MIRA INFORM REPORT

Report Date :

25.05.2013

IDENTIFICATION DETAILS

Name :	BANK OF BARODA
Registered Office :	Bank of Baroda Building, Mandvi, Vadodara – 390 006, Gujarat
Country :	India
Financials (as on) :	31.03.2012
Year of Establishment :	1908
Capital Investment / Paid-up Capital :	Rs.4123.846 Millions
TAN No.: [Tax Deduction & Collection Account No.]	BRDB01794C
PAN No.: [Permanent Account No.]	AAACB1534F
Legal Form :	Subject is a Government of India Bank. The Bank’s Shares are traded on the Stock Exchanges.
Line of Business :	Banking Activities
No. of Employees :	42175 (Approximately)

RATING & COMMENTS

MIRA’s Rating :

Aa (76)

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 :	USD 1000000000
Status :	Excellent
Payment Behaviour :	Regular
Litigation :	Exist
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 – June 30, 2012

Country Name	Previous Rating (31.03.2012)	Current Rating (30.06.2012)
India	A1	A1

Risk Category	ECGC Classification
Insignificant	A1
Low	A2
Moderate	B1
High	B2
Very High	C1
Restricted	C2
Off-credit	D

EXTERNAL AGENCY RATING

Rating Agency Name	ICRA
Rating	Corporate Governance Practices = CCR2
Rating Explanation	High Level of assurance
Date	April, 2013

Rating Agency Name	CARE
Rating	Rating for Upper, Lower tier IInd Perpetual Bonds = AAA-
Rating Explanation	Highest degree of safety and lowest credit risk.
Date	14.03.213

RBI DEFAULTERS’ LIST STATUS

Subject’s name is not enlisted as a defaulter in the publicly available RBI Defaulters’ list.

EPF (Employee Provident Fund) DEFAULTERS’ LIST STATUS

Subject’s name is not enlisted as a defaulter in the publicly available EPF (Employee Provident Fund) Defaulters’ list as of 31-03-2012.

LOCATIONS

Registered Office / Head Office 1 :	Bank of Baroda Building, Mandvi, Vadodara – 390006, Gujarat, India
Tel. No.:	91-265-2330274 /2563932
Fax No.:	91-265-2330824 / 2562445
E-Mail :	info@bankofbaroda.com
Website :	http://www.bankofbaroda.com
Corporate Office / Investor Services Department :	1st Floor, Baroda Corporate Centre, C-26, G-Block, Bandra Kurla, Bandra, Mumbai-400051, Maharashtra, India
Tel. No.:	91-22-66985000 / 04
Fax No.:	91-22-26523500
Head Office 2 :	Suraj Plaza-1, Sayaji Ganj, Vadodara -390005, Gujarat, India
Tel. No.:	91-265-236 1852 (10lines)
Fax No.:	91-265-2362395 / 2361824 / 2361806

DIRECTORS

As on 31.03.2012

Name :	Mr. M. D. Mallya
Designation :	Chairman and Managing Director
Name :	Mr. Alok Nigam
Designation :	Director
Name :	Mr. Sudarshan Sen
Designation :	Director
Name :	Mr. Vinil Kumar Saxena
Designation :	Director
Name :	Mr. Ajay Mathur
Designation :	Director
Name :	Mr. Maulin Arvind Vaishnav
Designation :	Director
Name :	Mr. Surendra Singh Bhandari
Designation :	Director
Name :	Mr. Rajib Sekhar Sahoo
Designation :	Director
Name :	Mr. R. Gandhi
Designation :	Director
Name :	Dr. Dharmendra Bhandari
Designation :	Director
Name :	Dr. Deepak B. Phatak
Designation :	Director
Name :	Mr. Satya Dev Tripathi
Designation :	Director
Name :	Mr. V B Chavan
Designation :	Director
Name :	Dr (Mrs.) Masarrat Shahid
Designation :	Director
Name :	Mr. Rajib S Sahoo
Designation :	Director

