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Directors Report of Bank of India

Mar 31, 2023

1. GLOBAL SCENARIO

The year 2022-23 was unique in terms of multiple shocks and challenges leading to economic uncertainty, geopolitical hostilities, financial volatility triggered by Russia Ukraine war disrupting the restoration of the supply chains and hindering the global economic recovery process. The result was persistent build up of inflationary pressures across the globe in terms of soaring prices of food, fuel and fertilizer. To combat this situation, Central Banks throughout the world responded with monetary policy tightening and fast rise in policy rates. This posed a downside risk to global economic growth prospects due to contraction in consumption and output. As per the estimates by the IMF, as against growth of 6.4% during 2021, the global output contracted to 3.4% during 2022.The advanced economies grew by 2.7% and the emerging market and developing economies grew by 4.0%. Thus the slowing of global growth accompanied by supply chain disruptions also moderated global trade. Global trade growth slowed from 10.4% in 2021 to 5.1% in 2022. Global inflation increased from 4.7% in 2021 to a high of 8.7% in 2022. There were large currency depreciations in Emerging market economies, capital flight, investor risk aversion and debt distress.

The renewed phase of turbulence surfaced in global economy towards the end of FY 23 in the form of banking sector turmoil in US and Europe. This brought into picture vulnerabilities in the banking sector and fears of contagion have risen across the broad financial sector.

2. DOMESTIC ECONOMIC SCENARIO:

Notwithstanding the challenges from global spillovers, the Indian economy remained on the path of recovery on account of normalization of domestic supply chains, restoration of consumer confidence and rebounding of activity in contact intensive sectors. The economy exhibited resilience & stability due to strong macroeconomic fundamentals, well regulated & capitalized banking sector and robust balance sheets of corporate sector. This spurred a rebound in credit demand facilitated by a large increase in capex by the government.

As per the latest estimate of the National Statistical Office (NSO), the GDP grew by 7% in 2022-23 amidst global headwinds. With this, Indian economy became one of the fastest growing major economies of the world during 202223. Agriculture and allied sector remained buoyant in 202223 with gross value added registering a growth of 3.3% as a result of record production of food grains, sugarcane, rapeseed and mustard.

Industrial output measured by the index of industrial production (IIP) registered a growth rate of 5.1% during FY23 as compared to 11.4% last year. Among the three subsectors, manufacturing sector largely shaped the industrial sector recovery but slowdown in global demand affected manufacturing activity in second half of FY 23 and growth moderated to 4.5 %. On the other hand mining recorded growth of 5.8% and electricity generation depicted good growth of 8.9% in 2022-23. As per the use-based classification, primary goods and infrastructure/construction goods recorded robust growth on a y-o-y basis while capital goods production got fillip from government led investment

in infrastructure. On the other hand, production of consumer goods remained muted with production of consumer durables remaining below the pre-pandemic output levels of 2019-20 and production of consumer non-durables remained almost flat in 2022-23.

Services sector exhibited rebound in economic activities and revived strongly in 2022-23 led by construction, domestic trade and transport which surpassed their pre-pandemic levels. On the other hand the sectors which faced the major brunt of covid-19 pandemic like aviation, tourism and hospitality have recovered considerably.

Both Retail inflation (CPI) and WPI remained at elevated level especially during first half of the year due to various factors such as supply side bottleneck, sharp increase in global prices of crude oil, food, fertilizers, and metals. Thus passing through of higher input costs along with renewed supply disruptions in the aftermath of the war accentuated the situation. However with softening of global commodity prices, the promptness of measures taken by the government, normalization of global supply chains and successive hikes in the policy repo rate by the RBI, inflation moderated in second half of the year 2022-23. The overall headline CPI inflation moved up from 5.5 % in 2021-22 to 6.7% in 202223 exhibiting stickiness in core inflation throughout the year above the pre pandemic levels.

Despite global slowdown and persisting geopolitical tensions, India''s merchandise exports grew by 6.7% and reached $ 450.4 billion in 2022-23 as compared to 44.6% growth in the previous year. The major driver of export growth were petroleum products whose share in export basket rose from 16% in FY 22 to 21.6 % in FY 23. Moreover strong growth was witnessed in services exports with record growth of 27.9% led by software services. However merchandise imports grew at a faster rate than exports by 16.5 % owing to strong domestic demand recovery during 2022-23 and touched $714.0 billion during the same period. With this, trade deficit rose by about 38% from the previous year of $192.24billion to $263.6 billion in FY 23. During 2022-23, net inflows under FDI stood at $28 billion, a tad lower than that during 2021-22 (i.e. $38.6 billion). However net portfolio outflows were to the tune of $5.9 billion during the year. For the nine months period during FY23, though the current account deficit (CAD) stood at 2.7% of GDP as against 1.1% during the corresponding period of FY22 but it remained within sustainable level. These factors culminated in decline in foreign Exchange reserves by $28.9 billion from end of March 22 to end of March 23 and stood at $578.4 billion and provided cover of almost 9 months of import projected for 2022-23. Nevertheless, Indian economy appeared resilient on external front also with its vulnerability indicators like external debt (as a ratio to GDP) and others faring better than most peer emerging market economies.

On fiscal front, with the bouncing back of economy, tax revenues remained robust due to significant increase in GST collections, income tax and corporation tax and there was rationalization of revenue expenditure. The Gross fiscal deficit improved from 6.75% of GDP in FY22 to 6.45% of GDP in FY23. (as per revised estimates). Maiden issuance of Sovereign Green Bonds (SGrBs) by the central government during the year was a landmark development in the fiscal

arena. The proceeds of the bond will be used in those public sector projects that reduce the emission intensity of the economy.

3. BANKING AND FINANCIAL SECTOR DEVELOPMENTS:

During FY23, the banking industry witnessed a higher advances growth and lower deposits growth. The advances registered a double digit growth of 15% against 9.6% in FY22 and deposits grew by 9.6% against 8.9% during FY22. Return of consumer optimism and improvement in business outlook during the year sustained credit growth. Credit flow to all the sub-sectors i.e. agriculture, industrial and services sector increased by 15.4%, 5.7% and 19.8% respectively, which was much higher than that during the previous year except industrial sector. The financial performance of the Banks was encouraging in terms of rise in NII, in the rising interest rate cycle, leading to strong growth in Operating profit, Net profit and improvement in ROA and ROE ratios. The asset quality also considerably improved with GNPA ratio coming below 5% and NNPA to less than 2% and there was containment of fresh slippages.

With a thrust on digitalization and inclusive growth, 75 Digital Banking units (DBUs) were set up in 75 districts in the country for adopting digital modes of doing banking transactions in the country. The no. of DBUs increased to 84 as on March 31,2023. Moreover RBI introduced Central Bank Digital Currency (CBDC) in phases during the year in the wholesale and retail segments on Nov.1, 2022 and Dec.1,2022 respectively.

Though RBI''s withdrawal of accommodative stance in the monetary policy led to gradual reduction in the level of surplus liquidity in the system, a calibrated approach was followed to ensure availability of liquidity to meet the credit needs of productive sectors of the economy. In April 2022, Standing deposit facility (SDF) was introduced which enabled banks to deposit excess funds to RBI without necessity of collateral in the form of Govt. securities. The aim was effective liquidity management in a collateral free manner. The daily absorption under the SDF during 2022-23 averaged 1.5 lakh Cr while through VRRR auctions the amount absorbed averaged 1.4 lakh Cr. There was 50 basis points increase in CRR to 4.5% which resulted in withdrawal of primary liquidity to the tune of Rs.87,000 Cr from the banking system. The daily net liquidity absorption came down from a daily average of Rs. 6.6 lakh Cr in March 2022 to Rs. 0.14 lakh Cr in March 2023. Moreover to counter frictional liquidity pressures on account of GST payments, advance tax outflows and usual year end tightness, VRRR auctions were conducted from time to time.

The G-sec yield followed an upward trajectory and hardened initially during the first quarter of FY 2023 on concerns of high inflation worldwide and policy rate hikes across the globe. However change in macroeconomic conditions like lowering of crude oil prices, fall in inflation level, a slower rate of hikes and general moderation in government bond yield in the US brought down the yield in between but again moved up. The 10 year benchmark yield rose from 6.79% as on March 31,2022 to high of 7.50% as on June 30, 2023 and ended up at 7.31% as on March 31,2023.

The Rupee-USD exchange rate exhibited orderly movement during the year in tandem with global developments mostly with depreciating bias in nominal terms. The Indian rupee has depreciated against USD by 8.3% from April 2022

to Dec.2022. The main causal factors affecting rupee to depreciate against USD were the outflow in foreign portfolio investment, appreciation of USD against all other currencies, rise in crude oil prices, monetary policy normalization and geopolitical tensions. The Rupee-USD exchange rate moved from Rs.75.79 as on March, 31, 2022 to Rs.82.18 as on March 31,2023. However, the depreciation of rupee against the USD is lower than that of the currencies of emerging market peers.

The year 2022-23 was significant in terms of numerous policy measures taken by the Govt. and RBI in continuation with past trend for promoting stability, sustainable growth and strengthening the system to remain resilient amidst global uncertainties. RBI withdrew the accommodative stance and cumulatively increased the policy repo rate by 250 basis points to anchor inflationary expectations while fostering growth. The Foreign Trade policy (FTP) 2023 was announced on March 31, 2023 to promote an export friendly environment by enhancing ease of doing business and exploring more trade in Indian rupee. On the fiscal front, capital expenditure of the Government increased by 63.4% in the first eight months of FY 23 leading to crowding in of private investment and increasing animal spirits in the economy spurring capital investment cycle. Moreover with focus on Aatmanirbhar Bharat and Make in India programme, PLI schemes has been extended to other sectors also to enhance manufacturing capabilities. Further, in the Union Budget 2022-23, the Government has announced various growth-oriented measures such as 33% increase in capital investment to the tune of Rs.10 lakh Cr, emphasis on infrastructure expenditure with ‘Gati Shakti'', boosting logistics infrastructure for last mile connectivity under National Logistics Policy(NLP), strengthening agricultural extension services through digital public infrastructure etc. to provide a fillip to the growth momentum and cushion against global headwinds.

BUSINESS REVIEW:1. RESOURCE MOBILISATION:

There has been an overall CASA growth of Rs 6,684 crore during the FY 2022-23 depicting a YoY growth of 2.72%. During the period the Saving Bank deposits have shown a higher growth of Rs.5,711 crore with 2.64% growth over last year. Bank has also registered growth in current deposits with base figures increasing by Rs 974 crore with 3.26% growth over last year. The TDR has also shown growth of Rs 11,732 crore with 3.91% growth over last year.

167418 new customer were added to the SB Diamond customer base, an increase of 4.75% YOY with a growth of Rs.7,647 crore in the deposit base of SB Diamond customers. Similarly the 2600 new customer were added to the CD diamond base, an increase of 1.96% growth over last year.

The CASA ratio stood at 44.73% at the end of FY 2022-23, The bank continues to focus on retails deposits & CASA.

2. ADVANCES:

Bank''s Global Gross Advances improved from Rs. 4,57,014 crore as on 31.03.2022 to Rs. 5,15,852 crore as on 31.03.2023 showing an improvement of 12.87% on Y-o-Y basis. Gross Domestic Credit registered a moderate growth of 9.55% from Rs. 3,93,991 crore as on 31.03.2022 to Rs. 4,31,637

crore as on 31.03.2023. Bank caters to specialised needs of Corporates/Mid Corporates through 10 Large Corporate Branches and other Large Branches headed by AGMs/CMs. Further 18 branches at identified centres have been marked for Mid Corporate Business.

3. RETAIL:

The Retail loan segment grew at 17.41% and schematic retail growth of 18.01% during FY 2022-23. We kept our special focus on Home Loans and vehicle loans during the year.

The Home loan segment during the year recorded a growth of 15.60% from Rs. 44,895 crore to Rs. 51,897 crore. The Vehicle Loan segment recorded growth of 31.21% from Rs. 10,353 crore to Rs.13,584 crore during the year.

Bank has introduced Star Suvidha Express Personal Loan during the year for salaried customers, existing customers who have availed Home Loan, LAP & education loan and for pensioners. The Personal Loan segment recorded a growth of 26.12% from Rs. 5,483 crore to Rs.6,915 crore.

Bank has tie-up arrangement with Maruti Suzuki, Tata Motors, Mahindra & Mahindra and Kia for vehicle loans. Similarly, tie-ups with Housing.com, Nobroker.com and Prop Tiger for home loans.

Bank also extends Personal Loans to employees of PSUs/ PSEs/Reputed Corporates/ Institutions under tie up arrangement with employer.

Apart from Home Loans, Vehicle loans & Personal Loans, we also extend Loan against Property and Education Loans.

4. MSME (MICRO, SMALL AND MEDIUM ENTERPRISES):

The MSME sector is the backbone of the Indian economy and plays an important role in the employment and income generation adding to the decentralize growth of the economy with low per capita investment. MSME Sector contributes 30.74% of GDP of Nation and 49.35% of total exports. The MSME sector is expected to rebound sharply with 15-17% growth for the current financial year 2022-23 on the back of demand recovery following the pick-up in economic activity with the gradual easing of Covid restrictions domestically and globally.

Focus on programmes, such as Make in India, Start Up India, Digital India, Aatmnirbhar Bharat and Ease Reforms have also brought major changes in MSME Credit at Bank''s Level.

The performance under MSME segment of the Bank is as under:

GROSS MSME ADVANCES (EXCLUDING PWO & URI)

Particulars

Mar-22

Dec-22

Mar-23

Growth

YoY

Growth

YOY

(%)

GROSS MSME

64,750

69,250

70,777

6,027

9.31%

Highlights of FY 2022-23:

• During FY 22-23, 4,00,272 new MSME loan accounts have been added for loan amount of Rs.21,424Cr.

• Bank has sanctioned Rs.8273.58 Cr under the Mudra Loan during the year.

• ECLGS business reached to the level of Rs. 9002.64 Cr till March ''2023.

• Bank has crossed TReDS business of Rs.2000.00 Cr and stood at Rs. 2,134.38 Cr at the end of March''23

• In order to amplify MSME portfolio and to penetrate the market of MSME loans, Policy on Business Sourcing Associates (BSA) has been approved during FY 2223. The BSA shall work as extended arm of the bank to connect with prospective MSME borrowers.

• Bank has digitized the Channel Finance business with launch of its own portal.

• Bank''s centralized processing centres (SMECC/ SMEUC) for MSME loans have been increased to 98 across the country .

• Bank of India was conferred the MSME BANKING EXCELLENCE AWARD-2022 as Winner in “INNOVATIVE BANK” category and Runners up in “BEST BANK FOR PROMOTING SOCIAL SCHEME” by Chamber of Indian Micro, Small & Medium Enterprises(CIMSME),New Delhi.

5. AGRICULTURE FINANCE:

Priority Sector Advances:

The bank is serving to the priority and agriculture sectors, through its network of rural and semi-urban branches. The Bank has registered an outstanding level of Rs 1,64,411 crore (43.28 % of Average FY 22-23 ANBC) under Priority Sector Advances consisting of Agriculture Rs. 72,366 crore (19.00% of Average FY 22-23 ANBC). Out of which SF & MF Rs.43,244 crore (11.23% of Average FY 22-23 ANBC), SME Rs 68,678 crore out of which MSME Micro Rs. 43,136 crore (11.29% of Average FY 22-23 ANBC), Education Rs 2,206 crore, Housing Rs. 21,050 crore and other priority sector advances is Rs 112 crore. The Bank has achieved the regulatory ratios under Priority sector, SF & MF, MSME Micro and credit to weaker sections of FY 2022-23.

Amt in crore

Particulars

Amt. O/S

Y-O-Y Growth (Mar 22 / Mar 23)

% of Marc 23

Qtrs.

ANBC

Mar 22

Mar 23

Amt

%

Total Agriculture

66418

72366

5948

8.96

19.00

Small & Marginal Farmers

38927

43244

4317

11.09

11.23

Micro Enterprises

39637

43136

3499

8.83

11.29

Priority Sector1

151600

164411

12811

8.45

43.28

*Total Agriculture and Priority Sector includes outstanding of RIDF & PSLC

Under Agriculture, Bank branches disbursed Rs 34,632 crore, whereas under Small and Marginal Farmers total disbursement during FY 2022-23 was Rs. 26,443 crore. Bank has issued 2.83 lakhs Kisan Credit Cards during the year with credit limits of Rs 4,219 crore for flexible credit

utilization. The Bank also extends financial assistance under Differential Rate of Interest at concessional rate of interest of 4% to low income groups. The Bank has sanctioned 191 cases under DRI scheme during the year involving Rs 4.95 crore. Bank''s credit exposure to the Minority Communities is Rs 18,626 crores as on March 23 (13.59% of Priority Sector Lending against target of 15.00%). Amount O/s as on 31.03.2023 under weaker section is Rs. 56,558 crores (14.75 % for FY 22-23). Bank''s finance to Food & Agro Industries as on 31.03.2023 is Rs. 7,348 crore.

Gold Loan: Gold loans registered incremental growth of Rs.6,187 Cr (YOY growth of 38.72%) during FY 22-23 and stood at Rs. 22,166 crore as on 31.03.2023.

Self Help Groups (SHGs): Bank has customer base of 6.52 lakhs Self Help Groups (SHGs) as on 31.03.2023 of which 2.76 lakhs SHGs are credit linked including 2.34 lakhs women SHGs as on 31.03.2023.

National Rural Livelihood Mission (NRLM): It is an

important poverty eradication programme for rural poor. During the year Bank has disbursed Rs 4,755 crore to 1.76 lakhs borrowers.

Star Krishi Vikas Kendra (SKVK) : Presently, 138 SKVKs are functional in 61 Zones across all 13 NBGs. SKVK disbursed Rs.7,866 crore in last FY 22-23. In addition to this, 97 Agri Desks are operationalized in SME City centres for focused & quality growth in agriculture portfolio.

Lead Bank Scheme: The Bank has Lead Bank responsibility in 51 districts spread across five states of Jharkhand (15), Maharashtra (14), Madhya Pradesh (13), Uttar Pradesh (7) and Odisha (2). The Bank is convener of the State Level Bankers'' Committee (SLBC) in the state of Jharkhand.

KCC Saturation: During year 2022-23 we have added 2.83 lakhs new KCC customer under KCC Saturation Campaign.

FINANCIAL INCLUSION:

Bank considers Financial Inclusion as a viable business proposition and has shifted outlook from “CSR” to “economic viability”. ICT based solution to support and secure sufficiently low cost transactions required by the financial sector. Financial inclusion drive gained momentum with Pradhan Mantri Jan Dhan Yojna (PMJDY) programme. Bank has provided banking services in unbanked rural areas through ICT led Business Correspondents model.

PMJDY and Social Security Schemes:

During the FY 22-23, 16.98 Lakh PMJDY account has been opened. Bank has also actively participated in Social security schemes launched by Govt of India. During the FY 22-23, Bank has covered 31.97 Lakh account under PMSBY (Pradhan Mantri Suraksha Bima Yojana) and 37.82 Lakh account has been covered under PMJJBY (Pradhan Mantri Jivan Jyoti Bima Yojana) in this period. 6.54 Lakh number of APY (Atal Pension Yojana) new subscribers have been canvassed by the Bank in FY 22-23.

Star Hawker Atamnirbhar Loan (SHAL):

Star Hawker Atamnirbhar Loan (SHAL)-PMSVANidhi has been launched in June 2020 to provide hassle free Working Capital Demand Loan up to 10,000/- repayable in 12 EMI to Street Vendors under Tranche I. Second Tranche under PMSVANidhi for those street vendors who have repaid/repaid their 1st PMSVANidhi Loan. Under Tranche II, WCDL up to Rs 20,000/- (Minimum Rs 15,000/-) provides to street vendors and it is repayable in 18 months installments. Under Tranche III, WCDL up to Rs 50,000/- (Minimum Rs 30,000/-) provides to street vendors and it is repayable in 36 months installments.

Till 31.03.2023, we have sanctioned 3.56 lakh cases (99.72%) and total disbursed 3.40 lakhs (95.24%) out of 3.57 Lakhs applications received.

Star Swarojgar Prashikshan Sansthan (RSETIs):

Bank is sponsoring 43 RSETIs in the States of Jharkhand, Odisha, Uttar Pradesh, Madhya Pradesh, Maharashtra and West Bengal to impart training to Rural Youth. During the FY 22-23 the RSETIs have conducted 1158 training programs and imparted training to 32,341 candidates ensuring settlement of 76.57% (24764) and providing credit linkage to 58.23% (14175) candidates to enable them for gainful employment. All of our 43 RSETIs are graded in “AA” category by MoRD.

Financial Literacy and credit Counseling Centres (FLCC)

FLCC/FLCs are established as per Reserve Bank of India guidelines at Rural and Urban Centers at district locations where Bank is having Lead Bank responsibility. Bank''s 51 FLCs are functional in all 51 Lead districts. The FLCs in addition to imparting training also undertake remedial counselling on case to case basis for the distressed borrowers, preventive counselling through media, workshops and seminars. Till

31.03.2023, total 17.21 Lakh needy distressed people were given counseling.

Centre For Financial Literacy (CFL): Pilot Project

RBI has advised Banks for expanding the reach of CFL to every block in the Country in phased manner by March 2024. We have been associated as one of the sponsor bank since initial implementation of CFL Pilot Project which stands scaled up w.e.f. 01.12.2021. We were entrusted responsibilities for sponsoring of 106 CFL in first phase and 45 CFLs in Second Phase (w.e.f. December,2022), funded from Depositor Education and Awareness (DEA) / Financial Inclusion Fund (FIF) with some portion to be funded by sponsor bank. Accordingly, we have opened / scaled up 151 CFLs in five States (Jharkhand, Maharashtra, Odisha, Madhya Pradesh & Uttar Pradesh) in collaboration with RBI Identified Five NGOs from 1st December, 2021. Put together, all 151 CFL have conducted 54,553 camps and total 14,26,944 distressed people have been counseled upto

31.03.2023.

Regional Rural Banks:

Post amalgamation, we are sponsoring 3 RRBs, Aryavart Bank (AB),- in Uttar Pradesh, Madhya Pradesh Gramin Bank (MPGB) in Madhya Pradesh and Vidharbha Konkan Gramin Bank (VKGB) in Maharashtra state, covering 82 districts with a network of 2554 branches as on 31.03.2023. All these sponsored RRBs are managed by the Chairmen deputed from Bank of India and the performances are being monitored by General Manager FI & RRB (Div.) from Head Office. All three RRBs Branches and Administrative offices are on CBS platform with system generated report facility. These RRBs are enabled on RTGS, NEFT and ATM platform. All our RRB have a combined business mix of Rs.9,6612 crore as on 31.03.2023.

7. INTERNATIONAL:

The Bank has 21 Overseas Branches, 1 Representative Office at Jakarta (Indonesia), 4 Subsidiaries, 1 Associate/ Joint Venture, all spread across 15 countries in 5 Continents of all time zones. The contribution of foreign operations in Bank''s global business mix has been 15.75% as on

31.03.2023.

Overseas Subsidiaries and Associates:

i) PT Bank of India Indonesia Tbk

ii) Bank of India (Tanzania) Ltd

iii) Bank of India (New Zealand) Ltd

iv) Bank of India (Uganda) Ltd

v) Indo-Zambia Bank Ltd. (IZB) - Joint Venture

8. CREDIT MONITORING:

Monitoring of the credit portfolio is essential in order to maintain and improve the asset quality of the bank and minimize credit risks. The main objective of Credit Monitoring is to ensure Compliance of sanction terms and end use of funds. It has to further ensure that the credit assets remain in standard category, endeavor made for up-gradation of identified stressed accounts/watch list accounts and take corrective action to prevent slippage of the accounts from performing to non-performing. The Department has been using various tools and methods for identifying and monitoring stressed accounts with signs of weakness /potential default/delinquencies to ensure good asset quality coupled with containment of probable slippages effectively.

Tools for efficient monitoring & control process:-Early Warning Signal:

A fully tech based EWS solution is implemented in our Bank since August 2020. Our EWS is fully automated solution with in built well defined work flow. Alerts are generated based on both internal (CBS and Rating Data) and External Data (MCA, CIC etc). The alerts generated helps the Bank for identifying incipient weakness and initiate proactive timely remedial measures. The solution helps the Bank in early identification of Fraud in accounts (if any). This solution also enables the branches for close monitoring of accounts.

Credit RFA/Fraud examination:

As per DFS directive, all NPA accounts of Rs.50 Crs & above should be simultaneously be examined for fraud angle. And hence, department is mandatorily examining all the NPA accounts of Rs.50 Crs and above for fraud angle. Further, the accounts wherever EWS indicates something suspicious, is immediately examined to Red Flag and thereafter, the process of fraud examination is initiated for decision within the regulatory timeframe.

CRILC Reporting:

Identification of the accounts in SMA category triggers mitigating steps such as follow-up for regularization, restructuring etc. In terms of RBI''s revised guidelines, stressed accounts with credit limit of Rs.5 crore and above are reported to RBI on CRILC platform on weekly basis.

System Asset Classification (SASCL):

A predictive program in identifying the probable slippages showing overdue of more than two months period based on record of recovery as well as for accounts showing technical irregularities such as non-submission of Stock/Book debt statement, non-review, insufficient/ no credit in CC accounts etc. for last 90 days. This may cause downgrading of accounts if timely corrective action is not taken. These accounts are monitored specifically by various verticals for containment of downgrading of standard assets. A new SASCL format has been devised which is more user friendly and will provide more focused information to the field.

SMA Monitoring:

Apart from SASCL, Focus will shift to SMA monitoring this year. Branches will be disciplined to start monitoring SMA 0 accounts so that the remedial actions can be taken at initial steps and the concerned account do not move further to SMA 1 or SASCL. We push SMA data to branches directly instead of NBGs (present practice).

Collection Management System (CMS):

We are in process of implementing Collection Management System, which will help us in managing SMA/DNPA portfolio by providing Digital Platform to Branch officials. Following are the scope of work for the proposed solution:

• SMA Risk Gradation

• SMA/DNPA account list with all relevant information like Overdue amount/address/Contact Detail etc.

• Tracking of SMA movement (Roll Forward/Backward)

• Updating of Collection actions & Customer response, including Promise to Pay

(PTP)

• Visibility of past communication

• Pushing of reminder SMS/IVR/email to the borrower

• Suggestive corrective action

• Integrated with Call centre to capture customer response through outbound calling

• Geo tagging & Suggested next visits based on field officer location

• MIS for Branch/ZO/NBG/HO for better monitoring

We expect to launch the proposed Solution during the current FY:

Credit Process Audit:

Credit Process Audit is to ensure compliance of Pre and Post disbursement terms of sanction terms/ covenants, where in the disbursing officer, before parting with the Banks funds, has taken all necessary measures for creation/perfection of security with a view to ensure enforceability of the said securities. Now, CPA is Finacle integrated to monitor in realtime.

Stock Audit:

We ensure timely conduct of Stock & Receivables audit in eligible accounts and take active/preventive steps wherever warranted. The stock audit is presently applicable to standard advance accounts having working capital exposure of Rs.5 crore and above. It is required to be conducted

annually. Assets showing inherent signs of weakness, such as out of order position, overdue Bills under Letters of Credit, invocation of guarantees, review overdue etc., which pose a threat to the bank''s asset quality, are followed up at various platforms & levels through Tele/ Video conferencing.

A new menu for stock audit (STKADT) has been developed in Finacle for stock audit MIS, which will enable us to get timely information about the status of Stock Audit in any applicable account.

Daily marking of NPA:

The Banks has migrated to daily marking of NPA w.e.f. 15.04.2021 to have more transparency in identification of NPA & for compliance of regulatory guidelines.

Monitoring of Restructured Accounts (RFCRS portfolio):

To guard the asset quality of accounts restructured under RFCRS, a dedicated team is formed at Head Office, NBG and Zonal Office level, which ensures close monitoring of RFCRS accounts. Apart from the same, SMS are being sent from HO level to all RFCRS borrowers including the DNPA borrowers.

Reminder calls from Call Centre:

A dedicated team of 50 people employed at our call Centre is working for Monitoring of advances. They are engaged in outbound calling for SASCL & SMA borrowers.

Agencies for Specialised Monitoring (ASM):

As per IBA guide lines ASM (Agencies for Specialised Monitoring) is appointed in accounts having total Banking exposure of above Rs.250 crore and accounts with exposure of a specialised nature except in some exempted category accounts like Navaratna Accounts and PSU/Government Guaranteed accounts. We are also engaging services of ASM in stressed accounts wherever required.

Other monitoring tools:

• Centralized monitoring of Pre-disbursement & post disbursement covenants implemented for strengthening Compliance level.

• Policies are in place for Red Flagging of accounts on observance of EWS & examination of Fraud angle within a specified timeline in terms of regulatory guidelines. Prompt reporting is ensured once account is declared fraud, in RBI''s CRILC platform.

• SMS & IVR are being sent to SMA borrowers and CC/OD & TL borrowers for repayment intimation. In addition to this, SMS are being sent in vernacular languages as well.

• Separate list of account where review is overdue for 90 days and where stock statement is due for more than 90 days is being provided to branches on a monthly frequency for aversion of technical slippages.

9. NPA MANAGEMENT:

The Bank made sustained relentless efforts for NPA and Written Off recovery by adopting Board approved strategies with activation of Asset Recovery Branches, staff at grass root levels.

The NPA Position of as on 31.03.2022 & 31.03.2023 are as under:

(Amount in Crore)

Particular

Position as on

31.03.2022

31.03.2023

Gross NPA

45605

37686

Net NPA

9852

8054

Gross NPA (%)

9.98

7.31

Net NPA (%)

2.34

1.66

Provision Coverage Ratio

(%)

87.76%

89.68%

ABC analysis of NPA

• During the year, GNPA improved by 267 bps (from 9.98% to 7.31%) whereas NNPA has also improved by 68 bps (from 2.34% to 1.66%) while PCR also increased to 89.68% from 87.76%.

• Weekly Recovery Camps are being organised at NBG/Zone level whereas “STAR Intensive Recovery campaign” is organised on monthly basis. We have extended “Branch Adalat campaign” to include amount upto Rs. 5.00 crore to maximize recovery in small ticket size NPA accounts.

• Thrust on recovery in written off accounts. This also helps to improve our Cost to Income Ratio (CIR). For recovery in PWO accounts various strategies are followed such as :

Pursuing SARFAESI Action, Resolution through NCLT, enforcement of securities of guarantors through SARFAESI/DRT, compromise settlement, Sale through ARC/NARCL, wherever feasible, Resolution through OTS schemes - Star Sanjeevani 2023, BOI-OTS 2023 and NPA management policy etc.

• For resolution of NPA accounts various campaign will be launched.

• We are expecting our Gross NPA below 5% and Net NPA ratio below 1.30% by March 2024.

• We have modified our tailor made scheme for One Time Settlement (OTS) which are non-discretionary & non-discriminatory and scheme re-launched w.e.f

01.04.2023.

• Conducting Mega E-auctions every month on Pan-India basis to improve recovery in the accounts.

• Holding monthly Gold auction for faster resolution for NPA in Gold Loan NPA accounts.

• Thrust on generation of OTS proposals at each level through participation under Star Intensive recovery Day, Weekly recovery camp, Virtual Recovery Camp and interaction with customers directly.

• Focus on resolution of stressed asset accounts by selling to ARCs/ through NCLT route.

• Participation in the National Lok Adalat at various levels.

10. TREASURY:Forex Business:

The Treasury manages the foreign exchange business of the bank, providing hedging solutions to the customers through forwards and swaps. Apart from having Centralized Treasury at Mumbai, the Bank has 4 satellite dealing rooms situated at New Delhi, Ahmedabad, Chennai and Kolkata and one centralized back office in Gift city (Ahmedabad) so as to provide better services to the customers. During the FY 22-23, Merchant and Interbank turnover was Rs.1.45 lakh crore and Rs.45.94 lakh crore respectively. The aggregate turnover of Bank''s forex business during the year was Rs.47.39 lakh crore. The Treasury actively participates in trading in Currency Futures and is one of the leading banks in all the exchanges. During the FY 22-23, Bank''s Turnover in Currency Futures was USD 108.64 Bn. The Bank was awarded as the Top performer in Currency Future (Banks) segment by BSE for FY 21-22.

Treasury Operations & Investments:

Bank continued to play an active role in all segments of the market - Money market, Forex, Bonds and Derivatives 2022-23. Bank has maintained a higher level of investments by holding SLR investments in excess of the regulatory requirement of 18.00% of NDTL from time to time to ensure that sufficient liquidity is available by the way of borrowing against excess SLR from Repo/TREPS windows. As on 31.03.2023 the gross SLR investments were Rs.155,027 crore (77.68% of total Investments) and Non-SLR investments stood at Rs.44,544 crore (22.32% of total investments). The Non- SLR investments also includes Recapitalisation bonds of Rs.24,699 crore. M-Duration of SLR AFS portfolio stood at 1.20% as on 31.03.2023 against 0.47% as on 31.03.2022. M-duration of SLR and Non-SLR investment under AFS portfolio as on 31.03.2023 stands at 1.55%. In concurrence with the Green initiatives taken by Government of India, RBI had issued notification for sale of Sovereign Green Bonds, Treasury branch invested Rs 680 Cr in Sovereign Green Bonds. The investments are made in accordance with the Board approved investment policy which is reviewed periodically to respond to market developments/regulatory requirements.

11. INFORMATION TECHNOLOGY:Website:

• Bank of India has revamped its Corporate and Global Website (12 Foreign Centers) with the latest Technology in the market with respect to look and feel, user experience with improved and enriched customer journey

• Built on Liferay Digital Experience Platform (DXP), it enables Code Independent Content Management System and greater flexibility to cater to any complexity of customizations for the needs of business and ease of the customers

• Hosted on Public Cloud, the website is highly scalable, allowing to seamlessly adjust to changing traffic demands. It also offers improved reliability, better redundancy and failover options to ensure high availability of the website, with increased security.

• Designed to be responsive and developed keeping in mind the current users trends with proper structured menus to provide easy navigation.

• Enriched with Google Analytics to capture the behavior of customer and to provide the better services to the customer.

• Corporate Website is currently available in 3 languages (Hindi, English and Marathi) and apart from this, 9 more Regional Languages(Bengali, Tamil, Telugu, Odiya, Gujarati, Malayalam, Urdu, Kannada and Punjabi) shall be included very soon.

• Bank''s website with new UI/UX design has been made live on 26.11.2022.

Document Management System:

• Document Management System has helped various departments to continue their work in an effective way .Various HO departments, branches and zones are accessing DMS in live environment.

• Statutory Branch Audit (SBA) and Statutory Control Audit (SCA) has been conducted effectively with the help of DMS. All the documents have been made available to the auditors on real-time basis.

• The Saving Bank (SB) account opening Process through DMS is made live in all the branches linked to 69 ZCODs (Zonal Centralized Operations Department).

• Templates have been generated for storage and retrieval of necessary documents based on the requests received from different departments (International, HRMS, L&D, DBD,CPD Insurance Claim, UPI Insurance Claim etc.)

Account Aggregator Framework:

• The Account Aggregator (AA) Ecosystem is consent based data sharing mechanism that helps an individual securely and digitally access and share information from one financial institution they have an account with to any other regulated financial institution in the AA network.

• It helps the Lenders\Service Providers to leverage on digital data acquired with the consent (Sahamati) from the customers eliminating the need of physical documentation. Data cannot be shared without the consent of the individual.

• AA framework was made live on 27.07.2022 with one Aggregator M/s Anumati. Subsequently, 4 other AAs Viz. NADL, FINVU, CAMS and OneMoney have been onboarded on 27.09.2022.

Cheque Deposit Kiosk:

• Cheque Deposit Kiosk (CDK) has been implemented in the Bank since 2021 with the view to automate the cheque clearing process.

• The customers submit the cheque in the Kiosk with minimum required information and upon successful submission acknowledgement slip is generated for the customer.

• End of Day (EOD) of the CDK is performed by the designated branch officials. After EOD, the cheques submitted in the Kiosk is processed through CTS application and submitted to NPCI.

• The process reduces the load on the employees and customer can deposit cheque at any e-gallery/Branch lobby.

MISSCALLPAY:

• MissCallPay is digital payment offline solution that provides all the functionality of UPI based mobile payments over a feature phone using Missed Call. It does not have any dependency on Internet connection, hence it is suitable for rural and urban under-served population of India.

• Users can also transact in their local language. Currently 12 local languages are available.

• MissCallPay P2P solution is one of the distinct option of UPI123Pay

• User can send money, check balance, set UPI PIN using MissCallPay

12. MANAGEMENT INFORMATION SYSTEM:E-Platform Project:

Bank has launched Project E-Platform in April 2021 for Straight through Origination and Processing of all Banking Products (Assets & Liability products) including third party products.

Phase-wise status of product implementation is under:

• E-platform phase 1 implementation consists of 20 products. MSME, Retail, Agriculture KCC, Credit Card and self-Onboarding Saving account Digital journeys are launched.

• Fintech Collaboration - Video KYC, Bank statement analysis, Name Check and Fintech services are integrated with the E-Platform for end to end Digital journeys.

• Integrated CRM Next Solution is launched with end to end Lead Sourcing & management, Collaboration, Service Management/ Complaint management. Business Correspondents are also integrated with this platform. Other Modules Customer 360, Integrated Campaign management is in implementation phase.

