INSTITUTE OF MANAGEMENT STUDIES

GHAZIABAD

A PROJECT REPORT ON

TOPIC: HR PRACTICES AND VARIOUS BUSINESS

STRATEGIES OF BANK OF BARODA

In

SUBJECT: PPSP

Submitted to: Prof. Soumen Mukherjee.

Date of Submission: 4-01-2010.

1
 INSTITUTE OF MANAGEMENT STUDIES
GHAZIABAD

A PROJECT REPORT ON

TOPIC: HR PRACTICES AND VARIOUS BUSINESS

STRATEGIES OF BANK OF BARODA

In
SUBJECT: PPSP

Submitted to: Submitted by:

Prof. Soumen Mukherjee Jyoti Varma (BM-
09087)
Kalap Sen(BM-
09089)
Manisha Agarwal(BM-09100)
Mayank Mohan(BM-09106)
Naveen Pandey(BM-09113)
Neelu Chaudhary(BM-09115)
Neha Rathi(BM-09119)
Nikhil Singh(BM-09124)
Nitya Singh(BM-09130)
Nupur Sharma(BM-09132)
Pradeep Sharma(BM-09142)

2
 Pratik Dhir(BM-09147)
Prerna Paul(BM-09151)
Priyanka Gulati(BM-09152)
Rashmi Amita(BM-
DECLARATION
We hereby declare that this submission is our own work & to the best of our knowledge
& belief, it contains no material previously published or written by another person nor
material which to a substantial extent has been accepted for the award of any other
degree or diploma of the university or other institute of higher learning except where due
acknowledge has been made in the text.

Jyoti Varma(BM-09087) Date: - 2nd

January 2010

Kalap Sen(BM-09089)

Manisha(BM-09100)

Mayank Mohan(BM-09106)

Naveen Pandey(BM-09113)

Neelu Chaudhary(BM-09115)

Neha Rathi(BM-09119)

Nikhil Singh(BM-09124)

Nitya Singh(BM-09130)

Nupur Sharma(BM-09132)

Pradeep Sharma(BM-09142)

Pratik Dhir(BM-09147)

Prerna Paul(BM-09151)

Priyanka Gulati(BM-09152)

Rashmi Amita(BM-09247)

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 CERTIFICATE

This is to certify that the Project entitled “HR Practices of Bank of Baroda ” which is
being submitted by PGDM (Jyoti Varma(BM-09087),Kalap Sen(BM-
09089),Manisha(BM-09100),Mayank Mohan(BM-09106),Naveen Pandey(BM-
09113),Neelu Chaudhary(BM-09115),Neha Rathi(BM-09119),Nikhil Singh(BM-
124),Nitya Singh(BM-091),Nupur Sharma(BM-09132),Pradeep Sharma(BM-
09142),Pratik Dhir(BM-09147), Prerna Paul(BM-09151),Priyanka Gulati(BM-
09152),Rashmi Amita(BM-09247) student of IMS, Ghaziabad is a record of the
candidate group’s own work carried by them under my supervision. The matter embodied
in this report is original and has not been submitted for the award of any other degree.

Project Guide:
Prof. Soumen Mukherjee Date: 04-01-2010.

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 PREFACE

Gross profit of the organization is directly influenced by the marketing strategy and
practices followed by the organization and it has always been one of the most important
aspect of the succeeding process. However in the recent age Marketing is the core
function of any organization to be put in sight of administration and always need
standardized manual and digital backup. HR department has a strong correlation and
harbored link with marketing and rest of the departments. HR is also responsible equally
for the better output, services and productivity of any organization. Both these factors are
considered immense in BOB.

A century long sustainability of BOB is successful blend of the HR and marketing

practices. BOB planned to expand its wing internationally within 40 years of
establishment in the decade of independence, that proves BOB has been following a
planned HR strategy from its day of establishment. Within 50 years of establishment
BOB got one of eminent organization of that time ‘The Hind’. Dissolution shows the
constructive strength of HR practices followed by the BOB. Economically effective
presence of BOB in more than 25 nations is another proof of follow up of class practices
in HR adopted by BOB. Aims and objective in the declaration of BOB are demonstrative
elements of compactness of HR practices of BOB.

This report inculcate various aspects of infrastructural complexity and strength of BOB
including a specified emphasis on the HR practices followed by BOB.

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 ACKNOWLEDGEMENT

We would sincerely like to thank our project guide Prof. Soumen Mukherjee, for
enabling us to successfully carry out the project work through his constant guidance, for
endless support and continuous involvement in the project.
It was really worthwhile to receive help from Mr. S. K. Luthra, Senior Branch
Manager of Bank of Baroda, who in person was always present to help us out anytime
we felt his need. Without his constant support this project would not have been
acknowledged as it is now.
Finally, we owe a great deal of sincere thanks to the faculty members who have been of
great support from time to time along with our friends, who kept encouraging us all
along.

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 TABLE OF CONTENTS

SR.NO. CHAPTER PAGE

NO.
1. ABSTRACT 1
2. QUESTION 2
3. LOGO 3
4. INTRODUCTION 4
6. HR MISSION 21
7. TRAINNING 27
8. PROMOTION 28
9. COMPETITORS 52
10. BUSINESS STRATEGIES 54
11. ORGANIZATIONAL STRUCTURE 68
12. LITERATURE REVIEW 71
13. QUESTIONS ASKED 73
14. EXERPTS 77
15. CONCLUSION 80
16. RECOMMENDATIONS 81
17. APPENDIX 82
18. LIST OF REFRENCES 85
19 BIBLIOGRAPHY 86
20 GLOSSARY 87
INDEX

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 ABSTRACT

India is being widely recognized as one of the most exciting emerging economics
in the world. Besides becoming a global hub of outsourcing, Indian firms are
spreading their wings globally through mergers and acquisitions. During the first
four months of 1997, Indian companies have bought 34 foreign companies for
about U.S. $11 billion dollars. This impressive development has been due to a
growth in inputs (capital and labor) as well as factor productivity. By the year
2020, India is expected to add about 250 million to its labor pool at the rate of
about 18 million a year, which is more than the entire labor force of Germany.
This so-called ‘demographic dividend’ has drawn a new interest in the Human
Resource concepts and practices in India. This paper traces notable evidence of
economic organizations and managerial ideas from ancient Indian sources with
enduring traditions and considers them in the context of contemporary
challenges.

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QUESTION:
Given the fact that a brand name can be worth almost half of a
companies value, the effective use of brands is extremely
important. As Adrea Dunham of Unique Value International puts
it, reliability associated with the brand becomes “ a repository of
knowledge about the things that people are going to buy or use”
(U.S. news and world report, 9 October 2000.). What are some
do’s and don’ts as far as brand maintenance goes? From the
marketing stand point, what should companies do to insure that
their brands are effective? Keeping in mind the structure of a
standard report, prepare a report based on the above mentioned
questions.

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10
 INTRODUCTION

Bank of Baroda (BSE: 532134) (BoB) is the third largest Public Sector bank in India,
after State Bank of India and Punjab National Bank. BoB has total assets in excess of Rs.
2.27 lakh crores, or Rs. 2,274 billion, a network of over 3000 branches and offices, and
about 1100+ ATMs. It offers a wide range of banking products and financial services to
corporate and retail customers through a variety of delivery channels and through its
specialized subsidiaries and affiliates in the areas of investment banking, credit cards and
asset management.
Maharajah of Baroda Sir Sayajirao Gaekwad III founded the bank on July 20, 1908 in the
princely state of Baroda, in Gujarat. The bank, along with 13 other major commercial
banks of India, was nationalized on 19 July 1969, by the Government of India.

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 HISTORY
1908-1958
1908: Maharaja Sayajirao Gaekwad III set up Bank of Baroda (BOB).
1910: BOB established its first branch in Ahmadabad.
1953: BOB established a branch in Mombasa and another in Kampala.
1954: BOB opened a branch in Nairobi.
1956: BOB opened a branch in Dar-es-Salaam.
1957: BOB established a branch in London.
1959: BOB acquired Hind Bank

1960s
1961: BOB merged in New Citizen Bank of India. This merger helped it increase its
branch network in Maharashtra.
BOB also opened a branch in Fiji.
1962: BOB opened a branch in Mauritius.
1963: BOB acquired Surat Banking Corporation in Surat, Gujarat.
1964: BOB acquired two banks, Umbergaon People’s Bank in southern Gujarat and
Tamil Nadu Central Bank in Tamil Nadu state.
1964: BOB lost its branch in Narayanjanj (East Pakistan) due to the Indo-Pakistan war. It
is unclear when BOB had opened the branch.
1965: BOB opened a branch in Guyana.
1967: The Tanzanian government nationalized BOB’s three branches there and
transferred their operations to the Tanzanian government-owned National Banking
Corporation.
1969: The Government of India nationalized 14 top banks, including BOB.
BOB incorporated its operations in Uganda as a 51% subsidiary, with the government
owning the rest.

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1970s and 1980s
1972: BOB acquired Bank of India’s operations in Uganda.
1974: BOB opened a branch each in Dubai and Abu Dhabi.
1975: BOB acquired the majority shareholding and management control of Bareilly
Corporation Bank (est. 1928) and Nainital Bank (est. in 1954), both in Uttar Pradesh.
Since then, Nainital Bank has expanded to Uttarakhand State.
1976: BOB opened a branch in Oman and another in Brussels. The Brussels branch was
aimed at Indian firms from Mumbai (Bombay) engaged in diamond cutting and jewellery
having business in Antwerp, a major center for diamond cutting.
1978: BOB opened branch in New York and another in the Seychelles.
1979: BOB opened a branch in Nassau, the Bahamas.
1980: BOB opened a branch in Bahrain and a representative office in Sydney, Australia.
BOB, Union Bank of India and Indian Bank established IUB International Finance, a
licensed deposit taker, in Hong Kong. Each of the three banks took an equal share.
1985: BOB (20%), Bank of India (20%), Central Bank of India (20%) and ZIMCO
(Zambian government; 40%) established Indo-Zambia Bank (Lusaka).
BOB also opened an Offshore Banking Unit (OBU) in Bahrain.
1988: BOB acquired Traders Bank, which had a branch network in Delhi.

1990s
1990: BOB opened an OBU in Mauritius, but closed its representative office in Sydney.
1991: BOB took over the London branches of Union Bank of India and Punjab & Sind
Bank (P&S). P&S’s branch had been established before 1970 and Union Bank’s after
1980. The Reserve Bank of India ordered the takeover of the two following the banks'
involvement in the Sethia fraud in 1987 and subsequent losses.
1992 BOB incorporated its operations in Kenya into a local subsidiary with a small
tranche of shares quoted on the Nairobi Stock Exchange.
1993: BOB closed its OBU in Bahrain.
1996: BOB Bank entered the capital market in December with an Initial Public Offering
(IPO). The Government of India is still the largest shareholder, owning 66% of the bank's
equity.

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1997: BOB opened a branch in Durban.
1998: BOB bought out its partners in IUB International Finance in Hong Kong.
Apparently this was a response to regulatory changes following Hong Kong’s reversion
to the People’s Republic of China. The now wholly owned subsidiary became Bank of
Baroda (Hong Kong), a restricted license bank.
BOB also acquired Punjab Cooperative Bank in a rescue.
1999: BOB merged in Bareilly Corporation Bank in another rescue. At the time, Bareilly
had 64 branches, including four in Delhi.
In Guyana, BOB incorporated its branch as a subsidiary, Bank of Baroda Guyana.
BOB added a branch in Mauritius, but closed its Harrow Branch in London.
2000s
2000: BOB established Bank of Baroda (Botswana).
2002: BOB acquired Benares State Bank in Benares at the Reserve Bank of India’s
request.
2002: Bank of Baroda (Uganda) was listed on the Uganda Securities Exchange (USE).
2003: BOB opened an OBU in Mumbai.
2004: BOB acquired the failed Gujarat Local Area Bank, and returned to Tanzania by
establishing a subsidiary in Dar-es-Salaam.
BOB also opened a representative office each in Kuala Lumpur, Malaysia, and
Guangdong, PRC.
2005: The Reserve Bank of India (RBI) has approved a joint venture between BOB, Bank
of Maharashtra (BOM), and Oriental Bank of Commerce (OBC) to set up a bank in
Malaysia. The new bank will reside in Kuala Lumpur, which has a large population of
Indians. The initial capital required will be US$78 million; BOB will invest 40%, and the
other two banks will invest 30% each. The JV is awaiting approval from the Malaysian
Central Bank. Bank has built and commissioned its own State-of-the-Art Global Data
Centre (DC) in Mumbai for running its centralized banking solution (CBS) and other
applications in 1900+ branches across India and 20 other counties where the Bank is
operating.
BOB also opened a representative office in Thailand.
2006: BOB established an Offshore Banking Unit (OBU) in Singapore.