KEY EXECUTIVES

Name :	Mr. N. Ramani
Designation :	General Manager
Name :	Mr. A. K. Gupta
Designation :	General Manager
Name :	Mr. R. K. Bansal
Designation :	General Manager
Name :	Mr. Cyril Patro
Designation :	General Manager
Name :	Mr. B. B. Garg
Designation :	General Manager
Name :	Mr. J. Ramesh
Designation :	General Manager
Name :	Mr. V. H. Thatte
Designation :	General Manager
Name :	Mr. S. K. Das
Designation :	General Manager
Name :	Mr. C. D. Kalkar
Designation :	General Manager
Name :	Mr. Subhash C. Ahuja
Designation :	General Manager
Name :	Mr. Ulhas P. Sangekar
Designation :	General Manager
Name :	Mr. R. S. Setia
Designation :	General Manager
Name :	Mr. Arun Tiwari
Designation :	General Manager
Name :	Mr. S. Kalyanraman
Designation :	General Manager
Name :	Mr. Animesh Chauhan
Designation :	General Manager
Name :	Mr. K. N. Manvi
Designation :	General Manager
Name :	Mr. T. N. Athinathan
Designation :	General Manager
Name :	Mr. K. D. Lamba
Designation :	General Manager
Name :	Mr. Mohar Singh
Designation :	General Manager
Name :	Mr. P. K. Gupta
Designation :	General Manager
Name :	Mr. K. K. Shukla
Designation :	General Manager
Name :	Mr. Arun Shrivastava
Designation :	General Manager
Name :	Mr. R. P. Marathe
Designation :	General Manager
Name :	Mr. Rajesh Mahajan
Designation :	General Manager
Name :	Mr. J. D. Parmar
Designation :	General Manager
Name :	Mr. P. D. Singh
Designation :	General Manager
Name :	Mr. R. S. Abhyankar
Designation :	General Manager
Name :	Mr. R. Koteeswaran
Designation :	General Manager
Name :	Mr. D. K. Garg
Designation :	General Manager
Name :	Mr. V. K. Gupta
Designation :	General Manager
Name :	Mr. R. K. Sinha
Designation :	General Manager
Name :	Mr. K Venkata Rama Moorthy
Designation :	General Manager
Name :	Mr. K. P. Kharat
Designation :	General Manager
Name :	Mr. U. K. Bijapur
Designation :	General Manager
Name :	Mr. Nirmesh Kumar
Designation :	General Manager
Name :	Mr. N.S. Srinath
Designation :	General Manager
Name :	Mr. B Elango
Designation :	Assistant General Manager Corporate A/c and Taxation
Name :	Dr. (Mrs.) Rupa Nitsure
Designation :	Chief Economist

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

As on 31.03.2013

Category of Shareholders	No. of Shares	Percentage of Holding
(A) Shareholding of Promoter and Promoter Group
(1) Indian
Central Government / State Government(s)	233412499	55.41
Sub Total	233412499	55.41
(2) Foreign
Total shareholding of Promoter and Promoter Group (A)	233412499	55.41
(B) Public Shareholding
(1) Institutions
Mutual Funds / UTI	24192201	5.74
Financial Institutions / Banks	587343	0.14
Insurance Companies	50231026	11.92
Foreign Institutional Investors	70211403	16.67
Sub Total	145221973	34.47
(2) Non-Institutions
Bodies Corporate	19575555	4.65
Individuals
Individual shareholders holding nominal share capital up to Rs. 0.100 Million	19140130	4.54
Individual shareholders holding nominal share capital in excess of Rs. 0.100 Million	1123602	0.27
Any Others (Specify)	2782544	0.66
Non Resident Indians	1991881	0.47
Overseas Corporate Bodies	22000	0.01
Trusts	349296	0.08
Clearing Members	419367	0.10
Sub Total	42621831	10.12
Total Public shareholding (B)	187843804	44.59
Total (A)+(B)	421256303	100.00
(C) Shares held by Custodians and against which Depository Receipts have been issued	0	0.00
(1) Promoter and Promoter Group	0	0.00
(2) Public	0	0.00
Sub Total	0	0.00
Total (A)+(B)+(C)	421256303	0.00

BUSINESS DETAILS

Line of Business :

Banking Activities

GENERAL INFORMATION

No. of Employees :

42175 (Approximately)

Bankers :

· State Bank of India, Madame Cama Road, Mumbai - 400 021, Maharashtra, India

· Reserve Bank of India

Facilities :

(Rs. In Millions)

Borrowings	As on 31.03.2012	As on 31.03.2011
I. Borrowings in India
Reserve Bank of India	0.000	3500.000
Other Banks	1680.019	1144.874
Other Institutions and Agencies	4102.099	4715.624
Innovative Perpetual Debt Instruments (IPDI)	19117.000	19117.000
Hybrid Debt Capital Instruments issued as bonds	50000.000	50000.000
Subordinated Bonds	24900.000	24900.000
II. Borrowings outside India (includes MTN Bonds of Rs.15262.500 Millions (previous year Rs.13378.800 Millions) )	135931.394	119701.050
Total	235730.512	223078.548

Banking Relations :	--
Auditors :
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
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
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
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
3000000000	Equity Shares	Rs.10/- each	Rs.30000.000 Millions

Issued, Subscribed Capital :

No. of Shares	Type	Value	Amount
413856883	Equity Shares	Rs.10/- each	Rs.4138.569 Millions

Paid-up Capital :

No. of Shares	Type	Value	Amount
411123383	Equity Shares	Rs.10/- each	Rs.4111.234 Millions
	Forfeited Shares		Rs.12.612 Millions
	Total		Rs.4123.846 Millions

Note :

Equity Shares of Rs.10 each including 223279579 Equity 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
Total	4473214.670	3583971.754	2783167.028
ASSETS
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
	SALES
		Income	296737.242	218859.156	166983.424
		Other Income	34223.282	28091.860	28063.565
		TOTAL	330960.524	246951.016	195046.989
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
	NET PROFIT FOR THE YEAR		50069.562	42416.797	30583.310
	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

