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41
Directors’ Report¢›¸™½©¸ˆÅ¸½¿ ˆÅú ¢£œ¸¸½’Ä
¢›¸™½©¸ˆÅ ˆÅú ¢£œ¸¸½’ÄDirectors’ Report
Performance Highlights
• Total Business (Deposit+Advances) stood at` 9,57,808
crore.
• Gross Profit andNet Profitwere` 8816 crore and` (5396)
crorerespectively.
• Capital Adequacy Ratio (CAR)asperBaselIIIstoodat13.17%.
• Retail Credit stoodat`50,850 croreconstituting 18%
ofyourBank’sGrossDomesticCreditinFY16.
• MSME Credit stood at ` 54,990 crore constituting20%
ofyourBank’sGrossDomesticCreditinFY16.
• Net Interest Margin (NIM) in global operationswas2.05% and in
domestic operations at 2.60% duringFY16.
• While Gross NPAs to Gross Advances stoodat 9.99%, Net NPAs to
Net Advances wereat5.06%.
• Net Worth ason31.03.2016wasat`30,586 crore.
• Book Value per share at`132.74 ason31.03.2016.
• Business per Employeewas`1680 lac.
Capital Adequacy Ratio (CAR)
YourBank’sCapital Adequacy Ratio (CAR) under Basel
IIIwascomfortableat13.17%ason31stMarch2016.Tier1ratiowasat10.79%andCommonEquityTier1(CET-1)wasat10.29%underBaselIIIframework.
YourBank’sNetWorthason31stMarch2016was`30,586
crorecomprisingpaid-upequitycapitalof`462 croreandreserves
(excluding revaluation reserves, FCTR & Net
ofIntangibleassets)of`30,123 crore.
Provisions towards Retirement and Other Benefits
During the year FY16, your Bankmade provision
towardscontribution to gratuity (`.20.56 crore), pension
funds(`.3025.08crore)whichincludedprovisionof`1563.70croreon
account of shifting ofmortality table from LICI 1994-96to IALM
2006-08, leave encashment (` 259.37 crore)
andadditionalretirementbenefits(` 87.23crore).Totalprovisionsunder
these four categories amounted to ` 3392.24
croreduringtheyearFY16.TotalcorpusavailablewithyourBank
Your Directors have pleasure in presenting the One Hundred and
Eighth Annual Report of your Bank with the audited Balance Sheet,
Profit & Loss Account and the Report on Business and Operations
for the year ended March 31, 2016 (FY16).
attheendofMarch2016undertheseheadswas:` 1346.55crore(gratuity),`
11947.17crore(pension funds),` 881.23crore (leave encashment) and `
375.96 crore (additionalretirementbenefit).
Dividend
Bankisnoteligibletopaydividendforthefinancialyear2015-16onaccountofnotmeetingtheeligibilitycriteriastipulatedbyReserveBankofIndiaforthispurpose.
Management Discussion and Analysis
IndianEconomicOverviewandOutlookforFY17
India’smacroeconomic stability has improved
substantiallyduetofiscalprudence,lowerinflation,lowercurrentaccountdeficit,
and robust foreign exchange reserves. As per
theadvancedestimatesofCSO,therealGDP(2011-12prices)for2015-16stoodat7.6%andtheGrossValueAdded(GVA)atbasicconstantprices(2011-12)stoodat7.3%in2015-16.Thisgrowthwasachieveddespitesubduedglobaldemandandtwoconsecutivebelow-normalmonsoonsthatimpactedfarmoutput.
While theagriculturesector isexpected togrowat1.1%
in2015-16,thegrowthinservicessectorhasmoderatedslightlyto9.2%.Theindustrialsector
isestimatedtogrowby7.3%in2015-16.Theindexofindustrialproduction(IIP)forApril-March2015-16wasat2.4%.
Key Financial Ratios
Particulars FY16 FY15
ReturnonAverageAssets(ROAA)(%)
(0.78) 0.49
AverageCostofFunds 5.08 5.23
AverageYield(%) 7.09 7.53
AverageInterestEarningAssets(` crore)
6,21,234.89 5,70,592.45
AverageInterestBearingLiabilities(` crore)
6,16,002.63 5,69,190.46
NetInterestMargin(%) 2.05 2.31
Cost-IncomeRatio(%) 50.30 43.63
BookValueperShare(` ) 132.74* 166.83*
EPS(` ) (23.89)* 15.83*
*post split of face value of the share to ` 2/-
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42
2015 - 2016¨¸¸¢«¸ÄˆÅ ¢£œ¸¸½’Ä Annual Report
Themajorachievementin2015-16hasbeensharpdeclineininflationdrivenbyanumberoffactorssuchassharpdeclinein
crude oil prices, RBI formally targeting inflation,
astutefoodsupplymanagementandminimalincreaseinminimumsupportpricesandslowdowninChina.TheCPIhasrangedbetween5-6%duringtheyearandWPIstoodat(-)0.91%.Theoverall
inflation remainedwithin the targets setby
theRBI.Theexportscontinuedtocontractfor15consecutivemonthsandimportsalsoremainedsubduedduetosloweconomicrecoveryinthedomesticeconomyanddeclineinoilprices.Thecurrentaccountdeficitremainedat1.3%inQ3,FY16asagainst1.5%inQ3,FY15.Thebuoyantinwardremittances,lower
oil prices and significant FDIswhich jumped
around40%resultedinhigherforeignexchangereservesaboveUS$350billion.Fiscaldeficitretainedat3.9%(RevisedEstimates)for2015-16and3.5%(BudgetEstimates)for2016-17.
Theyearwitnessedthecontinuationofthereformmeasures.Thereformsaimedatdebottleneckingtheeconomy,removingstructuralconstraints,promotingindustryandenterpriseviaMake-in-Indiainitiativeandtheattendantmeasurestoimprovethe
ease of doing business, improving delivery throughdirect benefit
transfer and deepening of banking servicesand liberalising foreign
direct investment policy in
varioussectorsweretakenforwardthisyear.ThenewinitiativeslikePublic
Sector Banks’ Revamp Plan (Indradhanush), UDAY(Ujwal DISCOM
Assurance Yojana) for ensuring financialturnaround of the ailing
power distribution
companies,Start-upIndiafortappingbuddingentrepreneurialpotential,the
PradhanMantri Fasal Bima Yojana for crop insurance,add to
theongoing reformmeasures. ThePAHAL schemeof transferring LPG
subsidies via DBT reduced leakagesby 24 per cent. As announced in
the Union Budget, thebankruptcy law was passed in the Parliament.
Also, theannouncement of Smart Cities, Housing for all by 2022,Make
in India and stand up/start-up initiatives are positivedevelopments
frombankingperspective. Theefforts of thegovernment to improve the
ease of doing business wouldfacilitate the growth imperatives.
Though Indian
economyhasemergedasoneofthefastestgrowinglargeeconomiesin theworld,
theexternal risks togrowthsuchassubdued
global growth; slowdown and rebalancing in China’seconomy;
increased volatility in financial markets;
and,gradualtighteninginthemonetarypolicyintheUnitedStatesremain.
Recent Developments in Indian Banking and Outlook forFY17
The RBI effected a shift in its monetary policy stance
onJanuary15,2015witha reduction in reporateby25basispoints (bps) to
7.75 per cent and followed it up with
acumulativereductionof125bpsto6.50percenttillrecently.Correspondingly,thebankseffectedacutintheirBaserates,though,
the pace of decline in Base Rate was lower thanthatof
thepolicybenchmark rate.The limited transmissionof monetary policy
became a cause of concern for theRBI.Given the limited
transmissionofpolicy rates,
theRBIintroducedMarginalCostofFundsbasedLendingRate.Withthischange,thetransmissionofpolicyratesintothelendingratesofbankswouldimprove.
The performance of the scheduled commercial
banks(SCBs)during2015-16 remainedsubdueddue tosluggishdeposit &
credit growth and asset quality concerns. Thedeposit growth was
9.7% and the credit growth remainedat10.7%.
Gyan Sangam 2.0 was held at Gurgaon in the first weekof March
2016 to review the progress made on
therecommendationsofGyanSangam-I.DeliberationswereheldwithtopmanagementofPublicSectorBanksonRestructuring/Mergersandacquisitions,NPAmanagementandrecovery,technology,digitalandfinancialinclusion,creditgrowthandriskmanagement.UnderProject
Indradhanush, a
rangeofmeasureswereannouncedforimprovingtheperformanceofPSBsincludingthecapitalisationofPSBstotheextentof`
70,000croretill2019.TheBankBoardBureauhasstartedfunctioningwef1stApril,2016,whichaimsat
improvingthegovernance of Public Sector Banks (PSBs) and
formulateappropriatestrategiesfortheirgrowth.TheBureauwillalsorecommend
for selection of heads of Public Sector BanksandFinancial
Institutions andhelpBanks in capital raisingplans.
Business Performance
ResourceMobilizationandCreditExpansion
During the year, your Bank made strategic shift in
itsapproachtowardsbusinessbymovingtoaveragebusinessconcept.Theallocationofbusinesstargetsaswellasreviewof
performance of all operating units is done on the
basisofaveragebusinessfigures(basedondailyaverage).GivenbelowarethedetailsofyourBank’smajorachievementsonbusinessfrontduringFY16.
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43
Directors’ Report¢›¸™½©¸ˆÅ¸½¿ ˆÅú ¢£œ¸¸½’Ä
Total AverageDeposits of your Bank rose from ` 5,34,470croreto`
5,78,317crore,postingagrowthof8.20%overthepreviousyear.Ofthis,AverageSavingsBankDepositsgrewby12.71%from`
94,705croreto`
1,06,739crore.Theshareoflowcostdeposits(Current+Savings)orCASAdepositsinTotal(Domestic+Overseas)DepositsasonMar’16wasat26.36%and
inDomesticDepositsat33.57%asagainst26.39%and33.01%respectivelylastyear.ShareofaverageCASA
(domestic) to total average deposits of your
Bank,increasedfrom29.31%asonMarch2015to29.43%asonMarch2016.YourBankcontinues
toshedbulkpreferentialratetermdepositsinfavourofretailtermdeposits.Domesticretailtermdepositsratioimprovedto73.96%ason31.03.2016from62.79%lastyear.
ShriP.S.Jayakumar,MD&CEO,addressingthemediaoneveofannoucementofFinancialResultsforFY2015-16andQ4:FY2015–16,fortheyearended31stMarch2016.
Your Bank’s Total Average Advances expanded by
5.69%duringFY16ledby6.43%expansioninDomesticAdvancesand 4.24%
expansion in Overseas Advances. Bank has
Composition of Funds – Global
Particulars(` crore)
EndMarch2015 AverageFiguresMarch2015
EndMarch2016 AverageFiguresMarch2016
GrowthonAverageFigures
(%)
Deposits 6,17,560 5,34,470 5,74,038 5,78,317 8.20
-Domestic 4,14,278 3,61,917 3,94,844 4,03,503 11.49
-Overseas 2,03,282 1,72,553 1,79,194 1,74,814 1.31
Borrowings 35,264 - 33,471 - -
Global Advances*
Particulars(` crore)
EndMarch2015 AverageFiguresMarch2015
EndMarch2016 AverageFiguresMarch2016
GrowthonAverageFigures
(%)Advances 4,28,065 3,83,313 3,83,770 4,05,126 5.69-Domestic
2,91,870 2,53,788 2,63,268 2,70,108 6.43-Overseas 1,36,195 1,29,525
1,20,502 1,35,018 4.24
*WhileendofyearnumbersareNetAdvances,averagefiguresareofGrossAdvances
focusedonre-balancingofitsloanbookafterthoroughreviewoftheportfoliowithacalibratedshifttoassetsgrowthwhereitcanimproveitsearningsandshareofoverallbusinesswithcustomers.
Operating Performance(`crore)
Particulars EndMarch2015
EndMarch2016
Growth(%)
NetInterestIncome 13,187 12,740 -3.39%
OtherIncome 4,402 4,999 13.56%
TotalRevenue 17,589 17,739 0.85%
OperatingExpenses
7,674 8,923 16.28%
OperatingProfit 9,915 8,816 -11.08%
ProvisionsNPAs 3,998 13,766 244.32%
OtherProvisions 497 1,748 251.71%
ProvisionsforTax 2,022 (1,303) -
TotalProvisions 6,517 14,211 118.06%
NetProfit 3,398 (5,396) -
Net Interest Income of your Bank decreased by 3.39% onaccount of
significant increase in non-performing assetswhich led to interest
reversals and cessation of interestincome of such assets. However
Total Revenue
increasedby0.85%ledby13.56%increaseinotherincome.Operatingexpenses,
including employee cost increased by 16.28%.OperatingProfitof
theBankat`8,816crorewas lowerby11.08%.
