This was achieved at an early stage in conformity with the laid down norms and guidelines. Your Bank has placed a special focus on sharpening the credit monitoring process for improving its asset quality, identifying areas of concern and branches requiring special attention, working out strategies and ensuring their implementation in a time bound manner.

The primary objectives of your Bank’s Credit Monitoring Department at the Corporate level are fixed as under:

  • Identification of weakness/Potential default/incipient sickness in the account at an early stage;

  • Initiation of suitable and timely corrective actions for preventing impairment in credit quality, whenever signals are noticed in any account, e.g. decline in credit rating, delay in meeting liabilities in LC/Guarantee and delay in servicing of interest/ installments etc;

  • Prevention of slippage in the Asset Classification and relegation in Credit Ratings through a vigorous follow up;

  • Identification of suitable cases for restructuring/ rescheduling/rephasement to explore the possiblility of further financing in deserving and genuine cases; Liaison with CDR Cell and functional units is undertaken on continuous basis.

  • Taking necessary steps/regular follow up, for review of accounts and compliance of terms and conditions, thereby improving the quality of your Bank’s credit portfolio;

  • Endeavoring for upward migration of Credit Ratings.

  • Monitoring progress of accounts under BIFR.

Prevention of Slippages

As a part of an ongoing business strategy to improve upon the quality of assets, your Bank reaffirmed the need to look into the advances portfolio on a continuous basis, industry-wise as well as borrower-wise, to analyze the present position and the problems foreseen in near future and to identify weaknesses/ potential default/incipient sickness in the advance accounts at an early stage so as to initiate suitable and timely corrective measures for preventing impairment in credit quality.

Your Bank launched an online web-based software developed by its IT Department for MMRs (Monthly Monitoring Reports) in respect of advance accounts with Fund-based plus non-fundbased exposure of Rs 10 crore and above in January 2013. This will enable speedy and effective monitoring of advances and ensure timely action in respect of stressed accounts.

Your Bank also initiated follow up actions for ensuring expeditious review of accounts, compliance of terms and conditions, up-gradation in credit rating etc. in high value advance accounts for improving the asset quality of its credit portfolio.

During FY13, your Bank undertook restructuring of various advances accounts in its global operations as per the table given below.

Restructuring of Advance Accounts (Global) Done during FY 2012-13

(Rs crore)

Particulars

CDR Mechanism

SME Restructuring

Others

Total

Standard Advances Restructured

No. of Borrowers

26

743

17,455

18,224

Amt. Outstanding

2,031.92

950.61

4,533.60

7,516.12

  Sacrifice [diminution in fair value] 177.42 11.05 124.83 313.30

Sub-standard Advances Restructured

No. of Borrowers

1

44

620

665

Amt. Outstanding

68.30

52.19

373.38

493.87

  Sacrifice [diminution in fair value] 5.18 0.02 1.13 6.33

Doubtful Advances Restructured

No. of Borrowers

0

9

349

358

Amt. Outstanding

0

20.43

475.64

496.07

  Sacrifice [diminution in fair value] 0 0.04 10.86 10.90

Total

No. of Borrowers

27

796

18424

19247

Amt. Outstanding

2,100.22

1,023.23

5,382.62

8,506.06

  Sacrifice [diminution in fair value] 182.60 11.12 136.81 330.54

Economic Intelligence Unit

At the Corporate Office of your Bank, a specialized Economic Intelligence Unit (EIU) supports the Top Management in several critical areas like Macroeconomic Forecasting, Business Strategy Formulation, Investor Relations, Asset- Liability Management and in discussions/deliberations with the Regulators (both domestic & international) and Rating Agencies. The Unit regularly provides the Top Management as well as various operational units a periodic outlook on key macro variables like industrial and infrastructural growth, inflation, interest rates, stocks’ movement, credit deployment & resource mobilization of Banking industry, liquidity conditions and exchange rates.

By providing better understanding of macroeconomic aspects, corporate sector health and banking sector policies, the EIU of Bank of Baroda supports Bank’s efforts in tapping business opportunities and swiftly responding to market dynamics.

The EIU brings out a weekly e-publication on macro-economic, policy and regulatory developments to share its perspective with bankers, investors, regulators and other industry leaders. The division works as an intellectual arm of your Bank in comprehending developments that eventually aid the development of rightly aligned strategies.

Internal Control Systems

Your Bank has a well established Central Inspection & Audit Division (CIAD) that examines the adherence to systems, policies and procedures of the Bank. The guidelines received on various issues of internal control from RBI, Government of India, Bank’s Board and the Audit Committee of the Board have become part of the Internal Control System for better risk management.

With the size of business increasing year after year, the CIAD is constantly aiming for curbing the inherent risks through effective control mechanism so as to safeguard the Banks’ interest.

The CIAD operates through thirteen Zonal Inspection Centres to carry out the inspection of branches/offices as per the periodicity decided by the Audit Committee of the Board and examines adherence to such systems of internal control and risk management.

The Audit Committee of the Board oversees the Internal Audit function of your Bank. The committee guides in developing effective internal audit, concurrent audit, IS Audit and all other inspection & audit functions for improving the efficiency of systemic controls. The committee monitors the functioning of the Audit Committee of Executives and inspection/audit department in the Bank.

Audit Committee of Executives has been established and is one layer above the CIAD and it monitors the entire inspection system in the Bank. The Audit Committee of Executives has worked as a strong deterrent and preventive mechanism for frauds as it focuses on audit system in the Bank and its effectiveness in getting the desired results.

All the branches of your Bank are covered under the Risk Based Internal Audit (RBIA). A total of 3,046 branches were inspected during FY13. Out of these, 2,206 branches (72.42%) were in Low Risk, 735 branches (24.13%) were in Medium Risk and 105 branches (3.45%) were in High Risk categories.

The I.S. Audit Cell working under Inspection Division, is based in Mumbai and performing the function of Offsite Surveillance.

In line with the guidelines issued by the Department of Financial Services, Ministry of Finance, your Bank has implemented the following.

• Audit Committee of Executives has been established to oversee the work of Central Inspection & Audit Division and Zonal Audit Committees with effect from March 2013. This is expected to strengthen further the level of compliance of systems, procedures and internal guidelines.

• The Concurrent Audit Policy, Manual and Scoring Sheets duly approved by Audit Committee of the Board and Risk Based Concurrent Audit will be implemented from the next financial year.

The coverage of Concurrent Audit has been increased to 834 branches in 2013-14 from 709 branches in FY13 and will cover 64.36% of the Bank’s total deposits, 80.87% of its total advances and 71.13% of its total business as on 31.12.2012.

As per the observation made by the RBI during Annual Financial Inspection: 2011-12, Credit Audit will now be nurtured as a specialized function within CIAD and the new structure will start functioning from July 2013. The Credit Audits were conducted in respect of 3,504 accounts covering fund-based and nonfund- based business of Rs 1,97,048 crore ensuring increased level of compliance for large loans.

To summarise, your Bank’s Central Inspection & Audit Division has been effectively monitoring the compliance of systems & procedures laid down by its own Board, the Regulator and the Government of India.

Operations and Services

Customer-Centric Initiatives

As always, efficient customer service and customer satisfaction are the primary objectives of your Bank in its day to day operations. Your Bank is highly responsive to the needs and satisfaction of its customers, and is committed to the belief that all technology, processes, products and skills of its people must be leveraged for delivering superior banking experience to its customers.

Recently, your Bank has taken several measures to improve the customer service at its branches and at the same time, strengthened the customer complaint redressal machinery for fast disposal of customer complaints. Your Bank has implemented Standardized Public Grievances Redressal System (SPGRS), a web-based customer complaint redressal module.

Some of the other major initiatives in improving the customer service during FY13 are as under.

1. Online Fixed Deposits- The Bank’s customers can now make online Fixed Deposits through the system called Baroda Connect.

2. SMS alert facility

a. Financial transactions: In respect of transactions where the amount is greater than or equal to Rs 5,000 has been enabled to all resident savings and current deposit holders and overdraft customers of the Bank whose mobile numbers are registered in the Bank’s record (CBS system).

b. Non financial transactions:

i. For renewal of term deposits: 30 days before due date.

ii. Communicating to the potentially dormant account holders (i.e. before the account becomes dormant) to operate the accounts.

iii. To advise dormant account holders to activate their accounts.

3. Intra-Bank Deposit Account Portability: This means savings, current and time deposits accounts in your Bank may be transferred from one branch to another branch without changing the account number.

4. Activation of inoperative Accounts: A campaign was launched for activation of Inoperative Accounts during the period 01.09.2012 to 30.12.2012. Your Bank’s branches were advised to put their all out efforts for activation of inoperative/dormant accounts and to prevent potential dormant accounts from becoming dormant/ inoperative.

5. Campaign for Mobile Number/Email ID Registration: A campaign was launched with some incentives to staff from 01.01.2013 to 31.03.2013 to register mobile numbers and email-ids in existing as well as new accounts.

6. Details of Principal Nodal Officer in Pass Book: For convenience of customers to lodge their grievances/ complaints, the process has been initiated to incorporate the details of Principal Nodal Officer and Banking Ombudsman in the passbook at the time of passbook printing. In the meantime, the branches have been advised to affix these details in all passbooks by a rubber stamp.

7. Display of gross interest on Term Deposit: This means monthly or quarterly interest paid or tax deducted at source, etc., are displayed separately in the customer’s saving bank (SB) account statement.

8. Compensation for ATM failed Transactions: Branches were advised to resolve the complaints lodged on the ATM failed transactions, cash not dispensed, etc., and the account is credited within seven working days from the date of lodging the complaint.

If not resolved, compensation of Rs 100 per day will be paid from the eighth day till the amount is re-credited automatically by the Bank.

9. NEFT/RTGS: To popularize remittance through NEFT [National Electronic Funds Transfer] and RTGS [Real time Gross settlement], the remittance request for fund transfer up to Rs 50,000 is accepted from the walk-in customers.

Moreover, the following information is displayed on the Banks’ website.

1. Notice for CTS 2010 (Cheque Truncation System) Standards Cheque Book as per the direction of the RBI.

2. Checklist along with all relevant forms for deceased account claim settlement.

3. Display of the list of inoperative/dormant/unclaimed deposit accounts on the Banks’ website (only name and address of the customers more than 10 years are displayed as per the advice of the RBI).

Efforts to Improve Customer Service at Branches

The feedback on quality of customer service at branches is obtained through the Branch Level Customer Service Committee meetings that are held every month in which customers from various cross sections of the society are invited including senior citizens and pensioners. The suggestions/views generated during the meetings are collated and an appropriate follow-up action is taken to examine the feasibility to implement the suggestions for improving the service quality.

Your Bank is focused towards providing excellent customer service through all delivery channels and has been making continuous efforts for enhancing the level of customers’ satisfaction by leveraging technology to provide e-products and alternative delivery channels e.g. ATM/Debit cards, POS, Internet Banking, Mobile Banking, etc., best suited to the diverse needs of different customers. The varied interests and expectations of customers are taken care of by improving upon various processes and procedures.

Compliance

Your Bank is a member of the Banking Codes and Standards Board of India (BCSBI) and has adopted the “Code of Commitment to the Customers” prescribed by the BCSBI in August 2009. It has also adopted the “Code of Bank’s Commitment to MICRO and Small Enterprises”. These have been placed on your Bank’s website and also made available to customers at the branches.

While announcing the “Annual Monetary and Credit Policy for the year FY11”, the Governor, RBI, had proposed that banks should devote exclusive time in their Board Meetings once in every six months to review and deliberate on issues concerning customer service/customer care. To comply with this, two such six monthly reviews were undertaken by your Bank’s Board for the sub-periods January-June 2012 and July-December 2012, in meetings dated 4th August 2012 and 3rd March 2013, respectively.

Customer Service Committee of the Board

Your Bank has a Sub-Committee of Board for Customer Service which is headed by your Bank’s Chairman and Managing Director with the following members as on 31st March 2013.

1.

Shri S. S. Mundra

Chairman and Managing Director

2.

Shri P. Srinivas

Executive Director

3.

Shri Sudhir Kumar Jain

Executive Director

4.

Shri Ranjan Dhawan

Executive Director

5.

Shri Maulin Arvind Vaishnav

Director

6..

Shri Satya Dev Tripathi

Director

This Sub-Committee addresses the issues relating to the formulation of policies and assessment of their compliance which brings about consistent improvement in the quality of customer service. It also monitors the status of the number of deceased claims pending for settlement beyond 15 days pertaining to depositors/locker hirers/depositors of safe custody articles, and reviews the status of implementation of awards passed by the Banking Ombudsman.

Standing Committee on Customer Service

Your Bank has also set up a Standing Committee on Procedures and Performance Audit on Customer Services, comprising of three eminent public personalities as members along with all the three Executive Directors and four General Managers of your Bank. This Committee oversees timely and effective compliance of the RBI instructions on Customer Service and also reviews the practices and procedures prevalent in your Bank and takes necessary corrective steps on an ongoing basis.

The suggestions emanating in the Branch Level Customer Service Committee meetings are obtained by your Bank’s Head Office on quarterly basis from Regional Offices and placed before the Standing Committee on Procedure and Performance Audit on Customer Services. The feedback of the committee meetings is then put up to the Customer Service Committee of the Board of Directors.

Customer-Centric Initiatives and Redressal of Complaints

  • Your Bank has put in place a Customer Grievance Redressal Policy, approved by the Board, and a well structured Customer Grievance Redressal Mechanism. The General Manager in charge of Operations & Services is designated as Nodal Officer for customer complaints regarding your Bank. At Zonal and Regional levels, Zonal Heads and Regional Heads are designated as Nodal Officers for their respective Zones and Regions. The names of all Nodal Officers along with their contact numbers are displayed in all the branches.

  • A note on Review of Customer Services & Grievances Redressal is placed before the Board of Directors every quarter giving position of customers’ complaints received at your Bank’s Regional Offices and Head office. Subsequently, relevant follow up measures with important initiatives are taken by your Bank for improving the service quality to customers.

  • To minimize customer complaints and to ensure hassle free customer service, a regular analysis is done on the complaints received from the customers and a suitable action is taken on time so that there is no repetition of such complaints in future.

  • Your Bank has Board-approved policies on customer services and the same are placed on your Bank’s website.

To facilitate customers, as directed by Ministry of Finance (MOF), Govt. of India, vide their letter No. DO:NO:1/3/2012-BOIII dated 11th June, 2012, to bring uniformity in all banks and for maintaining centralized data base of all complaints, your Bank has implemented Standardized Public Grievance Redress System to enable the complainants to lodge their grievances in a simple and easy manner through multiple channels.

Furthermore, to facilitate this, an icon “online complaints (SPGRS)” has been provided on the home page of your Bank’s website.

Features of SPGRS

  • An icon “online complaints (SPGRS)” has been provided on the home page of your Bank’s website.

  • Immediately upon registering the grievances/complaints, an automatic tracker id is generated and the same is conveyed to the complainant on his e-mail id. On the basis of this tracker-id, a customer is able to know the current status of his complaint/grievance.

  • The same tracker id is also sent to the concerned branch through e-mail for speedy disposal of the grievances.

  • An auto escalating matrix to next higher authority is also provided in redressing the grievances depending upon the number of days taken to resolve the complaint.

  • An auto generated text message is sent to the complainant at the time of closure of the grievances.

  • Upon implementation of SPGRS, the “turnaround time” for the redressal of grievances/complaints lodged has been reduced drastically to an average of five to seven days.

  • Your Bank has installed KIOSK, a dedicated computer system at all Zonal Offices along with the Head Office, to enable the customers to lodge their grievances/complaints online.

Based on the feedback and suggestions from the grass root level customer committees and various studies/surveys, a slew of customer centric initiatives and measures were taken by your Bank during the year under review to improve customer service at its branches.

Systems for KYC-AML-CFT

Know Your Customer (KYC) norms/Anti-Money Laundering (AML) Standards/Combating of Financing of Terrorism (CFT) measures and Obligation of Bank under PMLA, 2002

Your Bank has a Board-approved KYC-AML-CFT Policy. The said Policy is the foundation on which the Bank’s implementation of KYC norms, AML standards, CFT measures and obligation of the Bank under Prevention of Money Laundering Act (PMLA) 2002 is based.

The major highlights of KYC-AML-CFT implementation across the Bank are as under.

  • The Bank generates Cash Transaction Reports (CTRs) electronically for submission to Financial Intelligence Unit (FIU), through the electronic medium.

  • The “AML Solution” for generating system-based alerts has been installed and implemented.