QUARTERLY RESULTS

PARTICULARS	30.06.2012	30.09.2012	31.12.2012	31.03.2013
Type	1^st Quarter	2^nd Quarter	3^rd Quarter	4^th Quarter
Interest Earned	85576.100	87225.500	88449.200	90715.700
Income On Investments	17315.100	18698.600	18979.200	19841.000
Interest On Balances With Rbi Other Inter Bank Funds	2879.200	3387.600	4032.100	4131.300
Interest / Discount On Advances / Bills	64266.500	64387.200	64853.200	65163.600
Others	1115.300	752.100	584.700	1579.800
Other Income	7708.000	8283.100	8405.900	11909.300
Total Income	93284.100	95508.600	96855.100	102625.000
Interest Expended	57595.400	58602.500	60040.200	62575.800
Operating Expenses	13156.900	13080.300	14255.100	18228.800
Total Expenditure	13156.900	13080.300	14255.100	18228.800
Operating Profit Before Provisions and Contingencies	22531.800	23825.800	22559.800	21820.400
Exceptional Items	(124.400)	(124.400)	(124.400)	(373.100)
Provisions and contingencies	8938.000	6464.100	10293.100	15984.000
Profit Before Tax	13469.400	17237.300	12142.300	5463.300
Tax	2080.800	4223.400	2026.100	(4825.200)
Profit After Tax	11388.600	13013.900	10116.200	10288.500
+/- Extraordinary Items	0.000	0.000	0.000	0.000
+/- Prior period items	0.000	0.000	0.000	0.000
Net Profit	113886.000	130139.000	101162.000	102885.000

LOCAL AGENCY FURTHER INFORMATION

Sr. No.	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 involved in	Yes
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
31]	Date of Birth of Proprietor/Partner/Director, if available	No
32]	PAN of Proprietor/Partner/Director, if available	No
33]	Voter ID No of Proprietor/Partner/Director, if available	No
34]	External Agency Rating, if available	Yes

DETAILS OF LITIGATIONS

HIGH COURT OF BOMBAY

Case Details

Bench:-Bombay

Stamp No.:- AOST/266/2012 Filing Date:- 30/01/2012 Reg. No.:- AO/255/2012 Reg. Date:- 27/02/2012

Petitioner:- MODEKA CHEMICALS PRIVATE LIMITED

Respondent:- BANK OF BARODA

Petn.Adv.:- Mr. Sunil N. Nair

Resp.Adv.:- Purnima Pandit

District:- PUNE

Bench:- SINGLE

Status:- Admitted (Unready)

Last Date:- 08/12/2012 Stage:- FOR ADMISSION - AFTER NOTICE

Last Coram:- HON'BLE SHRI JUSTICE S.C. Dharmadhikari

Act :- Indian Contempt of Court Act 1872

Code of Civil Procedure 1908

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 31^st March, 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 31^st 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

AUDITED FINANCIAL RESULTS FOR THE QUARTER / YEAR ENDED 31ST MARCH, 2013

Rs. In Millions

Sr. No.		Particulars	Quarter ended (Standalone)		Year ended (Standalone)
			31.03.2013	31.12.2012	31.03.2013
			Audited	Reviewed	Audited
1		Interest earned (a)+ (b)+(c)+(d)	907.157	884.492	3519.665
	(a)	Interest /discount on advances/bills	651.636	648.532	2586.705
	(b)	Income on investments Interest on balances	198.410	189.792	748.339
	(c)	with Reserve Bank of India and other inter bank funds	41.313	40.321	144.302
	(d)	Others	15.798	5.847	40.319
2		Other Income	119.093	84.059	363.063
3		Total Income (1 + 2)	1026.250	968.551	3882.728
4		Interest Expended	625.758	600.402	2388.139
5		Operating Expenses (a) + (b)	182.288	142.551	587.211
	(a)	Employees cost	113.930	79.815	344.965
	(b)	Other operating expenses	68.358	62.736	242.246
6		Total Expenditure (4+5) excluding provisions and contingencies	808.046	742.953	2975.350
7		Operating Profit before Provisions and Contingencies (3-6)	218.204	225.598	907.378
8		Provisions (other than tax) and Contingencies	159.840	102.931	416.792
9		Exceptional Items (Refer Note no. 5)	3.731	1.244	7.463
10		Profit (+)/Loss (-) from Ordinary Activities before tax (7-8-9)	54.633	121.423	483.123
11		Tax expenses	(48.252)	20.261	35.051
12		Net Profit (+) / Loss (-) from Ordinary Activities after tax (10-11)	102.885	101.162	448.072
		Less: Minority Interest	NA	NA	NA
		Add: Share of earnings in Associates	NA	NA	NA
13		Extraordinary items (net of tax expenses)	--	--	--
14		Net Profit (+) / Loss (-) for the period (1213)	102.885	101.162	448.072
15		Paid-up equity share capital (Face Value of Rs.10 each)	42.252	41.238	42.252
16		Reserve excluding Revaluation Reserve	--	--	3044.266
17		Analytical Ratios
	i)	Percentage of shares held by Government of India	55.41	54.31	55.41
	ii)	Capital Adequacy Ratio (%)	13.30	12.66	13.30
	iii)	Earnings Per Share
		Basic and diluted EPS before and after Extraordinary items, net of tax expenses (not annualized) [ in Rs.]	24.99	24.61	108.84
	iv)	NPA Ratios
	(a)	Gross NPA	7982,58	7321,45	7982,58
		Net NPA	4192,02	3363,23	4192,02
	(b)	% of Gross NPA	2.40	2.41	2.40
		% of Net NPA	1.28	1.12	1.28
	v)	Return on Assets (annualized) %	0.79	0.84	0.90
18		Public Shareholding
	-	No. of shares	18,78,43,804	18,78,43,804	18,78,43,804
	-	Percentage of shareholding	44.59	45.69	44.59
19		Promoters and promoter group Shareholding	23,34,12,499	22,32,79,579	23,34,12,499
	(a)	Pledged/Encumbered
	-	Number of shares	--	--	--
	-	Percentage of shares (as a % of the total shareholding of promoter and promoter group)	--	--	--
	-	Percentage of share (as a % of the total share capital of the bank)	--	--	--
	(b)	Non-encumbered
	-	Number of shares	23,34,12,499	22,32,79,579	23,34,12,499
	-	Percentage of shares (as a % of the total shareholding of promoter and promoter group)	100.00	100.00	100.00
	-	Percentage of share (as a % of the total share capital of the bank)	55.41	54.31	55.41

