Home  »  Company  »  Bank of Baroda  »  Quotes  »  Directors Report
Enter the first few characters of Company and click 'Go'

Directors Report of Bank of Baroda

Mar 31, 2014

The Directors have pleasure in presenting the One Hundred and Sixth 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 31,2014 (FY14).

Performance Highlights

- Total Business (Deposit Advances) increased to Rs 9,65,900 crore reflecting a growth of 20.43% (y-o-y).

- Gross Profit and Net Profit were Rs 9,291 crore and Rs 4,541 crore respectively. Net Profit registered a growth of 1.35% over the previous year.

- Credit-Deposit Ratio stood at 86.15% as against 82.03% last year.

- Retail Credit posted a growth of 20.96% constituting 16.6% of your Bank''s Gross Domestic Credit in FY14.

- MSME Credit posted a growth of 21.21% constituting 20.3% of your Bank''s Gross Domestic Credit in FY14.

- Net Interest Margin (NIM) as per cent of interest earning assets in global operations was at the level of 2.36% and in domestic operations at 2.87% during FY14.

- Net NPAs to Net Advances stood at 1.52% this year against 1.28% last year.

- Capital Adequacy Ratio (CAR) as per Basel II stood at 12.87%.

- Capital Adequacy Ratio (CAR) as per Basel III stood at 12.28%

- Net Worth improved to Rs 34,933 crore registering a rise of 13.7%.

- BookValue improved from Rs729.11 to Rs 813.50 on year.

- Business per Employee moved up from Rs 1,689 lakh to Rs 1,865 lakh on year.

Segment-Wise Performance

The Segment Results for the year FY14 reveal that the contribution of Treasury Operations was Rs 1,527.24 crore, that of Corporate/Wholesale Banking was minus Rs 461.11 crore, that of Retail Banking was Rs 3,359.84 crore, and of Other Banking Operations was Rs 2,458.02 crore. Your Bank earned a Profit after Tax (PAT) of Rs 4,541.08 crore after deducting Rs 1,386.68 crore of unallocated expenditure and Rs 956.23 crore towards provision for tax.

Dividend

Your Bank''s Directors have proposed a final dividend of Rs 10.50 per share. The final dividend together with interim dividend of Rs 11 per share paid in January 2014 results in total dividend of Rs 21.5 per share (on the face value of Rs 10/-per share) for the year ended March 31st, 2014. The total outgo in the form of dividend, including taxes, will be Rs 1,083.68 crore.

Capital Adequacy Ratio (CAR)

Your Bank''s Capital Adequacy Ratio (CAR) was comfortable at 12.87% under Basel II and at 12.28% under Basel III as on 31st March 2014. Moreover, your Bank''s Tier 1 ratio was at 9.28% and common equity Tier 1 was at 8.95% under Basel III framework.

Your Bank''s Net Worth as at 31st March 2014 was Rs 34,933.06 crore comprising paid-up equity capital of Rs 430.68 crore and reserves (excluding revaluation reserves) of Rs 34,502.38 crore. An amount of Rs 3,457.40 crore was transferred to reserves from the profits earned.

Provisions towards Retirement and Other Benefits

During the year FY14, your Bank made provision towards contribution to gratuity (Rs 100.72 crore), pension funds (Rs 1,014.76 crore), leave encashment (Rs 106.18 crore) and additional retirement benefits (Rs 54.71 crore) on actuarial basis. Total provisions under these four categories amounted to Rs 1,276.37 crore during the year FY14, against Rs 1,205.63 crore during FY13. Total corpus available with your Bank at the end of March 2014 under these heads was: Rs 1,532.62 crore (gratuity), Rs 7,893.50 crore (pension funds), Rs 735.69 crore (leave encashment) and Rs 647.17 crore (additional retirement benefit).

Key Financial Ratios

Particulars FY 14 FY13

Return on Average Assets (ROAA) (%) 0.75 0.90

Average Cost of Funds (%) 5.37 5.75

Average Yield (%) 7.68 8.29

Average Interest Earning Assets (Rs crore) 5,07,082.68 4,24,761.33

Average Interest Bearing Liabilities (Rs crore) 5,02,176.05 4,15,246.10

Net Interest Margin (%) 2.36 2.66

Cost-Income Ratio (%) 43.44 39.79

BookValue per Share (Rs) 813.50 729.11

EPS (Rs) 107.38 108.84



A Dedicated Cell for Training & Development

Looking to the importance of Training and Development in the context of large scale recruitment in the Bank combined with the need for grooming of the existing work force in the context of the growing competition, your Bank created a new cell for "Learning" and a new functional position as Chief Learning Officer (CLO) in the Bank during FY14. The CLO is of the level of a General Manager and supports the organization through learning interventions.

The broad mandate of this new vertical is as follows.

- Institutionalizing and enhancing E-learning for effective knowledge management.

- Fostering a learning environment across the organization through innovative interventions.

- Helping customers to understand and use your Bank''s products and services through customer education.

- Aligning training with operational priorities by designing suitable courses through collaboration with other functional heads.

- Steering the Baroda Academy towards the objectives for which it was set up.

Your Bank has 15 training establishments spread all over the country including its apex Staff College at Ahmedabad. The Staff College has successfully completed its glorious journey of 49 years and stepped into the Golden Jubilee year on 21st November, 2013. Golden Jubilee year was launched by your Bank''s Chairman & Managing Director on the same day. A series of learning events took place throughout the year to commemorate the Golden Jubilee year. During the year, a new Training Centre was commissioned at Bangalore.

Faculty members of the Bank have authored good number of research papers that were presented in national and international conferences and subsequently published as well.

The training system in your Bank extensively uses case study methodology and has built up a pool of case studies developed by faculty members to make training highly experiential and simulation-based.

A good number of innovative steps have been taken by the Bank in the domain of training over the years. The training system of your Bank bagged a National Award for Innovative Training Practices in various industries by securing third position, awarded by the Indian Society for Training & Development (ISTD) during the year FY14.

Large Scale Training on Products

Your Bank carried out a campaign called "ASCEND" for large scale product training to impart product knowledge to the front line officers on Retail Liability, Retail Asset and e-Business products. The campaign was run entirely by the trainers and operational bankers, and it covered 5,987 employees amounting to about 95% of the target group.

Similarly two rounds of All India quiz christened "Baroda Gyani" were organized to bring more awareness on product knowledge. More than 4,000 employees from sub-staff to officers participated in this competition upgrading their product knowledge. E-learning modules on retail products were also launched for this purpose.

Adoption of new Training Policy

Your Bank has a Board approved comprehensive training policy. It covers entire spectrum of training activities that include a) laying down streamlined processes, b) a full-fledged training structure, c) capacity building, d) measurement of training efficacy and, e) intervention methodology.

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. Around 49 programmes covering 1,221 SC and 573 ST employees were conducted during FY14 to prepare them for promotion exercise. Similarly, 9,602 SC employees, 3,795 ST employees and 10,292 OBC employees were imparted training during FY14 in various key banking areas.

Training to Customers: "Customer Connect" Campaign

As part of customer education, the training system ran a campaign during Feb-Mar 2014 to impart training to customers for using net banking and mobile banking services. More than 15,342 customers were trained at various centres and the initiative will continue throughout the calendar year.

Capability Building Initiatives

To build knowledge power of its employees, your Bank has been focusing on comprehensive grooming of the staff in key banking areas like credit, forex, Priority Sector, Retail Banking, CBS, Financial Inclusion, Risk Management etc. Besides, your Bank conducts comprehensive training programme called "On-Boarding Programme" for newly recruited officers and clerks using in-house resources and through a tie-up with reputed external agencies. The Bank conducted more than 2,337 in-house training programs during the year FY14 covering 49,044 participants in addition to the external training of officers and executives at various business schools in India and abroad. Your Bank is at an advanced stage to take the next big step in the area of e-learning to augment its capabilities to reach out to every single employee.

External Training

During FY14, around 988 staff members were nominated to various external training programmes. Your Bank considers External Training an integral part of capacity building, wherein employees at all levels are exposed to such programmes to learn and adopt the best practices existing in the industry.

Some of the noteworthy and dedicated programmes organised during the year FY14 were:

- Top Management Programme for General Managers and Deputy General Managers of your Bank at ISB, Hyderabad from 13th to 18th May 2013.

- Top Management Programme for two batches of newly promoted Assistant General Managers and Chief Managers at International Management Institute (IMI), New Delhi from 13th to 17th May 2013 and from 20* to 24th May 2013.

- A Leadership Development Programme for newly promoted Assistant General Managers of the Bank from 7th to 12th October 2013 at Centre for Organization Development, Hyderabad.

- Integrated Treasury Bourse Programme in association with Trinity Academy, Mumbai from 26th August to 5th September 2013 for treasury officers.

- Talent management training on ''Communication and Influence'' and ''People Development and Team Focus'' for the identified officers during Oct-Dec2013.

- Executive Development Programme on Rational Emotive Behavior Therapy (REBT) from 5th to 7th December 2013 at University of Mumbai.

- A dedicated Programme for Agriculture Officers of your Bank from 2nd to 7th December 2013 at Manipal Academy of Banking, Bangalore.

- Nearly 3,000 new clerks were on-boarded in tie-up with NIIT-I FBI thus covering all the new clerks who joined the Bank post June, 2013. More than 800 existing clerks were trained under a refreshers'' course "UTKARSH" by I FBI.

- A programme on "Positive Approach to Vigilance Administration for Disciplinary Authorities" on 18th & 19th October 2013 at New Delhi.

- A Faculty Development Programme was conducted from 16th to 21st December2013 by M/s Fourth Quadrant Training Pvt. Ltd.

Business Process Re-engineering (Project Navnirmaan)

Ever since your Bank changed its brand identity, there has been a tremendous growth in its brand recall value, which in turn gave rise to enhanced expectations from all stakeholders. The expectations were further strengthened by your Bank''s tag line as India''s International Bank and its mission to be a ''National Bank of International Standards''. However, your Bank has responded well to these expectations by restructuring its products and processes in an optimum fashion.

Actually, the process of change began with the setting up of Retail Loan Factories in 2007. Subsequently, your Bank commissioned a comprehensive change programme in June 2009 that sought to rebuild the Bank for the future underthe name Project Navnirmaan.

This project touched all aspects of your Bank''s processes, structures and systems with an objective to simplify processes, improve branch productivity and provide best- in-class service to its customers.

The change programme has been successful and this initiative has been one of the major factors to help your Bank bag a number of awards and accolades establishing itself truly as India''s International Bank.

The major achievements under the project Navnirmaan during FY14 are enumerated as under.

- Baroda-Next Branch: Around 1,433 metro and urban branches have been rolled out as Baroda Next branches in your Bank until end of FY14.

- Branch Front-end Automation: The Queue Management System (QMS), Cheque Deposit Machines and Personalized Pass Book Printers were installed in 9,840 and 1,200 branches, respectively.

- City Back Office (CBO): Clearing operations were centralized for all branches (linked to CBO). At present, there are 85 CBOs operational throughout the country.

- Regional Back Office (RBO): Two RBOs at Bareilly and Ahmedabad were added during the year taking the total strength to 12. Altogether 3,653 branches are linked for CASA opening and 4,263 branches linked for PCB (Personalized Cheque Book) issuance.

- Credit centralization Pilot (RLF/SMELF): The Retail and SME credit centralization pilot of your Bank initiated in FY14 is under progress at the Loan Factories in Baroda.

