MIRA
INFORM REPORT
|
Report Date : |
11.07.2012 |
IDENTIFICATION DETAILS
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Name : |
BANK OF |
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Registered
Office : |
Bank of |
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Country : |
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Financials (as
on) : |
31.03.2012 |
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Year of Establishment : |
1908 |
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Capital
Investment / Paid-up Capital : |
Rs.4123.846 Millions |
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TAN No.: [Tax Deduction &
Collection Account No.] |
BRDB01794C |
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PAN No.: [Permanent Account No.] |
AAACB1534F |
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Legal Form : |
Subject is a Government of India Bank. The Bank’s Shares
are traded on the Stock Exchanges. |
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Line of Business
: |
Banking Activities |
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No. of Employees
: |
42175 (Approximately) |
RATING & COMMENTS
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MIRA’s Rating : |
Aa (76) |
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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 |
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Maximum Credit Limit : |
USD 1000000000 |
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Status : |
Excellent |
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Payment Behaviour : |
Regular |
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Litigation : |
Clear |
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Comments : |
Subject is a well established
and reputed bank having excellent track record. Financially Bank is
performing good. Directors are reported as experience and respectable business.
Bank leverage seems to be good. Trade relations are reported as fair.
Business is active. Payment are reported to be regular and as per commitment.
The bank can be considered trustworthy for business dealing at usual
trade terms and conditions |
NOTES :
Any query related to this report can be made
on e-mail : infodept@mirainform.com
while quoting report number, name and date.
ECGC Country Risk Classification List – September 30, 2011
|
Country Name |
Previous Rating (30.06.2011) |
Current Rating (30.09.2011) |
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A1 |
A1 |
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Risk Category |
ECGC Classification |
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Insignificant |
A1 |
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Low |
A2 |
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Moderate |
B1 |
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High |
B2 |
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Very High |
C1 |
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Restricted |
C2 |
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Off-credit |
D |
LOCATIONS
|
Registered Office / Head Office 1 : |
Bank of |
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Tel. No.: |
91-265-2330274 /2563932 |
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Fax No.: |
91-265-2330824 / 2562445 |
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E-Mail : |
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Website : |
http://www.bankofbaroda.com |
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Corporate Office / Investor
Services Department : |
1st Floor, Baroda Corporate Centre, C-26, G-Block, Bandra Kurla, Bandra, Mumbai-400051, Maharashtra, India |
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Tel. No.: |
91-22-66985000 / 04 |
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Fax No.: |
91-22-26523500 |
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Head Office 2 : |
Suraj Plaza-1, Sayaji Ganj, Vadodara -390005, Gujarat, India |
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Tel. No.: |
91-265-236 1852 (10lines) |
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Fax No.: |
91-265-2362395 / 2361824 / 2361806 |
DIRECTORS
As on 31.03.2012
|
Name : |
Mr. M. D. Mallya |
|
Designation : |
Chairman and Managing Director |
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Name : |
Mr. Alok Nigam |
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Designation : |
Director |
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Name : |
Mr. Sudarshan Sen |
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Designation : |
Director |
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Name : |
Mr. Vinil Kumar Saxena |
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Designation : |
Director |
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Name : |
Mr. Ajay Mathur |
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Designation : |
Director |
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Name : |
Mr. Maulin Arvind Vaishnav |
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Designation : |
Director |
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Name : |
Mr. Surendra Singh Bhandari |
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Designation : |
Director |
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Name : |
Mr. Rajib Sekhar Sahoo |
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Designation : |
Director |
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Name : |
Mr. R. Gandhi |
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Designation : |
Director |
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Name : |
Dr. Dharmendra Bhandari |
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Designation : |
Director |
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Name : |
Dr. Deepak B. Phatak |
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Designation : |
Director |
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Name : |
Mr. Satya Dev Tripathi |
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Designation : |
Director |
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Name : |
Mr. V B Chavan |
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Designation : |
Director |
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Name : |
Dr (Mrs.) Masarrat Shahid |
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Designation : |
Director |
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Name : |
Mr. Rajib S Sahoo |
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Designation : |
Director |
KEY EXECUTIVES
|
Name : |
Mr. N. Ramani |
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Designation : |
General Manager |
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Name : |
Mr. A. K. Gupta |
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Designation : |
General Manager |
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Name : |
Mr. R. K. Bansal |
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Designation : |
General Manager |
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Name : |
Mr. Cyril Patro |
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Designation : |
General Manager |
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Name : |
Mr. B. B. Garg |
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Designation : |
General Manager |
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Name : |
Mr. J. Ramesh |
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Designation : |
General Manager |
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Name : |
Mr. V. H. Thatte |
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Designation : |
General Manager |
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Name : |
Mr. S. K. Das |
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Designation : |
General Manager |
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Name : |
Mr. C. D. Kalkar |
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Designation : |
General Manager |
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Name : |
Mr. Subhash C. Ahuja |
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Designation : |
General Manager |
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Name : |
Mr. Ulhas P. Sangekar |
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Designation : |
General Manager |
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Name : |
Mr. R. S. Setia |
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Designation : |
General Manager |
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Name : |
Mr. Arun Tiwari |
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Designation : |
General Manager |
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Name : |
Mr. S. Kalyanraman |
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Designation : |
General Manager |
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Name : |
Mr. Animesh Chauhan |
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Designation : |
General Manager |
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Name : |
Mr. K. N. Manvi |
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Designation : |
General Manager |
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Name : |
Mr. T. N. Athinathan |
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Designation : |
General Manager |
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Name : |
Mr. K. D. Lamba |
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Designation : |
General Manager |
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Name : |
Mr. Mohar Singh |
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Designation : |
General Manager |
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Name : |
Mr. P. K. Gupta |
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Designation : |
General Manager |
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Name : |
Mr. K. K. Shukla |
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Designation : |
General Manager |
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Name : |
Mr. Arun Shrivastava |
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Designation : |
General Manager |
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Name : |
Mr. R. P. Marathe |
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Designation : |
General Manager |
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Name : |
Mr. Rajesh Mahajan |
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Designation : |
General Manager |
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Name : |
Mr. J. D. Parmar |
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Designation : |
General Manager |
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Name : |
Mr. P. D. Singh |
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Designation : |
General Manager |
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Name : |
Mr. R. S. Abhyankar |
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Designation : |
General Manager |
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Name : |
Mr. R. Koteeswaran |
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Designation : |
General Manager |
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Name : |
Mr. D. K. Garg |
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Designation : |
General Manager |
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Name : |
Mr. V. K. Gupta |
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Designation : |
General Manager |
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Name : |
Mr. R. K. Sinha |
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Designation : |
General Manager |
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Name : |
Mr. K Venkata Rama Moorthy |
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Designation : |
General Manager |
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Name : |
Mr. K. P. Kharat |
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Designation : |
General Manager |
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Name : |
Mr. U. K. Bijapur |
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Designation : |
General Manager |
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Name : |
Mr. Nirmesh Kumar |
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Designation : |
General Manager |
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Name : |
Mr. N.S. Srinath |
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Designation : |
General Manager |
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Name : |
Mr. B Elango |
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Designation : |
Assistant General Manager Corporate A/c and Taxation |
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Name : |
Dr. (Mrs.) Rupa Nitsure |
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Designation : |
Chief Economist |
MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN
As on 31.03.2012
|
Category of Shareholders |
No. of Shares |
Percentage of
Holding |
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(A)
Shareholding of Promoter and Promoter Group |
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Central Government/State Government(s) |
223,279,579 |
54.31 |
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223,279,579 |
54.31 |
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Total
shareholding of Promoter and Promoter Group (A) |
223,279,579 |
54.31 |
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(B)
Public Shareholding |
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30,891,062 |
7.51 |
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10,011,281 |
2.44 |
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Insurance Companies |
43,393,871 |
10.55 |
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55,666,571 |
13.54 |
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139,962,785 |
34.04 |
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25,634,066 |
6.24 |
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18,837,887 |
4.58 |
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761,473 |
0.19 |
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2,647,593 |
0.64 |
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1,935,862 |
0.47 |
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Overseas Corporate Bodies |
22,000 |
0.01 |
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53,056 |
0.01 |
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Clearing Member |
636,675 |
0.15 |
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|
47,881,019 |
11.64 |
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Total
Public shareholding (B) |
187,843,804 |
45.69 |
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Total
(A)+(B) |
411,123,383 |
100.00 |
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(C)
Shares held by Custodians and against which Depository Receipts have been
issued |
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-- |
-- |
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-- |
-- |
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-- |
-- |
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Total
(A)+(B)+(C) |
411,123,383 |
100.00 |
(1) Indian
Mutual Funds / UTI
Individual shareholders holding nominal
share capital up to Rs.0.100 MillionBUSINESS DETAILS
|
Line of Business : |
Banking Activities |
GENERAL INFORMATION
|
No. of Employees : |
42175 (Approximately) |
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Bankers : |
· State Bank of India, Madame Cama Road, Mumbai - 400 021, Maharashtra, India · Reserve Bank of India |
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Facilities : |
(Rs.