Notes forming part of the Audited financial results for the quarter / year ended 31st March, 2013

1. The above financial results have been reviewed by the Audit Committee of Board in their meeting held on 12th May 2013 and approved by the Board of Directors in their meeting held on 13th May 2013. The same have been subjected to audit by the Statutory Central Auditors of the Bank, in line with the guidelines issued by Reserve Bank of India and as per the requirement of listing agreement with Stock Exchanges.

2. The above results for the quarter / full year ended 31st March, 2013 have been prepared following the same accounting policy as those followed in the annual financial statements for the year ended 31st March, 2012.

3. The figures for the quarter ended 31st March, 2013 and the corresponding quarter ended in the previous year as reported in these financial results are the balancing figure between audited figures in respect of the full financial year and the reviewed year to date figures upto the end of the third quarter of the relevant financial year.

4. In accordance with RBI circular no. DBOD.BP.BC.80/21.04.018/2010-11 dated 9th February, 2011, out of the additional pension fund liability as on 31st March, 2011 of Rs.18299.000 Millions towards serving employees who exercised option for pension, a proportionate sum of Rs.915.000 Millions has been charged to the Profit and Loss Account during the quarter and Rs.3659.800 Millions during the year ended 31st March 2013. The unamortized pension fund liability of Rs.7319.600 Millions will be charged proportionately in accordance with the directions contained in the said circular.

5. The Bank has taken over specified Assets and Liabilities of The Memon Co-operative Bank Limited on 18th April, 2011 as per approval granted by RBI vide letter no. UBD.CO.MEROER No. 7814/09.16.901/2010.11 dated 4th March, 2011. Out of the deficit of Rs.1865.800 Millions (after adjusting claim received from DICGCI) on account of the said take over, the Bank has charged Rs.373.100 Millions to the Profit and Loss Account during the quarter and Rs.746.300 Millions during the year ended 31st March, 2013. As approved by RBI vide letter no. DBOD. No. BP. 1311/21.04.048/2010-11 dated 25th July 2011 the balance amount of Rs.622.000 Millions will be charged upto Financial Year 2013-14.

6. The financial results for the quarter / year ended 31st March, 2013 have been arrived at after considering provision for Non performing Assets, Standard Assets, Restructured assets and depreciation/provision for Investments on the basis of prudential norms and specific guidelines issued by RBI. The Bank has made provision @ 20% on the Secured Sub-standard Advance as against the Regulatory requirement of 15%. Further the bank has made an additional adhoc provision of Rs. 1367.500 Millions during the quarter/year ended 31st March 2013 in certain non performing domestic advance accounts.

7. During the year bank has allotted 1,01,32,920 equity shares of Rs.10/- each at a premium of Rs.828.85 per share, to Government of India as approved by the shareholders in an Extra-Ordinary General Meeting in accordance with regulation 76 (1) of SEBI (Issue of Capital and Disclosure Requirements) Regulations 2009, on preferential basis. The total amount received by the Bank on this account is Rs.850 crores.

8. Non Performing Loan Provisioning Coverage Ratio (including technical write off) is 68.24% as on 31st March, 2013.

9. The Board of Directors has proposed a dividend of 215% i.e. Rs.21.50 per share (on face value of Rs.10/-) which is subject to approval of shareholders.

