MIRA INFORM REPORT

Report Date :

20.10.2008

IDENTIFICATION DETAILS

Name :	BANK OF INDIA
Registered Office :	Orental Building, Espanade Road, Mumbai, Maharashtra
Country :	India
Financials (as on) :	31.03.2008
Date of Incorporation :	07.09.1906
Com. Reg. No.:	11-243
CIN No.: [Company Identification No.]	U99999MH1906PTC000243
Legal Form :	A Public Sector Commercial Bank. The Bank's Shares are Listed on the Stock Exchanges.
Line of Business :	Banking Services

RATING & COMMENTS

MIRA’s Rating :

Aa

RATING		STATUS	PROPOSED CREDIT LINE
71-85	Aa	Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums	Large

Maximum Credit Limit :	Large
Status :	Good
Payment Behaviour :	Regular
Litigation :	Clear
Comments :	Subject is a leading commercial bank, listed on the Stock Exchanges and owned by the Government of India. Available information indicates high financial responsibility of the Bank. Their trade relations are reported as fair. Financial position of the bank is satisfactory. Payments are usually correct and as per commitments. The bank can be considered good for normal business dealings at usual trade terms and conditions.

LOCATIONS

Registered Office :	Orental Building, Espanade Road, Mumbai, Maharashtra, India
E – Mail :	boigmcm@vsnl.net hoshares@bankofindia.co.in
Website :	http://www.bankofindia.com
Head Office :	Star House, 3^rd Floor, East Wing, E47, C-5, G Block, Bandra Kurla Complex, Bandra (East), Mumbai, Maharashtra, India
Tel. No.:	91-22-56684490 / 56684441 / 444 / 900
Fax No.:	91-22-56684491 / 56684442
E – Mail :	boigmcm@vsnl.net hoshares@bankofindia.co.in
Website :	http://www.bankofindia.com
Corporate Office 1:	14^th Floor Express Towers, Nariman Point, Mumbai-400021
Tel. No.:	91-22-22023020 (36 lines)
Fax No.:	91-22-22024701/56684558/22824212
E-Mail :	boicic@bom5.vsnl.net.in
Website :	http://www.bankofindia.com
Corporate Office 2:	C-5, G- Block, Star House, Bandra Kurla Complex, Bandra (East), Mumbai – 400051, Maharashtra, India
ZONAL OFFICES:	Andhra Pradesh Zone 2^nd Floor, P. T. I. Building, A. C. Guards, Hyderabad – 500 004, Andhra Pradesh, INDIA Nagpur Zone Bank of India Building, 3^rd Floor, S. V. Patel Road, P. B. No. 4, Nagpur – 440 001, INDIA Bihar North Zone Chanakya Place, Birchand Patel Marg, Patna – 800 001, Bihar, INDIA Bihar South Zone Pradhan Towers, Near Overbridge, Main Road (South), P. B. No. 141, Ranchi – 834 001, INDIA Eastern Zone 5, B. T. M. Road, Brabourne Road, Calcutta – 700 001, West Bengal, INDIA Northern Zone Jeevan Bharti, Level-5, Tower-1, 124 Connaught Circus, New Delhi – 110 001, INDIA North Western Zone S. C. O. No. 181-182, Sector 17-C, Post Box No. 6, Chandigarh – 160 017, Punjab, INDIA Orissa Zone 12 Satya Nagar, Janpath, Unit 3, Bhubaneshwar – 751 007, Orissa, INDIA Gujarat Zone Bank of India Building, Bhadra, Post Box No. 8, Ahmedabad – 380 001, Gujarat, INDIA Pune Zone 1162/6 Shivajinagar, Pune University Road, P. B. No. 944, Pune – 411 005, Maharashtra, INDIA Madhya Pradesh Zone Bank of India Bhawan, Arera Hills, Bhopal – 462 004, Madhya Pradesh, INDIA Southern Zone Garuda Building, 46 Cathedral Road, P. B. No. 4908, Gopalapuram Post Office, Chennai – 600 086, Tamilnadu, INDIA Mumbai North Zone `Caesar’s Court’, 2^nd Floor, 217 S. V. Road, Andheri (West), Mumbai – 400 058, INDIA Mumbai South Zone 70-80, Mahatma Gandhi Road, Post Box No. 238, Mumbai – 400 023, INDIA Uttar Pradesh Zone Mohini Mansion, Post Box No. 272, 1 Nawal Kishore Road, Lucknow – 226 001, Uttar Pradesh, INDIA
Branches :	Located at : Andhra Pradesh Assam Bihar Delhi Goa Gujarat Haryana Himachal Pradesh Jammu & Kashmir Karnataka Kerala Madhya Pradesh Maharashtra Meghalaya Orissa Punjab Rajasthan Sikkim Tamilnadu Tripura Uttar Pradesh West Bengal Chandigarh Diu Pondicherry
Overseas offices:	U.S.A. 277, Park Avenue, New York, N.Y. 10172-0083 San Francisco (Agency) 555, California Street, Suite 4646, San Francisco, California 94104 UNITED KINGDOM London Park House, 16 Finsbury Circus, London EC 2m7 DJ Birmingham 399, Stratford Road, Spark Hill, Birmingham B11 4JZ Leicester 105-107 Belgrave Road, Leicester LE4 6AS Manchester 79 Newton Street, Manchester M1 1EX Wembley 293, Harrow Road, Wembley, Middlesex HA9 6BD East Hum 320/322 Barking Road, East Ham, London E6 3BA CHANNEL ISLANDS Jersey 37 New Street, St. Hetlier, Jersey, JE2 3RA, Channel Islands FRANCE Paris 3, Rue Scribe 75009, Paris KENYA Nairobi Kenyatta Avenue, Post Box No. 30246, Nairobi, Kenya Mombasa Bank of India Building, Nikrumah Road, Treasury Square, P. B. No. 90684, Mombasa, Kenya SINGAPORE Singapore 138 Robinson Road, 01/02/03-01 Hong Leong Centre, Singapore 068906 INDONESIA Jakarta (Representative Office) 12^th Floor, Menara B. D. N., J. L. Kebon Sirih No. 83, Tromol Pos No. 3003/JKT, Jakarta – 10030 HONG KONG Hong Kong Ruttonje Centre, 2^nd Floor, Duddell Street, Central Hong Kong Kowloon Units 407-409, 4^th Floor, Hong Kong Pacific Centre, 28, Han Kow Road, Kowloon, Hong Kong WEST INDIES Cayman Islands P. O. Box 694, Grand Cayman, Cayman Islands, West Indies JAPAN Tokyo Mitsubishi Debki Building, 2-2-3 Marunouchi Chiyoda-Ku, Tokyo – 100 Postal Address Central P. O. 253, Tokyo – 100 Osaka 8-12 Honmachi 1, Chome, Chou-Ku, Osaka 541 Postal Address Higashi, P. O. Box 14, Osaka 540-91