In Millions)
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Banking
Relations : |
-- |
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Auditors : |
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Name : |
Khimji Kunverji and Company Chartered Accountants Brahmayya and Company Chartered Accountants Ray and Ray Chartered Accountants S. K. Mittal and Company Chartered Accountants N. B. S. and Company Chartered Accountants Laxminiwas Neeth and Company Chartered Accountants |
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Subsidiaries
Company : |
· BOB Capital Markets Limited · BOB Cards Limited · The Nainital Bank Limited · Bank of Baroda (Botswana) Limited · Bank of Baroda (Kenya) Limited · Bank of Baroda (Uganda) Limited · Bank of Baroda (Guyana) Inc. · Bank of Baroda (UK) Limited · Bank of Baroda (Tanzania) Limited · Baroda Capital Markets (Uganda) Limited. (Subsidiary of Bank of Baroda Uganda Limited) · BOB Trinidad and Tobago Limited · Bank of Baroda (Ghana) Limited · Bank of Baroda (New Zealand) Limited |
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Associates Company
: |
· Baroda Uttar Pradesh Gramin Bank · Nainital-Almora Kshetriya Gramin Bank · Baroda Rajasthan Gramin Bank · Baroda Gujarat Gramin Bank · Jhabua-Dhar Kshetriya Gramin Bank · Baroda Pioneer Asset Management Company Limited · Indo Zambia Bank Limited |
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Joint Ventures : |
· India First Life Insurance Company Limited · India International Bank (Malaysia) Bhd. |
CAPITAL STRUCTURE
As on 31.03.2012
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
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|
3000000000 |
Equity Shares |
Rs.10/- each |
Rs.30000.000 Millions |
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Issued, Subscribed Capital :
|
No. of Shares |
Type |
Value |
Amount |
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|
413856883 |
Equity Shares |
Rs.10/- each |
Rs.4138.569 Millions |
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Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
411123383 |
Equity Shares |
Rs.10/- each |
Rs.4111.234 Millions |
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|
Forfeited Shares |
|
Rs.12.612 Millions |
|
|
Total |
|
Rs.4123.846
Millions |
Note :
Equity Shares of Rs.10 each including 223279579 Equity Shares (Previous year 223279579 Shares) amounting to Rs.2232.800 Millions held by Central Government
FINANCIAL DATA
[all figures are in
Rupees Millions]
ABRIDGED BALANCE
SHEET
|
PARTICULARS |
31.03.2012 |
31.03.2011 |
31.03.2010 |
|
CAPITAL & LIABILITIES |
|
|
|
|
Capital |
4123.846 |
3928.073 |
3655.277 |
|
Reserves and Surplus |
270644.661 |
206507.258 |
147408.550 |
|
Deposits |
3848711.059 |
3054394.819 |
2412619.252 |
|
Borrowings |
235730.512 |
223078.548 |
133500.850 |
|
Other Liabilities and Provisions |
114004.592 |
96063.056 |
85983.099 |
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Total |
4473214.670 |
3583971.754 |
2783167.028 |
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ASSETS |
|
|
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Cash and Balances with Reserve Bank of India |
216514.596 |
198681.789 |
135399.691 |
|
Balances with Banks & Money at Call & Short Notice |
425170.816 |
300658.889 |
219270.885 |
|
Investments |
832094.001 |
713965.921 |
611823.754 |
|
Advances |
2873772.935 |
2286763.609 |
1750352.859 |
|
Fixed Assets |
23415.020 |
22997.183 |
22847.648 |
|
Other Assets |
102247.302 |
60904.363 |
43472.191 |
|
|
|
|
|
|
Total |
4473214.670 |
3583971.754 |
2783167.028 |
PROFIT & LOSS
ACCOUNT
|
|
PARTICULARS |
31.03.2012 |
31.03.2011 |
31.03.2010 |
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SALES |
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|
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|
|
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Income |
296737.242 |
218859.156 |
166983.424 |
|
|
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Other Income |
34223.282 |
28091.860 |
28063.565 |
|
|
|
TOTAL |
330960.524 |
246951.016 |
195046.989 |
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Less |
EXPENSES |
|
|
|
|
|
|
|
Interest Expended |
193567.123 |
130836.577 |
107588.566 |
|
|
|
Operating Expenses |
51587.173 |
46298.349 |
38105.813 |
|
|
|
Provisions & Contingencies |
35736.666 |
27399.293 |
18769.300 |
|
|
|
TOTAL |
280890.962 |
204534.219 |
164463.679 |
|
|
|
|
|
|
|
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|
NET PROFIT FOR THE
YEAR |
50069.562 |
42416.797 |
30583.310 |
|
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APPROPRIATIONS |
|
|
|
|
|
|
|
Statutory Reserve |
12517.391 |
10604.199 |
7645.828 |
|
|
|
Capital Reserve |
223.986 |
209.956 |
1265.895 |
|
|
|
Revenue and Other Reserves |
|
|
|
|
|
|
I) General Reserve |
24538.608 |
21004.556 |
12569.961 |
|
|
|
II) Special Reserve |
5338.466 |
3353.900 |
2700.000 |
|
|
|
III) Statutory Reserve (Foreign) |
15.580 |
24.692 |
9.022 |
|
|
|
Proposed Dividend (including Dividend Tax) |
8122.904 |
7533.520 |
6392.604 |
|
|
|
Investment Reserve Account |
(687.373) |
(314.026) |
0.000 |
|
|
TOTAL |
50069.562 |
42146.797 |
30583.310 |
|
|
|
|
|
|
|
|
|
|
Earnings Per
Share (Rs.) |
127.84 |
116.37 |
83.96 |
|
LOCAL AGENCY FURTHER INFORMATION
|
Check List by Info Agents |
Available in Report (Yes / No) |
|
1) Year of Establishment |
Yes |
|
2) Locality of the firm |
Yes |
|
3) Constitutions of the firm |
Yes |
|
4) Premises details |
No |
|
5) Type of Business |
Yes |
|
6) Line of Business |
Yes |
|
7) Promoter’s background |
No |
|
8) No. of employees |
Yes |
|
9) Name of person contacted |
No |
|
10) Designation of contact person |
No |
|
11) Turnover of firm for last three years |
Yes |
|
12) Profitability for last three years |
Yes |
|
13) Reasons for variation <> 20% |
-- |
|
14) Estimation for coming financial year |
No |
|
15) Capital in the business |
Yes |
|
16) Details of sister concerns |
Yes |
|
17) Major suppliers |
No |
|
18) Major customers |
No |
|
19) Payments terms |
No |
|
20) Export / Import details (if applicable) |
No |
|
21) Market information |
-- |
|
22) Litigations that the firm / promoter |
-- |
|
23) Banking Details |
Yes |
|
24) Banking facility details |
Yes |
|
25) Conduct of the banking account |
-- |
|
26) Buyer visit details |
-- |
|
27) Financials, if provided |
Yes |
|
28) Incorporation details, if applicable |
Yes |
|
29) Last accounts filed at ROC |
Yes |
|
30) Major Shareholders, if available |
No |
Performance
Highlights
· Total Business (Deposit + Advances) increased to Rs 6722480.000 Millions reflecting a growth of 25.86%.