- Sustainability of NAVNIRMAAN initiatives/impact:

Process Compliance Audit (PCA) - A certification procedure for Baroda Next branches was introduced through which process compliance/adherence by branches are being evaluated by your Bank''s inspecting officers. Till date, 907 branches have been covered under the PCA.

- Train the Trainers Programme: A two days'' programme was held at Staff College Ahmadabad from 29th to 30* June, 2013-in connection with holding workshops at all zones for branch heads, sales heads, relationship managers, customers service and branch hosts of Baroda Next branches.

- Change Leader-cum-RBDM Conclave: A two days'' conclave was held at Staff College, Ahmadabad during 12-13 August, 2013.

- Contact Centre: Your bank has two Contact Centres at Lucknow and Vadodara. In addition to the existing basket of service, Mobile Banking assistance service has been added during the year. The service timing has been increased to 6am to 10pm (from earlier 8am to 8pm) for better customer convenience.

- E- Lobby: Your Bank has started 45 independent E-Lobbies in different zones. It offers the following six services- Cash Dispenser (ATM), Bunch Note Acceptor (BNA), Self Service Automatic Passbook Printing Kiosk, Cheque Deposit Machine (CDM), Internet Banking Kiosk and Phone Banking facility.

- Innovation Committee: With a view to encourage a culture of innovation across the organization, your Bank set up an Innovation Committee in March 2014 with the following objectives - developing new products and services, innovation in internal processes that add value to customers and the Bank, innovation in service delivery that delights the customers.

Marketing

During FY14, your Bank continued to promote its brand and various products and services through various marketing initiatives. This involved effective utilization of different media vehicles such as Print, Electronic (TV, Radio, Online etc.) and OOH, apart from supporting the "Below-the-Line" (BTL) activities undertaken by the Zones and Regions.

The highlights of various marketing / communication activities undertaken during FY14 are given below:

Your Bank, encouraged from the success of its initiative of FY13i.e. BRAND Engagement Program, launched the next edition of ''Bank of Baroda Canvas Competition'' during January 2014 to continue and harness the potential of long- term relationship formed with the younger audience as well as their influencers i.e. parents and teachers. This year again the momentum was to build long-term relationship with both existing and new educational institutions and as such, students across the country were invited to submit their entries through their respective schools on a pre- determined topic and winning entries were selected on National/Regional levels by a select panel of judges. The brand-association formed with the target audience through involvement of the Bank''s mascot i.e. ''Stickman" increased significantly this year and participants were invited to name the stickman. A judicious mix of on-ground activities at the Zonal and Regional levels were used in the campaign to maximize the number of entries in the said competition.

In addition to the above initiative, your Bank undertook various Product Promotion Campaigns to promote its products and services amongst target audience through advertising across different geographies. Besides focusing on providing information on various products and services, particularly Saving Deposits, Current Deposits, Home Loans, Car Loans and SME Loans, new product-lines like Consumer Durable loans and Alternate Delivery Channels (ADCs) were aggressively promoted. Furthermore, special customer segments were also targeted viz; Special Campaigns for Doctors and NRIs etc. through judicious use of various media vehicles on Pan India basis. Information relating to expansion of branch network, both domestic and overseas, was also given due publicity largely through print medium which helped enhancing your Bank''s brand image and visibility.

Your Bankalso participated in various events such as Pravasi Bhartiya Diwas 2014, FICCI-IBA Banking Conference 2013, World Ranking Snooker Tournament-Indian Leg, India-Australia Cricket Series 2013, MINT Annual Banking Conclave, BKC Financial Institutions Employees Marathon and Standard Chartered Mumbai Marathon 2014, among many other events to continue the brand association with the customers and stakeholders thereby increasing the recall value.

During FY14, as part of its public relations task, your Bank had wide media coverage of its activities across the country, which helped in enhancing your Bank''s brand image.

Awards and Industry Recognition for Bank of Baroda

Your Bank won several awards and recognitions during FY14 from the reputed media houses and other prestigious organizations on various business and financial parameters for its steady and all round performance, superior management thereby contributing to the growth of the economy.

Given below are some select awards won by your Bank during the year FY14:

- Your Bank''s Chairman & Managing Director Shri S S Mundra, ranked 41st in the list of Top 100 India Inc''s Most Powerful CEOs as per CD-ET (Corporate Dossier- Economic Times) Inc''s Survey 2013, published in Economic Times issue dated 12.07.2013. He was also ranked 3rd amongst CEOs of Public Sector Banks as per the survey.

- Your Bank ranked 20th amongst ''Best Indian Brands'' - Brand Equity Economic Times Survey. This was published in Economic Times issue dated 31st July 2013.

- Your Bank won a Special Award for Best IT Team among Public Sector Banks at IDRBT Banking Technology Excellence Awards 2012-13.

- Your Bank was recognized as the Best Public Sector Bank under the category ''Global Business Development'' by Dun & Bradstreet - Polaris Financial Technology Banking Awards 2013.

- The Reserve Bank Rajbhasha Competition, 28.08.2013, Mumbai gave your Bank the following prizes.

a) First Prize in Region ''C

b) Second Prize in Region ''A'' & ''B''

c) Third Prize for ''AKSHAYYAM'' in Hindi House - Bilingual House Journal Competition

d) Third Prize for ''BOBMAITRI'' in - Bilingual House Journal Competition

- The Sunday Standard Best Bankers'' Awards - Best Banker - HR constituted by The New Indian Express Group, was conferred on Shri S S Mundra, Chairman & Managing Director of your Bank during FY14.

- Your Bank received an award in Indira Gandhi Rajbhasha Shield Competition, 14.09.2013, New Delhi.

- First Prize for the Year 2011-12 was given for your Bank''s exemplary performance in Official Language Implementation.

- In the ASSOCHAM 9th Annual Banking Summit-cum- Social Banking Excellence Awards 2013, 16.09.2013, New Delhi, your Bank was the Winner in Public Sector Banks Category in recognition of its distinguished and commendable work done in the field of ''Social Banking''.

- Your Bank improved its ranking from 66th to 52nd in The Asian Banker - Region''s Largest Bank category, in September 2013 special issue 122 of The Asian Banker.

- Your Bank won the following awards during the 53rd Annual Awards Nite of the Association of Business Communications of India (ABCI), 18.10.2013, Hotel Taj, Colaba, Mumbai.

a) Special Column (English) - BronzeTrophy for BOBMAITRI

b) Special Column (Language) - Silver Trophy for Apni Baat - Akshayyam

c) Headlines - Bronze Trophy for Corporate Ad (Stamp Creative)

- Your Bank was ranked No.3 in THEBWReal500 - India''s 50 Biggest Financial Companies published in Business World Issue dated 04.11.2013.

- Your Bank was ranked No.50 in BT500 India''s Most Valuable Companies published in Business Today November 10 2013 issue.

- Your Bank was rated as the 3rd Fastest Growing Large Bank and 4th ''Best Bank- in Large Bank Category'' in a Survey of India''s Best Banks by - BW-PwC Survey. This Survey was published in Business World issue dated 30th December 2013.

- Your Bank was ranked 22nd in Brand Equity Top Service Brands published in Brand Equity Issue dated 18.12.2013, retaining its brand ranking position as that of last year.

- Your Bank was ranked 28th in Fortune India 500 lists published in Fortune India Magazine Special issue December 2013.

- Your Bank received the MSME Banking Excellence Award -2013 as the Best Bank in MSME by Chamber of Indian Micro Small and Medium Enterprises on 09.01.2014 at New Delhi.

- Your Bank was ranked 27th in India''s Biggest 500 Companies - Top 500 company listing 2013 published in ET 500 Magazine issue January 2014.

- Your Bank was awarded "Best Bank - Public Sector" by ABP News in Banking, Financial Services & Insurance Awards on 14.02.2014 in Mumbai.

- Your Bank was awarded for "Excellence in Banking (PSU)" by My FM Stars of the Industry award on 14.02.2014 in Mumbai.

- Your Bank was awarded for "Excellence in Home Loan Banking" by My FM Stars of the Industry award on 14.02.2014 in Mumbai.

- Your Bank received the ''Global Excellence & Leadership Award'' in the category of ''50 most talented CSR Professionals of India'' by World CSR Congress in Mumbai on 18/02/2014.

- Your Bank was ranked 53rd on Net Revenue and 45th on Market Capitalization in FE 500 list published in Financial Express Magazine February 2014 issue.

- Your Bank was ranked No.1 in the Public Sector Bank Category in FE-EY Best Banks Survey 2012-13 published in The Financial Express Magazine March 2014 issue.

- Your Bank''s Eastern UP Zone, Lucknow was awarded the 1st Prize by Government Of India for Implementation of Official Language (Hindi) in Banks for the year 2012- 13 by Official Language Dept, Ministry of Home Affairs, Government of India at a function held in Chandigarh.

Premises Re-Engineering and Ambience Enhancement

The major achievements of your Bank in the area of "Premises re-engineering and ambience enhancement" during the year FY14 are as given below.

- Construction of office building cum currency chest at Varanasi was completed. This building is equipped with ultra modern gadgets and systems with energy efficient equipments and rain water harvesting system. The eco-friendly materials were used in its construction. Your Bank''s presence by this building in Varanasi is admired by one and all. Now, it has become one of the landmark buildings of the city.

- As per the directives from Ministry of Finance, your Bank linked its corporate office with all zonal and regional offices through State-of-the Art Video Conferencing (VC) systems based on MPLS Connectivity. Interaction of functional heads through VC has made the decision making process more efficient, quick and cost effective.

- During FY14, your Bank adopted all technology centric initiatives in the form of e-tendering, e-procurement etc. and this was implemented in a phased manner.

- You Bank ensured that all payments to vendors are made through RTGS/NEFT.

- 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 (Rajasthan), Dehradun (Uttrakhand), Jaipur (Rajasthan) and New Raipur (Chhatisgarh), Bareilly (UP) and Ernakulam (Kerala) for construction of commercial /residential buildings.

- Looking to the ever increasing rentals, area optimisation of every corner of the available premises is being ensured by your Bank. Layouts are being revisited while renovation and furnishing of branches and offices is being done by introducing eco-friendly and ergonomically designed sleek furniture items. The area norms for acquisition of the premises have also been reviewed and implemented.

- To have uniformity in systems and procedures pan- India, Premises Policy Guidelines, Constructions Manual, Refurbishment Manual were designed and formulated. Agencies have been identified for quick procurement of the furniture items and to have similar and identical design to get aesthetically pleasant look and vibrant indoor environment.

Projects implemented during FY14

- The construction of office building cum currency chest at Varanasi.

- Construction of residential complex at Janakpuri, New Delhi.

- The construction of multi-storey integrated office building at Jaipur.

- Construction of BSVS at Ajmer, Dungarpur, Banswada and Pratapgarh.

- The setting-up of e-lobbies at 45 various locations in the country.

- Your Bank purchased residential flats at various places for newly transfered officers.

Projects under implementation

- Construction of BSVS at Alirajpur, Jaipur, Surat, Bharuch and Jhabua.

- Construction of administrative and residential buildings at New Raipur.

- Construction of residential cum commercial complex at Indore (MP).

- Construction of own building for Disaster Recovery Site at Hyderabad.

- Renovation of Bank of Baroda Institute of Information Technology at Gandhinagar (Gujarat).

- Construction of Regional Office Building at Faizabad.

- Renovation of residential building and flats at Nehru Enclave, Lucknow.

Future Plans for Estate Management

- To facelift the Bank''s Building at Parliament Street, New Delhi.