  • There is a system-based detection and submission of Suspicious Transaction Reports (STRs) to the Financial Intelligence Unit (FIU).

  • System-based Risk Categorization (from AML Measure) of Bank’s customers’ accounts has been done every half year.

  • The Bank files Counterfeit Currency Reports (CCRs) to FIU-IND, New Delhi.

  • The Bank files Non Profit Organizations Transaction Reports (NTRs) to FIU-IND.

The full KYC compliance entails Staff Education as well as Customer Education for which the following measures are taken by the Bank.

  • A comprehensive list of KYC documents is uploaded on the Bank’s website (www.bankofbaroda.com) for the benefit of customers.

  • A KYC-AML page is created at the Bank’s INTRANET for posting reference material on KYC-AML-CFT education.

  • Regular training sessions are conducted on the KYC-AML-CFT guidelines at the Bank’s training establishments.

  • Training is being arranged for the Bank’s senior officials/ executives at RBI, IBA (Indian Banks’ Association) and National Institute of Bank Management (NIBM).

  • Sustained efforts are being made to create expertise at the Banks’ Head Office for the Corporate Oversight and also for the KYC Audit of branches.

Back Office Operations

Regional Back Offices and City Back Offices

Two types of Back Offices have been conceptualized and rolled out by your Bank – Regional Back Offices (RBO) and City Back Offices (CBO). The RBO deals with centralized processing of account opening forms (AOF) and centralized processing of issuance of Personalized Cheque Books (PCB). Your Bank has ten RBOs - one each at Baroda, Bhopal, Delhi, Coimbatore, Mumbai, Lucknow, Jaipur, Kolkata, Pune and Jamshedpur. The RBOs are opening CASA accounts for 2,915 branches. The Centralised account opening activities of seven RBOs have ensured coverage of 100.0% branches of eight zones of your Bank and the process has been initiated to roll out two more RBOs to cover all the remaining branches of the Bank under the RBO process for account opening and maintenance.

The Personalised Cheque Book (PCB) issuance through Regional Back Offices provides customers of the 3,908 branches of your Bank with this facility. Your Bank has extended this facility to all the branches in 12 out of its 13 zones. The remaining branches of the Rajasthan Zone will soon be brought under the PCB issuance facility to cover customers across entire India.

The CBOs deal with centralized upload of clearing transactions – both inward and outward – as well as government collections and ECS transactions. Your Bank has 21 CBOs (service branches) where clearing and ECS are centralized for branches in each city/centre. The centralization of clearing has also been introduced in 64 main branches (which handles clearing for local branches). The CBO concept has so far covered 1,372 branches of your Bank. During FY13, your Bank has introduced fully automated cheque processing system at Mumbai, Ahmedabad and Surat.

Government Business & Currency Chest

Given below are the new business avenues opened by your Bank in the domain of Government Business during FY13.

  1. Your Bank has obtained permission for “Tax Collection” in the states of Jharkhand, Orissa, Assam, Tripura, West Bengal, Daman & Diu, Chhattisgarh, MP, Chandigarh, Kerala, Pondicherry.

  2. Additional 350 branches have been authorized by your Bank for undertaking PPF/SCSS business.

  3. Your Bank undertook special campaigns for the mobilization of PPF accounts with effect from 1st December, 2012 to 31st March, 2013 and total, 22,540 new PPF accounts were mobilized during the campaign period.

  4. The Remittance business from Ministry of External Affairs through their missions/ posts abroad has also been obtained. The International Business Branch (IBB) located in New Delhi has been identified as Nodal branch for settlement of funds in respect of Banking arrangements under the scheme.

  5. The Bank implemented physical collection of Custom Duty at Kennedy Avenue Branch, Amritsar and B M Marg Branch, Jallandhar.

  6. In Tamil Nadu, the payment of RTO taxes through e-mode has been made operational in your Bank.

  7. Around 15 more branches in Delhi and Himachal Pradesh of your Bank have been activated for the purpose of e-stamping.

  8. Your Bank has activated the GBM module for the receipt and payment of RBI Bonds. All the authorized branches have now migrated the entire data into the GBM module and changed the reporting system as per the RBI requirement.

  9. For e-payment of Direct taxes by all the Bank’s branches, CA118 menu developed in Finacle which provides off line mode for the remittance of taxes.

  10. Establishment of CPPC for processing and payment of pension to the Telecom pensioners.

New Pension Scheme (NPS)

Your Bank has made operational the New Pension Scheme (NPS) under NPS-Lite. After launching the scheme on 14.09.2012 in your Bank, a total of 20,872 applications were canvassed up to 31.03.2013 under the scheme.

Cash Management & Currency Chest

1. Your Bank has managed to maintain the Cash Deposits Ratio (Without ATM cash) at 0.30 or below by constant monitoring and follow up with the Zones/Regions.

2. Your Bank has identified 30 centers for opening of new currency chest and has begun the process of obtaining the sanction from various authorities.

Strategic Plan on Currency Management (2011-14)

As a customer-centric Initiative to improve payment system, your Bank has identified 30 new centres for opening New Currency Chests under Strategic Plan on Currency Management 2011- 14, thereby increasing total No. of Currency Chest from 84 at present to 114.

Sr.No.

Name of the Zone

New Currency Chest Proposed over three years (By March 2014)

1.

Bihar Orissa & Jharkhand Zone

03

2.

Eastern Zone

04

3.

Greater Mumbai Zone

00

4.

North Gujarat Zone

02

5.

South Gujarat Zone

00

6.

Maharashtra & Goa Zone

02

7.

MP & Chhatisgarh Zone

04

8.

Northern Zone

01

9.

Rajasthan Zone

04

10.

Karnataka & AP Zone

01

11.

Tamilnadu & Kerala Zone

01

12.

Eastern UP Zone

06

13. WUP & Uttarakhand Zone 02

 

TOTAL

30

Vigilance

Despite global changes towards automation and other drastic changes that are taking place in the banking industry, its very nature remains person oriented. Banking unlike production organisations demands personalised service hence the quality of its service largely depends upon the quality and attitude of its personnel.

It has been the endeavour of the Vigilance department of your Bank to encourage and enable the operating level staff as also those at controlling offices to exercise due care and caution to take preventive and detective measures. This helps in increasing efficiency and creating an environment of security for the honest workforce.

Careful distinction is made by your Bank’s Vigilance department between the cases of gross negligence and the cases where business decisions have gone awry. Also, periodical monitoring of individual cases is carried out to ensure that inquiries are quickly concluded and are perceived as fair by all the concerned parties. Endeavour is made towards ensuring that penalties, where necessary, are timely and just.

Vigilance machinery in your Bank is effectively performing its proactive role in new risk prone areas emerging in computerised/e-banking environment, in addition to sensitising all categories of staff members with the various preventive measures.

To bring about greater transparency in procurement and tendering processes in your Bank, a notice inviting tenders/ details of tenders awarded by the Bank and summary of tenders/ contracts concluded are put on your Bank’s website for widest possible publicity.

Your Bank has introduced a facility for on-line application and tracking status thereof in respect of Housing loans, Education loans and Auto loans. Standardized Public Grievance Redress System (SPGRS) as advised by the Ministry of Finance for uniform implementation in PSBs is made active with effect from 11th January, 2013.

It is heartening to note that with the awareness, alertness and diligence exhibited by the operating staff, 40 fraudulent attempts by unscrupulous elements were thwarted in your Bank which saved it from a colossal financial loss.

Business Performance

Given below are the details of your Bank’s major achievements on business front during the year FY13.

Resource Mobilisation and Asset Expansion

The share of Bank’s Deposits in total resources stood at 86.6% as of 31st March 2013. The Total Deposits grew from Rs 3,84,871.11 crore to Rs 4,73,883.34 crore, posting a healthy growth of 23.1% over the previous year. Of this, Savings Bank Deposits – a critical component of low cost deposits grew by 13.04% from Rs 74,579.53 crore to Rs 84,302.61 crore.

The share of low cost deposits (Current + Savings) or CASA deposits in Total Deposits was at 25.3% and in Domestic Deposits at 30.4%.

Your Bank’s Total Advances expanded by 14.2% during FY13 led by 11.0% expansion in Domestic Advances and 21.89% expansion in Overseas Advances.

Composition of Funds – Global

Particulars (Rs crore)

End March 2012

End March 2013

Growth (%)

Deposits

3,84,871.11

4,73,883.34

23.13

- Domestic

2,80,135.26

3,41,705.59

21.98

- Overseas

1,04,735.85

1,32,177.74

26.20

Borrowings

23,573.05

26,579.28

12.75

Global Advances (Net)

Particulars (Rs crore)

End March 2012

End March 2013

Growth (%)

Advances

2,87,377.29

3,28,185.77

14.20

- Domestic

2,02,075.39

2,24,294.33

11.00

- Overseas

85,301.90

1,03,891.44

21.79

Wholesale & Mid Corporate Banking

Your Bank’s Wholesale Banking and Mid Corporate Division offers an array of loan products and services such as Term Loans, Short-Term Loans, Demand Loans, Working Capital Facilities, Trade Finance Products, Bridge Loans, Syndicated Loans, Infrastructure Loans, Foreign Currency Loans, Loan Against Future Rent Receivables and many more to its large and mid corporate clients depending upon their needs. The product offerings are flexible and suitably structured taking into account the customers’ risk profile and specific needs.

Over the years, your Bank has made significant progress in establishing healthy business relations with several multinationals, domestic business houses and prime public sector companies.

Your Bank’s corporate customers are segmented as large and mid corporate. Those with sales turnover above Rs 500 crore are classified as large corporates and those having annual sales turnover of between Rs 150 crore to Rs 500 crore are classified as mid-corporates.

The prospect of any banking industry is closely interlinked with the growth of the economy to which it belongs. Unfortunately, Indian economy has recorded the decade’s lowest economic growth in FY13. The twin deficits viz. fiscal & current account deficits, high inflation & interest rates, volatile exchange rate, low private investment in new projects, etc., have thwarted the growth story of the country.

However, even during this phase, your Bank identified sectors for credit expansion and created 94 new relationships through its Fast Track Desk. The Wholesale & Mid Corporate departments have sanctioned fresh/increased credit facilities to the tune of Rs 53,565 crore during the year to various sectors /industries with projects /units spread across the country. It also took a view for further exposure to sensitive sectors like Domestic Commercial Real Estate, Power, Roads, Telecom, Iron & Steel etc.

Total domestic non-food gross advances of your Bank increased from Rs 2,01,822.71 crore as on 31.03.2012 to Rs 2,23,990.20 crore as on 31.03.2013. Approximately, 37.5% of the Bank’s total gross domestic credit belonged to wholesale credit during FY13.

Your Bank set up a new business vertical, i.e., Mid Corporate Segment in FY13. The objective was to create a specialisation to accelerate the credit to Mid Corporate borrowers and substantially increase the number of mid corporate clients through dedicated branches. In order to have a focused business approach for catering to the valued Mid– Corporate business segment, initially 16 Mid Corporate branches were opened across the country.

Your Bank’s aim is to harness Large Corporate business through CFS branches and Mid Corporate business through Mid Corporate Branches thereby maximizing earnings from both the “On and Off” balance sheet business.

Your Bank’s Wholesale Banking Department also has a fullfledged ‘Project Finance Division’ (PFD). This PFD is well equipped with professionals from various disciplines who undertake the TEV (i.e. Technical Evaluation & Viability) studies for your Bank’s clients.

The Department is also equipped with a Syndication Desk to syndicate domestic funding requirement of the clients. The Department earns decent fee-based income by carrying out TEV studies, vetting of projects, syndication deals, etc.

Your Bank’s Wholesale Banking Department also houses the “Domestic Foreign Business” Division (DFB). The DFB drives its business through all Authorized Branches including its MIS and reporting/managing Export–Import business.

Your Bank has placed thrust on proper due diligence and screening to raise the bar on the quality of appraisal to maintain asset quality.

A necessary precondition to achieve the above is rightly skilled employees or the agile, able and skilled manpower. Keeping this in view, your Bank continued its thrust on regular grooming of Credit and Forex Officers and provides specialized training within the Bank as well as in collaboration with renowned institutions outside. Your Bank also continued to recruit specialized officers and lateral recruitment of professionals like CA/ICWA/CS/MBA as well as the experienced banking professionals.

It may be noted that your Bank has adopted a “Committee Approach for Credit Approval Process” for fast dispensation of credit proposals. These committees meet as frequently as possible to reduce the Turn Around Time (TAT).

Retail Business

Retail banking services continued to remain an important business division for your Bank in FY13. Your Bank is focused on meeting the financial needs of personal and small business customers (traders) who are looking for accessible and affordable banking services.

The performance of your Bank’s Retail banking division during the year under review is as under.

Growth under Retail Lending

Your Bank’s Retail Loan Book consists of five key products viz. Home Loan, Auto Loan, Education Loan, Traders Loan and Mortgage Loan, which constituted 80.4% of the total Retail Loans at end-Mar, 2013. The other products namely LABOD/ ODBOD constituted 16.7% of the Bank’s total Retail loans.

Besides, the products like Baroda Personal Loan and other miscellaneous product viz. Doctors Loan, Loan against government securities, etc., constituted 2.9% of Retail Loans.

Total Retail Loans stood at Rs 38,046 crore as on 31.03.2013 as against the level of Rs 35,668 crore as on 31.03.2012. A growth of Rs 2,379 crore (6.7%) was registered during FY13 reflecting a slowdown in retail demand on account of economic slowdown and high fuel prices.

Growth under Five Key Retail Products

Under five key loan products which constituted 80.4% of total Retail Loans, an absolute growth of Rs 4,412 crore (16.9%) was posted during FY13.

• Under Home Loans, an absolute growth of Rs 1,911 crore (13.5%) was registered during FY13.

• Under Auto Loans, an absolute growth of Rs 512 crore (21.1%) was registered during FY13.

• Under Baroda Traders Loans, an absolute growth of Rs 1,620 crore (29.1%) was registered during FY13.

• Under Baroda Mortgage Loans, an absolute growth of Rs 284 crore (13.0%) was registered during FY13.

• Under Education Loans, an absolute growth of Rs 86 crore (4.6%) was registered during FY13..

NPAs under the Retail Loan

The amount of Non Performing Assets as on 31.03.2013 under your Bank’s Retail Loans Business stood at Rs 669.08 crore (1.76%) as against the level of Rs 681.67 crore (1.99 %) as on 31.12.2012 and the level of Rs 653.47 crore (1.92%) as on 30.09.2012. The amount of Non Performing Assets as on 31.03.2012 under Retail Loan was Rs 682.37 crore (1.91%).

Growth under Retail Deposits

Savings Deposit of your Bank stood at Rs 81,995 crore as on 31.03.2013 reflecting a growth of Rs 9,425 crore (12.98%) on y-o-y basis.

Retail Term Deposit of your Bank were at Rs 1,37,215 crore as on 31.03.2013 indicating an annual growth of Rs 16,672 crore (13.83%).

Under Total Retail Deposits, i.e., Retail Term Deposit plus Savings Deposit, an absolute growth of Rs 26,097 crore (13.51%) was posted during the year under consideration.

Sale of Gold Coins

Around 77,459 Gold Coins of different denominations aggregating 696.076 kgs were sold during the year FY13.

Initiatives in Retail Banking during FY13

1. New Products Launched

A Retail Asset product styled as ‘Baroda Education Loan for Vocational Education & Training Courses’ was introduced on 1st July 2012 during this year.

Baroda Double Dhamaka Deposit Scheme or a Term Deposit Product styled as “Baroda Double Dhamaka” was introduced on 25th February 2013 offering an interest rate of 9.34% for a period of seven years, six months and five days.

2. Product Modification

• During FY13, your Bank modified Baroda Additional Assured Advance (AAA) Scheme, a Top-Up Home Loan Product, by increasing the maximum limit to Rs 25 lakh and reducing the interest rate to Base Rate plus 1.50%.

Baroda Nagarik Bachat Khata was modified as Baroda Small Savings Bank Deposit Scheme and followings features were added to make it more acceptable and attractive.

  • Minimum initial deposit amount was reduced to NIL from Rs 50.

  • Number of Withdrawals allowed in a month increased to four from three.

  • Number of cheque leaves allowed free in a year is increased to 50 from the existing ten.

  • NIL Charges for non operation/ activation of inoperative /dormant accounts from charges applicable earlier.

  • Availability of standing instruction, ECS and Internet Banking, which were not available earlier.

• Your Bank effected several modifications in key parameters of home Loan, Educational Loan and Baroda Traders’ Loan schemes to make the offerings under these loans more attractive to your Bank’s retail customers.