DIRECTORS

Name :	Mr. T S Narayansami
Designation :	Chairman and Managing Director
Name :	Mr. M. Balachandran
Designation :	Chairman and Managing Director
Name :	Mr. K R Kamath
Designation :	Executive Director
Name :	Mr. A V Sardesai
Designation :	Nominee (RBI)
Name :	Mr. Rameshwar Prasad
Designation :	Director (Workman Employee)
Name :	Mr. V Eswaran
Designation :	Director
Name :	Mr. K K Gupta
Designation :	Director
Name :	Ms. Prabha Taviad
Designation :	Director(PartTime NonOfficial)
Name :	Ms. Shantaben Chavda
Designation :	Director(PartTime NonOfficial)
Name :	Mr. V B Kaujalgi
Designation :	Director(Shareholders)
Name :	Mr. M N Gopinath
Designation :	Director(Shareholders)
Name :	Mr. A D Parulkar
Designation :	Executive Director
Name :	Mr. Tarun Bajaj
Designation :	Nominee (Govt)
Name :	Mr. Indresh V. Singh
Designation :	Director
Name :	Mr. K S Sampath
Designation :

SHAREHOLDING PATTERN

AS ON 31.03.2008

Names of Shareholders	No. of Shares	Percentage of Holding
Shareholding of Promoter and Promoter Group2
Indian
Cental/State Government(s)	338580000	64.47
Public Shareholding3
Mutual Fund/Axis	14546286	2.77
Financial Institutions/Banks	8177434	1.56
Central/State Government(s)	750	0.00
Insurance Companies	39411905	7.50
Foreign Institutional Investors	79308142	15.10
Non Institutions
Bodies Corporate	6638992	1.26
Individuals
i) Holding nominal share capital upto Rs. 0.100 Million	33712790	6.42
ii) Holding nominal share capital in excess of Rs. 0.100 Million	1250517	0.24
Any Other(specify)
Overseas Corporate Bodies	102800	0.02
Non Resident Individuals	3164984	0.60
Any Others	280200	0.06
Total	525174800	100.00

BUSINESS DETAILS

Line of Business :

Banking Services

GENERAL INFORMATION

No. of Employees :	43141
Bankers :	Reserve Bank of India

Banking Relations :	Good
Auditors :	Ø Brahmayya and Company Chartered Accountants Ø S. K. Kapoor and Company Chartered Accountants Ø Prakash Chandra Jain and Company Chartered Accountants Ø M. Bhaskara Rao and Company Chartered Accountants Ø Chhajed & Doshi Chartered Accountants Ø M. Thomas & Company Chartered Accountants
Subsidiaries :	BOI Finance Limited [Fully Owned Subsidiary] Phiroze Jeejeebhoy Towers, 24^th Floor, Dalal Street, Mumbai – 400023, Maharashtra BOI Shareholding Limited Stock Exchange, Rotunda Building, Ground Floor, Dalal Street, Mumbai – 400023, Maharashtra, India The Bank of India (U.K.) Nominees Limited Park House, 16 Finsbury Circus, London EC 2M 7DJ Bank of India Finance (Kenya) Limited Kenyatta Avenue, Post Box No. 30246, Nairobi, Kenya BOI Assets Management Company Limited Phiroze Jeejeebhoy Towers, 24^th Floor, Dalal Street, Mumbai – 400023, Maharashtra Indo Zambia Bank Limited 86, Cairo Road, Post Box No. 35411, Lusaka, Zambia BOI Mutual Fund Securities Trading Corporation of India Limited (STCL) IL & FS Investment Managers Limited (IIMl) Central Depository Services (INDIA) Limited (CDSL) PT Bank Swadesi Bank of India Nominees (Singapore) Limited 138 Robinson Road, 01/02/03-01, Hong Leong Centre, Singapore, 068906
Associates:	BOI Mutual Fund Phiroze Jeejeebhoy Towers, 24^th Floor, Dalal Street, Mumbai – 400 023, Maharashtra Avadh Gramin Bank Baitarni Gramya Bank Bhandara Gramin Bank Chandrapur Gadchiroli Gramin Bank Dewas Shajapur Kshetriya Gramin Bank Farrukhabad Gramin Bank Giridih Kshetriya Gramin Bank Hazaribagh Kshetriya Gramin Bank Indore Ujjain Kshetriya Gramin Bank Nimbar Kshetriya Gramin Bank Rajgarh Sehore Kshetriya Gramin Bank Ranchi Kshetriya Gramin Bank Ratnagiri Sindhudurg Gramin Bank Singhbhum Kshetriya Gramin Bank Solapur Gramin Bank Securities Trading Corporation of India Limited Indo-Zambia Bank Limited Credit Capital Venture Fund (India) Limited 62, Basantlok, Vansant Vihar, New Delhi – 110 057, India Allied Bank of Nigeria Limited Allied House, 155/161 Board Street, M B 12785, Lagos, Nigeria

CAPITAL STRUCTURE

Authorised Capital :

No. of Shares	Type	Value	Amount
1500000000	Equity Shares	Rs.10/- each	Rs.15000.000 millions

Issued, Subscribed :

No. of Shares	Type	Value	Amount
526352600	Equity Shares	Rs.10/- each	Rs.5263.526 millions

Paid-up Capital:

No. of Shares	Type	Value	Amount
525174800	Equity Shares	Rs.10/- each	Rs.5251.748 millions
Add	Share Forfeited		Rs.7.398 millions
	Total		Rs.5259.146 millions

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS	31.03.2008	31.03.2007	31.03.2006
CAPITAL & LIABILITIES
Capital	5259.146	4881.400	4881.400
Reserves & Surplus	100634.764	54072.300	44957.500
Deposits	1500119.812	1198817.400	939320.300
Borrowings	71724.490	66208.300	58939.100
Other Liabilities & Provisions	110561.565	92690.700	74763.900
GRAND TOTAL	1788299.777	1416670.100	1122862.200
ASSETS
Cash & Balances with Reserve Bank of India	117418.505	71968.900	55884.100
Balances with Banks & Money at Call & Short Notices	59755.389	102086.500	58575.700
Investments	418028.767	354927.600	317817.500
Advances	1134763.264	849358.900	651737.500
Fixed Assets	24260.671	7893.000	8099.700
Other Assets	34073.181	30435.200	30747.700
GRAND TOTAL	1788299.777	1416670.100	1122862.200

PROFIT & LOSS ACCOUNT

PARTICULARS	31.03.2008	31.03.2007	31.03.2006
Interest Earned	123552.212	91803.300	70287.000
Other Income	21169.261	15629.500	11843.800
TOTAL	144752.7038	107432.800	82130.800
Interest expended	81259.517	57398.600	43967.200
Operating Expenses	26449.874	26084.200	21151.400
Provisions & Contingencies	16918.056	12718.300	9997.800
TOTAL	124627.447	96201.100	75116.400
Net Profit for the year	20094.026	11231.700	7014.400
Profit brought forward	5417.591	5417.600	2200.000
TOTAL	25511.617	16649.300	9214.400

QUARTERLY RESULTS

PARTICULARS	30.06.2008
Type	1^st Quarter
Sales Turnover	35483.200
Other Income	5664.200
Total Income	41147.400
Total Expenditure	10237.700
Operating Profit	30909.700
Interest	23675.500
Gross Profit	7234.200
Depreciation	0.000
Tax	1614.700
Reported PAT	5619.500

KEY RATIOS

PARTICULARS	31.03.2008	31.03.2007	31.03.2006
Credit Deposit Ratio	73.58	70.21	69.87
Investment Deposit Ratio	28.64	31.46	35.00
Cash Deposit Ratio	7.02	5.98	5.50
Interest Expended/Interest Earned	65.77	62.52	62.55
Other Income/Total Income	14.63	14.55	14.42
Operating Expense/Total Income	18.28	24.28	25.75
Interest Income/Total Funds	7.75	7.24	6.79
Interest Expended /Total Funds	5.10	4.53	4.25
Net Interest Income/Total Funds	2.65	2.71	2.54
Non Interest Income/Total Funds	1.33	1.23	1.14
Operating Expense/Total Income	1.66	2.06	2.04
Profit Before Provisions/Total Funds	2.32	1.89	1.64
Net Profit/Total Funds	1.26	0.89	0.68
Return On Net Worth(%)	27.58	21.25	15.37