- To redevelop the Bhandup Staff Quarters building, Mumbai, thereby to construct about 138 residential flats for transfered officers/executives.

- The redevelopment of Jogeshwari Staff Quarters, Mumbai, to construct a building for residential and commercial use.

- To construct the training centre at Bangalore.

- Construction of BSVS at various centres across India as per the directives from the Government of India.

- To set up the Baroda Academy (i.e., training Centre) at Gandhinagar (Ahmedabad), Bangalore, Greater Noida and Bhubhneshwar.

Brick & Mortar Branch Expansion

Given below is the information on your Bank''s brick and mortar distribution channels as on 31 st March, 2014, which is observed to be closer to common customers as compared to the E-Banking channels that are generally preferred by the tech savvy urban masses.

Area Classification Number of % Share in (India) Branches Total

Metro 980 20.11

Urban 849 17.42

Semi-urban 1273 26.11

Rural 1772 36.36

Total 4874 100.00

Overseas 60 --

Domestic Subsidiaries and Associates

The performance of your Bank''s Subsidiaries, Joint Ventures and Associates was quite satisfactory during FY14.

BOBCARDS Ltd. turned around during FY11 due to the recovery in NPA accounts. Subsequently, it posted profits during FY12 and FY13. During FY14, the company focused on all qualitative aspects of business development, which resulted in better profitability, quality card base and ME base. The Company introduced a range of Titanium Cards, Signature Cards, Assure Cards, Corporate Platinum Cards and Bobcards Elite with premium features like added privileges and offers. Special schemes for corporate and HNI customers were also launched during the year. The Company has drawn up aggressive plans for the enlargement of Card and Merchant Base for the coming year.

BOB Capital Markets Ltd. was professionally strengthened during the year by deputing a team of Project Finance Department and embarked upon undertaking techno- economic viability (TEV) studies, debt restructuring and corporate finance services on a large scale for various customers. Throughout the year, the focus remained on investment advisory services, debt and equity syndication and capital market activities. The Company commenced institutional broking business and also launched an Online Institutional Trading platform from October 2009. The On-Line Retail Trading platform, which was commercially launched on July 20, 2012 was extensively modified to make it much simpler and easier to use by customers to have the benefit of user-friendly retail trading platform. The company, functioning in a very competitive market, is ever alert to opportunities in the market and is poised to grow bigger in the coming years.

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 communique 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 e.g Mobile banking & e-banking etc. The Bank also took various initiatives to increase its retail segment particularly in housing loan & consumer loan to high income salaried employees of Government Departments & PSU as well as professionals.

Baroda Pioneer Asset Management Company Ltd. a joint venture with Pioneer Global Asset Management SpA, is in its sixth year of operation. During the year under review, the Company was able to strengthen its AUM (Asset under Management) significantly which rose by 75.0% on year on year basis as of March''14and was able to add one lakh folios despite weak sentiments prevailing in both debt and equity markets. The key to this growth was strong focus on the institutional segment which helped the Company to grow its debts and money market products coupled with focus on Systematic Investment Plans (SIPs) for retail investors. The Company has increased the number of investor servicing points from 77 to 203 during the year. There was a substantial growth in Company''s average assets under management (AAUM) during the year which has placed it among the top 20 mutual funds in India and is ranked 19th for the month of March, 2014. The Company''s (AAUM) growth was robust on year on year basis and was at 11% whereas industry growth was at 10.0%, as per the AMFI (Association of Mutual Funds of India) website. With equity markets remaining volatile, SIPs continue to be one of the best ways for the Company to channelize customers'' savings into the equity market.

India First Life Insurance Company Ltd., a joint venture company with Legal & General group, commenced its business operations on 16th November 2009 and has received an overwhelming response for its products across the country. The Company has won Model Insurer Award (Asia) for the three successive years. India First garnered new business registering a year on year growth of 67.0%. Its industry-wide new business ranking improved from 9th position last year to 7th position in the current year (Feb ''14). Increase in the new business (NB) premium has improved the market share from 3.0% last year to 5.0% current year (Feb''14). Number of customers grew by 46.0% year on year on account of new distribution tie-ups which include RRBs/ NBFCs/Brokers through Alternate Channel Distribution. Renewal collection grew by 23.0% year on year leading to increase in premium income for the Company and subsequent increase in the policy and premium persistence. The Company''s total revenue increased by 46.0% (y-o-y). Company''s major initiative with the Bank includes launch of premium option through mobile banking for Bank of Baroda customers and financial inclusion branch module.

India Infradebt Limited is a joint venture company with ICICI Bank Limited, ICICI Home Finance Company Limited, Citicorp Finance (India) Limited and Life Insurance Corporation of India. The Company was incorporated on October 31, 2012 in Mumbai and has been issued registration certificate No.N-13.02039 dated 08.02.2013 by the Reserve Bank of India to operate as an Infrastructure Debt Fund - Non Banking Financial Company (IDF-NBFC). The Company''s principal activity is to re-finance part of the debt liabilities of the Project Companies.

India Infradebt Limited (Infradebt) is India''s first Infrastructure Debt Fund structured as Non Banking Financial Company (IDF-NBFC). Infradebt closely worked with National Highways Authority of India, Ministry of Finance (MoF) and Ministry of Road Transport & Highways towards the successful implementation of IDF framework.

During the year, it became the first IDF-NBFC to be rated "AAA" by CRISIL in July 2013 for its proposed debenture issue. Subsequently, in December 2013, ICRA also assigned a rating of AAA to the debenture issue programme of Infradebt consequent to the efforts of Infradebt in convincing various authorities.

Infradebt is primarily focusing on sectors like roads and ports. During the year, the Board Credit & Risk Committee has approved provision of financial assistance to a few proposals in the roads sector, in addition to the sanction provided to HEL (Himalayan Expressway Ltd.). Furthermore, Infradebt would constantly keep identifying additional projects for takeout financing and envisages closing additional transactions over the next few months.

Baroda Pioneer Trustee Company Pvt. Ltd. Baroda Pioneer Trustee Company Pvt. Ltd. is the trustee to Baroda Pioneer Mutual Fund. As a trustee, the Company ensures that the transactions entered into by Baroda Pioneer Asset Management Company Limited are in accordance with the SEBI (Mutual Funds) Regulations, 1996 and also reviews the activities carried on by the AMC.

(Rs lakh)

Entity (with date of Country Owned Total Net Profit Offices Staff registration) Funds Assets

BOB Capital India 14,277 .82 15,791 .55 686.64 1 38

Markets Ltd. (11.03.1996)

BOBCARDSLtd. India 17,292 .00 21,939 .00 2,811.00 37 191 (29.09.1994)

Baroda India 6,626 .40 7,258 .67 (-)982.46 1 85

Pioneer Asset Management Co. Ltd. (05.11.1992)

Baroda Pioneer India 5.70 11.95 2.22 1 0 Trustee Co Pvt Ltd. (23.12.2011)

India First Life India 60,500 .00 7,11, 617.59 2,547.35 48 1,549 Insurance Co. Ltd. (19.06.2008)

The Nainital Bank India 44,528 .00 5,34, 259.00 6,542.00 116 843 Ltd. (31.07.1922)

India Infradebt Ltd. India 32,893 .74 33,157 .37 2,092.67 1 11 (31.10.2012)

During the period under review, your Bank made noteworthy progress regarding implementation of Official Language Policy of Government of India. Besides compliance of various statutory requirements of Official Language Act and Rules, your Bank took the initiative of promoting and utilizing Hindi as a tool for establishing better connect with customers and ensuring them the best possible service.

Your Bank prepared a well-structured annual action plan for the achievement of various targets set by the Government of India under its Annual Implementation Programme 2013-14 and the assurances given to the Committee of Parliament on Official Language during its visits to various offices/ branches of the Bank. Through continuous monitoring and regular efforts at various levels, your Bank could achieve all the major targets of the Programme and fulfilled all the assurances given to the Committee of Parliament on Official Language.

The Meetings of Central Official Language Implementation Committee, presided over by Chairman and Managing Director of the Bank, were organized regularly on quarterly basis. Under the guidance received from the Committee, several new initiatives were taken during the year FY14. Your Bank took a major initiative of automating the Quarterly Hindi Progress report submission system in the Bank. The Bank implemented Pragati online package'' across the Bank. The package was made available on the Bank''s wide area network. All the operating units, administrative offices were provided user ID and passwords for submitting Rajbhasha Reports. Your Bank started sending systems- generated letters pertaining to opening of accounts in bilingual (Hindi-English) format through its Regional Back Offices. Through this package, every month lakhs of letters were generated in bi-lingual form which helped the Bank in meeting to a great extent its targets set under the Official Language programme. Your Bank brought more branches under the coverage of an IT programme used to generate and print pass-books and account statements in Hindi at the branches situated in linguistic regions A and B. For the convenience of customers, the facility of getting transaction slips in Hindi from ATMs was expanded further and now majority of your Bank''s ATMs are covered under it. Your Bank introduced display of screen in additional four Indian Languages i.e Telugu, Tamil, Malyalam and Kannada during the year. Your Bank also prepared an Inward- Outward package viz. Document Management System for maintaining records of inward/outward letters as per the linguistic region-wise reporting requirements of its OL policy.

To increase financial literacy amongst masses, your Bank prepared cartoon booklets, animation films in Hindi and also in some regional languages on developing the habit of saving, features of Kisan Credit Card and on the need of timely repayment of loans. These cartoon booklets and animation films were christened as "Chhoti Bachat badi Khushhali", " Aam ke aam guthliyon ke daam" and " Samay Par Karj Ka Bhugtan, Jindagi Bane Aasaan" in their Hindi edition. Marathi, Gujarati, Bangla, Punjabi editions of these booklets/films were also released. These Booklets/animation films were sent to Regional Offices/ Zonal Offices of the Bank for their effective utilization.

Your Bank has been pioneer in spreading and promoting the use of Hindi through the forum of Nagar Rajbhasha Samitis. During the year under review, your Bank, with the approval of Home Ministry, Government of India constituted four new Nagar Rajbhasha Samitis. These committees are functioning at Jodhpur, Rajkot, Surat and Bareilly under the convenorship of your Bank. Nagar Rajbhasha Samiti, Baroda and Jaipur are the oldest TOLICs (i.e., Town Official Language Implementation Committees) working underyour Bank''s convenorship.

The Third Sub-Committee of parliament on official language visited your Bank''s branches/offices at Chitrakoot and Anand. The Committee also reviewed efforts of your Bank''s Corporate Office in its visit to Mumbai. The Committee was full of praise of the efforts put in by your Bank for promotion of the use of Hindi language.

Your Bank''s efforts were well recognised by Government of India and Reserve Bank of India also. Government of India awarded your Bank with the 1st Prize in the Indira Gandhi Rajbhasha Shield Competition consecutively for the second year. Your Bank''s Chairman and Managing Director (CMD) received this award from Honorable President of India at a function held at Vigyan Bhawan, New Delhi on Hindi Diwas 2013. Further, your Bank was awarded first prize for '' C Region and second prizes for Region ''A'' and B'' by Reserve Bank of India (RBI) under the RBI Rajbhasha Shield Competition. The Bank''s In-House Magazine BOBMAITRI'' and Hindi Magazine ''Akshayyam'' were also awarded with the third prize by the RBI. Your Bank''s CMD received these awards from the Governor of RBI. These magazines also won two awards from Association of Business Communicators of India.