3. Other Business Initiatives

  • Retail Loan Campaign- Retail Mansoon Dhamaka: For augmenting your Banks’ Retail Loan portfolio, a Retail Loan Campaign, Mansoon Dhamaka was launched during the period 14th May, 2012 to 30th September, 2012. During the campaign period, a fresh business of Rs 2,088.21 crore in 24,323 accounts was mobilized.

  • Retail Loan Campaign- Retail Loan Festive Dhamaka (i): Going by the success of Retail Mansoon Dhamaka Campaign, a new campaign - “Retail Loan Festive Dhamaka” with a focus on Home Loans and Car Loans was launched between 1st October 2012 and 30th November 2012. This was further extended up to 31st December 2012, going by the response. Aggregate amount of sanctions until 31st December 2012 after the launch of this campaign stood at Rs 1,617.58 crore in 18,102 accounts.

  • Retail Loan Campaign- Retail Loan Festive Dhamaka (ii): Going by the success of the above mentioned campaigns, a new campaign, “Retail Loan Festive Dhamaka (II)” focusing on the Home and Car Loans was launched from 1st January 2013 to 31st January 2013, and further extended up to 31st March 2013. Aggregate amounts of sanctions until 31st March 2013 after the launch of this Campaign were Rs 1,811.04 crore in 16,750- accounts.

  • Baroda Maha Utsava Deposit Scheme: Term Deposit Product styled as “Baroda Maha Utsava Deposit Scheme” for 1111 days was introduced on 13th August 2012 offering an interest rate of 9.15% replacing earlier scheme “Baroda Utsav Deposit Scheme” of 444 days with interest rate of 9.35%.

  • Savings Bank Deposit Campaign (i): For mobilizing low cost deposits, a Savings Bank Deposit Campaign was launched on 1st July 2012 for a period of three months. An amount of Rs 2,301 crore (retained amount) as fresh Savings Bank Deposit was mobilized in 16, 06,508 accounts during the campaign period.

  • Savings Bank Deposit Campaign (ii): To further mobilise low cost deposits, a second Campaign was launched on 1st January 2013 again for a period of three months. An amount of Rs 2,700 crore (retained amount) as fresh Savings Bank Deposit was mobilized in 13,89,750 accounts opened during this particular Campaign period.

  • Opening of new Retail Loan factories: Three new Retail Loan factories were opened during the year under review at Sodepur, Mehsana and Rajkot to stimulate the retail loan business.

Wealth Management Services

As a part of its customer centric measures, your Bank has been providing Wealth Management Services (WMS) for its HNI & affluent customers since June 2004. At present, under its WMS, your Bank provides various third-party products in Life Insurance, Non Life Insurance including Health Insurance, Mutual Funds & Equity Trading under tie-up arrangements with different partners.

With a purpose to strengthen the Wealth Management segment, your Bank had formed two joint ventures with leading international brands in Mutual Funds and Life Insurance. The products of these two J.V. Companies are distributed through your Bank’s wide network of branches across India. The sales have started showing encouraging growth since the inception of these joint venture companies.

Besides distributing the products of its J.V. Companies, your Bank has other tie-ups with National Insurance Company Ltd. for General Insurance and seven leading Asset Management Companies for Mutual Fund products. Your Bank also has a tie up with India Infoline Ltd for e-trading since Jan 2007 and has its own equity trading platform through BOB Capital Market Ltd. which was launched for retail customers. Your Bank has taken several customer friendly & investor convenience measures by enabling all its branches to accept ASBA applications for IPO/FPO and Rights Issue subscriptions. Furthermore, it has launched an online ASBA application submission facility for its net-banking customers with transaction rights to apply in IPO/ FPO/Rights issue from the comfort of their home/office. Your Bank has enabled 12 centers for accepting Syndicate ASBA applications. These customer centric measures are expected to contribute significantly to your Bank’s endeavor at CASA mobilization.

To improve its service standards further, your Bank has introduced a premium Collection module for IndiaFirst Life Insurance policy holders. Moreover, your Bank’s Non-Life Insurance products provide a cover to the assets financed by your Bank. This augments your Bank’s fee based income and also offers borrowal units the option to mitigate risks under the umbrella of its Wealth Management services.

The year FY14 would see the Bank move to the next stage in qualitative Wealth Management Services. These include “insurance renewal premium collection” through ATMs and fund collection module for Baroda Pioneer. This will help your Bank’s branches to extend services to its investor customers. Your Bank’s tie up partner for Non-life Insurance business will also take a further step by enabling issuance and renewal of policy through the CBS platform and through the Bank’s i-banking portal.

MSME Business

The importance of micro, small & medium enterprise sector (MSME) in the developmental context of any country is well known.

According to the Dun & Bradstreet research (2012), the MSME sector in India is highly heterogeneous in terms of the size of the enterprises, variety of products and services, and levels of technology. The sector not only plays a critical role in providing employment opportunities at comparatively lower capital cost than large industries but also helps in industrialisation of rural and backward areas, reducing regional imbalances and assuring more equitable distribution of national income and wealth. MSMEs complement large industries as ancillary units and contribute enormously to the socioeconomic development of the country.

Taking into account the importance of this sector, your Bank also considers units in manufacturing/services sectors that have investment in Plant and Machinery/Equipment respectively, in excess of regulatory guidelines and have turnover up to Rs 150 crore, on the same footing as MSME units. This is done to give a preferred attention to this ‘expanded’ sector on the lines of regulatory MSME enterprises. For regulatory reporting, however, your Bank strictly follows the regulatory definition and guidelines.

Performance of your Bank under the regulatory category of MSME was extremely strong during FY13 despite challenging economic environment. In fact, to give a boost to this business, the interest rates applicable to these units were further rationalized by your Bank during the year under review to suit the specific requirements of MSME units.

It may be noted that your Bank successfully achieved all targets under this business fixed at the beginning of the year.

Growth of Business

The total outstanding in MSME Sector works out to Rs 44,974 crore as on 31st March 2013. The growth in MSME advances during the last three years is given in the table below.

Year

Growth (%, YoY)

2010-11

29.63%

2011-12

26.11%

2012-13

30.31%

Major Achievements in FY13

  • The SME advances of Rs 44,974 crore as of end-Mar 2013 reflected a growth of Rs 10,462 crore (30.31%) on a y-o-y basis.

  • The advances of Rs 17,409 crore to Micro Enterprises in the total credit of Rs 28,047 crore to MSE sector (as of the previous year) stood at 62.1% in FY13 comfortably surpassing the mandatory target of 60.0% fixed by the RBI.

  • The SME advances as on 31st Mar, 2013 contributed 19.7% to the Gross Domestic Credit of your Bank.

  • The advances to Micro & Small enterprises reached the level of Rs 38,227 crore as against the government set mandatory target of Rs 33,650 crore by end-Mar, 2013.

  • Going by the success of the loan factory model, your Bank opened six New SME Loan Factories during FY13.

  • Your Bank introduced a New Product named as “MSME Capex Loan and Capex Card” during FY13 to further promote its MSME business.

Initiatives in MSME Financing During FY13

  1. Your Bank opened five new SME Loan Factories at Indraprastha (New Delhi), Anand, Bhopal, Junagarh, and Jalandhar – taking the total of SME loan factories to 52 across India. The ‘loan-factory’ model is a pioneering concept introduced by your Bank to ensure better quality of credit appraisal, reduced turn-around time and improved volumes – thereby enabling your Bank to increase its MSME lending without sacrificing the quality of credit.

  2. Your Bank has already planned the SME Loan Factories, Specialized SME Branches and MSME cells at various branches for the fiscal year FY14.

  3. Your Bank actively participated in various exhibitions and seminars during FY13 to build brand image of the Bank in MSME financing.

  4. Your Bank organized an Awareness Programme in order to achieve total customer relationship through enhanced cross selling, locational meetings, and involvement of trade bodies at national and state levels.

  5. Your Bank introduced the system of monthly performance ranking to share performance of SME Loan Factories amongst all and to recognize/felicitate/award best performing SME Loan Factory on half yearly/ annual basis as a proactive skill building and encouraging measure.

  6. For the purpose of continuous knowledge updating and skill building of processing/ marketing officers attached to the SME factories, your Bank organized external training/ special courses at Training Centers and its own Staff College.

  7. Your Bank has a plan to introduce a new product viz. ‘Standby Term Loan and Working Capital Limit’ to SMEs with attractive value propositions.

  8. Your Bank also introduced a “online loan application” for MSME borrowers with tracking of the proposal.

  9. Your Bank renewed a number of area specific schemes pertaining to a variety of sectors/industries across India during FY13.

  10. Your Bank also celebrated the MSME Festival during Jan- Mar 2013 to encourage staff at the SME Loan Factories and branches to re-double efforts at canvassing new business.

  11. Your Bank organized an SME borrowers’ meet at Aligarh & Raipur jointly with Dun & Bradstreet for imparting relevant knowledge about Rating, Financial terms & balance sheet ratios etc.

The area-specific-schemes developed for certain pockets involving a cluster of units engaged in similar activities with good business potential yielded satisfactory results during the year under review. The cluster Development was also undertaken with lead district branches. Directed programmes of the Government of India, particularly the Weavers Credit Card and lending under Prime Minister’s Employment Generation Programme (PMEGP) received focused attention during FY13.

In recognition of your Bank’s performance in the MSME lending in the Western part of India, your Bank received an Award at the august hands of His Excellency, the President of India for the year FY13 in New Delhi recently.

Rural and Agricultural Lending

Your Bank has always been a frontrunner in the area of Priority Sector, in general, and Agriculture lending, in particular. It has been harnessing the vast potential of the rural market through its wide network of 1,436 rural branches and 1,162 semi-urban branches.

Even during FY13, your Bank opened 291 new branches in rural and semi-urban areas.

Your Bank is the proud Convener of State Level Banker’s Committee (SLBC) in the states of Uttar Pradesh and Rajasthan. Your Bank shoulders the Lead Bank Responsibility in 45 districts in the states of Gujarat (12), Rajasthan (12), Uttar Pradesh (15), Uttaranchal (2), Madhya Pradesh (2) and Bihar (2).

Your Bank has also sponsored three Regional Rural Banks (RRBs) in three states with a network of 1,526 branches and total business of Rs 29,282.38 crore as of end-March, 2013.

Performance of Priority Sector Lending in FY13

Priority Sector Advances of your Bank surged from Rs 68,527 crore as at the end-March 2012 to Rs 80,004 crore as at the end-March 2013 and formed 39.31% of the Adjusted Net Bank Credit (ANBC) against the mandated target of 40.00%. A shortfall in achieving the target is primarily due to some changes/modifications in the regulatory definitions pertaining to priority sectors.

Agriculture Advances: The Direct Agriculture advances of your Bank rose to Rs 22,645 crore with a rise of 10.9% over the previous year with an absolute growth of Rs 2,220 crore. The total agriculture advances of your Bank recorded a flat growth of 0.02% (y-o-y) and reached the level of Rs 28,739 crore as at end-March 2013. As stated earlier, this is due to the impact of revised guidelines of Priority Sector Lending issued by the RBI and made applicable w.e.f.20.07.2012. Your Bank’s Direct Agricultural advances formed 11.13 % of ANBC as at end-March 2013 against the mandated target of 13.50%. The Total Agricultural Advances were at 14.12% of ANBC against the mandated target of 18.00%.

Under its flagship agriculture loan product “Baroda Kisan Credit Card”, your Bank issued as many as 2,74,665 Credit Cards during FY13 to provide credit to farmers. Your Bank has also launched Baroda Kisan RuPay Card, a ATM enabled Kisan Card, during the year, for the convenience of the farming community. Your Bank financed as many as 3,32,141 new farmers during FY13. As a part of its microfinance initiatives, your Bank credit linked 10,912 Self Help Groups with an amount of Rs 198.45 crore during FY13 thereby taking the total number of SHGs credit linked to 1,65,328 amounting to Rs 1,369.97 crore.

Business and Social Initiatives

Your Bank introduced various initiatives/strategies during FY13 to harness the emerging opportunities for rural and agriculture lending. Some of them are mentioned below.

  • To augment Agriculture advances, your Bank conducted Special Campaigns viz. Kharif and Rabi campaigns for crop loans under which the disbursements of Rs 5,284 crore and Rs 2,262 crore, respectively, were made. Another campaign for Investment Credit was also launched under which disbursements of Rs 1,096 crore were made.

  • Your Bank organized 4,245 Village Level Credit Camps and disbursed Rs 2,922.48 crore to 2,06,375 borrowers during FY13.

  • Your Bank identified 450 Thrust Branches across India to enhance Agriculture lending which contributed 36.0% of total Agriculture outstanding as at end-March 2013.

  • Your Bank formulated various Area-specific Schemes tailor-made to the needs of local requirements, particularly where there is a concentration of activities like Cold storages, Poultry units, fishery etc. Suitable concessions in the rates of interest, charges, etc. were allowed under these schemes to garner maximum possible business.

  • Your Bank launched automated loan processing system for improving the efficiency of branches in processing of loan proposals under Agriculture thereby facilitating timely availability of credit to farmers in adequate quantity.

Baroda Grameen Paramarsh Kendra (BGPK)This is another initiative undertaken by your Bank to help the rural community by providing credit counseling, financial literacy and other services like information on the prices of agricultural products, scientific farming, etc. Your Bank had 52 BGPKs as on 31st March, 2013.

Also, one more Baroda Swarojgar Vikas Sansthan (BSVS),Baroda R-SETI Center was opened during FY13. With this, the total number of BSVS went up to 47. Thus, each of your Bank’s Lead Districts now has a R-SETI as per the Indian government’s guidelines. A BSVS centre at Ajmer is exclusively for women entrepreneurs. The BSVSs are primarily the institutes for training the youth and imparting knowledge and skills required for taking up self-employment ventures. During FY13, around 42,601 youth beneficiaries were trained out of which 27,891 have established self-employment ventures. Out of the total 1,64,899 beneficiaries trained by these centers so far, 1,02,996 have established their self employment ventures.

Financial Literacy and Credit Counseling Centres (FLCC)-“SARATHEE” : Based on the guidelines issued by the RBI, your Bank has established 45 FLCCs, christened as “SARATHEE” to impart financial literacy and credit counseling services to the needy people to help them avail financial services from the banking system and also to provide counseling services to those who are under financial distress due to a debt burden.

Your Bank has opened these centers under its BSVS trust and services are provided by these centers to all the concerned free of cost. Your Bank opened six new FLCCs during FY13, taking the total number of FLCCs to 45 by end-Mar, 2013. Thus, each of the Bank’s Lead Districts now has a FLCC centre.

Business Facilitators Model : This model has been implemented across the country to accelerate Financial Inclusion of the excluded segment as well as to augment agriculture portfolio. Business Facilitators will mainly canvass loan applications for your Bank for which Bank will pay them compensation. Individuals including retired bank and government employees, NGOs, farmers’ clubs and SHGs are engaged as agents to greatly improve your Bank’s outreach in the rural/semi-urban areas.

Micro Loan Factory : Your Bank has opened Micro Loan Factories at Raebareli and Sultanpur in U.P. The Micro Finance Loan Factory has a mobile van with facilities and all related stationeries/documents necessary for SHG financing. It is manned by officers who are duly authorised to sanction and disburse loans up to Rs 25,000 to SHGs on the spot and at their door steps.

Performance of RRBs Sponsored by the Bank

Consequent upon the mergers of two of its RRBs during the year, the number of your Bank’s sponsored RRBs came down to three.

• Baroda Uttar Pradesh Gramin Bank, Head Office: Raebareli.

• Baroda Rajasthan Khetriya Gramin Bank, Head Office: Ajmer.

• Baroda Gujarat Gramin Bank, Head Office: Bharuch.

Two of the other banks’ RRBs were also merged with your Baroda Rajasthan RRB during the year under review. Consequent upon the merger, the aggregate business of these three RRBs rose to Rs. 29,284.23 crore as of end-March, 2013 from Rs 26,257.43 crore as at end-March, 2012, registering a growth of 11.53%.

The three RRBs together posted a Net Profit of Rs 97.06 crore during FY13 as against Rs 148.22 crore earned during FY12.

The “Net Worth” and the “Reserves and Surplus” of all these RRBs put together improved from Rs 1,018.44 crore at end- March, 2012 to Rs 1,234.42 crore at end-March, 2013 and from Rs 726.55 crore at end-March, 2012 to Rs 777.52 crore at end-March, 2013, respectively.