10. Details of Investor's complaints for the quarter ended 31st March, 2013: Pending at Beginning - Nil; Received - 76; Disposed off - 76; Closing - Nil

11. Statement of Assets and Liabilities is as under:-

Rs. In Millions

Particular	As on 31st Mar 2013 (Standalone) Audited
CAPITAL & LIABILITIES
Capital	42.252
Reserves and Surplus	3154.692
Deposits	47388.334
Borrowings	2657.928
Other Liabilities and Provisions	1470.338
TOTAL	54713.544
ASSETS
Cash and Balances with Reserve Bank of India	1345.208
Balances with Banks and Money at Call and Short Notice	7194.683
Investments	12139.372
Advances	32818.576
Fixed Assets	245.312
Other Assets	970.393
TOTAL	54713.544

12. The figures of previous period/ year have been regrouped/ rearranged wherever necessary so as to make them comparable with those of the current period.

SEGMENT REPORTING FOR THE QUARTER / YEAR ENDED 31ST MARCH, 2013

Part A: Business Segments

Rs. In Millions

Particulars	Quarter ended (Standalone)		Year ended (Standalone)
	Audited	Reviewed	Audited
1 Segment Revenue
(a) Treasury Operations	262.363	234.213	919.948
(b) Wholesale Banking	390.039	368.516	1502.666
(c) Retail Banking	247.963	246.502	960.456
(d) Banking & Other Operations	125.885	119.320	499.658
Total Revenue	1026.250	968.551	3882.728
2 Segment Results
(a) Treasury Operations	36.186	23.128	107.013
(b) Wholesale Banking	(51.165)	(30.455)	(10.395)
(c) Retail Banking	100.275	74.519	308.571
(d) Banking & Other Operations	4.238	61.792	222.171
Total	89.534	155.984	627.360
Unallocated Expenditure	34.901	34.561	144.237
Profit before Tax	54.633	121.423	483.123
Provision for Tax	(48.252)	20.261	35.051
Net Profit	102.885	101.162	448.072
3 Capital Employed
(a) Treasury Operations	852.691	828.164	852.691
(b) Wholesale Banking	892.757	844.752	892.757
(c) Retail Banking	427.882	458.167	427.882
(d) Banking & Other Operations	992.342	970.939	992.342
(e) Unallocated	31.272	35.833	31.272
Total Capital Employed	3196.944	3137.855	3196.944

Part- B : Geographic Segments

Rs. In Millions

Particulars	Quarter ended (Standalone)		Year ended (Standalone)
	Audited	Reviewed	Audited
1 Revenue
(a) Domestic	904.522	849.321	3387.670
(b) International	121.728	119.230	495.058
Total	1026.250	968.551	3882.728
2 Assets
(a) Domestic	38140.432	34017.180	38140.432
(b) International	16573.112	14839.120	16573.112
Total	54713.544	48856.300	54713.544

Notes on Segment Reporting:

1. As per guidelines of RBI on compliance with Accounting Standards, The Bank has adopted "Treasury Operations", Wholesale, Retail and "Other Banking Operations" as Primary business segments and "Domestic" and International as secondary / geographic segments for the purpose of compliance with AS-17 on Segment Reporting issued by ICAI.

2. Segment revenue represents revenue from external customers.

3. In determining the segment results, the funds transfer price mechanism followed by the bank has been used.

4. Capital employed for each segment has been allocated proportionate to the assets of the segment.

5. Results, Revenue and Capital Employed of International operations is included in other banking operations.

WEBSITE DETAILS

PRESS RELEASE

Moody's affirms ratings and outlook of Bank of Baroda

January 20, 2012

Moody's Investors Service has affirmed Bank of Baroda's deposit and debt ratings, with a stable outlook.

Bank of Baroda's Baa3/P-3 foreign currency deposit ratings are constrained by the sovereign ceiling for foreign currency deposits. The foreign currency debt ratings are assigned to the London branch of Bank of Baroda for where it issues this debt under its medium-term notes program.

Moody's has also affirmed the bank's D+ bank financial strength rating (BFSR), mapping to a baseline credit assessment (BCA) of Ba1, with a stable outlook.

"The affirmation of Bank of Baroda's deposit and debt ratings, and stable outlook, reflects the bank's significant franchise with growing market share, stable asset quality, as well as its strong liquidity position and income profiles," says Vineet Gupta, a Moody's Vice President and Senior Analyst.

Bank of Baroda's profitability indicators are strong, and compare well with other Baa2-rated public-sector banks. At end-March 2011, its recurring earnings power (pre-provision income/average risk weighted assets) was strong at 3.8%, and the return on average risk-weighted assets was also strong at 2.32%.

The bank's earnings profile has been maintained in the six-month period, ending September 2011.

"After factoring in the advantages of cost efficiency and stable fee income, and despite pressures on net interest margins due to an increase in the costs of funds, strong recurring earnings should continue," says Gupta.

"The possible downside to this expected scenario could emerge if the bank suffers significant asset quality or franchise deterioration, but which we do not believe is likely."

Asset quality indicators are stable, and compare well with other Baa2-rated public-sector banks. Its gross non-performing loan (NPL) ratio was stable at 1.4% at end-September 2011 (1.36% at end-March 2011), and net NPLs were below 0.5%.

Provisioning cover is adequate at 66%, although it has declined from 75% at end-March 2011. The bank's credit portfolio is well-diversified, with no individual sector exceeding 6% of total credit exposures.