LOCAL AGENCY FURTHER INFORMATION

HISTORY

Subject is a traditional bank have 101 year of experience in banking sector. It was started in the year 1906 under private ownership and continued till 1969 by the group of eminent businessmen in Bombay, later it was nationalised along with 13 other major Banks. The Bank came out with its maiden public issue in 1997. Company plays a vital role in several areas, such as Merchant banking, Housing Finance, Leasing, Venture capital, Credit card, Mutual Fund, Stock Broking etc. It was the first Indian Bank to open a branch outside the country. Company embarked on a major expansion plan of increasing its branch network in rural and semi urban areas after its nationalisation. During the year 2002 the bank returned Rs.1504.200 Millions of equity capital to Government, with this the government stake in the bank reduced to 69.3% from 76.5% earlier. 

The Bank has merged 2 of its branches in the year of 2004-05. As part of its strategy to give due focus to core banking, the bank has decided to prune down the non-core activity by rationalising the subsidiaries. It fulfilled the obligation of the assured returns to its investors in respect of two schemes floated by its subsidiary, Company Mutual Fund and another subsidiary, Company Finance. Company honored as "The Best Bank" in the implementation of Information System Security Polices from Institute for Development & Research in Banking Technology (IDRBT). 

Company has tied-up with ICICI Prudential Life Insurance for providing reference to customers for sale of their life insurance products against a referral fee. This scheme is being piloted at 7 centres, covering 70 branches and bank has also entered into an arrangement with ICICI Bank for using its wide branch network for their cash management services covering 1000 branches, which add to non interest income of the Bank. Company have also a strategic tie up with Securities Trading Corporation of India (STCI), in facilitating secondary market sale of Government Securities. As on May 2007, Company tied up with National Bulk Handling Corporation (NBHC) for lending to farmers against warehouse receipts at 10.25 per cent, 50 basis points (bps) lower than the normal agri lending rate of 10.75 per cent. 

Government of India rated the second Best Bank for 'Excellence in Lending to Tiny Sector' in 2005-06. Bank also received the Skock Challenger Award - 2007 for social impact. As on August 2007, BOI announced plans to provide free insurance cover on deposits which have a minimum base of Rs.0.100 Million and cheaper insurance cover on education loans to attract low-cost deposits and more customers and also bank has restructured its business model by segmenting its 2,734 branches in four categories - resources center, profit center, priority sector and general banking center. The resource center will have 522 branches under its fold which are mainly located in residential areas and will focus on mobilising low-cost deposits.  

Company is a public sector bank started credit card operations almost 30 years ago but has just seven lakh credit cards, hence bank decided to revamp its low key credit card operations to increase retail banking operations. As a enhancement, it is exploring an option to set up a subsidiary for credit card biz and may rope in a partner with expertise in this area addition to this the bank will also launch wealth management services. Company will open branches in Cambodia and Scotland and a subsidiary in Tanzania. Other areas the bank plans to expand include Canada, where a subsidiary will be set up soon, Auckland and Cairo. The African business is growing, as the capital involved is lower and recovery is higher. On future plans to invest in new businesses such as insurance and mutual funds, and increase its presence in the overseas market due to its recently-concluded Rs.13600.000 Millions qualified institutional placement (QIP). Insurance, for which it has a tie-up with Dai-ichi Insurance and Union Bank of India and also the bank is in talks with foreign players regarding a joint venture for mutual fund business.

PERFORMANCE HIGHLIGHTS: 

FINANCIAL PARAMETERS: 

• Operating profit Rs.37010.000 Millions.  

• All time high Net Profit of Rs.20090.000 Millions, recording 79% growth over previous year.  

• Capital Adequacy Ratio at 12.95% as against 11.75%, the previous year. 

• Net Worth Rs.86280.000 Millions, growth of 57% over March 2007. 

• Book Value per share Rs.1640.500 Millions

• Gross NPA ratio declined to 1.68% from 2.42% at March-end 2007.  

• Net NPA ratio declined to 0.52% as against 0.96% as on 31.03.07.  

• Total business reached at Rs.2648050.000 Millions recording a growth of Rs.581320.000 Millions (28.1%) Domestic business grew by 31.8% to reach the level Rs.2168040.000 Millions. 

• Total deposits increased by Rs.301300.000 Millions to reach the level of Rs.1500120.000 Millions, a growth of 25.1%. Domestic deposits increased by 32.4% to reach the level of Rs.1254160.000 Millions. Share of low cost deposits in the domestic deposits is 36% as on 31.03.08. 

• Gross credit touched Rs.1147930.000 Millions, growth by 32.3% with domestic credit recording a growth of 30.9% to reach level of Rs.913880.000 Millions. 

• Priority Sector lending constituted 49.33% of Net Adjusted Bank Credit and the share of Agricultural Credit to Net Adjusted Bank Credit stood at 19.73%. 

• Credit to SME sector grew from Rs.162110.000 Millions to Rs.204000.000 Millions (,25.84% growth as against 22.17% growth during the previous year. 

• Schematic Retail Credit grew by 22% from Rs.62350.000 Millions to Rs.76070.000 Millions. 

• Export Credit registered a rise of Rs.14020.000 Millions, i.e., 26.63 % growth. 

NEW PRODUCTS & SERVICES: 

• SB Diamond Customers (SB account holders having average quarterly balance of Rs.0.100 Million & above) apart from enjoying services of a Relationship Manager, now provided with free air accidental insurance upto Rs.0.500 Million. 

• Sale of gold coins of 99.9% purity was launched in a big way. During the year 0.105 Million gold coins were sold which earned an income of Rs.120.000 Millions. 

• Akshay Urja Shops under Retail Trade category and Star Dhanvantari Suvidha Scheme & Scheme for Tax Return Preparers under P&SE category were introduced. Features of their Priyadarshini Yojna, exclusively for women, have been revamped. 

• Star Mitra Personal Loan scheme, for extending financial support to physically challenged persons and Star Mahila Gold Loan Scheme to specifically cater to the needs of women were introduced as their commitment under 'Relationship beyond banking'. 

• Core Banking Solution implemented in 1525 branches. 

• Around 13000 ATMs made available to customers through shared ATMs network, besides the network of ATMs of VISA and Master Card. 

• RTGS enabled branches numbered 144.2 and NEFT enabled branches 1400. 

• Payment hub created to integrate application of various payment-systems like RTGS, SWIFT, etc.  

• Online facility made available for Educational Loan Application. 

• Solar Power System installed in 65 rural and semi-urban branches facing acute power shortage.  

• Technologies availed / implemented like Mobile technology to facilitate financial inclusion / payment solutions / e-commerce activities, wireless/ V-SAT connectivity at rural branches and Credit Card detail' through Internet Banking. 

BUSINESS INITIATIVES:

• Strategic Business Units or SBUs based on customer segmentation have been formed consequent to Organizational Restructuring. Branches have been categorised according to their business focus, i.e., Resource Centre, Profit Centre, Priority Sector Centre and General Banking Centre. 