• Lead Management Portal is made live for all the branches/offices of BOI with customer facing sources , BOI web Site, BOI E-Platform, BOI Customer Care, SMS,Analytics, Maruti Portal (tie-up arrangement), National portal.

• Complaint Module ,Customer Grievance Portal made Live with real time update of complaints (as and when status updated).

Next Generation Enterprise Reporting and Analytical Solution Project.

Bank has initiated RFP process for Building of Analytical Platform and Next Generation reporting Platform.

Analytics

The following Analytical models are developed and is in use for different business function :-

Model Name

Home Loan TakeOver

Home Loan Top-Up Model

MSME Pre - approved Letters

Third Party Non Life Insurance

Pre - approved PL to Salaried Customers

Pre - approved PL to Salaried and Non - salaried Customers

Third Party Mutual Fund

Customer Retention Model

CLTV - For Churn Customers

Personalized Personal Loan

Pre - closed TD model

Customer Churn Prediction Model

Home Loan

Vehicle Loan

MSME Limit Enhancement

Next Best Action/Product

CLTV - Customer Segmentation

MSME CCOD Renewal

MSME Term Loan Renewal

Credit Risk Gradation Model

Executive Dashboard

BOI pulse is an executive dashboard portal developed in house with enhanced features which shows figures related to Advance, Recovery, Finance, SMA, Deposits and E-platform in one place. It provides access to users through MMS id. It helps to visualise the different, but related information in a tabular and graphical format. It has capability to provide NBG, Zone and Branch wise figures. It includes KPIs of various sectors.

Other applications developed by In-house team

Following applications are developed by in-house bank team of MIS department for MSME Department.

• MSME Review Proposal

• SMECC lead Management

• Willful Defaulters

3. DIGITAL BANKING:

The Budget & Performance for various digital products or FY 2022-23 as under:

Product

As on 31.03.2023

Total Credit Card

77,668

Merchant Acquiring (POS Bharat QR BHIM Aadhaar)

42,700

UPI based QR

6,63,556

Mobile Banking

80,32,438

Internet Banking

84,63,850

UPI

1,55,79,280

Planned launch of products in FY 2023-24

• ICCW (Interoperable Cardless Cash Withdrawal) : Facilitate bank''s customers who are live on UPI, to withdraw cash from any participating banks'' ATMs without using their card

• Rupay Prepaid Card & Gift Card: Bank is in the process to launch Prepaid card & Gift Card in RuPay Scheme. RuPay Prepaid cards are proposed to provide flexibility to the card holders. The card will be contactless in nature, focusing on retail segment with various in-built features and offers.

• Regional Language implementation at ATM: Bank is implementing Regional Language option in ATM screen along with English & Hindi.

• MSME Credit Card: Bank is in process to launch MSME Credit Card in Rupay Scheme.

• Credit Card Onboarding through E-platform (STP of credit card): Bank is in the process of implementing Eplatform for online onboarding of various products of the bank. Credit card onboarding is also one of the products which will be onboarded through Branch and Web channel.

• Interoperable Card-based Cash Withdrawal at CRM: Facilitating cash withdrawal for customers of other bank at our CRM. Withdrawal Limits will be in line with regular ATM Cash Withdrawals.

• Credit Card linking in UPI.

• API Integration of ASBA IPO uploading process of stock Exchange with BSE

• Providing e-BG facility to customer.

• Providing platform to our loan accounts holder to create NACH/ECS mandate in his/her other bank account for collection of our EMI

Initiatives Implemented- FY 2022-23

• Digital Banking Units: Bank has opened two DBUs in East Singhbhum and Khurda to deliver the Digital Banking products & services as well as to spread awareness regarding Digital Banking. The purpose of DBU is to accelerate the delivery of financial products, besides improving access to finance for small businesses, Improve Digital Financial Literacy and increase Digital penetration.

• Trade Finance: To enable the Customers including Branches and department with an appropriate system/ solution which automates the end-to-end process of Trade Finance with adequate controls and to strengthen customer relationship, Bank has implemented a solution (Fusion Trade Innovation) with full front to back with inbuilt workflow management for carrying out Trade Finance business.

• BOI BIZ Pay: Bank has launched BOI BIZ Pay app, this app will help merchant to generate UPI QR code (Static / Dynamic) for payment acceptance and enables fast, simple & secure online payments using VPA and QR Code. This will provide Real-time credit to merchants, Complaint Management system (P2PM Merchants) and Dynamic MIS generation system.

• Go green Initiative: Bank has introduced Go green initiative aiming at less use of paper for day to day work/transactions on ATMs. Accordingly, poster was designed to be displayed on BOI ATM screens to encourage people not to print receipt for ATM transaction. Presently it has been deployed and being displayed on screens of all BOI ATMs.

• DCMS Migration- In order to improve the existing infrastructure, retaining card data at one place and to enhance customer experience we are in process of migrating Debit Card Management system to new vendor. This will provide real time Debit card services such as card issuance, replacement, hot listing, pin generation etc apart from PCI DSS compliance

• Integration of Loyalty Rewards in Mobile Banking-For transaction using BOI mobile, we have introduced reward points for our Customers to promote digitization and increase digital transaction volume of Bank.

• CRM Nxt - We have implemented new centralized portal for registering the complaints regarding failed/ unauthorised transations of various channels eg. ATM/PoS/UPI/IMPS. Branches can track the status of complaints using the portal and can reopen the complaints in case of non-satisfaction of customer.

• Dynamic UPI QR on POS : We have introduced generation of Dynamic QR on existing POS terminals, which can be scanned by the customers through any UPI App.

• VISA Bingo Debit Card: Bank has introduced Bingo Cards in VISA Scheme. Bingo Cards are exclusively for Students of the age between 15 and 25.

14. RISK MANAGEMENT:Risk and Control:

Bank has appropriate mechanism in place to ensure ongoing assessment of relevant risks on a Borrower Level as well as on a Portfolio level to maintain the trade-off between risks and returns. The Board of Directors of the Bank has an overall oversight of all risks in the Bank with specific Committees of the Board constituted to facilitate focused approach to specific risks. The Risk Management Committee of the Board (R.Com), is the subcommittee of the Board which is the apex body for Risk Management, supported by operational level committees of Top Executives for managing various risks, such as Asset Liability Management Committee (ALCO), CRMC (Credit Risk Management Committee), MRMC (Market Risk Management Committee) and CORM (Committee for Operational Risk Management).

Risk Management includes process of risk identification, measurement, monitoring, mitigation and reporting of all potential risks, in all activities and products in the Bank. These processes are well elaborated under respective policies viz. on Enterprise Wide Risk Management, Credit Risk Management, Operational Risk Management, Market Risk Management, Exposure (Bank Exposure & Large Exposure Framework), Asset Liability Management, Foreign Exchange and Dealing Room operations etc.

Bank''s Risk Management Framework is focused on full integration of risk management into its operations and culture. The integrated risk management framework starts with a risk

management cycle, consisting of several steps: determining the risk appetite, stress testing, scenario analysis, preparing full scope risk assessment of all segments. Risks are adequately identified, assessed, measured, reported and mitigated. Risk Management is one of the core focus areas of the Bank. The Bank is working to ensure that it adopts global best practices in all the risk areas. This commitment is being achieved by investing both in people and systems and building an enduring risk culture. Bank deploys various tools and techniques for achieving Risk Management objectives viz. Prudential and internal limits Monitoring, Basel Compliant Credit Rating Models, Active liquidity management, ERM Scorecards etc.

Credit Rating thresholds were based on the performance of the specific industry/sector. Bank uses different internal Credit Risk Assessment Models and scorecards for assessing borrowers credit worthiness. In current FY bank has done the rating model recalibration in view of the changing economic environment and evolving business models, to better capture the risk drivers and further strengthen the onboarding & underwriting standards.

In the normal course of business Banks experience various risks viz. Credit Risk, Market Risk, Operational Risk, Liquidity Risk and Interest Rate Risk.

Credit Risk is the possibility of loss resulting from a borrower''s failure to repay a loan or meet contractual obligations. Bank has adopted Standardized Approach (SA) for Credit Risk Computation.

Market risk is possibility of loss to the bank due to movement in market factors viz. Interest Rate, Foreign Exchange Rate, Equity Prices etc. Bank has adopted Standardized Duration Method (SDM) for Market Risk computation.

Operational Risk is defined as the risk of loss resulting from inadequate or failed internal process, people and systems or external events. Operational Risk includes legal risk, but excludes strategic and reputation risk. Bank calculates Operational Risk Weighted Assets through Basic Indicator Approach (BIA). Bank is in the readiness to adopt New standardized approach for computing Operational Risk Weighted Assets, as mentioned in the draft RBI Guidelines, effective 01st April, 2023.

The Bank monitors and manages operational risks vis-a-vis a comprehensive set of processes, systems of internal controls, and policies are also in place, to reduce the probability and potential impact of losses from Operational Risks.

Liquidity Risk is defined as the risk of incurring losses resulting from the inability to meet payment obligations in a timely manner. Such liquidity risk is known as funding liquidity risk. The liquidity risk arising due to inability to find buyer for assets at the market price is known as market liquidity risk. Bank monitors liquidity risk through various statutory liquidity ratios viz LCR , NSFR, Stock liquidity etc. Bank also conducts stress testing for liquidity risk and prepares the contingency funding plan to overcome the stress period, if any.

Interest Rate Risk can be defined as the risk of losses arising in the portfolio on account of adverse movement in general market interest rates. Bank performs stress testing on banking book as well trading book to ascertain the impact of adverse movement in the interest rate risk and operate within the Board defined limits in Risk Appetite.

The Bank undertakes Internal Capital Adequacy Assessment Process (ICAAP) on a yearly basis which contains

assessment / measurement of various risks (Pillar II Risk) along with the pillar I risk, the Risk Appetite of the Bank and appropriate level of internal capital required by the bank in relation to the Banks risk profile. Stress Testing Process is in place for enhancing risk assessment by providing the Bank a better understanding of the likely impact even in extreme unfavorable circumstances. The ICAAP is the process by which the bank ensures that it operates with an appropriate level of capital. It encompasses a large part of what could be considered a complete Enterprise Risk Management (ERM) framework. The ICAAP brings together risk and capital management activities in a form that can be used to support business decisions. Bank also identify the Pillar II risks relevant for the Bank, assess and measure them and suggest the mitigation plan while reporting to risk committee. In last one and half year the regulation around Climate Risk, Sustainable Finance and ESG has been evolving rapidly. Bank has already identified climate risk as an pillar II risk in ICAAP. Further, as the regulation and governance around climate risk has evolved, Bank''s Board has adopted ESG Policy (Environment, Social and Governance) for the Bank. ESG policy include the governance structure for taking the cause ahead and also set deliverables for the various departments in the Bank. The ESG policy outlines the Banks intent to move in the direction of net zero as per the country''s commitment and also enable to comply with all the regulatory requirement on ESG & related disclosures.

In addition, Bank has field level Risk Managers at all geographical centers (Zones, National Banking Group, Overseas Branches) to inculcate the risk culture at the field functionary level also.

Bank''s Information Risk Management System has clear objective to protect the bank from Information Security risks in the face of acceleration in cyber-attacks and cyber security threat, specifically to financial institutions. Information security department strengthens controls to protect the brand, reputation and assets of the Bank. Bank is vigilant of the security and privacy of the data related to its patrons and account holders and takes utmost care to protect it from cyber-attacks. Bank has put in place Captive Security Operation Centre (SOC). Bank has implemented information security tools for Real-Time monitoring of Information Security breach attempts / incidents / events on 24x7 basis in order to timely prevent, detect and respond. Advanced security tools like SIEM (Security Information and Event Management), PIM (Privilege Identity Management), DAM (Database Activity Monitoring), WAF (Web Application Firewall), NBAD (Network Behaviour Anomaly Detection), Anti-APT (Advance Persistence Threat) for Web & Email Channels and Anti-DDoS, Data DLP (Data Leakage Prevention) are some of the many security solutions are deployed. Various new security solutions focusing on threat hunting, prevention, detection and response are also put in place. The Bank is ISO 27001:2013 (ISMS) and ISO 22301:2012 (BCMS) certified. Effective brand protection services are put in place to protect Bank''s customers from Phishing attacks by way of fake sites. Risk and vulnerability assessment exercises are regularly carried out for all systems with timely remedial activities. Security awareness campaigns, especially with respect to social engineering, are conducted across the Bank encompassing staff as well as customers through various channels of learning and communication.

15. THIRD PARTY PRODUCTS DIVISION:

Bank of India acts as Corporate Agents for Two Life Insurance companies, Three General Insurance Companies and Three Standalone Health Insurance companies.

Bank has adopted Execution model for distribution of Mutual Fund products. In the Mutual Funds business, which is an open architecture the Bank can enter into multiple tie-up arrangements. Our Bank had also entered tie-up agreement with various Asset Management Companies to distribute Mutual Fund products.

While offering the products and services of Bancassurance & Mutual Fund AMCs, the Bank adheres to the relevant guidelines of RBI / IRDAI / AMFI /SEBI or any other regulator which is binding upon it.

The Existing Tie up of the Bank with various Insurance companies under each category as well as with Mutual Fund AMC are as follows:

Existing Tie-ups:-

Sr.

No

Products

Tie-up Partner

1

Life

1)

Star Union Dai-ichi Life Insurance

Insurance

Company Ltd.

2)

LIC of India

2

General

1)

Reliance General Insurance Co.

Insurance

Ltd.

2)

Bajaj Allianz General Insurance Co.Ltd.

3)

Future Generali India Insurance Co.Ltd.

2

Health

1)

Star Health & Allied Insurance

Insurance

Co. Ltd.

2)

Care Health Insurance Co. Ltd.

3)

Niva Bupa Insurance Co. Ltd.

4

Mutual

Name of AMCs

Funds

1)

Bank of India Investment Managers Pvt Ltd.

2)

UTI Asset Management Co. Pvt. Ltd.

3)

HDFC Asset Management Co. Ltd.

4)

Kotak Mahindra Asset Management Co. Ltd.

5)

Franklin Templeton Asset Mgmt. Pvt. Ltd.

6)

Bandhan Mutual Fund (Formerly IDFC Asset Management Co. Pvt. Ltd.)

7)

DSP Mutual Fund (Formerly DSP BlackRock Investment Managers Ltd.)

8)

Aditya Birla Sun Life Mutual Fund (Formerly Birla Sun Life Asset Management Co. Ltd.)

9)

Nippon India Mutual Fund (Formerly Reliance Mutual Fund).

10)

SBI Funds Management Private Limited

Bank has earned Commission for the FY 22-23 from each of the segment as follows:

(Amt. in Crs).

TPP Segment

Commission

Income

Life Insurance

140.36

General Insurance

21.75

Health Insurance

11.99

Mutual Fund

4.14

TOTAL

178.24

16. MARKETING & PUBLICITY:

Bank of India, implements various Publicity & Public Relations strategies for the Bank which helps to improve its visibility, spread brand awareness amongst general public, customers & all its stake holders. These overall marketing strategies, advertising & publicity activities are intended to create impact on general public and customers for sustained brand recall to translate the same into business growth. Bank has also adopted social media & digital marketing strategies to reach out larger population. Publicity & PR activities are implemented across all geographies with an objective to cater all sections of the society by bringing out various advertisements and communications through various media available viz. hoarding, electronic, digital, print etc. Bank in its Publicity & PR Strategies intend to highlight its Unique Selling Proposition (USP) for continued business growth. Marketing, publicity, advertising & public relations help the bank for sustained brand recall amongst population and the same is considered as an investment in the brand building.

17. BUSINESS PROCESS RE-ENGINEERING (BPR)

Bank''s BPR Department is in-charge of bringing about any changes in the organizational structure and has the prime responsibility of creation of zones and NBGs. This also convenes meeting for Executive level oversight on new products, processes and changes proposed in existing systems. BPR is the chief coordinator for change management between the various functional departments. The major initiatives taken during 2022-23 are given below:

Project works/initiatives during FY 22-23:• Creation of One NBGs and One New Zone: A new

NBG, NBG-Odisha and a zone Surat have been created according to study conducted on potential business opportunities. These will also assist top management with ease of monitoring and will help better customer service.

• Review of Area Manager Office (AMO) Structure:

Along with the reorganization of zones, BPR has rationalized the present 21 AMOs offices to 20. This has made the AMOs better focused on customer acquisition and render faster service.

• Product and Process Re-engineering in the Bank:

The products of the Bank have been organized to be system friendly and many new digital products introduced to capture large market with contactless internet based banking. This will help the Bank keep

up with the recent trend of banking transformation and will increase customer engagement and delight in contactless banking at the ease of the individual opting for our Bank''s services.

• Rationalization of Service Charges: Service charges have been rationalized in order to make it customer friendly, uniform, automated and remain competitive as per industry trend.

• Star Paramarsh - Staff Suggestion Scheme from the field functionaries: We have included the scheme in product group discussion so that top management will have firsthand knowledge regarding feasible and revolutionary ideas & suggestions of staff which will improve operational efficiency & service effectiveness. Out of 707 suggestions received during the year, 46 have been selected for implementation and Prizes have been awarded to 3 staff members.

• Improve our Ease Ranking by targeting composite score of over 75% and be amongst the top five banks in the PSB space, by working in close co ordination with cross functional teams from Business Verticals, Risk Management, Credit Monitoring, Recovery, Compliance and HR Departments.

18. LEGAL & RIGHT TO INFORMATION ACT:

Bank''s Legal department attends to various matters of Opinion, Documentation, Litigation etc. emanating from various other functional departments at Head Office.

Besides attending to referral matters of various NBGs/ Zones, Domestic Branches/Foreign Branches and Bank''s subsidiaries, the Department also caters to the specific needs of specialized Departments of the Bank by Drafting / Vetting of documents of various contracts/ Service Level Agreements (SLAs), Software/Hardware procurement, various types of tie-up arrangements /new products etc.

The Right to Information Act has taken a pivotal role in the Society and lot many applications are received by the Bank at various levels. Bank has identified Central Public Information Officer and Appellate Authority at various Zones / NBGs. Deputy General Manager (Law) of Legal Department, Head Office is designated as the CPIO of the Bank, and the General Manager, Legal Department is the Appellate Authority. The procedure for disposing of application or appeals involves collecting the desired information from various Departments and supplying the same to the applicant within the fixed time duration of 30 days and also to guide the other Zones / NBG on specific points.

Moreover, with a view to create awareness among the staff, Legal Department issues circulars and guidance to NBGs/ Zones on the amendments on Statutes and New Legislations.

In addition to the above, the Legal Department also attends to:

• Approval of Plaints in respect of suits filed by Bank and Monitoring of said cases.

• Advising on writs, cases, appeals, claims etc. filed against the Bank, vetting of the applications/affidavits etc. wherever required.

• Attending to the various queries of Ministry, Reserve

Bank of India and IBA on different matters including new Legislation/amendments under consideration on various Acts.

• Opinion on Share transmission matters of Share Dept.

• Cases against Bank/ Claim against Bank not acknowledged as debt/provision requirement/ follow up with Zones etc.

• Consolidation of Lok Adalat data received from NBGs/ Zones

• Collection and compilation of data/statistics pertaining to suit filed/ decreed cases/Lok Adalat and submission to various authorities like Reserve Bank of India, MOF etc. RBS data.

19. COMPLIANCE:

Bank has an independent Compliance Department which is headed by an officer of the rank of Chief General Manager who is for regulatory purposes also referred to as Chief Compliance Officer. The core function of the department is to ensure compliance of statutory, regulatory and Bank''s internal guidelines for both domestic as well as overseas operations. The department is the single point of contact for RBI and ensures smooth conduct of Risk Based Supervision (RBS) as per prevalent SPARC framework.

Bank has a Board approved Compliance Function Policy which is framed as per Reserve Bank of India guidelines and is reviewed & updated annually. The policy gives credence to the following components: i) Governance ii) Compliance Risk Assessment iii) Policies, Procedure and related controls iv) Compliance Monitoring and Testing v) Reporting and Communication vi) Training and use of technology to improve compliance and vii) Regulatory interaction and Coordination.

Having the right tools, to deal with uncertainty and manage risks, both known and unknown, can help improve strategy, improve performance, offer greater insights for decision making, and assure effectiveness over time. Therefore, Compliance Department has adopted technology in compliance function to improve transparency, efficacy, oversight and effectiveness. The Department is also conducting periodic testing exercise to conform adherence and sustenance of RBI guidelines/instructions.

The Compliance Department is also overseeing compliance function of overseas establishments who follow their respective territory based compliance policies as well as KYC-AML-CFT Policies. Each overseas centre/ branch/ subsidiary has a compliance officer to look after the respective compliance function. Overseas branches comply with the applicable regulatory requirements (home country /host country regulatory guidelines whichever is stringent) and submit confirmations / compliance sustainability reports. The compliance officer of each overseas branch undertakes quarterly compliance testing and submits report to Head Office.

20. OFFICIAL LANGUAGE:

The Bank has a well established Official Language Department which ensures the implementation of the provisions relating to the Official Language Policy of the Government of India and the progressive use of Hindi. Our Bank has been awarded Rajbhasha Kirti Puraskar (Third) by the Government of India for excellent implementation of the Official Language Policy during the period under review. For the planned implementation of the official language policy of the government, our bank has issued an annual action plan as per the annual programme of the Government of India. Keeping in view the historic achievement of our country on getting the presidency of G-20, an All India Essay Competition was organized on the occasion of World Hindi Day. On this occasion, a Sulekh Pratiyogita was organized by our New York branch. Keeping in view the Azadi ka Amrit Mahotsav, a booklet was prepared on the biography of 75 freedom fighters. For the dissemination of information related to official language, Rajbhasha webpage on the bank''s website was inaugurated by our Executive Director. In order to encourage the use of official language, several reference literature have also been prepared by the zones. Seminars and training programmes have been organized by the Zones and the Head Office on various subjects. Our Zones/TOLIC have received 15 regional level awards from the Government of India. In addition to it, 30 zones and branches have received awards from TOLIC during the year. This year, the Bank has organized a total of 210 Official Language Workshops in which 6866 staff members have been trained. Hindi e-mail competition for the departments of Head Office has been conducted on quarterly basis throughout the year. Hindi Month has been celebrated in the Bank from 14th September to 14th October, 2022. “Rajbhasha Shield Pratiyogita” was organized for the departments of the head office and zones. Every week, articles in hindi language pertaining to well-known personalities are sent by the department to all the offices/branches. The Bank is successfully performing the responsibility of convenorship of 12 TOLIC as entrusted by the Government. Our 04 offices/branches were inspected by the Committee of Parliament on Official Language during the year which was conducted smoothly. Hindi magazine “BOI Varta” is being published by the bank to encourage more work in official language.

21. HUMAN RESOURCES, LEARNING AND DEVELOPMENT: HUMAN RESOURCES:

During FY 2022-23, our Bank recruited 774 Staff Officers in General Banking and Specialist cadre in various scales and 2,017 in Clerical cadre. During FY23-24, the Bank has a plan to recruit 540 Staff Officers and 557 clerical staff.

• In the post pandemic scenario, necessity for innovation seems to be the key to achieve organisational objectives. Through and post- covid, we have maintained our efforts to adapt and respond to the requirements for delivering financial products to our customers and maintaining business continuity through various HR initiatives.

• Decision making in HR is aimed to be more data-driven to reduce the likelihood of failure and bias. Bank aims to achieve consistency through building capability and continuous learning and development.

• The various HR initiatives undertaken by the Bank include:

0 Posh Policy

0 Succession Planning in critical roles;

0 Performance Management System;

0 Talent Management;

0 Leadership Development;

0 Employee Engagement Survey (Star Anveshan)

and

0 Equal Opportunity Policy

• Bank has put in place a system driven mechanism for achieving an objective assessment of employee performance to enable course correction feedback and action thereof. In the FY 2022-23, the Performance Management System (PMS) in our Bank was based on Budgetary Appraisal with more than 70% marks allotted for Business dimensions which are autopopulated and Non-Budgetary Appraisal carrying 50% weightage for measurable KRAs. In the Budgetary Appraisal, target / budget figures are being captured from the FINACLE and compared with budgetary targets vis-a-vis the actual performance since FY 2019-20, Bank''s current endeavour is to increase the degree of measurability of the Non-budgetary parameters of Appraisal as well.

• In the area of Succession Planning, endeavour is being made to bridge systematically the gaps of skill shortage in the critical areas (Corporate Credit, Credit Monitoring, Recovery, Treasury, Risk Management, International Division, Information Technology, ITES and HRD) and also in the emerging new areas such as Infrastructure Financing and Financial Inclusion, through mapping of competencies vis-a-vis the critical roles identified.

• In Talent Management sphere, a focussed Talent Review & Development Process is being undertaken to ensure that the current incumbents and potential employees in these roles will be suitably trained and groomed to assume these roles in time.

• We have an integrated on-boarding process to enable greater integration of new recruits in the Bank. The training system is being redesigned to make it operation- oriented, creating a talent pool in critical areas of banking, to bridge competency gaps, role related training for executives and making training more meaningful in terms of prescribing credits for each of the training attended.

• Towards paperless HR and to provide hassle free services to the staff members, the following digitisation initiatives have been implemented:

0 Online acceptance of Gratuity nominations,

0 Application for PF/Gratuity/REMAS on VRS/ Resignation

0 Streamlining the Life certificate updation

0 Online Pension application and processing the same

0 Sending Form-16 through the system/email

0 Streamlining of DCPS updations

0 Investment Dashboard for the Management 0 Complaint handling

0 Implementation of DMS

0 Minimising the paper movements

0 Employee Grievance (including complaints under Prevention of Sexual Harassment Act) Redressal System

0 Whistle Blower Policy

0 HR Audit (Star Pratibimbh)

0 Reimbursement of Mobile Handsets through

HRMS

0 POSH Complaints on BOI-She Box

0 Online GMIS for Retiree Staff

• During FY 2022-23, 11 cases under POSH Act (Prevention of Sexual Harassment of Women at Work Place) were reported, which were actively resolved by the respective Internal Committees (ICs) of the Zones/ Head Office. The Bank has also formulated Board Approved Policy on POSH (Bank of India Prevention of Sexual Harassment of Women at Work Place Policy) to proactively work towards betterment of Women employees. Regular Workshops/ Awareness sessions are being conducted for all employees of the Bank in a phased manner.

• Job Family concept has been implemented to create job specialization and to facilitate exposure in different areas of banking operations and develop competencies.

• Since the last two years, Officers who are interested and are having flair of working in specialized areas like Credit, Risk Management, Treasury etc., are being identified through ‘Star Hunt'' scheme. Under the Star Hunt, interested Officers have to apply for the above verticals and their selection is based on written examination and interview. After selection, such officers are trained in the vertical they are selected for and are posted in identified fields.

• Development Centre is being carried out for Officers in Scale IV, V and VI to assess the identified competencies. Total approx. 1900 Officers are being identified for assessment and assessment of competencies has been completed for about 1600 officers. The level of individual competencies identified are entered in the Personal Data of the employees and may be used as one of the inputs for succession planning. Upon assessment of competencies, development through training shall be undertaken to improve identified competencies of the individual officers. Leadership Development programmes have been undertaken for Officers belonging to Scale V and above at ASCAI (Administrative Staff College of India), Hyderabad and IMI (International Management Institute), New Delhi.

• For the officers working in specialized areas like Credit, Foreign Exchange, Risk Management, Compliance etc., customized training programmes have been formulated in collaboration with external training institutes like CRISIL, IIBF, CAB Manipal Institute etc.

• To promote self-learning many courses from identified institutes as well as under MOOCS were included in the Bank''s Capacity Building and Reimbursement of

fee schemes where the fee for the completion of the course will be reimbursed to the officers along with some cash incentive.

• Bank aims to ensure seamless implementation of various HR initiatives launched by the Bank like Employee Engagement Survey, Job Family, Succession Planning & Talent Management Process and any other Government directive envisaged in PSB Reforms Agenda for Enhanced Access & Service Excellence (EASE). Presently our Bank stands at 7th Position in the EASE ranking for Q3 from 10th position in Q2.

• Bank has implemented ‘Bank of India Code of Ethics & Conflict of Interest Policy'' towards ensuring an organization based on ethics and moral values and a work environment free of any kind of bias/ discrimination, including zero tolerance to any kind of sexual harassment across the organization.

• Our Bank has concluded employee engagement survey on the theme "Employee Development and Wellness'' and shall shortly implement the focus areas brought out in the same. Necessary upgradation of existing skills through extensive training & development initiatives shall continue in order to have manpower with necessary competencies and skill sets at all levels.

• Talent induction model of the Bank to attract talent as well as to ensure sustained growth in qualitative head count in line with business growth and consistent replacement / replenishment of talent.

• E- learning has aided in educating and updating amidst the covid pandemic situation. It is being accordingly developed and updated through appropriate modules. Weightage is given in Performance Appraisal on completion of identified E-learning modules. We aim to promote and monitor progress of E-learning systems and link the same to Performance Appraisal and Promotion process.

• We are committed to strict compliance and implementation of Equal Opportunity Policy in our bank towards eliminating all forms of discrimination and ensure that the persons with disabilities enjoy equality, dignity and are empowered and better equipped to perform at par with others.

• Star Pratibimbh (HR Evaluation) was introduced in Jan.2023 for evaluation of HR Department''s performance PAN India. Star Pratibimb is a positive step for introspection and self-correction for creating better work ambience and modifications in the HR landscape

• As a part of the green initiative under ESG Policy of the Bank, Bank has decided to present dignitaries/ executives with oxygen plants in place of flower bouquets.

Compliance with Reservation Policy for representation

of SC/ST/OBC/EWS/PwD/Ex-SM:

The Bank is strictly complying with the reservation policy of

Government of India. Separate cell for SC/ST and OBC has

been set up at Head Office as well as in all Zonal Offices which takes exclusive care in implementing the reservation policy and redressal of grievances related to SC/ST/OBC Employees.

Separate Executives in the rank of General Manager are appointed as Chief Liaison officers for SC/PwD/ExSM, ST and OBC respectively. Similarly Officers from SC/ST/OBC categories are designated as Cell/Liaison officers at Zonal office.

EWS reservation in Direct Recruitment was implemented in the Bank since 01st February 2019.

Quarterly meetings

Bank conducts Quarterly meetings regularly with the representatives of All India Bank of India SC/ST/OBC Employees'' Welfare Association at Head office. Also such meetings are conducted quarterly at all our zonal offices.

Trainings

Bank has conducted pre-promotion training programmes for SC/ST/OBC employees. Bank also nominates SC/ST/OBC employees for outside trainings.

Rosters

Post based Roster registers are prepared on yearly basis for maintenance of the appointments made through Direct Recruitment for all groups of posts i.e. Group A to Group D. In case of promotion, separate roster Registers are maintained up to SCALE-III. Roster registers are prepared as per the format prescribed by Department of Financial Services. Representation of SC/ST/OBC/EWS staff as on 31.03.2023:

Cadre

SC

% to total staff

ST

% to total staff

OBC

% to total staff

EWS

% to total staff

Total

OFFICER

4764

17.97%

2440

9.20%

7782

29.35%

254

0.96%

26510

CLERK

2950

14.93%

2308

11.68%

5419

27.42%

546

2.76%

19764

SUBSTAFF

2007

33.82%

701

11.81%

1638

27.60%

-

-

5935

TOTAL

9721

18.62%

5449

10.44%

14839

28.42%

800

1.53%

52209

Learning and Development:

All training related activities including capacity building, in house talent development and imparting of class room trainings are being taken care of by the Learning and Development Department. Bank has adopted Hybrid mode of training to train its employees. Bank''s 7 training colleges have imparted training to 38,600 employees during the financial year using Hybrid mode. Bank has been using E-Learning modules for enhancing the competencies of employees and to equip the staff with right skills and knowledge for meeting ever changing business dynamics across different segments. 18,000 officers have done various e learning modules. To enhance the capabilities of employees, bank has made several collaborations with Training Institutes viz. Manipal Global, IMI New Delhi, ASCI Hyderabad, CAB Pune, IIBF, NIBM Pune etc. As per CVC guidelines, uniform Induction Training Programme of Newly Recruited Officers and also programme on preventive vigilance for newly joined officers and mid-career officers have been adopted by the Bank. Induction training for all the 625 newly recruited officers has been undertaken and completed by training colleges.

Development Centre has been conducted for 1900 officers of scale IV and above and individual Development Plans have been prepared. Weekly webinars are conducted on various banking topics by training colleges in the evening hours of every Friday. All training colleges are collectively bringing out monthly magazine, Darpan. Other publications like Sandipani and Vijeta by training colleges are instrumental in the skill upgradation of employees

22. CUSTOMER EXCELLENCE BRANCH BANKING:

The Bank has empowered the Customer Service Committee of the Board, which is an apex level Board Committee, empowered to evaluate the Customer Service in our Bank.

The Bank has a Standing Committee on Customer Service, which acts as the bridge between the various department of the Bank and the Customer Service Committee of the Board.

The Bank has adopted CRM Next module as per the regulatory requirement for integration of multiple channels of complaints registration on a single common digital platform, for effective monitoring and timely review.

Bank''s various Policies such as Customer Rights Policy and Customer Grievance Redressal Policy are in place as per the regulatory requirements and same are reviewed from time to time to incorporate the changes as per the directions/ guidelines of the regulatory authorities. All these policies are placed on public domain. We have appointed Internal Ombudsman as per the RBI guidelines to review the wholly/ partly rejected complaints and give decision.

The Bank has a full-fledged Call Centre located at two centre viz. Airoli (Navi Mumbai) and Begumpet (Hyderabad) providing 24X7 assistance to the customer/ non-customers.

Bank is committed to provide Customer Service of a high order in a transparent manner. Bank undertakes customer meetings on a regular basis to get the feedback of customers so as to enable the Bank to take appropriate decision on different banking products offered by the Bank.

23. BRANCH NETWORK & EXPANSION:

Bank has a geographically well spread branch network in India and aboard. Bank had 5129 branches in India as on 31.03.2023. In the foreign countries 21 branches, 4 Subsidiaries, 1 Joint Venture and 1 representative offices keep Bank''s presence felt in all times Zones and important financial centers of the globe. During the year 2022-23, Bank has opened 29 new branch. Composition of Bank''s Branch Network is as under:

Category

31.03.2022

31.03.2023

No of Branches

% to total

No of Branches

% to total

Metropolitan

991

19.41

991

19.32

Urban

815

15.97

829

16.16

Semi-Urban

1462

28.64

1456

28.39

Rural

1837

35.98

1853

36.13

Total Domestic Branches

5105

100

5129

100

Overseas

22

-

21

-

Total Branches

5127

-

5150

-

24. DOMESTIC SUBSIDIARY MANAGEMENT DIVISION:BANK’S DOMESTIC SUBSIDIARY/ASSOCIATES/JOINT VENTURES:BOI SHAREHOLDING LIMITED (BOISL):

Bank has investment of Rs.6.65 crore in BOISL, a wholly owned subsidiary of the Bank. BOISL acts as Depository Participant (DP) of both the Depositories, National Securities Depository Ltd. (NSDL) and the Central Depository Services (India) Ltd. (CDSL).

BANK OF INDIA INVESTMENT MANAGERS PVT. LTD. (BOIIMPL) & BANK OF INDIA TRUSTEE SERVICES PVT. LTD. (BOITSPL):

(Erstwhile BOI Star Investment Managers Pvt. Ltd. & BOI Star Trustee Services Pvt. Ltd).

These wholly owned subsidiaries are in the business of Mutual Fund and Investment Advisory Services under SEBI Investment Advisor Regulations. Bank of India is holding 100% Stake in BOIIMPL and BOITSPL with combined investments of Rs.78.90 crore.

BOI MERCHANT BANKERS LIMITED (BOIMBL):

BOI Merchant Bankers Limited was promoted on 31.10.2014 to undertake merchant banking business including arranging of Syndicated Loans, Bonds and Debentures. It is a wholly owned subsidiary of the Bank with paid up capital of Rs.10 crore.

STCI FINANCE LIMITED:

Established in 1994, STCI Finance Ltd., acts as a non-deposit taking NBFC. Bank of India with 29.96% holding (Investment of Rs. 130.10 Cr.) is the largest stakeholder in STCI with Equity Share capital of Rs 380 Crore. STCI Primary Dealer Ltd. (STCIPD) is a wholly owned subsidiary of STCI Finance Limited. STCIPD commenced its operations from 25.06.2007 and is one of the leading primary dealers in the country.

STAR UNION DAI-ICHI LIFE INSURANCE COMPANY LTD. (SUDLIFE):

Bank of India, Union Bank of India and Dai-Ichi Life International Holdings, Japan have formed a Joint Venture “Star Union Dai-Ichi Life Insurance Company” to provide life insurance services to its clients. The company commenced insurance business in February 2009. BOI holds 28.96% (Investment of Rs.132.92 crore), UBI holds 25.10%, and Dai-Ichi Life International Holdings holds 45.94% stake of the Company.

ASREC (INDIA) LTD. was floated by the Specified Undertaking of the Unit Trust of India (SUUTI) to undertake securitization and asset reconstruction activities. Bank holds 26.02% stake (Investment of Rs.27.60 Cr.), in the equity capital of the company of Rs. 98 crore.