· Gross Profit and Net Profit were Rs 85806.200 Millions and Rs 50069.600 Millions respectively. Net Profit registered a growth of 18.04 % over previous year.
· Credit-Deposit Ratio stood at 86.86% as against 86.77% last year.
· Retail Credit posted a growth of 9.97% constituting 17.36% of the Bank’s Gross Domestic Credit in FY12.
· Net Interest Margin (NIM) as per cent of interest earning assets in global operations was at the level of 2.97% and in domestic operations at 3.51%.
· Net NPAs to Net Advances stood at 0.54% this year against 0.35% last year.
· Capital Adequacy Ratio (CAR) as per Basel II stood at 14.67%.
· Net Worth improved to Rs 262036.700 Millions registering a rise of 32.67%.
· Book Value improved from Rs 504.43 to Rs 637.37 on year.
· Business per Employee moved up from Rs 122.900 Millions to Rs 146.600 Millions on year.
Segment-Wise
Performance
The Segment Results for the year FY12 reveal that the contribution of Treasury Operations was Rs 8877.200 Millions, that of Corporate/Wholesale Banking was Rs 9658.700 Millions, that of Retail Banking was Rs 27823.700 Millions, and of Other Banking Operations was Rs 29597.300 Millions. The Bank earneda Profit after Tax (PAT) of Rs 50069.600 Millions after deducting Rs.15698.900 Millions of unallocated expenditure and Rs. 10188.400 Millions towards provision for tax.
Management Discussion
and Analysis
Economic Scene in
FY12 and Outlook for FY13
The Central Statistical Organisation, Government of India has placed India’s economic growth during FY12 at 6.9% much lower than the growth of 8.4% witnessed during the previous two fiscal years. During FY12, while the economy could draw support from relatively robust agriculture and services, the slowdown was quite acute in industrial sector. The growth in industrial production significantly decelerated from 8.2% in FY11 to 2.8% in FY12. Within the industrial sector, maximum stresses were seen in mining, capital goods and intermediate goods sectors, which posted negative growth rates during the year FY12. Factors like sustained input cost pressures, shortages of important intermediates like coal and iron ore, uncertainty in land acquisition and environment clearances, sharp depreciation in rupee of 19.0% against the US dollar between end-Dec, 2010 and end-Dec, 2011 substantially depressed the investment sentiment during FY12.
Both investment and savings rates declined significantly between FY10 and FY12. As per the International Monetary Fund’s (IMF) calculation, India’s savings rate declined from 33.5% in FY10 to 31.3% in FY12 and investment rate from 36.3% in FY10 to 34.0% in FY12. According to RBI, the deceleration in capital formation is apparent in the sharp moderation in the number/outlay of projects sanctioned by major banks and financial institutions during FY12. The decline in financial assistance was particularly acute for ‘metal and metal products’ and power industries
Inflationary risks persisted throughout FY12 with headline (WPI) inflation averaging around 8.8% for the full year. Headline inflation, which was at 10.0% in Sept, 2011, however eased to 6.69% in Mar, 2012 on account of a seasonal decline in certain food prices and favourable base effect. After raising the policy rate by 375 bps during Mar, 2010 to Oct, 2011 to contain inflation and anchor inflation expectations, the RBI paused in its policy review in Dec, 2011. The emerging growth-inflation dynamics prompted the central bank to indicate that no further tightening was required and that future actions would be towards lowering the rates.
India’s balance of payments (BOP) came under stress during FY12 due to deterioration of the trade balance and moderation in capital inflows. While exports grew at the modest pace of 21.0% (y-o-y) to US$ 304 billion in FY12, imports grew by 32.2% to US$ 489 billion, widening India’s trade deficit from US$ 119 billion in FY11 to US$ 185 billion in FY12. Notwithstanding the rupee depreciation, the trade deficit increased in FY12 primarily due to a slowdown in global demand, inadequate passthrough of higher global oil prices and the relatively price inelastic nature of some of India’s imports like gold and silver. India’s current account deficit is expected to touch 4.0% of GDP in FY12. After the boom in FII inflows in FY11, rising global risk aversion and domestic policy concerns reduced the FII inflows by 43.0% (y-o-y) in FY12 to US$ 16.8 billion. This was the lowest FII investment in the last three years. Investment in Indian ADRs and GDRs too declined in FY12 to US$ 597 million.
Foreign Direct Investment (FDI) in India, however, spiked 34.0% (y-o-y) in FY12 to a record US$ 46.8 billion thanks to a spate of some big ticket deals like Vedanta or British BP, etc.
In nominal terms, India’s rupee depreciated by 18.3% against the US dollar from the last week of Aug, 2011 to mid-Dec, 2011 after being largely range-bound during the first four months of FY12. Subsequently, the exchange rate stabilized in response to the measures taken by the RBI and the Government aimed at improving dollar supply in the foreign exchange market as also to curb speculation.
Lower tax revenues, poor disinvestment receipts and higher spending on subsidies pushed up the central government’s fiscal deficit to 5.9% of GDP in FY12 as against the target of 4.6%.
Going forward into FY13, assuming a normal monsoon, the baseline GDP growth is projected at 7.3% by the RBI in its Annual Monetary Policy Statement for FY13 on the back of marginally improved global outlook and expected revival in domestic investment sentiment. Inflation, however, is forecast to remain above the RBI’s comfort zone and placed at 6.5%. The fiscal correction, as indicated in the Union Budget for FY13, along with other policy measures to address supply-side bottlenecks in agriculture, energy and transport sectors, are expected to create conditions for revival of investment activity in India during FY13.
Performance of Indian
Banking Sector in FY12 and Outlook for FY13
Credit growth of Indian commercial banks had been showing a decelerating trend from Dec, 2010 on the back of elevated inflation, interest rates and intensification of supply-side constraints. The year FY12 ended with bank credit growth of 19.3% and aggregate deposit growth of 17.4%. Even though the divergence between credit and deposit growth rates had narrowed during the first three quarters of FY12, it widened during the fourth quarter due to a sharper deceleration in deposit growth in Q4, FY12. This resulted in increased dependence of commercial banks on non-deposit sources of finance (i.e., borrowings) during Q4, FY12.