• Special focus on SME financing is given through 50 specialised SME  branches in the country. 

• The retail credit business is receiving continued focus through the operationalised Retail Hubs' at 20 centres across the country working on the concept of single window banking. 

• To achieve objectives of fnancial inclusion, information technology initiatives implemented and the concept of business correspondents and business facilitators introduced. 

• A comprehensive domestic travel insurance scheme under tie-up with NICL has been launched specially for the Bank of India account holders. 

• The-up entered with ING Investment Management and Franklin Templeton Investments for sale of their mutual fund products, thereby reasing number of tie up arrangement with five leading MFs. 

• A stake of 76% acquired in PT Bank Swadesi Tbk, Indonesia for expanding international operations. 

FINANCIAL REVIEW: 

· FINANCIAL PERFORMANCE: 

The Bank recorded an operating profit of Rs.37012.100 Millions, growth of 54.54% as against previous year's growth of 40.78%. Net Profit increased to Rs.20094.000 Millions recording growth of 78.90% as against previous year's growth of 60.12%. 

The Net Interest Margin marginally declined largely due to fall in yield on investment. However, due to rise in volume of business mix by 28.13% (from Rs.2066720.000 Millions to Rs.2648050.000 Millions), net interest income glow by 22.93%. 

Non-interest income got quantum leap by 35.44%. Non interest income has covered 80% of operating expenses as against 60% in the previous year. 

The Financial performance of the Bank for the year 2007-08 is summarised below:

· SEGMENT-WISE PERFORMANCE: 

The Bank earned a profit before tax of Rs.26847.100 Millions during the year 2007-08. The contribution from different segments of operations were Treasury Rs.3348.000 Millions, Wholesale Banking Rs.10064.400 Millions and Retail Banking Rs.17509.200 Millions. The unallocable expenditure net of unaWcable income was Rs.4074.500 Millions during the year 2007-08. 

MANAGEMENT DISCUSSION AND ANALYSIS: 

OVERALL ENVIRONMENTS: 

BUSINESS ENVIRONMENT: 

Indian economy has moved decisively from a moderate growth to a higher growth phase, with an average growth rate of 8.7% since 2003. As per advance estimates of Central Statistical Organisation (CSO), the GDP is to grow at 8.7% in 2007-08 as against 9.6% in the previous year. The deceleration of growth in 2007-08 is spread across all the sectors. Agriculture grew at a rate of 2.6% (3.8% in 2006-07), Industry grew at 8.6% (10.6% in 2006-07), Manufacturing grew at 9.4% (12% in 2006-07) and Services sector is pegged to grow at 10.6% (11.2% in 2006-07). 

Inflation flared up from the beginning of the year 2007-08, remained to be an area of concern. It touched a 39 months high at 7.41% for the week ended 28th March 2008. The rise was mainly on account of prices of food produces (rice, pulses, edible oils and vegetables) and metals / ores due to supply constrains and hardening of global prices. The world prices of crude oil, commodities and food grains have risen sharply during the year. 

Fiscal deficit was 3.1% against a budgetary estimate of 3.3% of GDP. The Revenue deficit at 1.4% of GDP, lower than the budgetary estimate of 1.5% due to buoyant growth in government revenues. During the year 2007-08 the export grew by 23.02% reaching 5156 billion and import grew by 27.01% at $236 billion, recording a huge jump in trade deficit at $80 billion. External debts soared to $201 billion. At the same time, net foreign capital inflows witnessed far in excess of the current account deficit. The foreign exchange reserve reached $305 billion mark at the end of March 2008.  

Money supply was targeted by RBI to be contained at around 17 to 17.5% during the year. However, it increased by 20.7% on year on year basis. Reserve Money increased by 30.9% during the period compared to 23.7% previous year. 

The stock markets moved very high in record time and remained extremely volatile for some time. The BSE index rose from 13072 at the end of March 07 to 15644 at the end of March, 2008 recording peak of 21206 on 10.01.2008. The commodity market also showed signs of expansion in terms of turnover and number of transactions during the year. 

The Rupee appreciation continued in the year, except in the last quarter when the position appeared in reverse or at easing process. It appreciated by 8.9% against USD during the period April-February 2008 mainly due to the effect of depreciation of USD against all major currencies and the surge in capital in flows. 

INDUSTRY STRUCTURE AND DEVELOPMENTS: 

In the year 2007-08, banking sector generally witnessed corrective trends in growth of deposits and advances. Growth in Aggregate Deposits of Scheduled Commercial Banks (SCBs) at 22.2% was lower than 23.8% a year ago. On a y-o-y basis, non-food credit of SCBs expanded by 22.3% (against the RBI's target of 24-25% for the year 2007-08) against an increase of 28.5% a year ago. 

With a view to attaining capital adequacy under Basel II as well as meeting expansion needs, many banks resorted to raising capital under Tier I and II through various modes and instruments.  

During the year, 

· Bank Rate was kept unchanged at 6%.  

· Reverse Repo Rate and Repo Rate were kept unchanged at 6% and 7.75% respectively. 

· Cash Reserve Ratio (CRR) was increased to 6.5% w.e.f. 28.04.07, to 7% w.e.f. 04.08.07 and finally to 7.5% w.e.# 10.11.07. In order to check a run on inflation, RBI increased CRR by 0.75% in three trenches in the beginning of 2008-09. 

There were pressures for easing interest rates during the year. Public Sector Banks (PSBs) reduced their deposit rates, particularly at the upper end of the range for various maturities by 25-60 basis points. Interest rate ceiling on FCNR(B) deposits reduced by 50 basis points to LIBOR minus 75 basis points. Interest rate ceiling on NR(E)RA deposits also reduced by 50 bps to LIBOR/ Swap Benchmark Prime Lending Rates (BPLRs) of private sector banks moved from a range of 12.50-17.25% to 13.00 16.50%. The range of BPLRs of PSBs and foreign banks, however, remained unchanged at 12.50-13.50% and 10.00-15.50% respectively. 

Certain relief was provided in provisioning requirements of banks during the year. The risk weight on the residential housing loans to individuals was reduced from existing 75% to 50% for loans up to Rs.2.000 Millions. The risk weight on loans up to Rs.0.100 Million against gold and silver ornaments was reduced to 50% from the existing level of 125%.  

OPPORTUNITIES: 

As 70% of the rural population is still unbanked and Financial Inclusion is an important goal for the Banks, there is immense potential for the Bank to grow. The Union Budget 2008-09 also threw open a number of opportunities for the Indian Exonomy. Budget proposal which may have positive impact on banking sector in general and PSBs in particular are: 

• The Union Budget 2008-09 announced a debt waiver and debt relief scheme for the farmers for the agricultural loans disbursed by scheduled commercial banks, regional rural banks and cooperative credit institutions up to March 31, 2007 and overdue as on December 31, 2007. 

• 288 PSU Bank branches are to be opened in backward areas by March 2009. 

• Commercial banks, including RRBs, to add at least 250 rural household accounts every year to each of their rural & semi-urban branches. 

•  Eligibility criteria for DRI borrowers would be annual family income of Rs.18000 in rural areas and Rs.24000 in urban areas. 

• Agriculture Credit disbursement target of Rs.2800000.000 Millions for the year 2008-09, of which 75% farm credit to be disbursed by Scheduled Commercial Banks. 

• Banking Cash Transaction Tax to be withdrawn from April 01, 2009. 