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2007: In its centenary year, BOB's total business crossed 2.09 lakh crores, its branches
crossed 1000, and its global customer base 29 million people.
2008: BOB opened a branch in Guangzhou, China (02/08/2008).
2009: Bank of Baroda registered with the Reserve Bank of New Zealand, enabling it to
trade as a bank in New Zealand (2009/09/01)

A saga of vision and mission of enterprise

Vision:
It has been a long and eventful journey of almost a century across 25 countries. Starting
in 1908 from a small building in Baroda to its new hi-rise and hi-tech Baroda Corporate
Centre in Mumbai is a saga of vision, enterprise, financial prudence and corporate
governance.

It all started with a visionary Maharaja's uncanny foresight into the future of trade and
enterprising in his country. On 20th July 1908, under the Companies Act of 1897, and
with a paid up capital of Rs 10 Lacs started the legend that has now translated into a
strong, trustworthy financial body, THE BANK OF BARODA.

It has been a wisely orchestrated growth, involving corporate wisdom, social pride and
the vision of helping others grow, and growing itself in turn.

The founder, Maharaja Sayajirao Gaekwad, with his insight into the future, saw "a
bank of this nature will prove a beneficial agency for lending, transmission, and deposit
of money and will be a powerful factor in the development of art, industries and
commerce of the State and adjoining territories."

It is a story scripted in corporate wisdom and social pride. It is a story crafted in private
capital, princely patronage and state ownership. It is a story of ordinary bankers and their
extraordinary contribution in the ascent of Bank of Baroda to the formidable heights of
corporate glory. It is a story that needs to be shared with all those millions of people -

15
customers, stakeholders, employees & the public at large - who in ample measure, have
contributed to the making of an institution.

Mission:
To be a top ranking National Bank of International Standards committed to augmenting
stakeholders' value through concern, care and competence.

BOB Logo

Our new logo is a unique representation of a universal symbol. It comprises dual ‘B’
letterforms that hold the rays of the rising sun. We call this the Baroda Sun.
The sun is an excellent representation of what our bank stands for. It is the single most
powerful source of light and energy – its far-reaching rays dispel darkness to illuminate
everything they touch. At Bank of Baroda, we seek to be the sources that will help all our
stakeholders realize their goals. To our customers, we seek to be one-stop, reliable
partners who will help them address different financial needs. To our employees, we
offer rewarding careers and to our investors and business partners, maximum return on
their investment.
The single-colour, compelling vermillion palette has been carefully chosen, for its
distinctiveness as it stands for hope and energy.
We also recognize that our bank is characterized by diversity. Our network of branches
spans geographical and cultural boundaries and rural-urban divides. Our customers come
from a wide spectrum of industries and backgrounds. The Baroda Sun is a fitting face for
our brand because it is a universal symbol of dynamism and optimism – it is meaningful
for our many audiences and easily decoded by all.
Our new corporate brand identity is much more than a cosmetic change. It is a signal that
we recognize and are prepared for new business paradigms in a globalised world. At the
same time, we will always stay in touch with our heritage and enduring relationships on
which our bank is founded. By adopting a symbol as simple and powerful as the Baroda
Sun, we hope to communicate both.

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 BOB ETHICS

Between 1913 and 1917, as many as 87 banks failed in India. Bank of Baroda survived
the crisis, mainly due to its honest and prudent leadership. This financial integrity,
business prudence, caution and an abiding care and concern for the hard earned savings
of hard working people, were to become the central philosophy around which business
decisions would be effected. This cardinal philosophy was over the 94 years of its
existence, to become its biggest asset. It ensured that the Bank survived the Great War
years. It ensured survival during the Great Depression. Even while big names were
dragged into the Stock Market scam and the Capital Market scam, the Bank of Baroda
continued its triumphant march along the best ethical practices.

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 Global Presence of Bank of Baroda
Global Presence
Australia
Bahamas
Bahrain
Belgium
Botswana
China
Fiji Islands
Ghana
Guyana
Hong Kong
Kenya
Mauritius
Malaysia
Seychelles
South Africa
Singapore
Sultanate of Oman
Tanzania
Thailand
Trinidad & Tobago
Uganda
United Arab Emirates
United Kingdom
United States of America
Zambia

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 Subsidiaries & Joint Ventures

Domestic Overseas
Subsidiary Subsidiary
BOBCARDS Ltd. Bank of Baroda (Botswana) Ltd.
Bank of Baroda (Kenya) Ltd.
BOB Capital Markets Ltd.
Bank of Baroda (Uganda) Ltd.
Nainital Bank Ltd. Bank of Baroda (Guyana) Ltd.
Bank of Baroda (UK) Ltd.
Bank of Baroda (Tanzania) Ltd
Bank of Baroda (Trinidad &
Tobago) Ltd.
Bank of Baroda (Ghana) Ltd.
Representative Offices
Bank of Baroda (Thailand)
Bank of Baroda (Malaysia)
Bank of Baroda (Australia)
Associate Associate
Baroda Pioneer Asset Management Indo-Zambia Bank Ltd. (Lusaka)
Company Ltd
UTI Asset Management Company Ltd
UTI Trustee Company Pvt Ltd
Baroda Uttar Pradesh Gramin Bank
Baroda Rajasthan Gramin Bank
Baroda Gujarat Gramin Bank
Nanital -Almora Kshetriya Gramin
Bank
Jhabua-Dhar Kshetriya Gramin Bank

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 Offices & Branches
Corporate Offices
Head Office Corporate Centre
Suraj Plaza 1, Sayaji Ganj, Bank Of Baroda
Baroda 390005 Baroda Corporate Centre,
Plot No. C-26, Block G,
Ph: (0265) 2361852(10lines) Bandra Kurla Complex,
Bandra (East),
Fax: (0265) 2362395, 2361824, 2361806 Mumbai 400051

Ph: (022) 6698 5000-04 (PBX)

Fax: (022) 2652 1955

Branch Network (as of 1/1/2010)
Area No. of Branches
Metro 555
Urban 627
Semi-Urban 684
Rural 1216
Total (Indian) 3082
Foreign (Overseas) 70
Total (Global) 3152
Controlling Offices
Zonal Offices 10
Regional Offices 43
Human Resources (Staff as of September 2006)
Officers 13525
Clerks 16497
Sub – Staff 8041
Total 38063

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 Business Indicators
Key Business Indicators
31.03.2009 31.03.2008
(Rs. in Crore)
Total Deposits 1,92,396.95 1,52,034.12
Total Advances 1,43,985.90 1,06,701.33
Total Investments 52445.88 43870.07
Total Assets 227406.73 179599.52
Net Profit 2227.20 1435.52
Capital Adequacy Ratio 12.88 as per Basel I 12.91 as per Basel I
(percentage) 14.05 as per Basel II 12.94 as per Basel II
Net Non Performing Loans 0.31 0.47
to Net Advances (percentage)
Operating profit to working 2.22 1.96
funds (percentage)
Business Per Employee 914 704
(Lacs)
Dividend History (Percentage)
2009 90
2008 80
2007 60
2006 50
2005 50
2004 65
2003 60
2002 40
2001 40
2000 40
1999 30
1998 30

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 KEY EXECUTIVE

S.No Name Designation

1 Milind N
Director
Nadkarni

2 Dharmendra
Director
Bhandari

3 A
Somasundar Director
am

4 Amitabh
Director
Verma

5 Maulin A
Director
Vaishnav

6 Atul Agarwal Director

7 Ranjit Kumar
Director
Chatterjee

8 Deepak B
Director
Patak

9 Executive
R K Bakshi
Director

10 Executive
Srinath
Director

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23
 The Initiative

• Marketing Initiatives
The mid-eighties marked the beginning of the shift to a buyers` market. The Bank
orchestrated its business strategies around the centrality of the customer. It diversified
into areas of merchant banking, housing finance, credit cards and mutual funds. A string
of segment specific branches entrenched operations in the profitable markets. Overseas
operations were revamped and structural changes intensified in the territories to cater to
second generation NRIs. Slowly but surely, the move to become a one stop financial
supermarket had been set in motion. Service delivery standards were stipulated.
Technology was adopted to add punch. Employees across the board were inculcated with
the marketing concept. Aggressive marketing became the new business philosophy.

• People Initiatives

Bank of Baroda has always had an immense faith in the infinite potential of its people.
This has been historically demonstrated in its recruitment practices, developmental
initiatives, placement processes and promotion policies. Strategic HR interventions like,
according cross border and cross cultural work exposure to its managers, hiring diverse
functional specialists to support line functionaries and complementing the technical
competencies of its people by imparting conceptual, managerial and leadership skills,
gave the Bank competitive advantage. The elaborate man management policies also made
the Bank a breeding ground for business leaders. The Bank provided around a dozen
CEOs to the industry- men who went on to build other great institutions. People
initiatives were blended with IR initiatives to create an effectively harmonious
workplace, where everyone prospered.

• Financial Initiatives

New norms for capital adequacy required new capital management strategies. In 1995 the
Bank raised Rs 300 crores through a Bond issue. In 1996 the Bank tapped the capital

24
market with an IPO of Rs 850 crores, despite adverse market conditions prevailing then,
the issue was over subscribed, reflecting the positive public perception of the Bank's
fundamental financial strength.

• Digital Initiatives

Bank of Baroda pioneered the shift from manual operating systems to a computerized
work environment. Starting with ledgers, to ledger posting machines, through ALPMs,
the Bank graduated to the use of Unix based systems to Mainframes; to client server
based Total Branch Mechanization Systems. Today, the Bank has 1918 computerized
branches, covering 70% of its network and 91.64% of its business. Alive to the growing
complexities of an intensely competitive marketplace and the mounting expectations of
customers fuelled by this competition, the Bank reworked its distribution strategy. It
ventured beyond the brick and mortar delivery channel into ATMs and the OmniBOB
range of anytime, anywhere electronic channels of PC banking, telephone banking. The
e-banking products used state of the art technologies like digital certificates, smart card
authentication and secure networking.

The new IT strategy, in the process of implementation will see the deployment of Core
Banking Systems, Multi Service Transaction Switch, Payment Gateways - all geared to
deliver convenience banking.

• Quality Initiatives

In its relentless striving for quality perfection, the Bank secured the ISO 9001:2000
certification for 15 branches. By end of the current financial, the Bank is targeting 54
more branches for this quality certification.

The Future Revolutionary and discontinuous changes in the operating

environment is a stark reminder that business success is 'impermanent'. The emergence of
IT as a major driver for change, has accentuated the need to initiate a major
transformation program. The conversion to an IT savvy, market driven bank will be a
prerequisite to survival and growth. A major and strategic step in hi-tech, was the
establishment of the Integrated Treasury branch, as a forerunner to full-fledged global

25
treasury operations. Towards creating a future Bank of Baroda, the Bank has adopted a
revolutionary new business strategy that will be enabled by a revolutionary new IT
strategy. Actioning this strategy will position Bank of Baroda as India's uncontested
premier bank.

At Bank of Baroda, change is a journey. It has a beginning. There will be no end.

It will be a long and difficult march. And the Bank will emerge stronger, more resilient
and positioned to become India's first bank of truly global standards. The relocation to
the imposing Baroda Corporate Centre is a true reflection of the Bank's resolve to move
ahead of the times. It will not be out of place now, as it stands on the threshold of a
digital era, to echo the same sentiments that guided the Bank in its platinum jubilee year
- 'a promising future is the sequel to a glorious past'.

26
 HUMAN RESOURCES

Bank of Baroda has the tradition of continuous enrichment of its human asset so that
they deliver value to the business.

In the ongoing Business Transformation Programme, our PEOPLE play a vital role and
are one of the key business enablers. Under its plan of organizational transformation
through people processes and systems, the Bank has launched a few innovative employee
centric initiatives and has also undertaken revamp of key systems and practices.

HR Objectives
 To initiate & institutionalize globally competitive HR practices in the Bank in
our pursuit to become a Bank of international standards and to become an
employer of preferred choice;
 To put in place relevant HRD strategies and use modern methodologies to
undertake organizational renewal; identify and nurture talent, bring about
marked changes in the mindset of employees at all levels so as to enhance HR
Quality;
 To create a performance-driven culture and an exciting workplace for the
employees
 To create a pool of entrepreneurial managers and business leaders for future;
 To inculcate a strong and effective sales and service culture across levels in the
organization in order to generate strong stakeholder affiliation;
 To create a learning organization for employees’ intellectual growth and
creativity; and to re-skill the workforce to operate in digitally enabled modern
core banking environment.