While the deceleration in bank credit growth was contributed by all the sectors, i.e., agriculture, industry, services and personal loans, the RBI data showed that the deceleration was particularly sharp in agriculture, real estate, hotels and restaurants, professional services, telecommunication, power, cement, textiles, iron and steel and personal vehicle loans.
Increasing stress in the corporate sector was reflected in the quantum jump in the corporate debt that came up for restructuring before the Corporate Debt Restructuring Cell during FY12. According to RBI, the Indian banking sector, in general became risk averse during FY12 to avoid the possibility of adverse selection in the given economic environment. As per the RBI’s report, the Gross NPA ratio of the Indian banking industry worsened by 59 basis points (bps) between end-Mar, 2011 to end-Dec, 2011 due to continued economic stresses and capital to risk-weighted asset ratio (CRAR) of Banking industry deteriorated by 91 bps during the said period. These factors appear to have negatively impacted the Banking sector’s capacity to extend credit during FY12. As a result, there was a compositional shift in Banks’ asset portfolio in favour of investments in government securities.
Liquidity conditions remained in a deficit mode throughout FY12. However, beginning Nov, 2011, the liquidity deficit went beyond the comfort level of (+)/(-) one per cent of net demand and time liabilities (NDTL) of banks. As a result, the RBI took steps to inject primary liquidity of a more durable nature in the form of open market operations and the aggressive cuts in the cash reserve ratio (by 125 bps during Jan - Mar, 2012), which helped ease the liquidity tightness to a great extent.
Going forward into FY13, the RBI has projected aggregate deposits of commercial banks to grow by 16.0% and non-food credit by 17.0% in line with the overall GDP growth of 7.3% and broad money supply growth of 15.0%. Banks with good capital strength, a balanced loan-mix, stable net interest margins (NIMs) and lower incremental delinquency ratios are likely to see decent earnings growth in FY13 also, despite subdued economic environment.
Credit Monitoring Function
A continuous monitoring of credit is one of the most important tools for ensuring the quality of advances assets for any bank.
The Bank too has a well-established system of monthly monitoring of its advances accounts at various levels to prevent asset quality slippages and to take timely corrective steps to improve the quality of its overall loan-book.
In the Bank, a separate department for Credit Monitoring function at the Corporate level, headed by a General Manager, and one at the Regional/Zonal level, has been functional since September 2008. The Slippage Prevention Task Force formed at all Zonal/Regional offices in terms of the Bank’s Domestic Loan Policy was activated for the purpose of arresting slippages and also for initiating necessary restructuring in potentially sick accounts at an early stage in conformity with the laid down norms and guidelines. The Bank has placed special focus on sharpening of the credit monitoring process for improving the asset quality, identifying the areas of concern and the branches requiring special attention. It has also worked out strategies to ensure implementation in a time-bound manner.
The primary objectives of the Bank’s Credit Monitoring Department at the Corporate level are fixed as under:
·
Identification
of weakness/Potential default/incipient sickness in the account at an early
stage;
·
Initiation
of suitable and timely corrective actions for preventing impairment in credit
quality, whenever signals are noticed in any account, e.g. decline in credit
rating, delay in meeting liabilities in LC/Guarantee and delay in servicing of
interest/ installments etc;
·
Prevention
of slippage in the Asset Classification and relegation in Credit Ratings
through a vigorous follow up;
·
Identification
of suitable cases for restructuring/ rescheduling/ rephasement as well as
further financing in deserving and genuine cases with matching contribution
from the borrower; Liaison with CDR Cell and Zonal/ Regional Offices.
·
Taking
necessary steps/regular follow up, for review of accounts and compliance of
terms and conditions, thereby improving the quality of the Bank’s credit
portfolio;
·
Endeavoring
for upward migration of Credit Ratings.
· Monitoring progress of accounts under BIFR.
Economic Intelligence
Unit
At the Corporate Office of the Bank, a specialized Economic Intelligence Unit (EIU) supports the Top Management in several critical areas like Macroeconomic Forecasting, Business Strategy Formulation, Investor Relations, Asset- Liability Management and in discussions/deliberations with the Regulators (both domestic and international) and Rating Agencies. The Unit regularly provides the Top Management as well as various operational units a periodic outlook on key macro variables like industrial and infrastructural growth, inflation, interest rates, stocks’ movement, credit deployment and resource mobilization of Banking industry, liquidity conditions and exchange rates.
By providing better understanding of macroeconomic aspects, corporate sector health and banking sector policies, the EIU of Bank of Baroda supports Bank’s efforts in tapping business opportunities and swiftly responding to market dynamics.
The EIU brings out a weekly e-publication on macro-economic, policy and regulatory developments to share its perspective with Bankers, investors, regulators and other industry leaders. The division works as an intellectual arm of the Bank in comprehending developments that eventually helps develop rightly aligned strategies.
Operations and
Services
Customer-Centric
Initiatives
As always, efficient customer service and customer satisfaction are the primary objectives of the Bank in its day to day operations. The Bank is highly responsive to the needs and satisfaction of its customers, and is committed to the belief that all technology, processes, products and skills of its people must be leveraged for delivering superior banking experience to its customers without fail.
Recently, the Bank has taken several measures to improve customer service at the branches and at the same time, strengthened the customer complaint redressal machinery for fast disposal of customer complaints. The Bank has implemented Online Complaint Tracking Module (OCTM) so that the customers may also have a view on the status of their complaint.
Some of the other major initiatives are as under:
· Implemented Intra- Bank Saving Bank Account Portability
· The automatic payment of compensation for delay in collection of outstation cheques/instruments has been configured in the system
· Creation of On line Fixed Deposit account through Baroda Connect
·
Registration
of nomination in all the existing accounts in Finacle system. It has also been
advised that nomination should be offered in all new accounts to be opened and
to record the nomination made / denied by the customer
·
The
SMS alert facility in respect of transactions where the amount is greater than
or equal to Rs. 50,000 has been enabled to all resident SB/CA and OD customers
of the Bank whose mobile numbers are registered in the Bank’s record (CBS
system)
· Branches were advised to send notices to customers having inoperative accounts requesting them to reactivate the account
Efforts to Improve
Customer Service at Branches
The feedback on quality of customer service at branches is obtained through the Branch Level Customer Service
Committee meetings that are held every month in which customers from various cross sections of the society are invited including Senior Citizens and Pensioners. The suggestions/ views generated during the meeting are collated and appropriate follow up action is taken to examine the feasibility to implement the suggestions for improving the quality of customer service rendered at the branches.
The Bank is focused towards providing excellent customer service through all delivery channels and has been making continuous efforts for enhancing the level of customers’ satisfaction by leveraging technology to provide e-products and alternative delivery channels e.g. ATM / DEBIT CARD, POS, Internet Banking, Mobile Banking, etc., best suited to the diverse needs of different customers. The varied interests and expectations of customers are taken care of by improving upon various processes and procedures.
KYC-AML-CFT
Know The Customer
(KYC) norms/Anti-Money Laundering (AML) standards/ Combating of Financing of
Terrorism (CFT) measures and obligation of Bank under PMLA, 2002.
The Bank has Board approved KYC-AML-CFT Policy in place. The said Policy is the foundation on which the Bank’s implementation of KYC norms, AML standards, CFT measures and obligation of the Bank under Prevention of Money Laundering Act (PMLA) 2002 is based.
The major highlights of KYC-AML-CFT implementation across the Bank are as under.
·
Generation
of Cash Transaction Reports (CTRs) electronically for submission to Financial
Intelligence Unit (FIU), through the electronic medium.
·
Installation
/ Implementation of “AML Solution” for generating System based alerts.
·
System-based
detection and submission of Suspicious Transaction Reports (STRs) to the
Financial
·
Intelligence
Unit (FIU)
·
System
based Risk Categorization (from AML Measure) of Bank’s customers’ accounts every
half year.
·
Filing
of Counterfeit Currency Reports (CCRs) to FIUIND, New Delhi.
·
Filing
of Non Profit Organizations Transaction Reports (NTRs) to FIU-IND
The full KYC
compliance entails staff education as well as customer education for which the following
measures have been taken by the Bank.
·
A
comprehensive list of KYC documents is uploaded on the Bank’s website
(www.bankofbaroda.com) for the benefit of customers.
·
Similarly
for internal usage, a KYC-AML page is created at the Bank’s INTRANET for
posting reference material on KYC-AML-CFT education.
·
Regular
Training Sessions are conducted on KYCAML- CFT Guidelines at the Bank’s
Training establishments.
·
Training
is being arranged for the Bank’s Senior Officials / Executives at RBI, IBA and
National Institute of Bank Management (NIBM).
· Sustained efforts are made to create expertise at the Bank’s Head Office for corporate oversight and also KYC Audit of branches.
Back Office
Operations
Regional Back Offices
and City Back Offices
Two types of Back Offices have been conceptualized by the Bank – Regional Back Office (RBO) and City Back Office (CBO).The RBO deals with centralized processing of account opening forms (AOF) and centralized processing of issuance of Personalized Cheque Books (PCB). The Bank has ten RBOs -one each at Baroda, Bhopal, Delhi, Coimbatore, Mumbai, Lucknow, Jaipur, Kolkata, Pune, Jamshedpur. The RBOs are opening accounts for 1,298 branches. Up to 31st Mar, 2012, the RBOs have opened more than 11 lakh accounts. The RBOs issue PCBs for 2,115 branches and have so far issued more than 36 lakh PCBs.
The CBOs deal with centralized upload of clearing transactions – both inward and outward – as well as government collections and ECS transactions. The Bank has 21 CBOs (Service branches) where clearing and ECS are centralized for branches in each city centre. The centralization of clearing has also been introduced in 59 main branches (which handles clearing for local branches). The CBO concept has so far covered 1,308 branches.
Currency Chest and
Government Business New Business Avenues opened during the year FY12
·
The
Bank has implemented payment of Custom Duties at 116 Custom House locations
through e-payment across the country
·
Two
new branches authorised for physical payment of Custom Duties taking the total
toten custom locations interfaced with ICES 1.5 Software
·
Additional
267 branches have been authorized for undertaking PPF/SCSS Business
·
Utility
for enabling e-freight payment for Railways has been commissioned
·
Conclusion
of Agreement with Stock Holding Corporation of India (SCHIL) for sale of
e-stamps. This business has been commenced in the state of Gujarat, Rajasthan
and Delhi
·
Development
under way for (i) Maharashtra State Government (ii) Rajasthan State Government
·
Implementation
of e-payment of State Taxes during the year at (1) Karnataka, (2) Andhra
Pradesh (3) West Bengal, (4) Delhi and (5) Bihar
·
Authorization
of e-payment of State Taxes obtained for Daman andDiu
·
Additional
authority for the payment of pension in the state of Madhya Pradesh,
Chhatisgarh, Punjab and Haryana has been obtained
·
Implementation
of Swavalamban Scheme under New Pension Scheme
·
The
Bank is selected as Implementing Agency Bank for Pension and Life Insurance
Fund
·
E-payment
of Professional Tax in Maharashtra started with effect from 1st Jan, 2012
·
The
Bank has identified its Service branch, New Delhi as Nodal Branch for e-payment
of Ministry of Health and Family Welfare and the facility has been made operational
for all the 11 Pay and Accounts Offices of the Ministry
·
The
Bank has identified its International Business Branch in New Delhi as a Nodal
branch for settlement of funds in respect of Banking arrangement with Ministry
of External Affairs for Foreign Exchange Remittances between Mission/ Posts
abroad
·
Establishment
of Centralised Pension Processing Centre for processing and payment of pension
to the State Government Pensioners of Rajasthan state is under process
·
Salary
accounts of staff/student accounts of Reliable college, Ghaziabad canvassed
·
A
MOU with Kandla Port executed after permission from Indian Ports Association,
Delhi
·
Implementation
of e-scroll on Postal Business
Strategic Plan on
Currency Management (2011-14)
As a customer-centric initiative to improve payment system, the Bank has identified 26 new centers (given below) for opening New Currency Chests under its Strategic Plan on Currency Management 2011-14, thereby increasing the total number of Currency Chests from 84, at present, to 110
Vigilance
It has been the endeavour of Vigilance department of the Bank to encourage and enable the operating level staff as also those at controlling offices to exercise due care and caution to take preventive and detective measures. This helps in increasing the efficiency and creating an environment of security for the honest work force.
A careful distinction is made between the cases of gross negligence which put the Bank’s funds into avoidable jeopardy and the cases where business decisions have gone awry. Periodical monitoring of individual cases is carried out to ensure that inquiries are quickly concluded and are perceived as fair by all concerned. The endeavour is made towards ensuring that penalties, where necessary, are timely and just.
Coordination is maintained with the zones/functional authorities of the Bank to locate specific cases of irregularities in the Bank’s operations. The complaints from the public/customers as also the cases of frauds and other irregularities are investigated promptly and followed up for corrective action, wherever necessary.
A study of fraud prone areas indicating loopholes/ obsolescence of the systems and procedures in vogue, is undertaken on an on-going basis to improve the controls and update operational procedures. On occurrence of such instances, detailed examination of the associated systems and procedures is carried out with the help of respective functional departments with a view to eliminate or minimise factors and processes likely to adversely affect the Bank’s interest.
We are pleased to note that with the awareness, alertness and diligence exhibited by the operating staff, during the year April 2011 to March 2012, 45 fraudulent attempts by unscrupulous elements were thwarted that saved the Bank from substantial financial loss.
Business Performance
Given below are the details of the Bank’s major achievements on business front during the year FY12.
Resource Mobilisation
and Asset Expansion
The share of Bank’s Deposits in total resources stood at 86.04% as of 31st March 2012. The Total Deposits grew from Rs 3054394.800 Millions to Rs 3848711.100 Millions, reflecting a growth of 26.01% over the previous year. Of this, Savings Bank Deposits – an important constituent of low cost deposits – grew by 15.71% from Rs 644540.400 Millions to Rs 745795.300 Millions. The share of low cost deposits (Current + Savings) in Total Deposits was at 26.90% and in Domestic Deposits at 33.18%.
The Bank’s Total Advances expanded by 25.67% during FY12 led by 19.28% expansion in Domestic Advances and 43.92% expansion in Overseas Advances.
Wholesale Banking
A strong corporate credit culture and healthy growth in credit – moderately above Banking industry average have been the consistent differentiators of Bank of Baroda for the past four years.
In fact, the Bank’s Wholesale Banking Division offers a full range of loan products and services such as Term Loans, Short-Term Loans, Demand Loans, Working Capital Facilities, Trade Finance Products, Treasury Products, Bridge Loans, Syndicated Loans, Infrastructure Loans, Cross Currency/ Interest Rate Swaps, Foreign Currency Loans, Loan Against Future Rent Receivables and many more to its large and mid corporate clients depending upon their needs. The product offerings are flexible and suitably structured taking into account the customers’ risk profiles and specific needs.
Based on the superior product delivery, passionate service orientation, timely and speedier sanctions with a customer-centric approach, the Bank has made significant achievements in providing an array of Wholesale Banking products and services to several multinationals, domestic business houses and prime public sector companies.
The Department places major thrust on faster delivery through efficient channels and adoption of better practices in credit administration. During FY12, the efforts were also made to improve the speed of decision making without compromising the quality of decision.
During FY12, the non-food credit growth, in general, remained low in the Indian banking industry. However, even during this phase, the Bank’s Wholesale Banking Division created 130 new relationships through its Fast Track Desk. The department sanctioned fresh/increased credit facilities to the tune of Rs 609550.000 Millions during the year to various sectors /industries with projects /units spread across the country.
Under Wholesale Banking, the corporate customers are identified as large and mid corporates. Those having annual sales turnover of between Rs 1500.000 Millions to Rs 5000.000 Millions are classified as mid-corporates, and those with sales turnover over Rs 5000.000 Millions are classified as large corporates.
Sensing the need to focus and serve the potential mid corporate segment, the Bank took an important initiative
of opening specialized Mid Corporate Branches in various potential locations throughout the country. These branches are equipped with mix of experienced and professionally qualified staff. Attaching high importance to the segment, the Bank arranged for training in soft skills plus domain-expertise knowledge for its staff identified for these specialized branches through an International Management Consultancy firm.
The Bank also opened one more specialized CFS (Corporate Financial Services) Branch taking total number of CFS Branches to eleven.
The Bank’s Wholesale Banking Department also has a full-fledged ‘Project Finance Division’ (PFD). The PFD is well equipped with professionals from various disciplines and undertakes TEV (i.e. Technical Evaluation and Viability) studies for clients of the Bank as well as that of other banks. The Department is also equipped with Syndication Desk to syndicate domestic funding requirement of the clients. The Department earns significant fee-based income by carrying out TEV studies, vetting of projects and through syndication deals.
The Bank attaches higher degree of importance to the quality of appraisal and efficient processing of credit proposals at all levels to maintain the asset quality and realizes the importance of skilled and motivated employees to achieve the same. Keeping this in view, the Bank continued its thrust on regular grooming of Credit and Forex Officers. The Bank also continued to recruit specialized officers from campuses and lateral recruitment of professionals cum experienced staff.
Retail Business
As in the past, Retail Business continued to be one of the important segments of overall business during FY12. The Bank’s performance under its Retail Banking Segment during the year under consideration is as under.
Growth under Retail
Lending
The Bank’s Retail Loan Book consisted of five key products (namely Home Loan, Auto Loan, Education Loan, Traders Loan and Mortgage Loan) which together constituted 74.0% of total retail loans and other products namely LABOD/ ODBOD that constituted 21.0% of total retail loans during FY12. Besides, the products like Baroda Personal Loan and other miscellaneous product viz. Doctors Loan, Loan against Government securities etc contributed around 5.0% to total retail loans.
Total Retail Loan outstanding as on 31st Mar, 2012 was Rs 356680.000 Millions as against the level of Rs 324350.000 Millions as on 31st Mar, 2011. A growth of Rs 32330.000 Millions (9.97%) was registered under total retail loans during FY12 as against a growth of 33.76% (Rs 81870.000 Millions) registered during FY11. The growth in retail business of the Bank during FY12 was in line with the overall segmental business trend witnessed by the Indian banking industry.
Growth under Five Key
Retail Products
Under five key products which constituted 74.0% of total retail loans, an absolute growth of Rs 31020.000 Millions (13.43%) was registered during the year FY12 as against a growth of Rs.40950.000 Millions (21.56%) during the previous financial year.
Under Home Loans, an absolute growth of Rs.15940.000 Millions (12.71%) was registered during the year FY12 as against a growth of Rs 22270.000 Millions (21.59%) during the previous year. Under Auto Loans, an absolute growth of Rs.3840.000 Millions (18.76%) was registered in FY12 as against a growth of Rs. 6120.000 Millions (42.58%) during FY11.
Under Baroda Traders Loans, an absolute growth of Rs 8760.000 Millions (18.63 %) was registered in FY12 as against a growth of Rs 8520.000 Millions (22.15%) during FY11.
Under Baroda Mortgage Loans, an absolute growth of only Rs 970.000 Millions (4.68%) was registered during FY12 as against a growth of Rs 1760.000 Millions (9.40%) during FY11. Under Education Loans, an absolute growth of Rs 1500.000 Millions (8.72%) was registered during FY12 versus a growth of Rs 2260.000 Millions (15.11%) during FY11.
Under LABOD /ODBOD, a growth of Rs 23070.000 Millions was registered. Under Baroda Personal Loans, a negative growth of Rs 21830.000 Millions was posted over the level of 31st Mar, 2011 due to repayment of Loan for Earnest Money Deposits during the year FY12. The repayments of short term loans primarily led to low growth under the total retail loans during the year under consideration.
MSME Business
The Micro, Small and Medium Enterprises (MSME) segment is a vital component of Indian economy. This sector accounts for around 40.0% of the nation’s total industrial production, 34.0% of industrial exports, 95.0% of industrial units and 35.0% of total employment in manufacturing and services sectors. The contribution of Services Sector within the SME segment is quite significant; especially the IT enabled services, hospitality services, tourism, couriering, transportation, etc.
To give a focused attention to emerging SMEs in India, the Bank has been considering other commercial units with a turnover up to Rs 1500.000 Millions at par with the SMEs. To promote the growth of SME Sector, the Bank has launched a special and novel delivery model, viz. SME Loan Factory, which at present, is operational in 46 centres of the Bank and well accepted in the market place. The SME Loan Factory is an innovative model for streamlining processes and for timely sanctions of SME loan proposals. The model comprises of the Central Processing Cell for speedy appraisal and sanctioning of proposals within the stipulated deadline and a sales team to follow up on leads generated by branches. Given its success, the Bank has plans to open more such loan factories in the ensuing year. The Bank has SME Loan Factories at all major business centres across the country, viz. Agra, Ahmedabad, Allahabad, Bangalore, Bareilly, Baroda, Bhilwara, Bhubhaneshwar, Bulsar, Bharuch, Chandigarh, Chennai, Coimbatore, Dehradun, two Factories in Delhi, Ernakulam, Gandhidham, Gorakhpur Hyderabad, Haldwani, Indore, Jaipur, Jamshedpur, Jamnagar, Jodhpur, Kanpur, Kolhapur, Kolkata, Lucknow, Ludhiana, 3 Factories in Mumbai, Meerut, Mehsana, Nagpur, Nashik, Pune,Patna, Rajkot, Raipur, Surat, Shahajahanpur, Varanasi and Vishakhapatnam. These SME Loan Factories sanctioned loans aggregating Rs 186190.000 Millions during FY12 as against Rs 145300.000 Millions in the previous year.
Rural and
Agricultural Lending
As you all are aware, the Bank has always been a frontrunner in the area of Priority Sector and Agriculture lending. It has been harnessing the vast potential of the rural market through its wide network of 1,270 rural branches and 1,045 semi-urban branches.
Even during FY12, the Banks opened 314 new branches in rural and semi-urban areas.
The Bank is the proud Convener of State Level Banker’s Committee (SLBC)in the states of Uttar Pradesh and Rajasthan. The Bank shoulders the Lead Bank Responsibility in 45 districts in the states of Gujarat (12), Rajasthan (12), Uttar Pradesh (15), Uttaranchal (2), Madhya Pradesh (2) and Bihar (2).
The Bank has also sponsored five Regional Rural Banks (RRBs) in various states with a network of 1,300 branches and total business of Rs 217000.000 Millions as of end-March, 2012.
Performance of
Priority Sector Lending in FY12
Priority Sector Advances of the Bank surged from Rs 573640.000 Millions as at the end-March 2011 to Rs 685270.000 Millions as at the end-March 2012 and formed 43.37% of the Adjusted Net Bank Credit (ANBC) against the mandated target of 40.00%.
Agriculture Advances: The Direct Agriculture advances of the Bank rose to Rs 214230.000 Millions with a rise of 24.86%over the previous year with an absolute growth of Rs 42660.000 Millions during the year. The total agriculture advances of the Bank recorded a growth of 18.38% over the previous year and rose to Rs 290360.000 Millions as at end-March 2012. The Bank’s Direct Agricultural advances formed 13.56% of ANBC as at end-March 2012 against the mandated target of 13.50%. Even the Total Agricultural Advances were at 18.06% of ANBC against the mandated target of 18.00%.
Under its flagship agriculture loan product “Baroda Kisan Credit Card”, the Bank issued as many as 3,09,685 Credit Cards during FY12 to provide credit to farmers. The Bank financed as many as 3,73,283 new farmers during FY12. As a part of its microfinance initiatives, the Bank credit linked 19,455 Self Help Groups with an amount of Rs 2140.000 Millions during FY12 thereby taking the total number of SHGs credit linked to 1,54,397 amounting to Rs11710.000 Millions.
Baroda Grameen Paramarsh Kendra (BGPK) is another initiative undertaken by the Bank to help the rural community by providing credit counseling, financial literacy and other services like information on the prices of agricultural produces, scientific farming, etc. The Bank had 52 BGPKs as on 31st March, 2012.
About ten more Baroda Swarojgar Vikas Sansthan (BSVS),Baroda R-SETI Centers were opened during FY12. With this, the total number of BSVS has gone up to 46. Thus, each of the Bank’s Lead Districts now has a R-SETI as per the GOI guidelines. Ajmer BSVS centre is exclusively for women entrepreneurs. The BSVS are primarily the institutes for training the youth and imparting knowledge and skills required for taking up self-employment ventures. During FY12, 42,786 youth beneficiaries were trained out of which 25,791 have established self-employment ventures. Out of the total 1,22,228 beneficiaries trained by these centers so far, 75,050 have established their self employment ventures.
Financial Literacy
and Credit Counseling Centres (FLCC)-“SARATHEE”
Based on the guidelines issued by the RBI, the Bank has established 39 FLCCs, christened as “SARATHEE” to impart financial literacy and credit counseling services to the needy to help them avail financial services from Banking system and also to provide counseling services to those who are under financial distress due to debt burden.
The Bank has opened these centers under its BSVS trust and counseling services are provided to the concerned free of cost. The Bank has opened 21 new FLCCs during FY 12, taking the total number of FLCCs to 39 by end Mar, 2012.The Bank will be opening FLCCs in each of its lead district in due course.
USB Model Adopted by
the Bank
· A BC is appointed in a village and provided with POS machine/ hand held terminal to provide banking services in the village through USB.
· The place for USB is identified preferably in Gram Panchayat or Common Service Centre in village.
· The board is displayed inside each USB indicating various banking services being provided by the Bank at USB. There is also a board giving details of BC, his contactnumber, name/contact number of link branch, fixed day/ time of visit by officer etc. for the convenience of villagers.
· The business correspondent is providing services like cash deposits, payments up to certain limit, remittances, account balance enquiry, mini-statement etc.
· A bank officer from the link branch visits the USB once in week at pre-fixed time and day for financial inclusion activities in village, as specified by the Ministry of Finance.
· Minimum furniture such as table, three to four chairs etc. have been provided in an ultra small branch.
Future Plans in
Overseas Business
The Bank has initiated steps for further expanding its overseas network to tap the opportunities for canvassing business and enhancing the profitability. Necessary infrastructure is being created for further expanding the network in UAE, Oman, Mauritius, Uganda, New Zealand, Tanzania, Botswana and Ghana.
The Bank has received ‘In Principle’ approval for upgradation of its Representative Office in Australia to a branch. An approval of RBI is awaited for opening of two additional branches in U.K. New centres are being identified in countries where the Bank is already present and also in new territories for further expanding the branch network.
E-Banking in Overseas
Operations
The Bank is gradually implementing and popularizing the e-banking services at its overseas centres.
Transaction based e-banking has been implemented in UAE, UK, Mauritius, Fiji, Seychelles, Uganda, Kenya, Botswana and New Zealand. It is in the process of being implemented in Oman and Tanzania. (At present, a view based e-banking is available at both these centres).
In TandT, Guyana and South Africa, it will be introduced in the next phase which will start shortly.
The transaction based e-banking is being implemented gradually at the Overseas Centres looking to their retail base and the cost effectiveness.
Treasury Operations
The Bank operates a State of the Art Dealing Room at Baroda Sun Tower at its Corporate Office in Mumbai. Through this dealing room the Bank is well positioned to scale up its Treasury Operations. The Treasury handles the Bank’s domestic treasury operations and covers activities in various markets i.e. Foreign Exchange, Interest Rates, Fixed Income, Derivatives, Equity and other alternative asset classes. The advanced technology platforms are used by the Bank to offer a basket of financial products to its clients including Interest rate swaps, currency swaps, forwards and options.
The Bank has also put in place a sophisticated Automated Dealing system to offer auto generated real time foreign exchange rates to the clients of its authorised branches spread across the country. As a customer friendly initiative, during the year FY12, enhancements were made in the “Global Treasury Solution” facilitating instant flow of information about credits received by the Bank in favour of its customers through its foreign correspondents.
Under the Business Process Re-engineering, the Bank has successfully implemented Global Treasury solution across major financial centres. The Global Treasury Platform is running smoothly in Mumbai, London, Bahamas, Brussels, Dubai, Bahrain, Singapore, Hongkong and New York.
During the year FY12, managing growth and price stability emerged as the key challenges against the backdrop of a slowing economy weighed down by the impact of tight monetary policy and slower economic growth. The advance estimates of Indian economy suggest a growth of approximately 6.9% in FY12, after having grown at the rate of 8.4% in each of the two preceding years. This indicates a slowdown compared not just to the previous two years but 2003 to 2011 (except FY09 a year of global financial crisis). During FY12, the RBI hiked interest rates by 125 bps taking repo rate to 8.50% before signaling a pause in Dec, 2011. To infuse liquidity into the system, the RBI reduced CRR [Cash Reserve Ratio] by a cumulative 125 bps in the last quarter of FY12 and conducted open market operations to the extent of Rs 1292520.000 Millions.
The Bank’s Treasury offers customized solutions using available products viz IRS, CIRS, Forwards and Options to meet the Interest rate and Foreign Exchange risk mitigation requirements of the corporate clients. During FY12, the Bank’s Treasury Division was active in taking benefit of the arbitrage opportunities available between various Treasury market asset classes including Money Market CBLO, Call, Market Repo, Government Securities and Forex markets. The Treasury actively utilised the market movements and used Overnight Indexed swaps, INBMK swaps for harnessing available hedging and trading opportunities.
Tight monetary policy coupled with a higher than announced borrowing program resulted in the benchmark 10 year Government security touching a high level of 9.0% in Nov, 2011. Against this backdrop, the Treasury focused on maintaining appropriate duration of portfolio, keeping minimal adverse impact on valuation and maintaining a good average yield on investment portfolio. The average yield on Domestic SLR investments was 7.87%. During FY12, the Treasury earned Rs 60320.000 Millions as Interest/Discount earnings, while the Profit on Sale of Investment and Exchange Earnings were Rs 6220.000 and 4120.000 Millions, respectively.
The Indian Equity markets were subdued for most part of FY12. This was due to the cumulative impact of weaker recovery of the US economy, European sovereign debt crisis and muted FII inflows into the emerging markets including India. The FII inflows picked up during the last quarter resulting in the market moving to higher levels. The Equity Desk of the Treasury actively churned its portfolio and booked profits at regular intervals whenever an opportunity emerged in the markets.
The unfolding of the euro zone crisis and uncertainty surrounding the global economy have impacted the Indian economy causing drop in growth, higher current account deficit (CAD) and declining capital inflows. As in 2008, the transmission of the crisis has been mainly through the Balance of- payments (BoP) channel. Export growth too decelerated in the third quarter of FY12, while imports remained high, primarily because of very high international oil prices. At the same time, foreign institutional investment flows declined, straining the capital account and the rupee exchange rate that touched an all-time low of Rs 54.23 per US dollar on 15 December 2011 during intra-day trading
The Foreign exchange desk of the Treasury retained its position as one of the premier market players in the Forex desks of the Public Sector Banks. The Proprietary trading desk was active in cashing in of available arbitrages, using volatility in the markets and mobilised resources in a tight liquidity position impacting the Indian markets. The turnover of the Foreign Exchange deskof the Bank’s Treasury increased by nearly 14.0% on y-o-y basis during FY12.
The Bank’s Treasury Mid-Office monitors market exposures and limits fixed by the Board of Directors, on a real time basis. The Risk Management parameters, including Value-at-risk (VaR) are used to measure Market Risk on all portfolios. These measures are backed up by the Back Testing on risk numbers and Stress Testing of various investment and currency portfolios.
Awards and Industry
Recognition for Bank of Baroda
The Bank received several awards during FY12, for its consistent outstanding and all-round performance (both business and financial), superior management, dedication to excellence and contribution to rural economy and financial inclusion.
Given below are a few select awards won by Bank during the year FY12:
· T A Pai Memorial “Best Banker” award.
· Most Efficient Bank in Kenya
· Best Initiatives in Inclusive Banking – FIBAC Banking Awards
· Dun and Bradstreet (D and B) Leading Public Sector Bank in ‘Global Business Development’ category
· National Award for performance under implementation of PMEGP scheme.
· India Best Banks and Financial Institutions Awards: MCX and CNBC–TV18, -
a. Best Public Sector Bank
b. Outstanding Financial Professional – 2010 was conferred upon Shri M D Mallya
· Commendation Certificate: Department of Official Language – Ministry of Home Affairs.
· HR Excellence Award for Best Intellectual Human Resource Utilization Practices” by Amity International Business School, New Delhi.
· Golden Peacock Award for Excellence in Corporate Governance.
· “Dainik Bhaskar India Pride Awards - Lifetime Achievement Award to M D Mallya
· ABCI Awards 2011.
a. Gold Trophy in Indian Language Publication- Akshayyam
b. Bronze Trophy in New Publication- Navnirmaan
c. Bronze Trophy in Special Column – Apni Baat
d. Gold Trophy in Web Communication online – Retail Product Campaign
· Business World Best Bank 2011 Awards
a. Fastest Growing Bank- Large
b. Banker of the Year to Shri M D Mallya, CMD
·
Best
Public Sector Bank Award by State Forum of Bankers Club, Kerala.
·
ICAI
awards for Excellence in Financial Reporting
·
Best
Public Sector Bank by NDTV Profit
· My FM Stars of the Industry Brand Leadership Award
Board of Directors
Mr. Sudarshan Sen was nominated as a Director w.e.f. 30.05.2011 by the Central Government u/s 9 (3) (c) of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 to hold the post until further orders.
Mr. Vinil Kumar Saxena was appointed as a Workmen Employee Director w.e.f. 25.07.2011 by the Central Government u/s 9 (3) (e) of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 for a period of three years or till he ceases to be workmen employee of Bank of Baroda or until further orders, whichever is earlier.
Mr. Maulin Arvind Vaishnav was re-elected as a Director by shareholders of the Bank other than the Central Government u/s 9 (3) (i) of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 at the Extra Ordinary General Meeting held on 23.12.2011 for a period of three years from 24.12.2011 to 23.12.2014.
Mr. Surendra Singh Bhandari was elected as a Director by shareholders of the Bank other than the Central Government u/s 9 ((3) (i) of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 at the Extra Ordinary General Meeting held on 23.12.2011 for a period of three years from 24.12.2011 to 23.12.2014.
Mr. Rajib Sekhar Sahoo was elected as a Director by shareholders of the Bank other than the Central Government u/s 9 ((3) (i) of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 at the Extra Ordinary General Meeting held on 23.12.2011 for a period of three years from 24.12.2011 to 23.12.2014.
Mr. R. Gandhi, who was nominated as a Director w.e.f. 30.07.2010 by the Central Government u/s 9 (3) (c) of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970, to hold the post until further orders, ceased to be a Director w.e.f. 30.05.2011 upon nomination of Shri Sudarshan Sen in his place.
Dr. Dharmendra Bhandari, elected as a Director by shareholders of the Bank other than the Central Government u/s 9 ((3) (i) of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 for a period of three years from 24.12.2008 to 23.12.2011, ceased to be a Director w.e.f 24.12.2011 on completion of his tenure.
Dr. Deepak B. Phatak elected as a Director by shareholders of the Bank other than the Central Government u/s 9 ((3) (i) of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 for a period of three years from 24.12.2008 to 23.12.2011, ceased to be Director w.e.f. 24.12.2011 on completion of his tenure.
CONTINGENT LIABILITIES
Rs. In Millions
|
Particular |
31.03.2012 |
31.03.2011 |
|
Claims against the Bank not acknowledged as Debts |
647.347 |
2325.606 |
|
Liability for partly paid Investments |
2.800 |
2.800 |
|
Liability on account of outstanding Forward Exchange Contracts |
930318.580 |
784329.931 |
|
Guarantees given on behalf of Constituents : |
|
|
|
a) In India |
137659.257 |
117800.465 |
|
b) Outside India |
99796.584 |
76781.584 |
|
Acceptances, Endorsements and Other Obligations |
179502.863 |
148909.528 |
|
Other items for which the Bank is Contingently liable |
177100.700 |
141488.789 |
CMT REPORT (Corruption, Money Laundering & Terrorism]
The Public Notice information has been collected from various sources
including but not limited to: The Courts,
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.55.81 |
|
|
1 |
Rs.86.53 |
|
Euro |
1 |
Rs.68.58 |
INFORMATION DETAILS
|
Report Prepared
by : |
NTH |
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 |
9 |
|
--LIQUIDITY |
1~10 |
9 |
|
--LEVERAGE |
1~10 |
9 |
|
--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 |
|
76 |
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 |
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 |
|
- |
NB |
New Business |
- |
This report is issued at your request without any
risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL)
or its officials.