• Income Tax Act to be amended so that reverse mortgage would not amount to 'transfer' and the revenue received by senior citizens would not be 'income'. 

•  LIC to cover all women SHGs linked to banks. 

•  Parent company can set off dividend received from its arm against dividend distributed by it. 

•  The corpus of Rural Infrastructure Development Fund to be raised to Rs.140000.000 Millions

•  National Rural Employment Guarantee Scheme to cover all 596 rural districts in 2008-09 with initial provision of Rs.160000.000 Millions

•  Allocation of Rs.102000.000 Millions for increasing the resource base of NABARD, SIDBI and NHB. 

Challenges:

• Inflation rate hovering over 7% will put pressure for upward revision in interest rate scenario, but banks have to restrain as far as possible due to immense competition. Resultant reduction in Net Interest Margin has to be compensated by matching increase in Non Interest Income. 

• The CRR increase, as measure for control of inflation will take some liquidity away from banking sector. This will have effect on profitability also. 

• Measures required in maintaining the assets quality in the environment of declining property prices. 

• Financing to agriculture needs to be stepped up substantially to make good the reduction in outstanding level due to debt waiver and debt relief scheme. 

 BUSINESS REVIEW: 

 DEPOSITS: 

Bank's deposits increased by Rs.301300.000 Millions to Rs.1500120.000 Millions during the year recording a growth of 25.13%o. The domestic deposits stood at Rs.1254160.000 Millions witnessing a growth to the tune of Rs.306720.000 Millions or 32.37% as against previous year's growth of 21.7%. Global their growth in aggregate deposit was much higher than the growth of All Scheduled Commercial Bank's, which was at 22.2%. Non-Resident Deposits of the Bank increased from Rs.107580.000 Millions as on March, 2007 to Rs.109090.000 Millions which constituted 8.70% of aggregate domestic deposits. 

Savings Bank deposits grew by 14.4% and Current deposits logged a growth of 37.9%, resulting in growth of Low Cost deposits by 19.4%. The share of low cost deposits comprising of savings and current deposits to total deposits is 36%. 

The Bank has a well diversified deposit base with 12.77% of domestic deposits coming from rural areas, 13.15% from semi urban, 20.37% from urban and 53.71 % from metro areas. The bank's total clientele base of 28 million consisted of 25.7 million depositors and 2.3 million borrowers as at end of March 2008. 

ADVANCES:

The gross domestic credit of, the Bank registered a growth of 30.91% from Rs.698110.000 Millions on 31.03.2007 to Rs.91380.000 Millions. This growth rate is better than last year when it was 29%. In the year, the non-food credit of schduled commercial Banks grew by 22.3%. Robust sanctions/ disburment to Large corporate, SME and Agriculture enabled the growth.  

Under Large Corporate, bank added 169 accunts. 13 corporate Banking Branches and 7 domestic overseas branches continue to the specialised credit require of corporate / borrowers exporters.  

INFRASTRUCTURE FINANCE: 

During the year, the Bank sanctioned credit limits Fund Based Rs.141210.000 Millions and Non Fund Based Rs.42410.000 Millions under infrastructure covering power generation, telecommunications, ports, roads, construction contractors etc. 

TECHNICAL APPRAISAL & LOAN SYNDICATION: 

The Bank's Technical Appraisal Department, manned by highly experienced engineers, continued appraisals of industrial projects, which helped the Bank in picking up right kind of projects to lend, reducing technology related risks and simultaneously earning the Bank fee based income of Rs.77.100 Millions. 

The Bank has also started taking up Loan Syndication assignments for which the department handled preparation of Information Memorandum apart from conducting TEV Study, earning additional fee based income of Rs.150.000 Millions.

EXPORT CREDIT: 

The Bank is very active in meeting the importers and exporter clients' financial requirements in domestic currency and also in foreign currency. Their 189 branches across the country are authorized to handle foreign exchange business and cater to the credit/ foreign exchange needs of importers & exporters. The Bank's export credit registered a growth of Rs.14019.000 Millions i.e. 26.63% increase over March 2007 and reached a level of Rs.66659.000 Millions as on 31st March, 2008. The share of export credit to net adjusted bank credit as at March 2008 was 10.01%.  

Financial requirements of both exporters and non-exporters are met through ECB at our overseas branches and Foreign Currency loans at domestic branches. The total amount of such advances as at 31-03-2008 was USD 1378.63 million (Comprising of ECBs USD 530.76 million and Foreign Currency Loan of USD 847.87 million) equivalent to Rs.56248.100 Millions. The bank also extended pre-shipment and post-shipment export credit in foreign currency and the amount outstanding as at 31-03-2008 was USD 376.47 million (equivalent to Rs.15103.900 Millions). 

RETAIL CREDIT: 

The growth in retail sector continued as a thrust area during the year. The retail credit business is receiving continued focus by the bank through the operationalised Retail Hubs' at 20 centres across the country working on the concept of single window banking. With the Retail Hubs coming into operation, the turnaround time is reduced and the credit delivery is made hassle free for prospective retail clients. 

During the year 2007-08, Retail Credit increased from Rs.174270.000 Millions to Rs.193780.000 Millions and constituted 21.70% of non-food credit as on 31.03.2008. The Schematic Retail Credit comprising of Home Loan, Mortgage Loan, Autofin, Personal Loans and Education Loan recorded a growth of 13% with focus on building a quality portfolio. 

Bank has continuously fine tuned its interest rates on retail loans from time to time keeping in view the market trends. Extra care was taken to insulate existing Home Loan borrowers even under floating rate schemes, from periodic increase in interest rates by making the increased interest rates applicable only to new Home Loan bcrrowers. This customer centric approach has ensured a healthy portfolio of home loans in an increasing interest rate scenario. To improve marketability Bank has provided free Personal Accident Insurance Cover to home loan borrowers. Also as an added incentive, Bank has come out with a group insurance scheme in tieup with ICICI Prudential Life Insurance Company Limited  

In order to sustain a higher growth in consumer credits, Bank has reduced the interest rates on consumer loans like personal loans (including loans to pensioners) as well as autofin loans. 

The Education Loan portfolio has been a popular product across India and has registered a robust 42% growth during the year. The portfolio has increased from a level of Rs.7200.000 Millions in March 07 to Rs.10190.000 Millions by 31.03.08. Bank has reduced the applicable interest rates on education loans upto Rs.0.075 Millions from the earlier level of 12.5% p.a. to 11% p.a. To protect the interests of the students and their parents who avail of educational loans an optional life insurance cover with very competitive premium rate is made available. 

In tune with their emphasis on 'Relationship beyond banking', the bank has formulated Star Mitra Personal Loan Scheme, for extending financial support to physically challenged persons for purchase of durables, sophisticated aids and appliances to promote their rehabilitation. Bank has also introduced Star Mahila Gold Scheme do specifically cater to the needs of women. 

PRIORITY SECTOR ADVANCES:

Priority Sector guidelines mandate banks to lend to those sectors that impact large sections or the population, the weaker sections and the sectors which are employment-intensive such as agriculture and tiny & small enterprises. The Bank is always in the forefront in the area of rural development with focussed attention on agriculture sector. 

During the year under review, Priority Sector advances increased from Rs.277650.000 Millions to Rs.328270.000 Millions thereby recording an incremental growth of Rs.50620.000 Millions, registering a growth of 18.23% over previous year. Priority Sector advances account for 49.33% of Net Bank Credit (NBC) as against stipulated benchmark of 40%. Total agricultural advances constitute 19.73% as against stipulated benchmark 18% of NBC. Direct Agricultural advances account for 13.97% against statutory requirement of 13.50% of NBC. The advances to weaker sections constitute 12.09% as against stipuled level of 10% of NBC. 