27
28
 HR Business Model

The Strategic HR Business Model adopted by Bank of Baroda incorporates its HR

Mission and Philosophy and is focused towards attainment of long-term organizational
goals.

A very strong Organizational Leadership at different levels forms the key link in the
Model. These are;

I. Strategic Leadership - Corporate level

II. Business Leadership - Zonal & Regional level
III. Operational Leadership - Business unit level i.e. branch

29
The two vital Human Resource sub-systems i.e. HR Planning & Management Sub-
System & Competency Based HRD Sub-System shape the very crucial Performance
Environment within the Bank which facilitates development of enabling capabilities of
people.

Through proper developmental inputs, Positive Attitude & Right Mindset is created
among people.

Through proper Communication Medium and an Organizational Culture of sharing,

openness, collaboration & confrontation, autonomy etc., people in the organization are
facilitated to give their best output (performance).

The Model is adequately supported by a suitable Learning Platform, which imparts

proper Knowledge and enhances Learning among people (functional, behavioural etc)
so that their Competence increases and their potential could be properly leveraged for
greater Individual and Organizational Effectiveness.

These create proper Employee Motivation, which ultimately facilitates Goal

Achievement.

30
 HR Initiatives

Board level approved strategy paper outlining various organization wide HR reforms /interventions

» HR Steering Committee

Board Level HR Committee for piloting HR initiatives and reforms. The Committee comprises of Directors
and leading professionals as Experts from outside the Bank.

» KHOJ

Organization wide Talent identification and Development Programme for Officers and Clerks

(Through scientific process of identification and selection, employees with high potential to be deployed in
key business areas. Such employees to be provided with suitable grooming and career growth opportunities)

» SAMPARK

SOS Employee HELP Line

(Employees in distress can directly approach the CMD for immediate relief)

» PARAMARSH

Employees Counseling Centre

(Counseling centers for providing psychological assistance and guidance to overcome their stress,
complexities and conflicts in order to lead a better life.

This is totally confidential between the employee and the counselor.

31
First such center set up at Mumbai where services of professional Clinical Psychologist are available.

» BARODA FINANCIAL REWARDS FOR BUSINESS LEADERS

Weighted Index based Model (with pre-defined weightages for different business KRAs) for balanced
assessment of efforts of Business Leaders (Branch Heads, Regional Heads, Deputy Regional Heads and
Zonal Heads).
Rewards in Cash for achievement of business KRAs

» MEP-TIKSHNA

Management Education Programs for Executives (GM, DGM, AGM, Chief Managers) in association
with top B-Schools like IIM-Ahemedabad and Management Development Institute, Gurgaon.
The specially designed programme is aimed at development of strategic business leaders for the future.
So far, 213 executives have undergone the programme.

» HR POLICY FOR OVERSEAS SELECTION & DEPLOYMENT

Scientific and process orientation in the new revamped policy for selection and deployment of officers
at the Bank’s overseas territories.

» HR RESOURCING POLICY

New HR Resourcing Policy formulate to take care of various recruitment needs of the bank
consequent upon abolition of the erstwhile Banking Services Recruitment Board (BSRB)

» Performance Appraisal System for Clerical and Sub-Staff

32
With the objective of bringing an organization wide performance culture in the organization, hitherto
uncovered employees in the Clerical and Sub-Staff cadre brought in under a new performance appraisal
system.

» Massive Recruitment of Specialist officers and also graduates from B-Schools through campus
recruitment

To take care of the Bank’s requirement in different specialized areas like IT, Treasury, HR, Marketing &
Sales, Credit, International Business etc (Around 500 officers being recruited).

» A New Induction cum Grooming Programme for Young Officers

With the objective of developing future managers and leaders and for deployment in key areas, a re-
vamped Officers’ Induction cum Grooming Programme is launched.

» Fast Track Career Growth Opportunities for Executives and Officers

In order to provide fast track growth opportunities to aspiring Executives and Officers, promotional
opportunities have been provided.

» BARODA LEADERSHIP DEVELOPMENT CENTRE

Board has taken the decision to set-up a World-Class Leadership Development Centre to be set up to
prepare future leaders for the Bank.

» NEW GROUP HR STRUCTURE

A new Group HR Organization Structure is being put in place to take care of the strategic business –
HR needs of the Organization. The Structure would have balanced focus on HRM and HRD aspects and
will put in place competency based HR systems and practices.

33
 TRAINING

To keep up with the fast changing business scenario, product profile, processes, customer preferences,
numerous technology applications and compliance & regulatory requirements, training has become a centre-
stage activity.

The bank conducted 342 training programs in the area of CBS covering 6234 employees during the year. To
provide appropriate thrust in the area of credit and risk management, 193 programmes were conducted in
other functional areas covering 4595 employees during the year.

The resources of external Training Institutions and Business schools were tapped for training employees in
the functional areas where in-house expertise was not available. 741 Officers and Executives attended
training programmes in specialized areas at various external training institutions and reputed Business
Schools. Also 20 Officers/Executives attended training overseas.

A Leadership Development Program – Project LEAP

Post-2009 technology environment, competitive compulsions, entry of foreign banks, M&A will all tend to
change the course of banking necessitating new breed of leaders at different levels. So managing & leading a
financial services organization in such an environment would be a new challenge for future leaders.

Further, One of the key drivers for market leadership is the bank’s internal leadership. It is in response to this
that the project LEAP (Leadership enhancement and appreciation process) was conceived and launched
aimed to groom the executives in leadership and capability building.

Under this program of Bank Of Baroda, nearby three hundred executives has been groomed in leadership in
a phased manner. It’s rigorous process involves:

34
  To identify a competency framework for future leaders in the Bank.

 Administration of psychometric instruments and 360-degree feedback for each identified executive
for building on their strength and working in the areas where development is needed.

 Classroom orientation & Action Learning Projects.

 Succession Planning.

Another is KHOJ-For talent Identification and grooming

KHOJ initially was initiated as an in-house talent identification and development exercise in 2005. An
element of self-development and career planning is built into the system, as this is a voluntary exercise
where aspiring employees apply for selection for grooming in various areas they perceive as their areas of
strength in our operations.

Encouraged by the huge response to the initiative, KHOJ exercise has been repeated in 2006 and in
2007.Candidates selected under KHOJ are groomed, placed in the area of operation of their choice. As part
of their development many are identified as change champions in many of the new initiatives. Mentors are
assigned for facilitating their grooming.

Exclusive Conclaves of KHOJ selectees were organized. In order to make the KHOJ selectees a vibrant and
visible group, due weight age is given to their contribution in career progression, rewards, special
assignments, etc.

PROMOTION

35
The present procedure of recruitment and promotion in the banks has evolved over the years in an ad hoc manner.
With the objective of bringing an organization wide performance culture in the organization, hitherto uncovered
employees in the Clerical and Sub-Staff cadre brought in under a new performance appraisal system.
To take care of the Bank’s requirement in different specialized areas like IT, Treasury, HR, Marketing & Sales,
Credit, International Business etc.
In most of the central government department there is provision for time bound promotion and hence
question of stagnation in particular scale does not arise. It is banks that even after completing twenty or thirty
years of service in a particular scale promotion is not given to an employee. (Now-a-days Interview is a
killer injection in the pocket of management, which can be injected to any good or bad performer in
promotion process as per whims, and fancies of the interviewer).
When leaders and bank management can give relief to retired employees
In order to provide fast track growth opportunities to aspiring Executives and Officers, promotional opportunities
have been provided.
According to Anurag Khanna, chairman and managing director of Bank net India, a banking research company,
new recruitments are to keep pace with the banks’ expansion plans. “The banks are adopting fast-track promotions to
fill in any management gap,” said Khanna.
We are battling private and foreign banks with public sector tools,” said Dipankar Mukherjee, general manager,
human resources and marketing at Bank of Baroda.
Low salary, tough working conditions, frequent transfers and an opaque promotion policy deter public sector
employees from working effectively.
Bank of Baroda wanted differential wages for their employees but they could not move ahead with their plans as the
unions opposed that.
Titles for the officer cadre start from assistant manager, deputy manager, manager, chief manager, general manager,
managing director and the chairman accordingly.
Though the pay scale slightly varies from bank to bank due to many reasons like the working place viz.metros, rural
areas the basic scale remains the same for every public sector bank.
The employees are promoted on the basis of their score in the exams taken by the bank. It includes written exam and
interview. It is taken time to time. There are some qualifications required for appearing in the exam.

36
 For example a clerk is eligible for the promotion to the Probationary Officer after one year of his service.
The promotion policy is based on two parameters
(i) Qualification,
(ii) Time

Separate marks were prescribed for each of the two parameters and, after obtaining the minimum qualifying marks
varying from cadre to cadre one could be promoted to the next higher position. While formulating the merit-based
promotion policy the consideration opinion was that separate points should not be prescribed for qualification and
length of service. The simple reason for this thinking was that the minimum qualification stood as prescribed at
induction for different levels of hierarchy. The other consideration for such views was that in case the employee had
increased his qualification for his better performance as compared to other colleagues, then the said qualification
would be reflected on his performance and this would obviously have him rated better than others. Views regarding
the seniority of an employee were similar.
To meet the Bank’s growth requirements and to fulfill the aspirations of employees, avenues for career progression
have been numerous. Special efforts have been made to maintain relatively younger employees manning key
positions. Keeping this in view the following numbers of employees were promoted to higher grade/scale during the
year

YEAR (2008-09)
JMG/S-I to MMG/S-II (Officer to Manager) 927

MMG/S II to MMG/S III (Manager to Sr. Manager) 552

MMG/S III to MMG/S IV (Sr. Manager to Chief Manager) 220

SMG/S IV to SMG/S V (Chief Manager to Asst. Gen. Manager) 46

SMG/S V to TEG/S VI (Asst. Gen. Manager to Dy. Gen. Manager) 30

TEG/S VI to TEG/S VII (Dy. Gen. Manager to General Manager) 10

37
But there are some negative aspect is also present. In olden days when officer was not found fit for
promotion due to inefficiency he was to face stagnation as mild dose of punishment. This used to happen
when promotion based on seniority used to take place and management used to give promotion even if there
were not adequate vacancies in that scale.

The powers and duties of its officers and employees

All the officers from JMGS I to TEGS VI grade of the bank, working in branches have certain discretionary
lending and administrative powers depending upon their positions. The Board decides the delegation of such
powers of various grades of officials. These powers are revised periodically, depending upon the
organization’s requirement and also Government / RBI guidelines.
Whether to sanction a loan or not, is the absolute discretion of the concerned sanctioning authority of the
bank and such discretion is exercised, after taking into consideration the relevant facts and circumstances of
each case.

The procedure followed in the decision-making process, including channels of supervision and
accountability.
There is a well-defined system in the Bank regarding decision-making process. The Board takes lending and
administrative decisions at various levels from JMGS I to Top Executive grade Scale VII and also by
Executive Director and Chairman & Managing Director depending upon their positions as per the
discretionary lending powers delegated to them. Branches receive applications for credit facilities and
recommend to the appropriate sanctioning authority. In the case of major retail loan products applications are
processed at branches and Centralised Credit Processing Cells at select centers.
There is a well-defined organizational structure and clear system of accountability based on RBI / CVC
guidelines. All credit decisions approved by any sanctioning authority are reported to the next higher
authority for control purpose. The system of exercising proper delegation of power and submission of control
reports is in place and they are monitored by control officers and through internal inspection

38
 The Baroda Sun

Our logo is a unique representation of a universal symbol. It comprises dual 'B' letterforms that hold the rays
of the rising sun. We call this the Baroda Sun.
The sun is an excellent representation of what our Bank stands for. It is the single most powerful source of
light and energy. Its far-reaching rays dispel darkness to illuminate everything they touch. At Bank of
Baroda, we seek to be the sources that will help all our stakeholders realize their goals. To our customers, we
seek to be a one stop, reliable partner who will help them address different financial needs. To our
employees, we offer rewarding careers and to our investors and business partners, maximum return on their
investment. The single color, compelling Vermillion palette has been carefully chosen, for its
distinctiveness as it stands for hope and energy. We also recognize that our Bank is characterized by
diversity. Our network of branches spans geographical and cultural boundaries and rural-urban divides. Our
Customers come from a wide spectrum of industries and backgrounds. The Baroda Sun is a fitting face for
our brand because it is a universal symbol of dynamism and optimism. Our corporate brand identity is
much more than a cosmetic change. It is a signal that we recognize and are prepared for new business
paradigms in a globalised world. At the same time, we will always stay in touch with our heritage and
enduring relationships on which our bank is founded. By adopting a symbol as simple and powerful as the
Baroda Sun, we hope to communicate both.