"Over the next few quarters, given the challenges in its operating environment and expected vulnerability in the infrastructure portfolio (power and telecom), the bank's asset quality indicators could experience some deterioration. However, we do not expect this deterioration to be strong enough to negatively impact the ratings," says Gupta.

The bank's capitalization levels improved at end-March 2011, driven by strong internal capital generation and an equity infusion of INR24.61 billion from the Indian government. The bank's core Tier 1 capital ratio is adequate at 8.5%, enabling it to grow further and to meet the proposed draft Basel III guidelines. The bank also expects to receive another equity infusion in FY2012, which would take the government's share to 58% from its current 57%.

Bank of Baroda has adequate liquidity, driven by its strong retail franchise and mandatory government securities portfolio. Its liquidity position is comparable to other Baa2-rated Indian public-sector banks.

The bank's D+ BFSR could be upgraded if it reduces its annual NPL formation rate to below 1%, and strengthens its core Tier 1 capital to over 10%.

The supported ratings -- Baa2 senior debt and Baa2/P-2 local currency deposit rating -- are already at the country ceilings. The constrained Baa3/P-3 foreign currency deposit rating would be upgraded if the country ceiling were revised upwards.

The bank's BFSR is at the lower end of D+, which provides a significant cushion on its asset quality, capitalization, and profitability indicators. However, if the bank were to face significant deterioration in its capitalization levels or asset quality, its BFSR could come under pressure.

The supported ratings -- Baa2 senior debt ratings, Baa3 subordinated debt, and (P)Ba1 junior subordinated debt program -- would be lowered if the support assumptions on these debt instruments changed.

The principal methodologies used in rating Bank of Baroda were Bank Financial Strength Ratings: Global Methodology published in February 2007, Incorporation of Joint-Default Analysis into Moody's Bank Ratings: A Refined Methodology published in March 2007 and Moody's Guidelines for Rating Bank Hybrid Securities and Subordinated Debt published in November 2009. Please see the Credit Policy page on Moodys.com for a copy of these methodologies.

Bank of Baroda, headquartered in Mumbai, had assets of INR 3,584 billion as of 31 March 2011.

BANK OF BARODA APPROVES RS 8.50 BN PREFERENTIAL ISSUE TO GOI

12 February 2013

Bank of Baroda, one of the leading public sector lenders, approved on Monday to issue shares aggregating upto Rs 8.50 billion on preferential basis to Government of lndia (GOI).

Shares with face value of Rs 10 each will be issued for cash at a premium to be determined in accordance with SEBI (ICDR) Regulations.

The bank has called extra-ordinary general meeting, which be held at Vadodara on Mar. 11, 2013 for the same purpose.

BOB PLANS TO EXPAND BRANCH NETWORK IN KARNATAKA

(29 October 2012)

Bank of Baroda (BoB), which has 80 branches in Karnataka, will open another 20 by March-end, according to an executive. M. D. Mallya, chairman and managing director of the bank, said with the opening of the new branches, the total number will cross 100 in Karnataka.

Added to this, the bank has 33 onsite ATMs and 19 offsite ATMs in the State.  In its financial inclusion efforts, the bank has engaged 13 business correspondents in the villages allocated to it in Karnataka.

He said the bank sees Karnataka as a potential industrial and trading region, that can attract substantial inflow of funds and create opportunities for speedy growth.

The credit processing and delivery systems of the bank have been centralised with retail and SME loan factories. These loan factories that operate on assembly line principle are well geared up to serve customers more efficiently and quickly.

He said the customer services, after-sale services and wealth management services have been put on the fast-track by linking them to dedicated city sales and city back offices managed by specially trained employees.

The bank has been co-ordinating with State-level bankers committee, State enterprises, corporate sector, industrial parks and infrastructure units to offer specialised funding and advisory services, he said.

The bank opened its 81st branch in Karnataka, the ninth branch in Mangalore region on Saturday.

M. M. Reddy, general manager (Karnataka and Andhra Pradesh zone), and J. Ganesh Kumar, deputy general manager, regional office (Karnataka), were present on the occasion.

Shares of the bank declined Rs 6.9, or 0.91%, to settle at Rs 754.10. The total volume of shares traded was 86,521 at the BSE (Monday).

BBVA CALLED OFF JV WITH BOB FOR CREDIT CARD BIZ

(29 February 2012)

Banco Bilbao Vizcaya Argentaria (BBVA) has called off a joint venture with Bank of Baroda (BoB) regarding credit card business.

“Although they consider Bank of Baroda as an ideal partner, due to change of strategy within BBVA, they may not be able to proceed further in the matter,`` the bank said in the statement.

Earlier the bank has entered into a Memorandum of Understanding (MOU) with BBVA.

Shares of the bank declined Rs 10.5, or 1.3%, to trade at Rs 799. The total volume of shares traded was 29,035 at the BSE (11.06 a.m., Wednesday).

BOB, ANDHRA BANK JV CO OFFERS LIFE INSURANCE COVER TO CAR BUYERS

(27 January 2012)

IndiaFirst Life Insurance, a joint venture of two of India`s largest public sector banks - Bank of Baroda and Andhra Bank along with UK`s leading risk, wealth and investment company Legal and General, today launched `Autolife` - a simple process of getting life insurance cover instantly at an affordable cost. 

The announcement was made by Dr P. Nandagopal, Managing Director and Chief Executive Officer, IndiaFirst Life Insurance. M D Mallya, Chairman and Managing Director of Bank of Baroda, B A Prabhakar, Chairman and Managing Director of Andhra Bank and Gareth Hoskin, Chief Executive Office - International Business, Legal and General were also present at the launch. 

``Today we are witnessing two quite distinct yet obvious trends - one in the automobile industry and another in life insurance.  Both these industries while may seem to be non-related to each other, offer an interesting possibility for synergy. In the recent times, the automobile industry has seen an upsurge not only in terms of numbers but also the kind of involvement and time spent by end users in deciding the right fit.  The second trend noticed is the growing preference of investors for returns over protection and instant gratification/ solutions instead of long waits. This we see as a gap as well as a great opportunity for us as we increase our focus on group business,`` 

Under Autolife, automobile buyers can now not only ensure their family’s happiness about also secure them from future uncertainties of life.  They can now avail the benefits of a life insurance cover at the same time and place as buying their new car and that too at an affordable cost.  

Autolife is a win-win proposition for all - the customer, dealer and the insurer.  

It is convenient as it does not require any documentation/ medicals or waiting period and assures speedy and empathetic settlement of claims within 48 hours`. 

The company has entered into its first tie-up with Varun Motors of Andhra Pradesh to offer life insurance cover to its customers. India First Life is planning similar tie-ups at a nationwide level across various untapped segments in the near future so that customers across the country can avail the benefit of a life insurance cover through a simple process. 

Varun Motors today caters to over 15000 customers every month.  They are spread across Andhra Pradesh through 100 centers.

Under its first tie-up for Autolife, customers of Varun Motors (two wheeler/ four wheeler) besides availing vehicle insurance; will also be able to avail a life insurance cover of upto Rs. 2.000 Millions at an affordable cost. Customers have the flexibility of selecting from any of the four options - blue, silver, gold or platinum, which will provide life insurance cover of upto Rs 0.300 Million, Rs 0.500 Million, Rs 1.000 Millions and Rs 2.000 Millions respectively.

`We believe such an initiative is important for a country like India which is still under insured and will help achieve greater insurance penetration,`` further added Dr Nandagopal. 

India First Life Insurance is constantly working towards making insurance buying a simple and informed process for its customers.  Some of the unique initiatives launched by the company include - LifeStore, a `Do-It-Yourself` online store for understanding and buying insurance, and Ask Apply Get (AAG) - an innovative and customer friendly process to buy life insurance in the most hassle free manner over the counter. IndiaFirst was also the first to introduce product audio-visuals as a compulsory part of their sales process to bring transparency in product information dissemination.

Shares of the company declined Rs 25, or 3.16%, to trade at Rs 764.90. The total volume of shares traded was 138,930 at the BSE (2.39 p.m., Friday).

COBRAPOST: WHAT WORRIES AND WHY INCENTIVE CULTURE BE REVISED?

May 14, 2013

Cobrapost expose on alleged money laundering cases has no doubt brought many things to public notice. However, there is a need to delve deep into reading beyond investigation reports. Incentive culture is one key reason behind it, says a RBI official.

A series of sting operations by online magazine — Cobrapost — prompted both the Reserve Bank of India (RBI) and the finance ministry to swing into action. The central bank had conducted an investigation and submitted a report. Now, the finance ministry seeks punitive action against banks allegedly involved in money-laundering.

Some of the banks indicted by the expose include HDFC Bank Limited, Axis Bank, ICICI Bank Limited, State Bank of India   (SBI), Punjab National Bank   (PNB), Bank of Baroda   (BoB), Canara Bank, IDBI Bank, Yes Bank  and others.

RBI and FinMin

Of late, the FinMin is believed to have written to RBI asking the reason for not taking action so far.

"RBI will not spare anybody if proved guilty," a senior RBI official told moneycontrol.com on condition of anonymity.

"However, it will not act on other's diktat. It will take its own decision based on its internal scrutiny and investigation. Banks have committed some procedural mistakes. It is very difficult to identify the element of criminality. It is the incentive culture, which lures bank managers to go any extent. Incentives, be it in private or public sector banks, should not be given for deposit collections only but for managing non performing assets and expanding credit as well," he said.

RBI investigation report

According to CNBC TV18, the RBI may revise penalty for Cobrapost violations. It is currently at Rs 10.000 Millions. Banks have been served "show cause" notice as to why they should not be penalised. Talks of capping cash investment in third party insurance products are also going on. There may be a common code on Know Your Customer (KYC)/ anti-money laundering guidelines.

Incentive and worries

It is widely perceived that private sector banking officials are offered huge incentives to attain business targets. However, state-owned banks too are not lagging behind. Incentive culture has slowly crept in public sector banks, which are facing tough competition.

"It was actually started by SBI, which offers exotic family tour packages to Singapore or Indonesia once an official achieves his/her business target. Now-a-days some big lenders practice the same," the RBI official said.

In many cases, it is learnt that business developments at the cost of incentives do not happen in real terms for the entire industry. A branch manager may obtain bulk deposits from a single customer. With his/her transfer to another location, he will shift the same customer in the new branch. It applies the same if he changes job to another bank. Consequently, deposits are not expanding as a whole.

"Had the incentive culture helped growing the industry, the average deposits would have grown leaps and bounds. It is only diversion of deposits," he said adding that elements of unaccounted money and funds for criminal activities are two other major factors to worry for. 

Ill-gotten money, be it by way of bribes or committing crimes, if laundered through banking system, will wreak havoc especially in an emerging economy like India. RBI is quite concerned about it.

"Name dropping is a big issue in India. Even big fishes when get money through unscrupulous means call their cohorts sitting in large institutions to park their sum in different deposit schemes in smaller denominations," said an industry expert who did not wish to be identified.

Banks viewpoint

Banks do not find anything wrong in giving incentives to efficient staff, who bring business. The "unnecessary" commotion is rather injecting an element of "fear psychosis" among managers (at the grass root level), who no more will work freely. It may hurt their performance as well, top lenders are of opinion.

"You mean to say every thing is going wrong in the system," was the curt reply from a CMD of large state-owned bank as against a moneycontrol query.

"If it is so, then change the system, do not blame banks. I still fail to understand what fraud exactly has taken place. In colloquial term, a bank manager may resort to some loose talks. It does not mean, he will apply the same," he said adding that bank managers are not expected to greet customers with a volley of intricate questions.

COBRAPOST EXPOSE: BANKS SUSPEND EMPLOYEES UNDER FINMIN HEAT

May 07, 2013

In the aftermath of Cobrapost 2, state-owned lenders including Punjab National Bank   (PNB), Bank of Baroda  (BoB) and IDBI Bank  on Tuesday suspended cumulatively five officials allegedly involved in money laundering and KYC (Know Your Customers) violation norms.  The finance ministry is exerting pressure on all institutions to take rapid actions

All those suspension can be revoked provided final investigation reports exonerate them.

Online investigative news website Cobrapost had carried out a sting operation on 23 financial institutions including large public sector banks, insurance companies and some mid size private sector lenders. In a press conference on Monday, it alleged all those of helping people convert black money into white by way of investment in their schemes.

India's third largest lender Punjab National Bank (PNB) on Tuesday suspended two out of three employees allegedly involved in Cobrapost expose. Those were working in South Delhi and Noida branches in the capacity of cheif manager and assistant general manager. However, decision is not yet taken on the third employee based in South Delhi.

"The bank prima facie has not found any evidence of violations. The conversations between Cobrapost and bank officials were purely of colloquial nature. Investigation is on. We are looking into the matter," said a senior official from PNB confirming the development. He did not wish to be quoted.

Similarly, IDBI Bank suspended two junior officials based in New Delhi. Bank of Baroda too is believed to have suspended one chief manager at Parliament Street branch.

According to a BoB official, all involved managers were doing business on behalf of respective banks, not for individual gains. However, banks are probably acting under ministry pressure.

"Any suspension does not prove somebody's guilt. They will be relieved from work till the final investigation report comes out. We are conducting our own investigation. It is not our responsibility to cross check the source of money. We can always refer it to FIU," said a senior banker from IDBI Bank.

It is a normal practice for a branch manager (of any bank) to report any suspicious transaction to the Financial Intelligence Unit (FIU), the government agency which reports the same to the Income Tax Department.

Earlier on Monday, the finance ministry had started scrutinizing the video footage shown in the exposure. Rajiv Takru the secretary at Department of Financial Services had asked all state owned banks and the Life Insurance Corporation (LIC) of India to initiate actions.

"I assume that the DVDs contain what is genuine material because that would be in the fitness of things. I don't think anybody would do something like this on the basis of fabricated evidence, so we assume that whatever has been shown in the DVDs prima facie is correct or reflects the transaction as it happened. At this moment we are not talking in terms of forensic examination of DVDs," he told CNBC TV18.

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 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.55.61
UK Pound	1	Rs.83.98
Euro	1	Rs.71.94

INFORMATION DETAILS

Report Prepared by :

NTH

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	9
PAID-UP CAPITAL	1~10	9
OPERATING SCALE	1~10	9
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	9
--PROFITABILIRY	1~10	9
--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	YES
--OTHER ADVERSE INFORMATION	YES/NO	NO
MERIT POINTS
--SOLE DISTRIBUTORSHIP	YES/NO	NO
--EXPORT ACTIVITIES	YES/NO	NO
--AFFILIATION	YES/NO	YES
--LISTED	YES/NO	YES
--OTHER MERIT FACTORS	YES/NO	YES
DEFAULTER
--RBI	YES/NO	NO
--EPF	YES/NO	NO
TOTAL		77

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	-

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

This report is issued at your request without any risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or its officials.