FOREX BUSINESS: 

The forex business handled by the bank showed a robust growth. While Export turnover during the year 2007-08 was Rs.283260.000 Millions, the Import turnover was Rs.244710.000 Millions for the year 2007-08. The Bank continues to be a leading player in forex market. The aggregate turnover of Bank's Treasury Branch during the year 2007-08 was Rs.13652520.000 Millions. 

TREASURY OPERATIONS: 

Bank continued to play an active role in all segments of the market Funds, Equity, Forex and Bonds during the year 2007-08. During the year the equity market reached historic levels but fell sharply in January 2008. Bank earned substantial income from the various 1POs and followon offers. The equity desk made significant contribution towards Treasury income. 

INTERNATIONAL OPERATIONS: 

With the inauguration of Representative Office in Johannesburg (South Africa) on 15th July 2007, the number of Overseas Offices has increased to 26.The bank has presence in 4 continents and 14 countries covering all the major financial centres such as London, New York, Paris, Tokyo, Singapore and Hong Kong. Bank has acquired 76% stake in PT Bank Swadeshi Tbk, a listed bank in Indonesia during the year. 

Apart from trade finance and other loans, bank has started acting as Mandated Lead Arranger (MLA) and Joint Book Runner (JBR) for Multicurrency International Syndication Loans and arranged loan in USD, JPY, EUR and GBP currencies for Indian Corporates engaged in Auto, Pharma, Textile and IT sectors for their overseas expansion/ acquisition and Joint Ventures. 

As at 31st March 2008, the level of Customer Deposits stood at Rs.199670.000 Millions recording arise of Rs.21240.000 Millions (11.91%) over previous year's figure of Rs.178430.000 Millions. The level of Advances stood at Rs.234040.000 Millions recording a rise of Rs.64240.000 Millions (37.83%) over the last year's level of Rs.169800.000 Millions. Investment at Rs.43400.000 Millions has shown a decline of Rs.1850.000 Millions (4.09%) over Rs.45250.000 as at March 2007. 

Operating profit for the year ended March 2008 at Rs.5541.500 Millions has shown an upward trend from Rs. 4067.500 Millions for the year ended March 2007. Correspondingly, Net profit at Rs.3026.800 Millions for March 2007 has also increased to Rs.3516.700 Millions. 

AWARDS:

Bank was awarded International Award for Excellence in outsourcing sponsored by Everest Group & Forbes at New York, USA. 

BANK'S SUBSIDIARIES/ASSOCIATES: 

• REGIONAL RURAL BANKS (RRBS): 

The Bank has sponsored 7 Regional Rural Banks (after consolidation from original 16 RRBs) operating in five States. These RRBs are operating in 44 districts (up from 37 in the previous year), with a network of 982 branches and 14 satellite branches. 

All the seven RRBs have registered profit during the year ended 31.03.2008. The Aggregate Deposits and Advances of RRBs as on 31.03.08 stood at Rs.62730.000 Millions and Rs.30490.000 Millions respectively. These RRBs have played a significant role in achieving financial inclusion in their respective area of operation by way of opening No Frill accounts, issuance of Kisan Credit Cards & other card products, forming of Farmers Clubs and Joint Liability Groups, financing for Nirmal Gram Yojna, etc. The RRBs have already ventured into other business activities such as Bancassurance, undertaking Government business, pension payments, etc. RRBs have also made progress in the field of Information Technology thereby achieving 96% computerization at the end of March, 2008. 

• BOI SHAREHOLDING LIMITED (BOISL):

Bank's association with the Capital Market spans a period of nine decades. The clearing and settlement function of Bombay Stock Exchange (BSE) is being handled by the Bank since 1921. 

In 1989, Bank set-up BOI Shareholding Ltd. (BOISL), a joint venture with BSE. The Bank is holding 51% of its paid up capital of Rs.20.000 Millions, to manage the clearing house activities of the Stock Exchange. 

The company has been carrying out the rolling and weekly settlements of trades executed by member brokers operating on the Exchange. BOISL is also a Depository Participant (DP) of both the Depositories viz. the National Securities Depository Limited (NSDL) and the Central Depository Services (India) Limited (CDSL) and provides depository services to the clearing members and investors. BOISL is the first Securities Clearing House in the country to have been awarded the ISO 9001-2000 ISO Certification. 

BOISL earned a net profit of Rs.94.800 Millions during 2007-08 as against Rs.39.654 Millions earned during 2006-07. For FY 2006-07 BOISL declared highest dividend of 100%. During the current FY 2007-08 the Company has declared an Interim dividend of 80%. 

• SECURITIES TRADING CORPORATION OF INDIA LIMITED (STCI): 

STCI Limited was one of the leading Primary Dealers in the country, promoted by RBI, along with major financial institutions and Banks in 1999 with the objectives of widening the gilt and other debt security market through development of a vibrant secondary market. Bank of India with 29.96% holding is the single largest stakeholder in STCI having Paid Up Capital of Rs.5000.000 Millions. The Company is an associate company of the Bank in terms of Accounting Standards 21 (AS-21) of the Institute of Chartered Accountants of India. 

With growing perception that Primary Dealership by itself is no longer an attractive business, STCI decided to hive off the Primary Dealership business to its new subsidiary namely STCI Primary Dealer Limited which commenced its operations from 25th June 2007. The Subsidiary which started on a cautious note has made steady progress since then and its operations so far have been profitable. 

STCI acquired 100% share capital of UTI Securities Limited, (UTISEL) in April 2006 from the specified undertaking of Unit Trust of India. UTISEL is a category / merchant banking company registered with SEBI and engaged in investment banking, corporate advisory services, institutional/ retail equity, derivative broking, portfolio management services, depository services, etc. In order to bring in quick revenues and to improve its bottom line, STCI entered into a definitive agreement with Standard Chartered Bank Mauritius Limited (SCBM), a subsidiary of Standard Chartered Bank. As per terms of Agreement, SCBM will acquire 49% stake initially with a option to acquire another 25.9% stake in 2008 and further option to acquire 100% stake in 2010. STCI will stand to gain a minimum profit of Rs.397.000 Millions to a maximum profit of Rs.797.000 Millions by selling of its stake to SCBM. 

During the FY 2007-08, STCI has made a PAT of Rs.250.500 Millions.

• INDO ZAMBIA BANK LIMITED (IZB): 

IZB is a joint venture of three Indian Banks viz. Bank of India, Bank of Baroda, Central Bank of India and Government of Zambia. Each of the Indian Banks holds 20% of the share capital, whereas Government of Zambia holds 40% of the share capital. Indo-Zambia Bank Ltd. is a line example of a successful joint venture. It enjoys the patronage of two friendly republics, the Government of the Republic of Zambia and the Government of India. 

•  PT BANK SWADESI TBK, INDONESIA: 

During FY 2007-08 the Bank acquired a stake of 76% in PT Bank S wade Tbk for a total consideration of Indian Rs.37.700 Millions. The Bank has three Directors on the Board of PT Bank Swadesi Tbk. 