Duringtheyear,theBankmadeProvisionsof`14,211croreagainst ` 6,517
crore in FY 15. These provisions
included`13,766croretowardsNPAsandotherprovisionsof`1748
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44
2015 - 2016¨¸¸¢«¸ÄˆÅ ¢£œ¸¸½’Ä Annual Report
crore. Provisions onNPAswere higher than the
regulatoryrequirements by ` 2,954 crore to improve the
provisioncoverage ratio to 60.09% against stressed assets and
tostrengthen the balance sheet. Other provisions
included`1,564croreprovidedonaccountofpensionliabilityarisingon
account ofmoving tomortality table from LICI 1994-96to IALMof
2006-08. YourBank hasprovided for all
knownliabilitiestoensurethatallfocuswouldbetoimproveearningsgoingforward.Onaccountofallthesefactors,Bankpostednet
lossof`5,396croreagainstnetprofitof`3,398crorelastyear.
Large & Mid Corporate Credit
Bankcaterstotheneedsofcorporatecreditmainlythrough10CorporateFinancialServicebranchesand17MidCorporatebranches.-82-newcorporaterelationshipswereestablishedduring
the year. In view of challenging market conditionsprevailing, your
Bank adopted cautious approach coupledwith proper due diligence
towards taking fresh exposures.Bank initiated following measures to
ensure
consistentgrowthoflargeandmid-corporatecreditwithquality:
• Monitoringofundrawnexposure
toachieveoptimumlevelofcapitalconservation;
• IntroductionofRAROCapproach toexamine the
riskadjustedreturnofanasset;
• Initiatedprocessofbuildingateamofsectoralexpertise;•
Established“RealEstateDesk”toexclusivelydealwith
CREproposals;•
Settingupmarketintelligencecellinviewofincreasing
numberofRedFlaggedAccounts;
DomesticForeignBusiness(DFB)divisionunderCorporateBankingBusiness
vertical supportsAuthorisedDealer
(AD)branchestodealwithForexBusiness.
MSMECredit
MSME is a vital sector to the nation’s economy
andBanksupportscredittothissectorthrough54SMELoanfactoriesandwidenetworkofbranches.MSMEadvancesofofyourBankwere`
54,990croreasonMarch2016.Theadvancesof ` 29,861 crore to Micro
Enterprises for FY16 to totalMSEcreditof`
55,535croreasofprecedingyearstoodat53.70%inFY16.TheMSMEadvancesason31stMarch,2016contributed19.58%tothegrossdomesticadvancesofyourBank.TheadvancestoMicro&Smallenterpriseswereatthelevelof`49,571crore.
PrimeMinisterMudraYojana(PMMY)waslaunchedbyGovtofIndiaon08.04.2015andyourBankisparticipatingactivelyinthesaidscheme.Bankhasachieved24%YOYgrowthinnumber
of accounts under Micro Enterprises category
asagainst10%achievementduring thesameperiodpreviousyear.
YourBankhassetupBarodaMicroEnterprise(BME)Cells,concept under
which these exclusive cells cater to
MicroEnterprises.Bankhas90suchcellsestablishedacross
thecountry.
Retail Credit
RetailcreditofyourBankisdispensedthrough66RetailLoanFactories(RLFs)andwidenetworkofbranches.Duringtheyear,
Bank initiated the process of re-designing RLFs
intoSpecializedMortgageStores(SMS)toundertakeSalesandMarketingactivitiesofmortgage
loansandcentralizationofprocessing of retail loans through
Centralized ProcessingCentres. Bank also undertook simplification
of
applicationformsforretailloans,revampedonlinehomeloanapplicationsystem
with instant ‘In principle sanction’ and
initiatedempanelmentofdirectsellingagents.
ShriB.B.Joshi,ExecutiveDirector,addressingatPrimeMinisterMudraSchememegacamporganizedbyZonaloffice,Baroda.
YourBank’sRetailLoanBookconsistsof
fivekeyproductsviz.HomeLoan,AutoLoan,EducationLoan,TradersLoanandMortgageLoan,whichconstituted83.12%oftotalRetailLoansasonMarch2016.HomeLoansgrewby`2427crore(10.77%)reachinga
levelof`24968croreasofMarch,16.Totaldisbursementsof`6632croreweremadeduring
thefinancialyearended31stMarch2016asagainst`
6335croreduringthesameperiodlastyear.AutoLoansgrewby`268crore(6.45%)reachingalevelof`4428croreasofMarch,16.
Fresh disbursement of auto loans were ` 1773 croreduring the
financial year ended 31st March 2016.
BarodaTradersloans,BarodaMortgageLoansandEducationLoanswereatalevelof`8836crore,`1914croreand`2123crorerespectively.TheotherretailloanproductsincludedBarodaPersonalLoanandothermiscellaneousproductsviz.DoctorsLoan,
Loan against Government securities etc. Total RetailLoansstoodat`
50,850croreason31stMarch,2016andconstituted18.82%oftheBank’sdomesticadvances.
Duringtheyear,yourBankundertookreviewandredesigningofvariousretailloanproductsandriskbasedpricingofloanslinkedtocreditbureauscore.
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45
Directors’ Report¢›¸™½©¸ˆÅ¸½¿ ˆÅú ¢£œ¸¸½’Ä
Rural and Agricultural Lending
TheBankhasalwaysbeenafrontrunnerintheareaofPrioritySectorandAgriculture
lending. It hasbeenharnessing
thepotentialoftheruralmarketthroughitswidenetworkof1,964ruralbranchesand1,425semi-urbanbranches.DuringFY16,yourBankhasopened95newbranchesinruralandsemi-urbanareas.
YourBankistheConvenerofStateLevelBanker’sCommittee(SLBC) in the
states ofUttar Pradesh andRajasthan.
YourBankshoulderstheLeadBankResponsibilityin48districtsofIndiacomprisingof14inGujarat,12inRajasthan,15inUttarPradesh,2eachinUttarakhand,MadhyaPradeshandBiharand1inDelhi.
Priority Sector Advances of your Bank increased from`
1,03,342.67croreasonMarch2015 to`1,13,121.13croreas onMarch 2016
and formed 37.05%of the
AdjustedNetBankCredit(ANBC).TheDirectAgricultureadvancesofyourBankincreasedto`
28,094.12crorewithanabsolutegrowthof̀
1483.20crore(5.57%)duringtheyear.Thetotalagricultureadvances
(excl.RIDF)ofyourBankhasgrownby` 4085.67crore and reached` 36822.21
crore as at end-March
2016.TheTotalAgriculturalAdvanceswereat14.76%ofANBC.
Under its flagship agriculture loan product “Baroda
KisanCreditCard”,yourBank issuedasmanyas2.29
lacCreditCardsduringthefinancialyear.BarodaKisanRuPayCard,anATMenabledsmartcard,hasbeenissuedto9.32lacfarmersfortheirconvenience.YourBankfinancedasmanyas303436newfarmersduringFY16grantingthemloansworth`
5302crore.Asapartofitsmicrofinanceinitiatives,yourBankcreditlinked15170SelfHelpGroupsbygrantingloansamountingto`
163.27croreduringFY16.
Key Initiatives
YourBankintroducedvariousinitiatives/strategiestoharnesstheemergingopportunities
in ruralandagriculture
lending.Someofthekeyinitiativesarementionedbelow:
1.
Toaddnewfarmerstoourfold,yourBankconductedtwospecialcampaignsviz.‘JODENKISAN’duringtheKharif
and Rabi seasons under which 1.17 lacs
newfarmerswereaddedandweregrantedloansof`2,640crores.
2. Your Bank has identified 482 thrust Branches acrossIndia to
boost Agriculture lending. These
branchescontributed33.01%ofthetotalAgricultureoutstandingoftheBankasat31stMarch2016.
3. Your Bank formulated various tailor made area-specific
schemes to the needs of the local farmingcommunity, with
concessions in rate of interest &charges etc. Thirteen such
schemes were approvedandimplementedduringtheyear.
4. YourBank has 49BarodaSwarojgar
VikasSansthan(BSVS),[BarodaR-SETICenters],acrossIndiatraining
the youth and imparting them knowledge and skillsrequired for
taking up self-employment
ventures.DuringFY16,38274youthbeneficiariesweretrainedatthesecentres.
YouthbeingtrainnedandempoweredbyBarodaSwarojgarVikas
Sansthan(BSVS),[BarodaR-SETICenters].
5. YourBankhasestablished51FinancialLiteracyCentres(FLCs) across
India, christened as “SARATHEE”
toimpartfinancialliteracyandcreditcounsellingservicestotheneedytohelpthemavailfinancialservicesfromthe
Banking system and also to provide
counsellingservicestothoseunderfinancialdistress.
Advances to SC/ST Communities during FY16
The outstanding advances granted by your Bank to SC/ST
communities have been growing year after year.
Theoutstandingadvancesgrantedtothesebeneficiarieswentupfrom`
4997croreasonMarch,2015to`
5,298croreasatend-March,2016.SC/STcommunitiesaccountedforashareof21.95%inthetotaladvancesgrantedtoweakersectionsbytheBank.Furthermore,aspecialthrustislaidbyyourBankin
financing SC/ST under various government
sponsoredschemesnamelyNationalRuralLivelihoodMission (NRLM)etc.
BarodaSwarojgarVikasSansthans(BSVS)givepreferenceto SC/ST
candidates while selecting the trainees. So far,thesecentreshave
trained14,304youthsunder theSC/STcategory.
Performance of RRBs Sponsored by your Bank
Your Bank has sponsored three Regional Rural Banks(RRBs) in
three states viz. Baroda Uttar Pradesh
GraminBank,BarodaRajasthanKshetriyaGraminBank,andBarodaGujarat
Gramin Bank. The aggregate business of thesethreeRRBsroseto`
42,640.52croreasofMarch,2016from` 37,440.67 crore as on March,
2015,registering a growthof 13.89%.The threeRRBs
togetherpostedaNetProfit of` 185.41croreduringFY16asagainst`
327.20croreearnedduringFY15.Thedecline inprofit isdue to
thepaymentofarrears on account of 10th Bipartite settlement. The
“NetWorth”oftheseRRBsputtogetherimprovedfrom` 1851.02
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46
2015 - 2016¨¸¸¢«¸ÄˆÅ ¢£œ¸¸½’Ä Annual Report
croreason31.03.2015to`
2036.43croreon31.03.2016and“ReservesandSurplus” from` 1394.12crore
to` 1579.53crore.
Financial Inclusion (FI)
Financial Inclusionaimstoprovideeasyaccesstofinancialservices to
all sections of the societywho are deprived ofit so far at
affordable cost thereby bringing them into
themainstreamofsociety.FinancialInclusionactivitiesarebeingimplemented
by the Bank since inception through variousGovernments sponsored
programs, lending to the
poorestofthepoor,lendingtotheminoritycommunities,lendingtoSC/ST,
lending to priority sectors, etc. Bank has
approveddisaggregatedFinancialInclusionPlanforall21526serviceareavillagesofourBank.
Models used by your Bank for FI
Your Bank has adopted following models for providingbanking
services under financial inclusion viz. Informationand
Communication Technology (ICT) based BusinessCorrespondentsmodels
likePOSbasedBCModel;KIOSKBCModelandBrickandMortarbranch.
Urban Financial Inclusion
The rural inhabitants have largely remained the focus
ofourfinancialinclusioneffortssincealargeproportionofourvillagesarestillunbanked.Besides,peoplelivinginruralandfar
flung areas, urban poor who are largelymigrants
fromvillagestourbanareastillhavenoaccesstoformalfinancialproducts
and services like savings, credit, remittance
andinsurance,forcingthemtodependonunscrupulousinformalsourcestomeettheirpersonal,health,andlivelihood-relatedneeds.Manyofthosearenormallymigrantlabors,hawkers,slum
dwellers from rural areas that generally leave
theirvillagesforlivelihood.Inordertocoverthemunderfinancialinclusion,theGovernmentofIndiahascompletedfirstphaseof
Jan Dhan Yojana campaign in all states to bring
thesevulnerablegroupsundermainstreamfinancialsystem.YourBank has
deployed 4530 urban BCs at various locationsacrossthecountry.