Your Bank continued with its flagship scheme "Medhavi Vidyarthi Samman Yojana" for popularising Hindi amongst the students'' community. Under this scheme, cash prizes and commendation certificates signed by your Bank''s CMD are given to those students who have scored highest marks in M.A.(Hindi). This scheme, at present, is applicable in 64 universities of the country.

Your Bank has published three books in Hindi during the year viz.''Proudyogiki aur Grahak Seva", "Thodi Si Dhoop" and "Maharaja Sayaji Rao Gaekwad III", for providing qualitative reading material in the Hindi language.

Board of Directors

Shri Bhuwanchandra B. Joshi appointed as a Whole Time Director (designated as Executive Director) w.e.f. 05.08.2013 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 31.12.2016 i.e. the date of his superannuation or until further orders, whichever is earlier.

Dr. K. P. Krishnan, IAS, nominated as a non executive Director, representing Government of India, w.e.f. 19-02- 2014, vice Shri Alok Nigam, IAS.

Shri Sudhir Kumar Jain appointed as a Whole Time Director (designated as Executive Director) ceased to be a Director with effect from 08.07.2013 on his elevation as Chairman and Managing Director of Syndicate Bank.

Shri Ajay Mathur, a part time non- official Director/Non executive director, ceased to be a Director with effect from 04.05.2013 on completion of his term.

Shri Satya Dev Tripathi, a part time non- official Director/ non executive director ceased to be a Director with effect from 30.08.2013 on completion of his term.

Shri V.B. Chavan, a part time non- official Director / Non executive director ceased to be a Director with effect from 31.01.2014 on attaining the age of superannuation.

Shri Alok Nigam, IAS, a part time non- official Director/ Non executive director ceased to be a Director with effect from 18.02.2014 on the nomination of Dr. K.P. Krishnan, IAS, in his place.

Directors'' Responsibility Statement

The Directors confirm that in the preparation of the annual accounts for the year ended March 31, 2014:

- 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, 2014;

- 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 and Managing Director


Mar 31, 2013

The Directors have pleasure in presenting the One Hundred and Fifth 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 the 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% of your Bank's 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. 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). 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 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 non- commercial 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. Activity No. of Amount No. Donations (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 2,012 2,630 618 operationalised No. of Debit 80.44 103.76 23.32 Cards Issued (lakh) 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 32,49,216 45,79,969 13,30,753 Linked 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 16,62,070 61,37,139 21,83,550 1,31,42,497 Transactions No. of Outward 21,47,527 29,48,252 27,45,872 53,77,922 Transactions Avg Transactions per 7,720 28,376 9,929 76,361 day (Inward) -during last month i.e. March Avg Transactions per 9,338 13,211 11,713 25,092 day (Outward) - during last month i.e. March 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 in- house (through its network of 12 Training Centres across the country, one IT training center and an Apex Training College at Ahmedabad) and thereby trained 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. 160 Manager) SM-V to TEG-VI (Asstt. Gen. Manager to Dy. Gen. 35 Manager) TEG-VI to TEG-VII (Dy. Gen. Manager to General 18 Manager) 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 Place of Meeting Date No 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 on- ground 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 brand- association 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 communique 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 Owned Total Net Country Offices Staff registration) Funds Assets Profit BOB Capital Markets India 13,591.17 15,018.28 596.79 1 30 Ltd., 11 Mar, 1996 BOBCARDS Ltd 29 India 14,546.46 16,019.04 1,922.74 33 102 Sept, 1994 Baroda Pioneer Asset Mgmt Co. Ltd., 5 Nov, India 1,749.46 2,525.75 -1,871.98 1 88 1992 lndiaFirst Life India 37,586.92 4,19,621.90-3,958.40 35 1,476 Insurance Co. Ltd., 19 June, 2008 Nainital Bank Ltd, 31 India 40,065.36 4,31,808.79 5,106.10 107 830 July, 1922 India Infra debt Ltd. India 30,801.66 30,813.10 801.66 1 1 31.10.2012 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 and Managing Director


Mar 31, 2012

The 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 31,2012 (FY12).

Performance Highlights

- total Business (Deposit Advances) increased to Rs 6,72,248 crore reflecting a growth of 25.86%.

- Gross Profit and Net Profit were Rs 8,580.62 crore and Rs 5,006.96 crore respectively. Net Profit registered a growth of 18.04 % over previous year.

- Credit-Deposit Ratio stood at 86.86% as against 86.77% last year.

- Retail Credit posted a growth of 9.97% constituting 17.36% of your Bank's Gross Domestic Credit in FY12.

- Net Interest Margin (NIM) as per cent of interest earning assets in global operations was at the level of 2.97% and in domestic operations at 3.51%.

- Net NPAs to Net Advances stood at 0.54% this year against 0.35% last year.

- Capital Adequacy Ratio (CAR) as per Basel II stood at 14.67%.

- Net Worth improved to Rs 26,203.67 crore registering a rise of 32.67%.

- Book Value improved from Rs 504.43 to Rs 637.37 on year.

- Business per Employee moved up from Rs 1,229 lakh to Rs 1,466 lakh on year.

Segment-Wise Performance

The Segment Results for the year FY12 reveal that the contribution of Treasury Operations was Rs 887.72 crore, that of Corporate/Wholesale Banking was Rs 965.87 crore, that of Retail Banking was Rs 2,782.37 crore, and of Other Banking Operations was Rs 2,959.73 crore. Your Bank earned a Profit after Tax (PAT) of Rs 5,006.96 crore after deducting Rs 1,569.89 crore of unallocated expenditure and Rs 1,018.84 crore towards provision for tax.

Dividend

Your Bank's Directors have proposed a dividend of Rs 17 per share (on the face value of Rs 10/-per share) for the year ended March 31st, 2012. The total outgo in the form of dividend, including taxes, will be Rs 812.29 crore.

Capital Adequacy Ratio (CAR)

Your Bank's Capital Adequacy Ratio (CAR) was comfortable at 14.67% under Basel II as on 31st March 2012.

Your Bank's Net Worth as at 31st March 2012 was Rs 26,203.67 crore comprising paid-up equity capital of Rs 412.38 crore and reserves (excluding revaluation reserves) of Rs 25,791.29 crore. An amount of Rs 4,194.67 crore was transferred to reserves from the profits earned.

Provisions towards Retirement and Other Benefits

During the year FY12, your Bank made provision towards contribution to gratuity (Rs 145.63 crore), pension funds (Rs 671.88 crore), leave encashment (Rs 93.46 crore) and additional retirement benefits (Rs 80.97 crore) on actuarial basis. Total provisions under these four categories amounted to Rs 991.94 crore during the year FY12, against Rs 1,160.42 crore during FY11. Total corpus available with your Bank at the end of March 2012 under these heads was: Rs 1,416.85 crore (gratuity), Rs 5,935.62 crore (pension funds), Rs 566.01 crore (leave encashment), and Rs 446.62 crore (additional retirement benefits).

Key Financial Ratios

Particulars FY12 FY11

Return on Average Assets (ROAA) (%) 1.24 1.33

Average Cost of Funds (%) 5.64 4.67

Average Yield (%) 8.55 7.76

Average Interest Earning Assets (Rs crore) 3,47,223.21 2,82,109.79

Average Interest Bearing Liabilities (Rs crore) 3,43,397.26 2,80,098.94

Net Interest Margin (%) 2.97 3.12

Cost-Income Ratio (%) 37.55 39.87

Book Value per Share (Rs) 637.37 504.43

EPS (Rs) 127.84 116.37

Business Performance

Given below are the details of your Bank's major achievements on business front during the year FY12.

Resource Mobilisation and Asset Expansion

The share of Bank's Deposits in total resources stood at 86.04% as of 31st March 2012. The Total Deposits grew from Rs 3,05,439.48 crore to Rs 3,84,871.11 crore, reflecting a growth of 26.01% over the previous year. Of this, Savings Bank Deposits - an important constituent of low cost deposits - grew by 15.71% from Rs 64,454.04 crore to Rs 74,579.53 crore. The share of low cost deposits (Current Savings) in Total Deposits was at 26.90% and in Domestic Deposits at 33.18%.

Your Bank's Total Advances expanded by 25.67% during FY12 led by 19.28% expansion in Domestic Advances and 43.92% expansion in Overseas Advances.

Composition of Funds - Global

Particulars End End Growth March 2011 March 2012 (%) (Rs crore) (Rs crore)

Deposits 3,05,439.48 3,84,871.11 26.01

- Domestic 2,33,323.30 2,80,135.26 20.06

- Overseas 72,116.18 1,04,735.85 45.23

Borrowings 22,307.85 23,573.05 5.67

Global Advances

Particulars End End Growth March 2011 March 2012 (%) (Rs crore) (Rs crore)

Advances 2,28,676.36 2,87,377.29 25.67

- Domestic 1,69,407.86 2,02,075.39 19.28

- Overseas 59,268.50 85,301.90 43.92

Wholesale Banking

A strong corporate credit culture and healthy growth in credit

- moderately above Banking industry average have been the consistent differentiators of Bank of Baroda for the past four years.

In fact, your Bank's Wholesale Banking Division offers a full range of loan products and services such as Term Loans, Short-Term Loans, Demand Loans, Working Capital Facilities, Trade Finance Products, Treasury Products, Bridge Loans, Syndicated Loans, Infrastructure Loans, Cross Currency/ Interest Rate Swaps, Foreign Currency Loans, Loan Against Future Rent Receivables and many more to its large and mid corporate clients depending upon their needs. The product offerings are flexible and suitably structured taking into account the customers' risk profiles and specific needs.

Based on the superior product delivery, passionate service orientation, timely and speedier sanctions with a customer-centric approach, your Bank has made significant achievements in providing an array of Wholesale Banking products and services to several multinationals, domestic business houses and prime public sector companies.

The Department places major thrust on faster delivery through efficient channels and adoption of better practices in credit administration. During FY12, the efforts were also made to improve the speed of decision making without compromising the quality of decision.

During FY12, the non-food credit growth, in general, remained low in the Indian banking industry. However, even during this phase, your Bank's Wholesale Banking Division created 130 new relationships through its Fast Track Desk. The department sanctioned fresh/increased credit facilities to the tune of Rs 60,955 crore during the year to various sectors /industries with projects /units spread across the country.

Under Wholesale Banking, the corporate customers are identified as large and mid corporates. Those having annual sales turnover of between Rs 150 crore to Rs 500 crore are classified as mid-corporates, and those with sales turnover over Rs 500 crore are classified as large corporates.

Sensing the need to focus and serve the potential mid corporate segment, your Bank took an important initiative of opening specialized Mid Corporate Branches in various potential locations throughout the country. These branches are equipped with mix of experienced and professionally qualified staff. Attaching high importance to the segment, your Bank arranged for training in soft skills plus domain-expertise knowledge for its staff identified for these specialized branches through an International Management Consultancy firm.

Your Bank also opened one more specialized CFS (Corporate Financial Services) Branch taking total number of CFS Branches to eleven.

Your Bank's Wholesale Banking Department also has a full-fledged 'Project Finance Division' (PFD). The PFD is well equipped with professionals from various disciplines and undertakes TEV (i.e. Technical Evaluation & Viability) studies for clients of your Bank as well as that of other banks. The Department is also equipped with Syndication Desk to syndicate domestic funding requirement of the clients. The Department earns significant fee-based income by carrying out TEV studies, vetting of projects and through syndication deals.

Your Bank attaches higher degree of importance to the quality of appraisal and efficient processing of credit proposals at all levels to maintain the asset quality and realizes the importance of skilled and motivated employees to achieve the same. Keeping this in view, your Bank continued its thrust on regular grooming of Credit and Forex Officers. Your Bank also continued to recruit specialized officers from campuses and lateral recruitment of professionals cum experienced staff.