•  STAR UNION DAI-ICHI LIFE INSURANCE COMPANY LIMITED 

 A Joint Venture Agreement was signed by our Bank with Union Bank of India and Dai-ichi Mutual Life Insurance Co. Japan., (DMLIC) on 6th December 2007 for entering into Life Insurance Business. Bank of India will be holding 51% stake, DMLIC will hold 26% stake and the remaining stake of 23% will be held by Union Bank of India. The Authorised Capital of the company will be Rs. 250 crore, and all partners will contribute to equity of the company in the agreed pattern. Star Union Dai-ichi Life Insurance Company Ltd. is yet to receive approval from IRDA to commence business.  

STRATEGIC INVESTMENTS/ALLIANCES: 

• Central Depository Services (India) Limited (CDSL): 

The company was promoted in 1997 by the Stock Exchange, Mumbai and Bank of India along with other Banks. The main objective of promoting CDSL was to accelerate the pace of dematerialisation of scrips, bring wide participation of investors in the capital market and to create a competitive environment as country's second depository. Bank holds 9.57% stake in the paid-up capital of Rs.1045.000 Millions of CDSL. 

• ASREC (India) Limited: 

The company was floated by the specified undertaking of the Unit Trust of India to undertake securitisation and asset reconstruction activities. The Company was granted Certificate of Registration by RBI under the SARFAESI Act, 2002 in the second half of FY 2004-05 and has since commenced full-fledged operations. Bank has an investment of 15.30% in the equity capital of the company and expects to earn good returns thereon with growth in activities of the company.  

• Credit Information Bureau (India) Limited (CIBIL): 

CIBIL is the first credit information bureau in the Country, incorporated in August, 2000 for providing credit information and risk analysis services to the banking and financial services sectors. The company launched its consumer bureau operations in FY 2004-05 and commercial bureau operations during 2006-07. Bank acquired a stake of 5% in the equity share capital of the company during 2005-06 and expects to derive synergies through its association with the company. 

• Multi-Commodity Exchange of India Limited (MCX):  

MCX is a new generation multi-commodity exchange undertaking future trading in multi commodities at the national level. The Exchange commenced operation during FY 2004-05. Bank has a nominal stake of 2% by way of equity participation in the capital of MCX with a view to be associated with one of the major commodity exchanges. Bank also handles clearing bank functions of the Exchange through Bullion Exchange Branch. MCX paid an interim dividend of 220% for FY 2006-07, and have declared an Interim Dividend of 50% during the current financial year. 

• National Collateral Management Services Limited (NCMSL): 

National Collateral Management Services Limited is promoted by the National Commodity and Derivatives Exchange Limited (NCDEX). It was incorporated on 28.09.2004 to promote and provide collateral management services for securing, managing and controlling securities and commodities. It offers various services for the development of trades on commodity exchange such as valuation, grading, insuring, securing, storaging, distributing, clearing and forwarding of securities and commodities etc. Bank holds a stake of 10% (Rs.30.000 Millions) in the equity capital of the company, thus providing opportunities to the bank to harness its association with NCMSL for credit lines to its members and clients. 

• SME Rating Agency of India Limited (SMERA): 

SMERA was set up during FY 2005-06 by SIDBI in association with Dun & Bradstreet, one of the credit rating agencies. SMERA's primary objective is to provide comprehensive, transparent and reliable ratings which would facilitate greater and easier flow of credit to SME sector. Bank has a nominal stake of 4% in the equity capital of the company. 

• National Commodity & Derivatives Exchange Limited (NCDEX): 

NCDEX is one of the prime commodity exchanges, promoted by the National Stock Exchange and other FIs and permitted by the Forward Market Commission to undertake on-line screen based trades in agricultural and other commodities. Bank has joined NCDEX as a business associate and is empanelled as a clearing bank. The functions are being handled through the Stock Exchange Branch. Bank also extends DP services to the traders/members of NCDEX under NSDL and CDSL through its DP offices. Bank expects to leverage the association for business growth. 

BRIEF PROFILE OF THE DIRECTORS WHO JOINED THE BANK DURING THE YEAR

Shri T.S. Narayanasami

Shri T.S. Narayanasami, aged 58 years, is the Chairman and Managing Director of our Bank, with effect from June, 4, 2007. He holds a Bachelor’s degree of Science from University of Madras. He started his career in Union Bank of India in 1969 and held various positions and was promoted as General Manager of Union Bank of India to head the bank’s operation at Delhi. He was appointed as the Executive Director of Punjab National Bank from 2000 to 2004. Subsequently he was appointed as the Chairman and Managing Director of Andhra Bank from April 2004 to May 2005 and from June 2005 he was appointed as a Chairman and Managing Director of Indian Overseas Bank. He is a recipient of “TA Pai Memorial BEST BANKER Award by Dehali, Kannadiga, a Kannada Monthly Magazine. He has over 38 years experience in banking sector.

Shri A.D. Parulkar

Shri A.D. Pariulkar was Executive Director of the Bank w.e.f. June 6, 2007. He held a Bachelor’s Degree of Commerce from Shivaji University, Kolhapur and was also a Certified Associate of Indian Institute of Bankers. He started his carreer from Bank of Baroda in 1971. He had a wide range of experience in handling project finance syndication and headed various international branches of Bank of Baroda. He was the head of the Brussels branch and was also the General Manager of the US operation of Bank of Baroda. He had over 36 years of experience in banking sector with nearly 7 years of experience in International Banking. He expired on 24th February 2008.

Shri Tarun Bajaj

Shri Tarun Bajaj, aged 45 years, is the Government Nominee Director of their Bank, with effect from July 5, 2007. He holds a Masters in Business Administration from Indian Institute of Management Ahmedabad and Post Graduation Degree from London School of Economics and Political Sciences. He is also a qualified financial analyst. Mr. Tarun Bajaj is presently in the Indian Administrative Service as the Joint Secretary (Insurance & Banking), Department of Financial Services, Ministry of Finance, New Delhi.

Shri K.S. Sampath

Shri K.S. Sampath, aged 48 years, is the part-time non-official Director of their Bank, w.e.f. Janury 1, 2008. He holds Bachelor’s Degree in Science from University of Madras. He is also a Fellow of Institute of Chartered Accountants of India. He was a Director of Punjab National Bank between November 2001 and November, 2004. He has been practising as a Chartered Accountant.

Shri Indresh Vikram Singh

Shri Indresh Vikram Singh, aged 56 years, is the part-time non-official director of our Bank, w.e.f. January 2, 2008. He holds Master’s Degree in Science (Physics) from Magadh University. He was Chairman of a Cooperative Bank for 10 years. He is an agriculturist, educationist and social worker.

AS PER WEBSITE:

MANAGING DIRECTOR

Shri M. Balachandran took charge as the Chairman and Managing Director of Bank of India on 9th June 2005, prior to which he was Executive Director of the Bank.

Bank of India is 100 year old and a Public Sector Bank with majority share holding by Govt. of India, with 2622 branches in India and 23 branches/offices in 12 countries abroad with assets of value in excess of US$ 25 billion.

Shri Balachandran joined Bank of Baroda as a Specialist Direct Recruit Officer in 1970 after completing his Masters degree in Science. Starting his career as a Banker in the State of Tamilnadu, he has rich knowledge of various aspects of Banking, covering Priority Sector Finance, Commercial Credit and International Banking. In addition to various linguistic territorial exposures, he has vast experiences of managing different categories of branches, as a Regional Head and Zonal Head besides in the Corporate Office of the Bank.

