Directors Report of Bank of Baroda

Mar 31, 2025

“Your Directors have pleasure in presenting the One Hundred and Seventeenth Annual Report of the Bank with the audited Balance Sheet, Profit & Loss Account and the Report on Business and Operations for the year ended March 31, 2025(FY 2025)”.

Business Performance & Key Financials		Â	(? in Crore)
Â		FY 2024	FY 2025
Global Deposits		13,35,136	14,72,035
of which - International Deposits		1,98,444	2,29,866
Domestic Deposits		11,36,692	12,42,169
of which	Current Account Deposits	76,386	87,778
	Savings Bank Deposits	3,90,014	4,08,684
Domestic CASA Deposits		4,66,400	4,96,462
Domestic CASA to Domestic Deposits (%)		41.03	39.97
Net Advances		10,65,782	12,09,558
Global Gross Advance		10,90,506	12,30,461
of which	International Advances	1,923,90	2,09,349
	Domestic Advance	8,98,116	10,21,112
Total Business (Global Deposit + Global Gross Advance)		24,25,642	27,02,496
Total Assets		15,85,797	17,81,247
Net Interest Income (NII)		44,722	45,659
Other Income		14,495	16,647
Of which Trading Gains		1,492	2,266
Operating Income (NII + Other Income)		59,217	62,306
Operating Expenses		28,252	29,871
Operating Profit		30,965	32,435
Provisions (Other than Tax)		6,076	5,980
of which-Provisions for NPAs and Bad debts written off		6,471	5,170
Profit Before Tax		24,890	26,454
Provision for Tax		7,101	6,873
Net Profit		17,789	19,581
Appropriations/Transfers		Â	Â
Statutory Reserve		4,447.20	4895.29
Capital Reserve		104.17	451.49
Revenue and Other Reserves		Â	Â
I) General Reserve		8,079.23	8415.21
II) Special Reserve u/s 36 (I) (viii) of the Income Tax Act 1961		615.92	1446.53
III) Investment Reserve Account		563.86	-
IV) Investment Fluctuation Reserve		-	-
V) Statutory Reserve (Foreign)		48.17	54.55
Proposed Dividend		3,930.24	4318.09

Total deposits of the bank increased to '14,72,035 crore in FY 2025 from '13,35,136 crore in FY 2024, there by registered a growth of 10.3 % on a YoY basis. The domestic CASA of the bank grew by 6.4% on a YoY basis, to reach to the level of '4,96,462 crore in FY 2025. The Domestic Deposit grew by 9.3% on a YoY basis and reached to '12,42,169 crore in FY 2025. The Global Gross advance of the Bank reached to the level of '12,30,461 crore in FY 2025 as compared with '10,90,506 crore in FY 2024 by registering a growth of 12.8% on a YoY basis. The Total Business of the Bank grew to '27,02,496 crore in FY 2025 crore from '24,25,642 crore in FY 2024, registered a growth of 11.4% on YoY basis.

Net Interest Income of the Bank increased to '45,659 crore in FY 2025 from '44,722 crore in FY 2024, grew by 2.1% on a YoY basis. Other Income of the Bank increased to '16,647 crore in FY 2025 which was at '14,495 crore in FY 2024, thereby registered a growth of 14.8% on a YoY basis. Operating expenses of the Bank stood at '29,871 crore in FY 2025 as compared with '28,252 crore in FY 2024. Operating Income of the Bank increased to '62,306 crore in FY 2025 from '59,217 crore in FY 2024, registered a growth of 5.2% on a YoY basis.

The Bank reported a Net Profit of '19,581 crore in FY 2025 against '17,789 crore in FY 2024, grew by 10.1% on a YoY basis. The Operating profit ofthe Bank grew by 4.7% at'32,435 crore in FY 2025 as compared with '30,965 crore in FY 2024.

Key Performance indicators
Key Performance Indicators	FY 2024	FY 2025
Net Interest Margin - Global (%)	3.18	3.02
Cost-Income Ratio (%)	47.71	47.94
Return on Average Assets (ROAA) (%)	1.17	1.16
Return on Equity (%)	18.95	16.96
Book Value per Share (')	181.48	223.26
Basic EPS (')	34.40	37.86

Net Interest Margin (NIM) stood at 3.02% in FY 2025 as against 3.18% in FY 2024. Cost to income ratio stood at 47.94% in FY 2025 from 47.71% in FY 2024. Return on Avg.Assets stood at 1.16% in FY 2025 as against 1.17% in 2024. Return on Equity stood at 16.96% in FY2025 as against 18.95% in FY2024. Book value per share increased to '223.36 in FY 2025 from '181.48 in FY 2024. Earnings Per share increased to '37.86 in FY 2025 from '34.40 in FY 2024.

Average Cost & Yield of funds and Average Interest earning Assets

Key Performance Indicators	FY 2024	FY 2025
Average Cost of Funds (%)	5.12	5.27
Average Yield on Funds (%)	8.01	8.04
Average Interest Earning Assets (' in crore)	14,05,271	15,10,144
Average Interest Bearing Liabilities (' in crore)	13,26,655	14,38,612

The average cost of fund and yield of fund stood at 5.27% and 8.04% in FY 2025. Average Interest Earning asset increased

to '15,10,144 crore in FY 2025 from '14,05,271 crore in FY 2024. The Average Interest Bearing Liabilities also increased to '14,38,612 crore in FY 2025 from '13,26,655 crore in FY 2024.

Capital Adequacy Ratio

(Ratio in %)
Particulars	FY 2024	FY 2025
Capital Adequacy Ratio Basel III	16.31	17.19
CET I	12.54	13.78
Tier I	14.07	14.79
Tier II	2.24	2.40

The Capital Adequacy Ratio (CAR) of the Bank increased to 17.19% as of March 31, 2025 from 16.31% as of March 31, 2024. CET-1 ratio increased to 13.78% in FY 2025 from 12.54% in FY 2024. The consolidated capital adequacy ratio of the Bank was 17.60 % as of March 31,2025 against 16.68% as of March 31,2024.

During FY 2025, the Bank issued Tier 2 capital of ' 3500 crore.

Net worth

The Bank’s net worth for FY 2025 increased to '1,15,457.35 crore from '93,850.76 crore for the FY 2024. The net worth comprising of paid-up equity capital of '1,035.53 crore and reserves of '1,14,421.82 crore (excluding revaluation reserves, foreign currency translation reserves and other intangible assets).

Book value per share (Face Value '2) increased to '223.26 in FY 2025 from '181.48 in FY 2024.

Provisions towards Retirement and other benefits

During FY 2025, the Bank made provision towards contribution to gratuity ('1206.71 crore), pension funds C2216.33 crore), leave encashment, additional retirement benefits and other benefits ('467.15 crore). Total provisions under these categories amounted to '3890.19 crore during FY 2025.

Dividend Distribution

Board of Directors of the bank has recommended a dividend of '8.35 per share for the financial year ended March 31,2025. The total outgo in the form of dividend will be '4,318.09 crore. The payment of dividend is subject to requisite approvals.

Management Discussion and Analysis

Global Economy

Global growth in 2024 remained steady with economies that contribute over 60% to the world GDP witnessing election. According to the IMF’s World Economic Outlook, global GDP growth was solid at 3.2% in 2024 compared with 3.3% in 2023. Despite stable global growth, significant differences have been noted across various countries and regions. The ongoing geopolitical conflict in the Middle East and extreme weather conditions resulted in some disruptions and had an adverse impact on emerging and developing economies.

Within the advanced economies, US registered stable growth of 2.8% in 2024 compared with 2.9% growth in 2023. This was supported by stronger consumption and non-residential investment. In Euro Area, GDP growth was recorded at 0.9% in 2024, up from 0.4% in 2023, driven by strong demand conditions. High real wages also helped consumption. Within the Euro Area, Spain recorded a robust growth of 3.2% in 2024 (2.7% in 2023). In Germany, the pace of contraction has slowed marginally to -0.2% in 2024 against -0.3% in 2023. Economic growth in the UK performed much better than expected at 1.1% in 2024 compared with just 0.3% in 2023. On the other hand, growth in Japan decelerated to 0.1% in 2024 from 1.5% in 2023 amidst lower inflation.

Emerging and Developing economies (EMDE) registered stable growth of 4.3% in 2024. Growth in China moderated marginally to 5% in 2024 from 5.2% in 2023. Positive impetus to growth was provided by exports, especially during the last months of the year. Notably, property sector which declined back in 2021, showed early signs of stabilisation supported by concerted efforts of policymakers in Sep’24.

On the inflation front, consumer prices in the advanced economies eased down to 2.6% in 2024 from 4.6% in 2023. Even for EMDEs, inflation cooled off to 7.7% in 2024 from 8% in 2023. The moderation was led by lower energy and food prices. This has also led to a significant moderation in inflation in a few advanced economies which started to fall below the target. Despite the disinflationary impact, core inflation in certain pockets have remained elevated due to pick up in service inflation.

In 2024, global central banks made the decisive shift towards easing monetary policy. The Fed began the easing cycle with 50bps cut in Sep’24, and ended the year with a total of 3 cuts in 2024 bringing the federal fund rate to 4.25% to 4.5%. Separately, ECB has made 4 rate cuts in 2024, lowering its deposit rate to 3% from 4% earlier. Bank of England lowered rates twice in 2024, bringing the interest rate down from 5.25% to 4.75%. Given that inflation rate did not align to the central bank target mark in 2024, Reserve Bank of Australia kept rates steady. On the other hand, signalling policy divergence, BoJ raised rates twice in 2024 to 0.1%, moving away from the negative interest rate regime.

Global economy has witnessed unprecedented series of shocks in the past. However, global growth is showing signs of stabilizing with inflation inching closer to the target mark, and a pivot towards monetary easing cycle. However, there are headwinds pertaining to geopolitical conflicts, adverse shift in trade policy, and heightened policy uncertainty pose downside risks to global economic outlook. This raises the possibility of tighter global financial conditions, thereby raising the prospects of global growth to be divergent and uncertain in 2025.

Based on this, IMF has projected world economy to grow at a slower pace of 2.8% in 2025, with risks tilted to the downside. The policy shifts, escalating trade conflicts and uncertainties is expected to hinder global growth. The shift in trade policies could result in capital outflows and tightening of global financial conditions, especially for emerging markets.

Growth in EMDEs is projected to be lower at 3.7% in 2025. This will be driven by China which is expected to register a lower GDP growth of 4%, given weaker domestic demand and the impact of tariffs. Even economies such as Russia and Brazil are expected to clock slower growth 1.5% and 2% respectively. India’s GDP growth is expected at 6.2%, which is tad lower than RBI projection of 6.5%.

For AEs, growth will be weaker at 1.4% in 2025, with the US economy expected to grow by 1.8% amidst softer demand outlook, policy uncertainty and trade tensions. Euro Area is projected to grow at a slower pace of 0.8%, weighed down by tariffs and growing uncertainty. Growth in France and Italy is expected to moderate to 0.6% and 0.4% respectively in 2025, while Germany is expected to come out of the recession. On the other hand, GDP growth in Japan is expected to expand by 0.6%, while GDP growth in UK is expected remain stable at 1.1%.

Global inflation is projected to moderate to 4.3% in 2025, with inflation in advanced economies expected to converge to the target mark compared with emerging market and developed economies. Even as the inflation outlook has improved, the effects of tariffs impositions will vary across countries. Trade tariffs act as a supply shock with countries imposing the tariffs experiencing higher unit costs and lower productivity. On the other hand, tariffed countries are expected to face negative demand shock as export demand will be lower and there will be downward pressure on prices. The trade uncertainty has also added a layer of demand shock for businesses and these could result in tighter financial conditions along with higher exchange rate volatility. The global trade growth is also expected to slow down on account of increased tariff restrictions which will affect the trade flows.

Indian Economy

Growth in the Indian economy continues to showcase resilience backed by strong macro fundamentals, even as growth came off a high base. The economy clocked a growth of 6.5% in FY 2025 compared with a growth of 9.2% in FY 2024. Industry growth normalised as it rose by 5.6% against 10.8% in FY 2024. This trend was more noticeable in case of manufacturing sector, as its growth eased to 4.3% in FY 2025 from 12.3% in FY 2024, reflecting base-effect. Other sub-sectors such as mining (2.8% versus 3.2%), construction (8.6% versus 10.4%) and utilities (6% versus 8.6%), recorded only marginal softening.

Services sector too registered some moderation (7.3% in FY 2025 versus 9% in FY 2024), but continued to record above 7% growth, supported by sustained momentum in public spending (8.8% in FY 2025, unchanged from last year). Other sub-sectors such as trade, hotels, transport, communication & services related to broadcasting, and financial, real estate & professional services noted some softening in growth. This trend was also visible in related high frequency indicators such as services PMI, domestic passenger traffic, vehicle sales, rail freight and port cargo traffic.

On price front, headline inflation averaged 4.6% in FY 2025 down from 5.4% in FY 2024. This is well-below RBI’s upper tolerance band of 6%. From 4.9% in Q1, headline inflation

eased to 4.2% in Q2, driven by moderation in food inflation. Within food, downward pressure was recorded in prices of cereals, vegetables, fruits and pulses, amidst good monsoon and higher Kharif sowing. However, by Q3 there was some upward pressure in food and fuel prices, which pushed headline inflation higher to 5.6%. Following this in Q4, when economies around the world were hit by trade war shock, global commodity prices softened. Food inflation also came down significantly, led by vegetable inflation. For FY26, RBI expects headline CPI to moderate further to 4% with risks evenly balanced and assuming a normal monsoon.

India's fiscal deficit for Apr-Feb’25 (FYTD25) stood at '13.5 lakh crore which is around 85.8% of the revised annual target for the year. For FY 2025, government has set fiscal deficit (% of GDP) target at 4.8% (at '15.7 lakh crore) lower than 4.9% set as per budget estimates. In FYTD25 so far, centre’s net tax revenues has risen by 13.5%, non-tax revenues have expanded by 36.9%. For FY26, it is estimated that the fiscal deficit target will be much lower than last year at 4.4% of GDR

India’s external position in FY 2025 showed signs of revival, as export growth improved. Exports rose by 0.1% in FY 2025, after declining by (-) 3.1% in FY 2024. Signalling robust domestic demand, and led by less sharp decline in international oil prices, import growth also picked up pace and rose by 6.2% in FY 2025 following (-) 5.3% decline in FY 2024. With this India’s trade deficit widened to US$ 282.6bn in FY 2025 from US$ 241.1bn in FY 2024. On the currency front, INR ended lower by 2.1% in FY 2025 against a depreciation of 2.9% in FY 2024. Dollar index during this period strengthened by 1.4%.

On monetary policy front, RBI embarked upon rate cut cycle from end of the last fiscal year (Feb’25) when it announced 25bps reduction in rates. At that time stance was left unchanged. At the beginning of the new financial year (FY26), the central bank has delivered another 25bps rate cut in Apr’25 and has changed the stance to ‘accommodative’ from ‘neutral’. It has also lowered both its growth and inflation projections for FY26 to 6.5% (6.7% estimated in Feb’25 policy) and 4% (4.2%) respectively. We expect the economy to clock a growth of 6.4-6.6% in the same period.

Developments in Indian Banking

Credit growth of SCBs decelerated in FY 2025 to 11% (increase of Rs. 18.1 lakh crore), while deposit growth was lower at 10.3% (increase of Rs. 21.1 lakh crore), which explained the liquidity deficit in the system. Notably, both credit and deposit growth in FY 2025 was lower than last year. In FY 2024, credit and deposit rose by 20.2% and 13.5% respectively. The credit deposit ratio of the banking system stood at 80.8% in FY 2025, marginally higher than 80.5% in FY 2024. On a sectoral level, credit to services and personal loans moderated sharply in FY 2025. This can be attributed to an increase in risk weights on banks’ lending to NBFCs and certain categories of personal loans. However, in Feb’25, RBI restored the risk weights on NBFCs lending by banks as per the external rating, which became applicable from FY26 and should boost credit growth to this sector.

Liquidity situation continued to remain volatile in FY 2025, with a marginal liquidity surplus in H1FY 2025, which turned into a deficit in H2FY 2025. The liquidity deficit was much more acute in Q4FY 2025, with an average daily liquidity deficit of Rs. 1.2 lakh crore. In response, RBI announced a slew of measures including a cut in the cash reserve ratio (CRR) by 50bps in Dec’24, restoring the CRR to 4%, a level last seen in May’22, before the start of monetary policy tightening by the RBI. In consonance, RBI also announced daily variable rate repo auctions (VRR), as well as USD/INR swap auctions and OMO purchases. This resulted in a noticeable improvement in liquidity conditions recently.

RBI also reduced its policy repo rate to 6.25% in Feb’25 from 6.5%, marking its first rate cut in 5 years. The weighted average lending rate (WALR) for SCBs on fresh rupee loans remained virtually flat in FY 2025, while there was a marginal decline in the weighted average domestic term deposits rate (WADTR) during the course of the year.

RBI also introduced significant changes to the priority sector lending (PSL) guidelines aimed at improving credit access for essential sectors, set to take effect from FY26. These included enhanced loan limits on certain segments, enhanced coverage for renewable energy and weaker sections as well as a comprehensive change in PSL for urban cooperative banks (UCB).

Health of the banking system remains robust with strong capital and liquidity buffers as well as improved asset quality. As per latest data from the RBI’s Financial Stability Report, the gross non-performing asset (GNPA) and net non-performing asset (NNPA) ratio of SCBs stood at a multi-year low of 2.9% and 0.9% respectively as of Sep’24. The capital to risk-weighted assets ratio (CRAR) of SCBs also remained healthy at 16.7% in Sep’24. Profitability indicators also witnessed an improvement with return on assets (RoA) and return on equity (RoE). Further, stress test results indicate that the CRAR of SCBs is likely to decline only marginally to 16.5% by Mar’26 under baseline scenario. Even under adverse scenarios, the CRAR of SCBs is likely to remain significantly higher than the minimum regulatory requirements. Further, the GNPA ratio of SCBs is expected to rise to 3% in Mar’26 under the baseline scenario, and 5% and 5.3% under adverse scenario 1 and 2 respectively.