Bank of Baroda rose in a new avatar with what it calls the "Baroda Sun" with cricketer Rahul Dravid (in
picture) roped in to endorse the brand which now projects itself as a modern and tech-savvy bank.

Brand marketers are calling it the impact of cut-throat competition in the domestic market. Faced with rising
competition on the domestic front, many Indian companies are increasingly going in for a corporate brand
makeover. But, as they insist, it's not merely a logo change but represents a fundamental shift in the way the
companies will operate henceforth.
According to Sharma, it is the fast-changing society and environment, which is driving companies to go in
for a change in their corporate logo and identity. "The change has to be relevant, as the company is related to
society and society is changing quickly and that change needs to be reflected," he says. "In fact, consumers
are evolving all the time, so it becomes critical for companies to stay contemporary and relevant. A
makeover gives a new identity and infuses freshness and is undertaken with an aim of altering perceptions,"

39
says an official from Synovate India, a market research firm. In most cases, the change in corporate logos is
also used to announce a far-reaching change within the company itself.
As Meeta Malhotra, Director, Ray + Keshavan Design, which redesigned the Bank of Baroda logo, says, a
logo is the face of a company and when you change that face, a company sets a certain level of expectation
which it has to meet. "Logo redesign is meant to signal change in a company and is the most effective way to
do it," she says. In BoB's case, she explains, the bank was itself undergoing a transformation in its operations
and services. "It's a huge exercise, and companies need to communicate that they are changing in a tangible
and visible way." A mere logo change without a change in a company's functioning is a meaningless
exercise, she adds.

The Bangalore-based design house has a five-point test for a company's brand identity: Is it relevant,
enduring, sustainable, memorable and unique? If they fail to meet one or more of the above requirements,
companies should look at a change. "It is hard to imagine a company changing logos just for cosmetic
reasons because it requires such significant investment and change management," says Malhotra

Interestingly, companies which are going in for a change in their corporate image can be divided into two -
those that have already implemented a change in their style of functioning and want to come up with a
fresher image to reflect it and those that are set to bring about far-reaching changes within the firm and are
announcing those changes through a new corporate identity.
A company's logo is perhaps the opening impression of a company in the eyes of its consumers both internal
and external. For companies, which grew organically over the last few decades and were often sheltered in
an economy that did not allow competition, the importance of the logo or initial impression was lost. Too
few players and hugely different product offerings! So no real competition. They didn't feel the need to
invest in an image. However, increasing competition and the need of companies to be seen differently from
their peers has catalyzed the need for change." says Anisha Shakdher, Founder & Creative Head, and Bounce
Design.
This is probably the reason why even public sector banks are now going in for an image makeover. While
State Bank of India is sprucing up many of its branches, the 97-year-old Bank of Baroda (BoB) is now
sporting a new logo and will soon unleash a high-pitched ad campaign? The old logo makes way for a new
one, which is a double `B' with a rising sun called `The Baroda Sun.' According to Anil K. Khandelwal,
Chairman & Managing Director, BoB, "The new corporate logo is much more than a cosmetic change. It is a
signal the bank recognizes and is preparing itself for the new business paradigms in the globalised world."

40
Coinciding with the unveiling of the new logo, the Bank also announced that it would be launching a number
of customer-centric initiatives, including IT products and expansion of electronic delivery channels. The
uphill task, however, is to create a lasting, perceptible difference in the consumer's mind that its style of
functioning too has changed. Otherwise, the whole exercise might be ineffectual.

"For instance, if a bank were to go in for a new corporate identity to appear younger and more modern, but
its branches are working in the same manner in which they were earlier, the point of the whole exercise of a
change in corporate identity would be lost on the consumer. Thereby, a change should not merely be
cosmetic," points out Sharma. In other words, a huge bank such as Bank of Baroda, which has over 2,700
branches, would need to implement a change across a large portion of its network to make an impression. "In
fact, it is tougher for service-oriented companies to make this transition. And even more difficult for banking
ones, since they have to focus on building a relationship with the consumer and in the same breath ask them
to use technology for banking, as banks increasingly do not want consumers visiting banks in order to cut
costs," says Sharma.

On whether the makeover actually makes a difference to the company's sales, analysts say it depends on
whether, after the initial "cosmetic" change, the company has been able to infuse the same freshness into its
functioning over a period of time. Trademarks or logos are unique symbols that help identify a product, a
brand or an institution, but as legendary designer Paul Rand once explained, "a trademark is created by a
designer but made by a corporation."

Bank of Baroda features in list of 50 India’s Most Valuable Brand 2009

The Economic Times has published the list of India’s Most Valuable Brands (2009) released out by Brand
Finance, a leading global brand valuation firm. Bank of Baroda features in the elite club of 9 Banking and
Finance companies in the list. Even though the Top 50 list points to the declining influence of companies
from the banking and finance services sector, Bank of Baroda has achieved 34th position as against its 39th
position last year. The brand is now valued at 466 US million $, close to 11 % increase from last year. It is
worth mentioning that the Brand Finance IMVB study indicates that as long as brands continue to reinvent
and deliver good value for money, they will do well.

41
 Domestic Operations

Baroda Fixed Deposit Account

Why just let your money idle, when you can idle it with interest? Depending on the period, our various fixed
deposit products help you get the best out of your savings by offering you good interest rates.

Enjoy both security and competitive rates of interest on your deposits with any of the following products.

For Deposits upto 12 months:

Short Deposits
For Deposits over 12 months:
Fast Access Deposit Scheme
BoB Flexible Fixed Deposit Scheme
Regular Income Plan
Monthly Income Plan
Regular Income Cum Recurring Deposit
Capital Gain Account Scheme, 1988
Term Deposits
Baroda Tax Savings Term Deposit

As Recurring Deposits:
General Scheme
Baroda Flexible Recurring Deposit Account

Current Account
Current Deposits product is ideal for firm, companies, institutions, HUF, individuals etc., who need banking
facility more frequently. This is one of the most basic and flexible deposit options, allowing transaction
without limiting the numbers.You may choose from:

42
Baroda Current Account

Baroda Premium Current Account (BPCA)

Baroda Premium Current Account-Privilege (BPCAP)

Baroda Advantage Current Account
Current Account rules

Baroda Savings Account

Depending on the nature of the account and the governing terms and conditions, Bank of Baroda offers you
under Savings Accounts.

Baroda Centenary Savings Account

Savings Bank Account
Super Savings Account
Nagrik Bachat Khata
Baroda Salary Advantage Saving Account
Baroda Bachat Mitra

Business Banking Services

Customised services for unique requirements.

The small and medium business enterprise is one of the fastest growing sectors in the country. Bank of
Baroda offers various products and services that meet the specific requirements of such enterprises and help
them grow.
In addition to tailor-made products, you can depend on the strength of our nation-wide network and facilities
that will enable you to conduct your business smoothly, without geographical constraints.
Be it Deposits, Loans & Advances, Collection Services, Working Capital Finance, Term Finance, Non-Fund
based Facilities, Trade Finance, Merchant Banking or other such aspects of banking, we have a solution to
help your business run smoothly and efficiently.

43
Personal Banking Service
The strength and integrity of relationships.
Bank of Baroda believes in the strength and integrity of relationships built with its customers like you. With
over 101 years of experience in the banking industry and a wide network of over 3000 branches all over the
country, we have always been active in extending financial support and adapting to your changing needs.
Our Deposit Products, Retail Loans, Credit Cards and Debit Cards help you with your growing financial
needs. With facilities like Lockers we ensure that your valuables are safe with us.
Our countrywide branches offer you convenience and ease in operating your account wherever you are. Our
24-hour ATMs enable you to withdraw cash, check your account balance and request for a new chequebook
even after banking hours.
Faster technology for better service

Baroda Internet Banking / Baroda Mobile Banking, our latest Internet and Mobile banking initiatives enable
you to operate your account just as you would in any of our branches. You can through the Internet check
your balance, request for chequebooks and print account details.

Corporate Supporting corporate growth

Banking
Services As corporations grow they feel the need to expand and invest in new infrastructure.
External finance is one of the most important sources for funding expansion plans.
With services ranging from Working Capital Finance, Short Term Corporate Loans
Project Finance to Cash Management and Merchant Banking,
Bank of Baroda Corporate Banking offers various options that help
fund and enable corporations in their investment and expansion plans.
These products also offer merchant banking and cash management solutions.
Our global presence, large-scale operability, highly networked systems and local market penetration al
our customers to reap financial benefits to the maximum.

44
Treasury In the changing economic environment of the country in particular and the globe in general,
Operations Bank of Baroda was the premier public sector bank in India to set up a Specialized Integrated Treasury
Branch (SITB) in Mumbai and the integrated approach initiated by the Bank in its treasury operations i
now being emulated by other peer banks.
Bank of Baroda has consciously adopted a focused approach towards improving efficiency and profitab
successfully integrating the operations of different financial markets, viz. Domestic Money, Inves
Foreign Exchange and Derivatives and has made its mark as an important player in the market-place.

The SITB at Mumbai, equipped with the State-of-the-art technology, with modern communication fa
handles all types of financial transactions, both for managing its resources and deployments and ef
compliance of regulatory requirements.

Rural Strengthening the rural economy

Banking
Services Rural India contributes a major chunk to the economy every year. To give this sector a
stronghold on finance and to enable economic independence, Bank of Baroda has special
offerings that extend credit facilities to small and marginal farmers, agricultural labourers
and cottage industry entrepreneurs.
With the objective of developing rural economy through promotion of agriculture, trade,
commerce, industry and extending credit facilities particularly to small and marginal
farmers, agricultural labourers and small entrepreneurs, Bank of Baroda, over the years, has
reached out to larger part of rural India. We extend loans for agricultural activities and a host
of services for farmers well tuned to the rural market, and aim to make a Self Reliant Rural
India.

45
International Operations

• Wide global network

Bank of Baroda started its overseas journey by opening its first branch way back in 1953 in Mombassa,
Kenya. Since then the Bank has come a long way in expanding its international network to serve NRIs/PIOs
and locals. Today it has transformed into India's International Bank.

It has significant international presence with a network of 76 offices in 25 countries including 48

branches/offices of the Bank, 25 branches of its 7 Subsidiaries and 3 Representative Offices in Malaysia,
Thailand & Australia. The Bank also has a Joint Venture in Zambia with 11 branches.

The Bank has presence in world's major financial centers i.e. New York, London, Brussels, Dubai, Hong
Kong, and Singapore.The "round the clock around the globe", Bank of Baroda is further in the process of
identifying/opening more overseas centers for increasing its global presence to serve its 36 million global
customers in still better way.

Recently, its Subsidiary in Uganda - Bank of Baroda (Uganda) Ltd. opened its 8th branch at Kawempe and
the Subsidiary in Kenya - Bank of Baroda (Kenya) Ltd. also opened its 8th branch at Nakuru. Bank now has
-32- branches in -8- countries in Africa.

Bank has plans to establish overseas offices in New Zealand, Russia, Canada, Qatar, Mozambique,
Suriname, Kuwait, Saudi Arabia etc. and also open additional branches in UAE, Oman, USA, China,
Trinidad & Tobago and Uganda. It has further plans to upgrade its Representative Offices in Malaysia and
Australia to branches.

Money Centre Branches

Seven branches at London, New York,
Brussels, OBU Mauritius, OBU Nassau,
Dubai and Singapore are our Money
Centre Branches, thus offering flexibility
as well as good standing.