Retail Business

As in the past, Retail Business continued to be one of the important segments of overall business during FY12. Your Bank's performance under its Retail Banking Segment during the year under consideration is as under.

Growth under Retail Lending

Your Bank's Retail Loan Book consisted of five key products (namely Home Loan, Auto Loan, Education Loan, Traders Loan and Mortgage Loan) which together constituted 74.0% of total retail loans and other products namely LABOD/ ODBOD that constituted 21.0% of total retail loans during FY12. Besides, the products like Baroda Personal Loan and other miscellaneous product viz. Doctors Loan, Loan against Government securities etc contributed around 5.0% to total retail loans.

Total Retail Loan outstanding as on 31st Mar, 2012 was Rs 35,668 crore as against the level of Rs 32,435 crore as on 31st Mar, 2011. A growth of Rs 3,233 crore (9.97%) was registered under total retail loans during FY12 as against a growth of 33.76% (Rs 8,187 crore) registered during FY11. The growth in retail business of your Bank during FY12 was in line with the overall segmental business trend witnessed by the Indian banking industry.

Growth under Five Key Retail Products

Under five key products which constituted 74.0% of total retail loans, an absolute growth of Rs 3,102 crore (13.43%) was registered during the year FY12 as against a growth of Rs 4,095 crore (21.56%) during the previous financial year.

Under Home Loans, an absolute growth of Rs 1,594 crore (12.71%) was registered during the year FY12 as against a growth of Rs 2,227 crore (21.59%) during the previous year.

Under Auto Loans, an absolute growth of Rs 384 crore (18.76%) was registered in FY12 as against a growth of Rs 612 crore (42.58%) during FY11.

Under Baroda Traders Loans, an absolute growth of Rs 876 crore (18.63 %) was registered in FY12 as against a growth of Rs 852 crore (22.15%) during FY11.

Under Baroda Mortgage Loans, an absolute growth of only Rs 97 crore (4.68%) was registered during FY12 as against a growth of Rs 176 crore (9.40%) during FY11.

Under Education Loans, an absolute growth of Rs 150 crore (8.72%) was registered during FY12 versus a growth of Rs 226 crore (15.11%) during FY11.

Under LABOD /ODBOD, a growth of Rs 2,307 crore was registered. Under Baroda Personal Loans, a negative growth of Rs 2,183 crore was posted over the level of 31st Mar, 2011 due to repayment of Loan for Earnest Money Deposits during the year FY12. The repayments of short term loans primarily led to low growth under the total retail loans during the year under consideration.

NPA under the Retail Loan

The amount of Non Performing Assets as on 31st Mar, 2012 under Retail Loan was Rs 682 crore (1.91%) versus the level of

Rs. 662 crore (2.13%) as on 31st Dec, 2011 and Rs 649 crore (2.17%) as on 30th Sept, 2011. As on 31st Mar, 2011,the NPA was at the level of Rs 580 crore(1.79%).

Savings Bank Deposits

Your Bank's overall Saving Deposits stood at a level of Rs 72,570 crore as on 31.03.2012 registering a growth of Rs 9,611 crore (15.27%) over the level of Rs 62,959 crore as on 31.03.11. During the last FY 2010-11, a growth of Rs11,717 crore i.e. 22.87% was registered over the level of 31.03.2010.

Retail Term Deposits

Retail Term Deposit of your Bank stood at the level of Rs 1,18,727 crore as on 31st Mar, 2012 as against the level of Rs 95,325 crore as on 31st Mar, 2011 registering a growth of Rs 23,402 crore i.e. 24.55% versus the growth of Rs 12,295 crore i.e. 14.80% registered during the last financial year.

Under Total Retail Deposits i.e. Retail Term Deposit plus Savings Deposits, an absolute growth of Rs 33,013 crore i.e. 20.85% was posted during FY12 as against the growth of Rs 24,012 crore i.e.17.88.% registered during FY11.

Initiatives in Retail Banking during FY12

New Products Launched

- Baroda First Wealth Pack, a combo of two products namely Baroda First Savings Bank and Baroda First Regular Deposit jointly with two Insurance Products namely ULIP & Term Insurance Plan was launched on 2nd Jan, 2012. Until end-Mar, 2012, a total of 53,516 Packs were sold by your Bank.

- Baroda Samriddhi Quarterly Recurring Deposit & Baroda Samriddhi Half yearly Recurring Deposit Schemes were launched on 6th March 2012 primarily to facilitate Agriculturists, Self Employed & Professionals etc.

- Sales Operating Model was launched at 163 Baroda Navnirman Branches for developing Sales & Service culture to generate Business Leads.

Product Modification

- During FY12, a proposal was approved for increasing the maximum limit under Baroda Home Loan to Resident Indians and NRIs/PIOs at all Metro and Urban Centers from the existing Rs100 lakh to Rs300 lakh.

- Prepayment charges for foreclosure of Home Loan Accounts were completely waived with effect from 15th Dec, 2011.

Business Initiatives

- Savings Bank Deposit Campaigns: For mobilizing low cost deposits, a Savings Bank Deposit Campaign was launched on 1st Jun, 2011 for two months. The period of this campaign was later extended upto 31st Aug, 2011 foreseeing the challenge of mobilizing savings bank deposits in a rising interest rate scenario. To accelerate the pace of Savings Bank accretion, Savings Bank campaign was reintroduced during 2nd Jan, 2012 to 31st Mar, 2012, besides the launch of a special incentive scheme

i.e. "Evening with CMD & Picnic with staff" for the award winning branches & regional offices.

- Retail Loan campaign: With a view to harness the potential of ongoing festive season and to augment your Bank's Retail Loan Book with a special focus on Home Loans and Car Loans, a Retail Loan Festival Campaign was launched during 26th Sept to 30th Nov, 2011. Going by the success of Retail Loan Campaign, it was further extended till 31st Mar, 2012, with a modification by increasing ROI concession from 0.25% to 0.50% in Auto Loans. Both the SB Deposit Campaign and the Retail Loan Campaigns yielded good results.

- Opening of New City Sales Offices: Nine City Sales Offices were opened at Haldwani, Raebareilly, Faizabad, Raipur, Bhopal, Indore, Bengaluru, Ghaziabad & Rajkot during FY12.

- Opening of New Retail Loan factories: Three new Retail Loan factories were opened at Haldwani , Dehradun and Nasik during FY12.

- Delegation of Additional Discretionary Powers for Concessions: All Zonal Heads of your Bank were delegated with powers for considering concession to the extent of 100bps in the applicable interest rate on Baroda Trader Loan for mobilizing fresh business & to augment Retail Loan Book during FY12.

- Providing Group Life Insurance Cover: The Facility of Group Credit Life Insurance cover was approved for Auto

Loans and Personal Loan Borrowers, in addition to facility presently available for Home Loans & Education Loans. During FY12, a total of 18 death claims were settled by the insurers.

- Strategies adopted for Prevention of Frauds: A system of verification of various steps undertaken by the branches for fraud prevention under Retail Loans through a checklist was also introduced.

- Under the Home Loan Suraksha Beema Scheme (A Tie- up Arrangement with National Insurance Co. Ltd) a total of ten Accidental Death Insurance claims were settled by the insurer during the year under consideration.

Wealth Management Services

As a part of its customer centric measures, your Bank has been providing Wealth Management Services for its HNI & affluent customers since June 2004. At present, your Bank provides various 3rd party products in Life Insurance, Non Life Insurance including Health Insurance, Mutual Funds & Equity Trading under tie-up arrangements with different partners. Moving ahead further in the segment, your Bank also formed two joint ventures with leading international brands in Mutual Fund and Life Insurance.

The Baroda Pioneer Asset Management Co. Ltd., your Bank's joint venture in mutual fund in association with Pioneer Investments of Italy and the India First Life Insurance Co. a joint venture in life insurance with Andhra Bank and L&G of U.K. have successfully positioned themselves in the Indian marketplace with consistently improving performance since their inception.

The year FY12 was destabilizing for Indian equities with wild fluctuations impacting the overall sentiment of investors. In these testing times, your Bank changed its strategies by focusing on mutual fund investments through a SIP route to safeguard the customers from the unpredicted movement in the market. The strategies were successful with a large number of customers yielding benefits and your Bank's business performance in the format being intact while nurturing a disciplined saving/ investing habit amongst its customers. During the last two years, your Bank has been endeavoring to widen the scope of ASBA (application supported by Blocked Amount) facility by extending it to a number of designated branches and enabling an on-line ASBA Facility for its net banking customers. During FY12, your Bank introduced Syndicate ASBA Facility for those customers who wish to make IPO/FPO/NFO application through other intermediaries such as brokers.

It is heartening to note that the initiatives of your Bank under its Wealth Management segment have been encouragingly contributing to its overall non-interest income.

MSME Business

The Micro, Small and Medium Enterprises (MSME) segment is a vital component of Indian economy. This sector accounts for around 40.0% of the nation's total industrial production, 34.0% of industrial exports, 95.0% of industrial units and 35.0% of total employment in manufacturing and services sectors. The contribution of Services Sector within the SME segment is quite significant; especially the IT enabled services, hospitality services, tourism, couriering, transportation, etc.

To give a focused attention to emerging SMEs in India, your Bank has been considering other commercial units with a turnover up to Rs 150 crore at par with the SMEs. To promote the growth of SME Sector, your Bank has launched a special and novel delivery model, viz. SME Loan Factory, which at present, is operational in 46 centres of your Bank and well accepted in the market place. The SME Loan Factory is an innovative model for streamlining processes and for timely sanctions of SME loan proposals. The model comprises of the Central Processing Cell for speedy appraisal and sanctioning of proposals within the stipulated deadline and a sales team to follow up on leads generated by branches. Given its success, your Bank has plans to open more such loan factories in the ensuing year. Your Bank has SME Loan Factories at all major business centres across the country, viz. Agra, Ahmedabad, Allahabad, Bangalore, Bareilly, Baroda, Bhilwara, Bhubhaneshwar, Bulsar, Bharuch, Chandigarh, Chennai, Coimbatore, Dehradun, two Factories in Delhi, Ernakulam,Gandhidham,Gorakhpur Hyderabad, Haldwani,Indore, Jaipur, Jamshedpur, Jamnagar, Jodhpur, Kanpur, Kolhapur, Kolkata, Lucknow, Ludhiana, 3 Factories in Mumbai, Meerut, Mehsana, Nagpur, Nashik, Pune,Patna, Rajkot, Raipur, Surat, Shahajahanpur, Varanasi and Vishakhapatnam. These SME Loan Factories sanctioned loans aggregating Rs 18,619 crore during FY12 as against Rs 14,530 crore in the previous year.

Growth of Business

The total outstanding in MSME Sector works out to Rs 34,512 crore as on 31st March 2012. The growth in lending to MSME Sector during the last three years is given in the table below.

Year Growth (%, YoY)

2009-10 43.98%

2010-11 29.63%

2011-12 26.11%

The percentage growth of MSME credit during FY10 was relatively high as the advances up to Rs 20 lakh to Retail Trade were classified for the first time under the "Micro & Small Enterprises Sector" during this year in line with the RBI's revised guidelines issued during September, 2009. The growth rate was normalized during the year FY11.

The Bank took the following initiatives in its SME business

segment during the year under review.