INVESTMENT / ALLIANCES:NATIONAL ASSET RECONSTRUCTION COMPANY LIMITED (NARCL):

IBA has set up of Bad Bank to resolve the NPA issue in Banking Sector. Bank has invested Rs 126.81 Crore in the company with 9% holding.

INDIA DEBT RESOLUTION COMPANY LIMITED (IDRCL):

IBA has also set up of IDRCL to provide debt management service to NARCL comprising of sectorial experts and

turnaround specialists. Bank has invested Rs 0.80 Crore in the company with 4% holding.

OPEN NETWORK FOR DIGITAL COMMERCE (ONDC):

ONDC was incorporated as a Section 8 company in December 2021, with first-of-its-kind initiative globally to pave the way for reimagining digital commerce in India and establishing a globally replicable model for digital commerce. Bank has invested Rs 10.00 Crore in the company with 5.56% holding.

NATIONAL COMMODITIES MANAGEMENT SERVICES LIMITED (NCML) is promoted by the National Commodity and Derivatives Exchange Ltd. (NCDEX). It was incorporated on 28.09.2004 to promote and provide collateral management services for securing, managing and controlling securities and commodities. Bank holds stake of 2.34% in the equity capital of the company with investment of Rs.3 crore.

SWIFT INDIA DOMESTIC SERVICES PRIVATE LIMITED is

a joint venture company promoted by SWIFT and 9 major Banks including Bank of India. SWIFT is holding 55 % equity and remaining 45% is held by 9 major Banks. Bank of India has an equity stake of 3.26% in the company with Rs.7.71 crore Investment.

ACUITE RATINGS & RESEARCH LIMITED was set up

during FY 2005-06 by SIDBI in association with Dun & Bradstreet, one of the leading providers of commercial data and analytics. The Company''s objective is to provide comprehensive, transparent and reliable ratings which would facilitate greater and easy flow of credit to SME sector. Bank holds a stake of 1.88% in the equity capital with investment of Rs.0.28 crore.

OTHER STRATEGIC INVESTMENTS:

Bank also has strategic investments in SIDBI (Rs.45.30 crore), Metropolitan Stock Exchange of India Ltd. (Rs.27.50 crore), NPCI (Rs.10 crore), Invent Assets Securitization and Reconstruction Pvt. Ltd. (Rs.10 crore), SBIDFHI (Rs.5.54 crore), CERSAI (Rs.2.16 crore), Agricultural Finance Corporation Ltd. (Rs.1.26 crore), Central Ware Housing Corporation Ltd. (Rs.1.11 crore), PSB Alliance Pvt. Ltd. (Rs. 2.14 crore), CSC e-Governance Services India Ltd. (Rs.1.00 crore), Clearing Corporation of India (Rs.0.50 crore), U.V. Asset Reconstruction Co. Ltd. (Rs.0.15 crore).

25. FRAUD RISK MANAGEMENT

Good corporate governance serves as an important factor in control of fraudulent activities. It may be true that Fraud itself cannot be eliminated but fraud risks can be managed and mitigated like other business risks with a proactive framework such as -

• Devising and managing Fraud Risk Management Framework with board approved Policy supported by Operational Manual & SOPs,

• Reporting Frauds to Regulators and Board,

• Diagnosis and root cause analysis of fraud cases and implementation of remedial measures and steps to mitigate risks thereof in respect of product deficiencies with support from stake-holders departments at HO,

• Dissemination of modus operandi & reasons for occurrence of fraud by way of Circulars / instructions to avoid the risk of recurrence of frauds of similar nature, at branches,

• Sensitizing staff through short alert messages through tickers / periodical messages through MMS and training / Video Conferencing on Fraud prevention in coordination with Learning & Development Dept,

• Enterprise wide Fraud Risk Management Solution (EFRMS) encompassing all non-credit delivery channels except cards has been implemented covering domestic branches and specific overseas centre.

• Working on ‘Indian Cyber Crime Coordination Centre (I4C) portal managed by LEAs to provide required data in coordination with Digital Banking Department and Freezing of the accounts for blocking further damage to customers,

• Filing of Complaints with Law Enforcement Agencies (LEAs) by branches/ controlling offices.

• Issuance of LOCs as per extent guidelines of IBA (Indian Banks'' Association) basing on direction from MHA (Ministry of Home Affairs).

Highlight during the year:

• Perpetration of frauds reported during the FY 202223 is Rs.582.59 Cr which shows significant reduction on comparing with frauds reported in FY 2021-22 amounting to Rs.5793.22 Cr.

• Internal frauds due to staff involvement was amounting to Rs.2.81 Cr in FY 2022-23 which is only 0.48% of total frauds reported Rs.582.59 Cr and also shows considerable reduction by 21.72% from the frauds reported last year. This reflects improvement in internal control.

26. VIGILANCE MANAGEMENT:

Vigilance department is headed by Chief Vigilance Officer for vigilance administration in the Bank under the general superintendence of Central Vigilance Commission (CVC). The vigilance department covers all vigilance related matters of bank''s officials in domestic operation, overseas operations, and subsidiaries.

The vigilance administration of three Regional Rural banks sponsored by Bank of India, viz. Vidharbha-Konkan Gramin Bank, Aryavart Bank and Madhya Pradesh Gramin Bank are also supervised by Vigilance Department.

The Vigilance Department works under Chief vigilance Officer assisted by one Deputy General Manager and other officials having background/experience in the field of investigation and disciplinary matters. For operational convenience, Vigilance Department has operationalized 13 Vigilance Units under the direct control of Vigilance Department, Head Office, which covers all the National Banking Groups. Concurrent Auditors, working at overseas centres, perform the role of Vigilance Officer for overseas branches.

The Vigilance department deals with all 3 functions of vigilance administration such as, Preventive, Detective and Punitive vigilance with the objective of enhancing the level of managerial efficiency and effectiveness in the organisation. Communications covering gist of circulars, guidelines, and instructions etc., issued by the DFS, DoPT, CVC are circulated to field functionaries/offices from time to time along with other related subjects of preventive vigilance”.

27. DIVIDEND DISTRIBUTION POLICY

In terms of Regulation 43A of SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015, Bank has formed a Dividend Distribution Policy and the same is available on our website - https://bankofindia.co.in/ documents/20121/0/DDP.pdf/ba6223a7-2777-012c-3ca7-f27b7f718d9a?t=1663666944772

28. BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORTING-2022-23

In terms of Regulation 34 (2)(f) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Business Responsibility and Sustainability Report is available on our website - www. bankofindia.co.in.

29. BASEL-III (PILLAR 3) DISCLOSURE (CONSOLIDATED) MARCH 2023

In terms of RBI Circular RBI/2022-23/12 DOR.CAP. REC.3/21.06.201/2022-23 dated April 1, 2022 on Basel III Capital Regulations read together with RBI Circular DBR. No.BP. BC.80/21.06.201/2014-15 dated March 31, 2015 on Prudential Guidelines on Capital adequacy and Liquidity Standard - Amendments, requires Banks to make applicable Pillar 3 disclosures including Leverage Ratio and Liquidity Coverage Ratio under the Basel III framework. These disclosures are available on Bank''s website at the link -https://bankofindia.co.in/regulatory-disclosure-section.

30. STRATEGY FOR IND-AS IMPLEMENTATION AND ITS PROGRESS:

RBI vide its circular DBR.BP.BC.No.29/21.07.001/2018-19 dated March 22, 2019 deferred implementation of Ind AS till further notice as the legislative amendments in Banking Regulation Act, 1949 as recommended by RBI are under consideration of the Government of India. However, RBI requires all banks to submit Proforma Ind AS financial statements every half year. Accordingly, the Bank has been preparing and submitting to RBI Proforma Ind AS Financial Statements (PFS) half yearly with effect from September-2021, after approval of Steering Committee formed for monitoring of implementation of Ind AS in the Bank. The PFS are also presented to Audit Committee of Board and Board for information and reporting.

ACKNOWLEDGEMENT:

The Board expresses its gratitude to the Government of India, Reserve Bank of India and Securities and Exchange Board of India and other regulatory authorities for their valuable guidance and support. The Board also thanks the financial Institutions and correspondent banks for their co-operation and support. The Board acknowledges the unstinted support of its customers, business associates and shareholders. The Board also wishes to place on record its appreciation of staff members for their dedicated service and contribution for the overall performance of the Bank.

For and on behalf of the Board of Directors

Sd/-

Place : Mumbai Rajneesh Karnatak

Date : 06.05.2023 MD & CEO

1

Bank has launched E-Platform for digitized processing of MSME loans upto Rs.10 lakhs.


Mar 31, 2022

The Board of Directors have pleasure in presenting the Bank''s Annual Report along with the audited statement of accounts and the cash flow statement for the year ended 31st March 2022.

PERFORMANCE:Domestic Business:

> Overall Domestic Business of the Bank increased by 3.43% and reached at Rs.944,824 crore as on 31.03.2022 from Rs. 913,496 crore as on 31.03.2021.

> CASA deposits increased by 9.26% on YOY and stood at Rs. 245,464 crore. Share of low cost deposits (CASA), in domestic deposits stood at 45.02% as on 31.03.2022. Saving Bank deposit has registered a growth of 9.74% and reached at Rs. 215,638 crore as on 31.03.2022. Where as Current deposit registered a growth of 5.89% and reached at Rs. 29,826 crore as on 31.03.2022.

> Due to deliberate strategy of shedding of Bulk Deposits, there was negative growth in total deposits. Total deposits stood at Rs. 550,833 crore as on 31.03.2022 from Rs. 551,135 crore as on 31.03.2021.

> Gross Domestic Advances registered growth of 8.73% YoY, reached at Rs. 393,991 crore as on 31.03.2022 from Rs. 362,361 crore as on 31.03.2021.

> Share of RAM Advances to Total advances is 54.97% (i.e. Rs. 216,567 crore) as on 31.03.2022 as compared to 51.60% (i.e. Rs. 187181 crore) as on 31.03.2021.

> Priority Sector lending constituted 41.55% of Adjusted Net Bank Credit and the share of Agricultural Credit to Adjusted Net Bank Credit was 18.00%.

> Retail Credit grew by 18.54% from Rs 68,058 crore as on

31.03.2021 to Rs 80,674 crore as on 31.03.2022. The share of Retail Credit to Total Domestic Credit was 20.48% as on

31.03.2022.

> MSME Credit grew by 9.52% from Rs 63,425 crore as on

31.03.2021 to Rs 69,462 crore as on 31.03.2022. The share of MSME Credit to Total Domestic Credit was 17.63% as on

31.03.2022.

Overseas Business:

> Overseas business has increased by 12.92% and stood at Rs. 140,086 crore as on 31.03.2022 as compared to Rs. 124,053 crore as on 31.03.2021.

> Total Foreign Deposit registered a growth of 1.43%, reached at Rs.77, 063 crore as on 31.03.2022 from Rs. 75,978 crore as on 31.03.2021.

> The Overseas CD Ratio stood at 81.78% as on 31.03.2022. Global Business:

> Gross Business of the Bank registered a growth of 4.56%, reached at Rs. 1,084,910 crore as on 31.03.2022 from Rs.1,037,549 crore as on 31.03.2021.

S REPORT

> Total deposits increased to Rs.627,896 crore as on

31.03.2022 from Rs. 627,114 crore as on 31.03.2021.

> Gross Advances registered a growth of 11.35% , reached at Rs. 457,014 crore as on 31.03.2022.

> The Global CD Ratio stood at 72.78% as on 31.03.2022.

Financial Parameters:

> Operating Profit stood at Rs.9,988 crore as on 31.03.2022 as against Rs. 10,273 crore as on 31.03.2021.

> Non-Interest Income increased to Rs.7,879 crore in FY''22 from Rs.6,842 crore as on 31.03.2021.

> The Bank registered Net profit of Rs.3,405 crore in FY''22 as against Net Profit of Rs. 2,160 crore for FY 21.

> Capital Adequacy Ratio stood at 17.04% as on 31.03.2022 as against 14.93% as on 31.03.2021.

> Net Worth increased by 33.76% to 36,933 crore from Rs. 27,611 crore as on 31.03.2021.

> Book value per share is Rs. 90.00.

> Gross NPA amount reduced by 23.97% (i.e. Rs. 10,930 crore) reached at Rs 45,605 crore as on 31.03.2022 from 56,535 crore as on 31.03.2021.

> Gross NPA percentage reduced to 9.98% as on 31.03.2022 from 13.77% as on 31.03.2021.

> Net NPA amount reduced by 24.46% (i.e. Rs. 2,410 crore) reached at Rs.9,852 crore as on 31.03.2022 from Rs. 12,262 crore as on 31.03.2021.

> Net NPA percentage reduced to 2.34% as on 31.03.2022 from 3.35% as on 31.03.2021.

> The Financial performance of the Bank for the year 2021-22 is summarized below:

(Amount in crore)

Particulars

2020-21

2021-22

Growth (%)

Net Interest Income

14270

14062

-1.46

Non-Interest Income

6842

7879

15.16

Operating Expenses

10839

11952

10.27

Operating Profit

10273

9988

-2.77

Provisions / Contingencies

8112

6584

-18.84

Net Profit/ Loss

2160

3405

57.63

Earnings per share (Rs.)

6.59

8.84

34.14

Book Value per share (Rs.)

84.24

90.00

6.84

Return on Equity (%)

8.81

10.55

Return on Average Assets (%)

0.28

0.43

Key financial Ratios are presented below

(Percentage) (%)

Particulars

2020-21

2021-22

Yield on Advances

7.48

6.76

Yield on Investments

6.58

6.32

Yield on Funds

5.87

5.21

Cost of Deposits

4.10

3.69

Cost of Funds

3.81

3.29

Net Interest Margin

2.48

2.36

Non-Interest Income to Operating Expenses

63.12

65.92

Other Income to Average Working Fund

0.90

1.00

Operating Expenses to Average Working Fund

1.57

1.64

Staff Expenses to Average Working Fund

0.94

0.97

Other Operating Expenses to Average Working Fund

0.63

0.67

Asset Utilisation Ratio

1.49

1.37

Non-Interest Income to Total Income

14.42

17.14

Non-Interest Income to Net Income

32.41

35.91

Cost to Income Ratio

51.34

54.48

CAPITAL

During the financial year, Bank has raised equity capital as under:

Particulars

Amount (Rs. in crore)

Date of allotment

Preferential Issue to Government of India @ Rs.71.23 per share (including share premium). GOI had deposited this amount on 31.03.2021 and the same was kept as Share Application Money pending allotment.

3,000

11.06.2021

Qualified Institutions Placement @ Rs.62.89 per share (including share premium)

2,550

31.08.2021

Bank has raised Rs.1,800 Crore by issue of Basel III compliant Tier II bonds on 30.09.2021.

During the financial year, Bank has redeemed the following bonds by exercising call option.

Particulars

Amount (Rs. in crore)

Date of redemption

8.57 % Tier II Bonds Series XIII

- 1,500

07.07.2021

8.00% Tier II Bonds Series

1,000

25.03.2022

XIV

CAPITAL ADEQUACY:

> As per Basel III framework, the Bank''s Capital Adequacy Ratio was 17.04% which is higher than the regulatory requirement of 11.5 %.

> Details of Capital Adequacy (BASEL III) are :

(Rs. in crore)

Particulars

BASEL-III

31.03.2021

31.03.2022

CET1 CRAR

34,690

11.51%

44,347

14.02%

AT1 CRAR

1,352

0.44%

1,352

0.44%

Tier I Capital

36,042

11.96%

45,699

14.44%

Tier II Capital

8,949

2.97%

8,206

2.59%

Total Capital

44,990

14.93%

53,905

17.04%

Risk Weighted Assets

301,305

316,395

BUSINESS INITIATIVE:

> “Area Managers” office structure rationalized for better connect for business development and better decision making.

> Strategy for more focus on “CASA” and “RAM advances” (Retail, Agriculture and MSME) and rationalizing exposure to corporate sector.

> Web-based - Retail Online Module launched to improve productivity and customer service by reducing turnaround time.

> “Swarna Dhara" - Gold Loans have been intensified with attractive features.

> Special Schemes like Star Kisan Ghar, Star Bio Energy Scheme, Star Kisan Sahayata Loan has been launched in Agriculture segment.

> “End to end digitization” of Retail, Agri and MSME loan process is in advance stage.

> “Contactless Platform (psbloansin59minutes.com)” - for

quick sanction and disbursement.

> Co-lending tie-up with MAS Financial Services has been initiated successfully.

> GECL Extension Scheme launched by GOI for MSME segment.

> Recovery mechanism through a host of OTS schemes like “Intensive Recovery Day”, “Branch Adalat” monthly mega E-auction and involving in-house staff such as “Sanjeevani”, “Saksham-2” put in place.

> SME City Centre increased from 58 to 91 and centralized processing of all proposals of Rs.10 Lakhs and above is being done smoothly.

> TReDS (Trade Receivables Discounting system) platform have been used more extensively to garner business growth.

> “Launched Small Town Big Support” campaign for Loan Guarantee Scheme for Covid Affected Sectors.

> “Shining Star Campaign” launched for generation of leads (convertible) & sanction of loans under Star Welcome Offer.

> E-PLATFORM solution is being implemented for Straight Through Origination and process of all Banking products.

> Non-discriminatory and Non-discretionary OTS Schemes, namely "Star Sanjeevani" and "BOI OTS 2021" were made more customer friendly with greater reach for quick resolution of NPAs.

> Star Mahashakti- Upgradation/ migration of IT platform from FINACLE 7 to FINACLE 10 has been successfully done.

> “Tech-driven Credit Monitoring System” for tracking of “Early Warning Signals” effectively used for SMA and SASCL management.

> “SMA automation process” for managing SMA portfolio of the Bank through automated system is under process.

> Star CPSU & Star GECL Scheme launched for catering to the requirements of CPSUs.

> Special schemes for extending financial assistance for augmentation of the Ethanol Production Capacity.

> “Enterprise wide fraud Risk Management” framework for real-time fraud monitoring is being effectively used for fraud monitoring and management

> Document Management System (DMS) has been made live and is being used effectively for retrieval of documents and storing, tracking, managing and accessing our data in a more flexible and hassle freeway.

> “MissCallPay” is digital payment offline solution that provides all the functionality of UPI based mobile payments over a feature phone using Missed Call. It does not have any dependency on internet connection. Hence it is suitable for rural and urban under-served population of India.

> Digi Locker has been launched. It is an online service provided by Ministry of Electronics and IT (MeitY), Government of India, under its Digital India initiative.

> Security Solutions- Bank has procured and implemented security solutions for strengthening ecosystem of the bank as per guidelines on “Cyber Security framework in Banks".

> Cheque Deposit Kiosks- Bank has deployed Cheque Deposit Kiosks for providing facility to the customers to deposit cheques in the self-operated Kiosks without intervention of bank staff.

> Bank has completed successfully all test scenarios for new tax collection system TIN 2.0 which is soon going to be launched by CBDT, Dept. of Revenue, MoF.

> Bank has launched New Merchant app with various digital facilities.

> Bank has announced FY 22-23 to be the year of digitalization.

> Star Hunt scheme- Interested Officers have an opportunity to work in their chosen vertical and their selection is based on written examination and interview. After selection, such officers are trained in the vertical they are selected for and are posted in identified fields.

> Development Centre is being carried out for Officers in Scale IV, V and VI to assess the identified competencies and use them for benefit of the bank.

> Additional National Banking Group and Zonal Offices

created to give good service to customers and more business growth

AWARDS:

> Bank of India received ‘HR Leadership Award 2021 ’ by World HRD Congress

> SKOCH AWARD 2021, SILVER in Excellence in Technology Category for “Document Management System”.

> Forbes recognized “Bank of India” as one of the World''s Best Employer in 2021.

> Bank has won Leadership Capital 3.0 APY award of excellence “Best Performing Managing Director” by our Respected MD & CEO Shri Atanu Kumar Das.

> BFSI Excellence Awards 2021 for the Best Cyber Security Initiative in banking category.

> Bank has won Infosys Finacle Client Innovation Awards in the category “Product Innovation” for QRCash, 2020.

> Bank of India, has been awarded Best MSME Bank of the Year Award for FY20-21 by SME Chamber of India.

> Bank of India has been awarded with “Best MSME Bank-Runner Up", “Best Branding-Winner" and “Best Bank for promoting Social Schemes - Winner” in “MSME Banking Excellence Awards 2021” by Chamber of Indian MSME.

> Bank of India has received appreciation Letter for Lending under MUDRA Scheme in FY21-22 by Govt. of India.

> Bank of India has been awarded “Dr. Ambedkar Business Excellence Award” for lending to SC Entrepreneurs awarded by IFCI Venture Capital Ltd.

> Bank of India has been awarded Runners-Up award for “The Best Fintech Collaboration” in IBA''s 17th Annual Banking Technology Conference and Awards: 2020-21.

> Bank has received AWARD OF EXCELLENCE in PFRDA APY Campaign LEADERSHIP CAPITAL 4.0 from PFRDA for good performance.

> Bank has won AWARD OF EXCELLENCE from PFRDA for good performance in PFRDA APY CAMPAIGN MAKERS OF EXCELLENCE 5.0.

VISION, STRATEGY and FUTURE OUTLOOK:

> Expand the Bank''s Retail, Agriculture and MSME (RAM) lending profile by leveraging its existing customer base.

> Continue to contain funding cost by sourcing low cost deposits such as CASA.

> Focus on improving asset quality and containing NPA levels.

> Leverage technology to increase cross selling opportunities, reduce cost and enhance customer experience.

> Improving Risk Management Systems to ensure long-term sustainability of our business.

DIRECTORS’ RESPONSIBILITY STATEMENT:

The Directors confirm that in the preparation of the annual accounts

for the year ended March 31,2022:

a) The applicable accounting standards have been followed along with proper explanation relating to material departures, if any,

b) The accounting policies framed in accordance with the guidelines of the Reserve Bank of India were consistently applied. Reasonable and prudent judgements and estimates were made so as to give a true and fair view of the state of

affairs of the Bank at the end of the financial year and of the profit and loss of the Bank for the year ended March 31, 2022.

c) Proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of applicable laws governing banks in India for safeguarding the assets of the Bank and for preventing and detecting fraud and other irregularities,

d) Annual accounts have been prepared on a going concern basis,

e) Internal financial controls system to be followed by the Bank were laid down and that such internal financial controls are adequate and were operating effectively,

f) Proper systems have been devised to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.


Mar 31, 2019

The Board of Directors have pleasure in presenting the Bank’s Annual Report along with the audited statement of accounts and the cash flow statement for the year ended 31st March 2019.

PERFORMANCE:

Domestic Business:

- Overall Domestic Business of the Bank increased by 4.93% reached at Rs. 749,920 crore as on 31.03.2019 from Rs. 714,712 crore as on 31.03.2018.

- CASA deposits increased by 5.20% on Y-O-Y and Stood at Rs. 181,765 crore, SB deposits grew by 7.61%. Share of low cost deposits (CASA) in domestic deposits improved from 41.43% as on 31.03.2018 to 43.36% as on 31.03.2019.

- Total deposits increased by 0.14% and stood at Rs. 421,783 crore.

- Gross Advances registered a growth of 11.80% from Rs. 293,500 crores as on 31.03.2018 to Rs. 328,137 crores as on 31.03.2019.

- The domestic CD Ratio stood at 77.80% as on 31.03.2019.

- Share of RAM Advances to Total advances is 49.19% (i.e. Rs. 161,425 crore) as on 31.03.2019 as compared to 51.42% (i.e. Rs. 150,924 crore) as on 31.03.2018.

- Priority Sector lending constituted 42.94% of Adjusted Net Bank Credit and the share of Agricultural Credit to Adjusted Net Bank Credit was 18.86%.

- Retail Credit grew by 18.14% from Rs 47,817 crore to Rs 56,492 crore.

Overseas Business:

- Overseas business has de-grown by 15.56% and stood at Rs. 153,803 crore as on 31.03.2019 compared to Rs. 182,138 crore as on 31.03.2018.

- The Overseas CD Ratio stood at 55.23% as on 31.03.2019.

Global Business:

- Global Business of the Bank stood at Rs.903,723 crore as on 31.03.2019 against Rs.896,850 crore as on 31.03.2018. The marginal growth of 0.77% in business level has been as a result of conscious decision of the Bank to rationalise its overseas exposure.

- Total deposits stood at Rs. 520,862 crores as on 31.03.2019.

- Gross Advances stood at Rs. 382,860 crores as on 31.03.2019.

- The Global CD Ratio stood at 73.51% as on 31.03.2019.

- Global CASA stood at 39.75% as on 31.03.2019.

Financial Parameters:

- Operating profit increased by 13.35% (Rs. 953 crore) and reached at Rs.8092 crores as on 31.03.2019 on Y-O-Y basis.

- Net loss stood at Rs. 5,547 crore as on 31.03.2019 from Rs. 6,044 crore as on 31.03.2018.

- Capital Adequacy Ratio stood at 14.19% as against 10.875% prescribed by RBI (under Basel III).

- Net Worth increased by 37.70% reached at Rs. 26,152 crores as on 31.03.2019 from Rs. 18,992 crore as on 31.03.2018.

- Book value per share is Rs. 79.81.

- Gross NPA amount reduced by 2.68% (i.e. Rs. 1,667 crore) reached at Rs. 60,661 crore as on 31.03.2019 from Rs. 62,328 crore as on 31.03.2018.

- Gross NPA percentage reduced to 15.84% as on 31.03.2019 from 16.58% as on 31.03.2018.

- Net NPA amount reduced by 32.22% (i.e. Rs. 9,088 crore) and reached at Rs. 19,119 crore as on 31.03.2019 from Rs. 28,207 crore as on 31.03.2018.

- Net NPA percentage reduced to 5.61% as on 31.03.2019 from 8.26% as on 31.03.2018.

- The Financial performance of the Bank for the year 2018-19 is summarised below:

(Amount in crore)

Particulars

2017-18

2018-19

Growth (%)

Net Interest Income

10,506

13,658

29.99

Non-Interest Income

5,734

5,132

-10.49

Operating Expenses

9,101

10,697

17.54

Operating Profit

7,139

8,092

13.35

Provisions / Contingencies

13,183

13,639

3.46

Net Profit/ Loss

-6,044

-5,547

8.22

Earnings per share (Rs.)

-52.55

-29.79

Book Value per share (Rs.)

108.91

79.81

Return on Equity (%)

-31.07

-24.57

Return on Average Assets (%)

-0.91

-0.84

Key Financial Ratios are presented below

(Percentage) (%)

Parameters

2017-18

2018-19

Yield on Advances

7.15

8.23

Yield on Investments

7.25

7.40

Yield on Funds

6.16

6.60

Cost of Deposits

4.58

4.50

Cost of Funds

4.46

4.39

Net Interest Margin

1.92

2.56

Non Interest Income to Operating Expenses

63.00

47.97

Other Income to Average Working Fund

0.86

0.77

Operating Expenses to Average Working Fund

1.47

1.73

Staff Expenses to Average Working Fund

0.79

0.98

Other Operating Expenses to Average Working Fund

0.68

0.76

Asset Utilisation Ratio

1.16

1.31

Non Interest Income to Total Income

13.09

11.18

Non Interest Income to Net Income

35.31

27.31

Cost to Income Ratio

56.04

56.93

CAPITAL

- During the year, Government of India has infused Rs.14,724 crore capital for fresh equity shares out of which Bank has made preferential allotment of 95,37,58,865 equity shares of Rs.10 each, in accordance with the provisions of SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018. The details of capital infused are as under:

Date of Capital Infusion

Issue Price per share (in Rs.)

Amount (Rs. Crore)

Date of Allotment

26.12.2018

105.75

10,086

16.02.2019

21.02.2019

89.60

4,638

20.04.2019*

Total

14,724

* In terms of RBI letter no. DBR.CO.BP.No. 8307/ 21.01.002/ 2018-19 dated 2nd April, 2019 the share application money of Rs.4,638 Crore received on 21.02.2019 has been considered for computation of CET 1 capital as on March 31, 2019.

- Further, the Bank under Bank of India- Employee Stock Purchase Scheme (ESPS) has raised an amount of Rs. 660.80 crore. Under this scheme the Bank has allotted 6,25,52,188 new equity shares having face value of Rs. 10/each at a discount of 24.28% on the floor price of Rs. 105.64 per share i.e. at an offer price of Rs. 80/- each. The details are as under:

Name of the Shareholder

Issue Price per share (in Rs.)

Amount (Rs. Crore)

Date of Allotment

Bank’s Employees

105.64

660.80

07.03.2019

(Offer Price Rs.80/-

Share)

- Bank has exercised the regulatory call option and redeemed Additional Tier-1 Bonds amounting Rs.5,500 Crore (Series 1 to 5) on April 21, 2018, Upper Tier II Bonds amounting to Rs.500 Crore on 16.10.2018 and IPDI bonds (Tier-1) amounting to Rs.400 Crore on 11.02.2019.

- The Govt. of India vide their Gazette Notification dated March 31, 2019 - April 6, 2019 increased the authorised capital from Rs.3,000 Crore (Rupees Three Thousand Crore) to Rs.6,000 Crore (Rupees Six Thousand Crore).

CAPITAL ADEQUACY:

- As per Basel III framework, the Bank’s Capital Adequacy Ratio was 14.19% which is higher than the regulatory requirement of 10.875 %.

- Details of Capital Adequacy (BASEL III) are :

(Rs. in crore)

Particulars

BASEL - III

31.03.2018

31.03.2019

CET1 CRAR

24,993

7.87%

33,683

11.01%

AT1 CRAR

5,905

1.86%

...

...

Tier I Capital

30,898

9.73%

33,870

11.07%

Tier II Capital

10,199

3.21%

9,534

3.12%

Total Capital

41,097

12.94%

43,404

14.19%

Risk Weighted Assets

317,546

305,953

BUSINESS INITIATIVES:

- Concept of Area Managers and Star Prime implemented for being more customer focused and for business development, recovery, digitization at ground level and re-activation of branches.

- Special CASA campaigns “Amantran” organized with special focus on Government, Business Associates, HNIs & NRIs.

- Strategy for re-balancing of portfolio in favour of RAM advances (Retail, Agriculture and MSME) and reducing exposure to Corporate sector.

- A non-discriminatory OTS Scheme called “Mission Samaadhan” formulated for quick resolution of NPAs.

- ”Swarna Dhara” - Gold Loans have been intensified.

- Refurbishing select branches as “Star Digi” branches with high end digitalized services for tech savvy customers.

- ”War Room” and “Watch room” formed in each Zone for Recovery, NPA reduction and credit monitoring/trigger management.

- Tech-driven Credit Monitoring System for tracking of ‘Early Warning Signals’ under implementation.

- On boarded the Contactless Platform (psbloansin59minutes. com)

- Launched GST based Financing to MSME Borrowers.

- Actively participating in the Udyami Mitra Portal - marketplace for new MSME loans.

- Digi Branches: 255 Select Branches converted to Digi Branches for meeting the demands of Next Gen Customers.

- Star Mahashakti- Up gradation of IT platform from FINACLE 7 to FINACLE 10.

- Centralised processing centres: New 11 RBCs and 28 new SME City Centres opened and separate 182 Gold Loan cells formed in all Zones within the existing infrastructure to increase RAM business.

- ”Enterprise wide Fraud Risk Management” framework initiated for real-time fraud monitoring.

- Rationalisation of Domestic/overseas branches and ATMs being undertaken to reduce Operational Cost.

- Seamless “Information and communication Technology (ICT)” based basic banking services enablement in Rural & unbanked areas.

- Selected as an “Authorized bank for Yen credit transaction by GOI-MOF” for Yen credit transaction.

- Synergizing of MCB with LCB and Branches to reduce the Operational Cost.

- Focus on Digitisation and Alternate Delivery Channels

- Activation of Growth Centers through Business Correspondents (BCs) called “Star Points” for expanding our outreach.

AWARDS AND RECOGNITION :

- 2nd Most Trusted Bank in the PSU Bank category by Economic Times.

- ”Market Achievers’ Award” in Currency Derivatives Segment amongst Public Sector Banks by NSE.

- ”Best Performer in Currency Derivative Segment” amongst all Banks’ Category by BSE.

- IDRBT Banking Technology Excellence Award, Best Bank for Managing IT Ecosystem, large Bank category.

- IDRBT Banking Technology Excellence Award, Best Bank for Electronic Payments, large bank category.

- Bank has been conferred Second Position among PSU Banks for performance under Sukanya Samriddhi by the National Savings Institute (Ministry of Finance) for the year 2017-18

- ”India’s Top Organisation with Innovative HR Practices” award in PSUs by the Asia Pacific HRM Congress for 2017-18.

- Bank of India awarded APY- Makers of Excellence Award by PFRDA for enrolment in APY in November,2018.

- ”India’s Top Organisation with Innovative HR Practices” award in PSUs in the Asia Pacific HRM Congress in Bengaluru.

- ”Best Corporate Social Practices” for promoting Employment for Physically Challenged and also for Support and improvement in Quality of Education from ET NOW- WORLD CSR DAY.

- ”India’s Top Organisation with Innovative HR Practices” award in PSUs in the Asia Pacific HRM Congress in Bengaluru.

- Best Corporate Social Practices for promoting Employment for Physically Challenged and also for Support and improvement in Quality of Education from ET NOW- WORLD CSR DAY.

- Runner up Trophy (3rd Prize) for Best Bank under - Atal Pension Yojana-Transformative Leaders Campaign.

DIRECTORS’ RESPONSIBILITY STATEMENT:

The Directors confirm that in the preparation of the annual accounts for the year ended March 31, 2019:

a) The applicable accounting standards have been followed along with proper explanation relating to material departures, if any,

b) The accounting policies framed in accordance with the guidelines of the Reserve Bank of India were consistently applied. Reasonable and prudent judgments and estimates were made so as to give a true and fair view of the state of affairs of the Bank at the end of the financial year and of the profit and loss of the Bank for the year ended March 31, 2019.

c) Proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of applicable laws governing banks in India for safeguarding the assets of the Bank and for preventing and detecting fraud and other irregularities,

d) Annual accounts have been prepared on a going concern basis,

e) Internal financial controls system to be followed by the Bank were laid down and that such internal financial controls are adequate and were operating effectively,

f) Proper systems have been devised to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

ACKNOWLEDGEMENT:

The Board expresses its gratitude to the Government of India, Reserve Bank of India and Securities and Exchange Board of India and other regulatory authorities for their valuable guidance and support. The Board also thanks financial Institutions and correspondent banks for their co-operation and support. The Board acknowledges the unstinted support of its customers, business associates and shareholders. The Board also wishes to place on record its appreciation of staff members for their dedicated service and contribution for the overall performance of the Bank..

For and on behalf of the Board of Directors

Place : Mumbai Dinabandhu Mohapatra

Date : 28.05.2019 Managing Director & CEO


Mar 31, 2018

DIRECTOR’S REPORT

The Board of Directors have pleasure in presenting the Bank''s Annual Report along with the audited statement of accounts and the cash flow statement for the year ended 31st March 2018.

Performance: Domestic Business:

- Overall Domestic Business of the Bank increased by 0.78% reached at Rs. 714,712 crore as on 31.03.2018 from Rs. 709,183 crore as on 31.03.2017.

- CASA deposits increased by 3.71% on Y-O-Y and Stood at Rs. 172,787 crore, SB deposits grew by 2.86% and CD by 8.86%. Share of low cost deposits (CASA), in domestic deposits improved from 39.84% as on 31.03.2017 to 41.43% as on 31.03.2018.

- Total deposits decreased by 0.53% and stood at Rs. 421,211 crores.

- Advances registered a growth of 2.72% from Rs. 285,725 crores to Rs. 293,500 crores.

- Priority Sector lending constituted 40.80% of Adjusted Net Bank Credit and the share of Agricultural Credit to Adjusted Net Bank Credit was 18.58%.

- Retail Credit grew by 19.25% from Rs 40,098 crores to Rs 47,817 crores.

Overseas Business:

- Overseas business has de-grown by 18.92% and stood at Rs. 182,138 crore as on 31.03.2018 compared to Rs. 224,637 crore as on 31.03.2017.

Global Business:

- Global Business of the Bank stood at Rs.896,850 crore as on

31.03.2018 against Rs.933,820 crore as on 31.03.2017. The de-growth of 3.96% in business level has been as a result of conscious decision of the Bank to rationalize its overseas exposure.

- Total deposits decreased by 3.55% and stood at Rs. 520,854 crores.

- Advances decreased by 4.52% and stood at Rs. 375,995 crores.

Financial Parameters:

- Operating profit at Rs.7139 crores and Net loss at Rs.6044 crores.

- Capital Adequacy Ratio at 12.94% as against 10.875% prescribed by RBI (under Basel III).

- Net Worth at Rs. 18992 crores, declined by 4.60% over 31.03.2017.

- Book value per share Rs.108.91.

- Gross NPA ratio at 16.58% as on 31.03.2018.

- Net NPA ratio at 8.26% as on 31.03.2018.

- The Financial performance of the Bank for the year 2017-18 is summarized below

(Amount in crore)

Particulars

2016-17

2017-18

Growth

(%)

Net Interest Income

11,826

10,506

-11.16

Non-Interest Income

6,772

5,734

-15.34

Operating Expenses

8,866

9,101

2.65

Operating Profit

9,733

7,139

-26.65

Provisions / Contingencies

11,291

13,183

16.75

Net Profit

-1,558

-6,044

Earnings per share (Rs.)