46
International Treasury:
Bank of Baroda has a strong presence in the Treasury Market in India as well as abroad. The overseas
Money Centre Branches undertake the Forex treasury operations on behalf of the customers. All the Forex
treasuries at the overseas money center branches are equipped with state of art technology, highly
experienced and motivated staff with professional skills. These branches deal in all the major international
currencies i.e. US$, GBP, Euro, Yen as well as other currencies. These branches undertake the following
treasury related activities:

• Forex Inter Bank Placements/ Borrowings

• Sale & Purchase of currency on behalf of customers
• Forward Cover Bookings
• Cross Currency Swaps
• Interest Rate Swaps (IRS)
• Forward Rate Arrangements (FRA's)
• Forex Money Market Operation

47
NRI Services

We offer a red carpet welcome to all NRI's to bank with us. As a premier nationalised bank in India,
with comprehensive banking experience world-wide, and by virtue of our consistent track record of profit
making since 1908,we are confident of meeting all your banking requirements.
Our wide network of foreign branches, offices and Correspondent Relations at convenient business locations
all round the world, which is the largest among any bank in India, will ensure a smooth and safe banking
experience.
We continue to cherish our rich ethnic traditional values and culture, during our personal interface. Yet we
are speedily repositioning ourselves in the e-millennium era of banking in India, to take care of your
changing needs and expectations. Our information technology strategies are directed towards enabling us to
provide you with a state of the art customer convenience, thereby facilitating a global banking experience.
We understand you, the NRI's, your needs and immensely value your patronage and would like to extend to
you our bouquet of products and services. We assure you the best possible banking experience and will
ensure that your wealth continues to grow with us.
Eligibility - FOR NON-RESIDENT INDIANS ONLY

Different meaning under different statutes

FERA, 1973 and I.T. Act 1961 had different definitions
Includes NRI and other non-resident foreign nationals
NRI includes non-resident Indian nationals and also non-resident Persons of Indian origin
Under FERA, emphasis in determining residential status was based on purpose of stay outside India and
not on duration of stay outside India.
Definition of person resident in India as per new legislation, FEMA

Earlier definition independent of period of stay

Current definition dependent on both 'purpose of stay' and on 'period of stay' as defined in Chapter 1,Clause
2 of FEMA

48
Definition of NRI: Regulation 2(vi) of FEMA 5

Person resident outside India, who is a citizen of India or is a person of Indian origin
Indian citizens working abroad on assignment with Foreign Governments, Govt. agencies or in UNO and
its affiliates IMF,IBRD etc. and Govt. officials (both central and state) and other officials of PSU's
deputed abroad on assignments or posted abroad including Diplomatic Missions.
Indian Students studying abroad are also treated as NRIs provided their stay abroad is for more than 182
days in the preceding financial year and their intention to stay outside India for an uncertain period
when they go abroad for studies.
Non-resident foreign citizens of Indian origin are treated on par with NRI citizens for the purpose of
certain facilities

Foreign Currency Credits

The Foreign currency denominated credit facilities are granted to the Indian corporations in India as well as
at the Money Centre Branches abroad.
Corporations interested in raising foreign currency funds both in India and abroad may contact in India the
branches they are dealing with, the Position Maintaining Offices (PMO's/ Authorised Foreign Exchange
Branches), Corporate Banking Branches, Industrial Finance branches or any of the major branch in the city.
They may also contact the Bank's Regional Offices/ Zonal Offices for the required information/ guidelines.
They may contact the International Division, Central Office at
Foreign Currency Loans In India (FCNR 'B' Loans).

The foreign currency denominated loans in India are granted against the foreign currency funds a bank has
on account of FCNR(B) Deposit. These loans are commonly known as FCNR(B) Loans.

Bank of Baroda with a wide global presence has a large base of NRI customers/ depositors. This enables,
Bank of Baroda pool in from a arge resource base of FCNR(B) deposits and is in a position to offer the
Foreign Currency Loans in India under FCNR(B) Plan at very competitive rates.

49
Foreign Currency Credit outside India

With a presence at major financial centers of the world, Bank of Baroda has strong foreign currency
resources at Money Centre Branches. This enables Bank of Baroda to arrange for and grant Foreign
Currency Credits to Indian as well as multinational corporations at competitive rates.

The foreign currency denominated Loans are granted at Money Centre Branches across the globe. The
Foreign Currency Loans granted to Indian Corporate are granted as per External Commercial Borrowing
(ECB) Policy of Govt. of India.

Mid-sized companies have also joined the bandwagon. The idea behind is to scale up operations, become
globally competitive and getting access to foreign markets.

They will also require the international Corporate/ Merchant/ Investment Banking Services to arrange the
funds as well for other purposes.

International Merchant Banking Cell (IMBC) has been set up at BCC, Mumbai to pay focused attention to
the international merchant banking needs of Indian corporates with special emphasis on Externational
Commercial Borrowing .

IMBC has been offering Corporate/ Merchant/ Investment Banking services with a range of products as
enumerated below :

Arranging/ granting Foreign Currency Loans/ External Commercial Borrowing.

Providing whole range of transactional banking services to Indian corporates for their offices, Joint
Ventures, Subsidiaries abroad at places where we have branches.
Offering Foreign Exchange/ Derivative products.
Providing Buyers’ Credit/ Suppliers’ Credit.
Arranging / underwriting/ participating in Syndicated Loan
Raising funds for corporates through bilateral loans/ club deals
Arranging funds from International Markets by way of Bonds, FRNs, FCCBs etc.
Arranging loans from Export Credit Agencies of other countries
Advisory services on overseas investments

50
 Innovative tailor-made solutions to the specific requirements of corporates.
Structured financing for procuring specific assets such as rigs, ships, aircrafts etc.
Financing and structuring cross border acquisition debt.

External Commercial Borrowings

The foreign currency borrowings raised by the Indian corporates from confirmed banking sources outside
India are called "External Commercial Borrowings" (ECBs). These Foreign Currency borrowings can be
raised within ECB Policy guidelines of Govt. of India/ Reserve Bank of India applicable from time to time.

ECBs at Bank Of Baroda (BOB)

BOB is very active and is a leading player in granting and arranging various forms of foreign currency
facilities through ECB route for the Indian Corporates. BOB focuses on all type of foreign currency credit
requirements of Indian corporates in arranging the Foreign Currency Loans.

Bank of Baroda , India’s International Bank , having a strong global presence with 60 offices in 21 countries
including the major global Financial Centers ( Brussels, Dubai, Hong Kong, London, New York and
Singapore etc.) is very evenly placed and have an edge over all others in its capability to arrange/ grant the
funds from the international market.

BOB has a few decades of experience in arranging foreign currency loans. This long experience and wide
presence across the globe brings leverage to BOB to understand the ECB market better thus offer best terms
to the clientele .

International Merchant Banking Cell (IMBC)

With rising activities by Indian corporates in the global as well as back home in India , the quest for cheaper
and quicker global fund is growing at a substantial pace. Mid-sized companies have also joined the
bandwagon. The idea behind is to scale up operations, become globally competitive and getting access to
foreign markets.

They will also require the international Corporate/ Merchant/ Investment Banking Services to arrange the

51
funds as well for other purposes.

International Merchant Banking Cell (IMBC) has been set up at BCC, Mumbai to pay focused attention to
the international merchant banking needs of Indian corporates with special emphasis on Externational
Commercial Borrowing .

IMBC has been offering Corporate/ Merchant/ Investment Banking services with a range of products as
enumerated below :

Arranging/ granting Foreign Currency Loans/ External Commercial Borrowing.

Providing whole range of transactional banking services to Indian corporates for their offices, Joint
Ventures, Subsidiaries abroad at places where we have branches.
Offering Foreign Exchange/ Derivative products.
Providing Buyers’ Credit/ Suppliers’ Credit.
Arranging / underwriting/ participating in Syndicated Loan
Raising funds for corporates through bilateral loans/ club deals
Arranging funds from International Markets by way of Bonds, FRNs, FCCBs etc.
Arranging loans from Export Credit Agencies of other countries
Advisory services on overseas investments
Innovative tailor-made solutions to the specific requirements of corporates.
Structured financing for procuring specific assets such as rigs, ships, aircrafts etc.
Financing and structuring cross border acquisition debt.
Regional Syndication Centres (RSCs)

BOB has set up Regional Syndication Centres at Dubai , London and Singapore to exclusively arrange tailor
made solutions for foreign currency / services at a competitive price for Indian / non Indian corporates .

It has a dedicated , professionally expert and specialist team both in India and abroad with international
exposure in the area of arranging Loan Syndication / other services .

Contact us at Intending corporate / Institutional clients can contact any of the following offices

52
 Corporate Financial Service Branches (CFS)
Corporate Banking Branches (CBBs)
International Business Branches (IBBs)
Nearest selected branches
Main branch of the city

Pricing :

The pricing of the foreign currency loans/ services implies the total cost to the company comprising –

rate of interest / margin ( it is linked with the risk profile of the intending borrower)
arrangement/ upfront fee and other fees.
The arrangement fee / upfront fee is a one time cost. The pricing depends on various factors such as the
credit rating of the borrower, tenor of the loan, demand/supply position of the foreign currency
available, market conditions etc. The prices keep on changing as per the market scenario and are
normally valid for a period of -30- days. In addition to the pricing, there are legal/ documentation /
out of pocket expenses etc. These are normally in the range of US$ 15,000 or US$ 20,000, but can be
higher in some cases.
Offshore Banking

Give your FOREX earnings a safe home:

In an unpredictable financial world, your well earned money needs a safe home. A home
where it can grow. Bank of Baroda takes this opportunity to announce the opening of its first Offshore
Banking Unit (OBU) in India at SEEPZ, Mumbai

With years of experience and expertise in overseas banking we are just one of the few banks
that have been granted permission by the Government of India to operate OBU within the country. This
comes in addition to our already existing OBUs in Mauritius and Bahamas.

So, when you invest your well earned FOREX with us, you get the expert opinions and services of a

53
bank which has an international presence in 22 countries through 64 offices and represented by 2800 fully
equipped branches spanning the globe.

Export Credit (Rs)

RUPEE EXPORT CREDIT (PRE-SHIPMENT AND POST-SHIPMENT) : BOB offers both pre and post
shipment credit to the Indian exporters through Rupee Denominated Loans as well as foreign currency loans
in India.

Exporters having firm export orders or confirmed L/C from a recognized Bank can avail the export credit
facilities from BOB provided they satisfy the required credit norms. The details of the credit norms can be
obtained from the nearest authorised branch of the Bank.

Rupee export credit is available for a maximum period of -180- days from the date of first disbursement. The
corporates, if required can book forward contracts in respect of future export credit drawals.

EXPORT BILL REDISCOUNTING : BOB offers financing of export by way of bill discounting of
export bills to provide post shipment finance to the exporters at competitive international rate of interest.

The export bills (both Sight and Usance) can be purchased/ discounted provided they comply with the norms
of the Bank/ RBI.

All exporters are eligible to cover the bills drawn under L/C, non-credit bills under sanctioned limits under
the Bill discounting Scheme.

Import Finance

Bank of Baroda provides various types of funding/ services to the importers for facilitating the imports in the
country. The vast network of Bank's overseas branches/ subsidiaries and Correspondent Banks worldwide
facilitate prompt & efficient services to the importers. All the facilities are subject to the prevalent rules of
the Bank/ RBI guidelines. The various facilities provided are:

Collection of import bill.

54
 Opening of Import L/Cs (Sight/ DA)
Financing of import by way of Foreign Currency Loans
Issuing Guarantees etc. on behalf of importers.
COLLECTION OF IMPORT BILLS:

The import bills are collected through the 120 authorised branches at very competitive rates. The Bank has
correspondent relationship with reputed International Banks throughout the world and can provide the
services to importers who may be importing from any part of the globe.

LETTER OF CREDIT:

Bank of Baroda offers L/C facility for the purchase of goods in the international market. Being a well-known
international Bank of repute, the L/Cs of the Bank of Baroda are well accepted in the International market.

With the Letter of Credit of Bank of Baroda, importers can build up better trust/ confidence in their suppliers
and develop other business relationship at a much faster pace.

The L/C facility can be granted to the importers after assessing their requirement/ credit worthiness/ financial
strength and other parameters being to the satisfaction of the Bank.

BANK GUARANTEES:

Bank of Baroda on behalf of importers/ other customers issues guarantees in favour of beneficiaries abroad.
The guarantees can be both Performance and Financial.

Trade Finance

Bank of Baroda through its overseas branches and subsidiaries, is very active in financing of Usance post
sales international trade bills by way of discounting of the same.

With its large foreign currency resources and overseas presence , Bank of Baroda is in a position to offer the
most competitive rates for discounting of these bills.

The bills under the L/Cs of the most of the Indian Banks as well as International Banks can be discounted at

55
competitive rates.

The Banks / Corporates desirous of discounting the bills under / outside L/Cs can contact the respective
overseas money center branches / overseas subsidiaries

Corporate Office Bank of Baroda,

LIFE INSURANCES OF BANK OF BARODA

Life insurance business may take over eight years to break even, but, venturing into life insurance is turning
out to be extremely profitable for banks, which are also very aggressive in the marketing strategy.