- The SME advances of Rs 34,512 crore as of end-Mar 2012 reflected a growth of Rs 7,147 crore (26.11%) over the SME advances of Rs 27,365 crore in the previous year.

- The advances of Rs15,455 crore to Micro Enterprises in total credit of Rs 28,047 crore to MSE sector stood at 55.10% in FY12 comfortably reaching the mandatory target fixed by the RBI.

- The SME advances as on 31st Mar, 2012 contributed 16.8% to the gross domestic advances of your Bank.

- The advances to Micro & Small enterprises reached the level of Rs 28,047 crore as against the government set mandatory target of Rs 27,000 crore by end-Mar, 2012.

- I n FY12, your Bank opened ten New SME Loan Factories and eight New SME Specialized Branches.

- Your Bank introduced a New Product named as "Baroda Channel Financing" on pilot basis during FY12 to further promote its MSME business.

- Your Bank also introduced "Baroda Entrepreneur Awards" for Micro & Small Enterprises

Initiatives in MSME Financing During FY12

1. Your Bank introduced five new customer-centric area- specific products to suit the local cluster needs during FY12 while renewing the existing ten customer-centric area specific products.

2. Your Bank sponsored a Workshop on "Management Skills to source financing and Management of Technology by SMEs" for entrepreneurs arranged by AIMA at Hyedrabad, Ahemedabad, Jaipur.

3. Your Bank introduced "Protrack"{an e-tracking system for SME credit proposals} with a view to have a firm control over turnaround time.

4. Your Bank celebrated SME Festival from 1st January

2012 to 31st March, 2012 in order to give boost to SME advances. Some concessions in rate of interest and service charges were also announced for loans sanctioned during the festival period.

5. Your Bank participated in the Workshops arranged by the CGTMSE on Bank Credit to Micro & Small Enterprises and the Role of Credit Guarantee.

6. Your Bank focused on collateral free credit under the CGTMSE scheme through special campaign.

7. To achieve total customer relationship through enhanced cross selling, several meetings at different locations were conducted and various trade bodies were involved at the national and the state level.

8. Your Bank undertook continuous knowledge updating and skill building of processing/ marketing officers attached to its SME factories through external training and special courses at the training centers and staff college.

9. Your Bank introduced monthly performance ranking to share performance of SME Loan Factories amongst all and to recognize/ felicitate/ award the best performing SME Loan Factory on Half yearly/ annual basis.

10. The MOU was entered by your Bank with the NSIC for sourcing applications of MSME borrowers from it.

11. Your Bank released a booklet called Practical Guide to help entrepreneurs by giving them information on Your Bank's SME products and also on the CGTMSE scheme.

12. Your Bank also signed a MOU with four credit rating agencies for rating of the SME accounts.

Rural and Agricultural Lending

As you all are aware, your Bank has always been a frontrunner in the area of Priority Sector and Agriculture lending. It has been harnessing the vast potential of the rural market through its wide network of 1,270 rural branches and 1,045 semi-urban branches.

Even during FY12, your Banks opened 314 new branches in rural and semi-urban areas.

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

Your Bank has also sponsored five Regional Rural Banks (RRBs) in various states with a network of 1,300 branches and total business of Rs 21,700 crore as of end-March, 2012.

Performance of Priority Sector Lending in FY12

Priority Sector Advances of your Bank surged from Rs 57,364 crore as at the end-March 2011 to Rs 68,527 crore as at the end-March 2012 and formed 43.37% of the Adjusted Net Bank Credit (ANBC) against the mandated target of 40.00%.

Agriculture Advances: The Direct Agriculture advances of your Bank rose to Rs 21,423 crore with a rise of 24.86%over the previous year with an absolute growth of Rs 4,266 crore during the year. The total agriculture advances of your Bank recorded a growth of 18.38% over the previous year and rose to Rs 29,036 crore as at end-March 2012. Your Bank's Direct Agricultural advances formed 13.56% of ANBC as at end-March 2012 against the mandated target of 13.50%. Even the Total Agricultural Advances were at 18.06% of ANBC against the mandated target of 18.00%.

Under its flagship agriculture loan product "Baroda Kisan Credit Card", your Bank issued as many as 3,09,685 Credit Cards during FY12 to provide credit to farmers. Your Bank financed as many as 3,73,283 new farmers during FY12. As a part of its microfinance initiatives, your Bank credit linked 19,455 Self Help Groups with an amount of Rs 214 crore during FY12 thereby taking the total number of SHGs credit linked to 1,54,397 amounting to Rs1,171 crore.

Business and Social Initiatives

Your Bank introduced various initiatives/strategies during FY12 to harness the emerging opportunities for rural and agriculture lending. Some of them are mentioned below.

1. To augment the Agriculture advances, your Bank conducted special campaigns viz. Kharif and Rabi campaign for crop loans under which the disbursements of Rs 3,676 crore and Rs 2,013 crore were made respectively. Another Campaign for Investment Credit was also launched under which disbursements of Rs 1,178 crore were made.

2. Your Bank organized 5,944 Village Level Credit Camps and disbursed Rs 3,338 crore to 2,84,062 borrowers during FY12.

3. Your Bank identified 450 Thrust Branches across India to enhance Agriculture lending which constituted 33% of total Agriculture lending as at end-March 2012.

4. Your Bank formulated various area-specific schemes tailor made to the needs of local requirements, particularly where there is a concentration of industries like Rice Mills, Cold storages, cotton ginning units, Poultry units, etc. Suitable concessions in rate of interest, charges, etc. were allowed under these schemes to garner maximum possible business. As many as 22 area specific schemes were formulated to increase your Bank's agricultural lending.

Baroda Grameen Paramarsh Kendra (BGPK) is another initiative undertaken by your Bank to help the rural community by providing credit counseling, financial literacy and other services like information on the prices of agricultural produces, scientific farming, etc. Your Bank had 52 BGPKs as on 31st March, 2012.

About ten more Baroda Swarojgar Vikas Sansthan (BSVS),Baroda R-SETI Centers were opened during FY12. With this, the total number of BSVS has gone up to 46. Thus, each of your Bank's Lead Districts now has a R-SETI as per the GOI guidelines. Ajmer BSVS centre is exclusively for women entrepreneurs. The BSVS are primarily the institutes for training the youth and imparting knowledge and skills required for taking up self-employment ventures. During FY12, 42,786 youth beneficiaries were trained out of which 25,791 have established self-employment ventures. Out of the total 1,22,228 beneficiaries trained by these centers so far, 75,050 have established their self employment ventures.

Financial Literacy and Credit Counseling Centres (FLCC)-"SARATHEE"

Based on the guidelines issued by the RBI, your Bank has established 39 FLCCs, christened as "SARATHEE" to impart financial literacy and credit counseling services to the needy to help them avail financial services from Banking system and also to provide counseling services to those who are under financial distress due to debt burden.

Your Bank has opened these centers under its BSVS trust and counseling services are provided to the concerned free of cost.

Your Bank has opened 21 new FLCCs during FY 12, taking the total number of FLCCs to 39 by end-Mar, 2012.Your Bank will be opening FLCCs in each of its lead district in due course.

Business Facilitators Model

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

Micro Loan Factory

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

Performance of RRBs Sponsored by the Bank

Your Bank has sponsored five RRBs as under.

- Baroda Uttar Pradesh Gramin Bank,

Head Office: Raebareli.

- Baroda Rajasthan Gramin Bank,

Head Office: Ajmer.

- Baroda Gujarat Gramin Bank,

Head Office: Bharuch.

- Nainital-Almora Kshetriya Gramin Bank,

Head Office: Haldwani.

- Jhabua-Dhar Kshetriya Gramin Bank,

Head Office: Jhabua.

The aggregate business of these five RRBs rose to Rs 21,693 crore as of March, 2012 from Rs 18,803 crore as at end-March, 2011, registering a growth of 15.37%.

The five RRBs together posted a Net Profit of Rs 120 crore during FY12 as against Rs 117 crore earned during FY11.

The "Net Worth" and the "Reserves and Surplus" of all these RRBs put together improved from Rs 730 crore at end-March, 2011 to Rs 883 crore at end-March, 2012 and from Rs 453 crore at end-March, 2011 to Rs 566 crore at end-March, 2012, respectively.

Bank's Efforts towards Financial Inclusion (FI) Targeted villages and models adopted

- As per the original communication received from RBI in January 2010, your Bank prepared a Financial Inclusion (FI) plan to cover 20,000 villages under Financial Inclusion within a span of three years commencing from 2010-11 to 2013-14.

- However, the Finance Minister in his speech on Union Budget for FY11 gave emphasis on the coverage of villages having population of more than 2,000 under FI by March 2012.

- Accordingly, 2,864 villages having population of more than 2,000 were allocated to your Bank through SLBCs for provision of basic banking services by March 2012.

- Out of the above, 1,200 villages were targeted to be covered in FY11 and the rest in FY12.

- Your Bank has adopted ICT based Business Correspondent (BC) model and Mobile Banking van model for coverage of the allotted villages. Wherever feasible, new branches are also being opened.

Service Providers

- Your Bank has selected M/s TCS and M/s HCL Info systems as the service providers for end to end solution under the BC model. The service area has been allocated to these service providers.

- Out of 2,864 villages allocated to your Bank by SLBCs, 1,979 villages are allotted to M/s tcs and 885 villages to M/s HCL.

Technology and Data Security

- The FI data and transactions are integrated to your Bank's CBS (Core Banking Solution) through an FI server/ Gateway of the service provider. The FI server is kept in the Data Centre of your Bank for which the vendor will have only limited access to the application software for the purpose of maintenance. The data will be under the control of your Bank. Hence the data security is well taken care of.

- Smart cards are issued to the customers after uploading the accounts in CBS and KYC verification by the link branches.

Business Correspondents (BC)

- The service provider has appointed corporate BCs at the state/zonal level. The field level business agents are selected in consultation with your Bank's link branches following the BC selection policy approved by the Board.

- The technical training to BCs is provided by the service provider as and when BCs are appointed. Your Bank's R-SETI, Training Centres and Baroda Grameen Paramarsh Kendras (BGPK) have been providing training on banking products and customer service. The BCs are also encouraged to take up the BC certificate programme of IIBF {Indian Institute of Banking & Finance, Mumbai} through accredited training establishments. All your Bank's BSVS centres are accredited by IIBF for this purpose.

Training of Your Bank Staff in Financial Inclusion

- Training to about 1,079 Branch Managers involved in FI activity was completed by Your Bank's training centres during FY12.

- Your Bank has tied-up with National Institute of Rural Development (NIRD), Hyderbad for designing and conducting special training programme for its officers on FI.

- Your Bank has also introduced e-learning module on FI on your Bank's intranet portal for educating the staff.

Monitoring the Implementation under Financial Inclusion

- Your Bank has a clear structure for implementation and monitoring of Financial Inclusion.

- In order to have an effective supervision of the BCs, retired bank officials are appointed as BC supervisors for every 10-15 BC agents.

- Your Bank's Chairman & Managing Director (CMD), Executive Directors (EDs) and General Managers (GMs) at the Corporate Office are visiting villages in different states.

- Besides, all the regional heads and zonal heads are also visiting the villages in their respective regions/ zones and monitoring the activities regularly.

- Your Bank's Board reviews the implementation of Financial Inclusion in your Bank every month on various parameters suggested by the Ministry of Finance, Government of India.

Publicity

- Specially designed banners/posters/leaflets are being used by your Bank's Zones/Regions/Branches at various stages of FI.

- Leaflets/posters have been prepared in regional languages and distributed in the villages.

- Usage of publicity material has helped to keep the people updated with the FI concept and also to remain informed about the FI enrolment dates, venue etc.

- Your Bank's Swabhiman logo is being used in village sign boards, BC ID cards, T- shirts, Caps etc.

Financial Literacy Efforts

- Your Bank has opened 39 Financial Literacy and counseling Centres (FLCC) out of 45 lead districts of the Bank.

- Your Bank has also established 46 R-SETIs (Baroda Swarojgar Vikas Sansthan) of which 42 are in its lead districts which will also facilitate financial literacy efforts.

- Village level meetings are organized by your Bank in all the identified villages to create awareness on the banking products and services.

- Camps are also organized in the villages at the time of enrolment.

Mobile Banking Vans

- Your Bank has introduced Mobile Banking vans for increasing the pace of Financial Inclusion.

- These vans will have connectivity to CBS through CDMA technology and they visit the villages on specified dates and time. The services are provided by your Bank's own staff travelling in the van.

- Five such Vans have been made operational and they cover around 41 villages. (One in Gujarat, two in UP,one in Bihar and one in Goa.)

Performance

- Your Bank has completed coverage of 100% villages allotted under financial inclusion well before the dead line of end- Mar, 2012. More than 7.61 lakh FI accounts have been opened in these villages as against the target of 7.10 lakh.

Ultra Small Branches (USBs)

The technology based BC model is an evolving concept and various issues were encountered by your Bank in implementation of FI through this model. The Ministry of Finance, Government of India as well as the RBI were issuing various guidelines from time to time to make implementation of financial inclusion more effective. In the strategy and guidelines on financial inclusion issued by Ministry of Finance in Oct, 2011,there was a suggestion to open brick and mortar branches in larger habitations with population of 5,000 and above in the under-banked districts. However, keeping the viability of brick and mortar branches in such villages, they further issued guidelines on opening of thin structures called Ultra Small Branches in all the villages allotted for financial inclusion.

USB Model Adopted by the Bank

- A BC is appointed in a village and provided with POS machine/ hand held terminal to provide banking services in the village through USB.

- The place for USB is identified preferably in Gram Panchayat or Common Service Centre in village.

- The board is displayed inside each USB indicating various banking services being provided by your Bank at USB. There is also a board giving details of BC, his contact number, name/contact number of link branch, fixed day/ time of visit by officer etc. for the convenience of villagers.

- The business correspondent is providing services like cash deposits, payments up to certain limit, remittances, account balance enquiry, mini-statement etc.

- A bank officer from the link branch visits the USB once in week at pre-fixed time and day for financial inclusion activities in village, as specified by the Ministry of Finance.

- Minimum furniture such as table, three to four chairs etc. have been provided in an ultra small branch.

Initiatives Taken for Effectiveness of USBs

- The village level publicity campaign has been conducted to create awareness amongst the villagers, with the help of Gram Panchayats as well as in some cases block development offices.

- The signboard along with swabhimaan logo is displayed at a prominent place in the village indicating details of the BC and link branch along with working hours.

- The BCs are provided with a brief profile of the villages including population of village, number of households in village, number of KCCs/ GCCs issued in respective village and other details, so that they can perform with better focus on village needs.

- All USBs are mapped for weekly visits by the officers of respective link branch. We have also devised a proper reporting system for monitoring these visits by the respective regional offices and corporate office.

- All the BCs are provided with the uniform T-Shirts, Caps and Identity cards in all the villages.

- The uniform posters about the services available at USBs are provided to all the zones and regions in local languages for displaying at the USBs.

- In order to overcome shortages and cater to the requirement of manpower in officer cadre, we are starting capacity building programmes to train other cadres to perform the job role of officers in the same spirit as desired by the MOF from visiting officer. The preference would be given to local staff as far as possible so that they can converse in the local language and get appropriately connected with villagers. This will also facilitate a confidence building amongst the villagers about the FI initiatives of your Bank/ Govt. of India. The pilot project of such capacity building initiative would be started in Gujarat and rolled out in other states upon success of said pilot project.

Advances to SC/ST Communities during FY12

The outstanding advances granted by your Bank to SC/ST communities have been growing year after year. This is evident from the fact that the outstanding advances granted to these beneficiaries went up from Rs 3,760 crore as at end-March, 2011 to Rs 4,336.02 crore as at end-March, 2012. In fact, the SC/ST communities accounted for a share of 27.0% in the total advances granted to weaker sections by the Bank during the year under review. Furthermore, a special thrust is laid by your Bank in financing SC/ST under various government sponsored schemes namely Swaranjayanti Gram Swarojgar Yojana (SGSY),Swarna Jayanti Shahari Rojgar Yojana (SJSRY), Prime Minister Employment Generation Programme (PMEGP), etc. Baroda Swarojgar Vikas Sansthans (BSVS) have been giving due preference to SC/ST communities while selecting the trainees. It is heartening to indicate that so far, these centres have trained 55,761 youths under the SC/ST category.

International Business

The global economy has not fully come out of the turmoil witnessed following the global financial crisis in 2008 in spite of the prompt measures taken by several countries around the world. Even in such challenging scenario, the International Operations of your Bank could achieve excellent results during FY12 and again proved the Bank's resilience to global shocks.

In order to achieve the stated goals, it was necessary to continuously understand the economic and banking environment in which your Bank operates, take lessons and make suitable changes in the business approach and actions. Your Bank kept a continuous watch on the trends emerging in the economic/financial sectors of the countries of its operation by factoring in the impact of global events.

Your Bank is in an advantageous position having large network of overseas branches and strong customer base built over the years. Your Bank has taken various technological and other initiatives at its overseas centres to garner a larger share of the business.

The excellent performance was possible during FY12 due to the Bank's focused attention and persistent efforts to stretch and improve upon its own capabilities and the support that it received from all its stakeholders.

The International Operations of your Bank are keeping pace with the fast changing environment to become increasingly more competitive in global terms and aiming for higher growth with profitability

The Branch Expansion plan was continued during the year to take advantage of the business opportunities. During the year FY12, five new branches/offices were opened, including four branches of the subsidiaries. Your Bank primarily concentrated on expanding the network in countries where it is already present to tap the opportunities offered by the upcoming centres and enhance the market share in the country of operation.

Business and Profit Performance

During FY12, the total business (Deposits Advances) of your Bank's overseas branches registered a growth of 44.64%. The Customer Deposits increased by 40.41%, Total Deposits by 45.23 % and Advances by 43.92%. The growth numbers look slightly aggressive because of the depreciation of rupee to the tune of 14.11% between end-March, 2011 and end-March, 2012.

During FY12, the International Operations contributed a sizeable 28.27% to the Bank's global business in line with its business aspirations.

Total Assets

Total Assets of your Bank's International Operations increased from Rs 91,273 crore as of March 2011 to Rs 1,28,398 crore as on March 2012 registering a growth of 40.67% during the year.

Profit

The Gross Profit for the year FY12 registered a healthy growth of 48.51% over the level of previous year. The Net Profit too recorded commensurate growth of 45.19% during the year. Your Bank was able to improve the spreads and also show good increase in Other Income.

Contribution of international operations to your Bank's global Net Profit is 23.35%.

Asset Quality

In the current scenario of economic downturn and uncertainties, there was a stringent monitoring of assets by the Bank's Top Management to safeguard your Bank's interest. Your Bank has put in place an efficient loan processing, credit audit and credit monitoring mechanism.

Borrowal accounts experiencing liquidity mismatch/crunch due to recessionary trends prevailing in the global economy/delay in projects for reasons beyond their control were restructured during the year FY12 based on their future cash flows and keeping the RBI guidelines in the matter in focus. These accounts as well as the accounts restructured in previous years were monitored regularly to maintain the asset quality and avoid any slip back.

Gross Advances during the year increased by 43.73% over the level of Mar'11, which means your Bank could maintain the healthy growth trend even during the challenging times. There were a few slippages and the Gross NPAs of your Bank as percentage to Total Advances marginally increased from 0.62% as of Mar'11 to 0.68% as on Mar'12.

International Presence

Your Bank's international presence covered 24 countries through its 89 offices during FY12 as under.

Bank's Overseas Branches/Offices 55

Bank's Representative Offices 2

Branches of Bank's Overseas Subsidiaries 32

Total 8

In addition to the above, your Bank's associate in Zambia has 14 branches.

Overseas Expansion

During the year FY12,your Bank opened five new branches/ offices (including that of the subsidiaries). An Electronic Banking Service Unit (EBSU) was opened at Hamriya Free Zone, Sharjah (UAE) and four branches of the subsidiaries were opened at Ovino Market (Uganda), Kakamega (Kenya), Nyali (Kenya) and Mon Repos (Guyana). The Representative Office in Malaysia was closed during the year as the Joint Venture Bank, namely, 'India International Bank (Malaysia) Bhd.' is expected to commence operations during the year FY13.

Future Plans in Overseas Business

Your Bank has initiated steps for further expanding its overseas network to tap the opportunities for canvassing business and enhancing the profitability. Necessary infrastructure is being created for further expanding the network in UAE, Oman, Mauritius, Uganda, New Zealand, Tanzania, Botswana and Ghana.

Your Bank has received 'In Principle' approval for up gradation of its Representative Office in Australia to a branch. An approval of RBI is awaited for opening of two additional branches in U.K. New centres are being identified in countries where your Bank is already present and also in new territories for further expanding the branch network.

Syndication Centre

Your Bank has Global Syndication Centres at London and Dubai which focus on the business of Syndication Loans in International Market. The Offshore Banking Unit in Singapore has been further strengthened to play a more active role in canvassing the business. The International Merchant Banking Cell (IMBC) set up at the Bank's Corporate Office, Mumbai plays a supportive role to the Regional Syndication Centres and also canvasses substantial business as there was increased demand from Indian Corporates for Foreign Currency resources.

The Bank's IMBC also actively participates in loan origination.

Products and Services

Your Bank has taken several steps to leverage the technology for introduction of products and services to meet the requirements of customers in the area of operation.

Your Bank's products and services are compatible with those offered by multi-national banks and local banks. These are being popularized through marketing campaigns in electronic and print media.

Technology

- The number of ATMs at overseas territories and subsidiaries increased to 76 (45 onsite and 31 offsite) as on 31st March, 2012 from 68 (42 onsite and 26 offsite) as on 31st March, 2011.

- The Global Treasury Solution is implemented by your Bank at UK, UAE, Bahamas, Bahrain, Hong Kong, Singapore and Belgium.

- The Centralized SWIFT activity is operating from the Data Centre of your Bank.

- All Territories/Subsidiaries except UK and USA are routing their Swift operations through SWIFT Cell, Data Centre.

- The Payment Messaging System implemented is a middleware between Core Banking Solution (Finacle) and SWIFT, which help in "Straight Through Processing of Incoming and Outgoing SWIFT Messages" with Anti Money Laundering check. It is implemented in all Territories/ Subsidiaries, except in UK and USA.

- The Anti Money laundering Erase (Batch mode) is implemented in all the overseas centres of your Bank except in Belgium and USA.

- An "Anti Money Laundering Online List Matching Solution" is also implemented in all the overseas centres with the exception of USA.

E-Banking in Overseas Operations

Your Bank is gradually implementing and popularizing the e-banking services at its overseas centres.

Transaction based e-banking has been implemented in UAE, UK, Mauritius, Fiji, Seychelles, Uganda, Kenya, Botswana and New Zealand. It is in the process of being implemented in Oman and Tanzania. (At present, a view based e-banking is available at both these centres).

In T&T, Guyana and South Africa, it will be introduced in the next phase which will start shortly.

The transaction based e-banking is being implemented gradually at the Overseas Centres looking to their retail base and the cost effectiveness.

Risk Management in Overseas Operations

Your Bank implemented Basel II guidelines at all its overseas territories with effect from 31st March 2008 and has already adopted Standardised Approach for Credit Risk, Standardised Duration Method for Market Risk and Basic Indicator Approach for Operational Risk.

The Risk Management Systems and their implementation are being continuously strengthened. A separate Risk Management Department has been set up at all centres to effectively deal with the credit, market and operational risk. Risk Managers are posted at all the overseas territories and subsidiaries of your Bank.

During the year under review, BOB RAM Model was implemented at all the overseas centres for capturing vital information related to advances accounts and their pricing.

An ASCROM Model for Asset Classification and Credit Monitoring is also in the advanced stage for implementation at your Bank's overseas centres.

Regulatory Compliance

Your Bank is well known for its regulatory compliance and has always followed home country regulations rigorously.

Your Bank has a dedicated compliance team at major overseas centres for ensuring regulatory compliance across all the businesses and operations. They are responsible for identification and assessment and compliance related matters from a regulatory compliance perspective and monitoring and reporting.

All the overseas centres have prudential policies in place as per the local regulatory requirements. The territories/subsidiaries ensure that these are periodically reviewed in line with the type of business undertaken, changing scenario and taking into account modifications if any in the regulatory guidelines.

Treasury Operations

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

Your Bank has also put in place a sophisticated Automated Dealing system to offer auto generated real time foreign exchange rates to the clients of its authorised branches spread across the country. As a customer friendly initiative, during the year FY12, enhancements were made in the "Global Treasury Solution" facilitating instant flow of information about credits received by your Bank in favour of its customers through its foreign correspondents.

Under the Business Process Re-engineering, your Bank has successfully implemented Global Treasury solution across major financial centres. The Global Treasury Platform is running smoothly in Mumbai, London, Bahamas, Brussels, Dubai, Bahrain, Singapore, Hongkong and New York.

During the year FY12, managing growth and price stability emerged as the key challenges against the backdrop of a slowing economy weighed down by the impact of tight monetary policy and slower economic growth. The advance estimates of Indian economy suggest a growth of approximately 6.9% in FY12, after having grown at the rate of 8.4% in each of the two preceding years. This indicates a slowdown compared not just to the previous two years but 2003 to 2011 (except FY09 a year of global financial crisis). During FY12, the RBI hiked interest rates by 125 bps taking repo rate to 8.50% before signaling a pause in Dec, 2011. To infuse liquidity into the system, the RBI reduced CRR [Cash Reserve Ratio] by a cumulative 125 bps in the last quarter of FY12 and conducted open market operations to the extent of Rs 1,29,252 crore.

Your Bank's Treasury offers customized solutions using available products viz IRS, CIRS, Forwards and Options to meet the Interest rate and Foreign Exchange risk mitigation requirements of the corporate clients. During FY12, your Bank's Treasury Division was active in taking benefit of the arbitrage opportunities available between various Treasury market asset classes including Money Market CBLO, Call, Market Repo, Government Securities and Forex markets. The Treasury actively utilised the market movements and used Overnight Indexed swaps, INBMK swaps for harnessing available hedging and trading opportunities.

Tight monetary policy coupled with a higher than announced borrowing program resulted in the benchmark 10 year Government security touching a high level of 9.0% in Nov, 2011. Against this backdrop, the Treasury focused on maintaining appropriate duration of portfolio, keeping minimal adverse impact on valuation and maintaining a good average yield on investment portfolio. The average yield on Domestic SLR investments was 7.87%. During FY12, the Treasury earned Rs 6,032 crore as Interest/Discount earnings, while the Profit on Sale of Investment and Exchange Earnings were Rs 622 and 412 crore, respectively.

The Indian Equity markets were subdued for most part of FY12. This was due to the cumulative impact of weaker recovery of the US economy, European sovereign debt crisis and muted FII inflows into the emerging markets including India. The FII inflows picked up during the last quarter resulting in the market moving to higher levels. The Equity Desk of the Treasury actively churned its portfolio and booked profits at regular intervals whenever an opportunity emerged in the markets.

The unfolding of the euro zone crisis and uncertainty surrounding the global economy have impacted the Indian economy causing drop in growth, higher current account deficit (CAD) and declining capital inflows. As in 2008, the transmission of the crisis has been mainly through the Balance- of-payments (BoP) channel. Export growth too decelerated in the third quarter of FY12, while imports remained high, primarily because of very high international oil prices. At the same time, foreign institutional investment flows declined, straining the capital account and the rupee exchange rate that touched an all-time low of Rs 54.23 per US dollar on 15 December 2011 during intra-day trading

The Foreign exchange desk of the Treasury retained its position as one of the premier market players in the Forex desks of the Public Sector Banks. The Proprietary trading desk was active in cashing in of available arbitrages, using volatility in the markets and mobilised resources in a tight liquidity position impacting the Indian markets. The turnover of the Foreign Exchange deskof your Bank's Treasury increased by nearly 14.0% on y-o-y basis during FY12.

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

Corporate Social Responsibility (CSR)

As a responsible corporate citizen, it has been the vision of your Bank to empower the community through socio-economic development of underprivileged and weaker sections. In its continued efforts to make a difference to the society at large, your Bank intensified its efforts further in this direction in FY12.

Your Bank has established Baroda Swarozgar Vikas Sansthan (Baroda R-SETI) for imparting training to unemployed youth, free of cost for gainful self employment and entrepreneurship skill development which help them improve their family economic status and also gives a boost to various regional economies within these locations. All the Lead Districts of your Bank have R-SETI each. About 46 such Sansthans have been established by your Bank in which more than 1,22,000 youth have been trained and around 75,000 have been gainfully self employed.

Your Bank has established 52 Baroda Gramin Paramarsh Kendra for knowledge sharing, problem solving and credit counseling for rural masses across the country. In order to spread awareness among the rural mass on various financial and banking services and to speed up the process of financial inclusion, your Bank has also established 21 Financial Literacy and Credit counseling Centres (FLCC)during FY12 making the total number of FLCCs to 39.

Asset Quality Management

The year FY12 has been a challenging year for the banking industry to maintain the Asset Quality due to a fragile economic environment. However, your Bank has continued its practice of rigorous monitoring and recovery of the NPA portfolio besides preventive mechanism for restricting slippages at the minimum level. Your Bank has continued its leadership position in the NPA management area in the Indian banking sector.

Indian banks, in general, witnessed heavy incidence of slippages in FY12 due to volatile financial markets both within and outside India, higher inflation and higher interest rate regime throughout the year FY12. In spite of various depressed economic parameters impacting the Bank, fresh slippages, during the year,were kept under control at 1.44% of the opening Standard Advances of your Bank. Against the backdrop of high slippages, the ratio of Gross NPA to Gross Advances was at 1.53% as on 31st Mar, 2012.Consequently, the ratio of Net NPA to Net Advances marginally increased to 0.54% by end-Mar, 2012.

Your Bank continued to maintain the Loan Loss Provisioning ratio at higher level than the mandated norms set by the RBI during FY11. Its Loan Loss Provisioning ratio was higher at 80.05% as on 31st Mar, 2012 after taking into account the Prudential/ Technically Written-off advances.

During the year under review, your Bank laid down a comprehensive structure of recovery and credit monitoring function at the Branch, Region, Zone and Corporate levels. Besides this, the Nodal officers at each DRT centre were assigned the role of a follow-up of legal cases on day to day basis so as to minimize the delay in obtaining decrees and execution thereof in order to expedite and maximize recoveries. Additionally, Lok Adalats, Recovery Camps and Village Chaupal Meets were regularly conducted by your Bank's branches to reduce long pending cases and expedite recoveries in small accounts.

Your Bank continued its emphasis on follow-up mechanism to explore recovery prospects of NPA accounts. The system of monitoring of large value NPA accounts of say Rs 25 lakh and above directly from the corporate office has ensured proactive action by branches, advocates, recovery agents, etc. Therefore, the cash recovery in NPA accounts during FY12 was Rs 580 crore, much higher than the cash recovery of Rs 455 crore during FY11. The upgradation was substantially higher at Rs 336 crore during FY12 compared to Rs 189 crore during FY11.

During the year FY12, your Bank laid specific focus on recovery of small accounts by organizing Lok Adalats and Recovery Camps at village/town level. Your Bank also launched an incentive- linked recovery scheme called "Sankalp - IV" to enlist personalized attention of each and every staff member in pursuing recovery efforts of small value accounts with an outstanding up to Rs 15 lakh. The cash recovery made during the year FY12 under the scheme was very impressive at Rs 191 crore.

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

(crore)

Asset Category (Gross) 31st March 2012 31st March 2011

Standard 2,86,542.59 2,28,173.03

Gross NPA 4,464.75 3,152.50

Total 2,91,007.34 2,31,325.53

Gross NPA is comprising of:

Sub-standard 2,661.82 1,097.23

Doubtful 1,318.71 1,336.64

Loss 484.22 718.63

Total Gross NPA 4,464.75 3,152.50

Information Technology

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

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

- Your Bank has also undertaken various other technology initiatives like windows server virtualization, desktop virtualisation and backup consolidation as green initiatives and also to improve Data Centre operational efficiency. Bank wide network was migrated to new technology based on MPLS for improving uptime and on demand upgrade. Enterprise Management System was upgraded and new modules deployed to effectively manage and monitor Bank's growing IT infrastructure.

- The Core Banking System was migrated to higher version with enhanced features. Various new modules like Fixed Assets maintenance, sales tracker module, centralized service tax, EBRC (Bank Realisation Certificate) module, account number portability, workflow automation for New Pension Scheme - Swavalamban were implemented during the year.

- I n order to enhance security and confidence in Internet Banking, your Bank introduced enhanced security features by deploying Fraud Management Solution, including two factor authentications. Your Bank continued to add more facilities under its Internet Banking channels. Internet Banking, viz., Baroda Connect, now provides speedy and secured facility to transfer funds to self, third party (within BOB) and inter-bank. Other facilities available are online opening of Fixed Deposits, Railways Freight Payment, online payment of Direct and Indirect Taxes and certain State Government Taxes, utility bills, rail tickets, online shopping, donation to temples and institutional fee payment. Corporates also have the facility of direct salary uploads, trade finance. Various State Tax payments have been enabled during the year. The SMS Alerts, RTGS/ NEFT transactions are also provided in internet banking portal. ASBA (Application Supported by Blocked Amount) functionality has been provided in Baroda Connect for Online subscription to Initial Public Offers and Follow-on Public Offers for applying for Equity Shares. Transaction based Internet Banking has also been implemented in Uganda, Botswana, New Zealand, UAE, Kenya, Mauritius, Seychelles, Fiji and UK providing facilities such as fund transfer to self and third party, bill payments, corporate salary upload and online shopping. View based internet banking has been implemented overseas in Oman and Tanzania.

- Mobile Banking - BARODA M-CONNECT - one more alternate delivery channel was added to provide various facilities to customers, viz., Balance Enquiry, Mini Statement, Linking of Multiple Accounts, Fund Transfer, Request to the Bank, Bill Payments, Ticket Booking, Shopping, Feedback/ Complaints etc. The IMPS was also enabled through Mobile Banking for interbank fund transfer.

- The AT

 
Subscribe now to get personal finance updates in your inbox!