He is also credited with evolving Policies and Guidelines for enhancing the flow of timely credit to activities identified as national priority, particularly Agriculture, Rural Finance and SSI lending and has been associated with various Committees of NABARD and IBA.

He was the Chief Executive of Bank of Baroda's USA, Bahamas & Guyana operations before he was elected as the Executive Director, Bank of India. While at New York he was also Chairman of Bank of Baroda (Guyana) Inc., Georgetown, Guyana, South America.

He was a Director of Indo Zambia Bank Limited, a joint venture in Zambia, between Indian Public Sector Banks and Government of Zambia. He has been a Director of ASREC (India) Limited, an asset reconstruction company. Presently Shri Balachandran is the Chairman of BOI Shareholding Limited, and is a Director of Agriculture Finance Corporation Limited, and NABARD Consultancy Services Limited

Shri Balachandran is also on the Managing Committee of Indian Bank's Association, Governing Council member of Indian Institute of Banking and Finance and Reserve Bank of India's College of Agricultural Banking.

EXECUTIVE DIRECTOR

Shri K.R. Kamath assumed the charge as the Executive Director on 19.05.2006 . Shri Kamath was a General Manager in Corporation Bank since 2002, in charge of Information Technology, Information Security, Management Information System and Integrated Risk Management.

A brilliant academician, Shri Kamath had secured "VI rank" in University of Mysore in II year B.Com in the year 1975 and was adjudged as the "Best Outgoing Commerce Student" of the college in the year 1976. He is a Certified Associate of Indian Institute of Bankers.

He was promoted to Executive cadre in 1994 and was posted as Regional Manager for Collection And Payment Services (CAPS), a "Specialised Business Unit" set up on an experimental basis by the Bank. Contribution of Shri Kamath in building a strong team, spearheading the marketing activities of CAPS and positioning CAPS as the flag ship product of the Bank, has earned him special recognition.

During his tenure in Information Technology Division in Corporation Bank, Shri Kamath was responsible for 100% automation of the Branches, migration of about 88% of business to Core Banking Solution, positioning the 900 strong ATM network of the Bank, putting in place Wide Area Network of the Bank, introduction of Internet Banking and implementing the Information Security System. During this period, the Bank received various awards from IDRBT & IBA for the technology lead of the Bank.

Shri Kamath has secured various Corporate Awards instituted by the Bank such as, Super Productivity Award, SOGian Award, Chairman's Club Membership and Regional Leadership Award. He was also conferred with "Sanman Award" by Joint Commissioner of Income Tax, Calicut Range, Calicut for the financial year 1997-98 in the year 2000.

He was one of the participants of the Technology Tour of US organised by TATA IBM in the year 1997-98. Shri Kamath has undergone various training programmes including workshop/seminars at IIM, Ahmedabad, IBA and BTC.

Known for his conceptual clarity, communication skills and ability to build strong result oriented teams, Shri Kamath has been one of the key members of the Team that has conceptualised and initiated steps to implement Organisational Transformation Project of Corporation Bank. With 29 years experience of working in various capacities in Corporation Bank, he will now add strength to the Team 'Bank of India'.

CMT REPORT (Corruption, Money Laundering & Terrorism]

The Public Notice information has been collected from various sources including but not limited to: The Courts, India Prisons Service, Interpol, etc.

1] INFORMATION ON DESIGNATED PARTY

No exist designating subject or any of its beneficial owners, controlling shareholders or senior officers as terrorist or terrorist organization or whom notice had been received that all financial transactions involving their assets have been blocked or convicted, found guilty or against whom a judgement or order had been entered in a proceedings for violating money-laundering, anti-corruption or bribery or international economic or anti-terrorism sanction laws or whose assets were seized, blocked, frozen or ordered forfeited for violation of money laundering or international anti-terrorism laws.

2] Court Declaration :

No records exist to suggest that subject is or was the subject of any formal or informal allegations, prosecutions or other official proceeding for making any prohibited payments or other improper payments to government officials for engaging in prohibited transactions or with designated parties.

3] Asset Declaration :

No records exist to suggest that the property or assets of the subject are derived from criminal conduct or a prohibited transaction.

4] Record on Financial Crime :

Charges or conviction registered against subject: None

5] Records on Violation of Anti-Corruption Laws :

Charges or investigation registered against subject: None

6] Records on Int’l Anti-Money Laundering Laws/Standards :

Charges or investigation registered against subject: None

7] Criminal Records

No available information exist that suggest that subject or any of its principals have been formally charged or convicted by a competent governmental authority for any financial crime or under any formal investigation by a competent government authority for any violation of anti-corruption laws or international anti-money laundering laws or standard.

8] Affiliation with Government :

No record exists to suggest that any director or indirect owners, controlling shareholders, director, officer or employee of the company is a government official or a family member or close business associate of a Government official.

9] Compensation Package :

Our market survey revealed that the amount of compensation sought by the subject is fair and reasonable and comparable to compensation paid to others for similar services.

10] Press Report :

No press reports / filings exists on the subject.

CORPORATE GOVERNANCE

MIRA INFORM as part of its Due Diligence do provide comments on Corporate Governance to identify management and governance. These factors often have been predictive and in some cases have created vulnerabilities to credit deterioration.

Our Governance Assessment focuses principally on the interactions between a company’s management, its Board of Directors, Shareholders and other financial stakeholders.

CONTRAVENTION

Subject is not known to have contravened any existing local laws, regulations or policies that prohibit, restrict or otherwise affect the terms and conditions that could be included in the agreement with the subject.

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.48.68
UK Pound	1	Rs.84.37
Euro	1	Rs.65.70

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	8
PAID-UP CAPITAL	1~10	8
OPERATING SCALE	1~10	8
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	9
--PROFITABILIRY	1~10	7
--LIQUIDITY	1~10	8
--LEVERAGE	1~10	8
--RESERVES	1~10	8
--CREDIT LINES	1~10	8
--MARGINS	-5~5	-
DEMERIT POINTS
--BANK CHARGES	YES/NO	YES
--LITIGATION	YES/NO	NO
--OTHER ADVERSE INFORMATION	YES/NO	NO
MERIT POINTS
--SOLE DISTRIBUTORSHIP	YES/NO	NO
--EXPORT ACTIVITIES	YES/NO	YES
--AFFILIATION	YES/NO	YES
--LISTED	YES/NO	YES
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		72

This score serves as a reference to assess SC’s credit risk and to set the amount of credit to be extended. It is calculated from a composite of weighted scores obtained from each of the major sections of this report. The assessed factors and their relative weights (as indicated through %) are as follows:

Financial condition (40%) Ownership background (20%) Payment record (10%)

Credit history (10%) Market trend (10%) Operational size (10%)

RATING EXPLANATIONS

RATING		STATUS	PROPOSED CREDIT LINE
>86	Aaa	Possesses an extremely sound financial base with the strongest capability for timely payment of interest and principal sums	Unlimited
71-85	Aa	Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums	Large
56-70	A	Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums	Fairly Large
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory
26-40	B	Unfavourable & favourable factors carry similar weight in credit consideration. Capability to overcome financial difficulties seems comparatively below average.	Small
11-25	Ca	Adverse factors are apparent. Repayment of interest and principal sums in default or expected to be in default upon maturity	Limited with full security
<10	C	Absolute credit risk exists. Caution needed to be exercised	Credit not recommended
NR		In view of the lack of information, we have no basis upon which to recommend credit dealings	No Rating

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions