PREFACE

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

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

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

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

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

19 BIBLIOGRAPHY 86
20 GLOSSARY 87
INDEX

ABSTRACT
India is being widely recognized as one of the most exciting emerging economics in the world.
Besides becoming a global hub of outsourcing, Indian firms are spreading their wings globally
through mergers and acquisitions. During the first four months of 1997, Indian companies have
bought 34 foreign companies for about U.S. $11 billion dollars. This impressive development has
been due to a growth in inputs (capital and labor) as well as factor productivity. By the year
2020, India is expected to add about 250 million to its labor pool at the rate of about 18 million a
year, which is more than the entire labor force of Germany.

This so-called demographic dividend has drawn a new interest in the Human Resource concepts
and practices in India. This paper traces notable evidence of economic organizations and
managerial ideas from ancient Indian sources with enduring traditions and considers them in the
context of contemporary challenges.

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

INTRODUCTION
Bank of Baroda (BSE: 532134) (BoB) is the third largest Public Sector bank in India, after State
Bank of India and Punjab National Bank. BoB has total assets in excess of Rs. 2.27 lakh crores,
or Rs. 2,274 billion, a network of over 3000 branches and offices, and about 1100+ ATMs. It
offers a wide range of banking products and financial services to corporate and retail customers
through a variety of delivery channels and through its specialized subsidiaries and affiliates in
the areas of investment banking, credit cards and asset management.

Maharajah of Baroda Sir Sayajirao Gaekwad III founded the bank on July 20, 1908 in the
princely state of Baroda, in Gujarat. The bank, along with 13 other major commercial banks of
India, was nationalized on 19 July 1969, by the Government of India.

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

1960s
7

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

1970s and 1980s

1972: BOB acquired Bank of Indias operations in Uganda.
1974: BOB opened a branch each in Dubai and Abu Dhabi.
1975: BOB acquired the majority shareholding and management control of Bareilly Corporation
Bank (est. 1928) and Nainital Bank (est. in 1954), both in Uttar Pradesh. Since then, Nainital
Bank has expanded to Uttarakhand State.

1976: BOB opened a branch in Oman and another in Brussels. The Brussels branch was aimed at
Indian firms from Mumbai (Bombay) engaged in diamond cutting and jewellery having business
in Antwerp, a major center for diamond cutting.
1978: BOB opened branch in New York and another in the Seychelles.
1979: BOB opened a branch in Nassau, the Bahamas.
1980: BOB opened a branch in Bahrain and a representative office in Sydney, Australia.
BOB, Union Bank of India and Indian Bank established IUB International Finance, a licensed
deposit taker, in Hong Kong. Each of the three banks took an equal share.
1985: BOB (20%), Bank of India (20%), Central Bank of India (20%) and ZIMCO
(Zambian government; 40%) established Indo-Zambia Bank (Lusaka).
BOB also opened an Offshore Banking Unit (OBU) in Bahrain.
1988: BOB acquired Traders Bank, which had a branch network in Delhi.

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

1997: BOB opened a branch in Durban.

1998: BOB bought out its partners in IUB International Finance in Hong Kong.
Apparently this was a response to regulatory changes following Hong Kongs reversion to the
Peoples Republic of China. The now wholly owned subsidiary became Bank of Baroda (Hong
Kong), a restricted license bank.
BOB also acquired Punjab Cooperative Bank in a rescue.
1999: BOB merged in Bareilly Corporation Bank in another rescue. At the time, Bareilly had 64
branches, including four in Delhi.
In Guyana, BOB incorporated its branch as a subsidiary, Bank of Baroda Guyana.
BOB added a branch in Mauritius, but closed its Harrow Branch in London.

2000s
2000: BOB established Bank of Baroda (Botswana).
2002: BOB acquired Benares State Bank in Benares at the Reserve Bank of Indias request.
2002: Bank of Baroda (Uganda) was listed on the Uganda Securities Exchange (USE).
2003: BOB opened an OBU in Mumbai.
2004: BOB acquired the failed Gujarat Local Area Bank, and returned to Tanzania by
establishing a subsidiary in Dar-es-Salaam.
BOB also opened a representative office each in Kuala Lumpur, Malaysia, and Guangdong,
PRC.
2005: The Reserve Bank of India (RBI) has approved a joint venture between BOB, Bank of
Maharashtra (BOM), and Oriental Bank of Commerce (OBC) to set up a bank in Malaysia. The
new bank will reside in Kuala Lumpur, which has a large population of Indians. The initial
capital required will be US$78 million; BOB will invest 40%, and the other two banks will

10

invest 30% each. The JV is awaiting approval from the Malaysian Central Bank. Bank has built
and commissioned its own State-of-the-Art Global Data Centre (DC) in Mumbai for running its
centralized banking solution (CBS) and other applications in 1900+ branches across India and 20
other counties where the Bank is operating.
BOB also opened a representative office in Thailand.
2006: BOB established an Offshore Banking Unit (OBU) in Singapore.
2007: In its centenary year, BOB's total business crossed 2.09 lakh crores, its branches crossed
1000, and its global customer base 29 million people.
2008: BOB opened a branch in Guangzhou, China (02/08/2008).
2009: Bank of Baroda registered with the Reserve Bank of New Zealand, enabling it to trade as a
bank in New Zealand (2009/09/01)

11

A saga of vision and mission of enterprise

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

It all started with a visionary Maharaja's uncanny foresight into the future of trade and
enterprising in his country. On 20th July 1908, under the Companies Act of 1897, and with a paid
up capital of Rs 10 Lacs started the legend that has now translated into a strong, trustworthy
financial body, THE BANK OF BARODA. It has been a wisely orchestrated growth, involving
corporate wisdom, social pride and the vision of helping others grow, and growing itself in turn.

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

It is a story scripted in corporate wisdom and social pride. It is a story crafted in private capital,
princely patronage and state ownership. It is a story of ordinary bankers and their extraordinary
contribution in the ascent of Bank of Baroda to the formidable heights of corporate glory. It is a
story that needs to be shared with all those millions of people - customers, stakeholders,
employees & the public at large - who in ample measure, have contributed to the making of an
institution.

12

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

BOB Logo
Our new logo is a unique representation of a universal symbol. It comprises dual B letterforms
that hold the rays of the rising sun. We call this the Baroda Sun. The sun is an excellent
representation of what our bank stands for. It is the single most powerful source of light and
energy its far-reaching rays dispel darkness to illuminate everything they touch. At Bank of
Baroda, we seek to be the sources that will help all our stakeholders realize their goals. To our
customers, we seek to be one-stop, reliable partners who will help them address different
financial needs. To our employees, we offer rewarding careers and to our investors and business
partners, maximum return on their investment.

The single-colour, compelling vermillion palette has been carefully chosen, for its distinctiveness
as it stands for hope and energy. We also recognize that our bank is characterized by diversity.
Our network of branches spans geographical and cultural boundaries and rural-urban divides.
Our customers come from a wide spectrum of industries and backgrounds. The Baroda Sun is a
fitting face for our brand because it is a universal symbol of dynamism and optimism it is
meaningful for our many audiences and easily decoded by all.

Our new corporate brand identity is much more than a cosmetic change. It is a signal that we
recognize and are prepared for new business paradigms in a globalised world. At the same time,
13

we will always stay in touch with our heritage and enduring relationships on which our bank is
founded. By adopting a symbol as simple and powerful as the Baroda Sun, we hope to
communicate both.

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

Global Presence of Bank of Baroda

Global Presence
Australia
Bahamas
Bahrain
Belgium
Botswana
China
Fiji Islands
14

Ghana
Guyana
Hong Kong
Kenya
Mauritius
Malaysia
Seychelles
South Africa
Singapore
Sultanate of Oman
Tanzania
Thailand
Trinidad & Tobago
Uganda
United Arab Emirates
United Kingdom
United States of America
Zambia

Subsidiaries & Joint Ventures

Domestic Overseas
Subsidiary Subsidiary
Bank of Baroda (Botswana) Ltd.
Bank of Baroda (Kenya) Ltd.
Bank of Baroda (Uganda) Ltd.
Bank of Baroda (Guyana) Ltd.
15

Bank of Baroda (UK) Ltd.

Bank of Baroda (Tanzania) Ltd
Bank of Baroda (Trinidad &
Tobago) Ltd.
Bank of Baroda (Ghana) Ltd.
Representative Offices
BOBCARDS Ltd.
BOB Capital Markets Ltd.
Nainital Bank Ltd.
Bank of Baroda (Thailand)
Bank of Baroda (Malaysia)
Bank of Baroda (Australia)
Associate Associate
Baroda Pioneer Asset Management
Company Ltd
UTI Asset Management Company Ltd
UTI Trustee Company Pvt Ltd
Baroda Uttar Pradesh Gramin Bank
Baroda Rajasthan Gramin Bank
Baroda Gujarat Gramin Bank
Nanital -Almora Kshetriya Gramin
Bank
Jhabua-Dhar Kshetriya Gramin Bank

16

Indo-Zambia Bank Ltd. (Lusaka)

Offices & Branches

Corporate Offices
Head Office
Suraj Plaza 1, Sayaji Ganj,
Baroda 390005
Ph: (0265) 2361852(10lines)
Fax: (0265) 2362395, 2361824, 2361806
Corporate Centre
Bank Of Baroda
Baroda Corporate Centre,
Plot No. C-26, Block G,
Bandra Kurla Complex,
Bandra (East),
Mumbai 400051
Ph: (022) 6698 5000-04 (PBX)
Fax: (022) 2652 1955
Branch Network (as of 1/1/2010)
Area No. of Branches
Metro 555
Urban 627
Semi-Urban 684
Rural 1216

17

Total (Indian) 3082

Foreign (Overseas) 70
Total (Global) 3152
Controlling Offices
Zonal Offices 10
Regional Offices 43
Human Resources (Staff as of September 2006)
Officers 13525
Clerks 16497
Sub Staff 8041
Total 38063

Business Indicators
Key Business Indicators
(Rs. in Crore)
31.03.2009 31.03.2008
Total Deposits 1,92,396.95 1,52,034.12
Total Advances 1,43,985.90 1,06,701.33
Total Investments 52445.88 43870.07
Total Assets 227406.73 179599.52
Net Profit 2227.20 1435.52
Capital Adequacy Ratio
(percentage)
12.88 as per Basel I

18

14.05 as per Basel II

12.91 as per Basel I
12.94 as per Basel II
Net Non Performing Loans
to Net Advances (percentage)
0.31 0.47
Operating profit to working
funds (percentage)
2.22 1.96
Business Per Employee
(Lacs)
914 704
Dividend History (Percentage)
2009 90
2008 80
2007 60
2006 50
2005 50
2004 65
2003 60
2002 40
2001 40
2000 40

19

1999 30
1998 30

20

KEY EXECUTIVE
S.No

Name

Designation

Milind N Nadkarni

Director

Dharmendra Bhandari

Director

A Somasundaram

Director

Amitabh Verma

Director

Maulin A Vaishnav

Director

Atul Agarwal

Director

Ranjit Kumar Chatterjee

Director

Deepak B Patak

Director

R K Bakshi

Executive Director

10

Srinath

Executive Director

21

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

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

22

 Financial Initiatives
New norms for capital adequacy required new capital management strategies. In 1995 the
Bank raised Rs 300 crores through a Bond issue. In 1996 the Bank tapped the capital market with
an IPO of Rs 850 crores, despite adverse market conditions prevailing then, the issue was over
subscribed, reflecting the positive public perception of the Bank's fundamental financial strength.

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

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

23

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

The Future Revolutionary and discontinuous changes in the operating environment is a stark
reminder that business success is 'impermanent'. The emergence of IT as a major driver for
change, has accentuated the need to initiate a major transformation program. The conversion to
an IT savvy, market driven bank will be a prerequisite to survival and growth. A major and
strategic step in hi-tech, was the establishment of the Integrated Treasury branch, as a forerunner
to full-fledged global treasury operations. Towards creating a future Bank of Baroda, the Bank
has adopted a revolutionary new business strategy that will be enabled by a revolutionary new IT
strategy. Actioning this strategy will position Bank of Baroda as India's uncontested premier
bank.

At Bank of Baroda, change is a journey. It has a beginning. There will be no end. It will be a long
and difficult march. And the Bank will emerge stronger, more resilient and positioned to become
India's first bank of truly global standards. The relocation to the imposing Baroda Corporate
Centre is a true reflection of the Bank's resolve to move ahead of the times. It will not be out of
place now, as it stands on the threshold of a digital era, to echo the same sentiments that guided
the Bank in its platinum jubilee year - 'a promising future is the sequel to a glorious past'.

24

HUMAN RESOURCES
Bank of Baroda has the tradition of continuous enrichment of its human asset so that they
deliver value to the business. In the ongoing Business Transformation Programme, our PEOPLE
play a vital role and are one of the key business enablers. Under its plan of organizational
transformation through people processes and systems, the Bank has launched a few innovative
employee centric initiatives and has also undertaken revamp of key systems and practices.

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

HR Business Model
The Strategic HR Business Model adopted by Bank of Baroda incorporates its HR Mission
and Philosophy and is focused towards attainment of long-term organizational goals.
25

A very strong Organizational Leadership at different levels forms the key link in the Model.
These are;
I. Strategic Leadership - Corporate level
II. Business Leadership - Zonal & Regional level
III. Operational Leadership - Business unit level i.e. branch
The two vital Human Resource sub-systems i.e. HR Planning & Management Sub-System &
Competency Based HRD Sub-System shape the very crucial Performance Environment
within the Bank which facilitates development of enabling capabilities of people.

Through proper developmental inputs, Positive Attitude & Right Mindset is created among
people.
Through proper Communication Medium and an Organizational Culture of sharing,
openness, collaboration & confrontation, autonomy etc., people in the organization are facilitated
to give their best output (performance).

The Model is adequately supported by a suitable Learning Platform, which imparts proper
Knowledge and enhances Learning among people (functional, behavioural etc) so that their
Competence increases and their potential could be properly leveraged for greater Individual
and Organizational Effectiveness.

These create proper Employee Motivation, which ultimately facilitates Goal Achievement.

26

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

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

KHOJ
Organization wide Talent identification and Development Programme for Officers and Clerks
(Through scientific process of identification and selection, employees with high potential to be
deployed in key business areas. Such employees to be provided with suitable grooming and
career growth opportunities)

SAMPARK
SOS Employee HELP Line
(Employees in distress can directly approach the CMD for immediate relief)
PARAMARSH
Employees Counseling Centre
(Counseling centers for providing psychological assistance and guidance to overcome their
stress, complexities and conflicts in order to lead a better life.
This is totally confidential between the employee and the counselor.

27

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

BARODA FINANCIAL REWARDS FOR BUSINESS LEADERS

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

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

HR POLICY FOR OVERSEAS SELECTION & DEPLOYMENT

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

28

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

Performance Appraisal System for Clerical and Sub-Staff

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

Massive Recruitment of Specialist officers and also graduates from B-Schools through
campus recruitment
To take care of the Banks requirement in different specialized areas like IT, Treasury, HR,
Marketing & Sales, Credit, International Business etc (Around 500 officers being recruited).

A New Induction cum Grooming Programme for Young Officers

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

Fast Track Career Growth Opportunities for Executives and Officers

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

BARODA LEADERSHIP DEVELOPMENT CENTRE

29

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

NEW GROUP HR STRUCTURE

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

TRAINING
To keep up with the fast changing business scenario, product profile, processes, customer
preferences, numerous technology applications and compliance & regulatory requirements,
training has become a centrestage activity.
The bank conducted 342 training programs in the area of CBS covering 6234 employees during
the year. To provide appropriate thrust in the area of credit and risk management, 193
programmes were conducted in other functional areas covering 4595 employees during the year.

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

A Leadership Development Program Project LEAP

30

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

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

Under this program of Bank Of Baroda, nearby three hundred executives has been groomed in
leadership in a phased manner. Its rigorous process involves:
To identify a competency framework for future leaders in the Bank.
Administration of psychometric instruments and 360-degree feedback for each identified
executive for building on their strength and working in the areas where development is needed.
Classroom orientation & Action Learning Projects.
Succession Planning.

Another is KHOJ-For talent Identification and grooming

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

31

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

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

PROMOTION
The present procedure of recruitment and promotion in the banks has evolved over the years in
an ad hoc manner. With the objective of bringing an organization wide performance culture in
the organization, hitherto uncovered employees in the Clerical and Sub-Staff cadre brought in
under a new performance appraisal system.

To take care of the Banks requirement in different specialized areas like IT, Treasury, HR,
Marketing & Sales, Credit, International Business etc. In most of the central government
department there is provision for time bound promotion and hence question of stagnation in
particular scale does not arise. It is banks that even after completing twenty or thirty years of
service in a particular scale promotion is not given to an employee. (Now-a-days Interview is a
killer injection in the pocket of management, which can be injected to any good or bad performer
in promotion process as per whims, and fancies of the interviewer).

32

When leaders and bank management can give relief to retired employees In order to provide fast
track growth opportunities to aspiring Executives and Officers, promotional opportunities have
been provided.

According to Anurag Khanna, chairman and managing director of Bank net India, a banking
research company, new recruitments are to keep pace with the banks expansion plans. The
banks are adopting fast-track promotions to fill in any management gap, said Khanna. We are
battling private and foreign banks with public sector tools, said Dipankar Mukherjee, general
manager, human resources and marketing at Bank of Baroda.

Low salary, tough working conditions, frequent transfers and an opaque promotion policy deter
public sector employees from working effectively. Bank of Baroda wanted differential wages for
their employees but they could not move ahead with their plans as the unions opposed that. Titles
for the officer cadre start from assistant manager, deputy manager, manager, chief manager,
general manager, managing director and the chairman accordingly.

Though the pay scale slightly varies from bank to bank due to many reasons like the working
place viz.metros, rural areas the basic scale remains the same for every public sector bank. The
employees are promoted on the basis of their score in the exams taken by the bank. It includes
written exam and interview. It is taken time to time. There are some qualifications required for
appearing in the exam.

33

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

Separate marks were prescribed for each of the two parameters and, after obtaining the minimum
qualifying marks varying from cadre to cadre one could be promoted to the next higher position.
While formulating the merit-based promotion policy the consideration opinion was that separate
points should not be prescribed for qualification and length of service. The simple reason for this
thinking was that the minimum qualification stood as prescribed at induction for different levels
of hierarchy. The other consideration for such views was that in case the employee had increased
his qualification for his better performance as compared to other colleagues, then the said
qualification would be reflected on his performance and this would obviously have him rated
better than others. Views regarding the seniority of an employee were similar.

To meet the Banks growth requirements and to fulfill the aspirations of employees, avenues for
career progression have been numerous. Special efforts have been made to maintain relatively
younger employees manning key positions. Keeping this in view the following numbers of
employees were promoted to higher grade/scale during the year

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

34

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

MMG/S III to MMG/S IV (Sr. Manager to Chief Manager) 220
SMG/S IV to SMG/S V (Chief Manager to Asst. Gen. Manager) 46
SMG/S V to TEG/S VI (Asst. Gen. Manager to Dy. Gen. Manager) 30
TEG/S VI to TEG/S VII (Dy. Gen. Manager to General Manager) 10

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

The powers and duties of its officers and employees

All the officers from JMGS I to TEGS VI grade of the bank, working in branches have certain
discretionary lending and administrative powers depending upon their positions. The Board
decides the delegation of such powers of various grades of officials. These powers are revised
periodically, depending upon the organizations requirement and also Government / RBI
guidelines.

Whether to sanction a loan or not, is the absolute discretion of the concerned sanctioning
authority of the bank and such discretion is exercised, after taking into consideration the relevant
facts and circumstances of each case.

35

The procedure followed in the decision-making process, including channels of supervision

and accountability.

There is a well-defined system in the Bank regarding decision-making process. The Board takes
lending and administrative decisions at various levels from JMGS I to Top Executive grade Scale
VII and also by Executive Director and Chairman & Managing Director depending upon their
positions as per the discretionary lending powers delegated to them. Branches receive
applications for credit facilities and recommend to the appropriate sanctioning authority. In the
case of major retail loan products applications are processed at branches and Centralised Credit
Processing Cells at select centers.

There is a well-defined organizational structure and clear system of accountability based on

RBI / CVC guidelines. All credit decisions approved by any sanctioning authority are reported to
the next higher authority for control purpose. The system of exercising proper delegation of
power and submission of control reports is in place and they are monitored by control officers
and through internal inspection.

The Baroda Sun

Our logo is a unique representation of a universal symbol. It comprises dual 'B' letterforms that
hold the rays of the rising sun. We call this the Baroda Sun.

The sun is an excellent representation of what our Bank stands for. It is the single most powerful
source of light and energy. Its far-reaching rays dispel darkness to illuminate everything they
36

touch. At Bank of Baroda, we seek to be the sources that will help all our stakeholders realize
their goals. To our customers, we seek to be a one stop, reliable partner who will help them
address different financial needs. To our employees, we offer rewarding careers and to our
investors and business partners, maximum return on their investment. The single color,
compelling Vermillion palette has been carefully chosen, for its distinctiveness as it stands for
hope and energy. We also recognize that our Bank is characterized by diversity. Our network of
branches spans geographical and cultural boundaries and rural-urban divides.

Our Customers come from a wide spectrum of industries and backgrounds. The Baroda Sun is a
fitting face for our brand because it is a universal symbol of dynamism and optimism. Our
corporate brand identity is much more than a cosmetic change. It is a signal that we recognize
and are prepared for new business paradigms in a globalised world. At the same time, we will
always stay in touch with our heritage and enduring relationships on which our bank is founded.
By adopting a symbol as simple and powerful as the Baroda Sun, we hope to communicate both.

Bank of Baroda rose in a new avatar with what it calls the "Baroda Sun" with cricketer Rahul
Dravid (in picture) roped in to endorse the brand which now projects itself as a modern and techsavvy bank. Brand marketers are calling it the impact of cut-throat competition in the domestic
market. Faced with rising competition on the domestic front, many Indian companies are
increasingly going in for a corporate brand makeover. But, as they insist, it's not merely a logo
change but represents a fundamental shift in the way the companies will operate henceforth.

37

According to Sharma, it is the fast-changing society and environment, which is driving

companies to go in for a change in their corporate logo and identity. "The change has to be
relevant, as the company is related to society and society is changing quickly and that change
needs to be reflected," he says. "In fact, consumers are evolving all the time, so it becomes
critical for companies to stay contemporary and relevant. A makeover gives a new identity and
infuses freshness and is undertaken with an aim of altering perceptions," says an official from
Synovate India, a market research firm. In most cases, the change in corporate logos is also used
to announce a far-reaching change within the company itself.

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

The Bangalore-based design house has a five-point test for a company's brand identity: Is it
relevant, enduring, sustainable, memorable and unique? If they fail to meet one or more of the
above requirements, companies should look at a change. "It is hard to imagine a company

38

changing logos just for cosmetic reasons because it requires such significant investment and
change management," says Malhotra Interestingly, companies which are going in for a change in
their corporate image can be divided into two - those that have already implemented a change in
their style of functioning and want to come up with a fresher image to reflect it and those that are
set to bring about far-reaching changes within the firm and are announcing those changes
through a new corporate identity.

A company's logo is perhaps the opening impression of a company in the eyes of its consumers
both internal and external. For companies, which grew organically over the last few decades and
were often sheltered in an economy that did not allow competition, the importance of the logo or
initial impression was lost. Too few players and hugely different product offerings! So no real
competition. They didn't feel the need to invest in an image. However, increasing competition
and the need of companies to be seen differently from their peers has catalyzed the need for
change." says Anisha Shakdher, Founder & Creative Head, and Bounce Design.

This is probably the reason why even public sector banks are now going in for an image
makeover. While State Bank of India is sprucing up many of its branches, the 97-year-old Bank
of Baroda (BoB) is now sporting a new logo and will soon unleash a high-pitched ad campaign?
The old logo makes way for a new one, which is a double `B' with a rising sun called `The
Baroda Sun.' According to Anil K. Khandelwal, Chairman & Managing Director, BoB, "The new
corporate logo is much more than a cosmetic change. It is a signal the bank recognizes and is
preparing itself for the new business paradigms in the globalised world."

39

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

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

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

40

Bank of Baroda features in list of 50 Indias Most Valuable Brand 2009

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

Domestic Operations
Baroda Fixed Deposit Account
Why just let your money idle, when you can idle it with interest? Depending on the period, our
various fixed deposit products help you get the best out of your savings by offering you good
interest rates. Enjoy both security and competitive rates of interest on your deposits with any of
the following products.

For Deposits upto 12 months:

Short Deposits
For Deposits over 12 months:
Fast Access Deposit Scheme
BoB Flexible Fixed Deposit Scheme
Regular Income Plan
41

Monthly Income Plan

Regular Income Cum Recurring Deposit
Capital Gain Account Scheme, 1988
Term Deposits
Baroda Tax Savings Term Deposit

As Recurring Deposits:
General Scheme
Baroda Flexible Recurring Deposit Account

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

Baroda Savings Account

Depending on the nature of the account and the governing terms and conditions, Bank of Baroda
offers you under Savings Accounts.
42

Baroda Centenary Savings Account

Savings Bank Account
Super Savings Account
Nagrik Bachat Khata
Baroda Salary Advantage Saving Account
Baroda Bachat Mitra
Business Banking Services
Customised services for unique requirements.
The small and medium business enterprise is one of the fastest growing sectors in the country.
Bank of Baroda offers various products and services that meet the specific requirements of such
enterprises and help them grow.
In addition to tailor-made products, you can depend on the strength of our nation-wide network
and facilities that will enable you to conduct your business smoothly, without geographical
constraints.

Be it Deposits, Loans & Advances, Collection Services, Working Capital Finance, Term Finance,
Non-Fund based Facilities, Trade Finance, Merchant Banking or other such aspects of banking,
we have a solution to help your business run smoothly and efficiently.

Personal Banking Service

The strength and integrity of relationships. Bank of Baroda believes in the strength and integrity
of relationships built with its customers like you. With over 101 years of experience in the

43

banking industry and a wide network of over 3000 branches all over the country, we have always
been active in extending financial support and adapting to your changing needs.

Our Deposit Products, Retail Loans, Credit Cards and Debit Cards help you with your growing
financial needs. With facilities like Lockers we ensure that your valuables are safe with us.
Our countrywide branches offer you convenience and ease in operating your account wherever
you are. Our 24-hour ATMs enable you to withdraw cash, check your account balance and
request for a new chequebook even after banking hours.

Faster technology for better service

Baroda Internet Banking / Baroda Mobile Banking, our latest Internet and Mobile banking
initiatives enable you to operate your account just as you would in any of our branches. You can
through the Internet check your balance, request for chequebooks and print account details.
Corporate
Banking
Services
Supporting corporate growth
As corporations grow they feel the need to expand and invest in new infrastructure. External
finance is one of the most important sources for funding expansion plans. With services ranging
from Working Capital Finance, Short Term Corporate Loans Project Finance to Cash
Management and Merchant Banking, Bank of Baroda Corporate Banking offers various options
that help fund and enable corporations in their investment and expansion plans.

44

These products also offer merchant banking and cash management solutions.
Our global presence, large-scale operability, highly networked systems and local market
penetration allow our customers to reap financial benefits to the maximum.
Treasury
Operations
In the changing economic environment of the country in particular and the globe in general,
Bank of Baroda was the premier public sector bank in India to set up a Specialized Integrated
Treasury Branch (SITB) in Mumbai and the integrated approach initiated by the Bank in its
treasury operations is now being emulated by other peer banks.
Bank of Baroda has consciously adopted a focused approach towards improving efficiency and
profitability successfully integrating the operations of different financial markets, viz. Domestic
Money, Investments, Foreign Exchange and Derivatives and has made its mark as an important
player in the market-place.

The SITB at Mumbai, equipped with the State-of-the-art technology, with modern
communication facilities, handles all types of financial transactions, both for managing its
resources and deployments and effective compliance of regulatory requirements.
Rural
Banking
Services
Strengthening the rural economy
Rural India contributes a major chunk to the economy every year. To give this sector a
stronghold on finance and to enable economic independence, Bank of Baroda has special

45

offerings that extend credit facilities to small and marginal farmers, agricultural labourers and
cottage industry entrepreneurs.

With the objective of developing rural economy through promotion of agriculture, trade,
commerce, industry and extending credit facilities particularly to small and marginal farmers,
agricultural labourers and small entrepreneurs, Bank of Baroda, over the years, has reached out
to larger part of rural India. We extend loans for agricultural activities and a host of services for
farmers well tuned to the rural market, and aim to make a Self Reliant Rural India.

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

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

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

The Bank has presence in world's major financial centers i.e. New York, London, Brussels,
Dubai, Hong

46

Kong, and Singapore.The "round the clock around the globe", Bank of Baroda is further in the
process of identifying/opening more overseas centers for increasing its global presence to serve
its 36 million global customers in still better way.
Recently, its Subsidiary in Uganda - Bank of Baroda (Uganda) Ltd. opened its 8th branch at
Kawempe and the Subsidiary in Kenya - Bank of Baroda (Kenya) Ltd. also opened its 8th branch
at Nakuru. Bank now has -32- branches in -8- countries in Africa.

Bank has plans to establish overseas offices in New Zealand, Russia, Canada, Qatar,
Mozambique, Suriname, Kuwait, Saudi Arabia etc. and also open additional branches in UAE,
Oman, USA, China, Trinidad & Tobago and Uganda. It has further plans to upgrade its
Representative Offices in Malaysia and Australia to branches.
Money Centre Branches
Seven branches at London, New York,
Brussels, OBU Mauritius, OBU Nassau,
Dubai and Singapore are our Money Centre Branches, thus offering flexibility as well as good
standing.

International Treasury:
Bank of Baroda has a strong presence in the Treasury Market in India as well as abroad. The
overseas Money Centre Branches undertake the Forex treasury operations on behalf of the
customers. All the Forex treasuries at the overseas money center branches are equipped with
state of art technology, highly experienced and motivated staff with professional skills. These

47

branches deal in all the major international currencies i.e. US$, GBP, Euro, Yen as well as other
currencies. These branches undertake the following treasury related activities:
Forex Inter Bank Placements/ Borrowings
Sale & Purchase of currency on behalf of customers
Forward Cover Bookings
Cross Currency Swaps
Interest Rate Swaps (IRS)
Forward Rate Arrangements (FRA's)
Forex Money Market Operation

NRI Services
We offer a red carpet welcome to all NRI's to bank with us. As a premier nationalised bank in
India, with comprehensive banking experience world-wide, and by virtue of our consistent track
record of profit making since 1908,we are confident of meeting all your banking requirements.
Our wide network of foreign branches, offices and Correspondent Relations at convenient
business locations all round the world, which is the largest among any bank in India, will ensure
a smooth and safe banking experience.

We continue to cherish our rich ethnic traditional values and culture, during our personal
interface. Yet we are speedily repositioning ourselves in the e-millennium era of banking in
India, to take care of your changing needs and expectations. Our information technology
strategies are directed towards enabling us to provide you with a state of the art customer
convenience, thereby facilitating a global banking experience.

48

We understand you, the NRI's, your needs and immensely value your patronage and would like
to extend to you our bouquet of products and services. We assure you the best possible banking
experience and will ensure that your wealth continues to grow with us.

Eligibility - FOR NON-RESIDENT INDIANS ONLY

Different meaning under different statutes FERA, 1973 and I.T. Act 1961 had different
definitions Includes NRI and other non-resident foreign nationals NRI includes non-resident
Indian nationals and also non-resident Persons of Indian origin Under FERA, emphasis in
determining residential status was based on purpose of stay outside India and not on duration of
stay outside India.
Definition of person resident in India as per new legislation, FEMA Earlier definition
independent of period of stay Current definition dependent on both 'purpose of stay' and on
'period of stay' as defined in Chapter 1,Clause 2 of FEMA

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

Person resident outside India, who is a citizen of India or is a person of Indian origin Indian
citizens working abroad on assignment with Foreign Governments, Govt. agencies or in UNO
and its affiliates IMF,IBRD etc. and Govt. officials (both central and state) and other officials of
PSU's deputed abroad on assignments or posted abroad including Diplomatic Missions.

Indian Students studying abroad are also treated as NRIs provided their stay abroad is for more
than 182 days in the preceding financial year and their intention to stay outside India for an
uncertain period when they go abroad for studies.

49

Non-resident foreign citizens of Indian origin are treated on par with NRI citizens for the
purpose of certain facilities

Foreign Currency Credits

The Foreign currency denominated credit facilities are granted to the Indian corporations in India
as well as at the Money Centre Branches abroad.
Corporations interested in raising foreign currency funds both in India and abroad may contact in
India the branches they are dealing with, the Position Maintaining Offices (PMO's/ Authorised
Foreign Exchange Branches), Corporate Banking Branches, Industrial Finance branches or any
of the major branch in the city.

They may also contact the Bank's Regional Offices/ Zonal Offices for the required information/
guidelines. They may contact the International Division, Central Office at Foreign Currency
Loans In India (FCNR 'B' Loans). The foreign currency denominated loans in India are granted
against the foreign currency funds a bank has on account of FCNR(B) Deposit. These loans are
commonly known as FCNR(B) Loans.

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

50

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

The foreign currency denominated Loans are granted at Money Centre Branches across the
globe. The Foreign Currency Loans granted to Indian Corporate are granted as per External
Commercial Borrowing (ECB) Policy of Govt. of India. Mid-sized companies have also joined
the bandwagon. The idea behind is to scale up operations, become globally competitive and
getting access to foreign markets.

They will also require the international Corporate/ Merchant/ Investment Banking Services to
arrange the funds as well for other purposes. International Merchant Banking Cell (IMBC) has
been set up at BCC, Mumbai to pay focused attention to the international merchant banking
needs of Indian corporates with special emphasis on Externational Commercial Borrowing .

IMBC has been offering Corporate/ Merchant/ Investment Banking services with a range of
products as enumerated below :
Arranging/ granting Foreign Currency Loans/ External Commercial Borrowing.
Providing whole range of transactional banking services to Indian corporates for their offices,
Joint Ventures, Subsidiaries abroad at places where we have branches.
Offering Foreign Exchange/ Derivative products.
Providing Buyers Credit/ Suppliers Credit.

51

Arranging / underwriting/ participating in Syndicated Loan

Raising funds for corporates through bilateral loans/ club deals
Arranging funds from International Markets by way of Bonds, FRNs, FCCBs etc.
Arranging loans from Export Credit Agencies of other countries
Advisory services on overseas investments
Innovative tailor-made solutions to the specific requirements of corporates.
Structured financing for procuring specific assets such as rigs, ships, aircrafts etc.
Financing and structuring cross border acquisition debt.

External Commercial Borrowings

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

ECBs at Bank Of Baroda (BOB)

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

Bank of Baroda , Indias International Bank , having a strong global presence with 60 offices in
21 countries including the major global Financial Centers ( Brussels, Dubai, Hong Kong,

52

London, New York and Singapore etc.) is very evenly placed and have an edge over all others in
its capability to arrange/ grant the funds from the international market. BOB has a few decades
of experience in arranging foreign currency loans. This long experience and wide presence
across the globe brings leverage to BOB to understand the ECB market better thus offer best
terms to the clientele .

International Merchant Banking Cell (IMBC)

With rising activities by Indian corporates in the global as well as back home in India , the quest
for cheaper and quicker global fund is growing at a substantial pace. Mid-sized companies have
also joined the bandwagon. The idea behind is to scale up operations, become globally
competitive and getting access to foreign markets. They will also require the international
Corporate/ Merchant/ Investment Banking Services to arrange the funds as well for other
purposes.

International Merchant Banking Cell (IMBC) has been set up at BCC, Mumbai to pay focused
attention to the international merchant banking needs of Indian corporates with special emphasis
on Externational Commercial Borrowing . IMBC has been offering Corporate/ Merchant/
Investment Banking services with a range of products as enumerated below :
Arranging/ granting Foreign Currency Loans/ External Commercial Borrowing.
Providing whole range of transactional banking services to Indian corporates for their offices,
Joint Ventures, Subsidiaries abroad at places where we have branches.
Offering Foreign Exchange/ Derivative products.
Providing Buyers Credit/ Suppliers Credit.

53

Arranging / underwriting/ participating in Syndicated Loan

Raising funds for corporates through bilateral loans/ club deals
Arranging funds from International Markets by way of Bonds, FRNs, FCCBs etc.
Arranging loans from Export Credit Agencies of other countries
Advisory services on overseas investments
Innovative tailor-made solutions to the specific requirements of corporates.
Structured financing for procuring specific assets such as rigs, ships, aircrafts etc.
Financing and structuring cross border acquisition debt.
Regional Syndication Centres (RSCs)
BOB has set up Regional Syndication Centres at Dubai , London and Singapore to exclusively
arrange tailor made solutions for foreign currency / services at a competitive price for Indian /
non Indian corporates . It has a dedicated , professionally expert and specialist team both in India
and abroad with international exposure in the area of arranging Loan Syndication / other services
. Contact us at Intending corporate / Institutional clients can contact any of the following offices
Corporate Financial Service Branches (CFS)
Corporate Banking Branches (CBBs)
International Business Branches (IBBs)
Nearest selected branches
Main branch of the city

54

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

Offshore Banking
Give your FOREX earnings a safe home:
In an unpredictable financial world, your well earned money needs a safe home. A home where it
can grow. Bank of Baroda takes this opportunity to announce the opening of its first Offshore
Banking Unit (OBU) in India at SEEPZ, Mumbai With years of experience and expertise in
overseas banking we are just one of the few banks that have been granted permission by the
Government of India to operate OBU within the country. This comes in addition to our already
existing OBUs in Mauritius and Bahamas. So, when you invest your well earned FOREX with
us, you get the expert opinions and services of a bank which has an international presence in 22
countries through 64 offices and represented by 2800 fully equipped branches spanning the
globe.

Export Credit (Rs)

55

RUPEE EXPORT CREDIT (PRE-SHIPMENT AND POST-SHIPMENT) : BOB offers both pre
and post shipment credit to the Indian exporters through Rupee Denominated Loans as well as
foreign currency loans in India.
Exporters having firm export orders or confirmed L/C from a recognized Bank can avail the
export credit facilities from BOB provided they satisfy the required credit norms. The details of
the credit norms can be obtained from the nearest authorised branch of the Bank. Rupee export
credit is available for a maximum period of -180- days from the date of first disbursement. The
corporates, if required can book forward contracts in respect of future export credit drawals.

EXPORT BILL REDISCOUNTING : BOB offers financing of export by way of bill

discounting of export bills to provide post shipment finance to the exporters at competitive
international rate of interest. The export bills (both Sight and Usance) can be purchased/
discounted provided they comply with the norms of the Bank/ RBI.
All exporters are eligible to cover the bills drawn under L/C, non-credit bills under sanctioned
limits under the Bill discounting Scheme.

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

56

Opening of Import L/Cs (Sight/ DA)

Financing of import by way of Foreign Currency Loans
Issuing Guarantees etc. on behalf of importers.

COLLECTION OF IMPORT BILLS:

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

LETTER OF CREDIT:
Bank of Baroda offers L/C facility for the purchase of goods in the international market. Being a
well-known international Bank of repute, the L/Cs of the Bank of Baroda are well accepted in
the International market. With the Letter of Credit of Bank of Baroda, importers can build up
better trust/ confidence in their suppliers and develop other business relationship at a much faster
pace.

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

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

57

Trade Finance
Bank of Baroda through its overseas branches and subsidiaries, is very active in financing of
Usance post sales international trade bills by way of discounting of the same. With its large
foreign currency resources and overseas presence , Bank of Baroda is in a position to offer the
most competitive rates for discounting of these bills.

The bills under the L/Cs of the most of the Indian Banks as well as International Banks can be
discounted at competitive rates. The Banks / Corporates desirous of discounting the bills under /
outside L/Cs can contact the respective overseas money center branches / overseas subsidiaries
Corporate Office Bank of Baroda,

LIFE INSURANCES OF BANK OF BARODA

Life insurance business may take over eight years to break even, but, venturing into life
insurance is turning out to be extremely profitable for banks, which are also very aggressive in
the marketing strategy. Baroda L&G Life Insurance, the insurance joint venture (JV) promoted
by Bank of Baroda, Andhra Bank and the UK insurer Legal and General (L&G), has called for a
pitch for its creative and media duties.

The life insurance JV, with an initial paid up capital of Rs 220 crore, was formed in November
2007. Bank of Baroda holds a 44 per cent stake, Andhra Bank has a 30 per cent holding and the
remaining 26 per cent is held by L&G. The company is poised to launch its products like savings
insurance, Unit Linked Insurance Plans as well as pure protection and term products, within a

58

few months from now and plans to empanel three agencies for about three years. For this, the
company is inviting presentations from about 25 Mumbai based agencies.

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

The norms set by the Bank for the discharge of its functions.
Corporate Centre decide the rates to be offered by the Bank for the deposits, for different tenures
which are displayed in the Banks website and also at the branches. Regarding the advance, again
the corporate centre takes a decision on introduction of various loan products and details of
which are available in the website as well as at the branches. Corporate Centre also decides about
the rates of interest for various advances which again are available on our website and also at the
offices / Branches of the Bank.

59

Whether to sanction a loan or not, is the absolute discretion of the concerned sanctioning
authority of the Bank and such discretion is exercised, after taking into consideration the relevant
facts and circumstances of each case.

The rules, regulations, instructions, manuals and records, held by the Bank or under its
control or used by its employees for discharging its functions.
There are quite a number of documents like manuals, book of instructions, codified circulars,
scheme of delegation of powers, proceedings of the board etc. And also the periodical circulars,
used by the employees for discharging various functions. (These are all meant for internal
circulation and can not be shared with public)

A statement of the boards, councils, committees and other bodies consisting of two or more
persons constituted as its part or for the purpose of its advice, and as to whether meetings
of those boards, councils, committees and other bodies are open to the public, or the
minutes of such meetings are accessible for public

The Bank has following Sub Committees of the Board

Management Committee of the Board
Audit Committee of the Board
ALM & Risk Management Committee of the Board
Customer Service Committee of the Board
Committee on High Value Frauds
Shareholders Investors Grievances Committee

60

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

COMPETITORS
Company

Sales

Current Price Change (%) P/E Ratio Market Cap.(Rs.Million)

637884.34

2269.45

1.99

14.35

1440828.92

2500/894

Punjab National Bank 193261.63

906.85

-1.07

7.88

285932.07

943/286

Bank Of India Ltd

163473.58

385.00

-0.21

7.81

202192.49

475/180

Bank Of Baroda Ltd

150915.77

511.30

-0.81

6.70

186249.46

563/181

Canara Bank Ltd

171190.54

390.75

-1.83

5.55

160207.50

437/144

Union Bank Of India

118893.79

264.00

-0.36

6.40

133351.13

291/115

IDBI

116316.27

127.45

0.08

9.60

92378.09

140/40

Indian Bank Ltd

68303.30

174.05

0.26

5.16

74801.47

196/64

CentralBank of India

104551.89

167.25

10.95

6.78

67592.66

164/30

OrientBan

88564.72

250.40

-1.20

6.43

62735.14

296/95

Corporation Bank Ltd 60673.52

422.35

0.42

5.66

60581.88

480/156

Indian Overseas Bank 96414.03

110.55

-1.29 5.07

60227.64

141/38

Allahabad Bank Ltd

73647.28

126.10

-0.86

4.44

56328.87

144/37

Andhra Bank Ltd

53746.17

104.35

0.34

5.36

50609.75

125/37

Syndicate Bank Ltd

95796.37

95.95

0.10

5.00

50082.86

105/38

UCO Bank Ltd

81213.82

55.75

-0.18

4.98

30626.82

62/22

52-Week (Rs.Million)
High/Low
SBI

61

State.Bk of Travancore 41231.52

548.25

0.06

3.63

27412.50

604/176

StBkMysor

32472.76

707.65

2.00

6.16

25475.40

786/294

Dena Bank Ltd

34474.95

83.25

-0.89

4.86

23878.03

93/27

StBkBikan

38102.80

464.90

0.84

5.04

23245.00

540/168

Vijaya Bank

52378.25

51.95

-0.76

4.41

22521.25

59/20

Bank of Maharashtra

42915.57

50.15

0.30

4.84

21590.58

53/19

Business Strategies
BOB intend to enhance our position as a cost efficient and customer focused institution
that provides comprehensive banking and related services, with particular emphasis on
the following strategies.

Implement new initiatives to accomplish total customer centricity. BOB continue to

implement new information technology and other initiatives to provide total customer centricity
and have made advances in the networking, computerization and interconnectivity of our
branches, ATMs and other delivery channels. As part of our strategy to provide our customers
with the best on-demand service, BOB have commenced a comprehensive technology enabled
business transformation project. BOB have entered into an agreement with Hewlett Packard (HP)
to assist us in delivering a uniform, portal-based IT infrastructure to cover both our domestic and
international operations.

Through this project BOB will implement and manage an enterprise-wide serviceoriented
architecture including, among others, core banking, phone banking, Internet banking, call centre,
delivery channel integration, risk and performance management, financial analysis and planning,
customer relationship management, data warehousing, enterprise general ledger, global treasury,
62

human resources management system and cheque truncation system. The infrastructure will
allow us to realign the way in which BOB interact with our employees and conduct business with
our customers and business partners. It will also enable us to be compliant with Basel II norms
within the prescribed time limit whilst fulfilling the requirements of regulators in various
jurisdictions. Our aim is that all our branches and offices be brought under our private network in
order to provide our customers with total customer centricity and service their needs on an
anywhere anytime basis across the globe. BOB believe this will help us to compete and excel
in the increasingly challenging and competitive domestic and global banking environments.

Our additional customer service initiatives include providing customer services at certain
branches from 8 a.m. to 8 p.m., operating select 24-hour branches, providing value added
services on ATMs and introducing low cost rural ATMs.

Focus on marketing our credit products to large and medium sized industrial
units and infrastructure projects
BOB have initiated operational and organizational structure changes to accelerate our credit
growth to large and medium sized industrial units and infrastructure projects. Our organizational
changes include creating separate internal departments for product development, marketing and
credit expansion and establishing a project finance department. Our operational changes include
moving large corporate accounts to dedicated corporate finance services branches and
sanctioning of hunting limits (preapproved credit limits) for top rated corporations. Through
competitive pricing, BOB also plan to increase our share of non-funded and fee based business
such as project appraisals, loan syndications, debt refinancing, guarantees and letters of credit.
63

Grow our international operations

BOB have maintained an international presence for the past 52 years and BOB intend to continue
to grow our global operations. Our international branches, Subsidiaries and Associate are focused
on providing retail banking, structured products and BOBalth management services and, along
with our representative offices, allow us to focus on asset creation and to develop cross border
business by providing trade and project finance, remittances, syndications and correspondent
banking services. In addition, BOB are looking to grow our global loan syndication business
through our dedicated syndication center located in our London branch. BOB recently opened a
branch in Leicester in the United Kingdom and a representative office in Bangkok in Thailand.

BOB have received approval from the RBI and are awaiting host country approval for the
opening of branches in Houston (USA), Hong Kong Bangladesh, Maldives and an OBU at
Singapore. RBI approvals have been received for the opening of new offices in, Canada, New
Zealand, Sri Lanka and Trinidad and Tobago and Isle of Man. BOB will continue to look for
attractive opportunities to expand our international reach and grow our business outside India.

Continue growing our retail banking business

BOB have identified the growth of our retail-banking sector as a priority business initiative for
the past few years. Our dedicated retail-banking department was established in October 2002.
Our retail loans have grown from Rs. 27,128 million as at March 31, 2003 to Rs. 63,830 million
as at March 31, 2005, reflecting a CAGR of 53.39%. BOB have already intensified our focus on
this sector by simplifying our current processes, launching new products and services,
establishing specialist personal banking, Baroda Money lexes (dedicated retail product cells) and
64

housing finance branch locations, developing our distribution channels, including ATMs and
internet banking, and improving customer service. In addition, BOB believe that there is
potential to generate additional revenue growth by focusing on higher value added products and
by enhancing cross-selling across our different distribution channels. Increasing the sale of high
margin products such as insurance products and selling our depository services will also increase
our fee-based revenue.

Strengthen our priority sector banking business

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

The industry supports approximately two-thirds of Indias population and accounts for 14.7% of
export earnings. BOB have 1,709 branches in rural and semi-urban centers and BOB intend to
maintain and enhance our position as one of the leading banks for agricultural lending in India.
BOB have a nationwide presence in the agriculture and small-scale industry sectors. BOB intend
to further expand our agriculture and smallscale industry sector banking activities by establishing
more small-scale industry branches. BOB have identified over 500 of our rural branches to target
consumers for intensive farm credit lending. BOB see increased potential for credit deployment
in agricultural export zones throughout the country. Another aspect of our strategy is to further
strengthen our ties with the agricultural community as BOB as related manufacturers. For
example, BOB have entered tie-ups with eight tractor-manufacturing companies to promote

65

investment credit, and BOB have also initiated a special scheme for financing the purchase of
second hand farming equipment.

Entering new areas businesses, alliances and strategic acquisitions

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

Reduce cost of funds

BOB have achieved a low overall cost of funds through a large base of low-cost deposits, with
total deposits representing 85.92% of our funding as of March 31, 2005. Our low cost deposits,
both current and savings, constituted 36.45 % of our total deposits as of that date. As of
September 30, 2005, our low cost deposits constituted 38.32% of our total deposits. Our total
deposits represented 84.78% of our funds as of that date. BOB believe BOB can enlarge our lowcost funding base by leveraging our extensive branch network and large customer base,
particularly in the rural areas where many of the deposits are low-cost savings deposits. In
particular, BOB are focused on the retail rural section emphasizing low interest savings deposits.
Building our corporate image and our Bank of Baroda brand BOB intend to continue to
enhance our brand recognition in the marketplace through our brand building efforts. BOB have
undertaken various communication and promotional initiatives such as developing and
introducing our new logo, appointing a brand ambassador, and launching product focused
66

campaigns. BOB believe that these initiatives, as BOB, will enhance the visibility of our brand
name and strengthen our recognition as a premiere Indian bank.

BANK OF BARODA VARIOUS LOANS

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

Baroda Two Wheeler loan

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

Baroda Consumer Durables Loan

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

Baroda Personal Computer Loans

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

Baroda Personal Loans and Marriage Loan

67

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

Baroda Vaibhav Lakshmi

BOB extend loans to workingwomen up to a maximum of Rs. 200,000. BOB offer a maximum
repayment period of three years. BOB do not take any margin or security for this loan.

Baroda Festival Loans

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

Baroda Advance against Securities

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

Baroda Advance against Property

For properties in urban and metro centers, BOB offer loan/ overdrafts against unencumbered
property. Professionals, salaried individuals and self-employed businessmen are able to take

68

advantage of this product by borrowing up to a maximum of Rs. 5 million with a repayment

period of ten years for overdraft facilities and seven-years for loans.

Baroda Doctors Loans

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

Baroda Desh Videsh Yatra Loan

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

Baroda Loan for IPO Subscription

BOB extend loans up to a maximum of Rs. 1 million to individuals for subscribing to equity
shares in public issues. The margin money payable for such loans is 50% of the loan extended.
Such loans are required be repaid within 90 days.

Baroda Loans to Pensioners and Defense Pensioners

69

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

Baroda Professional Loans

BOB extend loans to professionals and self-employed individuals including, doctors, chartered
accountants, interior decorators, architects, practising company secretaries and travel agents.
Amounts betBOBen Rs. 25,000 and Rs. 2.5 million may be borrowed BOB under this product.

Baroda Traders Loan

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

Baroda Loans against Future Rent Receivable

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

Baroda Eco-friendly Gas Kit Loan

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

70

As part of our strategy to grow our retail banking business, BOB have undertaken the following
initiatives:
_ Customizing products for specific borroBOBr groups such as group of employees, teachers,
defence personnel, among others, and offering incentives for such borroBOBrs such as
concessional rates of interest or waiving processing and documentation charges;

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

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

Bank of Baroda - 5 yr Consolidated Performance

71

Bank of Baroda is fast trying to catch up with its private sector counterparts! While 5yr growth
CAGR may seem poor at ~16%, FY08 has seen handsome spurts in growth. Interest Income and
Total Income grew by over 30 percent. Bank of Baroda has now emerged as one of the most
cost-efficient banks, beating its private sector counterparts HDFC Bank and ICICI Bank and
even the smaller and nimbler Axis Bank handsomely. It shows decent margins and return ratios
but the stock is still languishing (Apr 2 2009) at less than consolidated book. Want to collaborate
with me and contribute towards India Stock Analysis?

Strong Capital Base

A strong capital base is the number one issue to consider before investing in a lender Bank of
Baroda has its Capital Adequacy ratios at ~13 percent, much above the mandatory 9 percent
requirement stipulated by RBI. Only 5 years back, Gross and Net NPAs (Non-Performing Assets)
were very high. But with a consistent focus on reducing NPA levels, these have been brought
down sequentially, year on year, to very comfortable levels in FY08. FY08 Gross and Net NPAs
stand at 1.82% and 0.45%, respectively. Financial Leverage is around 16 percent in FY08. It is
good to see Bank of Baroda maintaining contingent liabilities at low levels. Derivatives
Exposure stood at ~31% of total assets, while total contingent liabilities stood at ~45% of total
assets. This is probably one of the most conservative among all banks.

Private Banks usually average above 200% of total assets on contingent liabilities.
Return on Equity (RoE) and Return on Assets (RoA)
These metrics are the defacto standards for gauging bank profitability.

72

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

Efficiency Ratio
The efficiency ratio or cost to income ratio, measures non-interest expense, or operating costs, as
a percentage of income. Basically it tells you how efficiently the bank is managed. Many good
banks have efficiency ratios under 55% (lower the better) Cost Efficiency ratio has seen
significant improvements in the last 3 years with FY08 cost-efficiency ratio standing at ~33
percent; beats its private sector peers HDFC Bank, ICICI Bank, and even the smaller, nimbler
Axis Bank handsomely and rivals the much smaller Yes Bank.

Net Interest Margins (NIM)

Another simple measure to watch is net interest margin, which looks at net interest income as a
percentage of average earning assets. Track margins over time to get a feel for the trend.
Net Interest margins have been around the 3 percent mark. FY08 has shown NIMs coming down
a bit to 2.9 percent.

Strong Revenues
Historically many of the best-performing bank investments have been those that have proven
capable of above-average revenue growth While 5yr growth CAGR may seem poor at ~16%,
FY08 growth has been good. Interest Income and Total Income growth stands at over 30 percent

73

Bank of Baroda Q2 profit jumps 60 pct

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

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

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

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

ORGANISATIONAL STRUCTURE OF BANK OF BARODA

Organizational Structure of Bank of Baroda, Ghantaghar Branch, Ghaziabad

Total Number of employees

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

74

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

iii) Management Teams

The number of officers in BoB are
a. Branch Head
b. Two managers
c. 3 officers

Who is accountable to whom?

In BoB all the staff members are accountable to the Branch Manager and the
Branch Manager is accountable to

75

Branch Manager
Regional Officer
Zonal Officer
Central Office / Corporate Office

76

LITERATURE REVIEW
Bank lending in Dec up five-fold over Nov
31 Dec 2009, 0212 hrs IST, ET Bureau
After a sluggish November, bank lending picked up nearly five-fold in December over the
previous month.
According to the latest Reserve Bank of India (RBI) figures, total loans, including food credit
loans to Food Corporation of India for food grain procurementand non-food credit (all other
loans) amounted to Rs 29,41,293.07 crore as on December 19. This represents a sequential
growth of Rs 34,028 crore since November 27 compared to a growth of Rs 7,698 crore in the
whole of November. Of this, non-food credit grew Rs 31,342 crore in December, compared to Rs
5,247 crore in the entire month.

In a speech on Tuesday, RBI deputy governor Shyamala Gopinath had said that with the
economy posting strong growth in the second quarter of the year, credit demand was expected to
pick up. She added that this has already started reflecting in the recent fortnight. Speaking to ET
recently, Bank of India chairman & MD Alok Misra and Bank of Baroda CMD MD Mallya had
indicated that there were initial signs of credit revival. Going by the credit proposals that we
received for December, we are hopeful that the fourth quarter would be better than the preceding
three quarters, said Mr Misra.

There are signs of revival in credit demand and it is seen across sectorsinfrastructure, SME
and retail, Mr Mallya pointed out. Oriental Bank of Commerce CMD TY Prabhu said that as of
now credit demand is seen primarily from the agriculture sector. In the second quarter ended
77

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

Bank of Baroda to open over 300 branches next fiscal N.S. Vageesh Chennai.
Dec. 20 2009
Mr M.D. Mallya, Chairman and Managing Director of Bank of Baroda, is described by his
colleagues as a down-to-earth person and a thorough gentleman'. They say he has a good grip on
the business and has built on the contributions made by his predecessors. He has taken the bank
forward instead of undoing their initiatives.
Mr Mallya's academic credentials are interesting. He did his Engineering graduation from REC
Surathkal, and then did a management program at the Indian Institute of Science before joining
the banking world three decades ago. While acknowledging the contribution of his background
in giving him analytical skills, Mr Mallya tells you that what a banker needs most is common
sense. That point is highlighted a few moments later when we discuss new business being
acquired by the bank. He points out that the bank must chase profits rather than business
volumes. He carefully monitors the sustainability' of the business by looking at weekly growth
figures submitted by his officers rather than quarter-end figures which can often be dressed
up.

78

QUESTIONS ASKED TO THE IT MANAGER OF BOB: Which technologies are going to be the key drivers in banking in the coming
days?
Our technology initiatives are focused on the customer. Our Business Transformation Program,
encompassing technology, is a customer centric initiative to offer the convenience of banking on
a 24x7 basis, at all major centers in India and abroad. This would be done through deployment of
the core banking solution integrated with delivery channels like the ATM, Internet, phones,
mobiles, kiosks, and call centers.

Mobile technologies will play a very dominant role, as they provide convenience and ease of use.
In the indian banking space it will broaden the meaning of 'anytime, anywhere' banking to
customers. With increasing mobility of the Indian workforce, our customers want more
information on the move. Besides SMS-based information on their bank balance, they also need
information about the nearest ATM/branch on their mobile.

While banking transaction on the mobile is already a reality in India, the integration of barcodes
and technologies like RFID will bring on a revolution. Mobile phones used in European
countries will be introduced in India shortly, where the ATM will be able to connect to the phone
and carry out banking transactions.

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

79

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

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

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

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importantly, will contribute to the ecosystem and join the growing list of organizations concerned
about ecology.

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

The uniqueness of your IT and telecom infrastructure?

The IT infrastructure is mission critical in our bank because our 1,600 plus domestic branches
and 43 branches in 14 countries are running on a common platform, using centralized systems
through the IT infrastructure. Our ever-expanding ATM network and a vast card base with
merchant establishments are all linked through this infrastructure. Our value added services like
e-banking, RapidFunds2India, utility bills payment, and eticketing depend on the infrastructure.
Being the banking sector, our services are essential to our customers at any time and place. Our
presence in different time zones and 24x7 operations are supported by the IT infrastructure. The
intra-bank STP is possible through this infrastructure.
Now that convergence is taking place in ICT, how important would it be for your sector? The
banking sector is completely dependent on ICT. We expect that with the convergence of these
technologies, the operations will move toward self-service, and, thus, will substantially bring
down the cost of transaction with improved customer convenience. There will also be a lot of
savings on deployment, maintenance and operational cost of technology within the organization.

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How do you handle the IT risks and security issues?

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

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

service provider?
Our experience is reasonably good. It largely depends on a clear understanding of
expectations, backed by properly defined and documented SLAs. However, the industry
has to mature in terms of their commitment for deliveries, which, in the absence of a fast
and strong legal system, remains only at the contractual level. For instance, when we
enter into an agreement, we meet the marketing team of a vendor which promises the
heaven. But when they start delivering, our interaction is with the execution team, who
start reading the fine prints of the contract rather than the spirit of the relationship.
We also feel that lack of appreciation of virtues and follies of technology by conventional
business owners continue to be the biggest problem in unlocking business values.
Besides, integration of heterogeneous technologies to provide flexibility in delivering
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services is a technological challenge. Ultimately, to derive maximum value out of IT
investments, the technology has to be embedded in the business strategy of the
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organization.
Through active participation of business leaders in making IT investment decisions, we
try to ensure that all IT and telecom investments are linked to the business goals. Our
outsourcing model is BOT (Build, Operate and Transfer). We have adopted the system
integrator approach, where the identified SI is responsible for designing and
implementing an end-to-end solution, confirming to functional requirements and laid
down SLAs.
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Excerpts from the interview:

What are your plans for branch expansion?
As of now we have 3,033 branches pan-India. We have already opened 120 branches in
this fiscal. We plan to open 80 more in the next four months. Going forward, we have
applied to the RBI for opening 250 branches in Tier-I and Tier-II centres. So in fiscal
2010-11, we will probably open over 300 branches. The basic idea is to be present in all
district centres and in places where we are not adequately represented.
How have these new branches performed?
The business that has been generated by these new branches has been substantial. On an
average, each branch would be able to mop about Rs 20 crore of business in the first year
of its existence. Therefore, from the point of business expansion, it is a remunerative
work to do. Further, if I analyse the business mix, especially under deposits, about 44 per
cent of it is from CASA (current account and savings bank accounts) which is a
substantial improvement over our overall CASA and our existing record.
The branch opening that we are doing is also happening where we are well represented.
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For example, in Gujarat, we have a good presence. But we are still opening branches
there where it will add to our strength and synergy.
What about your presence in the southern region? What is the potential that you see
here?
In the southern region, we have about 325 branches in the four States. We have opened
about 45 branches here in the last one-year and hope to open another 75 branches over
the next one year to take our network here to 400 branches. We have already identified
centers where we expect substantial business. To give you an example, we opened a
branch in Sriperumbudur (a major industrial hub) in June and opened a branch in
Kanchipuram recently. If I take just these two branches, I expect a business of Rs 100
crore by March 2010. And I am not talking about bulk business. I want sustainable and
normal retail business. I am talking about a number of centers like this. We have a
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network of branches here and we have a footprint in the south. So, opening new branches
and getting business is not difficult at all.
How is your bank affected by the wage agreement between IBA (Indian Banks'
Association) and bank unions?
We have been providing 17.5 per cent for wage arrears from the day, the old agreement
ended. Coincidentally, it has been the same number that has been agreed to. Therefore,
we are not impacted either way. There is no impact on our Profit and Loss account in
terms of extra provisions.
How has your bank been impacted by the crisis in Dubai?
Dubai has been facing a bit of slowdown for the last couple of months. The recent

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developments that you are talking about are only one of the triggers. We were well
prepared. We did not make any investment in real estate during the last one-and-half
years. We do not have any issue whatsoever. The little exposure that we have was
contracted more than two years ago, when rates were low and those projects are nearing
completion. In any case, we have been cautious. Our gross NPA is about 0.4 per cent and
our net NPA is almost negligible. So I don't see any problem there.
What has been the impact of restructuring of distressed assets in your domestic
operations?
In terms of percentage of restructured assets to total loan book size, it is one of the lowest
in the industry at about 3.2 per cent. But more importantly the restructured assets are
performing well. The restructuring has been restricted to re-schedulement of interest
and these have been prompt. There has not been much of interest funding or hair-cuts for
the bank. The evidence of this is that these restructured assets have not turned into NPA
in September or till now. Our delinquency rate has been pegged at 1.04 per cent (when
the international benchmark is about 1 per cent). In a difficult economic scenario, if we
have been able to contain our NPAs (non-performing assets) at these levels, that indicates
the quality of our assets.
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What are your capital raising plans?
As of September 2009, our capital adequacy ratio was 14.67 per cent, which is
significantly high. In that, Tier-I was 8.8 per cent which was again quite high. We have
sufficient headroom in both Tier-I & II to raise about Rs 10,000 to 12,000 crore.
Factoring in a credit growth of 25 per cent, we can maintain our CAR (compounded

85

annual return) at above 13 per cent and higher than our internal benchmark of 12.5 per
cent. In the current quarter, we have risen about Rs. 600 crore in Tier-I capital through
perpetual bonds and this has taken our CAR beyond 15 per cent. So we can manage quite
comfortably for the next two to three years with this.
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CONLUSION
Bank of baroda an International bank of India. As the tag line of the bank suggests it is
the bank which has stepped in the global market and has left its foot prints everywhere.
Bank of baroda is an organization which had believed in the saving that every one has to
change with the time. BOB changed its logo in 2005 and started its new journey. While
visiting the BOB and after taking to the staff members we have found that BOB has
reached the Zenith today.
It has also been ranked as the top 25th organization by fortune 500 2009 companies.
BOB has always provided the good services and hospitality to its customers the all
branched have been applied with core banking services. Most of the branches have 12
working hours.
From the journey of BOB till date, our group has come to a conclusion that BOB has
struggled and survived only due to its mission and vision; its organization structure and
also due to its business strategies. Being the budding managers of the future we learned
that every organization has to accept the change at some point of time to be the market
leader.
BOB has given a new meaning to the banking by understanding the needs of its
customers. It has also provided a privilege to India by establishing its branches abroad.

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Lastly, we would like to conclude by saying that BOB is a gem to India. An organization
writing new stories
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RECCOMENDATIONS
After studying about BOB our group would like the following recommendations:
BOB needs to increase its number of ATMs in the country. Especially in
metropolitan cities. This is because today people dont like standing in queues for
withdrawing money.
Bank of Baroda did very well when Rahul Dravid was endorsed as its brand
ambassadors. Today BOB has no ambassadors. Therefore it should endorse
someone as their icon.
BOB is not very much liked by the youths of the country. The middle aged and
old aged people use it more. Therefore BOB should now concentrate on young
generation. It has a huge market in them.
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Appendix
MR. S.K. LUTHRA
BRANCH MANAGER
BANK OF BARODA
GHANT GHAR BRANCH
GHAZIABAD.

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90

Our teams photograph with Branch manager of BOB and

their employees
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Group photograph with some other employees of BOB.

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LIST OF REFERENCES
http://www.bankofbaroda.com/
http://www.bankofbaroda.com/recruitment.asp
http://finance.indiamart.com/investment_in_india/bank_of_baroda.ht
ml
http://en.wikipedia.org/wiki/Bank_of_baroda
http://www.moneycontrol.com/company-article/bank-ofbaroda/
news/BOB
http://www.citefin.com/1373-history-banking-india.html
http://www.studentsguide.in/careers-in-banking-financeinsurance/
history-of-banking-in-india.html
http://business.mapsofindia.com/banks-in-india/bank-of-barodacreditcard.html
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88

BIBLIOGRAPHY
Robbins Stephen P., Judge Timothy A., Sanghi Seema,
Organizational Behaviour 12th Edition
Bovee,Thill, and Schatzman , Business Communication Today,
9th edition
Aswathappa K., Essantials Of Business Environment, 6th
Edition
Baroda Next; Annual Report 2008-09
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GLOSSARY
BSE Bombay Stock Exchange
OBU Offshore Banking Unit
IPO Initial Public Offering
ISO International organization for standardization
HRD Human resource Development
BSRB Banking Service Recruitment Board
GM General Manager
DGM Deputy General manager
AGM Assistant General Manager
HRM Human Resource Management
IRS Internal Revenue Service
SME Small and Medium Enterprises
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 CAGR Compound Annual Growth Rate

CMD Chief Managing Director
ATM Automated Teller Machine
DR Death Rate
DEMOGRAPHIC DIVIDEND - The demographic dividend is a rise in the
rate of economic growth due to a rising share of working age people in a
population
ORGANISATIONAL CULTURE - Specific collection of values and norms
that are shared by people and groups in an organization and control the way the
interact with each other.
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INDEX
ABSTRACT
QUESTION
LOGO
INTRODUCTION
HR MISSION
TRAINNING
PROMOTION
COMPETITORS
BUSINESS STRATEGIES
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ORGANIZATIONAL STRUCTURE
LITERATURE REVIEW
QUESTIONS ASKED
EXERPTS
CONCLUSION
RECOMMENDATIONS
LIST OF REFRENCES
BIBLIOGRAPHY

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