Bank’s Committed Efforts towards Financial Inclusion (FI)

Financial Inclusion (FI) is being viewed in your Bank not just as a social commitment, but also as an instrument to bring about overall economic development of rural India so as to tap opportunities at the bottom of the pyramid of Indian economy through sustainable ICT based delivery channels.

Your Bank’s Financial Inclusion Plan aims at providing banking services at affordable cost to those segments of society who are deprived of it, thereby bringing the unbanked population/ areas into the formal financial sector.

Strategies & Models Adopted

The Ministry of Finance has identified around 6 lakh villages across India as an unbanked area. These villages are allocated to various banks under the service area approach. Your Bank had 21,526 villages under its service area as on 31/03/2013. The Ministry of Finance and Reserve Bank of India has advised banks to provide banking services at affordable costs to these villages. Accordingly your Bank has approved a plan, which is disaggregated further to a village level to cover these 21,526 service area villages by providing banking services to them in three years’ time i.e. 2013-2016.

The following three business models are adopted by your Bank for financial inclusion

1. ICT Based Business Correspondent Model

2. Mobile Van Model

3. Brick & mortar branches in FI villages.

Your Bank has covered 4,959 villages through the network of 1,436 brick and mortar rural branches, 3,474 villages through the BC model and 49 villages through the mobile van.

During FY13, your Bank opened 151 brick and mortar branches in un-banked villages.

• ICT Based Business Correspondent Model

In order to ensure that Financial Inclusion is implemented in a most efficient manner and is fully integrated with CBS, your Bank has appointed two Service Providers for a complete end to end solution, i.e., from enrolment of villagers to issuance of smart cards to them. The purpose is to bring technology-based banking transactions to the doorsteps of all villages.

The ICT based Business Correspondent Model is based on Application Service Provider (ASP) model with Biometric Smart Card based technology. Under this approach, Business Correspondents visit villages with Point of Service (POS) devices for carrying out customer enrolments and transaction processing. These POS devices are directly connected with the CBS of the Bank using GPRS technology.

• Mobile Van Model

The second business model adopted for implementation of financial inclusion is Mobile Van model. Under this model, Mobile Vans move within a cluster of villages in service area of the existing branch. The vans with the staff visit the identified villages during fixed days in a week for providing banking services.

These mobile vans are equipped with the computer hardware and connected directly to the CBS of the Bank to enable the customers to operate their accounts through mobile vans instantly. The account opening process and other activities including transactions in accounts are carried out in Mobile vans, as is done in normal branches.

Your Bank has presently deployed five mobile vans in Gujarat, Uttar Pradesh, Bihar and Goa states covering 49 FI villages allotted to it. There is good response from the FI customers for your Bank’s mobile vans. These vans’ exterior is designed with a view to educate the rural masses about the Bank’s various deposit/loan schemes.

Ultra Small Branches (USBs)

As per the guidelines of Ministry of Finance, Government of India, your Bank has opened 2,695 Ultra Small Branches by 31st Mar, 2013 across the country in villages having population above 2,000 which are covered through the Business Correspondent Model. Your Banks’ officers from the link branches are visiting these USBs on a pre-fixed date and time. They would clear all the applications for account opening, loan requests, resolving grievances, arranging meetings with villagers on financial literacy, etc. besides advising villagers on various banking products.

This initiative of your Bank has facilitated improvement in financial literacy and confidence building at the village level, which should eventually improve the responses for your Bank’s financial inclusion drive.

Financial Literacy: A Key to successful Inclusion

The desired objective of Financial Inclusion can be achieved only when the Bank is able to generate equal response from the villages. In order to invoke a response from the villagers, the Bank needs to educate them on various banking facilities and its benefits to them. In other words, financial literacy would be the key for success of financial inclusion initiatives of any bank. Therefore, all constituents of FI need to develop a bond with each other not only to provide banking facilities but also to create massive awareness of banking and banking products amongst the population through Financial Literacy, wherever a bank is implementing Financial Inclusion program.

Your Bank has taken the following major initiatives towards financial literacy in rural parts of the country.

  1. Around 47 Baroda Swarojgar Vikas Sansthan (Baroda RSETI) impart vocational training to unemployed youth in rural and semi-urban areas with the aim of equipping them to become self employed and have conducted 5,505 training programmes and trained 1,64,742 youth of which 1,02,477 are self employed, with a settlement ratio of 62.20 % as on March 2013.

  2. Around 45 Financial Literacy & Credit Counseling Centres (FLCCs) “SAARTHEE” are operational across the country. Since the inception of these FLCCs, total 46,860 individuals visited these centres and in 33,050 cases, the issues were resolved by end-Mar, 2013.

  3. Around 52 Baroda Grameen Paramarsh Kendra’s facilitate financial education, credit counseling, information sharing and problem solving on technical issues, synergy & liaison with other organizations for value added services and development activities in rural areas.

  4. Mobile Micro Finance Loan Factory has been established with a vision to provide credit and banking facilities to SHGs at their doorsteps under the SHG – Bank linkage program, ensuring a hassle free and prompt credit delivery within maximum of four days & hassle free credit to the SHGs.

  5. “BYST-BoB Entrepreneurship Development Programme” (BYST) provides end-to-end support to disadvantaged young dynamic micro-entrepreneurs in the form of loans, business mentors, training, and networking & marketing.

  6. Tie up with Centre for Micro Finance (CmF), Jaipur to provide support in formation of Quality SHGs, facilitating credit linkages and training of branch staff thus helps in development of villages in the service area of the Bank’s branches and improving the micro finance and agriculture lending.

  7. Your Bank has also instituted a Professor Chair at the Institute of Development Studies (IDS), Jaipur one of the premier Research & Policy Advisory institutions with a view to examine space available to rural credit, rural development and agriculture development and also to study challenges and measures to overcome them. The objective is to conduct various studies on the above lines and learn from the feedback.

Product Innovation in Financial Inclusion

Your Bank has also been using financial inclusion as an opportunity to strengthen its function of Corporate Social Responsibility (CSR). Your Bank is taking various steps to increase banking awareness amongst the rural people, educate them on its products, rural credit, agriculture technical knowhow, credit counseling, knowledge sharing/problem solving, up-lifting the women and the girl children, formation of farmers’ clubs & formation of SHGs, etc.

The project, with the help of imparting basic training and guidance, brought out the potential of the unemployed youth by encouraging them to start their own business in rural areas. With the introduction of new technologies, now customers are getting banking services instantly through business correspondents appointed in their villages.

Your Bank has introduced several customer-oriented products specifically designed for FI customers. Some of them are as follows.

Basic Savings Bank Deposit Account with in-Built OD Facility

The product is specially devised for individuals from Financial Inclusion villages with relaxed KYC norms as per the RBI guidelines. The account can be opened without depositing amount which doesn’t attract any penalty and will be opened/ operated through business correspondent, branch and ATM.

Flexible RD Account (Yashasvi Jama Yojana)

This is a money back RD facility duly designed for financial inclusion account holders to provide liquidity. The product offers money back facility, at the end of six months, an amount equivalent to 50.0% of the outstanding credit balance in the account can be paid back as per the requirement of depositor.

Baroda Kisan Credit Card (BKCC)

This product is for farmers to cover their needs like production credit, investment credit, personal loan needs as well as consumption needs. It is flexible in utilization of the limit as he can utilize the limits as per his requirements during the year.

Baroda General Credit Card (BGCC)

The BGCC is implemented through all the rural and semiurban branches of the Bank to cater to the different needs of the villagers.

Insurance Product with Low Premium

Your Bank has also introduced a life insurance product with low premium for financial inclusion customers in coordination with India-first Life Insurance Company. This gives flexibility to customers to obtain cover from Rs. 5,000/- to Rs. 50,000/- at single premium of Rs. 20.99 per thousand for the period of five years.

Direct Benefit Transfer

The Government of India has decided to roll out Direct Benefit Scheme (DBT). The purpose of Direct Benefit Transfer is to ensure that beneficiaries directly receive the government benefits to their accounts electronically, cutting down delays and pilferages if any in existing distribution system. A lot of preparatory work has been done and a lot of work is ongoing in connection with the rollout of DBT. The government will transfer cash benefits like subsidies, scholarships, pensions, NREGA wages, LPG subsidy, etc. directly to the bank accounts of the identified beneficiaries under this programme. A shift to this method of transferring government benefits would be done in a phased and time bound manner. Around 43 districts in 16 states have been identified for the first phase of DBT under 26 selected schemes w.e.f 01/01/2013. It should be rolled out in another 78 districts w.e.f. 01/07/2013. It is intended that the DBT scheme would be rolled out in all districts across India by 31/03/2013. The implementation of DBT scheme is done from the lead bank platform. Your Bank has the lead bank responsibility in 45 districts. Besides this, your Bank has to monitor the effective implementation of the DBT scheme.

Aadhaar Payment Bridge System (APBS)

APBS is the new payment service offered by National Payment Corporation of India (NPCI) using the Aadhaar Number issued by Unique Identification Authority of India. The government benefits are transferred to the accounts of the beneficiaries on the basis of Aadhaar number so that the bank details and account numbers of the beneficiaries need not be maintained by the government departments/agencies. APBS is now operational in your Bank.

Aadhaar Enabled Payment System (AEPS)

AEPS is a bank led model which allows online interoperable financial transactions by PoS (Micro ATM) through the Business correspondent of any bank using the Aadhaar authentication.

The four Aadhaar enabled basic types of banking transactions are as follows.

1. Balance Enquiry

2. Cash Deposit

3. Cash Withdrawal

4. Aadhaar to Aadhaar Funds Transfer

AEPS is in a testing phase in your Bank and will be operational by mid of May 2013.

Highlights of the Bank’s Performance in FI up to 31/03/2013

• Your Bank has so far covered 4,959 villages out of 21,526 villages under its service area. Almost 90% of the villages are on the active transaction mode.

• Your Bank has opened 49.60 lakh “No-Frill Basic Saving Banks Accounts”, out of which 8.69 lakh accounts were opened through the Business Correspondent Agents (BCAs).

• The average balance outstanding in the “No-Frill accounts” of your Bank is around Rs. 1,200 crore.

• Your Bank has opened 2,695 Ultra Small Branches in villages with population above 2,000.

• Your Bank has approved a disaggregation plan up to the branch level to implement its FIP for 21,526 villages by March 2016.

• Your Bank has introduced “Micro-Insurance” product for FI customers. Your Bank is the 1st Bank to do so.

• Your Bank is operating five mobile vans in four states i.e. Gujarat, Bihar, Goa and Uttar Pradesh and has plans to deploy 100 more mobile vans.

• Your Bank has entered into an agreement with CSC e-governance Ltd. to enroll their CSCs in the Bank’s service area as BCAs on KIOSK platform under FI.

• Your Bank is fully prepared technologically for Aadhar based payments, UIDAI Linkages, Village code updation etc.

Advances to SC/ST Communities during FY13

The outstanding advances granted by your Bank to SC/ ST communities have been growing year after year. This is evident from the fact that the outstanding advances granted to them went up from Rs 4,336.02 crore as at end-March, 2012 to Rs.4,712.66 crore as at end-March, 2013. In fact, the SC/ ST communities accounted for a share of 27.64% in the total advances granted to weaker sections by your Bank during the year under review. Furthermore, a special thrust is laid by your Bank in financing SC/ST under various government sponsored schemes namely Swaranjayanti Gram Swarojgar Yojana (SGSY), Swarna Jayanti Shahari Rojgar Yojana (SJSRY), Prime Minister Employment Generation Programme (PMEGP), etc.

The Baroda Swarojgar Vikas Sansthans (BSVS) have been giving due preference to SC/ST communities while selecting the trainees. It is heartening to indicate that so far, these centres have trained 72,365 youths under the SC/ST category.

International Operations

It was a historic year in the International Operations of your Bank with opening of 100th overseas office at DIFC, Dubai. The branch was inaugurated by Shri P. Chidambaram, Union Minister of Finance, Government of India. Since its foray into international arena in the year 1953, your Bank has been consistently expanding its overseas network to tap the global business opportunities.

International Business

During the year, the major advanced economies continued to face sluggish growth, fiscal drag and severe austerity measures and its spillover effect continued to impinge on the other economies. Even during this difficult environment, the International Operations of your Bank maintained the healthy growth trend, by keeping a constant watch on the developments and taking pre-emptive steps by suitably adjusting the business model.

Your Bank kept a constant watch on the emerging opportunities and there was greater synergy amongst the overseas centres to derive the full benefit of the large network of branches.

Your Bank continued with its initiatives for customer convenience through improvements/enhancements in its IT infrastructure, modifications in products and services in line with the local requirements, expanding the branch network and publicity through print and electronic media. The year also saw your Bank entering two new centres through branches in Sydney, Australia and DIFC, Dubai. The Joint Venture Bank in Malaysia – India International Bank (Malaysia) Bhd. was also made operational during the year.

Business & Profit Performance

During FY13, the total business (Deposits + Advances) of your Bank’s overseas branches registered a growth of 24.2%. While its Customer Deposits increased by 24.3%, Total Deposits by 26.2 % and Advances by 21.8%.

During FY13, the International Operations contributed a sizeable 29.4% to your Bank’s global business.

Total Assets

Total Assets of the Bank’s International Operations showed a healthy growth of 30.1% on y-o-y basis, as they increased from Rs 1,28,398 crore as of March 2012 to Rs 1,67,038 crore as on March 2013.

Profit

Even during this challenging period of surplus liquidity in the system and slowdown in the credit offtake, the Gross Profit for the year FY13 registered a growth of 24.7% over the level of previous year due to enhanced business level and improvement in spreads. However, the Net Profit posted a negative growth of 19.20% during the year on account of higher provisions.

The contribution of international operations to the Bank’s global Gross Profit was 24.6%.

Asset Quality

The wide spread international presence of your Bank exposes it to increased credit risk. Your Bank takes all steps for realistically assessing the credit needs of any project during the pre-disbursement stage and carefully monitors the appraisal and other technical, economic, commercial, organizational and financial aspects.

The global slowdown has impacted all sectors of the world economy and this has put added pressure on the quality of assets. In response to this, your Bank has further enhanced the monitoring techniques to maintain the quality of assets. This required timely identification of stressed accounts and taking all possible steps for recoveries. Furthermore, an enhanced monitoring of restructured accounts was effected so that these do not slip to NPA categories.

However, the external environment did impact the quality of assets and Gross NPAs as % to Total Advances increased from 0.68% as of Mar’12 to 1.37% as on Mar’13.

International Presence

Your Bank’s international presence covered 24 countries through its 100 offices during FY13 are as under:

Bank’s Overseas Branches/Offices

60

Bank’s Representative Offices

1

Branches of Bank’s Overseas Subsidiaries

39

Total

100

The Bank also has the following Joint Ventures:

1. Indo Zambia Bank Ltd., Zambia having - 20 branches

2. India International Bank (Malaysia) Bhd., Malaysia - 1 branch

Overseas Expansion

During FY13, your Bank opened 12 new branches/offices (including those of the subsidiaries). This included opening of the branches of the Bank at Sydney, Australia; DIFC, Dubai, Sohar, Oman; Rose Belle, Mauritius and Electronic Banking Service Unit (EBSU) at DMCC, Dubai.

The branches of the subsidiaries were opened at Wellington and Manukau in New Zealand; Entebbe, Kabale and Industrial Area, Kampala in Uganda; Tema in Ghana and Gaborone West in Botswana

In addition, the Joint Venture Bank in Malaysia – ‘India International Bank (Malaysia) Bhd. also commenced operations during the year.

Future Plans

In order to further expand the branch network, your Bank has identified upcoming centres in countries where it is already present. This will further consolidate your Banks’ operations and improve/protect the market share. Your Bank also has plans to enter new countries offering opportunities for profitable growth of business.

Necessary infrastructure is being created in your Bank for further expanding the network in UAE, Uganda, Kenya, and Botswana. Your Bank is awaiting approval of the RBI for opening of two additional branches in the U.K.

The overseas expansion is being considered in line with the various directives issued from Ministry of Finance, Government of India regarding the overseas expansion of Public Sector Banks of India.

Syndication Centre

Your Bank has Global Syndication Centre at London and Regional Syndication Centres at Dubai and Singapore, which focus on the business of Syndication Loans in International Market. Your Bank has set up an International Merchant Banking Cell (IMBC) at Corporate Office, Mumbai, which mainly caters to the requirements of Indian corporates. Your Bank is an active player in the Syndication Loan Market and also participates in loan origination.

Products and Services

Your Bank is having a single Core Banking Solution at all its overseas branches and subsidiaries. This facilitates introduction of new products and services and also helps in carrying out modification/improvement in line with the requirements of customers in the country of operation.