Product/ServicesofferedatourBCPointsareBasicSavingsBankDepositAccountwithin-builtODfacility,InstantAccountOpening,
E-KYC Account Opening,CashWithdrawal,
CashDeposit&Fundtransfer,depositinCurrenta/c,CashCredita/c,ODa/candLoana/c,TermDeposit&RecurringDepositAccount,
Enrollment for Micro Insurance – PMJJBY
andPMSBY,AadhaarSeedingandMobileseeding.
Highlights of Performance under Financial Inclusion for the year
2015-16
•
AlltargetsofDisaggregatedFIP–2016weresurpassedinDecember2014itself.
• Bank surpassed annual Basic Saving Bank DepositAccount opening
and Amount target for
financialyear2015-16,achievementwas220.18%&196.23%respectively.
• Thebalanceoutstanding in the
“BasicSavingsBankDepositAccount”oftheBankisaround`
4925croreasagainstatargetof` 2510croreforFY16.
• Surpassed urbanward coverage targets for
financialyear2015-16(achievement596.05%).
• Surpassed annual target for BC appointment for FY2015-16 by
appointing 11,131 BCs against target
of5503(achievement202.27%).
•
SurpassedannualtargetfornumberoftransactionsandamountoftransactionsinFIaccountsopenedthroughBC
for FY16 (achievement 403.02% & 1145.41%respectively)
• Surpassedannual target forODamountdisbursed
inBSBDAaccountforfinancialyear2015-16by848.83%.
Promoting Financial Literacy
ThedesiredobjectiveofFinancialInclusioncanbeachievedonlywhenenoughdemandforbankingservicesisgeneratedfrom
the targeted group of population. In order to invokeresponses
amongst villagers, it requires financial
literacyonvariousbankingfacilitiesand itsbenefitsparticularly
thebenefits of savings habit, Aadhaar seeding, maintainingminimum
balance, eligibility for availing Overdraft,
useandsafekeepingofRuPaycardsand itspin,USSD
facility,eligibilityofavailingaccidental&lifeinsurance,lodgmentofclaimunderinsurance,microinsuranceproducts,pensions,benefitsofKCC,GCC,promptrepayment,availabilityofotherretailandSMEloanstothem.Financialliteracywouldbethekey
tosuccessof financial inclusion initiativesof
theBank.YourBank’slinkbranchesandBCsareorganizingFinancialLiteracycampaignregularlybyconductingmeetingsintheirserviceareavillagesandschools.
CustomereducationandawarenesscampbyBank&ReserveBankofIndiaatFaizabadRegion
The Bank has also taken the following major
initiativestowardsfinancialliteracyinruralpartofthecountry.
1. Baroda Swarojgar Vikas Sansthan (Baroda RSETI)is a trust
formed by the Bank way back in 2003 forundertaking skill building
activities for unemployedrural youth and providing hand holding
support to
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47
Directors’ Report¢›¸™½©¸ˆÅ¸½¿ ˆÅú ¢£œ¸¸½’Ä
them till their settlement in their venture. Bank
hasestablished49suchcentersalloverthecountry.Theyhaveconducted1401trainingprogrammesduringtheFY16inwhich38,274candidatesweretrained.Outofthese,
20,679 candidates established their
businessventuressuccessfully.
2. Fifty one Financial Literacy & Credit
CounsellingCentres(FLCCs)“SAARTHEE”areoperationalacrossthecountry.
3. Mobile Micro Finance Loan Factory has
beenestablishedwithavisiontoprovidecreditandbankingfacilities to
SHGs at their doorstep under the SHG
–Banklinkageprogram,ensuringhasslefreeandpromptcreditdeliverywithinmaximumof4days&hasslefreecredittotheSHGs.
4. “BYST-BoB Entrepreneurship DevelopmentProgramme” (BYST)
provides end-to-end support todisadvantaged young dynamic
micro-entrepreneursin the form of Loans, Business Mentors,
Training,Networking&Marketing.
Pradhan Mantri Jan Dhan Yojana (PMJDY)
PMJDYisacomprehensivefinancial inclusionplanwhereintheambitof
financial inclusion isenlarged tomake itmoremeaningful. PMJDY is a
National Mission for
FinancialInclusion.Everyhouseholdhavingbankaccountwouldgainaccesstobankingandcreditfacilities.Thiswillenablethemtosecuretheirsavingsinabettermannerandalsotocomeout
from the habit of raising funds from informal sources.Asa
firststep,everypersonwhoopenstheaccountunderPMJDYwillgetaRuPaydebitcardandwouldbeeligiblefor`
1,00,000/- accident insurance cover. After six months
ofsatisfactoryconductofaccount,theywouldbeabletogetanoverdraftfacilityupto`
5000/-.Further,theaccountholderswhoopenedaccountbetween15.08.2014to31.01.2015willgetadditionalterminsuranceof̀
30,000/-fromLIC.FinancialLiteracyisanotherimportantaspectofPMJDY.
FurtherGovernmentofIndialaunchedJanSurakshaYojanaon9thMay2015whereby
lowpremium insuranceproductslike Pradhan Mantri Jeevan Jyoti Bima
Yojana,
PradhanMantriSurakshaBimaYojanaandpensionproductlikeAtalPensionYojanawereintroduced.
Initiatives under PMJDY:
• Your Bank has been allotted 6829 SSAs by SLBCscovering 22,055
villages and 3023 wards across thecountry. Survey has been
completed in all
allocatedSSAsandwards.Accordinglytherearetotal88,91,696householdsinBank’sservicearea.IthasbeenBank’sendeavor
to provide banking services to each andevery household in the
service area.Bank has since
saturated all households in service area by
openingatleastoneaccountperhousehold.
Bankhasopened1.25croreaccountswithadepositof`
2500croreandissued1.18croreRuPaydebitcards.
• YourBankisorganizingcampsperiodicallyforopeningof accounts,
conducting financial literacy
sessions,distributionoffinancialliteracymaterials,distributionofpassbooksandRuPayDebitcards,etc.
• Launched a scheme for engaging Retired
BankOfficers,ASHAworkers,Anganwadiworkers,fairpriceshopownersetcasBank’sDirectBCs.Brancheshavebeen
advised to identify and
recommendperformingSHGsandrefertoCorporateBCsforappointment.
• LaunchednewproductsatourBCpoints like Instantaccount opening,
Aadhaar Seeding, interoperableRuPay Card Based transactions,
deposit in CurrentAccount, CC accounts, loan accounts,
RecurringDepositandFixedDeposit.
• ImplementedautomationofOverdraftFacility throughATM and SMS to
PMJDY customers. The
PMJDYcustomerscanavailoverdraftwithoutevenvisitingthebranch.
• EnabledAlternateDeliveryChannelslikeATM,InternetBanking, SMS
and BC points for Aadhaar
Seeding.BankhasalsoenabledenrollmentofMicroinsuranceschemessuchasPMSBY&PMJJBYthroughinternetbanking,SMSandatBCpoints.
•
e-KYChasbeenimplementedatthebranchesaswellasBCpointsforopeningofAadhaarbasedaccounts.
•
BankhasrolledoutAadhaarEnabledPaymentSystem(AEPS)facilityatBCPoints.
• Bankhas rolledout InteroperableRuPay
cardbasedtransactionfacilityatBCPoints
• Bank has implemented Unstructured SupplementaryServiceData
(USSD) forcarryingoutmobilebankingtransactions on ordinary mobiles.
Facilities
availableunderUSSDarebalanceenquiry,moneytransfer,ministatement,knowingAadhaarlinkbanka/c.
• Adopted 3266 schools across India for
impartingFinancialLiteracytoSchoolChildren.RegularFinancialLiteracy
Sessions/Camps/chaupals are conductedby branches in schools,
villages along with BC.Standardized Financial Literacy materials
such
ascomicbooklet,audiovisualinvernacularlanguageforspreadingfinancialliteracyhavebeenlaunched.
• Bank has implementedModel Village concept by
allRuralandSemiUrbanbrancheswiththesoleobjective
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48
2015 - 2016¨¸¸¢«¸ÄˆÅ ¢£œ¸¸½’Ä Annual Report
of achieving 100% Aadhaar Seeding 100% mobileseeding, 100%
coverage under PMSBY, PMJJBY &APY, 100% funding of zero balance
accounts, 100%overdraft to eligible customers, 100% credit
linkage,100%NPAfreeandskillingofvillagers.
• Introduced special incentive scheme for BCs
formobilizingdepositsandfollowup&recoveryinsmallloana/csincludingNPA&PWOaccounts.
•
StandardizedFinancialLiteracymaterialsuchascomicbooklet,audiovisualhasbeensuppliedtoalloperatingunitsforspreadingfinancialliteracy.
In-housetrainingandcertificationprogramforBCs.
•
JointworkshopsofbranchheadsandBCstoincreasecoordinationandresolvefieldlevelissues.
Pradhan Mantri Jan Suraksha Yojana
1. PradhanMantriJeevanJyotiBimaYojana
•
TheschemewillbeaoneyearcoverTermLifeInsuranceScheme,renewablefromyeartoyear,offeringlifeinsurancecoverfordeathduetoanyreason.
•
AllsavingsBankaccountholdersintheage18to50yearsinparticipatingbankswillbeentitledtojoin.
• ` 2lakhsispayableonasubscriber’sdeathduetoany
reason.Thepremiumpayable is` 330/-perannumpersubscriber.
•
YourBankhastie-uparrangementwithIndiaFirstLifeInsuranceCompanyLtdforthisscheme.
2. PradhanMantriSurakshaBimaYojana
• ` 2 lakhs
ispayableonasubscriber’sdeathordisabilityduetoaccident.Thepremiumpayableis`
12/-perannumpersubscriber.
• AllsavingsBankaccountholders in
theage18to70yearsinparticipatingBankswillbeentitledtojoin.IncaseofmultiplesavingBankaccountsheldbyan
individual
inoneordifferentBanks,thepersonwouldbeeligibletojointheschemethroughonesavingsbankaccountonly.
•
YourBankhastie-uparrangementwithNationalInsuranceCompanyLtdforthisscheme.
Performance of your Bank under PMJJBY and PMSBY as on 31.03.2016
is as under:
• NoofPoliciesenrolledunderPMJJBY–14.42lacs
• NoofPoliciesenrolledunderPMSBY–40.24lacs
• TotalInsurancePoliciesenrolled–54.66lacs
International Operations
Your Bank has been keeping continuous watch on theemerging
trends in the International banking scenario
andadapteditselftothechangingenvironment.Bankhadtakenreview of
assets at overseas centres and moving
towardscalibratedre-balancingofportfoliotoimprovemargins.Thishasledtoconsciousdegrowthinthebusinesslevels.
BankofBaroda(Uganda)Ltd.Celebrated63rdFoundationDayon
18thDecember, 2015.Dr. A.V. S.
RameshChandra,HighCommissionerofIndiatoUgandawastheChiefGuest.
International Presence
Bank’sinternationalpresencecovers-24-countriesthroughits-106-branches/officesasunder:
Bank’sOverseasBranches/Offices 60
Bank’sRepresentativeOffice 1
BranchesofBank’sOverseasSubsidiaries 45
TOTAL 106
During theyear,yourBankhas furtherspread
itspresenceinAfricabyopening twonewbranchesof its subsidiary
inKenya.
TheBankalsohasfollowingJointVentures/Associates:
1. IndoZambiaBankLtd.,Zambiahaving-27-branches
2. India InternationalBank (Malaysia)Bhd.,Malaysia -1-branch
The international business of your Bank continued
tosupportsignificantlytothetotalbusinessoftheBank.Ason31.03.2016,
the International business contributed 31.3%of Global Business. Of
the total International
loan-book,47.92%comprisedofBuyer’sCredit/BP/BDportfoliowheretheexposureisontheBanks.22.03%oftheexposureistoIndiarelatedcorporatesbywayofECB/SyndicatedLoans.Exposuretonon-Indianentitiesbywayofsyndicatedloansisat4.30%andremaining25.75%exposureisbywayoflocalcredit.
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UK Subsidiary
YourBankisplanningtocarveoutRetailbusinessinUKintheformofa100%ownedsubsidiary,whichwillgiveboosttotheretailbusinessoftheBankaswellascomplywiththelocalregulatoryguidelines.
Treasury Operations
YourBankoperatesitsTreasuryoperationsfromStateofArtDealing Room
at its corporate Office in Mumbai. Treasuryhandles domestic
treasury operations and is a prominentplayer in various markets
e.g. Foreign Exchange, Interestrates, Fixed Income, Money Market,
Derivative, Equity,Currency and Interest Rate Futures and other
alternateassetclasses.Bank isofferingvariousservices like
interestrateswaps,currencyswaps,andcurrencyoptions,
forwardcontracts through advanced dealing systems and
throughAuthorized branches dealing in Foreign exchange
acrossIndia.
Your Bank has been able to capitalize on the
opportunityofferedbyhigheryields in the firsthalfof
theyearandhasadded bonds to the portfolio. Bank managed its
portfolioefficientlyandmaintainedaverageyieldonSLR investmentas on
31.03.2016 at 8.01%. During FY 2016, your
Bank’srealizedprofitonSaleof
InvestmentandForeignexchangeearningsare` 1,162croreand`
612crorerespectivelyandearned` 12,144croreasInterest/Discount.
Bank’s Treasury mid-office monitors market exposuresand limits
fixed by the Bank on real time basis. The Riskmanagement
parameters, including Value-at Risk (VAR)areused tomeasuremarket
riskonallportfolios.TheVARnumbersareregularlybacktestedforevaluatingthestrengthofthemodel.Stresstestingisdoneonvariousinvestmentsandcurrencypositions.
Government Business
GovernmentBusiness forms an important part of
businessstrategyofyourBank.ItistheAccreditedBankertoMinistryofHealth&FamilyWelfare(MHFW)andnewlyformedMinistryofAyush.YourBankhasbeenauthorisedtocollectcontributionandadministrativechargesonbehalfofEPFO(Employees’Provident
FundOrganization). Bank has received
approvalfromIRCTC(IndianRailwayCatering&TourismCorporation)forDebitCardintegration,implementationofwhichisunderprogress.YourBankundertookspecialeffortsformobilizationof
PPF accounts during FY16 and opened 91,370 newPPF accounts. Your
Bank has been adjudged as the BestPerforming Bank among Public
Sector Banks (2nd Rank)by PFRDA by opening 155589 Atal Pension
Yojana(APY)accounts during FY16. This has been possible due
toconcertedeffortsputinbyallbranchesoftheBank.Duringthe year,
yourBankconductedworkshopsonGovernment&PSUBusiness,covering850staffmembersand150BCs/BFs/VLEsat15locations.
YourBankparticipatedinDigitalIndiainitiativeofGovernmentofIndia.YourBankisoneofthefiveBanksassociatedwithGovernmentofIndia’sprestigiouse-Bizportal,whichwouldlaunch
about 50 services along with major state services.Digital Life
Certificate (DLC) is successfully automated.Digitizing the whole
process of securing life certificateswillbebeneficial
toallpensioners.YourBank isoneof theAuthorizedBank to
undertakeGoods&Service Tax
(GST)collectionwhichislikelytobeimplementedshortly.WorkonDigitalization
of Pension Payment Order (e-PPO) is
underprogressforspeedierpensionprocessinganddisbursement.YourBankisbeingintegratedforonlinepaymentofMHFW(MinistryofHealth&FamilyWelfare)andDBT(DirectBenefitTransfer)withPFMS(PublicFinancialManagementSystem).Your
Bank is integrated for online receipt of MHFW
withBharatKoshportal(Nontaxrevenuereceipts).
YourBankstartedprovidinge-stampingfacilityintheStateofPunjabin-03-branchesintheinitialphase.YourBankstartedthe
pilot project of E-panjiyan (a web enabled standalonesystem used
for stamping and registration of
documentsdevelopedbyDepartmentofRegistration&Stamps,MadhyaPradesh)in-03-branchesintheStateofMadhyaPradesh.
Your Bank has implemented Sukanya Samriddhi
Yojana,asmalldepositscheme forgirlchild,
launchedbyGovt.ofIndiaw.e.f.27.05.2015.SovereignGoldBond,2015andGoldMonetization
Scheme, 2015 were launched on 05.11.2015with a view to reduce
country’s gold import as well asmobilizing idlegoldheldbyhouseholds
and institutions inthe country for putting the gold into productive
use.
YourBankoperationalisedSovereignGoldBondschemeinallthebranchesinIndiatocanvassmaximumapplications.
Wealth Management Services
YourBankhasrealisedgrowingaspirationofcustomersforearning higher
returns and security through mutual fundand insurance
respectively.Bank is
inWealthManagementServicessince2004andMutualfund,LifeInsurance,NonLifeInsuranceproductsarebeingdistributed
to
thecustomers.YourBankcrossedthemarkof1,10,000newSIPsinFY16,firsttimeeverresultinginincreasedcustomerparticipation.Your
Bank has also covered 1.71 Lacs lives in addition tocoverage under
PMJJBY policies. Initiatives/ StrategiesadoptedduringFY16are:
1.
BankcreatedaseparateverticalforWealthManagementServicesandclubbeditwithMarketingtoputfocusontheimportanceofWealthManagementServices.
2. Team at Corporate Level is strengthened by
placingWealthManagementspecialistsandproductmanagershavebeenidentifiedforstrategicandmonitoringrole.
3. Bank initiated special focused campaign for
MutualFundsandLifeInsuranceforcanvassingbusiness.
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2015 - 2016¨¸¸¢«¸ÄˆÅ ¢£œ¸¸½’Ä Annual Report
ShriMayankKMehta,ExecutiveDirector,felicitatesShriPrabhatAgarwal,ZonalHead,EUPZone,atBarodaPioneerMutualFundeventorganisedatLucknow.
4. Bank has run pilot at 55 branches and conductedtraining/
refresher courses for broadening the visioninprevalent scenarioof
“CertifiedOfficers” to sourceMutual Fund and Insurance business.
Your Banklooked it as a model for enhancement in customerbondingand
feegenerationbyputtingextra focus todrawthemileage.
5. Bank identified 1350 thrust branches for establishingWealth
Management Service desk and “CertifiedPersons/Officers “for
distribution ofMutual Fund
andInsuranceshavebeenattachedatthesebranches.
6. Process initiated for inducting 2 Standalone HealthInsurer
and 2 General Insurance Cos after openarchitectureclause.
7. Bank is also in process of implementing
integratedWealthManagement Solution to put all Mutual
FundandInsurancerelatedinformationatoneplatform.
NPA Management
FY16 was a challenging year for the banking industry
intermsofstressinassetqualityonaccountofvariousmacro-economicandotherfactors.Freshslippageswereat6.38%oftheopeningStandardAdvancesofyourBank.Inviewofhighslippages,theratioofGrossNPAtoGrossAdvanceswasat9.99%ason31stMarch2016andtheratioofNetNPAtoNetAdvanceswas5.06%.Duringtheyear,Bankprovided̀
13,766croretowardsNPAprovisions(lastyear`3,998crore).Theseprovisions
were higher than the regulatory requirementsby`2,954croreto
improvetheprovisioncoverageagainststressed assets and strengthen
the balance sheet. TheProvision Coverage Ratio was at 60.09%
duringMarch
16includingPrudential/TechnicallyWrittenOffadvances.
Your Bank has developed a comprehensive structure forrecovery
and creditmonitoring across different levels.
TheNodalOfficerateachDRTcentrehasbeenassignedtheroleoffollow-upof
legalcasesondailybasissoastominimizethedelayinobtainingdecreesandexecutionandmaximizerecoveries.ForrecoveriesinallDRTSuitfiledNPAaccounts,
the assets charged to the Bank are now sold throughe-auction to
get fair market value. In addition, RecoveryAgents forassisting in
takingpossessionofassets&otherpre/postsaleactivitiesandConsultantshavebeenappointedto
liaisewithOfficial Liquidators (OL) to get the
recoveriesrealizedbyOLs.ThemaximumparticipationinNationalLokAdalatsisensuredtoexpediterecoveryinsuitfiled&nonsuitfiledNPAa/cs.RecoveryCampswere
regularly
conductedbyyourBank’sbranchestorecover&reducelongpendingcasesandexpediterecoveriesinsmallaccounts.
YourBankcontinuedemphasison follow-upmechanismtoeffect recovery
inNPAaccounts.ThesystemofmonitoringoflargevalueNPAaccountsof`
1croreandabovedirectlyfromcorporateofficebywayofvideoconferencingwiththeRegionandZonehaveensuredproactiveactionbybranches,advocates,recoveryagentsetc.TheactionunderSARFAESIActatvariouslevelsarealsomonitoredbyBank’sCorporateOffice.
YourBank continued its emphasis on sectorwise
follow-upmechanismtorecoverNPAsasunder:
Large and Mid Corporate accounts
1.
EngagingreputedseniorAdvocates/LawfirmsforhighvaluecasesandFraudmatters;
2. Distribution of High value NPA & PNPA
accountsamongstTopManagementforearlyresolution;
3.
MonitoringofhighvalueaccountsbyTopManagementteamheadedbyMD&CEOandEDs;
4. 3 General Managers from Corporate Office
havebeenallocatedZones
tomonitorNPAandWrittenoffaccountsononetoonebasis.
MSME Banking
1. Enriching data mining to identify delinquency in
thebucketof0-90days;
2. Early detection of problem accounts, initiation ofindependent
title re-verification, fresh valuation ofproperties and tracing
uncharged assets in SMA-2accounts;
3. Vigorous monitoring & follow up in small
bucketaccountsPanIndiabytheofficersengagedinrecovery;
4. Engaging dedicated team at ZO/RO/Branch level
forRecoveryandMonitoringtherunrateondailybasis.
Retail Lending
1. Leveraging Technology for Collection and
Recovery,engaging150telecallers;
2. Seizingofvehicles;
3. Enhancedpowertobranchesforcompromise;
4. Private treaty, early resolution incentive for
RecoveryAgents;
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Directors’ Report¢›¸™½©¸ˆÅ¸½¿ ˆÅú ¢£œ¸¸½’Ä
5. Issuanceofsoftreminders;
6. IncreaseinSMSalerts;
7. OutsourcingHardBucketscollectionthroughFOS;
8. Establishment of Collection centre for FOS at
major100centersisunderprocess.
Rural Agriculture
1. Optimum utilizations of BCs for recovery in NPAaccounts;
2. Incentive scheme (SANKALP9) for recovery of
smallNPAaccounts.
BankwasawardedasFirstRunnerupfor“BestFinancialInclusionInitiative”inthecategoryofLargeBanksbyIBAduringBankingTechnologyAwards2016atMumbai.
Pre delinquency Monitoring
• War room is established at Corporate level
forcollection/monitoringofaccountsabove` 5.00lacsto`
1.00CrsinSMEandRetailloanAccounts;
• Team of 10-12 officers in each Region (Total
800Officers)isworkingdedicatedly for followup for
timelycollectioninallRetailandSMEloanaccountstocontroldelinquency.
Suit filed Accounts
• Nodal Officers for DRTs closely monitor each
caseandensuretogettheRecoveryCertificateinshortestperiod. In RC
execution, theNodalOfficer to ensurethatRCexecutionprocess is
started,as soonas theRC is issued by DRT. The Nodal Officer
monitorstimelycomplianceoftheissuesraisedinDRTbybasebranchesandconcernedAdvocates.
CashrecoveryinNPAaccountsduringFY16stoodat` 1481croreand
theupgradationstoodat` 533.87crore.