Baroda L&G Life Insurance, the insurance joint venture (JV) promoted by Bank of Baroda, Andhra Bank
and the UK insurer Legal and General (L&G), has called for a pitch for its creative and media duties.

The life insurance JV, with an initial paid up capital of Rs 220 crore, was formed in November 2007. Bank
of Baroda holds a 44 per cent stake, Andhra Bank has a 30 per cent holding and the remaining 26 per cent is
held by L&G.

The company is poised to launch its products like savings insurance, Unit Linked Insurance Plans as well as
pure protection and term products, within a few months from now and plans to empanel three agencies for
about three years. For this, the company is inviting presentations from about 25 Mumbai based agencies.

Baroda L&G Life Insurance will bank on the customer base of both Bank of Baroda and Andhra Bank to
cash in on the already cluttered Indian life insurance segment. The two Indian banks have more than 40
million customers, who could be captive clients for the proposed insurance business. Together, these banks
have a network of about 4,000 branches across the country. The JV also plans to benefit from the strong
presence of the two banks in the rural and semi-urban markets.Life insurance is a very lucrative business,
with private life insurers having pumped in around Rs 25,000 crore into the life insurance segment. Most of
the money has come in the past two years when rising stock prices enabled promoters to raise funds from
foreign institutional investors

56
The norms set by the Bank for the discharge of its functions.
Corporate Centre decide the rates to be offered by the Bank for the deposits, for different tenures which are
displayed in the Bank’s website and also at the branches. Regarding the advance, again the corporate centre
takes a decision on introduction of various loan products and details of which are available in the website as
well as at the branches. Corporate Centre also decides about the rates of interest for various advances which
again are available on our website and also at the offices / Branches of the Bank.
Whether to sanction a loan or not, is the absolute discretion of the concerned sanctioning authority of the
Bank and such discretion is exercised, after taking into consideration the relevant facts and circumstances of
each case.
The rules, regulations, instructions, manuals and records, held by the Bank or under its control or
used by its employees for discharging its functions.
There are quite a number of documents like manuals, book of instructions, codified circulars, scheme of
delegation of powers, proceedings of the board etc. And also the periodical circulars, used by the employees
for discharging various functions. (These are all meant for internal circulation and can not be shared with
public)
A statement of the boards, councils, committees and other bodies consisting of two or more persons
constituted as its part or for the purpose of its advice, and as to whether meetings of those boards,
councils, committees and other bodies are open to the public, or the minutes of such meetings are
accessible for public

57
The Bank has following Sub Committees of the Board
• Management Committee of the Board
• Audit Committee of the Board
• ALM & Risk Management Committee of the Board
• Customer Service Committee of the Board
• Committee on High Value Frauds
• Shareholders Investors Grievances Committee
• Committee of Directors
• Steering Committee on HR

The Public are not entitled to participate on the above Committee meetings and minutes are not accessible to
public.

58
 COMPETITORS

Market
Sales Current 52-Week
Company Change (%) P/E Ratio Cap.(Rs.Millio
(Rs.Million) Price High/Low
n)

SBI 637884.34 2269.45 1.99 14.35 1440828.92 2500/894

Punjab National Bank 193261.63 906.85 -1.07 7.88 285932.07 943/286

Bank Of India Ltd 163473.58 385.00 -0.21 7.81 202192.49 475/180

Bank Of Baroda Ltd 150915.77 511.30 -0.81 6.70 186249.46 563/181

Canara Bank Ltd 171190.54 390.75 -1.83 5.55 160207.50 437/144

Union Bank Of India 118893.79 264.00 -0.36 6.40 133351.13 291/115

IDBI 116316.27 127.45 0.08 9.60 92378.09 140/40

Indian Bank Ltd 68303.30 174.05 0.26 5.16 74801.47 196/64

CentralBank of India 104551.89 167.25 10.95 6.78 67592.66 164/30

OrientBan 88564.72 250.40 -1.20 6.43 62735.14 296/95

Corporation Bank Ltd 60673.52 422.35 0.42 5.66 60581.88 480/156

Indian Overseas Bank 96414.03 110.55 -1.29 5.07 60227.64 141/38

Allahabad Bank Ltd 73647.28 126.10 -0.86 4.44 56328.87 144/37

59
Andhra Bank Ltd 53746.17 104.35 0.34 5.36 50609.75 125/37

Syndicate Bank Ltd 95796.37 95.95 0.10 5.00 50082.86 105/38

UCO Bank Ltd 81213.82 55.75 -0.18 4.98 30626.82 62/22

State.Bk of Travancore 41231.52 548.25 0.06 3.63 27412.50 604/176

StBkMysor 32472.76 707.65 2.00 6.16 25475.40 786/294

Dena Bank Ltd 34474.95 83.25 -0.89 4.86 23878.03 93/27

StBkBikan 38102.80 464.90 0.84 5.04 23245.00 540/168

Vijaya Bank 52378.25 51.95 -0.76 4.41 22521.25 59/20

Bank of Maharashtra 42915.57 50.15 0.30 4.84 21590.58 53/19

Business Strategies

60
BOB intend to enhance our position as a cost efficient and customer focused institution
that provides comprehensive banking and related services, with particular emphasis on
the following strategies.
Implement new initiatives to accomplish total customer centricity. BOB continue to
implement new information technology and other initiatives to provide total customer
centricity and have made advances in the networking, computerization and
interconnectivity of our branches, ATMs and other delivery channels.
As part of our strategy to provide our customers with the best on-demand service, BOB
have commenced a comprehensive technology enabled business transformation project.
BOB have entered into an agreement with Hewlett Packard (HP) to assist us in delivering
a uniform, portal-based IT infrastructure to cover both our domestic and international
operations.

Through this project BOB will implement and manage an enterprise-wide service-
oriented architecture including, among others, core banking, phone banking, Internet
banking, call centre, delivery channel integration, risk and performance management,
financial analysis and planning, customer relationship management, data warehousing,
enterprise general ledger, global treasury, human resources management system and
cheque truncation system. The infrastructure will allow us to realign the way in which
BOB interact with our employees and conduct business with our customers and business
partners. It will also enable us to be compliant with Basel II norms within the prescribed
time limit whilst fulfilling the requirements of regulators in various jurisdictions. Our aim
is that all our branches and offices be brought under our private network in order to
provide our customers with total customer centricity and service their needs on an
“anywhere anytime” basis across the globe. BOB believe this will help us to compete and
excel in the increasingly challenging and competitive domestic and global banking
environments.

Our additional customer service initiatives include providing customer services at certain
branches from 8 a.m. to 8 p.m., operating select 24-hour branches, providing value added

61
services on ATMs and introducing low cost rural ATMs.

Focus on marketing our credit products to large and medium sized

industrial units and infrastructure projects

BOB have initiated operational and organizational structure changes to accelerate our
credit growth to large and medium sized industrial units and infrastructure projects. Our
organizational changes include creating separate internal departments for product
development, marketing and credit expansion and establishing a project finance
department. Our operational changes include moving large corporate accounts to
dedicated corporate finance services branches and sanctioning of hunting limits (pre-
approved credit limits) for top rated corporations. Through competitive pricing, BOB also
plan to increase our share of non-funded and fee based business such as project
appraisals, loan syndications, debt refinancing, guarantees and letters of credit.

Grow our international operations

BOB have maintained an international presence for the past 52 years and BOB intend to
continue to grow our global operations. Our international branches, Subsidiaries and
Associate are focused on providing retail banking, structured products and BOBalth
management services and, along with our representative offices, allow us to focus on
asset creation and to develop cross border business by providing trade and project
finance, remittances, syndications and correspondent banking services. In addition, BOB
are looking to grow our global loan syndication business through our dedicated
syndication center located in our London branch. BOB recently opened a branch in
Leicester in the United Kingdom and a representative office in Bangkok in Thailand.
BOB have received approval from the RBI and are awaiting host country approval for the
opening of branches in Houston (USA), Hong Kong Bangladesh, Maldives and an OBU
at Singapore.

62
RBI approvals have been received for the opening of new offices in, Canada, New
Zealand, Sri Lanka and Trinidad and Tobago and Isle of Man. BOB will continue to look
for attractive opportunities to expand our international reach and grow our business
outside India.

Continue growing our retail banking business

BOB have identified the growth of our retail-banking sector as a priority business
initiative for the past few years. Our dedicated retail-banking department was established
in October 2002. Our retail loans have grown from Rs. 27,128 million as at March 31,
2003 to Rs. 63,830 million as at March 31, 2005, reflecting a CAGR of 53.39%. BOB
have already intensified our focus on this sector by simplifying our current processes,
launching new products and services, establishing specialist personal banking, Baroda
Money lexes (dedicated retail product cells) and housing finance branch locations,
developing our distribution channels, including ATMs and internet banking, and
improving customer service. In addition, BOB believe that there is potential to generate
additional revenue growth by focusing on higher value added products and by enhancing
cross-selling across our different distribution channels. Increasing the sale of high margin
products such as insurance products and selling our depository services will also increase
our fee-based revenue.

Strengthen our priority sector banking business

BOB believe that priority sectors (including agriculture and small-scale industry) offer
large and potentially profitable growth opportunities. India has large unexploited land
resources and a variety of agro-climatic zones. It is one of the largest producers of milk,
cereals, vegetables and fruits. Approximately 23.0% of India’s GDP is derived from
agriculture.

The industry supports approximately two-thirds of India’s population and accounts for
14.7% of export earnings. BOB have 1,709 branches in rural and semi-urban centers and

63
BOB intend to maintain and enhance our position as one of the leading banks for
agricultural lending in India. BOB have a nationwide presence in the agriculture and
small-scale industry sectors. BOB intend to further expand our agriculture and small-
scale industry sector banking activities by establishing more small-scale industry
branches. BOB have identified over 500 of our rural branches to target consumers for
intensive farm credit lending. BOB see increased potential for credit deployment in
agricultural export zones throughout the country. Another aspect of our strategy is to
further strengthen our ties with the agricultural community as BOB as related
manufacturers. For example, BOB have entered tie-ups with eight tractor-manufacturing
companies to promote investment credit, and BOB have also initiated a special scheme
for financing the purchase of second hand farming equipment.

Entering new areas businesses, alliances and strategic acquisitions

BOB intend to expand into new lines of business, which are complementary to our
existing product and service lines such as life insurance and stock broking. BOB intend to
develop these businesses by entering into joint ventures and alliances with leading
product and service suppliers and, in some cases, may also make strategic acquisitions.
BOB also intend to promote the cross selling of our own and third party products in order
to augment our fee-based revenue.

Reduce cost of funds

BOB have achieved a low overall cost of funds through a large base of low-cost deposits,
with total deposits representing 85.92% of our funding as of March 31, 2005. Our low
cost deposits, both current and savings, constituted 36.45 % of our total deposits as of
that date. As of September 30, 2005, our low cost deposits constituted 38.32% of our
total deposits. Our total deposits represented 84.78% of our funds as of that date. BOB
believe BOB can enlarge our low-cost funding base by leveraging our extensive branch
network and large customer base, particularly in the rural areas where many of the

64
deposits are low-cost savings deposits. In particular, BOB are focused on the retail rural
section emphasizing low interest savings deposits.

Building our corporate image and our “Bank of Baroda” brand

BOB intend to continue to enhance our brand recognition in the marketplace through our
brand building efforts. BOB have undertaken various communication and promotional
initiatives such as developing and introducing our new logo, appointing a brand
ambassador, and launching product focused campaigns. BOB believe that these
initiatives, as BOB, will enhance the visibility of our brand name and strengthen our
recognition as a premiere Indian bank.

65
BANK OF BARODA VARIOUS LOANS

• Baroda Car Loan

BOB provide loans up to Rs. 1 million to finance the purchase of new and used
automobiles.

• Baroda Two Wheeler loan

Available for all two wheelers, this loan product allows customers to borrow from Rs.
5,000 to Rs. 100,000, secured against the vehicle. The loan is to be repaid in a maximum
of 60 months from the date of the loan.

• Baroda Consumer Durables Loan

BOB provide personal loans up to a maximum of Rs. 100,000 for the purchase of
consumer durables. These loans are typically made for a period of up to five years and
secured against the durables purchased. Further security is required for loans in excess of
Rs. 50,000.

• Baroda Personal Computer Loans

Available for computer hardware (up to Rs. 100,000) and software (up to Rs. 20,000),
our personal computer loans allow individuals, families and small businesses obtain up to
date technology.