The technology is being fully utilized by your Bank to have a competitive edge by continuous improvement and innovation. Due publicity is given through electronic and print media to the target customers of your Bank.

Technology in Overseas Operations

  • The No. of ATMs at overseas Territories and subsidiaries increased to 89 (54 on-site and 35 off-site) as on 31st March, 2013 from 76 (45 onsite and 31 offsite) as on 31st March, 2012. Further, three more ATMs are in the process of being installed.

  • Many of the territories/Subsidiaries are moving to Chip based debit cards.

  • Transaction based internet banking branded as “Baroda Connect” is implemented in 12 overseas territories/ subsidiaries viz UAE, United Kingdom, Oman, Mauritius, Fiji, Seychelles, Australia, Kenya, Uganda, Botswana, New Zealand and Ghana. Moreover, a “view-based internet banking” is implemented in Tanzania.

  • Global Treasury Solution has been implemented at US, UK, UAE, Bahamas, Bahrain, Hongkong, Singapore and Belgium.

  • Implementation of Centralized SWIFT activity has been completed and is operating from your Bank’s Data Centre. Except US Territory, all Territories/Subsidiaries are routing their Swift operations through SWIFT Cell, Data Centre.

  • Payment Messaging System is a middleware between Core Banking Solution (Finacle) and SWIFT which help in Straight through Processing of incoming and outgoing SWIFT messages with Anti Money Laundering check. The same has been implemented in all /Subsidiaries, except in the US Territory.

  • The AML Erase (Batch mode) has been implemented in 21 Territories/Subsidiaries.

  • The Anti Money Laundering Online List Matching solution has been implemented at 21 Territories/Subsidiaries, except the US territory.

Risk Management in Overseas Operations

The Basel II guidelines were implemented at all the overseas territories of your Bank with effect from 31st March, 2008 and your Bank has adopted a Standardised Approach for Credit Risk, Standardised Duration Method for Market Risk and Basic Indicator Approach for Operational Risk.

Your Bank has set up a separate Risk Management Department at overseas centres to deal with Credit, Market & Operational Risk and has posted specialized Risk Managers to such centres. This has resulted in strengthening of Risk Management Systems and their implementation.

The BOB RAM Model for internal Credit Rating implemented at overseas centres has further strengthened the credit monitoring process by capturing vital information related to advances accounts and their pricing.

The ASCROM Model for Asset Classification and Credit Monitoring has been implemented at all the overseas territories of your Bank.

Regulatory Compliance in Overseas Operations

Your Bank follows stringent of the home/host country regulatory norms and always remains a regulation-compliant Bank. All the regulatory guidelines/changes/issues are attended on top priority basis.

To handle the compliance issues, your Bank has posted dedicated officers at overseas centres whose skills are continuously enhanced through training and other avenues. The compliance is seen not merely a regulatory requirement but also to protect the interest and reputation of the Bank and other stakeholders.

All the overseas territories/subsidiaries have the Policies/ Manuals in varied areas of banking as per their respective regulatory requirements. These are periodically reviewed to ensure their conformity with the regulatory guidelines and requirements.

Treasury Operations

Your Bank operates a State of the Art Dealing Room at Baroda Sun Tower at its Corporate Office in Mumbai. Through this dealing room, your Bank is well positioned to scale up its Treasury Operations. The Treasury Division handles your Bank’s domestic treasury operations and covers activities in various markets i.e. Foreign Exchange, Interest Rates, Fixed Income, Derivatives, Equity and other alternative asset classes. The advanced technology platforms are used by your Bank to offer a basket of financial products to its clients including interest rate swaps, currency swaps, forwards and options.

Your Bank has also put in place a sophisticated Automated Dealing system to offer the auto generated real time foreign exchange rates to the clients of its authorised branches spread across the country. As a customer friendly initiative, during the year FY13, enhancements were made by replacing the old servers with high end servers for BOB-Authorised Dealing System facilitating improved and faster processing of transactions cutting delays and breakdown in customer service.

Under the Business Process Re-engineering, your Bank has successfully implemented Global Treasury solution across major financial centers. The Global Treasury Platform is running smoothly in nine centres, notably, Mumbai, London, Bahamas, Brussels, Dubai, Bahrain, Singapore, Hong Kong and New York. The tenth implementation of Treasury solution at DIFC Dubai, an offshore Banking unit is on the cards.

During FY13, promotion of growth and control of stubborn inflation were the key monetary policy challenges. The RBI reduced the Repo and Reverse repo rates by 100 bps and infused liquidity by cutting CRR by 75 bps during the last year. The RBI also conducted Open Market Operations to the extent of Rs 1,27,180 crore to infuse liquidity into the system. Higher than announced borrowing programme and high inflation put pressure on Gilt yields until November, 2012. This and the pause by RBI in changing monetary policy rates resulted in the 10-year benchmark gilt to trade in the range of 8.05%-8.25% during July to December, FY13. However, after the resumption of Open Market Operations by the RBI in Dec, 2012 and easing of policy rates in January 2013, the 10 year Gilt touched a low of 7.80% while ending the year at 7.95%.

Against a backdrop of weak economic growth and corrective steps & measures by the government to control fiscal deficit, your Bank’s Treasury accumulated securities offering higher yields and maintained a prudent duration for its fixed income portfolio. This strategy was useful for the Bank to maintain a good average yield on its Investments and also helped in booking of profit on sale of Investments when the rate cutting cycle resumed in the last quarter of the year. The average yield on Domestic SLR investments was 7.76%. During FY13, the Treasury earned Rs 7,450 crore as Interest/Discount earnings, while the Profit on Sale of Investment and Exchange Earnings were Rs 617 crore and Rs 803 crore, respectively.

Your Bank’s Treasury offers customized solutions using available products viz Interest Rate Swaps (IRS), Currency Swaps (CIRS), Forwards and Options to meet the Interest rate and Foreign Exchange risk mitigation requirements of the corporate clients. During the year, your Bank’s Treasury actively participated in the arbitrage opportunities available between various asset classes including Money Market CBLO, Call, Market Repo, Government Securities and Forex markets. The Treasury actively utilised the market movements and used Overnight Indexed swaps for harnessing available hedging and trading opportunities.

The sentiment in Equity markets improved during second half of FY13 due to FII inflows, reform initiatives announced by the Government and improving fundamentals of the US economy. The Equity Desk of the Treasury actively churned its portfolio and booked profits at regular intervals whenever an opportunity emerged in the markets.

In line with the announcement of the Finance Minister in his budget speech for FY12, your Bank, last year, co-promoted the country’s First Infrastructure Debt Fund – M/s India Infradebt Limited to facilitate the flow of long term debt fund to infrastructure sector.

The Foreign exchange desk of the Treasury retained its position as one of the premier market players in the Forex desks of the Public Sector Banks. The Proprietary trading desk was active in cashing in of available arbitrages, using volatility in the markets and mobilised resources in a tight liquidity position impacting the Indian markets.

Your Bank’s Treasury Mid-Office monitors market exposures and limits fixed by the Board of Directors, on a real time basis. The Risk Management parameters, including Value-at-risk (VaR) are used to measure Market Risk on all portfolios. These measures are backed up by the Back Testing on risk numbers and Stress Testing of various investment and currency portfolios.

Corporate Social Responsibility (CSR)

As a responsible corporate citizen, your Bank is considering donation to National/State Relief Funds and to any individual, trust, society, charitable/social institutes of repute engaged in social activities for the benefit of vast variety of people.

Donations are given to promote various activities. They are extended essentially as a social welfare measure on a noncommercial basis to individual trusts, social work organizations/ institutions, etc.

In particular, your Bank has been giving donations for the following purposes:

• For the spread of education – including for the girl child and womenfolk in remote villages.

• To reputed colleges/public schools and other similar institutions.

• To reputed hospitals engaged in charity or in service of weaker sections

• Assisting families of soldiers died in wars and handicapped soldiers

• Old age homes

• Preservation of places of historical interest like gardens, forts, temples etc.

• Promotion of efforts for protection, conservation and cleaning of environment including plantation/re-plantation, rivers, lakes, forests, sanctuaries etc.

• Adoption of gardens in cities where your Bank’s name can be publicized

• Family planning activities

• For measures promoting prevention of cruelty to animals and for setting up and maintaining animal and bird Hospitals

• For promoting the promotion and use of non exhaustible sources of energy like solar power, gobar gas plants in rural areas

• Vaccination projects for controlling spread of diseases/ epidemics

• Providing support to organizations extending support to handicapped persons like blind, lame, deaf and dumb, etc. or suffering from any other disabilities

• Promotion of measures for pollution control

• Other matters/ projects of social and human value

During the Financial Year FY13, your Bank disbursed donations amounting to Rs.699.74 lakh to various organizations engaged in the field of education, health, women welfare etc. The activity-wise disbursement of donations are as follows.

Sr. No.

Activity

No. of Donations

Amount (Rs lakh)

1.

Education

4

24.00

2.

Health

3

4.50

3.

Women Welfare

1

2.00

4.

Social Welfare Activities

5

669.24

 

Total

13

699.74

Besides these activities, your Bank has established Baroda Swarozgar Vikas Sansthan for imparting training to unemployed youth, free of cost, for gainful self employment and entrepreneurship skill development which help them improve their family economic status and also gives a boost to various regional economies within these locations. All the Lead Districts of your Bank have Baroda Rural Self Employment Training Institute (R-SETI ).

Your Bank has also established Baroda Gramin Paramarsh Kendra for knowledge sharing, problem solving and credit counseling for rural masses across the country. In order to spread awareness among the rural mass on various financial and banking services and to speed up the process of financial inclusion, your Bank has also established Financial Literacy and Credit counseling Centres (FLCC). As on 31st March, 2013 your Bank had 45 FLCCs.

Asset Quality Management

The year FY13 was a challenging year for the Indian banking industry from the perspective of Asset Quality due to a fragile economic environment. However, your Bank continued its practice of rigorous monitoring and recovery of the NPA portfolio to prevent any serious deterioration in its asset quality. Yet, an overstretched economic downturn did impact your Bank’s asset quality to some extent during FY13.

Indian banks, in general, witnessed heavy incidence of slippages in FY13 due to volatile financial markets both within and outside India, higher inflation and higher interest rate regime throughout the year FY13.

In spite of various depressed economic parameters, the fresh slippages during the year, were at 2.29% of the opening Standard Advances of your Bank. Against the backdrop of high slippages, the ratio of Gross NPA to Gross Advances was at 2.40% as on 31st Mar, 2013. Consequently, the ratio of Net NPA to Net Advances increased to 1.28% by end-Mar, 2013.

However, your Bank’s Loan Loss Coverage ratio (including the technical write-offs) was at 68.24% in FY13 - a relatively higher level, if compared to your Bank’s peers from the PSU banking segment.

During the year under review, your Bank laid down a comprehensive structure of recovery and credit monitoring function at the Branch, Region, Zone and Corporate levels. Besides this, the Nodal officers at each DRT centre were advised to follow-up the legal cases on day to day basis so as to minimize the delay in obtaining decrees and execution thereof in order to expedite and maximize recoveries. For Recoveries of all DRT Suit filed NPA accounts, the assets charged to the banks are now being sold through E-auction to get a fair market value of assets charged to the Bank. Additionally, ARCs have been appointed as recovery agents and consultants have been appointed for liaison with Official Liquidator to speed up the recoveries.

Your Bank continued its emphasis on follow-up mechanism to explore recovery prospects of NPA accounts. The system of monitoring of large value NPA accounts of say Rs 25 lakh and above, directly from the corporate office has ensured proactive action by branches, advocates and recovery agents. Therefore, the cash recovery in NPA accounts during FY13 was Rs 625.57 crore, higher than the cash recovery of Rs 580.46 crore during FY12. The upgradation was also higher at Rs 341 crore during FY13 compared to Rs 336 crore during FY12.

During FY13, your Bank laid specific focus on recovery of small accounts by organizing Lok Adalats and Recovery Camps at village/town level. Your Bank also launched an incentive linked recovery scheme called “Sankalp – V”, to enlist personalized attention of each and every staff member in pursuing recovery efforts of small value accounts with an outstanding up to Rs 15 lakh. The cash recovery made during the year FY13 under the scheme was very impressive at over Rs 231 crore.

The asset classification wise breakup of advances portfolio of your Bank is as under.

(Rs crore)

Asset Category (Gross)

31st March 2013

31st March 2012

Standard

324828.74

286542.59

Gross NPA

7982.58

4464.75

Total

332811.32

291007.34

Gross NPA is comprising of:

Sub-standard

4981.15

2661.82

Doubtful

2628.33

1318.71

Loss

373.10

484.22

Total Gross NPA

7982.58

4464.75

Information Technology

Your Bank has undertaken a total end-to-end business and IT strategy project covering your Bank’s domestic, overseas and subsidiary operations.

  • Your Bank has built the best of technology infrastructure by implementing a state-of-the-art Data Centre conforming to Uptime Institute Tier-3 standard and also a Disaster Recovery Site in different seismic zone with redundancy built in every single point of failure to ensure uninterrupted banking service delivery to customers. After successfully migrating Data Centre to new Data Centre in the Bank’s own premises, your Bank had undertaken Disaster Recovery Centre expansion during the year to support its business growth and technology expansion.

  • Your Bank has undertaken various other technology initiatives like windows server virtualization, desktop virtualization and backup consolidation as green initiatives and also to improve Data Centre operational efficiency, Application virtualization, Bandwidth up-gradation, ASM & RAC Implementation, migration of Bank wide network to new technology based on MPLS for improving uptime and on demand upgrade has been successfully implemented. Enterprise Management System was upgraded and new modules deployed to effectively manage and monitor Bank’s growing IT infrastructure.

  • The Core Banking infrastructure has been upgraded by your Bank from PA-RISC to Itanium servers in all 23 Overseas Territories for supporting additional business volumes. Various new Regulatory initiatives like Linking of UID numbers, Account number portability, Capturing KYC related information, Simplified account opening procedures, Addition of village codes in core banking system, Implementation of Adhaar Payment Bridge System(APBS), Centralization of Loan Processing at RLF and SMEs, Biometric Authentication for CBS Login at Branches, Deployment of NPSLite (a scheme to provide financial security for economically disadvantaged people for protecting their future during old age), automated processing of payments to NREGA, NPS and MGPSYS beneficiaries etc were added during the year. Core Banking Solution was implemented in Sydney Branch, Australia. The robust technology platform has enabled your Bank to open 100th International Branch during the year. Your Bank’s RRBs are also on CBS Platform and as notified by GOI, your Bank has successfully migrated RRBs of Central Bank of India and Punjab National Bank with 350 branches into one of RRBs’ of your Bank.

Alternate Delivery channels

Internet Banking - BARODA CONNECT

The Internet Banking, viz., Baroda Connect (Retail portal) has been completely revamped in your Bank to enhance its look and feel and user-friendliness. Your Bank continued to add more facilities under its Internet Banking channels. Other enhanced features such as Tax payments of various States, Integration of GRIPS (Government Revenue Receipts for West Bengal), Credit to Loan accounts, Bill payments, Online donations to Prime Minister Relief Fund, India Life Insurance premium payment through e-banking, IMPS(Immediate Payment services) through e-banking were added during the year. Your Bank’s Internet banking facility is made available on all Smart-phones/ tablets offering comfort of anywhere Banking to its customers. Internet Banking has also been implemented in total 13 overseas territories viz. Tanzania, Uganda, Kenya, Mauritius, Seychelles, Botswana, New Zealand, UAE, FIJI and by adding Transaction based Internet Banking in UK, Oman and Ghana and view based in Australia during the Financial Year. View Based e-banking is also provided in all Bank sponsored RRBs. In order to enhance security and confidence in Internet Banking, your Bank introduced enhanced security features by deploying Fraud Management Solution, including two factor authentications in India and 5 Overseas territories viz. UAE, UK, New Zealand, Kenya and Uganda by enabling ARCOT OTP, PULL OTP and SMS OTP.

Your Bank has initiated the process of implementing Fraud Management Solution for remaining six overseas territories where transaction-based e-Banking is implemented. View-based Internet Banking for US territory, PPF through e-banking, Inter-Bank fund transfer through Internet Banking for UAE have also been initiated by your Bank. Your Bank also proposes to implement Transaction based Internet banking for its sponsored RRBs, with two-factor authentication.

• Mobile Banking – BARODA M-CONNECT

As one more alternate delivery channel, many features were added to Mobile Banking by your Bank to provide various facilities to customers, viz., IMPS i.e. Immediate Payment Services Person to Account (P2A) fund transfer, enabling mobile banking application in all i-Phones and i-Pads in addition to Blackberry, Android, Windows, enabling of NUUP(National Unified USSD Platform) etc.

Your Bank is also in process of implementing P2M (person to Merchant) fund transfer under IMPS and has acquired India First Life Insurance as the first merchant. Your Bank proposes to enable Mobile Banking application for Windows8, Implementation of Mobile banking in Uganda and UAE etc. It has also initiated implementation of Mobile banking in its sponsored RRBs.

• ATM

The ATM Switch is upgraded in your Bank to a higher version along with Hardware up-gradation with many enhanced features for better performance, speedy ATM transactions and ease of ATM expansion during the year. The ATM switch is upgraded for India, UAE, Oman, Mauritius, Fiji, Tanzania, Botswana, T&T and New Zealand. Many customer centric initiatives such as implementation of Rupay ATM Cards, Rupay POS and Rupay KCC Cards, Brown label ATMs, Collection of Insurance premium for IndiaFirst Life Insurance Policy holders through ATMs, ATM Transaction receipt printing in HINDI, Regional Language Screen selection for Gujarati, Marathi and Tamil, Talking ATMs for visually impaired persons, implementation of Fraud management Solution in ATMs/ POS in India have been added during the year. Your Bank has successfully launched Rupay ATM and Rupay KCC cards for its RRBs also.

Your Bank has also proposed some more Customer Centric initiatives like Immediate Payment Services (IMPS) through ATMs, Regional Language screen selection in ATMs (for Malyalam, Telugu, Kannada, Bengali), Cheque book request through ATMs, NEFT through ATMs, Rupay e-commerce, multi-factor authentication for card not present transactions, Visa Debit card for UAE, BSP(Bank South Pacific) Interchange Implementation for FIJI, Prepaid card withdrawals through ATMs, Chip Based Card Implementation in India, Oman and Mauritius, Card to Card fund transfer, Bill Payment through ATMs etc.

Payment Systems

  • All branches of your Bank (which are CBS-compliant) are enabled for interbank remittances through RTGS and NEFT. The RTGS and NEFT have also been interfaced with your Bank’s internet banking portal. The Straight through Processing (STP) of NEFT & RTGS have been implemented for the Bank as well as RRBs. RTGS & NEFT has also been implemented in Uganda.

  • Internet Payment Gateway services for debit cards/credit cards are increasingly offered to merchants and internet shopper as a safe and secure channel for online purchases.

  • Cash Management System is a full-function web enabled cash management solution offered to your Bank’s customers, covering services like Receipt Management (Collections), Payment Management and Invoice Management (Receivable and Payable Management).

  • New Credit Card Management System has been implemented to provide comprehensive management and support for your Bank’s Credit Card operations.

  • The SWIFT facility for worldwide inter-bank financial communication is provided at Foreign Exchange Authorized Branches in India as also in 22 overseas territories by adding UK and Australia during the year.

  • The Payment Messaging Solution (PMS) is implemented in 22 overseas territories by adding UK and Australia during the year & all authorized branches in India. PMS facilitates validation and formatting of SWIFT messages generated from CBS as per SWIFT standards, and also goes through AML check.

  • During the year under review, a grid based Cheque Truncation System (CTS) was implemented in all MICR Centres in Southern States, Kolkata, Ludhiana and Chandigarh in addition to Delhi. Your Bank has also initiated the process of implementation of CTS in Mumbai and Western Grid of Maharashtra, Gujarat and Madhya Pradesh.

  • Automated Cheque Processing Centre (Inward & Outward) was implemented in Mumbai and Surat and Ahmedabad were added during the year, as a part of Business Process Re-engineering under its Project Navnirmaan.

  • For regulatory compliance, the Anti Money Laundering (AML) has been implemented in India and 22 overseas territories by adding Belgium during the year. Your Bank has also implemented Risk Management solution. Your Bank has also implemented Phase I AML solution in all its sponsored RRBs and implementation for Phase II AML is in progress.

Other Initiatives

  • Your Bank has implemented Customer Relationship Management as a new initiative for providing better services to customers through a contact centre over phone in order to improve their satisfaction and loyalty. Existing customers/Prospective customers may call on Toll Free no. (1800223344 & 18001024455) wherein following services can be availed of.

  • Issuance of a cheque book

  • Enquiry about products and services

  • Account Enquiry – Balance, Transaction, Amount in Clearing etc.

  • Hot-listing of ATM cards

  • Stop payment marking / un-marking

  • Request for issuance of debit card.

  • Request for re-generation of debit card PIN

  • Support for e-banking users

  • Re-generation of mobile banking password

  • On-line (paperless) TPIN generation facility

    Other information regarding products and services of your Bank is also provided to prospective customers/account holders. The CRM applications is linked to sales offices like Retail Loan Factories (RLFs), City Sales Offices (CSOs) wherein the leads generated at contact centre on the basis of enquiry about the products by customers are transferred to these offices for further processing.

    Your Bank has also completed a launch of recovery processes through contact centre wherein customers are informed about the EMI and due amounts. This shall facilitate customers to deposit EMI/due amount on demand dates.

  • The Retail Depository Services are made available to your Bank’s Retail as well as Corporate customers. With a centralized depository application, branches are equipped to provide depository services for both NSDL as well as CDSL. With Online Trading System, your Bank will be able to provide complete suite of online services to the customers for trading in instruments like equities, mutual funds, bonds and initial public offering (IPOs).

  • For improving your Bank’s service delivery, the Back Office functions have been centralized at City Back Offices and Regional Back Offices. Your Bank now has 70 City Back Offices and 10 Regional Back Offices. The personalized cheque book issuance has been centralized. Your Bank has also started centralized FCNR operations.

  • The Integrated Global Treasury Solution has been implemented in UK, UAE, Bahamas, Bahrain, Hongkong, Singapore, Belgium and in India, reducing the cost of operations and better fund management.

  • Enterprise wide GL Solution has been implemented. This provides variety of inputs to your Bank for strategic decision making in business development and also generates enterprise wide consolidated reports.

  • The Centralized Payroll, Salary module, e-TDS module and Leave Module have been implemented for all your Bank’s offices in India.

  • The Human Resource Networking for Employees Service has been implemented with the objective of creating a central database of the Bank employees for facilitating decision-making, promotion and selection exercise as also for automating other HR processes.

  • Your Bank had also undertaken as a part of its business strategy, Data Warehouse for providing flexible and interactive source of strategic information, Customer Relationship Management for better customer insight and uniform customer view across channels.

  • Your Bank has upgraded existing applications like Exchange, e-Business suite with enhanced features, encompassing Customer Relationship Management, HRNes and Enterprise wide GL modules.

  • The IT setup has been developed for account opening process and transactions, both online and offline, to be carried out through Business Correspondent thus enabling Financial Inclusion. The Mobile Van Banking is launched in Gujarat, UP & Bihar on a pilot basis as the Bank’s Financial Inclusion initiative.

  • Your Bank has fully automated its Loan Processing (Retail, Agri and SME) modules for better and quick customer service. Your Bank also provides a single click Online loan Application feature for Home Loan, Auto Loan and Education Loan.

    Your Bank has also initiated automation of Loan processing for MID-Corporate and Corporate customers.

Information Security

  • A robust Information Security Management System was put in place during the year under review to protect the technology against security threat. A Comprehensive Audit by External Agencies is being successfully carried out by your Bank for its Core Banking Solution and all other applications as well as for Data Centre/Disaster Recovery centre Infrastructure.

  • Your Bank has set up a Security Operation Centre (SOC) for enhanced IT security.

  • Your Bank’s both Data Centre and Disaster Recovery Centre are ISO 27001 certified.

  • Your Banks has Implemented Fraud Management Solution for Internet Banking, ATM & POS. In order to enhance security and confidence in Internet Banking, your Bank introduced Fraud Management Solution, including two factor authentications in India and five Overseas territories viz. UAE, UK, New Zealand, Kenya and Uganda by enabling ARCOT OTP, PULL OTP and SMS OTP.

  • As a security measure, Your Bank has also enabled SMS Alerts delivery facility to its customers for all transactions made through alternate delivery channels and for all CBS transactions worth Rs.5000 and more.

  • Your Bank is regularly conducting VAPT (Vulnerability assessment & Penetration Testing) of external facing applications, eBanking log monitoring etc.

  • Your Bank has enabled a Fraud Risk Management system for day-to-day monitoring of suspicious transactions at Branches for protecting interest of customers.

  • While cyber-attacks have become more unpredictable and electronic payment systems vulnerable to new types of misuse, it is imperative that banks introduce certain minimum checks and balances to minimise the impact of such attacks and to arrest/minimise the damage. To minimise the damage, your Bank has initiated following additional security measures which will be enabled shortly.

    • All new debit and credit cards will be issued for domestic usage unless international usage is specifically sought by the customer.

    • Convert existing MagStrip Cards to EMV Chip card.

    • PIN enabled POS

    • Enabling additional security as addition of Digital signatures for Corporate Internet Banking.

Direct Benefit Transfer

  • Your Bank has initiated Direct Beneficiary Transfer under Aadhaar Payment Bridge System (APBS) and wages payment for Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA).

  • For MGNREGA transactions, your Bank has started Pilot Project for Sanganer Block in State of Rajasthan during the year and processed 9,593 transactions amounting Rs. 86,54,676/-

  • Under APBS, your Bank has linked 1, 31,735 Adhaar Card and provided credit to 6,635 beneficiary amounting Rs 49,01,659/-

  • Your Bank has also initiated another project for Direct Beneficiary transfer in association with Central Project Scheme Monitoring System (CPSMS).

E-business

Your Bank’s e-business department provides different types of Alternate Delivery Channels (ADC) such as ATMs, Internet Banking (Baroda Connect), Mobile Banking, RTGS/NEFT, Phone Banking, Internet Payment Gateway (IPG), Contact Centres etc. In addition to this, the e-banking department of your Bank looks after Depository Services, Cash Management Services.

This year, your Bank introduced different variants of Debit Cards i.e. Maestro PIN Debit Card and RuPay Debit Card. In addition to this, your Bank also launched a new variant of Pre-paid Card i.e. Baroda Travel Easy US Dollar Travel Card.

Also, Online Trading facility for Retail customers of your Bank was launched in July 2012.

The performance of various sections under the e-Business Department during FY13 is summarised below.

ATM/DEBIT Card Operations

Particulars

31/03/2012

31/03/2013

Addition during the year

No. of ATMs operationalised

2,012

2,630

618

No. of Debit Cards Issued (lakh)

80.44

103.76

23.32

New Initiatives & Achievement during FY13

a) Maestro PIN Debit Card: Launched in April’12

b) RuPay Debit Card : Launched in September’12

c) Onsite ATM – Installation of Cheque Drop Box in all onsite ATMs

d) Issuance of debit cards in Nagrik Bachat Khata with effect from 5th Dec, 2012.

Baroda Connect (Internet Banking)

Particulars

31/03/2012

31/03/2013

Addition during the year

No. of Users

8,10,430

10,76,635

2,66,205

No. of A/cs. Linked

32,49,216

45,79,969

13,30,753

New Initiatives during FY13

a) Credit/transfer to loan account through Baroda Connect.

b) Online FDR for NRIs/PIO enabled.

c) Online payment of premium of India First Insurance

BARODA RTGS/NEFT

Particulars

2011-12

2012-13

RTGS

NEFT

RTGS

NEFT

No. of Inward Transactions

16,62,070

61,37,139

21,83,550

1,31,42,497

No. of Outward Transactions

21,47,527

29,48,252

27,45,872

53,77,922

Avg Transactions per day (Inward) –during
last month i.e. March

7,720

28,376

9,929

76,361

Avg Transactions per day (Outward) – during last month i.e. March

9,338

13,211

11,713

25,092

Baroda Cash Management Services

  • During FY13, the total number of transactions in BCMS was 30.91 lakh as against 14.19 lakh during FY12, with a total turnover was Rs.27,480.62 crore as against Rs 10,355 crore during FY12 and a profit of Rs 97.27 lakh was earned during FY13.

  • The number of customer has increased from 206 as on 31/03/12 to 308 as on 31/03/13.

  • It is proposed to extend these services to 100 more centres in a phased manner.

Baroda e-Gateway (Internet Payment Gateway)

  • As on 31st March 2013, a total of 148 Merchants were registered as against 124 as on 31st March 2012 and the total turnover during FY13 was Rs 50.85 crore. A Profit of Rs 65.68 lakh was earned during FY13 from this activity.

Other New Initiatives taken during FY13

  • Online Trading launched for Retail Customers.

  • Baroda Travel Easy US Dollar Travel Card has been launched.

  • Debit Card failed transaction complaint registration through Contact Centre has been started.

  • Contact Centre for NRIs has also been launched.

  • Standardized Public Grievance Redressal system has been launched from Contact Centre (for registration of customer complaints).

  • Recovery of Retail Loans (EMIs) through ECS has been started on pilot basis in two Zones of your Bank, notably, the Greater Mumbai and Northern Zones in April 2013.

  • Your Bank is ready for a pilot launch of National Automated Clearing House (ECS credits).

  • The Complaints registration through Contact Centre (SPGRS Portal) has also been initiated in your Bank.

Proposed Initiatives/Strategies for FY14

  • To launch 50 e-lobbies (with ATM, Bulk Note Acceptor, Self Service Passbook Printer Kiosk, Internet Banking Kiosk, Cheque Deposit Machine & Phone Banking facility).

  • Installation of Self Service Passbook Printer Kiosks in all Baroda Next Branches.

  • To install 50-100 Bulk Note Acceptors.

ATM/Debit Card

  • Card to Card transfer

  • ATM Bill Pay

  • Non-Personalized Debit Card

  • Biometric ATMs/Debit Card

  • NEFT through ATM

  • Talking ATM

  • Request for Cheque book through ATM

Baroda Connect (Internet Banking)

  • Online premature payment of Fixed Deposit Receipt

  • Online facility of Saving Bank and Recurring Deposit

  • Providing convenient login without one-time-password with the help of QNA (for registered customers).

  • Revamping pages of “Baroda Connect” Corporate portal.

  • IMPS payments through Net Banking.

Baroda M-Connect (Mobile Banking)

  • Enabling Merchant Payments

  • Implementation of Fraud Management Solution

Baroda Pre-paid Cards

  • Online issuance of Baroda Gift Card

  • Issuance of reloadable cards.

Contact Centre

  • Outbound calls for Recovery and Sales.

  • Web Chat

  • SMS/Voice/Emails blasts

  • Expanded IVR (i.e. Mini Statement, request for account statement)

Human Resources

Human resource Development is a critical element of your Bank’s overall strategy for ensuring profitable and qualitative growth.

Today, your Bank is endowed with a competent and highly motivated employee base of around 43,108 people who are engaged in handling its mammoth business operations.

Your Bank has adopted a very balanced people strategy to create a composite and responsible Human Resource culture in the Bank that can drive growth and also adequately face various challenges of the current times, viz. the large retirements, massive induction of talent, huge training requirements and challenges of succession and productivity. A comprehensive HR strategy and Framework has been drawn up to take care of all these challenges in an integrated manner through a focused HR transformation project called Project SPARSH which is unique and path-breaking in the entire industry.

This journey of HR Transformation was started in August’2011 and over the last one year, various landmark HR initiatives have been launched in your Bank which are futuristic and designed to make Bank of Baroda one of the best places to work for its employees. For this, your Bank wants to create cutting edge HR policies and processes through which it can become a role model for all other banks and in the process, leverage the full potential of its human capital to substantially improve the employee productivity.

Formulation of Talent Management system: Developing the next line of leaders in the Bank

Your Bank took a big step for developing the next line of leaders for the future by putting in place a Talent Management system which proactively identifies future potential leaders to effectively mitigate the risks arising out of the anticipated leadership gaps in the next five years and also grooms these future leaders through a systematic development agenda. Through a systematic and structured process, the Bank was able to clearly identify around 15.0% to 20.0% people in specific scales of officers viz. in Scales III, IV, V and VI as the future leaders. A grooming plan has been laid down for each of them. The process is envisaged as an annual exercise so that the pool of identified people and the various talent management activities envisioned are continuously reviewed and refined. A first of its kind “Baroda Annual Leadership Conclave” was conceptualized to provide the members of the Talent pool to broaden their perspectives on banking and industry trends and help them connect and network with their peers and senior leadership in the Bank, and the first such conclave was held in Mumbai on 11-12 August, 2012.

Strategic workforce planning and Recruitment strategy

A scientific manpower planning model was developed by your Bank to estimate manpower needs by level, skills and by branch. With its help, your Bank has also undertaken the strategic workforce planning for the next few years to feed into various other HR functions like recruitment planning, career progression vacancies and postings & deployment.

Your Bank has put in place a clearly defined Recruitment strategy which looks at broad-basing recruitment from different channels, hiring of larger numbers in view of the emerging requirements as thrown up by the strategic workforce planning and also articulating a clearly-defined Employer Value proposition with the acronym “F I R S T” as shown below:

A specially designed ‘Career portal’ has been launched on the Bank’s website which defines this Value proposition further with clearly laid out sections related to why your Bank should be the preferred choice for any prospective applicant, what is the career path, the recruitment channels available, different facets of working at Bank of Baroda and testimonials from Bank’s existing employees. All these strategies are designed to improve Bank’s Employer Branding significantly.

In order to tackle the challenge of making the large number of fresh recruits productive in the quickest possible time, your Bank initiated a very structured “on-boarding programme” consisting of both functional and cultural components which enabled them to be work-ready quickly and also helped in their cultural assimilation within the Bank.

“Baroda Manipal School of Banking”

The Baroda Manipal School of Banking is a special initiative taken jointly by Bank of Baroda and Manipal Global education to train students for a Banking career in Bank of Baroda on a “first-day, first-hour” productivity model. The students undergo a focused one-year programme which is tailored to the Bank’s requirements and which leads to the award of a post-graduate diploma in Banking and Finance, before they are absorbed in your Bank as Probationary officers.

This innovative Resourcing channel was initiated during the year FY12 but after completing the one year course, the students have started joining the Bank from FY13 onwards. Around three batches of students numbering 526 have already joined the Bank while another four batches of students numbering around 864 are undertaking the said one-year course at present.

Capability Building Initiatives

With the objective of bringing the desired focus and developmental orientation, your Bank rebranded its training system as “Baroda Academy” and launched various training initiatives under this Baroda Academy umbrella in order to create a learning organization, help in better grooming and development of its people and thereby significantly improve organization’s performance.

On the processes side, several landmark initiatives were introduced like publication of a comprehensive annual training calendar, introduction of self-nominations as an additional channel of training nominations, introduction of the system of training credits, introduction of tests at the end of every training program, creation of a pool of expert practitioners as Associate Faculty, enhancement and standardization of course content, drive for building a directory of Case Studies for use in training programmes, preparation of a Training policy, Training Manuals, etc. All these initiatives have brought about a renewed focus to the Training and development function and helped in making training a very potent tool for human capital development in the Bank. Various IT tools have been put in place to streamline the training processes and enable large-scale implementation of all the training initiatives.

On specific capability building initiatives, your Bank has, in line with the renewed focus given to training, carried out substantial training and developmental activities during FY13, which included comprehensive grooming programmes in the area of Credit, Forex, Dealings, Branch Management, Planning, Risk Management, etc. besides soft skills programmes and ensuring all-round development and grooming of young officers and new recruits. Your Bank conducted 2,198 training programmes inhouse (through its network of 12 Training Centres across the country, one IT training center and an Apex Training College at Ahmedabad) and thereby trained 43,465 people during the year. Besides, your Bank also sent around 2015 employees for undergoing training in various reputed external training institutes of the country and even abroad. As part of the overall grooming plan for the Talent pool members, customized programmes were conducted through specialized external training institutions covering specific developmental areas.

Select Deputy General Managers and Assistant General Managers of your Bank were sent to undergo a Top Management programme at one of India’s best B-Schools viz. ISB, Hyderabad whereas in another initiative, your Bank trained an additional 150 specially identified people across the Bank to undergo a focused Mentoring programme so that they could act as ‘mentors’ to newly recruited officers, taking the total number of trained mentors in the Bank to around 500.

Leadership Development (Project UDAAN)

Taking into account the critical need for building leadership competencies in people, your Bank had launched a comprehensive leadership development program named as ‘Project UDAAN’ in FY12, covering Branch Heads of all Urban/Metro Branches and all Assistant General Managers and Deputy General Managers with the objective of creating leaders for the future.

The programme was structured around three modules of leadership viz. ‘Leading Self’, ‘Leading Others’ and ‘Leading Business’ and each of the three modules are being addressed through a combination of off-site forum events and coaching clinics. The programme covered around 960 participants across seven zones of your Bank during the year FY12 and the same was continued in FY13 to cover an additional 760 more participants in another five batches. Such a massive and comprehensive leadership development effort is first of its kind for an Indian state-owned Bank.

Implementation of HR Technology

Your Bank has created a very comprehensive HR technology platform covering HRM, Training, Payroll & Leave modules christened as the Human Resources Network for Employee Services (HRNes). This technology platform has enabled automation of various HR functionalities and various modules/ various new processes were automated/ implemented during the year.

Recruitment Drive

Your Bank has been undertaking focused hiring efforts on a sustained basis year on year, to cater to superannuation, sustained business growth and rapid Branch expansion. Various recruitment exercises were undertaken during the year to address the emerging manpower requirements in your Bank. Recruitment of Specialist officers, probationary officers, recruitment of young MBAs directly from the campuses of renowned Business Schools were initiated to meet the needs of your Bank, both in terms of replacements for normal attrition and factoring in the business growth needs. Your Bank recruited 1,246 Officers in various Grades/Scales (both Generalists & Specialists), 1,731 Clerks and 700 Subordinate staff members during FY13. The recruitment process is continued in the year 2013-14 also with various recruitment projects underway for filling up almost 2,800 posts of officers and 3,500 posts of clerks.

Framework for Career Progression

Special efforts were made during the year under review to fulfill the growing aspirations of the employees for faster career progression, thereby, motivating employees for higher productivity. Your Bank has been regularly promoting people in all grades / scales, year after year, without a break, in order to keep on continuously rewarding its top performers and make them assume higher responsibilities faster. In keeping with this trend, a large number of promotion exercises were undertaken during FY13 also resulting in the elevation of around 3,793 people within the Bank in all cadres/grades/scales, as depicted in the table below.

Sub-Staff to Clerk

160

Clerk to Officer

553

JM-I to MM-II (Officer to Manager)

1332

MM-II to MM-III (Manager to Sr Manager)

1055

MM-III to SM-IV (Sr. Manager to Chief Manager)

480

SM-IV to SM-V (Chief Manager to Asstt. Gen. Manager)

160

SM-V to TEG-VI (Asstt. Gen. Manager to Dy. Gen. Manager)

35

TEG-VI to TEG-VII (Dy. Gen. Manager to General Manager)

18

Special Thrust on Development of SC/ST/Other Backward Communities

Your Bank is committed to the constitutional safeguards and social objectives for development and welfare of persons belonging to SCs, STs and other backward classes in the society. Your Bank is one of those banks in the entire banking industry that have the highest number of employees belonging to SCs and STs, which itself shows the commitment of the Bank towards their development and upliftment. Some of the highlights of your Bank’s efforts for development and welfare of people belonging to SCs and STs are enumerated as under.

Reservation in Employment

Your Bank observes all guidelines stipulated by the Government of India for reservation of posts in employment in All India recruitment and local recruitment. Around 15.0% posts are reserved for SCs and 7.5% posts are reserved for STs in all India recruitments as also for selection to Baroda Manipal School of Banking (i.e., another channel of resourcing started by the Bank). For other recruitments made on regional basis, appropriate percentage prescribed for various States is being observed. Special efforts are made like offering pre-recruitment orientation training to SC/ST applicants for recruitment in your Bank. Relaxation in age limit and qualifications are given and interviews of SC/ST candidates are taken on relaxed standards in order to ensure that appointment of candidates to the reserved posts happens. In the Interview Panel for recruitment, a member belonging to SC/ST is invariably associated. Candidates belonging to SC/ST, who are called for interview, are reimbursed traveling expenses. In addition to providing reservation in employment, your Bank is also providing reservation and other enabling mechanisms in career growth and promotions to SC and ST employees as per the existing guidelines. Pre-promotion training before participating in promotion exercises is also provided to these candidates. Around 10.0% of the available residential accommodation of your Bank is reserved for the SC/ST candidates.

The staff strength and representation of SCs and STs as of 31st March 2013 is as under.

Cadre

Total

SC

SC %

ST

ST%

Officers 17933 3044 16.97 1261 7.03

Clerks

16869

2392

14.18

1158

6.86

Substaff

8306

2836

34.14

769

9.26

Total

43108

8272

19.19

3188

7.39

SC/ST Cell

An exclusive SC/ST Cell in your Bank has been set up to monitor the reservation and other enabling provisions for SC/ ST employees. An executive in the rank of General Manager is appointed as Chief Liaison Officer for SC/ST employees to ensure compliance of various guidelines pertaining to the SC/ ST employees. A Liaison Officer for SC/ST has been appointed in each Zone of the Bank who takes care of all matters and grievance redressal of SC/ST employees of that Zone.

Meeting with SC/ST Welfare Association

With a view to have direct dialogue and review of reservation and other special provisions for SC and ST, your Bank holds quarterly meetings with the representatives of SC/ST Welfare Association of the Bank. Your Bank’s Chairman and Managing Director and Senior Executives including the Chief Liaison Officer for SC/ST participate in such meetings.

Bharat Ratna Dr. Babasaheb Ambedkar Memorial Trust

Your Bank has established the “Bharat Ratna Dr. Babasaheb Ambedkar Memorial Trust” in 1991 for promoting welfare activities for the benefit of SC/ST employees and their family members. Apart from scholarships to children of employees belonging to SC/ST, the Trust also provides scholarship to needy students belonging to SC/ST community, in general, in major centres of the country.

Visit of National Commission for Scheduled Castes

The National Commission for Scheduled Castes visited your Bank at various places during the year as shown in the following table to review the implementation of the reservation policy of the Government of India for SCs in your Bank, had discussions and interactions and examined the level of implementation of the policies and programmes.

Sr No

Place of Meeting

Date

01 Jaipur 26.05.2012

02

Dehradhun

25.07.2012

03

Bangalore

22.08.2012

04

Bhopal

27.09.2012

The National Commission for SCs for verification of Rosters and other working service safeguards visited the Bank at Baroda on 05.12.2012 and also at Jaipur on 31.01.2013. The suggestions and guidance of the Commission are being scrupulously observed by your Bank.

Various other commissions and parliamentary committees formed for promoting the welfare of different backward classes and safeguarding the interest/working conditions of different sections of society also visited your Bank as per the details given below and were apprised of the steps taken by the Bank in implementing all the relevant government guidelines and the different welfare measures adopted by the Bank to ensure their overall development and meeting of social objectives.

  • The National Commission for Safai Karamcharis at Goa on 11.02.2013

  • Study visit of the Committee on Government Assurances, Rajyasabha (for Persons with disabilities) at Mumbai on 22.01.2013

  • Meeting with Parliamentary Committee on Welfare of OBCs at Mumbai on 07.02.2013.

Business Process Re-engineering (Project NAVNIRMAAN)

After almost four years of the BPR-led transformation, your Bank now stands tall in the Indian Banking space. First ever Annual Conference of Indian Public Sector Banks on Business Process Reengineering (BPR) was hosted by Bank of Baroda in Mumbai on 14 July, 2012, along with Union Bank of India under the aegis of the Ministry of Finance, Government of India.

Key areas of the “NAVNIRMAAN” Transformation

  • Your Bank has created the “Baroda-Next” line of branches with a modular design, clear front/back office separation, comfortable customer waiting area, suitable frontline automation and dedicated sales & service teams at all metro and urban centres.

  • It has carried out the upgradation of Back Offices through:

    - Process Redesign

    - Workflow-based Systems replacing Manual process and use of machines.

    - Enlargement (to make room for new work-step migration)

  • Your Bank has aggressively rolled out the Baroda-Next Branches and Back Offices across the country.

  • Your Bank has created a Sustainability enabler e.g. Documentation, Technology enablement, Performance Management and Training and Re-training.

  • Your Bank has rolled out the Sales processes at branch and enterprise-wide Sales Accountability Model (Baroda-Next Sales Operating Model).

  • Your Bank undertakes periodic customer and Employee Satisfaction Surveys for impact evaluation.

The BPR performance of your Bank has created a positive impact both in terms of business growth and customer/ employee satisfaction through the following.

Baroda-Next Branch- Around 1,382 metro/urban branches have been rolled out as Baroda Next branches in your Bank so far.

Branch Front-end Automation- The Queue Management System (QMS) & Cheque Deposit Machine (CDS) machines are installed in 93 and 40 branches, respectively.

City Back Office (CBO) - Clearing operations have been centralized for all branches (linked to CBO). Three CBOs at Mumbai, Ahmadabad and Surat have been automated.

Regional Back Office (RBO) - Altogether 2,925 and 3,900 branches are linked for CASA opening and PCB (Personalized Cheque Book) issuance, respectively.

Credit centralization Pilot (RLF/ SMELF) – The Retail and SME credit centralization pilot is under progress at the Loan Factories in Baroda.

Rollout Sales Operating Model at each Baroda next branch- The Sales Operating Model at 32 Regions covering 739 Baroda-Next branches has been rolled out.

Mid-corporate vertical- Separate Mid-corporate vertical has been created and 15 Mid-corporate branches have been opened at important locations.

Academy of Excellence- Continuous sensitization, training and capability building at all levels remain an integral part of the Baroda Next rollout programme. It involves a Zonal /Regional Kick-off, Branch Meeting; Boot camp, Branch-based Training, External Sales Trainings and Conclaves.

Sustainability of Navnirmaan Initiatives/Impact- A certification procedure for Baroda Next branches has been introduced in terms of which process compliance/ adherence are being evaluated by your Bank’s Internal inspectors and CSAT/ESAT are being evaluated externally by the Market Research Agencies.

Marketing

During FY13, your Bank continued to promote its brand and various products and services through advertising, customer engagement programs and in-branch display. In the process, your Bank endeavoured to use different media vehicles such as Print, Electronic and OOH apart from supporting the onground activities undertaken by branches in the Zones/Regions. The highlights of various marketing/communication activities undertaken during FY13 are given below.

Your Bank initiated a unique Brand Engagement Program titled ‘Bank of Baroda Canvass Competition’ on 14th November 2012 - Children’s Day, to create a platform for building a long-term relationship with a younger audience as well as their influencers i.e. parents/teachers. The Competition was designed to invite entries from school children across the country on a pre-determined topic and winning entries were selected on National/Zonal/Regional levels by a select panel of judges. Your Bank’s mascot i.e. ‘Stickman’ was also leveraged extensively during the Competition to help establish a brandassociation with the Target audience. A judicious mix of Print & Radio Media was used in the Campaign to maximise the number of entries in the Competition. Around cities, where our Regional Offices are present, were primarily targeted. A total of 1.98 Lakh students representing over 3,000 schools from across the country participated in the Competition, during a short span of 45 days, giving your Bank an opportunity to engage with them in the near future.

Your Bank undertook various Product Promotion Campaigns to promote its products and services amongst target audience through advertising across different geographies. The focus was on providing information on various products and services, particularly Savings Deposits, Current Deposits, NRI Deposits, Home Loan, Car Loan, SME Loans and Alternate Delivery Channels through judicious use of various media vehicles. Information relating to expansion of branch network, both domestic and overseas, was also given due publicity largely through print medium which helped in enhancing your Bank’s brand image & visibility.

Your Bank also took the initiative of educating its customers through publication of special literature on Alternate Delivery Channels and products & services relating to SME segment. It also participated in various events such as Pravasi Bhartiya Diwas 2013, FICCI – IBA Banking Conference, Dun & Bradstreet – Exporter’s Excellence Awards, MINT Annual Banking Conclave, CII’s Manufacturing Summit and Standard Chartered Mumbai Marathon 2013, among many others to interact with customers and also for creating brand association with them.

During FY13, as part of its Public Relations task, your Bank had wide Media Coverage of its activities across the country which helped in maintaining the Bank’s Brand image.

Your Bank also won several awards from reputed Media Houses and other Organizations during the Year on various business parameters, a list of which is appended below.

Awards and Industry Recognition for Bank of Baroda

Your Bank received several awards during FY13, for its consistent outstanding and all-round performance (both business and financial), superior management, dedication to excellence and contribution to rural economy and financial inclusion.

Given below are a few select awards won by Bank during the year FY13

  • Bloomberg UTV Financial Leadership Award –Best PSU Bank – 07.04.012, Mumbai

  • Best CIO Award of BFSI sector from Institute of Public Enterprises, 2012 – June, Hyderabad

  • Reserve Bank Rajbhasha Shield – 29.06.2012, Mumbai

    a) First Prize in Region A

    b) Second Prize in Region B

    c) Consolation Prize in bilingual house journal – Bob Maitri

  • The Sunday Standard FINWIZ 2012 Awards – 20.08.2012, New Delhi

  • Best Indian Bank – Large (Runner Up)

  • Best Public Sector Banker – Large (Runner Up)

  • Dun & Bradstreet – Polaris Financial Technology Banking Awards – 24.08.2012, Mumbai

    a) Best Public Sector Bank under the category Global Business Development

    b) Overall Best Public Sector Bank


  • Banking Technology Award-2011 by IBA – 27.08.2012, Mumbai

    a) Use of Technology in Training & e-learning – Winner

    b) Best Customer Relationship initiatives – 1st Runner up

    c) Best use of Business Intelligence – 1st Runner up

    d) Best use of mobility tech in Banking – 2nd Runner up

    e) Best Risk management & Security initiatives – 2nd Runner up

  • Silver Trophy for effective implementation of Automated storage Management & Oracle RAC from SKOCH Digital Inclusion Award- 2012, 04.09.2012, New Delhi

  • Business India Best Bank Award 2012 – 14.09.2012, Mumbai

  • Indira Gandhi Rajbhasha Shield Competition, New Delhi

    a) First Prize – 14.09.2012

    b) Second Prize for Akshayyam in Hindi House – Journal Competition

  • (Association of Business Communicators of India) ABCI Awards 2012, 19.10.2012

    a) Special Column (English) - Bobmaitri, Silver Trophy

    b) Special Column (Language) – Akshayyam, Silver Trophy

    c) Corporate Web-site – Bank of Baroda website, Silver Trophy

  • Forbes India Leadership Award – Best CEO Public Sector, 28.09.2012, Mumbai to Shri M D Mallya

  • CNBC TV18 – ‘India Best Banks and Financial Institutions Award 2012’ – Best Public Sector Bank, 17.10.2012, Mumbai presented to Shri M D Mallya

  • Best Large Bank 2012 – Business World November 26th 2012 Issue

  • Best Large Bank 2012 – Business Today – KPMG – December 2012

  • Best Public Sector Bank Award by State Forum of Bankers Club, Kerala, December 2012, at Ernakulam

  • Business Standard Banker of the Year (2011-12) was conferred on Shri. M D Mallya, Former CMD of Bank of Baroda in January 2013. Conferred on 23.03.2013.

  • My FM Stars of the Industry Award for Excellence in Banking (PSU) – Silver awarded by Radio FM on 14.02.2013 in Mumbai

  • My FM Stars of the Industry Award for Excellence in Home Loan Banking – Bronze awarded by Radio FM on 14.02.2013 in Mumbai

  • FE Best Banks Award 2011-12 for ‘Best PSU Bank’ awarded by Financial Express Group on 20.02.2013 in Mumbai

  • “Strategic Communication and Leadership Award” by Asian Confederation of Business and World CSR Congress at Corporate Affairs Award Ceremony, Mumbai on 18/02/2013

  • The Most Efficient Public Sector Bank by Dalal Street Investment Journal on 23/03/2013.

  • National Award for 2011-12, conferred for excellence in the field of Khadi & village Industries by Khadi & Village Industries Commission on 3rd April,2013

Premises Re-Engineering and Ambience Enhancement

Given below are the major achievements of your Bank in the area of “Premises re-engineering and ambience enhancement” during the year FY13.

  • Your Banks’ administrative office cum residential complex at Jamshedpur was completed. It was equipped with ultra modern gadgets and systems with energy efficient equipments, rain water harvesting system and eco- friendly materials. Your Bank’s presence by this building in the Steel City is admired by one and all. Now, it has become landmark building of Jamshedpur city.

  • As per the directives from Ministry of Finance, your Bank linked its Corporate Office and all Zonal and Regional Offices through State-of-the Art Video Conferencing systems with MPLS Connectivity. Interaction of functional heads through VC has expedited the decision making process in a more efficient and cost effective manner.

  • Your Bank is also marching towards technology based initiatives in the form of e-tendering, e-procurement, etc., and implemented these initiatives in a phased manner during FY13.

  • All payments to vendors are being made through RTGS/ NEFT or credit to beneficiary account.

  • In tune with your Bank’s policy to have its administrative offices in owned premises, your Bank purchased land at Bangalore (Karnataka), Hyderabad (AP), Faizabad (UP) Indore (MP), Udaipur, Haldwani (Uttrakhand ), Dehradun (Uttrakhand), Jaipur (Rajasthan) and New Raipur (Chhatisgarh) for construction of commercial buildings.

  • Looking to the ever increasing rentals, a need is being felt to use every nook and corner of the available premises. Layouts were revisited while renovation and furnishing of branches/offices was done by introducing eco-friendly and ergonomically designed sleek furniture items. The area norms for acquisition of the premises were also reviewed and implemented.

  • To have uniformity in systems and procedures pan-India, Premises Policy Guidelines, Constructions Manual, Refurbishment Manual were formulated and agencies for modular and chairs were also identified for quick procurement of the furniture items and to have similar and identical design to get aesthetically pleasant look.

Projects Implemented during FY13

  • Your Bank constructed a commercial complex at Mylapore, Chennai having Zonal Office, Branch & Currency Chest.

  • A residential complex at Cenotaph Road, Chennai was constructed wherein there were three 3-BHK flats, twelve 2-BHK and one General Guest house, and state of the art VIP guest house.

  • Your Bank constructed a residential complex at East of Kailash, New Delhi wherein there are 14 executive flats (four 3BHK flats, ten 2BHK flats) and one top executives/ guest house.

  • The construction of commercial cum residential complex at (Tata Nagar) Jamshedpur was wherein there are 23 2-BHK flats.

Projects under implementation

  • The construction of residential complex at Janakpuri, New Delhi of your Bank is in the advanced stage of completion.

  • The construction of office building cum currency chest at Varanasi is also nearing the completion.

  • The construction of Multi storey integrated office building at Jaipur is in the advanced stage of completion.

  • The construction of BSVS at Ajmer, Banswada, Dungarpur, Pratapgarh are also under implementation.

  • The construction of administrative and residential buildings at New Raipur is under implementation.

  • The construction of residential cum commercial complex at Indore (MP) is under implementation.

Future Plans for Estate Management

  • To facelift the Bank’s Building at Parliament Street, New Delhi

  • To redevelop the Ram Nagar Premises at Coimbatore, to have optimum utilisation of available space for Branch/ officers’ flats.

  • To construct an own building for Disaster Recovery Site at Hyderabad.

  • To renovate the Bank of Baroda Institute of Information Technology at Gandhinagar (Gujarat)

  • To undertake the redevelopment of Bhandup Staff Quarters building, Mumbai, thereby to construct about 138 residential flats for transferee Officers/ Executives.

  • To undertake the redevelopment of Jogeshwari Staff Quarters, Mumbai, to construct a building for residential and commercial use.

  • To construct a training centre at Bangalore.

  • To construct an Administrative Regional Office Building at Faizabad.

  • To construct the BSVS at various centres across India as per the directives from the Government of India.

Domestic Subsidiaries and Associates

The performance of “Subsidiaries, Joint Venture & Associates” of Bank of Baroda was satisfactory during FY13.

The BOBCARDS Limited turned around during FY11 and made profit during FY12 and FY13. The Company has focused on all qualitative aspects of business development, which has resulted in better profitability, quality card base and ME base. The Company has introduced a range of Platinum Cards with premium features like added privileges & offers. The Company has drawn up aggressive plans for enlargement of Card & Merchant Base.

The BOB Capital Markets Ltd. has been activated by recruiting a professional team. The focus is on investment advisory services, Debt & Equity Syndication and Capital market activities. The Company commenced institutional broking business and has also launched an Online Institutional Trading Platform from October 2009. The Company commercially launched an On-Line Retail Trading platform on July 20, 2012.

The Nainital Bank Ltd. was promoted by Late Bharat Ratna Pandit Govind Vallabh Pant and others and became Associate Bank of Bank of Baroda in the year 1973. Today, the shareholding of Bank of Baroda in Nainital Bank Ltd. is 98.57% and is a subsidiary of the Bank. The State of Uttarakhand, vide its communiqué dated August 3, 2012, has notified that The Nainital Bank Limited be treated at par with other PSU Banks. The Bank has initiated branch expansion initiatives and has already established a Regional Office at Dehradun and has aggressive plans to ramp up its scale of operations. The Bank has launched e-stamping facility in 15 branches and has initiated several new IT initiatives such as Mobile banking & e-banking, etc.

Baroda Pioneer Asset Management Company Ltd. is a joint venture with Pioneer Global Asset Management SpA and is in its fifth year of operation. During the year under review, the Company was able to strengthen its AUM significantly which rose by 75.0% on year on year basis as of Mar’13 and was able to add one lakh folios despite weak sentiments prevailing in Debt & Equity markets. The key to this growth was strong focus on the institutional segment which helped the Company grow its debts & money market products coupled with focus on Systematic Investment Plans for retail investors. Several new NFOs were launched during the year and two new channels were added to take care of the third party products. The Company has increased the number of investor servicing points from 77 to 203 during the year under review.

IndiaFirst Life insurance Company Ltd. is a joint venture company with Andhra Bank and Legal & General Group, U.K. It commenced its business operations on 16th November 2009 and has received an overwhelming response for its products across the country. The Company has outperformed the industry by having maximum year on year growth of 34.0%. The Company was the 22nd entrant in the Life Insurance space & has become the 8th largest player among private players within a span of less than four years. The IndiaFirst has launched MagicBoard, a one- of- its kind portable sales process tool. The Company has won Model Insurer Award (Asia) for the 3rd successive year.

India Infradebt Ltd. is a joint venture company with ICICI Bank Ltd., ICICI Home Finance Company Ltd., Citicorp Finance (India) Ltd. and Life Insurance Corporation of India. The Company was incorporated on Oct 31, 2012 in Mumbai and has been issued registration certificate No. N-13.022039 dated 08.02.2013 by the RBI to operate as an infrastructure Debt Fund – Non Banking Financial Company (IDF-NBFC). The Company’s principal activity is to refinance part of the debt liabilities of the project companies.

(Rs lakh)

Entity (with date of registration)

Country

Owned Funds

Total Assets

Net Profit

Offices

Staff

BOB Capital Markets Ltd., 11 Mar, 1996

India

13,591.17

15,018.28

596.79

1

30

BOBCARDS Ltd., 29 Sept, 1994

India

14,546.46

16,019.04

1,922.74

33

102

Baroda Pioneer Asset Mgmt Co. Ltd., 5 Nov, 1992

India

1,749.46

2,525.75

-1,871.98

1

88

IndiaFirst Life Insurance Co. Ltd., 19 June, 2008

India

37,586.92

4,19,621.90

-3,958.40

35

1,476

Nainital Bank Ltd., 31 July, 1922

India

40,065.36

4,31,808.79

5,106.10

107

830

India Infradebt Ltd. 31.10.2012 India 30,801.66 30,813.10 801.66 1 1

Implementation of Official Language (OL) Policy

During the period under review, your Bank made significant progress with regard to implementation of Official Language policy and ensured compliance of various statutory requirements of Official Language Act/Official Language Rules. Your Bank could achieve all major targets set by the Government o India under its Annual Implementation Programme and fulfilled the assurances given to the Committee of Parliament on Official Language.

In recognition of your Bank’s outstanding performance, the Bank was awarded 1st prize in Indira Gandhi Rajbhasha Shield by Shri Pranab Mukherjee, Hon’ble President of India. Your Banks’ in-House Hindi Magazine-Akshayam was also awarded Second prize at the hands of Shri Pranab Mukherjee, Hon’ble President of India for the year FY12.

During the year FY13, your Bank’s In-House Magazine ‘BOBMAITRI’ and Hindi magazine ‘AKSHYAAM’ got 3rd prize in the RBI Rajbhasha shield Competition. The Town Official Language Implementation Committees functioning at Jaipur and Baroda under your Bank’s convenorship were awarded 1st prize for their outstanding performance by the Department of Official Language, Government of India. Your Bank’s Zonal Office at Pune, Regional office at Jodhpur and Zonal office at Ahmedabad too got 1st, 2nd and 3rd prizes, respectively. Your Bank’s in-House Hindi Magazine ‘Akshayyam’ was awarded with ‘Gold Prize under Indian Language Publication category by the ‘ABCI’ and ‘Apni Baat’ with silver prize under special column (Language) category.

In addition to the above two magazines, a publication of your Bank’s Hindi web Magazine Baroda Hindi.com has been popularsing the use of Hindi language through technology. The Hindi magazines are regularly published by different Town Official Language Implementation Committees functioning under your Banks’ convenorship.

The Town Official Language Implementation Committees functioning under the convenorship of your Bank discharged their responsibilities excellently. During the year, three newly constituted Town Official Language Implementation Committees started functioning at Jalandhar, Varanasi and Haldwani under your Bank’s Convenorship and now your Bank is the Convenor of nine Town Official Language Implementation Committees.

The Third Sub-Committee of Parliament on Official Language visited your Bank’s branches at Jaisalmer, Vikas Nagar and Rudraprayag and appreciated the efforts put in by the Bank in the area of Official Language Implementation.

Your Bank was able to come out with a Programme to generate and print pass books and account statements in Hindi at the branches situated in linguistic regions A and B, through Finacle System on the CBS platform.

During the year under review, your Bank started printing the ATM slips in Hindi for the convenience of customers and introduced a display of ATM screen in Gujarati and Marathi languages in addition to Hindi and English. During the year, ‘Pragati online package’ was also developed for consolidation of quarterly progress report regarding the use of Hindi and online submission of Hindi reports.

During FY13, Hindi version of your Bank’s Book of Instructions was uploaded on the Bank’s Intranet. During the year FY13, your Bank published two books in Hindi namely “Financial Inclusion & Indian Languages” and “Samvaad” for prorogating the use of Hindi in the Indian banking industry.

Board of Directors

Shri S. S. Mundra appointed as the Chairman and Managing Director of the Bank w.e.f. 21.01.2013 by the Central Government u/s 9 (3) (a) of The Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 to hold the office till 31.07.2014 i.e. the date of his superannuation or until further orders, whichever is earlier.

Shri P. Srinivas appointed as a Whole Time Director (designated as Executive Director) w.e.f. 18.06.2012 by the Central Government u/s 9 (3) (a) of The Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970, to hold office up to 30.06.2016 i.e. the date of his superannuation or until further orders, whichever is earlier.

Shri Sudhir Kumar Jain appointed as a Whole Time Director (designated as Executive Director) w.e.f. 18.06.2012 by the Central Government u/s 9 (3) (a) of The Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 for a period of five years, or until further orders, whichever is earlier.

Shri Ranjan Dhawan appointed as a Whole Time Director (designated as Executive Director) w.e.f. 01.11.2012 by The Central Government u/s 9 (3) (a) of The Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970, to hold office up to 30.09.2015 i.e. the date of his superannuation or until further orders, whichever is earlier.

Shri n. S. Srinath, a Whole Time Director (designated as Executive Director) ceased to be a Director with effect from 01.06.2012 on completion of his term.

Dr. (Smt.) Masarrat Shahid, a part time non- official Director ceased to be a Director with effect from 29.10.2012 on completion of her term.

Shri Rajiv Kumar Bakshi , a Whole Time Director (designated as Executive Director), ceased to be a Director with effect from 01.11.2012 on completion of his term.

Shri M. D. Mallya, Chairman and Managing Director, ceased to be a Director with effect from 01.12.2012 on completion of his term.

Directors’ Responsibility Statement

The Directors confirm that in the preparation of the annual accounts for the year ended March 31, 2013:

  • 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 judgment and estimates were made so as to give true and fair view of the state of affairs of your Bank at the end of financial year and of the profit of your Bank for the year ended on March 31, 2013;

  • Proper and sufficient care was taken for the maintenance of adequate accounting records in accordance with the provisions of the applicable laws governing banks in India; and

  • The accounts have been prepared on a going concern basis.

Acknowledgement

The Directors express their sincere thanks to the Government of India, Reserve Bank of India, Securities and Exchange Board of India, other regulatory authorities, various financial institutions, banks and correspondents in India and abroad for their valuable guidance and support.

The Directors acknowledge with appreciation the assistance and cooperation extended by all stakeholders of your Bank like customers, shareholders and well wishers in India and abroad.

The Directors place on record deep appreciation for the hard work and dedication of the members of your Bank’s staff at different levels, which enabled your Bank to record high quality, consistent growth year after year despite economic challenges and consolidate its position as one of the premier banks in the country.

For and on behalf of the Board of Directors,

S. S. Mundra
Chairman & Managing Director


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