The asset classification wise breakup of
advancesportfolioofyourBankisasunder-
(` incrore)AssetCategory(Gross) 31stMarch
201631stMarch2015
Standard 3,64,996 4,21,019
(` incrore)AssetCategory(Gross) 31stMarch
201631stMarch2015
GrossNPA 40,521 16,261Total 4,05,517
4,37,280GrossNPAcomprisingof:Sub-Standard 11,569 4,368Doubtful
25,766 10,383Loss 3,186 1,510TotalGrossNPA 40,521 16,261
Credit MonitoringCredit monitoring is one of the most important
toolsfor ensuring asset quality. Your Bank has the system
ofmonitoring of advance accounts at various levels
(Branch/Region/ZoneandCorporate)topreventslippagesandtotaketimelycorrectiveactionstoimproveassetquality.AseparatedepartmentforCreditMonitoringfunctionsattheCorporatelevel,headedbyaGeneralManager,andoneattheRegionalandZonal
level,started functioningsinceSeptember2008.The Slippage Prevention
Task Force (SPTF) formed at
allZonalandRegionalOfficesintermsoftheBank’sDomesticLoan Policy was
activated for the purpose of arrestingslippagesandalsofor
initiatingnecessarycorrectiveactionplanatanearlystageinatimeboundmanner.TheprimaryobjectivesandfunctionsoftheCreditMonitoringDepartmentattheCorporatelevelareasunder:•
Identification of weakness/Potential default/incipient
sickness in the advance accounts at an early stageand initiating
suitable and timely corrective actionsfor preventing impairment in
advance accounts
/deteriorationincreditqualityoftheborrowalaccounts;
• BasedontheRBIguidelinesforRevitalizingDistressedAssets,
accounts with incipient stress are identifiedunder Special Mention
Accounts (SMA) categoriesof SMA0, SMA1 and SMA2. All SMA2 accounts
arefollowedupfortheformationoftheJointLendersForumandoptionstoresolvestressunderCorrectiveActionPlanareexploredbywayofRectification,RestructuringandRecovery;
•
PreventionofslippagesintheAssetClassificationandrelegationinCreditRatingsthroughvigorousfollowup;
• Identification of suitable cases for
restructuring/StrategicDebtRestructuringaswellasfurtherfinancingin
deserving and genuine cases with
matchingcontributionfromtheborrower;
• Takingnecessarysteps/regular followup,
forreviewofaccountsandcomplianceoftermsandconditions,therebyimprovingthequalityofcreditportfolio;
• Monitoring progress of accounts under Board
forIndustrialandFinancialReconstruction(BIFR);
• Your Bank has a mechanism of identifying the RedFlagged
Accounts ( RFA) based on Early
WarningSignals(EWS)aspertheRBIguidelinesonframeworkfordealingwithloanfraudsandreportingtheaccounts
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2015 - 2016¨¸¸¢«¸ÄˆÅ ¢£œ¸¸½’Ä Annual Report
onCRILCplatform.FurtherinvestigationintosuchRFAaremadetoclassifytheaccountasfraudorotherwise.
Monthly Monitoring of Advances accounts
On-lineweb-basedsoftwarehasbeendevelopedbytheBankforMonthlyMonitoringReports(MMR)inrespectofadvanceaccountswithFundandNon-FundBased(FB+NFB)exposureof`
10croreandabovewaslaunchedinJanuary2013andisbeingupgradedfromtimetotime.BasedontheMMRs,thefollowupactionsaretakenforensuringexpeditiousreviewofaccounts,
rectificationof irregularities, complianceof terms
andconditionsinhighvalueadvanceaccountsforimprovingthequalityofyourBank’screditportfolio.
Restructuring of Advances Accounts
In order to improve asset quality, your Bank scans
thestressedadvanceportfolioonacontinuousbasis,
industry-wiseaswellasborrower-wisesoastoinitiatesuitableactionbywayofrestructuringbasedontheviabilityoftheproject/activity.Duringthefinancialyear2015-16,theBankundertookrestructuringofvariousadvancesaccountsasperthetablegivenbelow.
Restructuring of Advance Accounts (Global) – 2015-16
(` crore)Particulars CDRMechanism SME Others
TotalStandardAdvances
Restructured
No.ofBorrowers 19 564 583AmountOutstanding 227 108 975 1,310
Sub-standardAdvances
Restructured
No.ofBorrowers 1 58 332 391AmountOutstanding 72 16 57 146
Doubtful
AdvancesRestructured
No.ofBorrowers 1 41 200 242AmountOutstanding 1,031 60 404
1,495
Total No.ofBorrowers 2 118 1,096 1,216AmountOutstanding 1,331
185 1,436 2,953
Information Technology (IT)
YourBankhasundertakena
totalend-to-endbusinessandITstrategyprojectcoveringyourBank’sdomestic,overseasandsubsidiaryoperations.
• YourBankhasbuiltthebestoftechnologyinfrastructureby
implementing a state-of-the-art Data Centreconforming to Uptime
Institute Tier-3 standard
andalsoaDisasterRecoverySiteindifferentseismiczonewith redundancy
built in every single point of failureto ensure uninterrupted
banking service delivery tocustomers;
• InadditiontotheDisasterRecoveryCentre,yourBankhas also
implemented the Near Disaster RecoveryCentre to ensure Near Zero
Data Loss as part of itsBusiness Continuity Planning and Disaster
Recoverystrategy;
• Your Bank continued to optimise its technologyinitiatives like
Windows Server virtualization, andbackupconsolidationasgreen
initiativesandalso
toimproveDataCentreoperationalefficiency.Applicationvirtualization,
Automatic StorageManagement (ASM)& Real Application Clusters
(RAC)
Implementation,Bandwidthup-gradation,provisionofbackuplink,useof
new technology based on MPLS (Multi
ProtocolLabelSwitching)forimprovinguptimeandondemandupgradearesomeofthemajorinitiatives;
• Your Bank has been undertaking regular capacityplanning,
upgrade and refresh to support growingdemand of business at various
service deliverychannels;
• Your Bank has implemented
EnterpriseManagementSystemandmoduleshavebeendeployedtoeffectivelymanageandmonitorBank’sgrowingITinfrastructure;
• YourBankhasdeployedcentralizedITarchitecturetoprovide the Core
Banking Solution (CBS) and
otherapplicationplatformtoallitsdomesticbranchesand23overseasterritories,providingeaseofmanagement&monitoringandoptimizationofresources.YourBank’sRegional
Rural Banks (RRBs) are also on the
CBSPlatformwithdeliverychannels;
• You Bank has initiated the upgradation of
CoreBankingSolution(CBS)toFinacle10.xande-bankingupgradationto11.x.
Digital Banking Initiatives
Internet Banking - BARODA CONNECT
YourBankcontinuedtoaddmorefacilitiesunderitsInternetBanking
(BarodaConnect)
channels.DuringFY16,BarodaConnecthasbeenenrichedwithmultiplefeaturestoprovideeaseofuseandbettercontrolforthecustomers.Stepstakeninthisregardare:
• Introductionof facility forSelfRegistration
forBarodaConnectusingDebitcardforRetailcustomers.Usingthis new
feature, all retail customers, who have notregistered for Baroda
Connect, can do so withoutvisitingthebranch;
• AfacilityforSelfRegenerationofTransactionpasswordfor Baroda
Connect has been introduced for RetailCustomers by which the retail
customer can
resettheirtransactionpasswordbyusingdebitcardincasetheyhaveforgottenthepassword/expiryofpassword/
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Directors’ Report¢›¸™½©¸ˆÅ¸½¿ ˆÅú ¢£œ¸¸½’Ä
passwordgettingdisabledduetowrongattempts;
• FacilityforselfretrievalofUserIDwhereinthecustomercan himself
get the User ID on registered email idwithoutvisiting
thebranchorcontacting theTollFreenumber;
• Customers can now link their PPF account to theirBaroda
Connect portal. The customers can view
theaccountstatementandmakecreditstothisaccount.
• Customerscannowregister
forPradhanMantriBimaYojanausingBarodaConnect;
• Customershavealsobeenprovidedoptionforlinking/delinking
account facility using which customer canchoose account, he wants
to get displayed whilemakingpayments;
•
CustomerscannowgiverequestforAdhaarSeedingintheirbankaccounts;
• FacilityisprovidedforinvestinginMonthlyIncomePlan,Regular
Income Plan, Baroda MahaUtsav Deposit,Baroda Double Dhamaka Deposit
Scheme,
BarodaTaxSaving-RIRD,BarodaTaxSaving-MIP,BarodaTaxSaving–QIPandShortDepositORD.
Mobile Banking – BARODA M-CONNECT & IMPS
MobileBankingapplicationhasbeencompletelyrevampedin your Bank to
attract the new generation and techsavvycustomersbyenhancing its
lookand
feel,user-friendlinessandexperience.TheMobileBankingplatformasanalternatedelivery
channel offers many features and facilities tocustomers, viz.
iconbaseduser
interface,balanceenquiry,ministatement,fundtransfer,stoppayment,chequestatus,etc.
Mobile banking application is made available in
alli-Phones,Blackberry,Android,Windowsdevices.ImmediatePaymentServices(IMPS)areimplementedcoveringPersontoAccount
(P2A),Merchant Payments (P2M) andAadhaarbased remittance (P2U).On
theMobileplatform,otherkeyfacilities likeMobile banking
registration through CBS andnetbanking,
IMPSthroughbranches,M-passbook forNREcustomers, DTH recharge
functionality etc. are added tomobilebanking.
Baroda Non-Stop Lobby
Baroda Non-Stop Lobby comprises of five self servicemachines
viz. Cash Recycler, ATM, Multi Function
Kiosk,PassbookPrinterandDigitalSignageSystem
forproviding24x7bankingservices.Thelobbieshaveincreasedvisibility
and are receiving encouraging response from
customersaswellasstaffmembers.ThenumberofBarodaNon-Stoplobbiesincreasedfrom-151-asofMarch2015to-252-asofMarch2016.
Baroda Express - 24X7 Lobby
“BarodaExpress–24X7”lobbyisa leanversionofBarodaNon-Stop lobby
for smaller centres by expanding
existingATMcabinswithminorchangesintheinteriorandprovidingadditionalservicesbyinstallingCashRecyclerandPassbookPrinter
in addition to ATM. Baroda Express Lobby startedfunctioning from
September 2015. Bank has -451-
BarodaExpress-24x7lobbiesasofMarch2016.
ShriB.B.Joshi,ExecutiveDirector,InauguratingtheE-LobbyinSayajigunjBranch,Baroda.ShriBharatkumarD.DangarDirector,isalsoseen.
Contact Centre
Contact Centre is providing most of the banking servicesthrough
telephone channel. All customers or members
ofgeneralpublic/customercanconnectwithContactCentrebydialingtheTollFreeNumber1800223344or18001024455fromanywhereinthecountry.
A dedicated Toll free no. 1800 102 77 88 is provided
forPradhanMantriJanDhanYojana(PMJDY)andotherFinancialInclusioncustomers.Services
throughContactCentresareavailablethroughouttheyearwithoutanyholiday.
ContactCentresarecurrentlyprovidingfollowingservices:
• AccountEnquiry–Balanceenquiry,transactionsdetailsetc;
• Cheque Services – Stop payment, Cheque
bookrequest,enquiryetc;
• Debit Card Services – Helpdesk,
Hot-listing,RegenerationofPIN,ReissuanceofCard,Complaintoffailedtransactionsetc;
•
InternetBanking–Helpdesk,Handholding,Activationofpassword,Regenerationofpassword,complaintonfailedtransactionsetc;
• MobileBanking–Helpdesk,handholdingetc;
• GeneralEnquiry–Productsandservices,Branch/ATMlocation,
interest rates information, lead creation forproductqueriesetc;
• Most of these services are also available through
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2015 - 2016¨¸¸¢«¸ÄˆÅ ¢£œ¸¸½’Ä Annual Report
Interactive Voice Response (IVR) 24X7. Servicesthrough agents
are available during 6 AM to 10
PM(exceptDebitCardHotlisting,Webchat&NRIhelpdeskwhichareavailable24X7).
SMS Banking
For customers who desire to avail only information basedbanking
services, your Bank has introduced SMS
bankingforbalanceenquiry,ministatement,Chequestatusfromtheregisteredmobile
number. This is a very simple and easytouseproduct
thatacustomercanstartusingwithoutanyregistrationprocess.
Baroda E Gateway – Internet Payment Gateway
Bank owns entire set up to provide electronic paymentplatform of
its merchant’s business by enabling
paymentcollectionusingcreditcard/debitcard&Netbanking.Bankis
having tie-up with payment aggregators viz.
BillDesk,CitrusPaymentSolutionsPvt. Ltd. andPayTm to
offerNetBanking of major Banks as additional payment option
tocustomers.YourBankisalsointheprocessofupgradingIPGinfrastructurewithmorerobustandfeaturesoastoofferrichexperiencetoourmerchants.