-15.72

-52.55

Book Value per share (Rs.)

188.62

108.91

-42.26

Return on Equity (%)

-7.78

-31.07

Return on Average Assets (%)

-0.24

-0.91

Key Financial Ratios are presented below

(Percentage) (%)

Parameters

2016-17

2017-18

Yield on Advances

7.98

7.15

Yield on Investments

7.58

7.25

Yield on Funds

6.41

6.16

Cost of Deposits

4.84

4.58

Cost of Funds

4.48

4.46

Net Interest Margin

2.20

1.92

Non Interest Income to Operating Expenses

76.39

63.00

Other Income to Average Working Fund

1.03

0.86

Operating Expenses to Average Working Fund

1.45

1.47

Staff Expenses to Average Working Fund

0.88

0.79

Other Operating Expenses to Average Working Fund

0.57

0.68

Asset Utilizations Ratio

1.59

1.16

Non Interest Income to Total Income

14.70

13.09

Non Interest Income to Net Income

36.41

35.31

Cost to Income Ratio

47.67

56.04

Capital

During the year Bank has raised Rs. 9232 crore by issue of 55,84,32,131 fresh shares of Rs.10/- each at a price of Rs.165.32 to Government of India. Bank has also issued Basel III compliant 8.79% Additional Tier I Bonds for an amount of Rs. 500 crore.

Bank has exercised the regulatory call option and redeemed all its Additional Tier I Bonds (Series 1 to 5) for an amount of Rs. 5500 crore on 21.04.2018.

Capital Adequacy:

- As per Basel III framework, the Bank''s Capital Adequacy Ratio was 12.94% which is higher than the regulatory requirement of 10.875%

- Details of Capital Adequacy (BASEL II & III) are :

(Rs, in crore)

Particulars

BASEL - III

31.03.2017

31.03.2018

CET1 CRAR

24858

7.17%

24993

7.87%

AT1 CRAR

6008

1.73%

5905

1.86%

Tier I Capital

30866

8.90%

30898

9.73%

Tier II Capital

11216

3.24%

10199

3.21%

Total Capital

42082

12.14%

41097

12.94%

Risk Weighted Assets

346611

317546

Business Initiatives:

During the current year the Bank has implemented various initiatives

for a Prompt Turn Around. A few of them are mentioned as under:

- Concept of Area Managers and Star Prime implemented for being more customer focused and for business development, recovery, digitization at ground level and re-activation of branches.

- Monthly Campaign called “Ghar Ghar Dastak” being organized every month for speeding up CASA, NPA Recovery and Credit disbursement.

- Special CASA campaigns “Amantran” organized with special focus on Government, Business Associates, HNIs & NRIs

- Strategy for re-balancing of portfolio in favour of RAM advances (Retail, Agriculture and MSME) and reducing exposure to Corporate sector.

- A non-discriminatory OTS Scheme called “Mission Samaadhan” formulated for quick resolution of NPAs.

- “Mission Rocket” launched to activate all the Scale-IV & V headed branches.

- “Swarna Dhara” - Gold Loans have been intensified.

- Refurbishing select branches as “Star Digi” branches with high end digitalized services for tech savvy customers.

- IT initiative “Star Mahashakti” being implemented for taking the Bank''s technological capability to next level.

- Focus on Digitization and Alternate Delivery Channels such as internet Banking, Debit and Credit Cards, POS machines.

- One of the premier Banks in implementing concept of Digital Village. Till now 325 villages converted into digital villages.

- Activation of 561 Growth Centers through Business Correspondents (BCs) called “Star Points” for expanding our outreach.

Awards and Recognition:

- Bank of India ranked as the 2nd Most Trusted Bank in the PSU Bank category by Economic Times.

- Bank of India has been conferred “Market Achievers'' Award” in Currency Derivatives Segment amongst Public Sector Banks by NSE.

- Bank of India awarded as “Best Performer in Currency Derivative Segment” amongst all Banks'' Category by BSE.

- IDRBT Banking Technology Excellence Award, Best Bank for Managing IT Ecosystem, large Bank category.

- IDRBT Banking Technology Excellence Award, Best Bank for Electronic Payments, large bank category.

- Bank of India awarded for Best Corporate Social Practices: Promoting Employment for Physically Challenged and also for Support and improvement in Quality of Education from ET NOW- WORLD CSR DAY Award.

- Bank of India awarded as “The Most Efficient Bank in Kenya” by Think Business Banking Award 2018.

- Bank of India-Uganda Subsidiary awarded for “Best Company Keeping Image High Award 2018” from Indian Business Forum, Uganda.

- Bank''s In-House Journal ‘Taarangan'' conferred with Prestigious “ABCI Magazine of the Year Award 2017” at Mumbai

DIRECTORS’ RESPONSIBILITY STATEMENT:

The Directors confirm that in the preparation of the annual accounts for the year ended March 31, 2018:

a) The applicable accounting standards have been followed along with proper explanation relating to material departures, if any,

b) The accounting policies framed in accordance with the guidelines of the Reserve Bank of India were consistently applied. Reasonable and prudent judgments and estimates were made so as to give a true and fair view of the state of affairs of the Bank at the end of the financial year and of the profit and loss of the Bank for the year ended March 31, 2018.

c) Proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of applicable laws governing banks in India for safeguarding the assets of the Bank and for preventing and detecting fraud and other irregularities,

d) Annual accounts have been prepared on a going concern basis,

e) Internal financial controls system to be followed by the Bank were laid down and that such internal financial controls are adequate and were operating effectively,

f) Proper systems have been devised to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

MANAGEMENT DISCUSSION AND ANALYSIS

GLOBAL SCENARIO

The global growth rate, according to the International Monetary Fund (IMF), has accelerated to 3.8% in 2017 from 3.2% in 2016. The growth has remained broad based and near synchronous across countries. The advanced economies viz: US, Euro Areas posted a growth rate of 2.3% each against 1.5% -1.8% growth witnessed by them during 2016. Growth during 2017 has been boosted by recovery in investment and upsurge in global trade. Particularly, the Fixed Capital formation was stronger in advanced economies. Both the advanced economies such as Germany, US, Japan and emerging Asia experienced recovery in exports. The emerging and developing economies have clocked 4.8% growth rate while the growth rate of emerging and developing Asia has been higher at 6.5%.The acceleration in growth and fall in unemployment rate has prompted Federal Reserve to increase the federal fund rates, three times during 2017 and with latest increase in March,2018 the fund rate now stands at 1.50-1.75%. The year 2017-18 also witnessed rise in commodity prices, with uptick in inflation.

DOMESTIC ECONOMIC SCENARIO

As per the provisional estimate by Central Statistical Organization (CSO), the Gross Domestic Product (GDP) grew at 6.7% during 2017-18, slower than the previous year''s growth rate of 7.1%.At the sectoral level on the basis of GVA at basic prices, the agriculture grew by 3.4% against previous year growth rate of 6.3%, mining at 2.9% against 13.0% during previous year, and manufacturing sector grew at 5.7% against previous year''s growth rate of 7.9%. The services sector registered an increase of 7.9% against previous year''s growth rate of 7.5%. The subdued growth rate of domestic economy during FY 2017-18 vis a vis higher global growth rate was as a result of combination of several temporary factors, such as delayed impact of demonetization and disruption of economic activities due to implementation of GST in July, 2017. Apart from this, tightening of monetary conditions and Twin Balance Sheet problem also adversely affected fresh investment.

The Index of Industrial Production (IIP) registered an increase at 4.3% during FY 2017-18 against 4.6% during FY 2016-17. Although overall industrial growth rate remained a tad lower than that during 2016-17, the capital goods sector and Infrastructure/construction goods segments witnessed higher growth rate, thus indicating uptrend in investment cycle.

The Consumer Price Index (CPI) which declined in the initial periods of the year and stood bellow 3.0% till July 2017 surged to 5.21% in December 2017. Of course, it gradually sobered down to 4.28% by March 2018. The hardening of inflation rate was due to rise in crude oil prices, increase in HRA to Central Government employees and rise in food inflation.

The exports rose 10.03% during 2017-18, the highest growth rate in six years, while imports went up nearly 20%, thus pushing up trade deficit. The Current Account Deficit (CAD) increased to USD 35.6 billion during April to December 2017 period from USD 11.8 billion during corresponding period previous year on account of widening trade deficit. As percentage of GDP, the CAD stood at 1.9% against 0.7% during the same period last year. The FDI in flow during April to December 2017 period stood at USD 35.94 billion, a little higher than last year''s level of USD 35.84 billion.

On fiscal front, the major initiative was the introduction of Goods and Service Tax in July 2017 and later rationalization of GST rate structure in November 2017. Another fiscal reform during the year was the Government''s decision to advance the budget cycle by about a month, which has implications for public expenditure. The fiscal deficit during the year FY 2017-18 overshot the budgeted amount and it stood at Rs.5.92 lakh crore (i.e. 3.53% of GDP) against the budget estimate of Rs.5.46 lakh crore (3.2% of GDP).

BANKING SECTOR DEVELOPMENT

The Banking System witnessed healthy credit growth during FY 2017-18 at 10.3% against 8.2% during FY 2016-17. The deposits growth, however, remained subdued with growth rate of 6.7% against 15.3% during FY 2016-17. The resurgence of credit growth, coming after nearly two years of depressed growth, has been across all the banks, varying in degrees of course, and it has been sect orally broad based.

During the most part of the year, liquidity position remained in surplus mode, with absorptions by the RBI under Liquidity Adjustment Facility (LAF). However, during the year, the volume of liquidity absorption declined over the period and by February 2018, the market turned into deficit mode requiring injection of liquidity by RBI.

One of the significant developments in the financial sector has been the hardening of G-Sec Yield, especially from August 2017. The 10 year G.Sec bench mark yield rose from 6.66% in the beginning of the year to around 7.78% in the first of week of March 2018. The upward bias in G-sec yield was caused by a host of global as well as domestic factors. Prominent among them are rise in federal fund rate (also,US treasury rate), higher CPI inflation, rise in crude oil prices, higher government borrowings, etc. Towards the year-end, however, yield softened mainly because of announcement by the Government not to front-load borrowings in first half of FY 2018-19.

The performance of the banking sector in areas of asset quality and profitability, remained depressed and the Public Sector Banks were worst affected. The Gross Non-Performing Advances (GNPA) ratio of the Banking System rose from 9.6% in March 2017 to 10.4% in December 2017. The Stressed Assets Ratio, however, declined from 12.0% to 11.9% during the same period.

Some of the policy measures announced by the RBI has lessened the impact of stress on banking sectors. These are- deferring applicability of Indian Accounting Standards to banks by one year, allowing six months'' moratorium to specified categories of MSMEs on overdue payments, removing limits stipulated for MSME sector for inclusion in priority sector, allowing banks to spread MTM provisions over four quarters.

The RBI notified a new framework of resolution of stressed assets in its Circular of February12, 2018, in which all the extant corporate restructuring packages such as CDR scheme, 5/25 scheme, SDR, and S4A schemes were withdrawn and a new time bound resolution plan, including that under IBC, was put in place. Notwithstanding various merits in the new guidelines, it did put pressure on banks in terms of sizeable increase in NPAs and consequent rise in provisioning requirement.

During 2017-18, the RBI mandated banks for resolution of large NPA accounts under Insolvency and Bankruptcy Code, initially for 12 large defaulting borrowers accounting for 25% of the Gross NPAs of banking system and later 29 large accounts. Although final resolution in these accounts did not materialize during FY 201718, the IBC processes are continuing, which would bring positive results for banks in FY 2018-19.

During the year, the Government came out with recapitalization of public sector banks to the tune of Rs.2.11 lakh crore, which has come as a great relief for banks. Along with recapitalization, the Government has also introduced Banking Reforms measures called- Enhanced Access and Service Excellence (EASE), which includes better customer services, fast paced digitization, strengthening credit appraisal system, norms for consortium lending, credit monitoring system, improving credit delivery and credit flow to MSME sector, better HR practices etc.

Strategy for Ind-AS implementation and its Progress -Disclosure

The Reserve Bank of India (RBI) issued a circular on February 11 2016 requiring banks to implement Indian Accounting Standards (Ind AS) and prepare Ind AS financial statements for accounting periods beginning from April 1, 2018 onwards, with comparatives for the periods ending March 31, 2018 or thereafter. However, in a recent press release by RBI on Developmental and Regulatory Policies dated April 5, 2018, it was communicated that owing to the pending legislative amendments in Banking Regulation Act, 1949 and looking at the level of preparedness of Banks, date of implementation of Ind AS has been deferred by one year i.e. it will come into effect from April 1, 2019.

In accordance with extant guidelines, Bank has constituted a Steering Committee headed by Executive Director to oversee the project and regular progress is being submitted to the Audit Committee of the Board. As required by RBI, Bank has submitted the Performa Financial Statements (PFS) for the half-year ended September 30, 2016 and for quarter ended June 30, 2017 on stand-alone basis.

RBI in its circular dated September 13, 2017, clarified regarding classification of advances in various stages which have been considered for preparing PFS as on June 30, 2017. We await further direction from RBI in this respect.

The implementation of Ind AS is expected to result in significant changes in the manner in which the Bank prepares and presents its financial statements. Since Ind AS is more principle-based compared to present reporting requirements, its implementation would involve use of substantial amount of judgments and assumptions, especially with respect to calculation of provision for advances as well as investments.

Bank is also evaluating various policy decisions and implementation strategies alongwith timelines to ensure readiness by actual implementation date. Necessary training for smooth implementation of Ind-AS is being imparted to concerned staff members.

The Bank will continue to liaise with RBI as well other industry bodies like Indian Bank''s Association seeking appropriate guidance in areas where Bank is facing challenges in Ind AS implementation and various other matters pertaining to it.

BUSINESS REVIEW 1. RESOURCE MOBILISATION:

Saving deposits grew by 2.86% and Current deposits by 8.86% in FY 2017-18. The CASA deposits registered y-o-y growth of 3.71%. The HNI segment (AQB Rs.1 lac & above) under Savings, registered y-o-y 0.33% growth and under Current account Deposits, registered 14.85% y-o-y growth. CASA ratio increased from 39.84% to 41.43% y-o-y in March, 2018. The share of Retail Term Deposits, One Crore and below has grown by 7.04% Y-o-Y and constitutes 83.36% of Total Term Deposits.

2. ADVANCES:

Bank''s gross advances decreased from Rs. 393,788 crore to Rs.375,995 Crore with decreased by 4.52%. Gross Domestic Credit registered a growth of 2.72% from Rs.285,725 crores on 31.03.2017 to Rs. 293,500 crores on

31.03.2018. Bank has focused on Retail and SME advances during current year with high yield to diversify the risk. Bank caters to specialized needs of Corporate/Mid Corporate through 10 Large Corporate Bank Branches and 31 Mid Corporate Branches. The requirements of other clients from Retail, SME and Agriculture are met through the Network of 5,186 branches and the Specialized Processing Centers. Bank''s 29 Overseas Branches cater to credit requirement of exporters and overseas clients.

3. RETAIL:

The Home Loan segment during the year recorded a growth of 19.63% from Rs. 22,248 crore to Rs. 26,616 crore. Bank has introduced Prime Minister Awas Yojana of Government of India (GOI) initiative for "Housing for All (Urban)" Mission, being implemented during 2015-2022. Loan Against Property (LAP) portfolio with a low rate of interest, longer repayment period and flexible repayment options registered a growth of 23.96% from Rs.5,617 crore to Rs.6,963 crore. Education Loan portfolio recorded a growth of 7.05% from Rs. 3,121 crore to Rs. 3,341 crore. Finance was also granted for Padho Pradesh Scheme (Interest subsidy for students from Minority communities for pursuing studies abroad). The Vehicle Loan segment recorded growth of 28.07% from Rs.3,495 crore to Rs.4,476 crore during the year. Bank has tie-up arrangement with Maruti Suzuki, Tata Motors, Hyundai Motors and Mahindra and Mahindra. Our Bank also extends Personal Loans to employees of PSUs/PSEs/Reputed Corporates/ Institutions under tie up arrangement with employer.

4. SMALL & MEDIUM ENTERPRISE:

Micro, Small and Medium Enterprises (MSME) is a very important segment and contribute nearly 6.11 % of the country''s manufacturing GDP, 33.4 % of the manufacturing output and nearly 45 % of the exports. Reserve Bank of India has revised the guidelines for targets and classification of Priority sector lending. In terms of revised guidelines, the cap on applicable loan limits under services, viz Rs. 5 Crore per borrower to Micro and Small enterprises and Rs. 10 Crore to Medium enterprises, has been removed for classification under priority sector. Accordingly all Bank loans to MSMEs engaged in providing and rendering of services as defined in terms of investment and equipment under MSMED Act 2006, shall qualify under priority sector without any credit cap. Focus on programmes, such as, Make in India, Skill India and Digital India have also brought major changes in MSME credit at Bank''s level.

PERFORMANCE

- Performance of our Bank in lending to MSME Sector as on 31.03.2018 is depicted as under:

(Amt. in crore)

Particulars

31st

March

2016

31st

March

2017

31st

March

2018

Y-o-Y Growth as on March 2017 over 2016 (%)

Y-o-Y Growth as on March 2018 over March 2017 (%)

Total

MSME

48206

51086

54285

5.97

6.26

- During the financial year 2017-18, 184,887 new accounts have been added with sanctioned limit of Rs.12,413.77 crores. Disbursement during the Financial year 2017-18 was Rs.11,183.34 crores and outstanding as on 31.03.2018 is Rs.9,418.80 crores.

- During the financial year 2017-18, disbursement under MUDRA as on 31.03.2018 was Rs.5,397.76 crore against budget of Rs.5,800.00 crore, thus achieving 93.06% of allocated budget with 361,708 no. of accounts.

- During financial year 2017-18, 1,083 accounts have been added with a total sanction limit of Rs.223.11 crore and cumulative figure is 5,185 accounts with total sanction limit of Rs. 943.18 crore under Stand Up India during Financial Year 2017-18.

- During financial year 2017-18, we have covered 29,830 new accounts under CGTMSE with total guarantee amount of Rs.3,474.58 crore and cumulative accounts covered CGTMSE is 340,862 with total amount of Rs.21,685.17 crore as on 31.03.2018.

- Total NPA under MSME segment was contained at 20%.

HIGHLIGHTS OF FY17-18

- TReDS: We have on boarded TReDS platform floated by RXIL for bill discounting of MSME customers.

- Exceeded the priority sector budget under MSME

- Achieved the regulatory target under micro enterprises with total outstanding being 7.96% on ANBC as on 31.03.2018 against target of 7.5% on ANBC.

- Enhanced working capital flow to MSE borrowers. Bank has now amended Policy to enhance the sanction of working capital limit to borrowers from minimum 20% to 25%. Further the working capital limit for these MSE borrowers transacting digitally, the working capital limit has been enhanced to 30% of the turn over for digital portion, from existing 20%.

- Launched new products for GST compliant borrowers for increased requirement of working capital limits and input credit.

- Identified and approved new schemes under cluster based lending in different sectors such as footwear, textile, glass, medicine, etc.

STRATEGY FOR GROWTH UNDER MSME

- More Focus in lending to assets with low RWA and lending below Rs 5 Crore (Regulatory Retail).

- Identification of 107 additional SME centric Branches, in addition to existing 100 for channelizing credit flow to MSME sector.

- Identified Relationship managers in all SME centric branches and SME nodal officers at all our administrative offices for providing assistance to MSME borrowers.

- Stepping up Cash Flow based financing to MSME sector.

- Launched GST returns based working capital funding to GST registered borrowers.

- Growth through various differentiated products and services to key industry based segments and markets.

- More emphasis on Cluster Based lending with common lending parameters and pricing for all the borrowers in a particular cluster.

- Evolving use of Fintechs for ease of MSME finance and to improve due diligence modalities.

- Ventured into Contactless Loans along with SIDBI and other public sector Banks.

- More effective use of Udyami Mitra portal for potential business.

- Reaching out to Entrepreneurs through increased linkages with Industry associations/Chamber of Commerce/Organizing Camps, etc.

- Instituting Credit Plus services to Borrowers through financial literacy programs and workshops.

- On boarded TReDS platform and mulling considerable growth under MSME through the Platform.

- Strengthening our SME processing centers with increase in FOS and relationship managers.

- Targeting growth under MUDRA, STAND UP INDIA, PMEGP, NULM schemes.

- Conducting customers meet in all our branches to increase customers'' wallet share, referral business and removing bottlenecks, if any.

- Leveraging on the new norms under CGTMSE.

- Identification of all SMA-1/2 MSME accounts needing help through the Revival Framework.

- Tie Ups with industries for funding to its backward and forward linkages, under MSME through Channel Credit.

- Organizing mega disbursement camps through our Ghar Ghar Dastak program for activation of branches for achieving various regulatory and internal budgets.

5. AGRICULTURE FINANCE:

Priority Sector Advances:

The bank is servicing to the priority and agriculture sectors, through its network of rural and semi-urban branches and 43 Agricultural Banking Centres ( ABCs ) set up in these areas. The Bank has registered an outstanding level of Rs 121,691 crore (40.80% of ANBC) under Priority Sector consisting of Agriculture Rs 51,938 crore (18.58% of ANBC). Out of which SF & MF Rs. 23,858 crore (8.45% of ANBC), SME Rs 51,678 crore out of which MSME Micro Rs. 24,051 crore (7.54% of ANBC), Education Rs 3,226 crore, Housing Rs 13,690 crore & others Rs 1,159 crore. Under Annual Credit Plan, Bank branches disbursed Rs 27,617 crore during the year. Bank has issued 171,908 KCC with credit limits of Rs 2,978 crore for flexible credit utilization. The Bank also extends financial assistance under Differential Rate of Interest at concessional rate of interest of 4% to low income groups. The Bank has sanctioned 430 cases under DRI scheme during the year involving Rs 2.80 crore. Bank''s credit exposure to the Minority Communities is Rs 13,879 crore as on March 2018. Amount O/s as on 31.03.2018 under weaker section is Rs. 32,184 (10.90% of ANBC). Bank''s finance to Food & Agro Industries as on 31.03.2018 is Rs. 5,573 crore. The Bank has surpassed the regulatory ratios under Priority sector, Agriculture, MSME Micro and credit to Weaker sections.

National Rural Livelihood Mission (NRLM): is an important poverty eradication programme for rural poor. During the year Bank has disbursed Rs 297 crore to 27,003 borrowers.

Self Help Groups (SHGs):

Bank has customer base of 218,555 Self Help Groups (SHGs) of which 123,955 SHGs are credit linked including 67,468 women SHGs during the year 2018. Bank has introduced Dual Biometric authentication for offsite transactions, financial and Data Digitalization for monitoring of SHGs.

Lead Bank Scheme:

The Bank has Lead Bank responsibility in 51 districts spread across five states of Jharkhand (15), Maharashtra (14), Madhya Pradesh (13),Uttar Pradesh (7) and Odisha (2) and one SLBC” Lead Bank Convener” responsibility in the State of Jharkhand.

“Bank was awarded with Certificate of Excellence in Social Banking Excellence Award - 2017"

(Joint Runner Up) for Agricultural Banking under Large Bank Category.

6. FINANCIAL INCLUSION:

Bank considers Financial Inclusion as a viable business proposition and has shifted outlook from “CSR” to “economic viability”. ICT based solution to support and secure sufficiently low cost transactions required by the financial sector. Financial inclusion drive gained momentum with Pradhan Mantri Jan Dhan Yojna (PMJDY) programme. Bank has provided banking services in unbanked rural areas through ICT led Business Correspondents model.

Star Swarojgar Prashikshan Sansthan(RSETIs):

Bank is operating 42 RSETIs in the States of Jharkhand, Odisha, Uttar Pradesh, Madhya Pradesh, Maharashtra and West Bengal. During the year the RSETIs have conducted 1,118 training programs and imparted training to 30,640 candidates with credit linkage of 9,943 candidates to enable them for gainful employment.

Financial Literacy and credit Counseling Centres (FLCC)

FLCC/FLCs are established as per Reserve Bank of India guidelines at Rural and Urban Centers at district locations where Bank is having Lead Bank responsibility. Bank''s 51 FLCs are functional in all 51 Lead districts. The FLCs in addition to imparting training also undertake remedial counselling on case to case basis for the distressed borrowers, preventive counselling through media, workshops and seminars. To date 1508178 needy distressed people were given counselling

Regional Rural Banks :

Bank has four sponsored Regional Rural Banks - Gramin Bank of Aryavart-GBA (Uttar Pradesh State), Narmada Jhabua Gramin Bank -NJGB (Madhya Pradesh State), Vidarbha Konkan Gramin Bank -VKGB (Maharashtra State) and Jharkhand Gramin Bank-JGB (Jharkhand State). All four RRBs Branches and Administrative offices are on CBS platform with system generated report facility. These RRBs are enabled on RTGS, NEFT and ATM platform and cover 61 districts, with a network of 1672 branches. They have a combined business mix of Rs.46422.52 Crore controlled by their respective 4 Head Offices and altogether 29 Regional Offices.

7. INTERNATIONAL:

The Bank has 29 Branches, 2 Representative Offices 5 Subsidiaries and 1 Associate/Joint Venture spread across 21 countries of all time zones. The contribution of foreign operations in Bank''s global business mix has been 20.31% as on 31.03.2018.

Overseas Subsidiaries and Associates:

i) PT Bank of India Indonesia Tbk

ii) Bank of India (Tanzania) Ltd

iii) Bank of India (New Zealand) Ltd

iv) Bank of India (Botswana) Ltd

v) Bank of India (Uganda) Ltd

vi) Indo Zambia Bank Ltd. (IZB)- Joint Venture.

Bank has closed its representative offices at Myanmar and Dubai during current year.

FOREIGN BUSINESS:

Bank''s key priority areas include meeting trade finance and forex requirements of exporters and importers. Bank has 217 Authorized Dealer Branches Pan India. These Branches handle foreign exchange business and cater to the need of exporters and importers. Bank also has correspondent banking relationship with 247 banks across the globe. Bank has Rupee Drawing Arrangements with Gulf based private exchange houses to facilitate inward remittances.

8. CREDIT MONITORING:

Prevention is better than cure. Profitability of the Bank is adversely affected due to provisioning when accounts slip into NPA category. It also has got bearing on the share prices. Funds are blocked which are not available for recycling to the deserving borrowers.

The Department has been using various tools and methods for identifying and monitoring accounts with signs of weakness /potential default/delinquencies and to ensure that Standard Accounts continue to remain standard and do not slip to NPAs.

Tools for efficient monitoring & control process:

i) Early Warning System for Monitoring Loan delinquency:-A comprehensive Monitoring Module is made available to all Branches and controlling offices for monitoring their credit assets categorised under SMA. Our Bank has a system that captures Early Warning Signals (EWS) in respect of accounts showing first signs of weakness i.e. generation of various alerts which include overdue accounts, L/C devolvement/Guarantee invocations, accounts overdue for review, expiry of renewal documents, overdue inspection, withdrawal of cash over Rs.10 lacs, Return of high value cheques, Frequent sanction of Adhoc/Over limits, High value RTGS etc. EWS are advised to various levels on weekly basis for close monitoring of these accounts. For internal monitoring purposes under the system, a time limit for overdue accounts is designated to determine the threshold for a proactive intervention - well before the accounts become NPA. This is to enable the Bank to assess whether the default is due to some inherent weakness or due to a temporary liquidity/cash flow problem. All accounts displaying unsatisfactory features/early warning signals are put under watch list for follow up and time bound action to prevent slippages, even though such accounts could be regular at present.

ii) Identification of the SMA category triggers mitigating steps such as follow-up for regularization, restructuring etc. In terms of RBI''s revised guidelines, stressed accounts with credit limit of Rs. 5 crores and above are reported to RBI on weekly basis.

iii) Marking of NPAs is done by the system. Data for showing overdue position based on record of recovery as well as for accounts showing technical lacunae such as non-submission of Stock/QIS statement over three months, insufficient/no credit in CC accounts etc. which may cause downgrading of accounts are generated periodically. These accounts are monitored specifically for containment of downgrading of standard assets.

iv) Credit Process Audit is to ensure verification of compliance of Pre and Post disbursement terms of sanction terms/covenants. CPA is to ensure that the disbursing officer, before parting with the Banks funds, has taken all necessary measures for creation/perfection of security with a view to ensure enforceability of the said securities.

v) We ensure timely conduct of Stock & Receivables audit in eligible accounts and take active/preventive steps wherever warranted. The stock audit is applicable for accounts having working capital exposure of Rs.

5 crores and above. It is required to be conducted annually. In the accounts showing EWS, the stock audit is required to be conducted half yearly.

vi) Assets showing inherent signs of weakness, such as out of order position, overdue Bills under Letters of Credit, invocation of guarantees, review overdue etc., which pose a threat to the bank''s asset quality are followed up by discussions at various platforms 6 levels by use of Tele/Video conferencing & thereby sensitizing all concerned.

vii) Critical analysis is done for quick mortality cases. Also accountability is examined in all delinquent assets

viii) On the basis of Early Warning Signal (EWS), the account is Red flagged and Forensic Audit is done. Information on Red Flagged Accounts (RFA), Fraud Accounts where our exposure is Rs.50 crore & above is uploaded in CRILC. The bank has approved the policy for Red Flagging of accounts and forensic Audit.

9. NPA MANAGEMENT:

The Bank made sustained relentless efforts for NPA and Written Off recovery by adopting Board approved strategies with activation of Asset Recovery Branches, staff at grass root levels. The measures initiated resulted in improved recovery through some of the following strategies:

- Holding-on operations in NPA accounts arising out of temporary Cash Flow mismatch for up-gradation within short span of time.

- Up-gradation of the entire account after recovery of the total overdue.

- Restructuring in accounts, which needs a long term support.

- Filing up application with NCLT, pursuing other Bank where we are not leader.

- OTS in accounts with positive impact in Bank''s profits & loss A/c; Invoke promptly the provisions of SARFAESI Act.

- Filing of suit and follow for vacation of stay and for speedy resolution through the DRT.

- Declaring Borrowers as wilful defaulters in all eligible cases, Mega E-auctions on Pan-India basis to fast forward the process.

- Participation in the National Lok Adalat at various levels.

- Suit filed/decreed cases are now monitored online.

- Proactive participation in JLF meetings conducted at Bank level in all cases where Bank is Leader and also a member of consortium.

1 0. TREASURY:

Forex Business: During the financial year 2017-18, Merchant and interbank turnover was Rs. 1.47 lakh crore and Rs. 37.12 lakh crore respectively. The aggregate turnover of Bank''s Forex Business during the year was Rs. 38.59 lakh crore.

Treasury Operations & Investments: Bank continued to play an active role in all segments of the market- Money market, Forex, Bonds and Derivatives 2017-18. Bank has maintained a higher level of investments by holding SLR investments in excess of the regulatory requirement of 19.50% of NDTL from time to time to utilize excess SLR for borrowing from Repo /CBLO windows. As on 31.03.2018 the gross SLR investments were Rs. 112,030.26 crore (82.57% of total investments) and Non SLR investments stood at Rs. 24,027.30 crore (17.66% of total investments). The investments are made in accordance with the Board approved comprehensive policy which is reviewed periodically to respond to market developments/regulatory requirements.

11. INFORMATION TECHNOLOGY:

Central KYC is implemented for Identified branches.

Central KYC Registry is a centralized repository of KYC records of customers in the financial sector with uniform KYC norms and inter-usability of the KYC records. It reduces the burden of production & verification of KYC documents every time when a customer creates a new relationship with a financial entity. The said project has been successfully rolled out on 21.03.2018.

EKYC Registered Devices (RD) services Rolled out PAN India

As per UIDAI (Aadhaar) guidelines, only registered biometric devices can be used for Aadhaar Authentication/ e-KYC transactions. Also, Customer Information must be communicated to UIDAI in encrypted form. Presently, about 4100 branches have been enabled for Customer Authentication and Customer ID Creation through Aadhaar.

Mobile application development and integration

i) We have integrated with NPCI''s BHIM application and Prepaid Mobile and DTH recharge module in Star Token NG.

ii) We have launched UPI (BHIM BOI UPI) application and BBPS (BOI Billpay) application.

Website related development and integration

i) We have redesigned our Corporate Website and our website is now mobile responsive.

ii) Launch of Vietnam Website

iii) Other integration and facilities in website are:

- To claim bill payment refund through online request

- To claim ATM failure refund online

- To claim POS failure refund online

- Facility for pre-paid card balance enquiry

iv) We have integrated online lead generation with Operational Customer Relationship Management (OCRM) module

Stardesk Development of modules /forms in Stardesk

i) Vigilance Portal

ii) Inspection and Audit Portal

iii) Concurrent Audit Feedback Form

iv) Marketing Staff Dashboard

v) Customer Service Committee Meeting

Enhancements and Integrations in Internet Banking

Facility of online regeneration of transaction password for Internet Banking users is introduced.

i) Bill Payment (BBPS) services through Internet Banking - We have integrated BBPS services in Internet Banking and customers can now make payment for Gas, Electricity, Mobile Postpaid, DTH and Electricity. Services include biller addition, fetch bill and pay, Quick Pay.

ii) Premature closure of Term deposits - We have enabled retail Internet Banking customers to submit request for premature closure of their term deposits opened through Internet Banking channel.

iii) Goods and Services Tax (GST) - Successful implementation of Goods and Services tax (Mode of Operation - Over the counter through Finacle and through Internet Banking)

iv) Interest Certificate for all deposits (including Savings bank accounts) for both domestic and NRE. The interest certificate is sent to customer''s registered email id.

v) Facility of submission of 15G/H through Internet Banking - This feature is a step towards providing customer convenience who does not need to visit the branch.

vi) Facility of Online update of contact details in Internet Banking.

A new facility has been provided to our Retail Internet Banking Customers for updating details like communication address, email-id and registered mobile number online without the need to visit the Branch.

IT related development in Regional Rural Banks Segment

i) Demographic Authentication is completed in all the 4 RRBs.

ii) IB setup is made available at both the locations (DC & DR) and cutover was also done. View facility is available to the customers.

iii) MMS facility through intranet has been extended to RRB recently

Data warehouse has released Top Management Dashboard (ver-2) for HO / NBGs and ZOs with the following enhancements

Top Management Dashboards provide at-a-glance views of KPIs (key performance indicators) relevant to a particular objective or business process (e.g. Branch Profile, Business Mix, etc) It provides information in graphical form for quick analysis of the data and it can be accessed from any PC on Bank''s Network or through BOI-Safe from Internet.

Other Initiatives of Datawarehouse

i) Provision in NPA Accounts

ii) Sector wise classification of accounts

iii) CIBIL reporting

iv) Providing MIS data/reports to HO Departments/NBGs/ Zones

v) Providing Daily NPA Report to the top management

vi) Generation of CA-23 report

vii) Generation of reports for Risk Management Department for analysing the Asset-Liability mismatch in various Time Buckets, Interest Sensitivity and Structural Liquidity

Improving the Network Infrastructure of Branches

i) 1900 Branch Routers upgraded with Ethernet cards.

ii) 2700 New Routers installed at branches.

iii) 1200 Branches upgraded with 2 MPBS bandwidth.

iv) All branches and offices shall be upgraded with Primary 2 MBPS BSNL links shortly. Upgrading secondary links to 2 MPBS for 4063 branches is initiated with M/s Tata, Sify, Bharati and Vodapone.

v) Secured Network : Latest, Intrusion Prevention Systems (IPS) are successfully installed for protecting our Network.

12. RISK MANAGEMENT : Risk and Control:

Bank has established mechanisms to ensure ongoing assessment of relevant risks on an individual as well as consolidated basis. Risk Management is a Board driven function with the Risk Management Committee of the Board at apex level supported by operational level committees of Top Executives for managing various risks, such as CRMC (Credit Risk Management Committee), MRMC (Market Risk Management Committee) and CORM (Committee for Operational Risk Management). As per the directions of RBI, Bank has appointed the Chief Risk Officer (CRO).

The process of Risk Management consists of identification, measurement, monitoring and control. These processes are covered in policies viz. Enterprise Wide Risk Management, Credit Risk Management, Operational Risk Management, Market Risk Management, Derivatives, ALM, Foreign Exchange and Dealing room operations. The identification, measurement, monitoring & mitigation of potential risks, in all activities and products is done through detailed analysis and vetting of the same is done by the operational level risk committees and task forces. Tools and systems of prudential limits, new Basel Compliant Credit Rating Models, Credit Audit, VaR models for Market Risks, Self-assessment exercise coupled with tracking of Key Risk Indicators for Operational Risk have been introduced for assessing / measuring the identified risks.

Bank has migrated to computation of Capital Adequacy under Basel III regulation based on Standardized Approach for Credit Risk, Standardized Measurement Method (SMM) for Market Risk and Basic Indicator Approach for Operational Risk as per RBI guidelines effective 01st April, 2013. The Bank undertakes Internal Capital Adequacy Assessment Process (ICAAP) on a yearly basis for assessment / measurement of various risks, the limits of its risk-bearing capacity and appropriate level of internal capital in relation to the risk and the Risk Appetite. Stress Testing Process is in place for enhancing risk assessment by providing the bank a better understanding of the likely impact even in extreme circumstances.