66
 • Baroda Personal Loans and Marriage Loan

BOB offer loans of betBOBen Rs. 20,000 and Rs. 200,000 to customers to cover
expenses such as unexpected medical expenses, travel expenses and honeymoon
holidays. BOB offer a maximum repayment period of 48 months. BOB also offer is the
Baroda Marriage Loan, which gives the flexibility of a personal loan as high as Rs.
200,000 to cover the expenses associated with BOBdding arrangements.

• Baroda Vaibhav Lakshmi

BOB extend loans to workingwomen up to a maximum of Rs. 200,000. BOB offer a

maximum repayment period of three years. BOB do not take any margin or security for
this loan.

• Baroda Festival Loans

Our Festival Loan facility provides loans up to a maximum of Rs. 50,000. The loans are
intended to meet expenses associated with festivals, purchase of gifts and purchase of
food grains, oil and other grocery items for the full year. Usual repayment terms of 10
months are offered to customers taking out festival loans.

• Baroda Advance against Securities

BOB are able to provide advances against national savings certificates, Kisan Vikas
Patra, Indira Vikas Patra, Life Insurance Polices, Relief Bonds, eligible Government
Bonds and shares.

67
 • Baroda Advance against Property

For properties in urban and metro centers, BOB offer loan/ overdrafts against
unencumbered property. Professionals, salaried individuals and self-employed
businessmen are able to take advantage of this product by borrowing up to a maximum of
Rs. 5 million with a repayment period of ten years for overdraft facilities and seven-years
for loans.

• Baroda Doctors Loans

BOB offer an exclusive product to cater to the financial needs of medical practitioners.
Under this scheme, an
amount up to Rs. 5 million can be availed way of loan and/or an overdraft facility for the
purchase of medical equipments, development of clinic, purchase of ambulance etc.

• Baroda Desh Videsh Yatra Loan

BOB extend loans to finance the expenses that may be incurred in the course of travelling
within India or and abroad. This facility is available to salaried or self-employed
individuals, professionals and businessmen having regular and stable income. A
maximum amount of Rs. 0.2 million and Rs. 1 million may be availed for travel in India
and abroad respectively. Such loans are typically repayable in three years.

• Baroda Loan for IPO Subscription

BOB extend loans up to a maximum of Rs. 1 million to individuals for subscribing to

equity shares in public issues. The margin money payable for such loans is 50% of the
loan extended. Such loans are required be repaid within 90 days.

68
 • Baroda Loans to Pensioners and Defense Pensioners

BOB extend loans to pensioners up to Rs. 0.1 million rising to Rs. 1.5 million for retired
defence personnel and their spouses.

• Baroda Professional Loans

BOB extend loans to professionals and self-employed individuals including, doctors,

chartered accountants, interior decorators, architects, practising company secretaries and
travel agents. Amounts betBOBen Rs. 25,000 and Rs. 2.5 million may be borrowed BOB
under this product.

• Baroda Traders Loan

The Baroda Traders Loan enables individuals and bodies such as partnership firms and
co-operative societies to raise working capital or undertake development of workspace by
way of loan or overdraft. Loans under this facility are limited to Rs. 10 million and
subject to a maximum term of five years.

• Baroda Loans against Future Rent Receivable

The Loans against Future Rent Receivables product has been developed following the
growth of real estate in various metropolitan and urban centers. Through this facility
BOB are able to offer loans secured against the future rental receipts of commercial
properties and shopping malls.

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 • Baroda Eco-friendly Gas Kit Loan

BOB provide loans of up to Rs. 25,000 for the installation of eco-friendly gas kits in cars,
which are often secured by the automobile or other acceptable security.

• New Retail Banking Initiatives

As part of our strategy to grow our retail banking business, BOB have undertaken the
following initiatives:

_ Customizing products for specific borroBOBr groups such as group of employees,

teachers, defence personnel, among others, and offering incentives for such borroBOBrs
such as concessional rates of interest or waiving processing and documentation charges;

_ Rolling-out our Lending Automation Processing Software package in all metro and
urban branches to simplify and speed up the authorisation and processing of loans and
ensure consistency amongst branches. As at November 30, 2005, Lending Automation
Processing Software had been rolled-out in 185 branches of which 71 BOBre dedicated
corporate branches; and

_ Establishing Baroda Money lexes, which are essentially dedicated retail centres within
branches with staff with authority to undertake the processing of loans and make credit
decisions. As at November 30, 2005, 62 Moneyplexes had been rolled-out. Money lexes
are designed to promote all of our retail products, and will allow us to foster relationships
with service providers such as builders, educational institutions, car manufacturers and
dealers and white goods suppliers and enter into tie-ups and strategic alliances in the
future.

_ Establishing ten ‘Centralized Processing Cells’ in eight metro/ urban centres for
speedier appraisal, processing and sanctioning of retail proposals by using Lending

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Bank of Baroda - 5 yr Consolidated Performance
Bank of Baroda is fast trying to catch up with its private sector counterparts! While 5yr
growth CAGR may seem poor at ~16%, FY08 has seen handsome spurts in growth.
Interest Income and Total Income grew by over 30 percent.
Bank of Baroda has now emerged as one of the most cost-efficient banks, beating its
private sector counterparts HDFC Bank and ICICI Bank and even the smaller and
nimbler Axis Bank handsomely. It shows decent margins and return ratios but the stock is
still languishing (Apr 2 2009) at less than consolidated book.
Want to collaborate with me and contribute towards India Stock Analysis?
Strong Capital Base
A strong capital base is the number one issue to consider before investing in a lender
Bank of Baroda has its Capital Adequacy ratios at ~13 percent, much above the
mandatory 9 percent requirement stipulated by RBI. Only 5 years back, Gross and Net
NPAs (Non-Performing Assets) were very high. But with a consistent focus on reducing
NPA levels, these have been brought down sequentially, year on year, to very
comfortable levels in FY08. FY08 Gross and Net NPAs stand at 1.82% and 0.45%,
respectively. Financial Leverage is around 16 percent in FY08.
It is good to see Bank of Baroda maintaining contingent liabilities at low levels.
Derivatives Exposure stood at ~31% of total assets, while total contingent liabilities stood
at ~45% of total assets. This is probably one of the most conservative among all banks.
Private Banks usually average above 200% of total assets on contingent liabilities.

 Return on Equity (RoE) and Return on Assets (RoA)

 These metrics are the defacto standards for gauging bank profitability.
Bank of Baroda's record on profitability needs to see more consistency. After dipping for
a couple of years in FY2005 and FY2006 Return on Equity is again showing signs of
improvement with FY08 RoE standing at 15%.This is primarily due to some
improvement in net margins. Return on Assets is also showing gradual improvement over
last 4 years.

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Efficiency Ratio
The efficiency ratio or cost to income ratio, measures non-interest expense, or operating
costs, as a percentage of income. Basically it tells you how efficiently the bank is
managed. Many good banks have efficiency ratios under 55% (lower the better)

Cost Efficiency ratio has seen significant improvements in the last 3 years with FY08
cost-efficiency ratio standing at ~33 percent; beats its private sector peers HDFC Bank,
ICICI Bank, and even the smaller, nimbler Axis Bank handsomely and rivals the much
smaller Yes Bank.

Net Interest Margins (NIM)

Another simple measure to watch is net interest margin, which looks at net interest
income as a percentage of average earning assets. Track margins over time to get a feel
for the trend.

Net Interest margins have been around the 3 percent mark. FY08 has shown NIMs
coming down a bit to 2.9 percent.

Strong Revenues
Historically many of the best-performing bank investments have been those that have
proven capable of above-average revenue growth

While 5yr growth CAGR may seem poor at ~16%, FY08 growth has been good. Interest
Income and Total Income growth stands at over 30 percent

Bank of Baroda Q2 profit jumps 60 pct

- Public sector lender Bank of Baroda (BoB) reported a jump of 60 per cent in net profit
to Rs 634.18 crore for the second quarter ended September over the corresponding period
a year earlier.

72
- The bank had a net profit of Rs 395.29 crore during the September quarter last financial
year.

- Total income of the bank rose to Rs 4,730.75 crore in the latest quarter of the current
fiscal from Rs 4,026.90 crore of the corresponding period a year ago, Bank of Baroda
said in a filing to the Bombay Stock Exchange (BSE).

- For the half-year ended September 30, 2009, Bank of Baroda registered a net profit of
Rs 1,319.56 crore, up 72 per cent compared to Rs 766.14 crore of the same period last
fiscal. Shares of Bank of Baroda were trading at Rs 506.70, up 4.10 per cent in afternoon
trade on the BSE.

73
74
ORGANISATIONAL STRUCTURE OF BANK OF BARODA

75
Organizational Structure of Bank of Baroda, Ghantaghar Branch, Ghaziabad

• Total Number of employees

The Total number of employees in Bank of Baroda is 12.

• Classes
The total number of classes is 2 .
a) Skilled work men
b) Non working men
i) Clerical
a. Union Teller
b. Head Cashier
c. Computer operator / Simple Clerk
ii) Sub Staff
a. Duftary
b. Guard
c. Peon

iii) Management Teams

The number of officers in BoB are –

a. Branch Head
b. Two managers
c. 3 officers

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• Who is accountable to whom?
In BoB all the staff members are accountable to the Branch Manager and the
Branch Manager is accountable to –

Branch Manager

Regional Officer

Zonal Officer

Central Office / Corporate Office

77
 LITERATURE REVIEW

Bank lending in Dec up five-fold over Nov

31 Dec 2009, 0212 hrs IST, ET Bureau

After a sluggish November, bank lending picked up nearly five-fold in December over
the previous month.
According to the latest Reserve Bank of India (RBI) figures, total loans, including food
credit—loans to Food Corporation of India for food grain procurement—and non-food
credit (all other loans) amounted to Rs 29,41,293.07 crore as on December 19. This
represents a sequential growth of Rs 34,028 crore since November 27 compared to a
growth of Rs 7,698 crore in the whole of November. Of this, non-food credit grew Rs
31,342 crore in December, compared to Rs 5,247 crore in the entire month.

In a speech on Tuesday, RBI deputy governor Shyamala Gopinath had said that with the
economy posting strong growth in the second quarter of the year, credit demand was
expected to pick up. She added that this has already started reflecting in the recent
fortnight.

Speaking to ET recently, Bank of India chairman & MD Alok Misra and Bank of Baroda
CMD MD Mallya had indicated that there were initial signs of credit revival. “Going by
the credit proposals that we received for December, we are hopeful that the fourth quarter
would be better than the preceding three quarters,” said Mr Misra.

“There are signs of revival in credit demand and it is seen across sectors—infrastructure,
SME and retail,” Mr Mallya pointed out.

Oriental Bank of Commerce CMD TY Prabhu said that as of now credit demand is seen
primarily from the agriculture sector.

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In the second quarter ended September 2009, many banks, including State Bank of India,
Bank of India, Union Bank of India and Bank of Baroda, had reported sanctioning large
loans worth Rs 20,000-30,000 crore to the infrastructure sector. However, the borrowers
have not sought disbursal for these loans.

Bank of Baroda to open over 300 branches next fiscal

N.S. Vageesh Chennai. Dec. 20 2009

Mr M.D. Mallya, Chairman and Managing Director of Bank of Baroda, is described by

his colleagues as a ‘down-to-earth person and a thorough gentleman'. They say he has a
good grip on the business and has built on the contributions made by his predecessors. He
has taken the bank forward – instead of undoing their initiatives.

Mr Mallya's academic credentials are interesting. He did his Engineering graduation from
REC Surathkal, and then did a management program at the Indian Institute of Science
before joining the banking world three decades ago. While acknowledging the
contribution of his background in giving him analytical skills, Mr Mallya tells you that
what a banker needs most is common sense. That point is highlighted a few moments
later when we discuss new business being acquired by the bank. He points out that the
bank must chase profits rather than business volumes. He carefully monitors the
‘sustainability' of the business by looking at weekly growth figures submitted by his
officers rather than quarter-end figures — which can often be dressed up.

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QUESTIONS ASKED TO THE IT MANAGER OF BOB: -
Which technologies are going to be the key drivers in banking in the
coming days?

Our technology initiatives are focused on the customer. Our “Business Transformation
Program”, encompassing technology, is a customer centric initiative to offer the
convenience of banking on a 24x7 basis, at all major centers in India and abroad. This
would be done through deployment of the core banking solution integrated with delivery
channels like the ATM, Internet, phones, mobiles, kiosks, and call centers.

Mobile technologies will play a very dominant role, as they provide convenience and
ease of use. In the indian banking space it will broaden the meaning of 'anytime,
anywhere' banking to customers. With increasing mobility of the Indian workforce, our
customers want more information on the move. Besides SMS-based information on their
bank balance, they also need information about the nearest ATM/branch on their mobile.
While banking transaction on the mobile is already a reality in India, the integration of
barcodes and technologies like RFID will bring on a revolution. Mobile phones used in
European countries will be introduced in India shortly, where the ATM will be able to
connect to the phone and carry out banking transactions.

Your presence is growing in both India and abroad. What then are your
main IT/telecom requirements?

What is your investment plan for 2008-09? We are looking at network expansion to
remote branches where terrestrial links are not available. We are also planning to explore
alternative links like RF/VSAT. Migration of our existing branches to a centralized
banking system will continue as a focus area. However, through unified communication
systems, we wish to introduce a videoconferencing system for our customers/branch
officials seeking experts' opinion from a centralized pool. This could be for portfolio
management, credit options, etc. We are also exploring various alternatives for our
ambitious overseas expansion. The time to market, reliability, and costs are major

80
concerns.

We had built our global data center in Mumbai for running our centralized banking
solution and other applications for all our branches across India and other countries on a
single platform of technology. The data center functions as a central data and application
hub of the bank for both its domestic and international operations. The center has been
designed and implemented by our technology partner HP, meeting all attributes of a tier-3
data center and having certification capability for ISO 27001.

When we started the data center, it was in a rental space. We are shifting this to our own
facilities, and this forms a large chunk of our expenditure. We are also planning to make
it green, aimed at contributing to the ecosystem. Our existing data center was designed
considering the vertical servers. With the invention of blade servers, which are horizontal
and have a very high computing density, the entire thermodynamics of the cooling system
at the data center has changed and, as the research indicates, it is extremely important to
look at an alternate design. With the introduction of the green data center, we will not
only save on energy bills, but, more importantly, will contribute to the ecosystem and
join the growing list of organizations concerned about ecology.

We are also planning to set up a “near site data center.” This is aimed at ensuring “online-
real time duplication of financial data to ensure 100% recovery. The other focus areas
include virtualization, data archival and data cleaning.

The uniqueness of your IT and telecom infrastructure?

The IT infrastructure is mission critical in our bank because our 1,600 plus domestic
branches and 43 branches in 14 countries are running on a common platform, using
centralized systems through the IT infrastructure. Our ever-expanding ATM network and
a vast card base with merchant establishments are all linked through this infrastructure.
Our value added services like e-banking, RapidFunds2India, utility bills payment, and e-
ticketing depend on the infrastructure. Being the banking sector, our services are essential
to our customers at any time and place. Our presence in different time zones and 24x7

81
operations are supported by the IT infrastructure. The intra-bank STP is possible through
this infrastructure.

Now that convergence is taking place in ICT, how important would it be for your sector?
The banking sector is completely dependent on ICT. We expect that with the
convergence of these technologies, the operations will move toward self-service, and,
thus, will substantially bring down the cost of transaction with improved customer
convenience. There will also be a lot of savings on deployment, maintenance and
operational cost of technology within the organization.

How do you handle the IT risks and security issues?

IT security issues are handled through a well-defined information security management

structure adopted by the bank, working at strategic, tactical and day-to-day operational
level. At the implementation level, the bank has deployed various advance security
mechanism and best-of-breed products like centralized AV solution, firewalls, IDS, RSA
tokens, ADs, SSL certificates, SSO, DR solutions, among other. Security services where
the bank does not have the required competence have been outsourced to SI, who are
implementing controls as based on the security management directives.

What has been your experience in terms of services delivered by the

service provider?
Our experience is reasonably good. It largely depends on a clear understanding of
expectations, backed by properly defined and documented SLAs. However, the industry
has to mature in terms of their commitment for deliveries, which, in the absence of a fast
and strong legal system, remains only at the contractual level. For instance, when we
enter into an agreement, we meet the marketing team of a vendor which promises the
heaven. But when they start delivering, our interaction is with the execution team, who
start reading the fine prints of the contract rather than the spirit of the relationship.
We also feel that lack of appreciation of virtues and follies of technology by conventional
business owners continue to be the biggest problem in unlocking business values.
Besides, integration of heterogeneous technologies to provide flexibility in delivering

82
services is a technological challenge. Ultimately, to derive maximum value out of IT
investments, the technology has to be embedded in the business strategy of the
organization.

Through active participation of business leaders in making IT investment decisions, we

try to ensure that all IT and telecom investments are linked to the business goals. Our
outsourcing model is BOT (Build, Operate and Transfer). We have adopted the system
integrator approach, where the identified SI is responsible for designing and
implementing an end-to-end solution, confirming to functional requirements and laid
down SLAs.

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Excerpts from the interview:

What are your plans for branch expansion?

As of now we have 3,033 branches pan-India. We have already opened 120 branches in
this fiscal. We plan to open 80 more in the next four months. Going forward, we have
applied to the RBI for opening 250 branches in Tier-I and Tier-II centres. So in fiscal
2010-11, we will probably open over 300 branches. The basic idea is to be present in all
district centres and in places where we are not adequately represented.

How have these new branches performed?

The business that has been generated by these new branches has been substantial. On an
average, each branch would be able to mop about Rs 20 crore of business in the first year
of its existence. Therefore, from the point of business expansion, it is a remunerative
work to do. Further, if I analyse the business mix, especially under deposits, about 44 per
cent of it is from CASA (current account and savings bank accounts) – which is a
substantial improvement over our overall CASA and our existing record.

The branch opening that we are doing is also happening where we are well represented.
For example, in Gujarat, we have a good presence. But we are still opening branches
there – where it will add to our strength and synergy.

What about your presence in the southern region? What is the potential that you see
here?

In the southern region, we have about 325 branches in the four States. We have opened
about 45 branches here in the last one-year and hope to open another 75 branches over
the next one year to take our network here to 400 branches. We have already identified
centers where we expect substantial business. To give you an example, we opened a
branch in Sriperumbudur (a major industrial hub) in June and opened a branch in
Kanchipuram recently. If I take just these two branches, I expect a business of Rs 100
crore by March 2010. And I am not talking about bulk business. I want sustainable and
normal retail business. I am talking about a number of centers like this. We have a

84
network of branches here and we have a footprint in the south. So, opening new branches
and getting business is not difficult at all.

How is your bank affected by the wage agreement between IBA (Indian Banks'
Association) and bank unions?

We have been providing 17.5 per cent for wage arrears from the day, the old agreement
ended. Coincidentally, it has been the same number that has been agreed to. Therefore,
we are not impacted either way. There is no impact on our Profit and Loss account in
terms of extra provisions.

How has your bank been impacted by the crisis in Dubai?

Dubai has been facing a bit of slowdown for the last couple of months. The recent
developments that you are talking about are only one of the triggers. We were well
prepared. We did not make any investment in real estate during the last one-and-half
years. We do not have any issue whatsoever. The little exposure that we have was
contracted more than two years ago, when rates were low and those projects are nearing
completion. In any case, we have been cautious. Our gross NPA is about 0.4 per cent and
our net NPA is almost negligible. So I don't see any problem there.

What has been the impact of restructuring of distressed assets in your domestic
operations?

In terms of percentage of restructured assets to total loan book size, it is one of the lowest
in the industry at about 3.2 per cent. But more importantly the restructured assets are
performing well. The restructuring has been restricted to re-schedulement of interest –
and these have been prompt. There has not been much of interest funding or hair-cuts for
the bank. The evidence of this is that these restructured assets have not turned into NPA –
in September or till now. Our delinquency rate has been pegged at 1.04 per cent (when
the international benchmark is about 1 per cent). In a difficult economic scenario, if we
have been able to contain our NPAs (non-performing assets) at these levels, that indicates
the quality of our assets.

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What are your capital raising plans?

As of September 2009, our capital adequacy ratio was 14.67 per cent, which is
significantly high. In that, Tier-I was 8.8 per cent which was again quite high. We have
sufficient headroom in both Tier-I & II to raise about Rs 10,000 to 12,000 crore.
Factoring in a credit growth of 25 per cent, we can maintain our CAR (compounded
annual return) at above 13 per cent and higher than our internal benchmark of 12.5 per
cent. In the current quarter, we have risen about Rs. 600 crore in Tier-I capital through
perpetual bonds and this has taken our CAR beyond 15 per cent. So we can manage quite
comfortably for the next two to three years with this.

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 CONLUSION
Bank of baroda – an International bank of India. As the tag line of the bank suggests it is
the bank which has stepped in the global market and has left its foot prints everywhere.
Bank of baroda is an organization which had believed in the saving that every one has to
change with the time. BOB changed its logo in 2005 and started its new journey. While
visiting the BOB and after taking to the staff members we have found that BOB has
reached the Zenith today.
It has also been ranked as the top 25th organization by fortune 500 2009 companies.
BOB has always provided the good services and hospitality to its customers the all
branched have been applied with core banking services. Most of the branches have 12
working hours.
From the journey of BOB till date, our group has come to a conclusion that BOB has
struggled and survived only due to its mission and vision; its organization structure and
also due to its business strategies. Being the budding managers of the future we learned
that every organization has to accept the change at some point of time to be the market
leader.
BOB has given a new meaning to the banking by understanding the needs of its
customers. It has also provided a privilege to India by establishing its branches abroad.
Lastly, we would like to conclude by saying that BOB is a gem to India. An organization
writing new stories

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 RECCOMENDATIONS
After studying about BOB our group would like the following recommendations:
 BOB needs to increase its number of ATMs in the country. Especially in
metropolitan cities. This is because today people don’t like standing in queues for
withdrawing money.
 Bank of Baroda did very well when Rahul Dravid was endorsed as its brand
ambassadors. Today BOB has no ambassadors. Therefore it should endorse
someone as their icon.
 BOB is not very much liked by the youths of the country. The middle aged and
old aged people use it more. Therefore BOB should now concentrate on young
generation. It has a huge market in them.

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 Appendix

MR. S.K. LUTHRA

BRANCH MANAGER
BANK OF BARODA
GHANT GHAR BRANCH
GHAZIABAD.

89
Our team’s photograph with Branch manager of BOB and
their employees

90
Group photograph with some other employees of BOB.

91
 LIST OF REFERENCES

 http://www.bankofbaroda.com/
 http://www.bankofbaroda.com/recruitment.asp
 http://finance.indiamart.com/investment_in_india/bank_of_baroda.ht
ml
 http://en.wikipedia.org/wiki/Bank_of_baroda
 http://www.moneycontrol.com/company-article/bank-of-
baroda/news/BOB
 http://www.citefin.com/1373-history-banking-india.html
 http://www.studentsguide.in/careers-in-banking-finance-
insurance/history-of-banking-in-india.html
 http://business.mapsofindia.com/banks-in-india/bank-of-baroda-
credit-card.html

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 BIBLIOGRAPHY

 Robbins Stephen P., Judge Timothy A., Sanghi Seema,

Organizational Behaviour 12th Edition
 Bovee,Thill, and Schatzman , Business Communication Today,
9th edition
 Aswathappa K., Essantials Of Business Environment, 6th
Edition
 Baroda Next; Annual Report 2008-09

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 GLOSSARY

• BSE      Bombay Stock Exchange 
• OBU     Offshore Banking Unit 
• IPO       Initial Public Offering 
• ISO       International organization for standardization 
• HRD     Human resource Development 
 
• BSRB     Banking Service Recruitment Board 
• GM         General Manager 
 
• DGM      Deputy General manager  
• AGM      Assistant General Manager 
• HRM      Human Resource Management 

• IRS Internal Revenue Service

• SME Small and Medium Enterprises

• CAGR Compound Annual Growth Rate
• CMD Chief Managing Director
• ATM Automated Teller Machine
• DR Death Rate
• DEMOGRAPHIC DIVIDEND - The demographic dividend is a rise in the
rate of economic growth due to a rising share of working age people in a
population
• ORGANISATIONAL CULTURE - Specific collection of values and norms
that are shared by people and groups in an organization and control the way the
interact with each other.

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 INDEX

ABSTRACT
QUESTION
LOGO
INTRODUCTION
HR MISSION
TRAINNING
PROMOTION
COMPETITORS
BUSINESS STRATEGIES
ORGANIZATIONAL STRUCTURE
LITERATURE REVIEW
QUESTIONS ASKED
EXERPTS
CONCLUSION
RECOMMENDATIONS
LIST OF REFRENCES
BIBLIOGRAPHY

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