Self Service Pass Book Printer (SSPBP)
SelfServicePassBookPrinterisanautomatedkioskwherecustomer can
print Pass Book on their own. SSPBP kioskrecognizes the account
details from the magnetic
stripplacedonthePassBook,throughthesedetailskioskfetchestheaccounttransactionandprintsitonPassBook.Customercanusethisfacility24x7fromtheSSPBPmachineinstalledinElobby/ATM.
ATM
Duringtheyear,yourBankinstalled945additionalATMstoprovideuninterruptedbasicbankingfacilitytothecustomersat
convenient places across India and replaced 206
ATMswhichwereolderthan7years.Morethan50ATMshavebeenredeployedatmoreconvenientlocationsforthecustomers.Ason31.03.2016,BankhasATMnetworkof8975ATMs.
Duringtheyear,mobilebankingregistrationthroughATMonNFSnetworkhasbeenimplemented.GujaratUrjaBillpaymentfacility
is provided throughATM.OverDraft request facilitythrough ATM for
PMJDY customers have been provided.Cashwithdrawal throughMicro ATM
for Bank’s customersincludingourRRBcustomersandotherBankcustomers
isimplemented.RupayEMVimplementation
forallourRRBs,LeadcapturethroughATM, BillpaymentthroughMFKusingcard
and PIN, Multi language receipt printing in ATM
andCashRecyclerwasenabled.CardlessdepositfacilityinCashRecycler,
Rupay cash at POS,Mudra cardswas
launchedforthecustomers.OnlineBarodaConnectusercreationandpasswordresetusingdebitcardandPIN,
OTPforregistrationofRupay,Visa,Mastere-comtransaction,VisaContact
lessdebitcardlaunchedforDomesticandNewZealandterritory.AlldebitcardproductsaremigratedtoEMVcards,ESQATMmonitoringsolutiontoenabletheBanktominimizetheATMdowntimeandservethecustomerbetter.FirstuseonPOSenabled
for Rupay cards,PIN at POSmademandatory for
international transactions,Debit cardblocking
throughSMSandbranch,VisaEMVforOMANterritoryimplemented.
Cash Recyclers:-
Your Bank launched its first Cash Recycler on 20th
July,2014.Bankhasdeployed1135CashRecyclers/BNAsason31.03.2016.CashRecyclerisenabledtoacceptcashaswellasdispensecashapartfrombalanceenquiry,ministatementand
PIN change facilities. Cash recyclers are very popularwith
retailaswellasbusinesscustomersgiven theeaseofoperation and 24x7
availability. All successful transactionsare immediately credited
or debited in real time andcustomers are issued an acknowledgment
slip
confirmingthetransaction.Nearly1.6lacstransactionsaretakingplaceeverydayinCashRecyclers.
Payment Systems
• All branches of your Bank are enabled for
interbankremittancesthroughRTGSandNEFT.TheRTGSandNEFT have also
been interfaced with your
Bank’sinternetbankingportal.TheStraightthroughProcessing(STP)ofRTGSandNEFThavebeenimplementedfortheBank
aswell asRRBs.RTGS&NEFT have
alsobeenimplementedinUgandaterritory.YourBankhassuccessfully
processed 782 lacs NEFT
transactionsand74.07lacsRTGStransactionsduringFY16.
• The SWIFT facility is provided at Foreign ExchangeAuthorized
Branches in India as also in 22
overseasterritories.Anewinterface‘XMM’ismadeavailabletoallFOREXbranches
in Indiaandalso
in22overseasterritoriesfortransmissionofswiftmessageswithAnti-money
Laundering check. The Payment MessagingSolution (PMS) is
implemented in 22 overseasterritories & all authorized branches
in India.
PMSfacilitatesvalidationandformattingofSWIFTmessagesgeneratedfromCBSasperSWIFTstandards,andalsogoesthroughAMLcheck.
• DuringFY16,underChequeTruncationSystem(CTS),your Bank has
migrated additional MICR centers
torespectiveCTSgridcentersofWesternGrid(Mumbai),NorthernGrid(Delhi)andSouthernGrid(Chennai).
• National Automated Clearing House (NACH)
isimplementedforbothdebitandcredittransactions.
Other Customer Centric initiatives
YourBankhasimplementedContactlessVISA/MasterCardsforDomesticOperationsCustomers,Card
toCardTransferfor ONUS and NPCI network, FI switch and ATM
switchintegration.YourBankhasimplementedEMVimplementationat New
Zealand, Oman and Mauritius. Your Bank
hasimplementedfacilitytoaccesse-fillingaccountoftheIncomeTaxDepartment
throughInternetBankingportal.YourBankhas implemented Statement of
more than 6 months ine-Banking and User induced limit set in
E-Banking. YourBankhasprovidedValueAddedservicesonMulti
functionKiosk and implemented online transaction password
resetwithDebitCardandpin.YourBankhasimplementedonlineaccount
opening for NRE domestic customers and
onlineremittancetoNREcustomers.
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Information Security
ArobustInformationSecurityManagementSystemhasbeenimplementedtoprotecttheexistingtechnologysetupagainstsecuritythreat.AComprehensiveAuditbyExternalAgenciesis
being successfully carriedout by yourBank for
itsDataCentre/Disaster Recovery centre Infrastructure.
BiometricAuthenticationisintroducedforCBSLoginatBranches.
Your Bank has a Security Operation Centre (SOC) forenhanced IT
security. Your Bank’s Data Centre as well
asDisasterRecoveryCentrearerecertifiedandupgradedtoISO/IEC
27001:2013 certification. Your Bank has ImplementedFraud Management
Solution for Internet Banking, ATM
&POS.InordertoenhancesecurityandconfidenceinInternetBanking,yourBankintroducedFraudManagementSolution,including
two factor authentications in India and thirteenOverseas
territoriesbyenablingMobileApp
(ARCOT)OTP,PULLOTPandSMSOTP.YourBankisregularlyconductingVAPT
(Vulnerability assessment & Penetration Testing)
ofexternalfacingapplicationsviz.Ebanking,mailmessaging,CMS,IPGetc.
YourBankhasenabledaFraudRiskManagementsystemforday-to-daymonitoringofsuspicioustransactionsatbranchesforprotectingtheinterestsofcustomers.Whilecyber-attackshave
becomemore unpredictable and electronic paymentsystemsvulnerable
tonewtypesofmisuse, it is
imperativethatBanksintroducecertainminimumchecksandbalancesto
minimise the impact of such attacks to
arrest/minimisethedamage.Forthis,yourBankhasimplementedfollowingadditionalsecuritymeasures:
• Your Bank has implemented the RBI mandates aspart of Risk
Mitigation measures for card presenttransactions.
• Allnewdebitandcreditcardsareissuedfordomesticusage only unless
international usage is specificallysoughtbythecustomer.
• YourBankhasenabledPINatPOS.
• YourBankhasenabledDigitalsignaturesinCorporateInternet Banking
for login and transactions
providingadditionalsecuritytocorporatecustomers.
Back Office Operations
Regional Back Offices and City Back Offices
Your Bank is having 13 Regional Back Offices (RBOs)
atpresent.YourBankhasoneRBOineachzoneforprocessingofCASAaccountopening
formsand issueofPersonalizedchequebooks.More
than5,281branchesofyourBankason 31.03.2016 are linked for
centralized account
openingprocessthroughRBOsandissuanceofPersonalizedchequebooks.YourBankishavingall22erstwhileServiceBranchesfunctioningasCityBackOfficeand62MainbranchesdoingclearingactivityandECScovering3030branchesatpresentfor
processing of inward and outward cheques throughclearing. During
the year under review, 100%migration toCTS
(ChequeTruncationSystem)clearinghas takenplacein Southern Grid and
also at all the 20 MICR (MagneticInk Character Recognition)
locations of the Western Grid.
Also,CTSclearinghasbeen implemented inNorthernGridconsistingof
21MICRcenters.CTSclearing is functioninginallthe3Grids
viz.,Southern,WesternandNorthernGridssmoothly.
Cash Management & Currency Chest
Your Bank has initiated steps to launch the Door
StepBankingServicesfromandatthedoorstepofcustomersoftheBankonPanIndiabasis.ThiswillgiveaboosttoBank’sCurrentDepositPortfolio.BankhasprovidedNSMsinallthebranchesandChests
tocomplywith thecleannotepolicyofRBI.4newcurrencychests
(DumDum,Karnal,Patan&Nipaniya)havebeenopenedduringthefinancialyear.NowyourBankhas-91-CurrencyChests.
Marketing
DuringFY16,yourBankfocusedonpromotionofBrandaswell as various
products and services through a variety ofmarketing initiatives.
Marketing initiatives involved
effectiveutilizationofdifferentmediavehiclessuchasPrint,Electronic(TV
/ Radio), Digital and Out of Home (OOH) for Above-The-Line (ATL)
activities as well as to support the
Below-The-Line(BTL)activitiesundertakenattheZonal/Regionallevel.
Your Bank launched its presence on Social Media viz;Facebook
& Twitter on 1st January of this calendar year.Your Bank
appreciates the importance of social mediaas a platform to connect
with individual customer
acrossdemographicsandgeographies.YourBankalsohasplanstousesocialmediaforconductingajudiciousmixofproductpromotion
and customer education campaigns to gainfullyengagewith customers
andevolve the
relationships.Bankreceivedpositiveresponsepostthelaunchbyengagingwithdesiredtargetaudiences.
ShriP.S.Jayakumar,MD&CEOlaunchingBank’spresence
inSocialMedia.ShriB.B.Joshi,ExecutiveDirectorandothertopexecutivesarealsoseen.
BankundertookdifferentcampaignsinFebruaryandMarchwith each
campaign being designed to serve
differentobjectivee.g.onlinebrandbuilding,awarenesswithdefinedtarget
segments, business acquisition, promote
AlternateDeliveryChannelstoreducecostofbankingtransactionetc.Coupleofcampaignsareelaboratedbelow:
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2015 - 2016¨¸¸¢«¸ÄˆÅ ¢£œ¸¸½’Ä Annual Report
#OneInALeap
#OneInALeapwasasocialmediacontestthatwasconductedonFacebookandTwitteron29thFeb2016.Theobjectivewastocapitalizeon
theLeapDayof theYearandenhance thebrand visibility in the digital
space and engage the targetgroup on a single day event. #OneInALeap
successfullyincreasedawarenessamongdesired target segments.Thedaily
post volumes around this campaign are the
recordhighestforasingledaysinceoursocialmediapresence.
BarodaSMS(Mortgagelinked)
Baroda SpecialisedMortgage Store (SMS) Campaign
wasexecutedwiththedualobjectiveofBrand&Productawarenessfor
newly launched One Stop Store - Baroda
SpecialisedMortgageStore(SMS)Branchandbusinessacquisitionvialead
generation for the branch through targeted
mediumsfocusingonlyMumbai.Inashortdurationof15days,morethan300leadsweregeneratedforprocessing,sanctionanddisbursements.
Your Bank also undertook various product promotioncampaigns
amongst target audience through
advertisingacrossdifferentgeographies.Besidesfocusingonprovidinginformation
on various products and services, AlternateDelivery Channels (ADCs)
were aggressively
promoted.FurtherspecialcustomersegmentswerealsotargetedsuchasspecialofferingsforMSMEs,Rural&Agrisegment,NRIsetc.throughjudicioususeofvariousmediachannelsonpanIndiabasis.
In order to augment the Brand connect with its
diversestakeholders,yourBankalsoparticipated
invariouseventssuchasFICCI-IBABankingConference2015,MINTAnnualBanking
Conclave 2016, Dun & Bradstreet – Top BFSICompanies 2016,
Standard Chartered Mumbai
Marathon2016,India–SouthAfricaCricketSeries2015amongmanyotherstherebyincreasingvisibilityandBrandrecallvalue.
Branch Network of the Bank
Ason31.03.2016,branchnetworkoftheBankwasasunder:
NumberofBranches
%ShareinTotal
Domestic:AreaClassificationMetro 1008 18.91Urban 933
17.50Semi-urban 1425 26.74Rural 1964 36.85Total 5330
100.00Overseas(IncludingBranchesofsubsidiariesandoneRepresentativeoffice)
106 -
Corporate Social Responsibility (CSR)
Bank of Baroda, has a long legacy and tradition
ofcontributingactivelytothesocialandeconomicdevelopmentofthecommunitiesthroughvariousdevelopmentalactivities.Education,health,humanwelfareandothersocialactivitiesareBank’smainfocusareas.Initscontinuedeffortstomake
adifferencetothesocietyatlarge,YourBankintensifieditseffortsfurther
inthisdirectionduringFY2015-16.Bankhassanctionedasumof`
1940.21lacstodifferentorganizationsengaged in various community
development and
socio-economicwelfareactivitiesforthebenefitofweakersection,ruralmassandothers.
DonationtoDayaRehabilitationTrust,Vadagara,KozhikodeKeralapurchaseofAmbulance
SomeoftheinitiativesinthedomainofCSRundertakenbyYourBankareasfollows:
Baroda Swarojgar Vikas Sansthan (Baroda R-SETI)
YourBankhasestablished49BSVS(BarodaR-SETI)
insixstatesofthecountry,outofwhich45areinourleaddistrictsand4areinnon-leaddistrictsforgeneratingselfemploymentof
Rural and Semi Urban youth through skill developmenttraining. It
reflects your Bank’s commitment towards thecause of poverty
alleviation through self employment. Tillnow, our BSVSs have
conducted 9188 programmes
andtrained2,63,378youth,outofwhich1,59,731havealreadysecuredeitheremploymentorsetuptheirownventure.Thesettlementratioisat60.19%.
Financial Literacy & Credit Counselling Centres (FLCC)
YourBankhasalsoestablished51FLCCs ineight
statesofthecountryforprovidingfinancialcounselingservicesandtoeducatethepeopleinruralandurbanareatovariousfinancialproductsandservicesavailablefromtheformalfinancialsector.These
centers also take up activities that promote
financialliteracy,awarenessaboutbankingservices,financialplanningandameliorationofdebt-relateddistressofanindividual.
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Risk Management
Toensure sustainablegrowth,
yourBankhasdevelopedasoundriskmanagementframeworksothattherisksassumedby
the Bank are properly assessed and monitored.
YourBank’sBoardhasputinplacearobustEnterprise-wideRiskManagementarchitecturesothattherisksremainwithintheriskappetitedefinedbytheBoard.SpecificcommitteesoftheBoardhavebeenconstituted
to facilitate focusedoversighton various risks. The Board has also
constituted a RiskManagementCommitteeofBoardwhichoversees the
interlinkages between different type of risks. Policies
approvedfromtimetotimebytheBoardofDirectorsorcommitteesoftheBoardformthegoverningframeworkforeachtypeofrisk.The
business activities are undertaken within these
policyframeworks.Abriefoutlineofthemechanismforidentifying,evaluating
and managing various risks within Bank is asfollows:-
Asset Liability Management
YourBank’sAsset LiabilityManagement (ALM) is aimedatstrategic
planning, implementation, and control processesthataffect
thevolume,mix,maturity,
ratesensitivity,qualityandliquidityoftheBank’sassetsandliabilities.AssetLiabilityManagement
Committee (ALCO), which comprises
ofGeneralManagersandExecutiveDirectorsandisheadedbytheManagingDirector&CEO,ensuresthattheriskprofileoftheBankintermsofLiquidityandInterestRateriskiswithintherisktolerancelimitssetbytheBoard.
LiquidityRiskistheinabilitytomeetexpectedandunexpectedcash and
collateral obligation at reasonable cost. In yourBank, the
liquidity risk ismeasuredandmonitored throughFlow approach and
Stock approach and other
prudentialstipulationsasperthelatestguidelinesoftheReserveBankofIndia.YourBankhasimplementedBaselIIIFrameworkonLiquidityStandards–LiquidityCoverageRatio(LCR),LiquidityRisk
Monitoring Tools and LCR Disclosure Standards.The LCR standard aims
to ensure that Banksmaintain
anadequatelevelofunencumberedHighQualityLiquidAssetsthatcanbeconverted
intocash tomeet liquidityneeds
fora30calendardaytimehorizonunderasignificantlysevereliquiditystressscenariospecifiedbytheRBI.YourBankhasalwaysbeenwellabovethestipulated
levelofLCRonsolobasisaswellasonconsolidatedbasis.
Interest Rate risk arises due to mismatch between ratesensitive
assets and liabilitieswhich adversely impacts theearnings of
theBankwith the change in rate of interest
inthemarket.FormeasurementandmonitoringofInterestraterisk,bothTraditionalGapandDurationGapapproachesarefollowed.Theshort-term
impactof interest ratemovementsonNIMisworkedout
through“EarningsatRisk”approachtaking into consideration Yield
curve risk, Basis risk andEmbedded Options Risk. The long-term
impact of interestratemovements onMarket Value of Equity is
alsoworkedout throughDurationGapapproach.Advanced
techniquessuchasstress testingof liquidity
riskbywayofsimulation,sensitivityandscenarioanalysisareusedatregularintervalsandtestedagainstthecontingencyfundingplan.
Your Bank’s comprehensive contingency funding planhasbeen
formalized to foresee andmitigate liquidity crisisboth for
temporary and long-range liquidity disruptions.With a powerful
suite of analytical and reporting tools, anefficient liquidity and
interest rate risk management hasbeen facilitated, enabling
strategic decision-making
andgeneratingalertsagainstpotentialdeviations.
Credit Risk
Creditriskisdefinedasthepossibilityoflossesassociatedwithdiminutioninthecreditqualityofborrowersorcounterparties.InaBank’sportfolio,
lossesstemfromoutrightdefaultduetoinabilityorunwillingnessofacustomerorcounterpartytomeetcommitmentsinrelationtolending,trading,settlementand
other financial transactions. Alternatively, losses resultfrom
reduction in portfolio value arising from actual
orperceiveddeteriorationincreditquality.
Credit risk is managed in your Bank through a
wellestablishedBoardapprovedframeworkthatsetsoutpolicies,proceduresandreportingwhichareinlinewithinternationalbestpractices.Adequateattentionisgiventosegregatetheactivities
of policy framers with risk takers. Your Bank hasa well structured
credit approval process, which
functionswithinthedefinedBoardapprovedcreditpolicy.
Credit Risk Rating in your Bank involves a method
ofsystematicallyclassifyingcreditproposalsaccordingtotheirqualityandinherentriskcharacteristics.RatingisanimportantsinglepointindicatorofcreditqualitytotheBankasalsotoother
stakeholders (viz. regulators, analysts, auditors
etc.).YourBankhasadoptedarobustwebbasedtwodimensionalcredit rating
system which consists of borrower rating
aswellasfacilityratingandisnamedasBankofBarodaRiskAssessment Module
(BOBRAM). This BOBRAM
systemwhichisinplacesince2007,assessesfourtypesofrisks(viz.IndustryRisk,BusinessRisk,FinancialRiskandManagementQualityRisk)pertainingtothecharacteristicsofaborrower.While
the first dimension, the borrower rating signifies thelikelihood of
default, the second dimension facility ratingindicates the likely
loss, incase theborrowerdefaults,andisexpressed in termsof
LossGivenDefault
(LGD).Facilityratingdependsontypeofcollateralofferedanditscoverage.The
combined rating of the borrower is arrived at by thecombination of
these two dimensions depicting expectedloss.
Over the years, yourBank hasgainedgood experience ininternal
rating and has thus built up data on credit
ratingmigration.ThisrobustplatformhasenabledyourBanktogetanapprovalofregulatorforaparallelrununderFoundationInternalRatingBased(FIRB)approachofCreditRiskunderBaselIIrulesfrom31stMarch,2013.UndertheIRBapproachthebanksareallowedtodeveloptheirownempiricalmodeltoquantifyrequiredcapitalforcreditrisk.IRBimplementationwillmakeyourBankmorerisksensitiveandwouldbenefittheBankwith
improved riskmanagement systems and
strongriskassessmentprocesses,andpossiblyreducedcreditriskcapitalrequirements.
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2015 - 2016¨¸¸¢«¸ÄˆÅ ¢£œ¸¸½’Ä Annual Report
YourBank’sCorporateResearchCellpreparesindustryreportstudiesthroughindustryexpertstoassesstheriskprevalentinindustrieswheretheBankhassizableexposureandalsofortheidentificationofsunriseindustries.Tomanageimprudentconcentration,
your Bank has also put in place
prudentialcapsacrossindustries,sectorsandborrowers.ThePortfolioReviewCellcarriesoutdetailedstudiesonsectoralexposure,creditconcentration,ratingsdistributionandmigration,andchartsoutcreditstrategyoftheBankbasedonthesestudies.
YourBankhasalso implemented theRiskAdjustedReturnon Capital
(RAROC) Framework for all credit exposures.RAROC is defined as the
ratio of risk adjusted return
tocapitalemployed.ImplementationofRAROCwillfacilitateustoevaluatewhetherthecreditriskassetgeneratesadequateprofittoaddeconomicvaluetoshareholders’funds.
Market Risk
MarketRiskimpliestheriskoflossofearningsoreconomicvalueduetoadversechangesinmarketratesorprices.Thechange
in economic value of different market products
islargelyafunctionofchangeininterestrates,exchangerates,economicgrowth,businessconfidenceetc.YourBankhasclearlyarticulatedpoliciestocontrolandmonitoritstreasuryfunctions.
Thesepolicies comprisemanagement practices,procedures, prudential
risk limits, reviewmechanisms andreportingsystems.Thesepoliciesare
reviewed regularly inline with changes in financial and market
conditions. TheInterestraterisk inyourBank
ismeasuredthroughInterestRateSensitivityGapReportsandEarningatRisk.Furthermore,yourBankcalculatesduration,modifiedduration,PV01,ValueatRiskforitsinvestmentportfolioconsistingoffixedincomesecuritiesondailybasis.
Itmonitors theshort-term Interestraterisk fromtheNII (Net Interest
Income)perspectiveandlong-term interest rate risk from the EVE
(Economic ValueofEquity)perspective.Moreover, thestress testingof
fixedinterestinvestmentportfoliothroughsensitivityanalysisandequities
through scenario analysis is regularly conductedin your Bank. The
foreign exchange risk and equity pricerisk ismonitored
tooandmeasured throughdailymarkingto market, stop loss limits, VaR
limits, portfolio size limits, IGL, AGL etc. The Value at Risk for
the treasury positionsiscalculated
throughhistoricalsimulationmethod fora
tendaysholdingperiod,at99.0%confidencelevel.
Operational Risk
OperationalRiskisdefined(asperBCBSandRBI)astheriskoflossresultingfrominadequateorfailedinternalprocesses,peopleandsystemsor
fromexternal events. This includeslegal risk but excludes strategic
and reputational risks.OperationalRisk is integral part ofBank’s
all activities andbusiness. Hence, it is required to bemanagedwith
activeengagement.
Operational RiskManagement Committee (ORMC) of
yourBankhastheresponsibilityofcontrollingtheoperationalrisklossessothattheydonotcausematerialimpacttotheBank’sfunctioning.
The robust management of operational risk isreflected from
theeffectivenessof
thecontrolenvironment.TheBankhasinitiatedmeasurestomodifytheprocessesandinstallnewsystemstoimprovethecontrolenvironment.Roll
outofkeyRiskIndicatorsprogramme,RiskControlandSelfAssessmentProgrammeandRootcauseanalysisduringthecurrentyearwillfurtherstrengthenthecontrolenvironment.
YourBank isoneof thepromotersand initialequitycapitalsubscribers
to Cordex India Private Limited, which will bea
consortiumofOperationalRisk loss data in India for
thebankingindustry.
Basel III Implementation
The Basel III capital regulations have been implementedby Indian
Banks with effect from April 1, 2013. Thisimplementation requires
enhanced quality and quantity ofcapital on one side andmore
elaborate disclosure on
theother.ForaugmentingandimprovingCoreCapitalofBank,newmeasuresfortheinclusionofFCTR,DTAandRevaluationReserveshavebeenintroducedbyRBIinMarch2016.AlsofromMarch2016onwardsBankwillstartmaintainingCCBinphasedmannerandwillreach2.5%aspertheregulator.TheBank
is fullyequipped tocomplywithall
regulatorynormswithreasonablecushionovertheminimumregulatorycapitalrequirements.