Bank''s Information Risk Management System has clear objectives to obviate cyber-security risks in the face of acceleration in Bank''s business by strengthening internal controls to protect the brand, reputation and assets of the Bank.

Bank has implemented various information security projects for monitoring of Real-Time Information Security breach attempts / incidents / events on 24x7 basis. Bank is vigilant of the security and privacy of the data related to its patrons and account holders and takes utmost care to protect it from cyber-attacks. Bank has developed reasonable resiliency to provide uninterrupted services in adverse situations. Bank has put in place Captive Security Operation Centre (SOC) at Data Center. The Bank is ISO 27001 (ISMS) and ISO 22301 (BCMS) certified and the PCI-DSS V3-2 certification is under process. Other advanced security tools like Privilege User Management, Database Activity Monitoring Anti-APT (web) and Anti-DDoS have been operational zed. Security solutions like Anti-APT (Email) is under installation process. Risk and vulnerability assessment exercises are routinely carried out for all critical application and services with in-time remedial activities.

13. ALTERNATE DELIVERY CHANNEL :

The Banking industry has become fast paced. Post demonetization era needs moving towards less cash society and thus, the emphasis is on digitalization. Bank of India is committed to give a stellar performance not only in distribution of various digital products viz. Debit cards, Credit cards, POS in all varieties of Swipe & Pay, Click & Pay, Touch & Pay, Internet Banking/ Mobile Banking but also in ensuring that these products are activated and used. BOI has successfully implemented Government of India launched UPI/BHIM, BHARAT QR and AADHAAR PAY. POS distribution has gone up from 16,622 to 85,980 as on 31.03.2018.Debit card activation has gone up from 35% before demonetization to 40% which shows our fast pace in digitalization. Bank has launched BOI Star Loyalty programme for introducing ‘Chillr'' Mobile App for easy money transfer and utility payments. Bank cobranded Prepaid cards, added value to POS for dynamic currency conversion launched and have taken lead to have 2594 Digital Villages Pan India.

14. TRANSACTION BANKING :

Bank set up separate Transaction Banking Department to generate bulk income and float for the Bank by providing management of “cash flows” of customers especially large corporate, government institutions and high net worth individuals through digital banking. The Star Cash Management Services (CMS) Hub comprising of Cheque collections, PDC collections and Direct Debit mandates, other services viz. Cash Management Services (Doorstep Banking), On-line Share Trading - (3 in 1 A/cs, ASBA SYND-ASBA), Payment Gateways, NACH activities on NPCI platform and operational aspect of Star Channel Finance. During the FY 2017-18, the Department has generated income of Rs. 49.40 Crores.

15. THIRD PARTY PRODUCTS DIVISION Life Insurance:

Bank has continued its Corporate Agency arrangement with Bank''s Joint Venture life Insurance Company Star Union Dai-ichi Life Insurance Co Ltd. for sale of life insurance products. Bank has more than 7,400 IRDAI certified Specified Person employees at the branches. Bank offers optional life insurance cover to Bank''s Retail Home and Education Loan borrowers under Group Insurance Policy at a discounted premium. Bank collected premium of Rs. 886 Crore thus earning commission income of Rs. 75.79 crore.

General Insurance:

Bank has Corporate Agency agreement with National Insurance Co. Ltd. (NICL), Reliance General Insurance Co. Ltd. & The New India Assurance Co. Ltd. for General Insurance products. Bank''s co-branded health insurance product - BOI National Swasthya Bima is a Family Floater Medi-claim Insurance Cover available for Bank of India account holders at a discounted premium. Bank has earned commission income of Rs. 28.15 Crore from sale of General Insurance products.

Standalone Health Insurance:

Bank has tie-up arrangement with Star Health & Allied Insurance Co. Ltd. under Standalone Health Insurance category. Bank collected premium of Rs. 17 crore thus earning commission income of Rs. 2.48 crore.

Mutual Funds Products:

Bank continues to be a shop for all financial needs to the customers by distributing various Mutual Fund products of 10 Asset Management Companies including BOI-AXA Mutual Fund, our own joint venture company. Bank has earned a commission of Rs. 9.28 Crore from Mutual Fund business during FY 2017-18.

16. MARKETING & PUBLICITY :

Bank''s Publicity and Public Relation Department executes multi-media corporate campaigns to enhance the visibility of Bank''s products and services along with image building. Bank''s various products down the line across the country are executed by various media plan, along the lines of Bank''s theme "Relationship Beyond Banking". Publicity of Bank''s Products through Radio channels and Television platform has been undertaken in a big way. The promotion of Bank''s product through print media in major national / regional dailies and various top magazines and OOH activities i.e. hoarding/Bill Boards/Gantries is also undertaken.

During the year 2017-18 Bank was awarded the 2nd Prize in the category of Best Corporate Film at ABCI Annual Awards ceremony.

17. BUSINESS PROCESS RE-ENGINEERING

BPR Department works on improving the existing systems and processes in the Bank as also on other aspects of change management that include the organizational structure, products, & policies. The major customer centric initiatives taken during 2017-18 are:

i) Introduction of Area Manager, A new cluster -head position under “Project Connect”:

112 clusters formed Pan -India by grouping contiguous branches (up to Scale III) with each headed by Scale IV/V officer & supported by Panch Pandav (Team of 5 officers). AMOs connect with the branches on a continuous basis & address all issues of business

& control of each constituent group branch through active field support, guidance and decision/ disposal.

ii) Creation of Star Prime Set-up/ Vertical for Prime Clients Care :

Bank''s 48% of domestic business is generated by Scale IV & V branches. In order to harness their full potential & drive business growth through timely & appropriate care of their prime clientele, Star Prime vertical has been created with a GM at HO, 6 CREs at identified NBGs & a score of RSMs at Zonal level.

iii) DIGI Branches:

112 Digi branches launched (through revamp of previous BOTF project) for unique customer experience, increase of retail business, & spread of digital banking.

iv) RERA Plus Account ( CD Product):

Introduced RERA Plus Account i.e. a combo of RERA complied escrow account and an operative regular CD a/c for builders and developers.

v) Categorization of Branches :

Re-categorization of branches done under revised norms for ensuring right staffing and ease of customer service delivery.

vi) Star Paramarsh - Staff Suggestion Scheme:

Expanded the scheme to cover all ideas & suggestions of staff given at all fora, including at conferences, conclaves, & training centers. Implementation committee of 6 General Managers constituted to monitor & expedite grounding of the selected suggestions. Suggestions received during the year: 1638, Selected for implementation: 178, Awarded prizes: 18

18. INSPECTION & AUDIT:

Bank has board approved policy on Risk Based Internal Audit, Risk Based Management Audit (Domestic), Concurrent Audit, Information System Audit and Audit of Foreign Branches. The policies were reviewed/revised to comply with the Guidelines issued by the Department of Financial Services, MOF, GOI and covers the areas mentioned in the

RBI SPARC report, MOF guidelines and also as per the directions of Audit Committee of the Board. During the FY 2017-18, the Department conducted audit of 5082 branches and offices. Concurrent Audit covers 750 Branches, Treasury Branch, Data Centre and HO Departments by practicing CAs and all the Foreign Branches are covered in-house by Bank''s officers. Concurrent Auditors covered more than 60% of Global Deposits and more than 80% of Global Advances.

Bank also conducts special assignments to meet requirements of the Bank from time to time in areas of:

- Discretionary Audit conducted at branches with ‘High Risk and above'' rating.

- Assessment of impact of preventive vigilance measures at branches under audit.

- Special Audit of select Authorized Dealer (AD) branches for checking/verification of transactions relating to Export transactions / Import Advance Remittances.

- IS Audit of Data Centre & Disaster Recovery site by Bank''s Internal Information System Auditors.

- Concurrent audit of Data Centre to ensure verification of interest parameters, application of interest process and checking of interest in sample accounts.

- Regular reporting on all important Audit findings are made to Top Management, Audit Committee of Executives and Audit Committee of the Board as per the directions.

- Concurrent Audit, IS Audit, Management Audit report submission is Online in the Bank.

19. LEGAL & RIGHT TO INFORMATION ACT :

Legal Department of the Bank is a support department and provides platform on matters of Opinion, Documentation, Litigation and emanating from functional departments at Head Office and Zones. In addition to attending to referral matters of NBGs/Zones, Domestic Branches/Foreign Branches and Bank''s subsidiaries, the Department undertakes Drafting / Vetting of documents of various contracts/ Service Level Agreements (SLAs), Software/Hardware procurement, tie-up arrangements /new products, approval of Plaints for suits filed by the bank, responds to MOF, RBI, IBA query, opinion on Share transmission matters and cases relating to Claims against the Bank. Under the Right to Information Act applications are responded as per the Act. Central Public Information Officer and Appellate Authority across Zones / NBGs are placed. Deputy General Manager (Law) is the CPIO of the Bank, General Manager, Legal, is the Appellate Authority. Department issues guidance to NBGs/Zones on the amendments on Statues.

20. COMPLIANCE DEPARTMENT:

A Compliance Function Policy for the Bank was adopted by the Board as per Reserve Bank of India guidelines. An independent Compliance Department, headed by a Chief Compliance Officer in the rank of General Manager, is functioning at Head office. Compliance of statutory, regulatory and Bank''s internal guidelines is the scope of operation of the compliance function of the Bank, both for Domestic and Overseas operations. Bank has framed Compliance Rules for different work areas of Bank''s domestic operations for implementation / monitoring purpose, given as under-

- Know Your Customer/Anti-Money Laundering/ Combating of Financing of Terrorism;

- Deposits & Services;

- Advances;

- FEMA

Based on these rules, half-yearly Compliance testing exercise (on sample basis) is undertaken. Test check is also being carried out for Tranche III compliance rules prescribed by RBI under Risk Based Supervision.

Overseas establishments comply with the applicable regulatory requirements and submit confirmations. Quarterly Compliance testing through the compliance officers at each overseas Branch is undertaken.

KYC /AML / CFT: Bank has also vested with the responsibility of implementation/ monitoring Know Your Customer (KYC)/ Anti Money Laundering (AML) Measures/ Combating Financing of Terrorism (CFT) Guidelines in the Bank. Compliance with KYC norms in all accounts, as directed by RBI is ensured. As per the provisions of Prevention of Money Laundering Act, 2002 (PML Act) and subsequent amendments thereto and the Rules made thereunder as well as the guidelines issued by the RBI, Bank has put in place Board approved KYC/AML/CFT Policy. Accordingly, branches are properly identifying every customer by obtaining recent photograph and required document for identity / address proof out of prescribed Officially Valid Documents (OVD). The persons, who do not possess any document specified as OVD, are being facilitated to open Bank account under “Small Account” category. All customers have been classified into High, Medium or Low Risk category based on the Risk perception. As per extant RBI guidelines, the review of the Risk categorization is done once in every six months. The department also ensures for imparting of training on KYC / AML and its related compliance aspects to the staff members.

The Compliance department is the nodal point of contact of Risk Based Supervision (RBS) undertaken by RBI. The RBS reports are attended in coordination with all the departments of Bank and compliance is submitted to RBI. The department is also the single point of contact for all the Regulatory Agencies.

21. OFFICIAL LANGUAGE :

Bank has a well established set- up of Official Language Department which ensures the implementation of Government of India policy related provisions and progressive use of Hindi. During the year Bank received RAJBHASHA KIRTI PURSKAR ‘ SECOND'' PRIZE for ‘B” Region category. Bank''s Nagpur & Ratnagiri zones received Rajbhasha

Regional Puraskar FIRST & SECOND prize respectively in TOLIC category “B” region. Other zones received 19 prizes/awards for excellent implementation of Official Language Hindi across pan India. Bank has conducted 149 Hindi work-shops and 3426 staff were imparted training to harness their Hindi language skills. On Vishwa Hindi Diwas (10 January 2018) debate and speech competitions were organized in 394 schools across the country in which 7253 students participated. The e-learning Rajbhasha E-module has been developed and placed in HRMS for harnessing and upgrading skills of staff members. Hindi-month was observed from 15 August to 14 September 2017 wherein various Hindi competitions were held for staff members to generate interest towards use of Hindi in their daily work.

22. HUMAN RESOURCES, LEARNING & DEVELOPMENT AND IN HOUSE JOURNALS:

The HR transformational strategy, focus is on Capacity Building, ensuring availability of manpower with right sets of skills, optimum utilization of existing manpower and by bridging skill gaps. The current and future human resources in consonance with business strategic plan, focus on HR transformation on a continuous basis to keep pace with emerging time. Bank has during the year recruited 872 General Banking, 381 Specialist officers and 2575 clerks. Endeavour is to bridge the human skill gaps in areas of Corporate Credit, Risk Management, Treasury, IT and Marketing on an ongoing basis.

Compliance with Reservation Policy :

The Bank is complying with the reservation policy of Government of India. Recruitment and SC/ST Cells at Head Office and Zonal Offices ensure to implement the reservation policy and redressal grievances relating to SC/ ST/OBC Employees. General Managers at Head Office are designated as Chief Liaison Officer for SC/STs and OBCs. Officers from SC/ST/OBC category are designated as Cell / Liaison Officers at Zonal Offices. Post-based Reservation Rosters are maintained as per Government guidelines.

Representation of SC/ST/OBCs Staff (Indian) :

Mar-2018

Officer

Clerk

Sub Staff

Total

Total

21,198

19,989

7,493

48,680

SC

3,768

3,242

2,494

9,504

% to total Staff

17.78

16.22

33.28

19.52

ST

1,791

2,233

825

4,849

% to total Staff

8.45

11.17

11.01

9.96

OBC

4,762

4,576

1,671

11,009

% to total Staff

22.46

22.89

22.30

22.62

LEARNING AND DEVELOPMENT:

A separate Cell for Learning and Development is functioning for imparting training and talent development programmes. Bank has introduced E-Learning modules for enhancing the competencies of employees and to equip the staff with right skills and knowledge for meeting ever changing business dynamics across different segments. The Bank''s Training Colleges have imparted training to 25,000 Staff members and 550 trainees from other Institutes including RRBs during the year. Executive Development Programmes for AGMs and DGMs were also conducted in-house. Pre-promotion skills training for internal promotion process was provided to 2100 staff members. Bank has also conducted, for the first time, special training programs for visually impaired staff members to enable them to perform their job with greater satisfaction and ease. Summer internship to 435 students was also provided during the year.

TAARANGAN (Bilingual) & BOI VAARTA (Hindi)

Internal communication Department has been created in the Bank consisting of Corporate In-House Journal ‘Taarangan (Since 1964)'' and Hindi Magazine ‘BOI Vaarta'' (Published for promotion of Hindi Language amongst employees as per GOI OL Policy). The In-house publications are important tool of employee engagement in the Bank. Bank''s publications are effectively serving as a platform for employees to express their views, share their achievements and bringing out their creativity & intellect in various areas. The house journals carries social, promotional, staff achievements, awards and other business activities organized at Zones/ Branches/ offices across India and abroad.

During 2017-18 Taarangan has been awarded prestigious ‘ABCI Magazine of the Year 2017 Award'' with an International Award for Best In-House Journal from CMO Asia at Singapore. Gold (First prize) for BOI Vaarta alongside 8 other awards.

StarParivar@112

On the eve of 112th Foundation Day of the Bank, a closed Facebook group titled StarParivar@112 was started for all serving employees of the Bank. The platform has been provided to share knowledge, general interactions on various matters, showcasing achievements and various day to day business activities, program and trainings etc. The initiative has been successful in engaging employees.

23. CUSTOMER EXCELLENCE BRANCH BANKING:

Our Bank is a member of the Banking Codes and Standards Board of India (BCSBI) since its inception in 2006. Our Bank is committed to provide service of a high order in a transparent manner. Our Bank undertakes customer orientation programmes on a regular basis and provides customers with necessary information so as to enable them to take appropriate decision on different banking products offered by the Bank.

Various policies such as Customer Rights Policy, Customer Acceptance, Care and Severance Policy and Grievance Redressal Policy etc. are in place as per the regulatory requirements and some are reviewed from time to time to incorporate the changes and are placed in the public domain.

The Bank took the following initiatives during the year to enhance Customer service at Branches:

i) Our training colleges have undertaken various trainings for improvement in customer service consisting a detailed session on customer service and banking codes in the induction training. It is also made mandatory for all the front line staff/ officers to attend such training at least once in a year.

ii) Bank has published the customer''s rights on our website in Hindi, English and Marathi as a pictorial booklet for the benefit of customers and branches.

iii) Bank has started an awareness campaign for staff through ticker in internal system and on ATM screens/ Digital signage system in selected branches, for customers.

iv) Compliance verification is included in the Internal Audit/ Inspection Report which would sensitize the staff for compliance of code provisions/ improved customer service.

v) We have kept E-book on Stardesk containing Grievance Redressal Policy, BCSBI codes for Consumers, BCSBI codes for MSME and Banking Ombudsman Scheme 2006 and the same is also being printed and distributed to all the branches for ready reference.

vi) The book named “Iki % DfOkiTj” was printed and di^ributed to all the branches.

vii) Most Important Terms & Conditions (MITC) printed and is being distributed to all the new customers through Welcome Kit.

24. BRANCH NETWORK & EXPANSION

Bank has a geographically well spread branch network in India and aboard. Bank had 5127 branches in India as on 31.03.2018. In the foreign countries, 29 branches and 30 representative offices keep Bank''s presence felt in all times Zones and important financial centers of the globe. During the year 2017-18, Bank opened 8 new branches out of which 3 are in rural area. Composition of Bank''s Branch Network is

Category

31.03.2017

31.03.2018

No of Brs

% to total

No of Brs

% to total

Metropolitan

875

17.07

885

17.26

Urban

859

16.76

860

16.77

Semi-Urban

1,379

26.94

1,371

26.74

Rural

2,010

39.23

2,011

39.22

Total Domestic Branches

5,123

100

5,127

100

Overseas

61

59

Total Branches

5,184

5,186

Of which Specialized

271

271

25. BANK’S DOMESTIC SUBSIDIARY/ASSOCIATES/JOINT VENTURES : BOI SHAREHOLDING LIMITED (BOISL)

Bank has investment of Rs.6.64 crore in BOISL, a 100% subsidiary of the Bank. BOISL acts as Depository Participant (DP) of both the Depositories, National Securities Depository Ltd. (NSDL) and the Central Depository Services (India)

Ltd. (CDSL). The Company also undertakes collection of Broker Turnover Stamp Duty on behalf of Government of Maharashtra, Gujarat, New Delhi, Tamil Nadu, Telangana, West Bengal, Haryana and Karnataka.

BOI AXA INVESTMENT MANAGERS PVT. LTD. & BOI AXA TRUSTEE SERVICES PVT. LTD.

These subsidiaries are in the business of Mutual Fund and Invesment Advisory Services under SEBI Investment Advisor Regulations. Bank of India is holding 51% Stake in both the Companies with Investment of Rs.60.69 crore.

BOI MERCHANT BANKERS LIMITED (BOIMBL)

BOI Merchant Bankers Limited was promoted on 31.10.2014 to undertake merchant banking business including arranging of Syndicated Loans, Bonds and Debentures. It is a wholly owned subsidiary of the Bank with paid up capital of Rs.10 crore.

STCI FINANCE LIMITED

Established in 1994, STCI Finance Ltd., acts as a non deposit taking NBFC. Bank of India with 29.96% holding is the largest stakeholder in STCI, with a Paid up Capital of Rs.380 crore. STCI Primary Dealer Ltd. (STCIPD) is a wholly owned subsidiary of STCI Finance Limited. STCIPD commenced its operations from 25th June 2007 and is one of the leading primary dealers in the country.

STAR UNION DAI-ICHI LIFE INSURANCE COMPANY LTD. (SUDLIFE):

Bank of India, Union Bank of India and Dai-Ichi Life Insurance Company, Japan have formed “Star Union Dai-Ichi Life Insurance Company” to provide life insurance services to its clients. The company commenced insurance business in February 2009. BOI holds 28.96% (Investment of Rs.75 crore), UBI holds 25.10%, and Dai-ichi Life Insurance Company holds 45.94% stake of the Company.

INVESTMENT / ALLIANCES :

Central Depository Services (India) Ltd. (CDSL) was promoted in 1997 by BSE and Bank of India along with other Banks. Bank of India holds 5.57% stake in the paid up capital of Rs.104 crore of CDSL.

ASREC (India) Ltd . was floated by the Specified Undertaking of the Unit Trust of India (SUUTI) to undertake securitization and asset reconstruction activities. Bank holds 26.02% stake, in the equity capital of the company of Rs. 98 crore.

National Collateral Management Services Ltd. (NCML)

is promoted by the National Commodity and Derivatives Exchange Ltd. (NCDEX). It was incorporated on 28.09.2004 to promote and provide collateral management services for securing, managing and controlling securities and commodities. Bank holds stake of 2.34% in the equity capital of the company with Investment of Rs.3 crore.

SWIFT India Domestic Service Pvt. Ltd. a joint venture company promoted by SWIFT and 9 major Banks including

Bank of India. SWIFT is holding 55 % equity and remaining 45% is held by 9 major Banks. Bank of India has an equity stake of 3.26% in the company with Rs.7.71 crore Investment.

SME Rating Agency of India Ltd. (SMERA) was set up

during FY 2005-06 by SIDBI in association with Dun & Bradstreet, one of the leading providers of commercial data and analytics. The Company''s objective is to provide comprehensive, transparent and reliable ratings which would facilitate greater and easy flow of credit to SME sector. Bank has a nominal stake of 2.69% in the equity capital with investment of Rs.0.40 crore.

Other Strategic Investments:

Bank also has strategic investments in CERSAI (Rs.2.15 crore), Equifax Credit Information Services Ltd. (Rs.4.73 crore), U.V. Asset Reconstruction Co. Ltd. (Rs.0.15 crore) Clearing Corporation of India (Rs.0.50 crore), Agricultural Finance Corporation Ltd. (Rs.1.26 crore), SIDBI (Rs.45.30 crore), Central Ware Housing Corporation Ltd. (Rs.1.11 crore), Loss Data Consortium CORDEX (Rs.1 crore), SBIDFHI (Rs.5.54 crore), NPCI (Rs.10 crore), MCX Stock Exchange Ltd. (Rs.27.50 crore), CSC e-Governance services India Ltd. (Rs.1 crore), Invent Assets Securitization and Reconstruction Pvt. Ltd. (Rs.10 crore).

26. FRAUD RISK MANAGEMENT

Good corporate governance serves as an important factor in control of fraudulent activities. It may be true that Fraud itself cannot be eliminated but fraud risks can be managed and mitigated like other business risks with a proactive framework and approach.

Fraud Risk Management Department handles all fraud related matters independently in areas of:

- Devising and Administration of FRM Policy for the Bank,

- Reporting to RBI within stipulated timeline and Monitoring of Frauds,

- Maintenance of Centralized data on frauds,

- Analysis of Perpetrated and Attempted Frauds,

- Diagnostic and root cause analysis of fraud cases and implementation of remedial measures and steps to mitigate risks thereof in respect of product deficiencies,

- Plugging the loopholes in the systems, procedures & practices leading to perpetration of frauds,

- Dissemination of modus operandi & reasons for occurrence of fraud revealed by way of Circulars/ instructions to avoid the risk of recurrence of frauds of similar nature,

- Sensitizing staff through short alerts messages through tickers/periodical messages through MMS/ training/Video Conferencing on Fraud prevention,

- Periodical circulation of checklist on prevention of frauds,

- Follow up of complaints and FIRs with police authorities,

- Convening meeting of Task Force Committee on frauds at HO and monitoring the meeting of Zonal Task Force Committee on frauds,

- Department is in the process of acquiring new Enterprise wide Fraud Risk Management Solution encompassing all delivery channels.

27. VIGILANCE MANAGEMENT :

Vigilance machinery is headed by the Chief Vigilance Officer (CVO) appointed by Government of India, Ministry of Finance and the Central Vigilance Commission. The CVO is assisted by General Banking officers with knowledge/ background of investigation and disciplinary matters for rendering advice and support on matters relating to vigilance cases. Vigilance Department also focuses on initiation and dissemination of preventive vigilance measures. Bank has eight separate “Vigilance Units” across NBG offices. The Vigilance Department also renders advice of the CVO in Vigilance cases referred by the Bank''s sponsored Regional Rural Banks (RRB).

28. DIVIDEND DISTRIBUTION POLICY

In terms of Clause 43A of SEBI-Listing Obligation and Disclosure Requirement Regulations, Bank has formed a Dividend Distribution Policy and the same is available on our website - https://www.bankofindia.co.in/pdf/DDP.pdf

29. BUSINESS RESPONSIBILITY REPORTING-2017-18

In terms of Clause 32 (2) (F) of SEBI-Listing Obligation and Disclosure Requirement Regulations, the Business Responsibility Report is available on our website - www. bankofindia.co.in

30. BASEL-III (PILLAR 3) DISCLOSURE (CONSOLIDATED) MARCH 2018

In terms of RBI Circular DBOD.No.BP.BC.1/21.06.201/2015-16 dated July 1, 2015 on Basel III Capital Regulations read together with RBI Circular DBR.No.BP. BC.80/21.06.201/2014-15 dated March 31, 2015 on Prudential Guidelines on Capital adequacy and Liquidity Standard - Amendments, requires Banks to make applicable Pillar 3 disclosures including Leverage Ratio and Liquidity Coverage Ratio under the Basel III framework. These disclosures are available on Bank''s website at the link http:// www.bankofindia.co.in/english/Regdisclosuresec.aspx.

ACKNOWLEDGEMENT:

The Board expresses its gratitude to the Government of India, Reserve Bank of India and Securities and Exchange Board of India and other regulatory authorities for their valuable guidance and support. The Board also thanks financial Institutions and correspondent banks for their co-operation and support. The Board acknowledges the unstinted support of its customers, business associates and shareholders. The Board also wishes to place on record its appreciation of staff members for their dedicated service and contribution for the overall performance of the Bank.

For and on behalf of the Board of Directors

Place : Mumbai Dinabandhu Mohapatra

Date : 6th June, 2018 Managing Director & CEO


Mar 31, 2017

The Board of Directors have pleasure in presenting the Bank’s Annual Report along with the audited statement of accounts and the cash flow statement for the year ended 31st March 2017.

Performance: Domestic Business:

- CASA deposits increased by 30.24% on Y-O-Y, SB deposits grew by 31.92% and CD by 20.86%. Share of low cost deposits (CASA), in domestic deposits improved from 34.18% as on 31-03-2016 to 39.84% as on 31.03.2017.

- Domestic deposits increased by 12.23% from Rs. 3,77,309 crore to Rs. 4,23,457 crore.

- Advances registered a growth of 6.38% from Rs. 2,68,579 crore to Rs. 2,85,725 crore.

- Priority Sector lending constituted 40.47% of Adjusted Net Bank Credit and the share of Agricultural Credit to Adjusted Net Bank Credit was 19.44%.

- Schematic Retail Credit grew by 10.63% from Rs 37,777 crore to Rs 41,793 crore.

- Overall, Domestic business has grown by 9.80% from Rs. 6,45,888 crore to Rs. 7,09,183 crore during FY 2016-17.

Overseas Business:

- Overseas business has de-grown by 9.70% during FY 2016-17 compared to last year de-growth of 2.87%.

Global Business:

- Global business has grown by 4.38% during FY 2016-17 compared to last year de-growth of 5.19%. Total Business mix (Deposits Advances) reached at Rs. 9,33,820 crore, a growth of Rs. 39,153 crore.

- Total deposits increased by 5.27% to Rs. 5,40,032 crore.

- Advances increased by 3.18% to Rs. 3,93,788 crore.

Financial Parameters:

- Operating profit Rs. 9,733 crore and Net loss Rs. 1,558 crore.

- Capital Adequacy Ratio at 12.14% as against 10.25% prescribed by RBI (under Basel III).

- Net Worth at Rs. 19,907 crore, declined by (1.31%) over March 2016.

- Book value per share Rs. 188.62.

- Gross NPA ratio at 13.22% as on 31.03.2017.

- Net NPA ratio at 6.90% as on 31.03.2017.

- The Financial performance of the Bank for the year 2016-17 is summarised below:

(Amount in crore)

Particulars

2015-16

2016-17

Growth

(%)

Net Interest Income

11,724

11,826

0.87

Non-Interest Income

3,653

6,772

85.38

Operating Expenses

9,341

8,866

-5.09

Operating Profit

6,036

9,733

61.25

Provisions / Contingencies

12,125

11,291

-6.88

Net Profit

-6089

-1558

74.41

Earnings per share (Rs.)

-83.01

-15.72

-81.06

Book Value per share (Rs.)

246.82

188.62

-23.58

Return on Equity (%)

-26.10

-7.78

Return on Average Assets (%)

-0.94

-0.24

Key Financial Ratios are presented below

(Percentage) (%)

Parameters

2015-16

2016-17

Yield on Advances

8.28

7.98

Yield on Investment

7.81

7.58

Yield on funds

6.87

6.41

Cost of Deposits

5.25

4.84

Cost of funds

4.95

4.48

Net Interest Margin

2.11

2.20

Non-Interest Income to Operating Expenses

39.10

76.38

Other Income to Average Working Fund

0.57

1.03

Operating Expenses to Average Working Fund

1.54

1.45

Staff Expenses to Average Working Fund

0.88

0.88

Other Operating Exp. to Average working Fund

0.66

0.57

Asset Utilization Ratio

0.99

1.59

Non-Interest Income to Total Income

8.04

14.70

Non-Interest Income to Net Income

23.75

36.41

Cost to Net Income Ratio

55.72

47.67

Business Initiatives:

- Bank of India has been ranked as the 2nd Most Trusted Bank in the PSU Bank category by Economic Times.

- Bank awarded as Best Bank for Managing IT Ecosystem among Large Banks in IDRBT Banking Technology Excellence Awards for FY 2015-16

- Bank received the Best Bank Award for Electronic Payments among Large Banks from IDRBT Banking Technology Excellence Awards for FY 2015-16,

- In-house Magazine ‘Taarangan’ conferred with International award for Best In-house Magazine - 7th CMO Asia Award at Singapore.

Capital

During the year Bank has reised Rs.1338 crore by issue of 12,06,60,113 fresh equity shares to Government of India at the price Rs.110.89 per share.

The Bank has also received Rs.1500 crore from Government of India and Rs.221.92 crore from Life Insurance Corporation of India towards share application money for subscription of equity share on preferential basis. The same is treated as CET-1 Capital for CRAR purpose on 31.03.2017 in accordance with RBI circulars.

During the year Bank has also received additional Tier-I capital Bonds for an amount of Rs.2500 crore and Tier-II Bonds for an amount of Rs.2500 crore. These bonds are listed on the stock Exchanges.

Capital Adequacy:

- As per Basel III framework, the Bank’s Capital Adequacy Ratio was 12.14% which is higher than the regulatory requirement of 10.25%

- Details of Capital Adequacy (BASEL-III) are :

DIRECTORS’ RESPONSIBILITY STATEMENT:

The Directors confirm that in the preparation of the annual accounts for the year ended March 31, 2017:

a) The applicable accounting standards have been followed along with proper explanation relating to material departures, if any,

b) The accounting policies framed in accordance with the guidelines of the Reserve Bank of India were consistently applied. Reasonable and prudent judgments and estimates were made so as to give a true and fair view of the state of affairs of the Bank at the end of the financial year and of the profit and loss of the Bank for the year ended March 31, 2017,

c) Proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of applicable laws governing banks in India for safeguarding the assets of the Bank and for preventing and detecting fraud and other irregularities,

d) Annual accounts have been prepared on a going concern basis,

e) Internal financial controls system to be followed by the Bank were laid down and that such internal financial controls are adequate and were operating effectively,

f) Proper systems have been devised to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

(Rs. in crore)

Particulars

BASEL - III

31.03.2016

31.03.2017

Amount

CRAR (%)

Amount

CRAR (%)

CET 1 Capital

27,385

7.97

24,857

7.17

Additional Tier I Capital

3,662

1.06

6,009

1.73

Tier I Capital

31,047

9.03

30,866

8.90

Tier II Capital

10,242

2.98

11,216

3.24

Total Capital

41,289

12.01

42,082

12.14

Risk Weighted Assets

3,43,754

3,46,611

ACKNOWLEDGEMENT:

The Board expresses its gratitude to the Government of India, Reserve Bank of India and Securities and Exchange Board of India and other regulatory authorities for their valuable guidance and support. The Board also thanks financial Institutions and correspondent banks for their co-operation and support. The Board acknowledges the unstinted support of its customers, business associates and shareholders. The Board also wishes to place on record its appreciation of staff members for their dedicated service and contribution for the overall performance of the Bank.

For and on behalf of the Board of Directors

Dinabandu Mohapatra

Managing Director & CEO

Place : Mumbai

Date : 9th June, 2017


Mar 31, 2015

Dear Members,

The Board of Directors have pleasure in presenting the Bank''s Annual Report along with audited statement of accounts for the year ended 31st March, 2015.

PERFORMANCE HIGHLIGHTS - FINANCIAL PARAMETERS

* ''A" Total Business (Deposit Advances) increased to Rs. 9,43,633 crores reflecting a growth of 10.60% (y-o-y).

* Operating Profit and Net Profit were at Rs. 7,488 crores and Rs. 1,709 crores respectively.

* Credit Deposit Ratio stood at 77.41% as against 78.88% during last year.

* Retail Credit as on 31st March 2015 stood at Rs. 34,153 crores, posted a growth of 15.38% constituting 11.80% of your Bank''s Gross Domestic Credit in FY 15.

* MSME Credit as on 31st March 2015 stood at Rs. 54,406 crores posted a growth of 20.68% constituting 18.79% of your Bank''s Gross Domestic Credit in FY 15.

* Net Interest Margin (NIM) for Global Operations was 2.11 % and for domestic Operations was 2.49 % during FY 15.

* Net NPA to Net Advances stood at 3.36% as against 2.00% during last year.

* Capital Adequacy Ratio (CRAR) as per Basel III stood at 10.73%.

* Net Worth improved to Rs. 26,494 crores and registered a rise of 7.95% over last year.

* Book Value improved to Rs. 398.02 from Rs. 381.69 during last year.

*Business Per Employee moved up to Rs. 20.69 crores from Rs. 19.63 crores during last year.

SOME OF THE KEY FINANCIAL RATIOS ARE PRESENTED BELOW:

(In %)

Parameters 2013-14 2014-15

Yield on Advances 8.45 8.36

Yield on Investment 8.12 8.08

Yield on Funds 7.19 7.13

Cost of Deposits 5.62 5.70

Cost of Funds 5.14 5.27

Net Interest Margin 2.34 2.11

Non Interest Income to Operating 64.06 52.33

Expenses

Other Income to Average Working Fund 0.81 0.66

Operating Expenses to Average Working 1.27 1.33

Fund

Staff Expenses to Average Working Fund 0.76 0.82

Other operating Exp. to Average Working 0.51 0.51

Fund

Asset Utilisation Ratio 1.60 1.23

Non-Interest Income to Total Income 10.17 8.88

Non-Interest Income to Net Income 28.38 27.17

Cost to Income Ratio 44.30 51.93

Return on Equity 11.82 6.70

Return on Average Assets 0.51 0.27

KEY FINANCIAL DATA

(Rs. In crore)

Particulars 2013-14 2014-15 Growth (%)

Net Interest Income 10,831 11,344 4.74

Non-Interest Income 4,292 4,233 -1.37

Operating Expenses 6,700 8,089 20.73

Operating Profit 8,423 7,488 -11.10

Provisions / Contingencies 5,694 5,779 1.49

Net Profit 2,729 1,709 -37.38

Earnings per share (Rs.) 44.74 26.57 -40.61

Book value per share (Rs.) 381.69 398.02 4.28

SEGMENT- wISE PERFORMANCE

The Bank earned an Operating Profit of Rs. 7,488 crores during the financial year 2014-15. The contribution made to Net Profit by Treasury operations was Rs. 1,510 crores, wholesale Banking was Rs. 750 crores and Retail Banking was Rs. 132 crores. Your Bank earned a profit after Tax (PAT) of Rs. 1,709 crores, after deducting Rs. 597 crores of un allocated expenditure and Rs. 86 crores towards provision for tax.

DIVIDEND

Your Bank''s Directors have recommend dividend of Rs. 5 /- per share (on the face value of Rs. 10/- per share) subject to GOI approval. The Total dividend payment will amount to Rs. 399.72 crore (including dividend distribution tax).

CAPITAL

Net worth of your Bank has increased to Rs. 26,494 crores from Rs. 24,543 crores during the financial year 2014-15. During the year, the Bank has issued 2,26,45,502 Equity Shares of Rs.10/- each at a price of Rs. 283.50 per share total amounting to Rs. 642 crores ( 2,00,00,000 equity shares to LIC and 26,45,502 equity shares to The New India Assurance Co. Ltd.).

During the year, the Bank has also issued Basel-III Compliant perpetual Additional Tier-I bonds of Rs. 2,500 crores with call option.

CAPITAL ADEQUACY

As per Basel III framework, Bank''s Capital Adequacy Ratio was 10.73% which was higher than the regulatory requirement of 9%. Details of Capital Adequacy (BASEL II & III) are shown as under:

(Rs. In crore)

Particulars 31.03.2014 31.03.2015 (Under BASEL - II)

Amount CRAR Amount CRAR (%) (%)

Tier I Capital 26,248 7.56 29,864 8.23%

Tier II Capital 11,103 3.20 11,554 3.19%

Total Capital 37,351 10.76 41,418 11.42%

Risk Weighted Assets 347,014 .... 362,726 ....

(Rs. In crore)

Particulars 31.03.2014 31.03.2015

(Under BASEL - III) Amount CRAR Amount CRAR (%) (%)

Common Equity Tier-I 23,771 6.84% 26,091 7.17%

Capital (CET 1)

Additional Tier-1 1,389 0.41% 3,618 1.00%

Tier I Capital 25,160 7.25% 29,709 8.17%

Tier II Capital 9,499 2.73% 9,289 2.56%

Total Capital 34,659 9.98% 38,998 10.73%

Risk weighted Assets 347,702 -- 363,523

AWARDS & ACCOLADES

* Bank received "Best MSME bank" and "best bank for Operational Performance" awards.

* Bank received "Outlook Money Award" for "best Home Loan Provider" under Runner up category.

* "Financial Inclusion & Payment System Award" by Elets Media at New Delhi at the hands of Minister of Rural Development.

* Bank received "PMJDY Excellence Award" from Honorable Union Minister.

* Bank received IBA Award for "best Financial Inclusion Technology Initiative" from IDRBT.

* Bank received Skoch Group "Financial Inclusion Deepening Award".

* Bank won "IT excellence award" by ETNOW and VMWare for effectively implementing Virtualization in the Bank.

* Bank received the Award CIO100 2014 for the "Product Startoken NG".

* Bank received "best HR Technology award, 2014" from Banking Frontiers at Mumbai.

Redefining banking standard with Techno Enabled Services

* ATM - Member of National Financial Switch (NFS), Banks Customer can access more than 1,40,000 ATMs across the country.

* Bank has launched chip based Debit and Credit cards.

* BOI has enabled E-commerce transactions of Rupay platform.

* Look and Feel of Internet Banking with two Factor Authentication Implemented for its clientele.

* Online Term Deposit Facility with online nomination facility.

* BOI e-Pay Payment of Utility Bills, Insurance Premia, Credit Card payments of Specified Banks Property Tax of Specified Municipal Corporations etc.

* BOI * Sandesh - on - Line SMS based alerts for ATM Financial Transactions & Internet Banking Funds Transfer.

* As per Finance Ministry Guidelines and recommendations our corporate web-site (English) has been enabled for persons with disabilities.

* Hot listing / reset / unblock / change of Debit-cum-ATM Card pin using Internet Banking Password.

* Self Service Kiosks - Bar-coded passbook printers.

* Missed call facility to know the balance in SB/CD/OD accounts.

* Online Deposit in PPF A/c using internet banking.

* Introduction of IMT - Instant Money Transfer.

* BOI ''* EazyPay - Person to Person Payment Solution launched.

* Payment Gateway Solution.

* mVisa - this is mobile to mobile payment solution from Person to Merchant.

* PayWave - Tap and go (contactless payment system)

* Introducing exclusive Youth Banking Solution with Infosys.

* RuPay Platinum Debit Cards.

* IMPS facility through Branches. * Bill payment facility in Mobile Banking.

* e-Wallet (similar to ICICI - Pocket and HDFC - Chillr).

* Virtual Cards for e-commerce.

DIRECTORS'' Responsibility STATEMENT

The Directors confirm that in the preparation of the annual accounts for the year ended March 31, 2015:

a) The applicable accounting standards had been followed along with proper explanation relating to material departures, if any;

b) The accounting policies framed in accordance with the guidelines of the Reserve Bank of India were consistently applied. Reasonable and prudent judgments and estimates were made so as to give a true and fair view of the state of affairs of the Bank at the end of the financial year and of the profit and loss of the Bank for the year ended March 31,2015;

c) Proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of applicable laws governing banks in India for safeguarding the assets of the Bank and for preventing and detecting fraud and other irregularities;

d) Annual accounts have been prepared on a going concern basis;

e) Internal financial controls system to be followed by the Bank were laid down and that such internal financial controls are adequate and were operating effectively;

f) Proper systems have been devised to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

BANK''S SUBSIDIARY / ASSOCIATES

1. Indo Zambia Bank Ltd.

2. PT. Bank of India (Indonesia) Tbk

3. Bank of India (Tanzania) Ltd.

4. Bank of India (New Zealand) Ltd.

5. Bank of India (Botswana) Ltd.

6. Bank of India (Uganda) Ltd.

7. BOI Shareholding Ltd.

8. BOI AXA Investment Managers Pvt. Ltd.

9. BOI AXA Trustee Services Pvt. Ltd.

10. BOI Merchant Bankers Ltd.

11. STCI Finance Limited.

12. Star Union Dai-ichi Life Insurance Company Ltd.

STRATEGIC INVESTMENT / ALLIANCES

1. Central Depository Services (India) Ltd. (CDSL)

2. ASREC (India) Ltd.

3. Credit Information Bureau (India) Ltd. (CIBIL)

4. National Collateral Management Services Ltd. (NCMSL)

5. SWIFT India Domestic Service Pvt. Ltd.

6. SME Rating Agency of India Ltd. (SMERA)

ACKNOWLEDGEMENT

The Board expresses its gratitude to the Government of India, Reserve Bank of India and Securities and Exchanges Board of India for the valuable guidance and support received from them. The Board also thanks financial Institutions and correspondent banks for their co-operation and support. The Board acknowledges the unstinted support of its customers and shareholders and also wishes to place on record its appreciation of staff members for their dedicated services and contribution for the overall performance of the Bank.

For and on behalf of the Board of Directors

Sd/- Place : Mumbai (Mrs. V. R. Iyer) Date : 28th May, 2015 Chairperson & Managing Director


Mar 31, 2014

The Board of Directors have pleasure in presenting the Bank''s Annual Report along with audited statement of accounts for the year ended 31st March, 2014.

PERFORMANCE HIGHLIGHTS - FINANCIAL PARAMETERS

- Total Business (Deposit Advances) increased to Rs. 853,202 crores reflecting a growth of 26.44 % (y-o-y).

- Operating Profit and Net Profit were Rs. 8,423 crores and Rs. 2,729 crores respectively. Operating Profit registered a growth of 12.94% over last year.

- Credit Deposit Ratio stood at 78.88 % as against 76.73 % during last year.

- Retail Credit posted a growth of 32.44 % constituting 11.20% of your Bank''s Gross Domestic Credit in FY 14.

- MSME Credit posted a growth of 21.09 % constituting 17.06% of your Bank''s Gross Domestic Credit in FY 14.

- Net Interest Margin (NIM) for Global Operations are 2.34 % and for domestic Operations are 2.85 % during FY 14.

- Net NPA to Net Advances stood at 2.00 % as against 2.06 % during last year.

- Capital Adequacy Ratio (CRAR) as per Basel III stood at 9.97%.

- Net Worth improved to Rs. 24,543 crores registering a rise of 13.52% over last year.

- Book Value improved to Rs. 387.53 from Rs. 362.37 during last year.

- Business Per Employee moved up to Rs. 19.63 crores from Rs. 15.82 crores during last year.

KEY FINANCIAL RATIOS:

(In %)

Parameters 2012-13 2013-14

Yield on Advances 8.87 8.45

Yield on Investment 7.81 8.12

Yield on Funds 7.67 7.19

Cost of Deposits 5.94 5.62

Cost of Funds 5.50 5.14

Net Interest Margin 2.38 2.34

Non Interest Income to Operating 70.64 64.06

Expenses

Other Income to Average Working Fund 0.90 0.81

Operating Expenses to Average Working 1.28 1.27

Fund

Staff Expenses to Average Working Fund 0.75 0.76

Other operating Exp. to Average Working 0.53 0.51 Fund

Asset Utilisation Ratio 1.79 1.60

Non-Interest Income to Total Income 10.56 10.17

Non-Interest Income to Net Income 29.45 28.38

Cost to Income Ratio 41.69 44.30

Return on Equity (%) 13.62 11.82

Return on Average Assets (%) 0.65 0.51

KEY FINANCIAL DATA

(Rs. In Crore)

Particulars 2012-13 2013-14 Growth (%)

Net Interest Income 9,024 10,831 20.02

Particulars 2012-13 2013-14 Growth (%)

Non-Interest Income 3,766 4,292 13.97

Operating Expenses 5,332 6,700 25.66

Operating Profit 7,459 8,423 12.94

Provisions / Contingencies 4,709 5,694 20.89

Net Profit 2,749 2,729 -0.73

Earnings per share (Rs.) 47.79 44.74 -

Book value per share(Rs.) 362 387 -

SEGMENT- WISE PERFORMANCE

The Bank earned an Operating Profit of Rs. 8,423 crores during the financial year 2013-14. The contribution made to Net Profit by Treasury operations was Rs. 1,628 crores, wholesale Banking was Rs. 1,271 crores and Retail Banking was Rs. 932 crores. Your Bank earned a proft after Tax (PAT) of Rs. 2,729 crores, after deducting Rs. 286 crores of un allocated expenditure and Rs. 816 crores towards provision for tax.

DIVIDEND

During the year your Bank has paid an Interim dividend of Rs. 5/- per share (on the face value of Rs. 10/- per share). With and view to conserve capital, no final dividend is declared by the Board of Directors. During the year the total dividend payment amounts to Rs. 375.72 crore (including dividend distribution tax).

CAPITAL

Net worth of your Bank has increased to Rs. 24,543 crores from Rs. 21,621 crores during the financial year 2013-14. During the year, the Bank has issued 46,360,686 Equity Shares of Rs. 10/- each at a price of Rs. 215.70 amounting to Rs. 1,000 crores to Government of India. In addition to that an amount of Rs. 1,922 crores was transferred to Reserves from the profits earned.

During the year, the Bank has also issued Basel-III Compliant Tier-II bonds for Rs. 1,500 crores for 10 years maturity, without any call option.

CAPITAL ADEQUACY

As per Basel III framework, Bank''s Capital Adequacy Ratio was 9.97 % which was higher than the regulatory requirement of 9%.

Details of Capital Adequacy (BASEL II & III) are shown as under:

(Rs. In crore) Particulars 31.03.2013 31.03.2014 (Under BASEL – II)

Amount CRAR Amount CRAR (%) (%)

Tier I Capital 23,019 8.20 26,248 7.57

Tier II Capital 7,916 2.82 11,103 3.19

Total Capital 30,935 11.02 37,351 10.76

Risk Weighted Assets 280,637 - 346,754 -

(Rs. In crore)

Particulars 31.03.2014

Amount CRAR (Under BASEL – III) (%)

Common Equity Tier-I Capital (CET 1) 23,770 6.84

Additional Tier-1 1,389 0.40

Tier I Capital 25,160 7.24

Tier II Capital 9,499 2.73

Total Capital 34,659 9.97

Risk weighted Assets 347,702 -



MANAGEMENT DISCUSSION & ANALYSIS

GLOBAL ECONOMIC SCENARIO:

The economic growth in the emerging markets like India and in the developed economies like the USA and the Euro region continues to present divergent scenarios. The growth in India was 4.5 per cent in the financial year 2013-14, mainly on improved performance in the agriculture and allied sectors and the overall growth in emerging markets as per International Monetary Fund (IMF) was about 4.50 to 5 per cent. The average growth of 4.50 to 5.50 per cent is likely to continue in 2014- 15 in the emerging markets backed by solid domestic demand, recovery in exports, and supportive fiscal, monetary and financial conditions. Commodity prices will continue to boost growth in many low-income countries, including those in sub-Saharan Africa.

DOMESTIC ECONOMIC SCENARIO

According to Central Statistical Organization (CSO) Indian economy grew 4.70 per cent in 2013-14. However, the higher headline number came on the back of a lower base, as the CSO revised the 2012-13 growth estimate downwards to 4.5 per cent from 5 per cent estimated earlier. Gross domestic product (GDP) growth was driven by better farm output, which grew at 4.7 per cent.

OUTLOOK FOR FY 2014-15

Estimates by various agencies predicted average growth rate to be around 5.50 per cent in 2014-15, up from average 4.70 per cent in 2013- 14. Slow industrial growth in 2013-14 is likely to improve and pick up during 2014-15. Economy seems to have bottomed out but with structural bottlenecks to be overcome, it is yet to reach its potential.

An Asian Development Bank report has stated that there are weaknesses in terms of persistent inflation, fiscal imbalances, bottlenecks to investment, and inefficiencies that need structural reforms. Growth would have to be led by improved investment and consumption. Inflation will have to be contained or else a continuance of tight monetary stance is inevitable.

BANKING INDUSTRY – DEVELOPMENTS OUTLOOK

The growth of the banking sector is very closely linked to the growth of Indian economy which is estimated to grow at a rate of 5.5-6 per cent between 2015 to 2016. The banking industry will benefit from economic expansion and conducive government policies to shield the economy from ups and downs in the global economy and geo-political disturbances. Further, as per capita income grows and awareness about banking spreads, more populace comes to the banking fold.

BUSINESS REVIEW DEPOSITS

Bank''s total Deposits increased by Rs. 95,134 crores to Rs. 476,974 crores during the year and recording a growth of 24.91%. The growth in domestic deposits was to the tune of Rs. 69,523 crores or 23.64 % over previous year.

Savings Bank deposits grew by 13.12% and Current deposits logged a growth of 9.31%. The share of Low cost deposits (CASA) comprising of Savings and Current deposits to total domestic deposits is 29.97%. The Bank has a well diversifed deposit base with 12% of domestic deposits coming from rural areas, 13% from semi urban, 18% from urban and 57% from metro areas. The bank''s total clientele base of 77.34 million consisted of 71.95 million depositors and 5.39 million borrowers as on 31st of March, 2014.

ADVANCES

Bank''s gross advances increased by Rs. 83,260 crores to Rs. 376,228 crores during the year and recording a growth of 28.42%. The Gross Domestic Credit of the Bank registered a growth of 29.52 % from Rs. 204,036 crores on 31.03.2013 to Rs. 264,260 crores on 31.03.2014 as against the growth rate of 14.66 % in the last financial year 2012-13. Incremental credit disbursement to new and existing accounts in Public Sector Units & Public Sector Entities and NBFCs has contributed in higher growth.

Timely sanctions and prompt disbursements in Large Corporate, Mid Corporate, Retail, SME and Agriculture segments have been instrumental in substantial credit growth.

The Bank also set up a New Business Department during the year to help in new customer acquisition and augment quality credit growth.

Bank added 164 New Corporate customers during the financial year. Bank caters to specialised needs of Corporate/Mid corporate through 10 Large Corporate Banking Branches, 41 Mid Corporate Branches. The needs of other clients from Retail, SME and Agriculture are met through the Network of 4,646 Domestic branches. Bank''s 56 Overseas Centers across 5 continents also caters to credit requirement of exporters and overseas clients.

INFRASTRUCTURE FINANCE

During the year, Bank sanctioned Fund Based Limit of Rs. 16,626 crores and Non Fund Based Limit of Rs. 4,367 crores under infrastructure projects in New and Existing accounts covering Power, Telecommunication, Roads, Ports and other infrastructure.

Bank continued to provide support in this segment with additional disbursement of Rs. 8,863 crores of which 52 % has been to Power sector and 28 % has been to Road and Port Projects.

CORPORATE CREDIT

Bank is extending credit to Corporate Customers through specialized branches which contribute 54 % of Gross Domestic Credit.

10 Large Corporate Branches Located at Major Cities and catering to all the major corporates across country at– Mumbai, New Delhi, Kolkata, Chennai, Bangalore, Hyderabad, Ahmedabad and Pune. Mid Corporate Branches covers rest of major business centers including above.

For serving corporates at other centres, 21 SME City Centres are equipped with Credit Processing Cells with direct reference to Large Corporate Credit Department at Head Office

LARGE CORPORATE

The advances through Large Corporate Branches constitutes 41 % share in total domestic advances as on 31.03.2014. Advances to Corporate segment through LCBs has increased from Rs. 84,047 crores as on 31.03.2013 to Rs. 110,651 crores as on 31.03.2014, showing a growth of 31.65 % over last year.

MID CORPORATE

Mid Corporate vertical contributes 12.91 % of the total domestic Credit portfolio. During the FY 2013-14, total Credit under Mid Corporate Branches grew from Rs. 30,949 crores to Rs. 34,923 crores registering a growth of 12.84 %.

NEW BUSINESS

During a short period of 3 months, the department has been successful in establishing relationships with large number of Public and Private sector enterprises. There has been a quantum jump in disbursements to leading Public Sector companies. As a Medium Term plan, New Business Department has embarked upon a plan to acquire substantial number of new clients in Mid and Large corporate segment. Department has shortlisted around 950 corporates after analyzing their financials and circulated the list to all the Mid and Large Corporate branches and to Zonal Offices for establishing initial contact, depending upon the geographical presence of the corporates. As a next step, the department shall provide all logistics support to branches/zones by meeting the prospective clients, understanding their needs and structuring the products as per their requirements. Going forward, department also proposes to undertake Syndication and Project Finance business to increase the fee based income of the bank.

FOREX BUSINESS

The Forex business handled by the Bank has shown decent growth on the back of need for foreign exchange from exporters and importers. During the year 2013-14, Merchant and Interbank turnover was Rs. 203,720 crores and Rs. 499,187 crores respectively. The Bank continues to be a leading player in the forex market. The aggregate turnover of Bank''s treasury Branch during the year was Rs. 702,907 crores.

TREASURY OPERATIONS

The Bank continues to play an active role in all segments of the market- Funds, Forex and Bonds during 2013-14. The Bank has churned its investments portfolio and earned profit from trading and sale of securities by taking advantage of the G sec rate movements. Bank has registered 78.08 % growth in profit from sale of securities in FY 2013-14 as compared to FY 2012-13. Bank has taken advantage of arbitrage opportunity within various market segments and could place the excess rupee funds in Certificate of deposits (CD), buy /sell foreign currency swaps, term money markets there by earning a spread of 1 % to 1.50 %. The Bank has built up a portfolio of Rs. 364 crores in CDs by borrowing in CBLO/Repo against ''T'' Bills and surplus securities thereby earning a spread of approximately 0.25 % to 0.75 %.

RURAL BANKING - PRIORITY SECTOR ADVANCES:

Priority sector advances have wide social ramifications apart from presenting a big business opportunity. With its vast network of rural and semi-urban branches and committed personnel, the Bank has always been one of the leaders in servicing to the priority and agriculture sectors. The Bank has registered an outstanding level of Rs. 82,021 crores under Priority Sector which is 40.45 % of Adjusted Net Bank Credit (ANBC).

Under Special Agricultural Credit Plan, Bank could disburse Rs. 19,130 crores during the financial year 2013-14. The outstanding position of priority sector advances under various segments is as under:

(Rs. In Crores)

As on 31st March Growth

2013 2014 Amount % age

1. Agriculture 27,041 36,071 9,030 33.39

2. Small Enterprise 28,913 35,504 6,591 22.80

3. Education 2,329 2,597 268 11.51

4. Housing 6,790 7,517 727 10.71

Total Priority Sector 65,518 82,021 16,503 25.19

FINANCIAL INCLUSION

The progress under Financial Inclusion Plan (FIP) in 2013-14 is:- - No. of Basic Savings Bank Deposit Accounts opened : 107.28 lakhs

- No. of Smart Cards issued : 22.68 lakhs

- GCC/KCC issued : 22.10 lakhs

- Business Correspondents engaged : 6072

- Channel Management Partners engaged : 105

- No. of Villages where 100% FI achieved : 14060

The Bank has achieved 100% Financial Inclusion in all 4,404 allotted villages with population above 2000 as on 31.03.2014. Robust operational systems with adequate risk mitigants and best practices have been built up and are being pursued.

REGIONAL RURAL BANKS

Bank has sponsored 4 (four) Regional Rural Banks (RRBs) namely Jharkhand Gramin Bank (Jharkhand State), Aryavart Kshetriya Gramin Bankt (Uttar Pradesh State), Narmada Jhabua Gramin Bank (Madhya Pradesh State) and Vidarbha Konkan Gramin Bank (Maharashtra State). All RRBs are profit making. All Branches and administrative offices of the Gramin Banks are now on CBS platform. These banks are enabled on RTGS and NEFT and ATM platforms. All RRBs taken together have a branch network of 1,524 outlets and have garnered a business mix of Rs. 30,891 crores.

RETAIL CREDIT

The Bank during the year 2013-14, perused the policy of building up a healthy retail credit portfolio. In the post recessionary period of FY 2013- 14 the spring buds of reviving economy gave ample opportunity for retail credit. The retail credit portfolio of the Bank increased from Rs. 22,350 crores to Rs. 29,600 crores as on 31st March, 2014. During this period the contours of retail credit were also redefined. The growth in respect of major Retail loan schemes was as under:

(Rs. In crores)

As on As on Growth & Scheme 31.03.2013 31.03.2014 %age growth

Star Home Loan 10,267 13,081 2,814 / 27 % Scheme

Star Education 2,412 2,652 240 /10 % Loan Scheme

Star Vehicle 2,037 2,351 314 /15 % loan Scheme

Star Personal 779 927 148 /19 % Loan Scheme

Star Mortgage 2,007 2,971 964 / 48 % Loan Scheme

SME - PERFORMANCE OF THE BANK UNDER MSME

- Business growth : MSME Outstanding -Rs.45,081 crores registering Y-O-Y growth of 21.04 %.

- Performance under MSE: MSE Outstanding - Rs. 38,686 crores registering Y-O-Y growth of 21.15 %.

- MSE manufacturing sector has grown from Rs. 16,031 crores (March 2013 ) to Rs. 20,095 crores ( March 2014), witnessed Y-O-Y growth of 25.35 %.

- Share of Micro sector within MSE has slightly decreased to 47.69 % as at March 2014 from 49.54 % as on March 2013.

- Growth in number of Micro accounts: 93,903 accounts have been sanctioned under Micro segment during 2013-14 registering growth of 18.60 % over accounts as at 31.03.2013 against the mandatory target of 10 %.

- Performance under CGTMSE -33,930 new accounts added under CGTMSE scheme during 2013-14 covering exposure of Rs. 2,351 crores. We continue to remain at No.1 among PSU banks in terms of total coverage under the scheme which has reached to the level of 1.51 lakhs accounts with total exposure coverage ofRs. 9,614 crores as on March 2014.

- Performance under PMEGP : 503 accounts with limit of Rs. 158 crores has been sanctioned during the year 2013-14 under PMEGP.

ASSET RECOVERY & NPA MANAGEMENT

The level of Non Performing Assets (NPA) is key to any bank''s profitability and consequently larger the efforts of a bank to minimise NPAs, the better it is in the long-term. The Bank continued its drive and focus in improving its performance in the area of NPA management in the year 2013-14 as well. NPA reduction has been given utmost priority at the Bank and this function has steadily grown in importance. Substantial measures were initiated to augment recovery and contain NPAs. Efforts were also made to maximize recovery in written off accounts and uncharged / unrealised interest in NPA accounts which contributes to the Bank''s profits significantly. The following table shows management of NPAs during last 3 years:

(Rs. in crores) Item 31.03.12 31.03.13 31.03.14 (Actual) (Actual) (Actual)

GROSS NPA (Opening) 4,812 5,894 8,765

Less:

Cash-Recovery 1,205 1,245 3,066

Upgradations 487 759 938

Write-off_ 2,415 2,415 1,767

Agr. Debt Waiver/Debt

Relief Scheme 2008 0 0 0

Total Reduction 4,107 4,419 5,771

Add:

Slippages 5,401 7,379 8,811

Less Unrealised Interest

(URI) (introduced from

F.Y 2009-10) 212 89 -63

Item 31.03.12 31.03.13 31.03.14 (Actual) (Actual) (Actual)

GROSS NPA (Closing) 5,894 8,765 11,869

Recovery in W/Off A/cs,

UCI/URI 672 1,051 878

Net NPA 3,656 5,947 7,417

% age of Gross NPA 2.34 2.99 3.15

to Gross Advances

% age of Net NPA to Net 1.47 2.06 2.00

Advances

During the year Bank sold assets with o/s Rs. 4,743 crores (Corporate as well as Retail) and both cash & SR basis in which assets sold on absolute cash basis for Rs. 11.53 crores. The component of cash & SR basis and the reserve assets is Rs. 146 crores / Rs. 2,471 crores respectively.

BRANCH NETWORK & EXPANSION

The Bank has a geographically well spread branch network in India and abroad. The Bank had 4,646 branches in India as on 31.03.2014. In the foreign countries, 25 branches and 31 representative offices keep Bank''s presence felt in all time zones and important financial centers of the globe.

During the year 2013-14, Bank opened 354 new branches including 5 Extension Counters converted into full-fedged branches.

Composition of Bank''s Branch Network is as follows :

31.03.2013 31.03.2014 Category No. of Brs. % to Total No. of Brs. % to Total

Metropolitan 787 18.34 833 17.93%

Urban 742 17.29 789 16.98%

Semi-Urban 1,165 27.14 1,258 27.08%

Rural 1,598 37.23 1,766 38.01%

Total Branches 4,292 100.00 4,646 100.00

COMPLIANCE WITH RESERVATION POLICY

The Bank is complying fully with the reservation policy of the Government of India. Special Recruitment and SC/ST Cells at Head Office / Zonal Offices are functioning to monitor the implementation of the reservation policy and redressal of grievances relating to SC/ST/OBC Employees.

REPRESENTATION OF SC/ST/OBCs IN TOTAL STAFF STRENGTH (INDIAN)

March 2014 Officers Clerks Sub-Staff Total

SC 2,958 3,025 2,736 8,719

% to total Staff in Indian Offices 16.82 16.86 35.90 20.21

ST 1,326 1,842 796 3,964

% to total Staff in Indian Offices 7.54 10.27 10.44 9.19

OBC 2,492 2,132 1,226 5,850

% to total Staff in Indian Offices 14.17 11.88 16.09 13.54

COMPLIANCE

Compliance in a regulatory context is of prime importance because of an ever-increasing number of regulations and a fairly widespread lack of understanding about what is required for an organisation to be compliant. Compliance has, thus, increasingly become a concern of corporate governance.

A Compliance Function Policy for the Bank was adopted by the Board as per Reserve Bank of India guidelines. An independent Compliance department, headed by a Chief Compliance Officer of the rank of General Manager, is functioning at Head office. Compliance of statutory, regulatory and internal guidelines of the Bank is the scope of operation of the compliance function of the Bank.

OFFICIAL LANGUAGE DEPT.

Bank''s Official Language Department successfully organized a series of Official Language conferences at Kolkata, Ahmedabad and New Delhi. Work done by our Bank has been appreciated by Govt. of India, Ministry of Home, Offcial Language Department.

Our Bank was the first to implement Rajbhasha model "Rajbhasha Prayog – Aapsi Sanwad – Sarthaki Disha" designed by Finance Ministry, Financial Services department, New Delhi by organizing this program at Lucknow (17.10.2013). A CD about this program was sent to the Head Offices of Nationalized Banks.

BANK''S SUBSIDIARY / ASSOCIATES

1. BOI Shareholding Ltd.

2. BOI AXA Investment Managers Pvt. Ltd.

3. BOI AXA Trusteeship Services Pvt. Ltd.

4. PT. Bank of India (Indonesia) Tbk.

5. Bank of India (Tanzania) Ltd.

6. Bank of India (New Zealand) Ltd.

7. Bank of India (Botswana) Ltd.

8. Star Union Dai-ichi Life Insurance Company Ltd. (SUDLife).

9. STCI Finance Limited.

10. Indo Zambia Bank Ltd. (IZB).

STRATEGIC INVESTMENT / ALLIANCES

1. Central Depository Services (India) Ltd. (CDSL).

2. ASREC (India) Ltd.

3. Credit Information Bureau (India) Ltd. (CIBIL).

4. National Collateral Management Services Ltd. (NCMSL).

5. SWIFT India Domestic Service Pvt. Ltd.

6. SME Rating Agency of India Ltd. (SMERA).

BUSINESS RESPONSIBILITY REPORTING

In terms of SEBI guidelines, text of the Business Responsibility Reporting is available on our website i.e. www.bankofndia.co.in

DIRECTORS'' RESPONSIBILITY STATEMENT

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

(a) The applicable accounting standards had been followed along with proper explanation relating to material departures, if any;

(b) The accounting policies framed in accordance with the guidelines of the Reserve Bank of India were consistently applied. Reasonable and prudent judgments and estimates were made so as to give a true and fair view of the state of affairs of the Bank at the end of the financial year and of the profit and loss of the Bank for the year ended March 31, 2014;

(c) Proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of applicable laws governing banks in India for safeguarding the assets of the Bank and for preventing and detecting fraud and other irregularities;

(d) Annual accounts have been prepared on a going concern basis;

(e) Internal financial controls system to be followed by the Bank were laid down and that such internal financial controls are adequate and were operating effectively;

(f) Proper systems have been devised to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

ACKNOWLEDGEMENT

The Board expresses its gratitude to the Government of India, Reserve Bank of India and Securities and Exchanges Board of India for the valuable guidance and support received from them. The Board also thanks financial Institutions and correspondent banks for their co-operation and support. The Board acknowledges the unstinted support of its customers and shareholders and also wishes to place on record its appreciation of staff members for their dedicated services and contribution for the overall performance of the Bank.



For and on behalf of the Board of Directors

Sd/-

Place : Mumbai (Mrs. V R Iyer)

Date : 15.05.2014 Chairperson & Managing Director


Mar 31, 2012

The Board of Directors have pleasure in presenting the Bank's Annual Report along with the audited statement of accounts and the cash flow statement for the year ended 31st March, 2012.

PERFORMANCE HIGHLIGHTS

FINANCIAL PARAMETERS

- Operating profit Rs 6,694 crore, with 24.33% growth over the previous year.

- Net Profit Rs 2,678 crore, recording 7.59% growth over previous year.

- Capital Adequacy Ratio at 11.95% as against 12.17% in previous year (under Basel-II).

- Net Worth at Rs 18,759 crore grew by 21.03% over March, 2011.

- Book Value per share Rs 326.52 (Rs 283.24 previous year)

- Gross NPA ratio at 2.34% as on 31.03.2012.

- Net NPA ratio at 1.47% as on 31.03.2012.

- Total business (Deposit Advances) reached Rs 5,69,710 crore recording a growth of Rs 54,670crore (10.61%).

- Total deposits increased by Rs 19,330 crore reached the level of Rs 3,18,216crore, a growth of 6.47%. Share of low cost deposits in the domestic deposits is 34.25% as on 31.03.2012 as against 29.18% as on 31.03.2011.

- Gross credit touched Rs 2,51,494 crore, recording a growth of 16.35%.

- Priority Sector lending constituted 36.67% of Net Adjusted Bank Credit and the share of Agricultural Credit to Net Adjusted Bank Credit was 14.54%.

- Credit to SME sector grew from Rs 30,045 crore to Rs 32,270 crore recording a growth of 7.41%.

- Schematic Retail credit grew by 14.82% from Rs 16,649 crore to Rs 19,116 crore.

- Export Credit registered a growth of Rs 791 crore, i.e., 10.50% growth over previous year to reach Rs 8,128 crore as on 31.03.2012.

NEW PRODUCTS & SERVICES

- Welcome Kits introduced for NRI Customers opening NRE/NRO accounts at foreign centers.

- Calculation of interest on Savings Bank account from 1st April 2010 has been changed from monthly product basis to daily product basis.

- As per Finance Ministry guidelines and recommendations, the Bank's corporate web-site (English) has been enabled for differently abled persons.

- The Bank has introduced a new format of Savings Bank Passbook (Horizontal Format) which will print all details of the transaction on the same page as against the existing format (Vertical Format) where the details are printed on two pages.

- As per Banking Codes and Standards Board of India (BCSBI) requirements, the Bank is printing helpline number on the passbook & statement of accounts.

- The Bank introduced issuance of insta pin for Debit- cum-ATM Card. This will resolve the customer grievance for non-receipt of Re-pin and also save the effort and expenses in generating and mailing Re-pins.

- Quarterly consolidated Statement of a/c is sent to the Diamond customers in PDF format via email.

- As a fraud prevention measure, SMS alerts - Star Sandesh are generated and provided to all customers who have registered their mobile numbers with the Bank for all Debit transactions from delivery channels (Internet banking/ATM/POS); all Debit clearing transactions of Rs 25,000/- and above; all Customer induced debit transfer & cash payments of Rs 10,000/- and above; all Debit ECS transactions of Rs 10,000/- and above; all Debit RTGS / NEFT transactions and acknowledgment on accepting the cheque book issue request.

- Enabling internet banking customers to make online Fixed Deposit with nomination facility.

- Hot Listing/Reset/Unblock/Change of Debit Cum ATM card PIN using Internet Banking password.

- Viewing of Annual Tax Statement (Form 26AS).

- Star Trade - Online share trading - Integration with Gupta Equities.

- Extended the facility of online e-Payment to the customers holding Bank's Debit-cum-ATM card. This will enable the customers to use their Debit-cum-ATM cards for e-payments in addition to credit card Internet banking account.

- Mobile Banking facility is introduced as the latest alternate delivery channel which allows customers to do banking activities virtually from the convenience of the Mobile phone at any time and from anywhere. This facility is extended to all Retail internet banking customers and includes features like Balance enquiry, last five transactions, Cheque status, Funds Transfer & Mobile Payments.

- Online Interbank Fund Transfer across banks, through Star Connect Internet Banking Services, using RTGS/ NEFT.

- BOI Star e-Pay for Auto-pay or on-line payment of various utility services / bills.

- e-Payment for Direct & Indirect, Central Excise & Service Tax.

- Star e-Share Trade to trade in shares.

- e-Freight Payment.

- Online Payment of Directorate General of Foreign Trade (DGFT) license fees.

- Online Booking of Railway & Airlines Ticket.

- Online Application for Education loan.

- Provision to make online bid-cum-application for Application Supported by Blocked Amount (ASBA) IPO issues by Retail Internet Banking Customers having account with any DPO.

- BOI-BTM (Banking through Mobile launched).

- DHAN-AADHAR CARD Launched with micro ATM & Biometric pin authentication facility.

- Introduction of Personal Accident Insurance Cover for all No Frill account holders.

- Bank has launched BOI Star Pension Aadhar Card, BOI Privilege International Credit & Debit Cards and RuPay Card as alternate delivery channels.

- For International Travellers BOI Star International Travel Card in US Currency with Visa Affiliation has been introduced.

BUSINESS INITIATIVES

- The National Banking and Wholesale & International Banking Group segments distinctly headed by the two Executive directors are functioning independently in an organised manner.

- National Banking group at Head Office level comprising of Retail, Rural including Financial Inclusion and SME Banking business units are concentrating in customer acquisition in a big way.

- Wholesale & International Banking group at Head Office level comprising of Large, Mid Corporate Banking, Project Finance including Syndication Services, International Banking and Treasury operations are catering to bulk business opportunities.

- The mapping of Large and Mid-Corporate accounts to the respective branches has been completed. This process of updation is undertaken on yearly intervals on 31st March.

- Presently 52 Rural Processing Centres are operational across 35 zones.

- Product Innovative Cells have been planned to be opened to explore new territories for penetration in agricultural business.

- All RRBs of the Bank have migrated to Core Banking Solution and are RTGS / NEFT enabled.

- Cash & Fidelity Insurance has been introduced for business correspondent channel.

- 21 Retail Business Centres are operational for quick delivery of Credit.

- Bank has introduced Star Vidhya Education Loan, BOI Star Loan against Property and Star Diamond Home Loan Schemes.

- A total of 21 SME City Centres are functioning in 20 zones. These centres have been instrumental in reduced Turn Around Time (TAT) for credit delivery.

- The 41 Mid-Corporate branches are monitored by Seven Divisional Managers.

- Bank has introduced Diamond / Platinum / Gold Customer concept for encouraging SME customers with good track record.

- Bank has launched Composite Loan Product and Demand / Term Loan Products for Medium & Small Enterprises. For SME Entrepreneurs, Star SME Contractor Credit Line, Star SME Liquid Plus, Star SME Auto Express & Star SME Education Plus Loans Schemes have been introduced.

- The 10 Large Corporate branches are directly monitored by the General Manager from Head Office.

- Lead Management System (Sales Force Automation), to generate, track and monitor leads, is stabilized and functioning satisfactorily.

- A scheme for extending financial assistance at concessional rate of 4% to select low income groups for productive endeavours under the Differential Rate of Interest (DRI) Scheme is being implemented by the Bank. The Bank has extended financial assistance to 11665 beneficiaries during the year.

- The Bank has been actively involved in implementation of the Golden Jubilee Rural Housing Finance Scheme (GJRHFS) and has achieved the target allocated by National Housing Bank for the year. During the year, Bank has sanctioned 1443 cases under GJRHFS.

- The Bank is very active in implementing programme of Financial Inclusion as a movement extending all banking products and services to all who are currently deprived from these services. So far, first step towards achievement of Financial Inclusion was opening of No- Frill Accounts and accordingly, the Bank has opened 12.63 lakh No-Frill Accounts during FY 2011-12.

- The Bank is also implementing IT solutions on end to end basis using hand held devices and smart cards. The Bank has issued/ enrolled 7.65 lakh smart cards.

- Project Finance And Syndications Group: It takes up assignments of technical appraisal, underwriting and syndication of loans. During FY 12 financial closures were done with a project cost of Rs 13,119 Crore and syndicated debt of Rs 20,957 Crore. Bank of India achieved fifth position in syndication space as per the Bloomberg Lead tables for the calendar year 2011.

- The Bank has created a new SME vertical headed by a General Manager to cater to the specific business needs of the segment. A more inclusive definition has been given for SME business to include all business activities with a turnover of upto Rs 100 crore. The vertical will look for growth not only on credit, but CASA, retail business, fee based income and third party products in the SME segment.

- Mobile Banking facility is introduced as the latest alternate delivery channel which allows customers to do banking activities virtually from the convenience of the Mobile phone at any time and from anywhere. This facility is extended to all Retail internet banking customers and includes features like Balance enquiry, last five transactions, Cheque status, Funds Transfer & Mobile Payments.

- Established Global Remittance Centre for centralizing some of the activities related to NRI Customers which would hasten turnaround time and product delivery and also enable proactive marketing strategies & grievance redressal mechanism.

AWARDS & ACCOLADES

- Bank of India has been rated by The Economic Times/ The Nielsen company survey

- The most Trusted Brand(MTB) 2011

- Under PSU Banking Category-2nd next to SBI

- Under Top Service Brands-11th

- Government of India has also acknowledged Bank's performance in lending Micro & Small Enterprises sector conferring second best performance award (next to SBI). The Bank has also recognized as "Best Performing Bank" for covering maximum number of Micro & Small accounts under collateral free lending scheme of CGTMSE.

- CIO Green IT Award.

- Bank of India, Mumbai North Zone received Third Prize for use of Official Language Hindi in Bank from Government of India, Ministry of Home Affairs, Official Language Department.

FINANCIAL REVIEW

FINANCIAL PERFORMANCE

The Bank recorded an Operating Profit of Rs 6,693.95 crore, (previous year Rs 5,384.23 crore). Net Profit stood at Rs 2677.52 crore (previous year Rs 2,488.71 crore).

Net interest income grew by 6.44% due to rise in volumes of business mix by 10.61% (from Rs 5,15,040.06 crore to Rs 5,69,710.32 crore). Non-interest income increased by 25.74% and covered 67.23% of Operating Expenses as against 52.12% in the previous year.

The Financial performance of the Bank for the year 2011-12 is summarised below:

(Amount in Rs crore)

Particulars 2010-11 2011-12 Growth (%)

Net Interest Income 7,810.69 8,313.43 6.44

Non-Interest Income 2,641.77 3,321.77 25.74

Operating Expenses 5,068.24 4,940.66 -2.52

Operating Profit 5,384.23 6,693.95 24.33

Provisions / Contingencies 2,895.52 4.016.43 38.71

Net Profit 2,488.71 2,677.52 7.59

Earnings per share (Rs) 47.35 48.98 3.44

Book value per share (Rs) 283.24 326.52 15.28

Return on Average Networth (%) 17.80 15.63 -

Return on Average Assets (%) 0.82 0.72 -

Some of the Key Financial Ratios are presented below:

(Percentage) (%)

Parameters 2010-11 2011-12

Yield on Advances 8.62 9.38

Yield on Investment 7.59 7.69

Yield on Funds 7.14 7.88

Cost of Deposits 5.03 6.01

Cost of Funds 4.57 5.58

Net Interest Margin 2.92 2.52

Non Interest Income to Operating Expenses 52.12 67.22

Other Income to Average Working Fund 0.87 0.92

Operating Expenses to Average Working Fund 1.66 1.37

Staff Expenses to Average Working Fund 1.14 0.84

Other operating Exp. to Average Working Fund 0.52 0.52

Asset Utilisation Ratio 1.77 1.85

Non-Interest Income to Total Income 10.83 10.44

Non-Interest Income to Net Income 25.27 28.55

Cost to Net Income 48.49 42.47

SEGMENT- WISE PERFORMANCE

The Bank earned an Operating Profit of Rs 6,693.95 crore during the year 2011-12. The contribution made through Treasury operations was Rs 5,909.00 crore and other banking operation earned a profit of Rs 784.95 crore. The unallocable expenditure net of unallocable income was Rs 152.98 crore during the year 2011-12.

DIVIDEND

A Dividend at the rate of Rs 7/- per share (70%) for the year, has been recommended. The total dividend payment amounts to Rs 465.98 crore (including dividend distribution tax).

CAPITAL

Net worth of the Bank has increased to Rs 18,759.40 crore from Rs 15,499.50 crore during the financial year ending 2011- 12. During the year, the Bank has increased its equity capital through Preferential Issue of Equity Shares to the Insurance Corporation of India.

CAPITAL ADEQUACY

As per Basel II framework, the Bank's Capital Adequacy Ratio of 11.95% which was higher than the regulatory requirement of 10%.

Details of Capital Adequacy (BASEL II) are shown as under :

(Rs in crore)

Particulars 31.03.2011 31.03.2012 (Under BASEL - II) Amount CRAR (%) Amount CRAR (%)

Tier I Capital 17,047 8.33 20,230 8.59

Tier II Capital 7,867 3.84 7,916 3.36

Total Capital 24,914 12.17 28,147 11.95

Risk Weighted Assets 2,04,76 - 2,35,466 _

BUSINESS REVIEW

DEPOSITS

Bank's total Deposits increased by Rs 19,330.22 crore to Rs 3,18,216.03 crore during the year recording a growth of 6.47%. The domestic deposits stood at Rs 2,48,475.30 crore and overseas deposits at Rs 69,741 crore.

Non-Resident Deposits of the Bank stood at Rs 13,778 crore which constituted 5.60% of aggregate domestic deposits.

Savings Bank deposits grew by 13.05% and Current deposits logged a growth of 3.81%. The share of low cost deposits comprising of savings and current deposits to total domestic deposits (excluding Inter Bank deposit) is 34.25%.

The Bank has a well diversified deposit base with 12% of domestic deposits coming from rural areas, 13% from semi urban, 18% from urban and 57% from metro areas. The bank's total clientele base of 54.09 million consisted of 49.90 million depositors and 4.19 million borrowers as on 31st of March, 2012.

ADVANCES

The Gross Advances of the Bank increased from Rs 2,16,154 crore as on 31.03.2011 to Rs 2,51,494 crore as on 31.03.2012, recording a growth rate of 16.4%.

Under Large Corporate portfolio, the Bank added 88 new customers and accounts, 13 Large Corporate Banking Branches, 41 Mid Corporate Branches and 9 Overseas NRI branches continue to cater exclusively to the specialised credit requirement of the Corporate borrowers/exporters.

INFRASTRUCTURE FINANCE

During the year, the Bank sanctioned fund based limits of Rs 4,654 crore and Non Fund Based limits Rs 336 crore under infrastructure projects covering power generation, telecommunications, ports, roads, construction contractors.

EXPORT CREDIT

The Bank is active in meeting the importers and exporters clients' financial requirements both in domestic and in foreign currency as well. Bank's 208 branches across the country are authorized to handle foreign exchange business and cater to the credit/ foreign exchange needs of importers & exporters. The Bank's export credit registered a growth of Rs 739 Crore i.e. 10% increase over March 2011 and reached a level of Rs 8,128 Crore as on 31st March, 2012. The share of export credit to net adjusted bank credit as at March 2012 was 5.04%.

Financial requirements of both exporters and non-exporters are met through ECB at the Bank's overseas branches and Foreign Currency loans at domestic branches. The total amount of such advances as at 31.03.2012 was USD 1405.84 million (Comprising of ECBs USD 652.12 Mn. and Foreign Currency Loan of USD 753.72 Mn.) equivalent to Rs 7,152.21 crore. The bank also extended pre-shipment and post-shipment export credit in foreign currency and the amount outstanding as at 31.03.2012 was USD 244.75 Mn. (equivalent to Rs 1,245.17 crore).

Wholesale and International Banking Group:

LARGE CORPORATE

The Large Corporate segment constitutes 47% share in total advances as on 31.03.2012. Advances to this important segment has increased from Rs 80,821 crore as on 31.03.2011 to Rs 86,703 crore as on 31.03.2012. It has been decided that large corporate share in total advances needs to be pruned gradually to around 42%, so that funds may be deployed in segments where yield is comparatively better.

With implementation of "SANKALP 10,000", Large Corporate Credit set-up has been re-designed for:.

- Separate Large Corporate Vertical has been created to cater to the large corporates having sales turnover above Rs 500 Crore. In order to have more focused attention and to reduce turnaround time, eight additional LCBs were opened during the year 2010-11 and two in the year 2011-12 taking the total LCBs to ten.

- Accounts at Large Corporate branches have been mapped with RSMs who would look after all corporate needs of the customer for cash management, forex, treasury products, trade finance, deposits, retail banking and third party products and customer will have one point contact through the Relationship Manager for all banking needs.

- Credit business at Large Corporate Branches have been segregated between Relationship Managers reporting to Branch Head and Credit Appraisal Officers reporting to Credit Team Leader as measure of Risk Management. Credit proposals processed at Large Corporate Branch are now sent directly to General Manager, Head Office, Large Corporate. This has resulted in reduction of turnaround time.

- Bank has put system in place to monitor pending Proposals / references at Large Corporate branches as well as at Head Office level. This has helped in reducing turn around time.

Strategies:

— The Bank, for reducing turn around time, has developed CAPS module for credit processing.

— Large Corporate branches, apart from meeting the credit needs of borrowers, are now taking care of entire banking needs of the corporate customers. The Relationship Managers (RSMs) have been posted at Large Corporate branches who serve as a focal point for corporate clients and canvass new business.

MID CORPORATE

Mid Corporate vertical was established in October, 2010 with the sole purpose of meeting all banking related requirements of the customer under a single roof. The purpose of setting up of separate Mid Corporate vertical is to harness the large potential in the segment which offers higher yields with wider risk spread.

Mid Corporate covers new companies with project cost of Rs 10 crore - Rs100 crore. For existing units sales turn over criteria of Rs 100 crore - Rs 500 crore applies. Mid Corporate vertical operates through 7 (Seven) Divisional Offices and 41 Mid Corporate branches. There are 12 (Twelve ) Credit Processing Centres (CPC) established exclusively for processing of the proposals.

During the FY 2011-12, the Credit business under Mid Corporate vertical grew from Rs 18,483 crore to Rs 22,234 Crore registering a growth of 20.30%. Similarly, Deposit business grew from Rs 8,360 crore to Rs 9,483 crore registering a growth of 13.40%. Mid Corporate vertical contributes 12.04% of the total domestic Credit and 4.08% of domestic Deposit business of the Bank.

PROJECT FINANCE AND SYNDICATIONS GROUP

Project Finance and Syndications Group of the bank is manned by highly experienced and qualified professionals. It undertakes appraisals of infrastructure and industrial projects.

It takes up assignments of technical appraisal, underwriting and syndication of loans. During the Year 2011-12 financial closures were done with a project cost of Rs 13,119 crore and syndicated debt of Rs 20,957 crore. Bank of India improved All India Rankings in Domestic Syndication from 6th to 5th in the Bloomberg Lead Tables for the calendar year 2011.

The bank has recruited Engineers and MBA's from the Industry with diverse experience to strengthen the technical appraisal and syndication team of the Bank.

Bank is also acting as Mandated Lead Arranger (MLA) and Joint Book Runner (JBR) for Multicurrency International Syndication loans and arranged loan in USD, JPY, EURO and GBP currencies for Indian Corporate for their expansion/ acquisition and Joint Ventures, covering a wide range of industries.

The technical appraisal department, which supports the syndication team, continued appraisal of industrial credit apart from that for syndicated loans. The team comprising of professional engineers, evaluated technology related risks for a business worth Rs 4,300 Crore for the year, enabling the bank to improve quality of industrial assets. The operations of the Technical Appraisal Department, translated into a fee based income of Rs 21.46 Crore for the Bank during the year.

TRANSACTION BANKING

Transaction Banking department is focusing on 4 business lines, with an intention to make them major revenue drivers for the Bank. They are:

- Cash Management Services,

- Channel Finance,

- Trade Finance, and

- Garnering Government Business

In the year 2011-12 Bank has made significant strides in Cash Management Services (CMS) space by adding 50 new clients and increasing the revenue from this business segment manifold.

The process for acquiring the new software system has been initiated. The system will take care of CMS, Channel Finance and centralization of trade finance. The direct customer interface through a portal will be made available through the new system. The first module of the new system is likely to be rolled out by August-September 2012. The installation will be in phases and is expected to be completed by March 2013. The new software will have integration with Bank's core system finacle with Host to Host connectivity, web access to the clients with capabilities to integrate with client ERP software. This will result in better targeting of clientele and will enhance the business volume and fee based income in addition to the sizable float balances. On standalone basis, small banks have been targeted for correspondent banking arrangements and deposit heavy clients for float.

For Bank's corporate and HNW clients, cash pick up facility (Door Step Banking) has been put in place at all NBG offices. The initiative has received positive response from target clientele who have been relieved from the worries and risks of handling and carrying huge amount of cash to Bank.

During the year 2011-12 Bank has made specific marketing efforts and has made liaison with the State Government Departments of Chhattisgarh (Raipur Zone), Jharkhand (Ranchi Zone), Uttaranchal (Ghaziabad Zone), Assam & Meghalaya (Siliguri Zone) which has yielded good results.

INTERNATIONAL BANKING

The Bank has presence across 5 continents and 19 countries covering all the major financial centres such as London, New York, Paris, Tokyo, Singapore and Hong Kong. As on 31.03.2012, bank has a network of 49 branches and offices abroad, including 5 representative offices. It also has 3 subsidiaries and 1 Joint Venture abroad.

Bank's subsidiary in New Zealand was opened on 6thOctober, 2011. Opening of subsidiaries at Uganda, Canada, Botswana and Brazil, upgradation of Representative Office to Branch in Johannesburg and Ho Chi Minh City and localisation of Kenya operations have reached an advanced stage. The Bank has a Global Processing Centre (GPC) at Singapore, thereby improving the Management Information system and the customer service. The integration of systems of overseas branches to Indian Operations will be completed by December 2012, bringing them under Finacle Core Banking platform.

Bank is acting as Mandated Lead Arranger (MLA) and Joint Book Runner (JBR) for Multicurrency International Syndication loans and has arranged loans in USD, JPY,

EURO and GBP currencies for Indian Corporates for their expansion / acquisition and Joint Ventures, covering a wide range of industries.

Bank has opened Global Remittance Centre (GRC) in Mumbai. The inward remittances, NRE/NRO Account opening of NRI customers have been centralized at GRC. For service to non resident customers in Deposits and remittances, SMS alerts for remitter as well as beneficiary for remittance from Gulf Countries have been introduced. Straight through processing (STP) for Speed Remittances has been put in place and viewing facility has been set up for offsite account details. The bank has introduced BOI Premium NR Deposit Scheme, Star e-Remit for UK based customers.

As at 31st March, 2012, total deposits at foreign branches stood at Rs 69,741 crore, registering a rise of Rs 23,818 crore (51.97%) over previous year. Total advances stood at Rs 73,544 crore recording a rise of Rs 22,537 crore (44.2%) over previous year. Investments were at Rs 4278 crore.

Operating profit of foreign branches for the year ended March 2012 at Rs 1,088 crore has shown a rise of Rs 332 crore over previous year. Correspondingly, Net profit at Rs 628 crore has also increased by Rs 133 crore over March 2011.

In terms of contribution to global business and profit, foreign branches contributed 25.1% towards global business, 16.2% and 23.5% towards Operating profit and Net profit respectively for the year ended 31.03.12.

FOREX BUSINESS

The forex business handled by the bank has shown good growth. During the year 2011-12, Export and Import turnover was Rs 52,546 crore and Rs 46,460 crore respectively. The Bank continues to be a leading player in forex market. The aggregate turnover of Bank's Treasury Branch during the year was Rs 26,60,625 crore.

TREASURY INVESTMENTS

The yield on benchmark 10 year G-Sec which was 8.01% as on 31st march, 2011 has since hardened to 8.57% as on 31.03.2012. However, movement of G-Sec yields was highly volatile and the same moved within a wide range between 8.15% to 8.98% during the year. The Bank had maintained a higher level of investments keeping a balance between interest income and market risk. The Bank had maintained SLR investments at higher level in excess of the regulatory requirement of 24% of Net Demand & Time Liabilities so that the excess SLR can be utilised for borrowing from Repo/CBLO window. The gross SLR investments were Rs 80,271 crore, (87.42% of total investments) and Non-SLR investments stood at Rs 11,554 crore, (12.58% of total investments).

The Investments are made in accordance with the comprehensive policy in this regard approved by the Board.

The policy is reviewed periodically to respond to market developments/regulatory requirements.

TREASURY OPERATIONS

The Bank continued to play an active role in all segments of the market - Funds, Forex and Bonds during the year 2011-12. Taking advantage of G-sec rate movements, bank also churned its investment portfolio and earned profits from trading and sale of securities. The Bank has taken advantage of arbitrage opportunity within various market segments and could place the excess rupee funds in Certificate of Deposits (CD), Buy/Sell Foreign Exchange swaps, term money market thereof earning a spread of 1% to 1.5%. The Bank has built up a portfolio of Rs 2,592 crore in CDs, lent Rs 850 Crore in Term Money, by borrowing in CBLO/Repo against 'T' Bills and surplus securities thereby earning a spread of approximately 1% to 1.5%.

National Banking Group (Head Office):

RURAL BANKING

1. Priority Sector Advances:

The bank has always been one of the leaders in servicing to the priority and agriculture sectors, with its vast network of rural and semi-urban branches and committed personnel. Priority sector advances, apart from presenting a big business opportunity, have wide social ramifications.

The Bank has registered an outstanding level of Rs 59,245 crore under Priority Sector which is 36.67% of Adjusted Net Bank Credit (ANBC).

Under Special Agricultural Credit Plan, Bank could disbursed Rs 13,067 crore upto March 2012.

The position of priority sector advances under various segments is as under:

(Rs in Crore) As on 31st March Growth 2011 2012 Amount Percentage

1. Agriculture 17,632 23,468 5,836 33.09

2. Small Enterprise 23,705 27,128 3,423 14.44

3. Education 1,927 2,193 266 13.80

4. Housing 5,616 6,416 800 14.25

Total Priority Sector 48,880 59,205 10,325 21.12

2. Centralized Processing Centres in focused districts:

As a part of implementation of Sankalp 10000 initiatives, Centralized Processing Centres have been established in select zones with the objective of augmenting agriculture credit. So far, 52 CPCs have been opened.

3. Kisan Credit Cards:

Kisan Credit Card Scheme aims at providing need based and timely credit support to the farmers for their cultivation needs as well as non-farm activities with an objective to bring about flexible and operational freedom in credit utilization. During the year Bank has issued 167440 new Kisan Credit Cards with aggregate limit of Rs 7,005 crore. The Bank has so far issued 1145162 Kisan Credit Cards (cumulative) involving financial outlay of Rs 8,179 crore.

4. Debt Swap :

Bank has designed 'Debt Swap' Scheme with an objective to help the indebted farmers to redeem their outstanding dues to money lenders and to mitigate acute distress faced by the farmers due to heavy burden of debt from non-institutional lenders at unrealistic interest rates. Bank has made more than 146 villages as money lender free villages and also financed more than 13000 beneficiaries.

5. Differential Rate of Interest :

A scheme for extending financial assistance at concessional interest rate of 4% to selected low income groups for productive endeavors under the name Differential Rate of Interest (DRI) Scheme is being implemented by the Bank. The Bank has sanctioned 11665 cases under DRI Scheme during the year.

6. Prime Minister's New 15 Point Programme for the welfare of Minority Communities :

With the focused attention for the welfare of minority communities, Bank has been extending finance to the minority communities of Sikhs, Muslims, Christians, Zoroastrians and Buddhists. During the year 2011-12, Bank has financed Rs 275.49 crore to the various minority communities and registered an outstanding level of Rs 8,184 crore as on March 2012.

7. Golden Jubilee Rural Housing Finance Scheme :

The Bank has been actively involved in implementation of the Golden Jubilee Rural Housing Finance Scheme (GJRHFS) and has achieved the target of Rs 72.73 crore allocated by National Housing Bank for the year. During the year, Bank has sanctioned 1443 cases under GJRHFS.

8. Micro Finance / Micro Credit :

The Scheme of Micro Credit has been found to be an effective instrument for lifting the poor above the level of poverty by providing them increased self employment opportunities and making them credit worthy.

Bank is having more than 99984 SHGs credit linked with Financial Outlay of Rs 1,631 crore. Out of this, more than 80328 women Self Help Groups are credit linked to the Bank having financial outlay of Rs 1,480 crore.

9. Solar Energy Home Lighting System :

To address the issues of electricity paucity the Bank has prepared and launched a scheme on Solar Energy Home Lighting System. The Bank extends financial assistance to the prospective borrowers for purchase and installation of Solar Energy Home Lighting System. The Bank has so far sanctioned 1072 units with financial outlay of Rs 6.17 crore.

10. Mega project - 140 villages :

The main objective of the scheme is to create awareness and bring urban amenities to rural areas including technology to rural households as available to urban clientele. So far, 140 villages spread over in 17 States and 78 districts have been covered under the Scheme. The Bank has financed to the tune of Rs 492 crore under the scheme through 51000 beneficiary accounts.

11. Lead Bank Responsibility:

The Bank has been assigned with Lead Bank responsibility in 48 districts spread over five states of Jharkhand (15), Maharashtra (12), Madhya Pradesh (12), Uttar Pradesh (7) and Orissa (2). The Bank has been successfully discharging its duties of Lead Bank in all these districts. The Annual Credit Plan (ACP) for the year 2011-12 was launched in all the Lead Districts involving credit outlay of Rs 7,483 crore for the Bank. The achievement of the Bank is Rs 7,495 crore which is 100.16% of ACP.

FINANCIAL INCLUSION

Financial Inclusion is integral to the inclusive growth process and sustainable development of the country. There has been a strategic shift in sustainable financial inclusion to the adoption of market oriented approach viewing financial inclusion as a viable business proposition. The paradigm has decidedly shifted from "CSR" to "economic viability". It has been made possible with the availability of ICT based solution to support secured and sufficiently low cost transactions required by the financial sector. The Bank is viewing these prospective banking service users through a prism of opportunity rather than obligation.

The Bank has carved out Financial Inclusion as a new Business Unit headed by General Manager to drive board approved Financial Inclusion Plan (2010-13). Bank is committed to provide banking services through Business Correspondents and ICT based hand held devices (micro ATMs) to 29000 villages, connect 125 lakh people through no frill accounts with inbuilt overdraft facilities to take care of their urgent consumption needs, extend entrepreneurship credit to eligible people to earn their sustainable livelihood, offer mobile based remittance facility to help mainly the migrant labour/ self employed to remit money to their family members and facilitate access to Bank's third party products including Micro Insurance amongst other services.

The progress under Financial Inclusion Plan (FIP) in 2011-12 is summarized as under:-

- No. of No frill accounts opened : 62.69 lakh (50.07 lakh in 2010-11)

- No. of Smart Cards issued : 7.65 lakh

- GCC/KCC issued : Rs 8,423 crore (12.44 lakh accounts)

- Business Correspondents engaged : 3813 Corporate BCs

- Channel Management Partners engaged : 81

- No. of Villages where 100% FI achieved : 10008

The Bank has achieved 100% Financial Inclusion in all 2992 allotted villages with population above 2000 as on 31.03.2011, ahead of targeted date of 31.03.2012 by GOI/ RBI. Robust operational systems with adequate risk mitigants and best practices have been built up and are being pursued.

Star Swarojgar Prashikshan Sansthan (RSETIs)

With the aim of mitigating the unemployment problem among the rural youth, the Bank took initiative to form a dedicated trust named "STAR SWAROJGAR PRASHIKSHAN SANSTHAN (SSPS)" in 2005. Two SSPS (RSETIs) were established at Bhopal and Kolhapur immediately after formation of the trust. Ministry of Rural Development, Government of India found value in the initiative and proposed to support establishment of such Institute in each district of the country to tap the rural BPL youth from the rural hinterland. The formation, nomenclature, sponsorship, management, programme structure, staffing and administration, MIS were defined. Bank was allotted 42 centres to establish institutes. Bank has established 41 such institutes in Jharkhand, Orissa, Uttar Pradesh, Madhya Pradesh, Maharashtra and West Bengal. 24968 participants have been trained and 9626 have been provided with credit inputs from these centres till date.

Bank has planned to upgrade/establish five integrated SSPS (RSETIs) at Ranchi (Jharkhand), Barabanki (Uttar Pradesh), Bhopal (Madhya Pradesh), Pen (Maharashtra) and Belgaum (Karnataka) for extending the scope of SSPS (RSETIs) to primary health care, adult literacy, comprehensive financial access and planning for growth, strengthening civil society organization, environmental sustainability. Bank would like to collaborate with and foster strategic partnership aiming at bringing diverse resources from the public, private and social sectors to bear on the challenges surrounding these areas.

Financial literacy and Credit Counseling Centres (ABHAY)

Bank has recognized the need of a common person for financial education to appreciate the complexities of financial dealing with financial intermediaries on matters relating to personal finances on a day to day basis. Further, those who suffer from financial problems due to unmanageable debts also need credit counseling to come out of the repayment obligations outside bankruptcy and also learn credit usages and improve their financial management. It is in this background that Bank has opened 5 (five) Credit counseling centres named ABHAY at Mumbai, Wardha, Gumla, Kolkata and Chennai and they are manned by senior and experienced bankers. In addition to remedial counseling on case to case basis for the distressed borrowers, preventive counseling through media, workshops and seminars are also given. So far 9370 cases of counseling were taken up and disposed off quickly bringing smile on the faces of the distressed people.

Regional Rural Banks

Bank has sponsored 5 (five) Regional Rural Banks (RRBs) namely Jharkhand Gramin Bank (Jharkhand State), Aryavart Gramin Bank (Uttar Pradesh State), Baitarani Gramya Bank (Orissa State), Narmada Malwa Gramin Bank (Madhya Pradesh State) and Wainganga Krishna Gramin Bank (Maharashtra State). All RRBs are profit making. All Branches and administrative offices of the Gramin Banks are now on CBS platform. These banks are also going to start RTGS and ATM services shortly. All RRBs taken together have a branch network of 1085 outlets and have garnered a business mix of Rs 1,17,685 Crore.

RETAIL CREDIT

The Bank during the year 2011-12, perused the policy of building up healthy retail credit portfolio. In the post recessionary period of FY 2011-12 the spring buds of reviving economy gave ample opportunity for retail credit. The Bank's retail credit portfolio increased from Rs 16,649 crore to Rs 19,116 crore as on 31st March, 2012. During this period the contours of retail credit were also redefined.

The bank has established 21 RBC's across major cities of the country to expedite the processing of retail Home Loans/ Loan Against Property and also processing of Vehicle Loans and Education Loans proposals- in case of tie-up arrangement. Home Loan segment recorded a growth of Rs 1,312(18.65%) crore from Rs 7,033crore (March, 2011) to Rs 8,345 crore (March, 2012). The Bank has formulated basic guidelines for entering in to tie-up with builders. In order to ensure that the tie-ups are encouraged only with builders with proven track record, the Zonal Managers have been empowered to scout and enter into tie-ups with builders of repute locally. The Bank is participating in the Central Govt. sponsored special Interest Subvention scheme to stimulate demand for credit to Housing in the middle and lower income segment as announced in the Union Budget.

Education loan portfolio recorded growth of 12.69% increasing from Rs 1,946 crore to Rs 2,193 crore during the year. The Bank has embraced the Interest subsidy scheme, wherein borrowers who have availed education loans during academic year 2010-11 and hailing from Economically Weaker Section are eligible for education loan interest subsidy from Government of India, Ministry of HRD, through Nodal Bank. The Bank continues to give top priority for extending credit for pursuing higher education under the Star Education Loan scheme. Towards this end, the Zonal Manager marketing teams are constantly entering into tie- up arrangements with local Institutions so that the students' requirements are speedily attended to by the Branches. Bank has also introduced a new product under Education Loan viz. BOI Star Vidya Loan to cater to students seeking admission to Premier Educational Institutions in the country such as IITs/IIMs/NIDs etc.

Autofinance segment also recorded reasonable growth of 28.92% increasing from Rs 1,408 crore to Rs 1,815 crore during the year. The strategy of tie-up arrangement with diverse reputed Auto manufacturers like Maruti Suzuki, Tata Motors, Hyundai Motors, TVS, Hero Honda. continues to provide healthy retail leads to augment Autofin portfolio.

The growth in respect of major Retail loan schemes was as under:

O/s as O/s as Growth & Scheme 31.03.2011 31.03.2012 % growth (Rs Crore) (Rs Crore) (Rs Crore)

Star Home Loan Scheme 7,033 8,345 1,312(18.65)

Star Education Loan Scheme 1,946 2,193 247(12.69)

Star Autofin Loan Scheme 1,408 1,815 407(28.92)

Star Personal Loan Scheme 649 692 30(04.53)

Star Mortgage Loan Scheme 1,495 1,632 137(09.57)

SME

The Bank has created a new SME vertical headed by a General Manager to cater to the specific business needs of the segment. A more inclusive definition has been given for SME business to include all business activities with a turnover of upto Rs 100 crore. The vertical will look for growth not only on credit, but CASA, retail business, fee based income and third party products in the SME segment.

Strategies for SME business growth, as enunciated by the Bank are:

- SME City Centres being rolled out to act as processing hubs for all SME credit business of limits above Rs 1 crore.

- 21 SME City Centres are presently operating across 20 zones.

- Credit origination and processing segregated in the City Centres as a risk management measure.

- Dedicated team for credit processing and outbound sales team for lead generation and follow up for business acquisition put in place.

- Credit processes de-layered and delegation revised upward to ensure reduced TAT.

- 4 new products launched to customize Bank's offering to SME customers.

- Pre-disbursement risk mitigation processes simplified to ensure faster disbursement.

- Simplified Application Form introduced for all SME customers irrespective of the quantum of finance.

- Master Check List formulated for obtaining information required for processing customer requests in one go.

- Tracking and Performance Management Systems introduced in the SME City Centres to bring about greater transparency in business processes.

Performance of the Bank under MSME

- Advances to Micro & Small Sector as on 31.03.2012 is Rs 27,128 Crore

- Growth over FY-2011-12 is 14.43%

- Advances to MSME (including Medium Industries) is Rs 32,270 crore

- This represents a growth of about 7.40% over FY 2010- 11.

- Growth has mainly been in Micro & Small segments in the MSME space

- NPA at 8.05% as compared to overall NPA of 2.34% of the Bank continues to be an area of concern

- Bank has put in place an OTS scheme and exhort the zones/branches to make effective use of the scheme to reduce the NPA in the current year

Strategies for achieving growth under MSME

- Formation of clusters for cluster based lending. Each Zone to identify at least 2 clusters and formulate cluster specific schemes to increase credit flow to MSME sector

- Sensitising Branches with high potential for MSME lending in order to boost credit flow, especially Micro and Small sectors

- Sensitising Branches about availability of CGTMSE insurance cover

- Conducting workshops for sales officers of SME City Centres

SANKALP 10,000

REORGANISATION OF THE BANK

Keeping its growth aspirations in mind, the Bank had in the year 2010 embarked upon a new bold vision Sankalp 10,000. This was a mammoth transformational exercise aiming at reviewing the structure, orientation, processes and the business focus. For this exercise Mckinsey and Co., the top-rated international consultants had been engaged to help identify proper growth opportunities, strategies, processes, manage the risks and above all, suggest an efficient and vibrant organisational structure which will ensure Bank's sustained and continued growth for quite some time to come Sankalp 10,000 rests on the three pillars:

- Customer First

- Building Winning Teams

- High performance Driven Culture

The organizational structure of the Bank was redesigned in two distinctly separate groups of businesses i.e (a) National Banking Group and (b) Wholesale and International Banking Group, in order to have a more focused attention to each business segment, the two groups are headed by the two Executive Directors of the Bank.

National Banking Group (Head Office) - The National Banking Group is comprised of the following Business Units:

- Rural Banking

- Financial Inclusion

- Retail Banking

- SME Banking

National Banking Group General Managers - There are 5 GMs, National Banking who head the five geographies that the country is divided into - Central, North, East, West and South. These five National Banking Group General Managers lead their respective geographies covering Rural, Retail and SME business of the Bank in the Branches/Zones.

Wholesale and International Banking Group (Head Office)

- The Wholesale and International Banking Groups are comprised of the following Business Units.

- Large Corporate Banking

- Mid-Corporate Banking

- Project Finance

- Transaction Banking

- International Banking

- Treasury

Verticals have been designed for Large Corporate and Mid-Corporate businesses to reduce Turn-Around-Time (TAT) effectively and to maximize the relationship for greater resource mobilization and augmenting fee based income also. Sourcing of Credit has been segregated from Credit appraisal and sanction to better manage risk management.

The Business Units are responsible for the entire business (end to end) and not only for credit to the respective customer/business segments. The responsibility extends to profitability of the business units and comprises of all type of banking businesses i.e Deposits, Advances, Fee Income and sale of other/third party products.

Creating Branch of the future model

Bank's Branch network remains one of the most important 'touch point' with the customer & driver of growth. To fully tap into the potential of branch network, Bank has embarked upon the plan of creating "Branch of the Future" model. The objective of the new model will be to bring about significant improvement in both customer experience and business performance. Creating a new model will also help institutionalizing the "new way of working" through the Bank.

In the Pilot phase, 5 branches, one each from NBG, have been selected vis-a-vis Chembur (NBG West), Navrangpura (NBG Central), Karol Bagh (NBG North), Bow Bazar (NBG East) and Mylapore Branch (NBG South) and converted with the new branch layout specification. The model has started yielding positive results and the bank aspires to increase number of branches manifold under this model.

The main objective of the branch of future are:

1. Redesign branch processes for account opening, passbook update, cash transactions.

2. Drive and enable customer migration to alternate channels such as ATMs, Self Service Passbook printer etc.

3. Redesign branch roles and responsibilities, staffing to have specialized sales and service roles.

4. Adopt a best-in-class activity schedule in branches.

5. New branch layout with large customer area, in-branch back office, physically separated from the customer area.

6. Automate key customer interactions (i.e., QMS, self- service passbook printer).

7. Implement new branch sales and service training.

REVIEW OF OTHER PRODUCTS & SERVICES

Card Products

The Bank is offering Five types of Credit Cards to select from to the customers. The Bank also has Two affiliate banks viz. Bank of Maharashtra and Tamilnadu Mercantile bank Ltd issuing Credit Cards under the brand name "India Card". During the year Issuing turnover witnessed a growth of -13.24% and stood at about Rs 351.45 Crore and acquiring turnover witnessed an increase of 2.2% and stood at Rs 309.27 Crore.

The Bank is also offering Five types of Debit cum ATM cards. Total Debit Cards issued as on 31.03.2012 stood at 101.42 lakh comprising of 36.41 lakh Starlinks International ATM cum Debit Cards (Visa Electron), 63.66 lakh BOI Global Debit cum ATM cards (MasterCard), 0.02 lakh Platinum Debit Cards (MasterCard), 0.15 lakh Gift Cards (Visa Electron) and 1.33 lakh Bingo Cards. Debit cards registered a growth 31.91% during the year 2011-12.

The Bank has in place bilateral and multilateral agreements with cross-section of Banks for sharing of ATMs. Thus Bank's cardholders have the privilege of accessing around 50,000 ATMs throughout the country. The Bank continues to be the settlement bank for MasterCard in India, Cash tree and Bancs networks.

Bullion Banking

Bullion banking was introduced by the Bank in November 1997. Initially the scheme was introduced at SEEPZ and Ahmedabad branches and was subsequently introduced at other branches. As on date although 9 branches are authorized to undertake bullion business only 5 branches are undertaking bullion business.

The gold is procured of consignment basis for catering to the need of Jewellery exporters and domestic jewellers. The Bank sold 11,717 kg of gold in the year 2011-12, with a turnover of Rs 2,773 crore, thereby earning an income of Rs 16.74 crore. The increase in the earning during the year was 3.93%.

STAR CASH MANAGEMENT SERVICES (STAR CMS)

The Bank has active presence in CMS space but the CMS operations have been revamped by adopting latest state of the art WEB based technology. The Bank has also entered into Correspondent banking arrangement with other Banks. Due to switch over to the WEB based software on ORACLE platform the Bank is well positioned to handle any number of transactions.

The Bank has a separate department for CMS at Head Office which monitors and controls the overall functioning of CMS. It is under the direct control of the General Manager (Transaction Banking).The CMS HUB located at M.G.Road, Mumbai takes care of the operational side of the initiative.

The Bank has over 4000 branches which are operating on CBS platform across more than 1000 cities and towns. All these branches can canvass for CMS clients for availing various CMS services.

Product-wise Capabilities

a. Local Collections:

The STAR CMS has the capability to provide location-wise daily MIS for realizations and returns. The Bank can also provide detailed listing of returns by encrypted e-mail and if required hard copy can also be mailed to the customers.

b. Bulk Collections:

Bulk collections are offered at all locations covered under local collections, but with prior approval since modalities/ systems are to be enabled. Soft copy of the details is needed for direct data upload for all Bulk collections.

c. Outstation Collections:

Day arrangements range from Day 0 - Day 21; which are always centre specific. These vary for local and upcountry cheque collection centres.

d. Physical Cash:

Physical cash can be absorbed at all locations being offered for cash management, this facility is being rolled out under Door Step banking initiative. Day arrangement will be T 1 day.

e. Payments:

Positive pay facility is available across all locations for drafts drawn on the Bank. The Bank has the facility for bulk printing of drafts/cheques and the locations can be fixed as per requirements.

f. Electronic Settlements:

The Bank has system capabilities to offer Direct Credit and Direct Debit facility. In case of Direct Debits, mandate verification is mandatory. TAT will depend upon the location of the beneficiary account.

g. Other additional services:

The Bank is open to offer services at its branches for collection of application forms for NFOs and Right Issues.

THIRD PARTY PRODUCTS

Tie-up for Life Insurance:

The Bank continued its Corporate Agency arrangement with its Joint Venture Life Insurance Company Star Union Dai-ichi Life Insurance Co Ltd. for sale of life insurance products. The Bank has around 897 employees to act as 'Specified Person' for sale of insurance products at various centres.

During the current financial year, the Bank collected premium of Rs 548 crore (Number of Policies - over 86,000) and contributed to more than 43% of the Joint Venture business.

The Bank continues to offer optional life insurance cover to its Star Home Loan and Star Education Loan borrowers under Group Policy wherein the borrowers pay subsidized premium for life cover.

Tie-up for General Insurance (Non-life) with National Insurance Co Ltd. (NICL):

The existing tie-up arrangement with NICL was converted into Corporate Agency Distribution Model in compliance with IRDA's revised guidelines covering Bancassurance Business with Distributors like Banks. The Bank has a co-branded health insurance product - BOI National Swasthya Bima Policy, which is a Family Floater Mediclaim Insurance Cover Policy available for Bank of India account holders, at a very low premium. The coverage is available for the main Account holder, Spouse and maximum of 2 Dependent Children. Entire family (Account holder, spouse and two dependent children) is covered to the extent of sum insured in as much as part of the sum insured can be availed at different times by family members individually. It has been a popular product and as on 31.03.2012 over 1.3 lakh Bank of India Account holders have taken this policy.

The total premium collected by the Bank for NICL during the financial year 2011-12 has been Rs 138 crore which earned a commission of Rs 14.51 crore.

Mutual Funds Products:

The Bank continues to be a shop for all financial needs to the customers as much as distributes various Mutual Fund products of the 9 Asset Management Companies, viz., Birla Sun Life Mutual Fund, DSP BlakhkRock Mutual Fund, Franklin Templeton Investments, HDFC Mutual Fund, IDFC Mutual Fund, ING Mutual Fund, Kotak Mutual Fund, Reliance Mutual Fund and UTI Mutual Fund.

The Bank has entered into joint venture with Bharti AXA IM to re-enter mutual fund business.

ASSET RECOVERY & NPA MANAGEMENT

The Bank continued its drive and focuss in improving its performance in the area of NPA management in the year 2011-12 as well. Reduction of NPAs is given utmost priority at the Bank and this function has steadily grown in importance. Substantial measures were initiated to augment recovery and contain NPAs. Efforts were also made to maximize recovery in written off accounts and uncharged / unrealised interest in NPA accounts which contributes to the Bank's profits significantly.

Bank has appointed Senior Executives as Nodal Officers at Five National Banking Group offices encompassing the entire Branch network for better control and recovery of NPAs.

The Bank has migrated to the identification of System Driven NPA during this year as per RBI notification.

The following table shows management of NPAs during last 3 years:

(Rs in crore) Item 31.03.10 31.03.11 31.03.12 (Actual) (Actual) (Actual)

GROSS NPA (Opening) 2,471 4,883 4,882

Less:

Cash-Recovery 622 895 1,205

Upgradations 204 1,038 487

Write-off 743 881 2,415

Agr.Debt Waiver/Debt Relief Scheme 2008 0 0 0

Total Reduction 1,569 2,814 4,107

Add:

Slippages 4,162 2,908 5,401

Less Unrealised Interest (URI) (introduced from F.Y 2009-10) 181 166 212

GROSS NPA (Closing) 4,883 4,811 5,894

Recovery in W/Off A/cs, UCI/URI 300 383 672

Net NPA 2,207 1,945 3,656

% of Gross NPA to Gross Advances 2.85 2.23 2.34

% of Net NPA to Net Advances 1.31 0.91 1.47

To boost recovery in small and soft impaired (NPA) accounts, two existing schemes have been modified as under:-

i) Star Sanjeevani Incentive Scheme for NPAs upto Rs 50 lakhs

ii) Incentive Scheme for Upgradation of accounts upto Rs 100 lakhs in sub-standard category.

The above Schemes have been introduced with intention to motivate the field level staff and reduce the dependence on Professional Enforcement Agents. This has paid rich dividends in the form of involvement of staff at every level.

Performance under Star-Sanjeevani Incentive schemes was as below:

(Rs in Crore)

Recovery during 2011-12 Amount

Recovery in LIVE NPAs 557.95

Recovery in written-off A/cs 29.58

Total Recovery 557.95

Recovery Camps and participation in LOK ADALAT for speedy resolution of small NPAs has also been undertaken in a big way at the Zones. The Bank has made recovery of Rs 142.38 Crore through LOK-ADALAT and Recovery Camps.

CREDIT MONITORING:

This is a critical area for the bank and it's importance has steadily grown, as retention of 'Asset quality' is the buzzword with rising interest rates, slowdown in the economy, high input cost squeezing profitability of various industries, besides, switching over to the system based identification and collation of NPAs form September 2011.

- The health of the advance accounts with exposure of Rs 100 lakhs and above is being monitored by the Credit Monitoring Department at Head Office, which covers approximately 70% of the domestic credit portfolio of the Bank. The monitoring is being done from various reports generated centrally from system giving alerts and fortnightly Flash Reports. These reports are being used effectively by Head Office/Zones/Branches to track and avoid delinquency. The out of order position with break-up of 30 to 60 days, 61 to 75 days & above 75 days overdue is made available to Branches for follow up & regularization. ZO/HO also monitor the progress to maintain asset quality.

- With migration of identification of NPAs by the system, slippages in small accounts with o/s below Rs 10 lakh are showing rising trend, It is a major challenge. Bank has addressed this challenge in a big way through effective follow up at all levels. The recovery culture at rural and semi urban branches has been revisited.

- Extra precautions and strict compliance in letter and spirit is ensured while take over accounts from other Banks. In deserving cases take over is approved on case to case basis after ensuring quality and comprehensive due diligence. While approving take over business, it is ensured that advances of sound and remunerative nature, with favourable financial ratios in line with entry level norms and Credit Rating of 'AAA' & 'AA' are taken over.

- To address the issues of 90 days default, the repayment schedule is fixed after making thorough study of Cash Flows which are achievable and realistic. Adequate moratorium is also reckoned on merit of the case while considering fresh term loan for new projects.

- Due diligence in respect of promoters is carried out before sanction of advance and antecedents of the applicants are ascertained through CIBIL Reports, RBI Defaulters List and ECGC Caution list and other means.

- Inspection of the securities charged to the Bank is of immense importance for ensuring end use of funds and is undertaken at regular intervals. Insurance of charged assets is given due importance for safe guarding the Bank's exposure. Timely renewal of insurance policies with adequacy of cover is not lost sight of. Renewal documents are obtained on yearly basis instead of waiting for 3 years time.

- Before parting with Bank's funds, the process of CPA is completed in all respect. Timely closure of CPA helps the bank in taking swift remedial measures wherever applicable.

- 'Stock & Receivable Audit', another important tool, is used to monitor the account. Branches undertake periodical stock & receivable audit by firm of approved Chartered Accountants so that deficiencies are known and remedial measures are undertaken in time. Closure of report is done within a reasonable time period.

- Credit Monitoring at Large Corporate/Mid Corporate Branches assumes added significance. One officer in such branches is exclusively monitoring the performance of projected Sales/Inventory/Profits of the accounts based on MSOD/QIS/Stock & Book Debt Statements and timely review of the advance accounts. The quarterly financial performance of associate companies having Large exposure is studied & remedial action taken.

- Conducting of monthly Zonal Credit Monitoring Committee meeting (ZCMC) is undertaken wherein out of order/problem accounts and items like

- Closure of CPA

- Closure of stock audit reports

- Closure of CALRM

- Account due for review

- Watch list accounts (AC 12) & Restructured accounts

- PSRS

- TOL/TOD

- Devolvement of L/C & Invocation of Guarantee not regularized

- Pending SAR & Quick Mortality cases are discussed which will help in proper monitoring and control. Similarly, meeting with GMs of SBU at H.O. with Credit Monitoring Department, HO is convened at fortnightly interval for discussing out of order/ stressed accounts for desired results.

- Extensive use of Video Conference facility at HO/ZO/ NBG level is used for follow up of out of order /stressed accounts which helps in arresting slippages.

- The marking of NPA through CBS system has been put in place w.e.f. 30.09.2011.The NPA so marked by the system are soft NPAs which attract immediate attention for recovery/ up gradation thereof so that slippages are reduced to bare minimal level.

BRANCH NETWORK & EXPANSION

The Bank has a geographically well spread branch network in India and abroad. The Bank had 4000 branches in India as on 31.03.2012. In the foreign countries, 44 branches and 5 representative offices keep Bank's presence felt in all time zones and important financial centers of the globe.

During the year 2011-12, Bank opened 510 new branches including 07 Extension Counters converted into full fledged branches.

Composition of Bank's branch network is as follows :

Category 31.03.2011 31.03.2012 No. of Brs. % to Total No. of Brs. % to Total

Metropolitan 660 18.91 722 18.05

Urban 645 18.49 709 17.72

Semi-Urban 841 24.09 1078 26.95

Rural 1344 38.51 1491 37.28

Total Branches 3490 100 4000 100

Falling in line with RBI liberalized policy of branch authorization, some branches were shifted to alternate sites and extension counters showing good performance and those with locational advantage were converted into full fledged branches. It is intended to continue this policy for the coming year as well.

RBI has further liberalized its branch aut


Mar 31, 2011

The Board of Directors have pleasure in presenting the Banks Annual Report along with the audited statement of accounts and the cash flow statement for the year ended 31st March 2011.

PERFORMANCE HIGHLIGHTS

FINANCIAL PARAMETERS

- Operating profit Rs. 5,384 crore.

- Net Profit Rs. 2,489 crore, recording 42.94% growth over previous year.

- Capital Adequacy Ratio at 12.17% as against 12.94% in previous year (under Basel-II).

- Net Worth at Rs. 15,500 crore grew by 24.43% over March 2010.

- Book Value per share Rs. 283.24 (Rs. 236.84 previous year).

- Gross NPA ratio at 2.23% as on 31.03.2011.

- Net NPA ratio at 0.91% as on 31.03.2011.

- Total business (Deposits + Advances) reached at Rs. 5,15,040 crore recording a growth of Rs. 1,13,961 crore (28.41%). Domestic business grew by 26.02% to reach the level of Rs. 4,18,110 crore.

- Total deposits increased by Rs. 69,124 crore reached the level of Rs. 2,98,886 crore, a growth of 30.08%. Domestic deposits increased by 28.68% to reach the level of Rs. 2,52,963 crore. Share of low cost deposits in the domestic deposits is 29.18% as on 31.03.2011.

- Gross credit touched Rs. 2,16,154 crore, recording a growth of 26.17% with domestic credit recording a growth of 22.16% to reach level of Rs. 1,65,147 crore.

- Priority Sector lending constituted 46.27% of Net Adjusted Bank Credit and the share of Agricultural Credit to Net Adjusted Bank Credit was 16.76%.

- Credit to SME sector grew from Rs. 29,568 crore to Rs. 35,586 crore recording a growth of 20.35%.

- Retail Credit grew by 5.70% from Rs. 15,750 crore to Rs. 16,649 crore.

- Export Credit registered a growth of Rs. 898 crore, i.e., 13.53% growth over previous year.

NEW PRODUCTS & SERVICES

- Welcome Kits introduced for NRI Customers opening NRE/ NRO accounts at foreign centers.

- Calculation of interest on Savings Bank account, from 1st April 2010, has been changed from monthly product basis to daily product basis.

- Launched Marathi version of the Banks website.

- As per Finance Ministry guidelines and recommendations, the Banks corporate web-site (English) has been enabled for persons with Disabilities.

- The Bank has introduced a new format of Savings Bank Passbook (Horizontal Format) which will print all details of the transaction on the same page as against the existing format (Vertical Format) where the details are printed on two pages.

- As per Banking Codes and Standards Board of India (BCSBI) requirements, the Bank is printing helpline number on the passbook & statement of accounts.

- The Bank introduced issuance of insta-pin for Debit-cum- ATM Card. This will address the customer grievance for non-receipt of Re-pin and also save the effort and expense in generating and mailing Re-pins.

- Quarterly consolidated Statement of a/c is sent to the Diamond customers in PDF format via email.

- As a fraud prevention measure, SMS alerts - Star Sandesh are generated and provided to all customers

who have registered their mobile number with the Bank for all Debit transactions from delivery channels (Internet banking/ATM/POS); all Debit clearing transactions of Rs. 25,000/- and above; all Customer induced debit transfer & cash payments of Rs. 10,000/- and above; all Debit ECS transactions of Rs. 10,000/- and above; all Debit RTGS transactions and acknowledgment on accepting the cheque book issue request.

- Enabling internet banking customers to make online Fixed Deposit.

- Hot Listing/Reset/Unblock/Change of Debit Cum ATM card PIN using Internet Banking password.

- Viewing of Annual Tax Statement (Form 26AS).

- Star eTrade - Online share trading - Integration with Gupta Equities.

- Extended the facility of online e-Payment to the customers holding Banks Debit-cum-ATM card. This will enable the customers to use their Debit-cum-ATM cards for e-payments in addition to credit card & Internet banking account.

- Mobile Banking facility is introduced as the latest alternate delivery channel which allows customers to do banking activities virtually from the convenience of the Mobile phone at any time and from anywhere. This facility is extended to all Retail internet banking customers and includes features like Balance enquiry, last five transactions, Cheque status, Funds Transfer & Mobile Payments.

- Online Interbank Fund Transfer across banks, through Star Connect Internet Banking Services, using RTGS/ NEFT

- BOI Star e-Pay for Auto-pay or on-line payment of various utility services/ bills.

- e-Payment for Direct & Indirect, Central Excise & Service Tax.

- Star e-Share Trade to trade in shares.

- e-Freight Payment.

- Online Payment of Directorate General of Foreign Trade (DGFT) license fees.

- Online Booking of Railway & Airlines Ticket.

- Online Application for Education loan.

- Facility to make online bid-cum-application for Application Supported by Blocked Amount (ASBA) IPO issues by Retail Internet Banking Customers having account with any DPO

BUSINESS INITIATIVES

- Keeping its growth aspirations in mind, the Bank has embarked upon a new bold vision Sankalp 10,000. Sankalp 10,000 rests on the three pillars of Customer First, Building Winning Teams & High performance Driven Culture.

- Under Project Sankalp, the organizational structure of the Bank has been redesigned in September 2010 with its division in two distinctly separate groups of businesses i.e. (a) National Banking Group and (b) Wholesale and

International Banking Group in order to have a more focused attention to each business segment. The two groups are headed by the two Executive Directors of the Bank.

- National Banking Group (Head Office) - The National Banking Group is comprised of Rural Banking, Financial Inclusion, Retail Banking and SME Banking business units.

- Wholesale and International Banking Group (Head Office) - The Wholesale and International Banking Group are comprised Large Corporate Banking, Mid- Corporate Banking, Project Finance, Transaction Banking, International Banking and Treasury.

- All accounts of Mid-Corporate and Large Corporate Branches have been mapped to respective branch RSMs.

- Fifteen Rural Centralised Credit Processing Centres (CPC) have been started at Belgaon, Ujjain, Barabanki, Mehasana, Ludhiana, Karad, Amalapuram, Tanjavur, Barasat, Hardoi, Nadiad, Ratnagiri, Nashik, Solapur & Barnagar.

- In all, 40 focused districts have been identified in 19 zones to target large and medium farmers and large institutions with high credit quality.

- Five New Retail Business Centres were launched in 5 identified Zones namely Bangalore, Chandigarh, Mumbai South, New Delhi and Pune on Pilot basis on 14.01.2011.

- Five SME City Centres at Ahmedabad, Coimbatore, Kolkata, Ludhiana, and Pune were launched on 14th December, 2010. Subsequently, seven more SME City Centres at Bangalore, Chandigarh, Hyderabad, NewDelhi, Nagpur, Mumbai North and Vadodara have started functioning.

- Mid-Corporate branches at Ernakulam, Andheri and Seepz opened.

- 10 Mid-Corporate CPCs started functioning.

- Large Corporate branches at Mumbai (Nariman Point) and Hyderabad opened.

- Lead Management System (Sales Force Automation), to generate, track and monitor leads, revamped.

- The Bank is treating financial inclusion as social cause and implementing it as a movement taking all banking products and services to those who are currently deprived from these services. So far, first step towards achievement of financial inclusion was opening of No-Frill Accounts and accordingly the Bank has opened 50.07 lakh No-Frill Accounts.

- The Bank is also implementing IT solutions on end to end basis using hand held devices and smart cards. The Bank has issued/ enrolled 6.01 lakh smart cards.

- Project Finance And Syndications Group: It takes up assignments of technical appraisal, underwriting and syndication of loans. During FY11, financial closures were done with a project cost of Rs. 26,901 crore and syndicated debt of Rs. 9,008 crore. Bank of India achieved sixth position in syndication space as per the Bloomberg Lead tables for the calendar year 2010.

- The Bank has created a new SME vertical headed by a General Manager to cater to the specific business needs of the segment. A more inclusive definition has been given for SME business to include all business activities with a turnover of up to Rs. 100 crore. The vertical will look for growth not only on credit, but CASA, retail business, fee based income and third party products in the SME segment.

- Mobile Banking facility is introduced as the latest alternate delivery channel which allows customers to do banking activities virtually from the convenience of the Mobile phone at any time and from anywhere. This facility is extended to all Retail internet banking customers and includes features like Balance enquiry, last five transactions, Cheque status, Funds Transfer & Mobile Payments.

- Established Global Remittance Centre for centralizing some of the activities related to NRI Customers which would hasten turnaround time and product delivery and also enable proactive marketing strategies & grievance redressal mechanism.

AWARDS & ACCOLADES

- The Bank has received the Winners Award in International Banking Technology Award 2010 from IBA in the Best Business Enablement Initiative category in recognition of its achievement in Banking Technology for the Year 2009.

- The Bank has been adjudged FE-EY Most Efficient Public Sector Bank 2010 by Dalal Street.

- Mumbai North Zone of the Bank has received Third Prize for use of Official Language Hindi in Bank from Government of India, Ministry of Home Affairs, Official Language Department.

- The Bank has received the consolation prize from Maharashtra State Level Bankers Committee for commendable work done in implementation of official language in Hindi.

- The Bank has received National Award for Best Bank in West Zone for PMEGP under lending to KVIC in August 2010.

- The Bank has been rated by The Economic Times/The Nielsen company survey “The Most Trusted Brands” (MTB) 2010 as follows”

- Under PSU Banking Category - 2nd next to SBI

- Under Top Service Brands-8th rank

FINANCIAL REVIEW

FINANCIAL PERFORMANCE

The Bank recorded an Operating Profit of Rs. 5,384.23 crore, (growth of 14.44% over previous year). Net Profit stood at Rs. 2,488.71Crore, recording a growth of 42.94%.

Net interest income grew by 35.70% on the backdrop of rise in volume of business mix by 28.41% (from Rs. 4,01,078.83 crore to Rs. 5,15,040.06 crore). Non-interest income increased by 0.96% and covered 52.12% of Operating Expenses as against 71.34% in the previous year.

The Financial performance of the Bank for the year 2010-11 is summarised below:

(Amount in Rs. Crore)

Particulars 2009-10 2010-11 Growth (%) Net Interest Income 5,755.94 7,810.69 35.70

Non-Interest Income 2,616.64 2,641.77 0.96

Operating Expenses 3,667.81 5,068.24 38.18

Operating Profit 4,704.77 5,384.23 14.44

Provisions / Contingencies 2,963.70 2,895.52 -2.30

Net Profit 1,741.07 2,488.71 42.94

Earnings per share (Rs.) 33.15 47.35 42.84

Book value per share (Rs.) 236.84 283.24 19.59

Return on Average Networth (%) 14.76 8.90 –

Return on Average Assets (%) 0.70 0.82 –

Some of the Financial Ratios are presented below:

(Percentage) (%)

Parameters 2009-10 2010-11

Yield on Advances 8.42 8.62

Yield on Investment 7.46 7.59

Yield on Funds 7.14 7.14

Cost of Deposits 5.16 5.03

Cost of Funds 4.84 4.57

Net Interest Margin 2.51 2.92

Non Interest Income to Operating 71.34 52.12 Expenses

Other Income to Average Working Fund 1.05 0.87

Operating Expenses to Average 1.47 1.66 Working Fund

Staff Expenses to Average Working Fund 0.92 1.14

Other operating Exp. to Average 0.55 0.52 Working Fund

Asset Utilisation Ratio 1.88 1.77

Non-Interest Income to Total Income 12.77 10.83

Non-Interest Income to Net Income 31.25 25.27

Cost to Net Income 43.81 48.49

SEGMENT- WISE PERFORMANCE

The Bank earned an Operating Profit of Rs. 5,384.23 crore during the year 2010-11. The contribution made by Treasury was Rs. 371.38 crore and other banking operation earned a profit of Rs. 5,161.12 crore. The unallocable expenditure net of unallocable income was Rs. 148.27 crore during the year 2010-11.

DIVIDEND

A Dividend at the rate of Rs. 7 per share (70%) for the year, has been declared. The total dividend payment amounts to Rs. 444.29 crore (including dividend distribution tax).

CAPITAL

Net worth of the Bank in FY 2010-11 has increased to Rs. 15,499.5 crore from Rs. 12,456 crore. During the year the bank has issued 2,13,04,870 Equity Shares of Rs. 10 each to Government of India at a price of Rs. 474.07 per share, on preferential basis, as approved by the shareholders in an Extra ordinary General Meeting held in accordance with the regulation 76(1) of SEBI (Issue of Capital and disclosure requirements) Regulations, 2009. The amount received by the bank on this account is Rs. 1,010 crore. Consequently, the Government of India shareholding has increased from 64.47% to 65.86%.

CAPITAL ADEQUACY

As per Basel II framework, the Banks Capital Adequacy Ratio was at 12.17%, which was higher than the regulatory requirement of 10%.

Details of Capital Adequacy (BASEL II) are shown as under:

(Rs. in crore)

Particulars 31.03.2010 31.03.2011 (Under BASEL – II)

Amount CRAR (%) Amount CRAR (%)

Tier I Capital 13,725 8.48 17,047 8.33

Tier II Capital 7,218 4.46 7,867 3.84

Total Capital 20,943 12.94 24,914 12.17

Risk Weighted Assets 1,61,857 – 2,04,762 –

BORROWINGS

The Bank has raised debts instrument through private placements like perpetual bonds and Upper Tier II Bonds and Medium Term Notes (MTN) through overseas borrowings. The bank has raised Rs. 300 crore through issue of IPDI and Rs. 1000 crore through Upper Tier-II instrument during the year 2010-11. The Bank has also redeemed Tier II Subordinated bonds for Rs. 450 crore.

DIRECTORS RESPONSIBILITY STATEMENT

The Directors confirm that in the preparation of the annual accounts for the year ended March 31, 2011,

- The applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

- The accounting policies, framed in accordance with the guidelines of the Reserve Bank of India, were consistently applied;

- Reasonable and prudent judgement and estimates were made so as to give a true and fair view of the state of affairs of the Bank at the end of the financial year and of the profit of the Bank for the year ended on March 31, 2011;

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

- The accounts have been prepared on a “going concern” basis.

CORPORATE GOVERNANCE

A detailed report on Corporate Governance, being a part of Directors Report is appearing from page no. 59 to 76.

ACKNOWLEDGEMENT

The Board express its gratitude to the Government of India, Reserve Bank of India and Securities and Exchanges Board of India for the valuable guidance and support received from them. The Board places on record its deep appreciation for the services and contributions made by Shri M. Narendra (Ex Executive Director), Shri K.S. Sampath, Shri A.V. Sardesai, Shri Amit K. Motayed, Shri Indresh V. Singh, all Directors of the Bank, who have relinquished office during the year. The Board also thanks financial Institutions and correspondent banks for their co-operation and support. The Board acknowledges the unstinted support of its customers and shareholders and also wishes to place on record its appreciation of staff members for their dedicated services and contribution for the overall performance of the Bank.

For and on behalf of the Board of Directors

(Alok K Misra) Chairman & Managing Director

Place : Mumbai Date : 02.05.2011


Mar 31, 2010

The Board of Directors have pleasure in presenting the Bank’s Annual Report along with the audited statement of accounts and the cash fl ow statement for the year ended 31st March 2010.

PERFORMANCE HIGHLIGHTS

FINANCIAL PARAMETERS

- Operating profit Rs.4,705 crore and Net Profit Rs.1,741 crore.

- Capital Adequacy Ratio at 12.94% as against 10% prescribed by RBI (under Basel-II).

- Net Worth at Rs.12,456 crore, grew by 11.78% over March 2009.

- Book Value per share Rs.236.84 (Rs.211.89 previous year)

- Gross NPA ratio at 2.85% as on 31.03.2010.

- Net NPA ratio at 1.31% as on 31.03.2010.

- Total business (Deposit + Advances) reached at Rs. 401,079 crore recording a growth of Rs. 66,639 crore (19.93%). Domestic

business grew by 20.72% to reach the level of Rs.331,779 crore.

- Total deposits increased by Rs. 40,053 crore reached the level of Rs.229,762 crore, a growth of 21.11%. Domestic deposits increased by 23.26% to reach the level of Rs.196,585 crore. Share of low cost deposits in the domestic deposits is 31.75% as on 31.03.2010.

- Gross credit touched Rs.171,317 crore, recording a growth of 18.37% with domestic credit recording a growth of 17.20% to reach level of Rs.135,194 crore.

- Priority Sector lending constituted 46.39% of Net Adjusted Bank Credit and the share of Agricultural Credit to Net Adjusted Bank Credit was 16.24%.

- Credit to SME sector grew from Rs.25,441 crore to Rs.29,568 crore recording a growth of 16.22%.

- Schematic Retail Credit grew by 15.73% from Rs.8,714 crore to Rs.10,088 crore.

- Export Credit registered a growth of Rs. 602 crore, i.e., 9.98% growth over previous year.

NEW PRODUCTS & SERVICES

- All domestic branches are covered under Core Banking Solution. New domestic branches opened are directly under the CBS platform. All domestic branches are RTGS/NEFT enabled.

- Call centre facility is made operational as an alternate delivery channel to a branch set-up which would act as a “Contact” centre and is a cost effective touch point for customers.

- Bank has launched the Marathi version of its web-site.

- Bank has launched “Welcome Kit” for all new accounts opened at the select branches of Mumbai, New Delhi, Chandigarh and Ghaziabad. The kit contains cheque book, ATM card, Pin, TPIN and internet PIN, the unique feature of which is that the same are in activated status from the day one.

- A web based Customer Complaint Management System has been made live from 1st January, 2010 to reduce the response time.

- Oracle Marketing Online product has been implemented at Data Warehouse for communicating with customers via email. With this system in vogue, Bank is able to deliver emails overnight to its customers.

- SMS alert facility has been introduced and provided to all customers for all debit transactions from delivery channels, all debit clearing transactions of Rs.25,000 and above, all customer induced debit transfer and cash payments of Rs. 10,000 and above, all debit RTGS transactions and acknowledgement on accepting the cheque book issue request

- Bank of India is the fi rst PSU Bank in India to implement TWO-Factor Authentication (2FA) – Star Token for both Retail and Corporate internet banking customers as an additional security measure. Bank’s customers enjoy the convenience of “secured” Anytime, Anywhere, Anyhow hassle free Banking from the comfort of their homes and offi ces with a click of a mouse.

- Resetting or Unblocking of Internet Banking login password can be done using Debit-cum-ATM card PIN.

- Transaction under taken through Credit Card can be viewed through Internet Banking channel.

- Provision to make online bid-cum-application for Application Supported by Blocked Amount (ASBA) IPO issues by Retail Internet Banking Customers.

- Mobile Banking Services extended to all retail internet banking customers which includes features like Balance enquiry, last fi ve transactions, Cheque status, Funds Transfer and Mobile Payments.

- Bank has joined National Financial Switch (NFS) which enables customers to access more than 50,000 ATMs across the through owned as well as shared ATMs network.

- Technology has been leveraged in some important projects like Financial inclusion project for Banking the unbanked sector, Solar Power Project which is Eco-friendly for Technology Power for Rural Areas, V-sat Connectivity Project – Networking / connecting the Rural / Remote locations.

- Bank launched “Star Abhilasha Biometric Smart Cards” in Nagpur, Maharashtra in February, 2010. Installation of Biometric ATMs and ATMs with easy accessibility for the physically handicapped is being established.

BUSINESS INITIATIVES

- To strengthen our internal control system, Project STAR BOOST has been initiated by the bank to leverage technology for more effective and focussed audit. With the launch of this programme bank has established a Back Offi ce for Offsite Audit and related work and is effectively making use of CAAT (Computer Aided Audit Tools). The Audit Exception Reports (AER) are generated in advance and sent to branches for compliance before commencement of audit. This process is expected to improve the audit rating of the branches.

- Bank has opened Global Remittance Centre (GRC) at Mumbai. The inward remittances, SB NRE / NRO Account opening of NRI customers have been centralized at GRC. Bank has initiated the process for establishing a hub for the purpose of handling the documentation part of Trade Finance portfolio.

- With a view to enhance the corporate image and identity, Bank has initiated media campaigns on the existing theme “Relationships beyond Banking”. Three TVCs were produced in line with our Relationship theme viz. Old Couple, Friends and Bus which were aired on both National as well as Regional Channels.

- For building the brand image and increasing the visibility and better marketing of various products through publicity, Bank has also been advertising our products in newspapers, magazines, television, Hoardings, banners, bus panels, trains, glow signs at railway stations, events and sponsorships, leafl ets and brochures, etc.

- Introduction of Credit Application Processing Systems through software termed as CAPS which covers all major

credit segments - Retail, Corporate, MSME and Agriculture. This has been launched from 15.02.2010 on pilot basis to cover Retail loans at all 24 Retail Hubs and select 263 branches across the Zones. It will be a fully Automated system to improve credit delivery.

- Two new products, “Star Suraksha SB account” and “Star Benefi t CD account” having unparallel features were launched on the Bank’s Foundation Day on 7th September, 2009 for improving the CASA business.

- To give a boost to SME business, Bank has SME branches and also SME hubs and Nodal Offi cers at all Zonal Centres.

- Bank has devised a Composite Loan Scheme for MSE sector borrowers in Rural / Semi Urban and Urban areas for maximum exposure of up to Rs. 5 lacs per borrower. The scheme has unique features like simplifi ed application cum proposal format, hassle free minimum documentations, relaxed margin and interest rates, etc.

- MOUs have been signed with Tata Motors, M/s. Piaggio Vehicles Pvt. Ltd., M/s. Asia Motor Works, M/s. JCB India Ltd., M/s. Mahindra Navistar, M/s. Ashok Leyland Ltd., Sonalika Group of companies etc. for fi nancing vehicles / earth moving equipments.

- Credit business is receiving focus through specialised branches - 29 SME branches, 28 Mid Corporate Branches 2 Large Corporate and 13 Corporate Banking branches, 36 Commercial & Personal banking branches and ‘Retail Hubs’ at 27 centres across the country working on the concept of single window for Housing & Personal fi nance banking.

- To achieve objective of Financial Inclusion, information technology initiatives implemented and the concept of business correspondents and facilitators has been introduced throughout the country.

AWARDS & ACCOLADES

- Best Performance in Western Zone under the Rural Employment Generation Program (REGP) of KVIC.

- Bank has been rated by the Economic Times / The Nielsen Company survey as “The Most Trusted Brands” (MTB) 2009 as follows :

? Under PSU Banking Category - 2nd next to SBI.

? Under Top Service Brands - 8th.

- The Debutant - 1st time in top 100.

- NDTV Profi t Business Leadership Awards 2009- Best PSU Bank.

- Outlook money NDTV Profi t Awards 2009 - Best Education Loan Provider - Runner up.

- CIO Green Information Technology Award.

- Dun & Bradstreet – Rolta Corporate Awards 2009, Best Bank under Banking Category.

- FE-EY Most Effi cient Public Sector Bank Awards 2010 by Dalal Street.

- Second Rank for excellent performance in lending to Micro & Small Enterprises Sector by the Ministry of Micro, Small & Medium Enterprises. Also, ‘Best Performing bank’ for covering maximum number of Micro & Small accounts under collateral free lending scheme of CGTMSE

FINANCIAL REVIEW

FINANCIAL PERFORMANCE

The Bank recorded an Operating Profi t of Rs. 4,704.77 crore, (previous year Rs. 5,456.80 crore). Net Profi t stood at Rs.1,741.07 crore (previous year Rs. 3,007.35 crore).

Net interest income grew by 4.67% due to rise in volume of business mix by 19.93% (from Rs.334,440 crore to Rs.401,079 crore). Non-interest income declined by 14.26% and covered 71.34% of Operating Expenses as against 98.64% in the previous year.

The Financial performance of the Bank for the year 2009-10 is summarised below:

(Amount in Rs. Crore)

Particulars 2008-09 2009-10 Growth (%)

Net Interest Income 5498.90 5755.94 4.67

Non-Interest Income 3051.86 2616.64 -14.26

Operating Expenses 3093.96 3667.81 18.55

Operating Profit 5456.80 4704.77 -13.78

Provisions / Contingencies 2449.45 2963.70 20.99

Net Profit 3007.35 1741.07 -42.11

Earnings per share (Rs.) 57.26 33.15 -42.11

Book value per share (Rs.) 211.89 236.84 11.77

Return on Average Networth (%) 30.42 14.76 --

Return on Average Assets (%) 1.49 0.70 --

Some of the Financial Ratios are presented below :

(Percentage) (%)

Parameters 2008-09 2009-10

Yield on Advances 9.78 8.42

Yield on Investment 7.14 7.46

Yield on Funds 8.09 7.14

Cost of Deposits 5.76 5.16

Cost of Funds 5.37 4.84

Net Interest Margin 2.97 2.51

Non Interest Income to Operating 98.64 71.34

Expenses

Other Income to Average Working Fund 1.51 1.05

Operating Expenses to Average 1.53 1.47 Working Fund

Staff Expenses to Average Working 0.96 0.92

Fund

Other operating Exp. to Average 0.57 0.55

Working Fund

Asset Utilisation Ratio 2.70 1.88

Non-Interest Income to Total Income 15.73 12.77

Non-Interest Income to Net Income 35.69 31.25

Cost to Net Income 36.18 43.81

SEGMENT- WISE PERFORMANCE

The Bank earned an Operating Profi t of Rs.4,704.77 crore during the year 2009-10. The contribution made by Treasury was Rs.603.42 crore and other banking operation earned a profi t of Rs.4,751.72 crore. The unallocable expenditure net of unallocable income was Rs. 673.98 crore during the year 2009-10.

DIVIDEND

A Dividend at the rate of Rs. 7/- per share (70%) for the year, has been declared. The total dividend payment amounts to Rs.428.65 crore (including dividend distribution tax).

CAPITAL

Net worth of the Bank in FY 2009-10 has increased to Rs.12,456 crore from Rs.11,144 crore. During the year, the Bank has not increased its equity capital either by way of Public or Right or Preferential Issue of Equity Shares.

CAPITAL ADEQUACY

As per Basel II framework, the Bank’s Capital Adequacy Ratio of 12.94% which was higher than the regulatory requirement of 10%.

Details of Capital Adequacy (BASEL II) are shown as under :

(Rs. In crore)

31.03.2009 31.03.2010

Particulars (Under BASEL - II) Amount CRAR (%) Amount CRAR (%)

Tier I Capital 12466 8.91 13725 8.48

Tier II Capital 5745 4.10 7218 4.46

Total Capital 18211 13.01 20943 12.94

Risk Weighted Assets 139931 - 161857 -

BORROWINGS

The Bank has raised Subordinated debts through private placements and Medium Term Note (MTN) for perpetual bonds and Upper Tier II Bonds through overseas borrowings. The bank has raised Rs.325 crore through issue of IPDI and Rs.2,000 crore through Upper Tier-II instrument during the year 2009-10.



ACKNOWLEDGEMENT

The Board express its gratitude to the Government of India, Reserve Bank of India and Securities and Exchanges Board of India for the valuable guidance and support received from them. The Board places on record its deep appreciation for the services and contributions made by Shri T.S. Narayanasami (Ex-Chairman & Managing Director), Shri Kamal Kishore Gupta, Shri Rameshwar Prasad, all Directors of the Bank, who have relinquished offi ce during the year. The Board also thanks fi nancial Institutions and correspondent banks for their co- operation and support. The Board acknowledges the unstinted support of its customers and shareholders and also wishes to place on record its appreciation of staff members for their dedicated services and contribution for the overall performance of the Bank.

For and on behalf of the Board of Directors (Alok K. Misra)

Chairman & Managing Director

Place: Mumbai Date: 07.05.2010

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