Risk Based supervision (RBS)
The Department of Banking Supervision (DBS) at RBI hasadopted a
Risk Based Supervisory (RBS) approach
forReviewofSupervisoryProcessesofCommercialBanks.TheRBS
frameworkhasbeennamedas“SupervisoryProgramforAssessmentofRiskandCapital(SPARC)”andoneofitsimportantcomponents/toolsemployedintheprocessisthe“IntegratedRiskandImpactScoring(IRISc)”Model.RBSisdrivenbyOffsiteaswellasOnsitesupervisionwhichrequiresaBanktoputinplacerobustsystemsfordatacollectionandcompilationprocessandreporting.RBSwasrolledoutinyourBank
in 2012-13 supervisory cycle. SPARC is risk
focusedandintendedtoincreasetheeffectivenessofthesupervisoryprocess.ThetwomajorareasofassessmentunderSPARCareRiskandCapitalAssessment.TheriskassessmentforaBankcoverstheinherentrisks,risksduetogapsincontrolsfor
the inherent risks, risksdue togaps in theGovernance&Oversight
as also the culture anddegree of complianceto regulatory
requirements. These assessments
togetherdeterminetheAggregateRiskforaBank.TheAggregateRiskandCapitalAvailabletogetherdeterminetheRiskofFailureScore(RoFS)foraBank.
YourBankhassuccessfullycompletedthethirdcycleunderSPARCandisnowwellpositionedtoembarkonthefourthsupervisorycycleof2015-16.
Internal Control Systems
AuditCommitteeoftheBoardoverseesoverallInternalAuditfunction of
the Bank. The committee guides in
developingeffectiveinternalaudit,concurrentaudit,ISAuditandallotherinspection
& audit functions of the Bank. The
committeemonitorsthefunctioningoftheAuditCommitteeofExecutivesand
inspection / audit department in the Bank. Your Bankhas a Central
Internal Audit Division (CIAD) that examinesthe adherence to
systems, policies and procedures of
theBank.Theguidelinesreceivedonvarious issuesof internalcontrol
from Reserve Bank of India, Government of India,
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Directors’ Report¢›¸™½©¸ˆÅ¸½¿ ˆÅú ¢£œ¸¸½’Ä
BoardandAuditCommitteeoftheBoardhavebecomepartof the
InternalControlSystem for better riskmanagement.With rising
business levels year after year, Central
InternalAuditDivisionisconstantlyaimingtocurbtheinherentrisksthrough
effective control mechanism so as to
safeguardBank’sinterest.CIADoperatesthroughthirteenZonalInternalAuditDivisionstocarryoutauditofbranches/officesaspertheperiodicitydecidedbytheAuditCommitteeoftheBoard.AllthebranchesoftheBankarecoveredunderRiskBasedInternalAudit(RBIA).Outof4455branchesinspectedduring2015-16,
3671 branches (82.40%) were in Low Risk, 694branches (15.58%)were
inMediumRisk and 90 branches(2.02%)wereinHighRiskcategory.
Bankisundertakinganexerciseforrevampingofsystemandprocesses
focusingoncentralizationof activitiesbyuseoftechnology, imaging
solutions and digitization. The
wholegamutofauditapproachwillundergoachangewithextensiveuseof
technology,analytics,samplingandadvancedauditmethodology. Bank
proposes to engage a
KnowledgePartneroutofleadingAuditfirmstoassistinputtinginplaceanefficientauditmechanismanditsimplementation.
Operations and Services
Customer-Centric initiatives
YourBank ishighly responsive to thecustomerneedsandbelieves that
technology, products, processes and
humanresourcesmustbeleveragedfordeliveringsuperiorbankingexperience
to its customers. To further enhance
customerservicedeliveryandcustomerredressal,
‘CustomerServiceDepartment’ during the yearwas strengthened. Your
Bankhas taken several measures to improve the
customerserviceatitsbranchesandatthesametime,strengthenthecustomercomplaintredressalmachineryforfastdisposalofcomplaints.
During the year, an online Customer Satisfaction
Survey2015–2016waslaunchedfrom08.06.2015to30.09.2015bysendingemails
tocustomers toknowabout their
feedbacksoastotakeremedialmeasures.Thefindingsofthesurveyandsuggestedactionpointstoaddressthedeficiencieswereconsideredandnecessaryactionstaken.
Efforts to improve Customer Service at Branches
In yourBank, the feedback on quality of customer
serviceatbranchesisobtainedthroughtheBranchLevelCustomerService
Committeemeetings that are held everymonth
inwhichcustomersfromvariouscrosssectionsofthesocietyincluding
senior citizens and pensioners are invited. Thesuggestions/views
generated during the meetings arecollated so as to examine the
feasibility to implement
thesuggestionsforimprovingservicequality.
YourBankis focusedtowardsprovidingexcellentcustomerservice
throughalldeliverychannelsandhasbeenmakingcontinuous efforts for
enhancing the level of customersatisfactionby
leveragingtechnologytoprovidee-productsandalternativedeliverychannelse.g.ATM/Debitcards,POS,Internet
Banking, Mobile Banking, etc., best suited to
thediverseneedsofvariouscustomersegments.
Customer Service Committee of the Board
Your Bank has a Sub-Committee of Board for Customer
ServicewhichisheadedbyyourBanks’ManagingDirector&CEOwiththefollowingmembersason31stMarch2016:
1. ShriP.S.Jayakumar,ManagingDirector&CEO
2. ShriBBJoshi,ExecutiveDirector
3. ShriM.K.Mehta,ExecutiveDirector
4. ShriPremKumarMakkar,Director
5. ShriBharatKumarD.Dangar,Director
This Sub-Committee addresses the issues relating to
theformulationofpoliciesandassessmentof
theircompliancewhichbringsaboutconsistentimprovementinthequalityofcustomerservice.
Italsomonitorsthestatusof
thenumberofdeceasedclaimspendingforsettlementbeyond15dayspertaining
to depositors/locker hirers/depositors of
safecustodyarticles,andreviewsthestatusofimplementationofawardspassedbytheBankingOmbudsman
Standing Committee on Customer Service
Your Bank has also set up a Standing Committee onProcedures
andPerformanceAudit
onCustomerServices,comprisingofthreeeminentpublicpersonalitiesasmembersalong
with all the Executive Directors and four
GeneralManagersofyourBank.ThisCommitteeoverseestimelyandeffective
compliance of the RBI instructions on CustomerService and also
reviews the practices and
proceduresprevalentinyourBankandtakesnecessarycorrectivestepsonanongoingbasis.
ThesuggestionsemanatingfromtheBranchLevelCustomerService
Committee meetings are obtained by your Bank’sHead Office on
quarterly basis and placed before theStandingCommittee onProcedure
andPerformanceAuditon Customer Services. The feedback of the
committeemeetingsisthenputuptotheCustomerServiceCommitteeoftheBoardofDirectors.
Customer-Centric initiatives and Redressal of Complaints
Your Bank has a Board approved Policy on CustomerGrievance
Redressal and the same is placed on theBank’swebsite.YourBank
isalsohavingawell
structuredCustomerGrievanceRedressalMechanism,duetowhichtheoutstandingcomplaintshavealsocomedownsignificantly.TheGeneralManager,Operations&Services,isdesignatedas
Principal NodalOfficer for customer complaints in
yourBank.Moreover, all Zonal Heads and Regional Heads
aredesignatedasNodalOfficersfortheirrespectiveZonesandRegions.Further,thenamesofallNodalOfficersalongwiththeir
contact numbers are displayed in all the branches
ofyourBank.AquarterlyreviewnoteoncustomerserviceandgrievancesisplacedbeforetheBoardofDirectorscomprisingbreakupandpositionofthecustomers’grievancesreceivedbyyourBank.
Your Bank is also focused on Root Cause Analysis of
thecomplaints and suitable remedial measures includingupdation of
the systems, procedures & sensitization ofemployees for
enhanced customer service. Your Bankis having a web based online
complaint registration andredressal portal named as Standardized
Public GrievanceRedressSystem (SPGRS).An icon is placedon
thehomepage of your Bank’s website, through which your Bank’s
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customersaswellasnoncustomerscanlodgetheircomplaintonline.Thesystemgeneratestrackeridfortrackingthestatusofthegrievancesinfuture.Italsofacilitatesthecomplainantforuploadingcomplaintinpdfortxtformatuptoadocumentsizeof500kb.Moreover,thecomplainantscanre-opentheircomplaintswithin15daysofitsredressal,ifnotsatisfiedwiththe
resolution and the same complaint is escalated to
thenexthigherauthority/functionalheadfornecessaryactionattheirend.SPGRSalsohasafacilitytocapturesuggestions/feedbacks.
IntermsofRBIdirectives,yourBankhasappointedaChiefCustomer
Service Officer (Internal Ombudsman - CCSO)w.e.f.
29.01.2016.AsdirectedbyRBI, yourBankescalatesthose complaint cases
to CCSO where Bank decides toreject a complaint and / or decides to
provide only partialrelieftothecomplainant.
Compliance of Banking codes and Standard Board of
India(BCSBI)
YourBankisamemberoftheBankingCodesandStandardsBoard of India
(BCSBI) and has adopted the “Code ofCommitment to the Customers”
and the “Code of
Bank’sCommitmenttoMICROandSmallEnterprises”prescribedbytheBCSBI.ThesehavebeenplacedonyourBank’swebsiteandalsomadeavailabletocustomersatthebranches.
KYC/AMLCompliance
YourBankhaswelldefinedKYC-AML-CFTPolicy,which
isthefoundationonwhichtheBank’s“implementationofKYCnorms,AMLstandards,CFTmeasuresandobligationoftheBank
under Prevention of Money Laundering Act (PMLA)2002”isbased.
ThemajorhighlightsofKYC-AML-CFTimplementationacrossyourBankareasunder:
• The Bank electronically generates Cash
TransactionReports(CTRs)forsubmissiontoFinancialIntelligenceUnit-India(FIU-IND)
• The “AML Solution” for generating system-basedalertson
thebasisof transactions in
theaccountsofthecustomersisinplace.Thescopehasbeenfurtherwidenedwithadditionofmorealertdefinitionsasperrecommendations
of IBA working group. Your Bankhas a designated Director for
overall compliance ofKYC-AML-CFTguidelines.
•
CentralTransactionMonitoringUnit(CTMU)hasstartedfunctioningfrom18.02.2016atyourBank’sHeadOfficefor
exclusively monitoring of the transactions/
alertsgeneratedinAMLSolutionandfilingofSTRs,iffoundsuspicious.
•
ThereisascrutinyteamfordetectionandsubmissionofSuspiciousTransactionReports(STRs)totheFinancialIntelligenceUnit-India(FIU-IND).
•
System-basedRiskCategorization(fromAMLangle)ofBank’scustomers’accountshasbeendonehalfyearlyi.e.inJulyandJanuary.
• The Bank files Counterfeit Currency Reports (CCRs)and Non
Profit Organizations Transaction Reports
(NTRs)toFIU-IND,NewDelhieverymonth.YourBankgenerates Cross
BorderWire Transfer Reports
everymonththroughelectronicmodeforsubmissiontoFIU-IND,NewDelhi
•
TheBankisintheprocessofallottingUniqueCustomerIdentificationCode(UCIC)toallitsexistingcustomersaspertheRBIguidelines.
• Online verification of PAN from NSDL has beenoperationalised
as a major step to tackle moneylaunderingactivities.
• CBS system has been modified suitably so as notto accept cash
deposits of ` 50,000/- and above inabsenceofPAN/FormNo.60/61.
•
YourBankhasimplementedAadhaarbasede-KYCincollaborationwithUIDAI.Real-timecheckingofnamesfromUNSCR
list is available inall thebranchesasasteptowardsCFT.
• Online scanning of the customer’s name with thenames of the
individuals/ entities included in
theupdatedALQaida/TalibanSanctionslistoranyotherBlacklistissuedbyGovt.Authorities,whileopeningofaccountsandgeneratestheAMLAlertsonpredefinedcriteria.
• Your Bank has successfully participated in Pilot
RunofCentralKYCRegistryandcompletedtheprocessofinclusionoftheCKYCmandatoryfieldsintheAccountOpeningFormandmappedtheCKYCcodeswiththecodesinourCBSsystem.
For achieving full KYC compliance, following measures are taken
by the Bank:
• Acomprehensive listofKYCdocuments
isuploadedonyourBank’swebsite (www.bankofbaroda.com) fo