Overall, prudent liquidity management by the RBI along with recent regulatory changes are likely to underline the strength of India’s banking industry. With adequate capital buffers, improved profitability and strong asset quality, Indian banks are likely to witness another year of robust growth.

EASE

The PSBs Reforms Agenda was launched as Enhanced Access and Service Excellence (EASE) in January 2018. The initial set of EASE reforms, EASE 1.0, EASE 2.0, and EASE 3.0 supported capacity building in multiple areas of banking - such as the Introduction of digital-first reforms such as “Diala-Loan”, “Credit @ Click”, technology, analytics, asset quality improvement, outcome-centric HR, and overall governance. These reforms had a significant contribution to increasing performance, transparency, and accountability across the banking landscape.

EASE 4.0 focused mainly on smart lending backed by analytics; 24x7 banking with resilient technology and cloud-based IT systems; data-enabled agriculture financing; and collaborating with the financial ecosystem.

EASE 5.0 agenda mainly focused on Enhancing Digital Customer Experience, Data-driven Integrated and Inclusive Banking with emphasis on supporting small businesses and agriculture. Further, EASE 5.0 continues to drive progress in ongoing agendas such as co-lending partnerships, mobile banking enhancements, payments in semi-urban and rural areas, cloud adoption, digital marketing improvement through Search Engine Optimization and deepening financial inclusion.

EASE 6.0 focused mainly on driving excellence in customer service with digital enablement, Digital and analytics-driven business improvement, Tech and data-enabled capability building and developing people and enhancing HR Operations. In EASE 6.0 index, Bank has secured 4^th position in FY 24 amongst all the Public Sector Banks. Moreover, bank secured 1^st Position in People & HR Operations and 3^rd Position in Delivering Excellence in Customer Service as well as Digital & Analytics Driven Business Improvement.

EASE 7.0

EASE 7.0 reforms agenda (FY 2025) was launched on 25th April 2024 with an emphasis on enabling banks to drive national priorities, maintaining a strong customer service orientation, managing operational risks effectively and catalysing new age capability building.

Major Accomplishments under EASE 7.0 Reform Agenda

•    Gen AI Adoption - Bank has rolled out Gen AI Chatbot ADI & Gen AI Virtual RM Aditi on Bank’s Website for improving Customer Experience & Gyan Sahay for Employee Assistance with successful controlled sandbox testing.

•    Formation of Green Cell & Setting up of Essential Infrastructure by the Bank for catering to climate-related initiatives

•    Internationalization of UPI App by the Bank by launch of Bank’s UPI Application in 7 Countries

•    Simplified Death Claim Processing by launch of Death Claim Portal

•    Simplified Online Current Account through website by prefilling of Forms during Digital Journey

•    Development & Adoption of Prescriptive Models for

Analytics, Business Augmentation and Strengthening Internal Controls thereby improving Compliance.

•    Addition of Services on Chatbot (MB / IB), WhatsApp Banking, Bank’s UPI Application, Tablets at Branches, Services at Non-Home Branches, Frequently availed customer services, Services available to customers without Branch visit etc.

•    Launch of Women Specific & Youth Oriented products

•    Development of New Product Smart OD for unsecured short-term working capital financing existing current account holders of the Bank having GST Registration

•    Development of Online Shishu Mudra E2E Journey

- A Complete customer facing E2E Digital STP Journey up to final disbursement stage for Mudra Loans upto 50,000.

•    Identification of Champion Sector - Bank has identified infra power renewable energy as Champion Sector under Corporate Segment

•    Launch of customer facing Non-Discriminatory NonDiscretionary E OTS Portal on Bank’s Website

The action points under each phase of EASE Programme envisaged deep-rooted transformation in approach and building new capabilities in PSBs.

EASE reforms agenda has contributed immensely towards the Bank’s journey in achieving efficiency and ease of operations in almost all areas of operations, helping in providing an enhanced experience to its customers.

Operating Performance & Key Ratios

The highlights of operating performance of the bank are as below:

( ' in Crore)
Particulars	FY 2024	FY 2025
Interest Earned	1,12,606	1,21,442
Interest Expended	67,884	75,783
Net Interest Income (NII)	44,722	45,659
Other Income	14,495	16,647
Trading Gains	1,492	2,266
Operating Income (NII + Other Income)	59,217	62,306
Operating Expenses	28,252	29,871
Employee Expenses	15,816	16,608
Other Operating Expenses	12,436	13,264
Operating Profit	30,965	32,435
Provisions (Other than Tax)	6,076	5,980
of which-Provisions for NPAs and Bad debts written off	6,471	5,170
Provision for Standard Advances	-689	419
Provision for Depreciation on Investment	-31	37
Other Provisions	325	353
Profit Before Tax	24,890	26,454
Provision for Tax	7,101	6,873
Net Profit	17,789	19,581

Net Interest Income of the Bank increased to '45,659 crore in FY 2025 from '44,722 crore in FY 2024, grew by 2.1% on a YoY basis. The Interest Income increased to '1,21,442 crore in FY 2025 by registering a growth of 7.8% on a YoY basis. The Interest Expense stood at '75,783 crore in FY 2025 which was at '67,884 crore in FY 2024.

Other Income of the Bank increased to '16,647 crore in FY 2025 which was at '14,495 crore in FY 2024, thereby registered a growth of 14.8% on a YoY basis. Operating expenses of the Bank stood at '29,871 crore in FY 2025 as compared with '28,252 crore in FY 2024. Operating Income of the Bank increased to '62,306 crore in FY 2025 from '59,217 crore in FY 2024, registered a growth of 5.2% on a YoY basis.

Total provisions (other than tax) and contingencies was '5,980 crore during FY 2025 against '6,076 crore during FY 2024. Out of the Total Provision, Provisions for NonPerforming Assets (NPA) was at '5,170 crore in FY 2025 against at ' 6,471 crore in FY 2024.

The Bank reported a Net Profit of '19,581 crore in FY 2025 increased from '17,789 crore in FY 2024, grew by 10.1% on a YoY basis. The Operating profit of the Bank grew by 4.7% at '32,435 crore in FY 2025 as compared with '30,965 crore in FY 2024.

Key Ratios
Key Ratios	FY 2024	FY 2025
Cost of Deposits - Global (%)	4.92	5.10
Cost of Deposits - Domestic (%)	4.97	5.21
Cost of Deposits - International (%)	4.57	4.46
Yield on Advances - Global (%)	8.53	8.39
Yield on Advances (Domestic) (%)	9.01	8.88
Yield on Advances (International) (%)	6.34	6.13
Net Interest Margin - Global (%)	3.18	3.02
Net Interest Margin - Domestic (%)	3.32	3.18
Net Interest Margin -International (%)	1.97	1.94
Cost-Income Ratio (%)	47.71	47.94
Return on Average Assets (ROAA) (%)	1.17	1.16
Return on Equity (%)	18.95	16.96

Cost of deposit (global) stood at 5.10% and Yield on Advances (global) at 8.39% in FY 2025. Net Interest Margin (NIM) global stood at 3.02% and NIM domestic stood at 3.18% in FY 2025. Cost to income ratio stood at 47.94% in FY 2025. Return on Avg. Assets for FY 2025 reported at 1.16% and Return on Equity reported at 16.96% in FY2025.

( 'in crore)
SL No.	Particulars	FY 2024	FY 2025
I	Total Deposits	13,35,136	14,72,035
II	International Deposits	1,98,444	2,29,855
III	Total CASA	5,14,367	5,56,666
IV	Total Current Account Deposits	1,20,411	143729
V	Total Savings Bank Deposits	3,93,956	412937
VI	Global CASA %	38.53	37.82
VII	Domestic Deposits	11,36,692	12,42,169
VIII	Domestic CASA Deposits	4,66,400	4,96,462
IX	Dom. Current Account Deposits	76,386	87,778
X	Dom. Savings Bank Deposits	3,90,014	4,08,684
XI	Domestic CASA to Domestic Deposits (%)	41.03	39.97

Total deposits of the bank increased to '14,72,035 crore in FY 2025 from '13,35,136 crore in FY 2024, there by registered a growth of 10.3 % on a YoY basis. Total international deposits of the bank increased to '2,29,855 crore in FY 2025 from '1,98,444 crore in FY 2024, there by registered a growth of 15.8% on a YoY basis.

The global CASA of the bank grew by 8.2% on a YoY basis, to reach to the level of '5,56,666 crore in FY 2025 from 5,14,367 crore in FY 2024. The total current deposit of the bank increased to '1,43,729 crore as on 31st March 2025 from '1,20,411 crore as on 31st March 2024, marked a growth of 19.37 % on a YoY basis. The total Savings deposit of the bank increased to '4,12,937 crore as on 31st March 2025 from '3,93,956 crore as on 31st March 2024, recorded a growth of 4.82% during the period. The global CASA % to global deposit stood at 37.82% in FY 2025 as compared with 38.53% in FY 2024.

Domestic Deposits and Domestic CASA

Domestic Deposit of the Bank increased to '12,42,169 crore as on 31.03.2025 from '11,36,692 crore as on 31.03.2024, registering a growth of 9.3 % during the period.

Bank’s domestic CASA deposits increased by 6.4% and rose to '4,96,462 crore as on March 31,2025. Bank’s CASA Ratio stood at 39.97%. Dom. Current Account deposits registered growth of 14.9% and reached to '87,778 crore, while Dom. Savings Bank deposits reached to '4,08,684 crore with an increase of 4.8% as on 31.03.2025.

Low-cost deposit mobilization initiatives

In FY 2025, the Bank achieved a milestone by opening 93.37 lakh new CASA accounts, with current account openings crossing 3 lakh for the first time, reaching a record 3.11 lakh current accounts. A key focus was driving paperless account openings through VCIP & TAB-based onboarding. The Bank has also introduced an innovative, high-end savings product-the Masterstroke SB Account-reinforcing its commitment to cutting-edge digital banking solutions.

Special emphasis was placed on increasing the penetration of key CASA enablers, which include POS systems, QR codes with sound boxes, IP and BCMS. Additionally, efforts were made to activate dormant accounts, initiate DEAF activations, and funding of zero balance accounts.

On the digital front, the Bank has significantly increased client acquisition through various digital channels such as VCIP and TAB mode. During the FY-2025, the Bank opened

I, 19,158 VCIP SB Accounts. Bank opened 3,17,735 Current Accounts in FY-2025; of which 89.97 % (2,85,857) accounts opened through TAB mode. Furthermore, 57,74,251 Non-FI SB Account opened

in FY 2025; of which 65.55 % (37,85,178) accounts opened through TAB mode.

Bank has made significant growth under bob Earth Green Deposit which is well recognized among banking fraternity.

The Bank introduced the bob Parivar Concept, “My Family, My Bank,” which extends a range of benefits to family members. This initiative includes tiered offerings for Premium Customers, segmenting them based on their CASA balances into three categories: RISE, Shine, and Sparkle. Sparkle. These customers receive personalized services through assigned personal Relationship Managers to build strong connect and improvise the banking services.

Bank executed MoUs with Govt Dept & Institutions for acquiring new Salary accounts.

Bank’s integration with the Ministry of Corporate Affairs Portal for opening Current Accounts of newly formed companies has resulted in the opening of a total of 3,794 current accounts.

Bank has established a dedicated Defence Banking Vertical, which is headed by a Chief Defence Banking Advisor, a retired Lieutenant General. This vertical is further supported by Deputy Defence Banking Advisors who are posted at key locations to effectively penetrate the Defence segment.

Bank is leading in providing Doorstep Banking Services through the PSB Alliance Doorstep Banking Services initiative. During FY 2025, the Bank successfully completed

II, 868 Doorstep Banking services.

Baroda Cash Management Services

Baroda DigiNext, the Bank’s Cash Management Services platform, offers a robust suite of omni-channel digital solutions designed for Corporate, MSME, and Government customers to efficiently manage their cash flows and liquidity. Over the past three years, the platform has witnessed remarkable growth, becoming a preferred solution for key

government departments and corporate entities to manage their collections.

Baroda DigiNext provides integrated, paperless payment solutions through both Host-to-Host (H2H) and API channels, enabling seamless transactions for both government and corporate clients. The platform also delivers real-time visibility into all types of receipts—including electronic payments, cheque clearances, and cash deposits made at branches across the country.

In FY 2025, Baroda Cash Management Services continued to expand its reach, establishing over 1,800 new client relationships. A dedicated cell has also been created within BCMS to cater to MSMEs, Supply Chain Finance (SCF), and Microfinance Institutions (MFIs). During the year, more than 11.87 crore transactions were executed through the DigiNext platform, underscoring its growing adoption and operational efficiency.

Credit Expansion

The Global Gross advance of the bank increased to '12,30,461 crore during FY 2025 from '10,90,506 crore during FY 2024, thereby registering a growth of 12.8% on YoY basis. The Gross Domestic Advance increased to '10,21,112 crore as on 31st March 2025 from '8,98,116 crore as on 31st March 2024, there by marked a growth of 13.7% during the period. The international advance of the bank increased to '2,09,349 crore during FY 2025, from '1,92,390 crore during FY 2024, there by registered a growth of 8.8% on a YoY basis.

The growth in major credit portfolio of the Bank is given below; ( 'in crore
Credit Portfolio of the Bank
Segment	FY 2024	FY 2025	YoY (%)
Retail*	2,14,942	2,56,633	19.40
Agriculture	1,38,640	1,58,324	14.20
MSME*	1,19,415	1,36,377	14.20
Corporate	3,79,747	4,12,274	8.57
Others	45,372	57,503	26.74
Gross Domestic Advances	8,98,116	10,21,112	13.69
International Gross Advances	1,92,390	2,09,349	8.81
Global Gross Advances	10,90,506	12,30,461	12.83
*Ex-pool purchase (Organic)

The growth in Advance portfolio was mainly led by Retail Advance (organic) which increased to '2,56,633 crore grew by 19.40%, Agriculture advance which increased to '1,58,324 crore grew by 14.20%, MSME (organic) segment which rose to '1,36,377 crore by 14.20%, on a YoY basis in FY 2025. The retail advance including pool purchase was at '2,74,493 crore and MSME including pool purchase was at '1,42,750 crore as on 31.03.2025.

Corporate Loan of the Bank increased to '4,12,274 crore in FY 2025 from '3,79,747 crore in FY 2024, grew by 8.6% on YoY basis.

The Bank has successfully implemented numerous digital banking initiatives to enhance its Advance Portfolio across various segments, including Retail, Corporate, Priority, MSME, and Agriculture. The Bank has equally focused on expanding its asset portfolio through branch banking as well as digital banking channels. Digital Lending Platform continuously contributing EASE of doing business in banking landscape. Bank has designed digital Personal Loan journeys for employees of Central & State Government, PSUs, Autonomous Bodies, high rated corporates, etc. The Bank has launched ‘GST Sahay’ an invoice-based financing for Current Account Holders to meet their working capital requirements. Bank has launched Digital Mudra Loan end-to-end digital journeys till disbursement on Digital Lending Platform. The Bank also launched Digital Gold Loan enabling its customers a quick and hassle-free disbursement of gold loans. These are the some of the digital initiative that Bank has taken during FY 2025 to expand its Advance portfolios including Retail, MSME and Agri portfolios.

The Bank has implemented many business campaigns through its Zonal and Regional Office from time to time based on the festival season and other opportunities to grab more business at various geographies across the country.

Corporate Credit

Corporate credit in the Bank is serviced through 33 specialized Corporate Financial Services (CFS) & Mid Corporate branches (MCB) which manages approximately 94% of the total standard corporate credit portfolio of the Bank. The corporate credit portfolio of the Bank has increased to '4,12,275 crore in FY 2025 as compared with '3,79,747 crore in FY 2024, there by recorded a growth rate of 8.6% on a YoY basis.

Credit Rating Distribution1	FY 2024	FY 2025
A and above	90%	94%
BBB	5%	3%
Below BBB	3%	1%
Unrated	2%	2%

•    Identification of industries / sectors for growth based on industry outlook i.e. the combined output of various industry parameters including market size, growth, demand-supply outlook, cost structure, competition, financial performance, government policies and investment outlay.

•    Sector-wise business plan for target market lending, based on exposure caps, existing exposures and further appetite for fresh acquisitions.

•    Detailed account planning with structured calling plans for meetings, identifying business opportunities, approval and closure.

•    Execution of the business plan under target market approach through dedicated relationship managers across the Bank.

•    The Bank focuses on overall yield from the customer rather than interest income by offering ancillary services like supply chain finance, value chain finance, cash management system facility and other retail products.

MSME Credit

The MSME portfolio of the Bank (excluding TWO, including pool purchase) increased to '1,42,750 crore in FY 2025 from '1,25,899 crore in FY 2024, registered a growth of 13.38% on a YoY basis. During the year, the Bank has taken the following initiatives to augment MSME business with improved asset quality.

1.    Formation of 359 specialized MSME Branches with exclusive team. These focussed branches have contributed 24% of the MSME book

2.    Digitalization of MSME loan journey through the state of art “Tejas “Platform.

3.    Enhanced focus on emerging product segments leading to over achievement of Target.

•    TreDs has achieved a YOY growth of 248%.

•    Supply Chain Finance has achieved a YOY growth of 90%

•    CV/CME segment has achieved a YOY growth of 43%.

Additionally, Bank has achieved almost all the Targets under the following key Government schemes-

1.    103% under PMMY Scheme.

2.    102% under Standup India.

3.    95.6 % under PM Svanidhi scheme (Disbursement against the applications received).

Retail Credit

The Retail Asset of the Bank (excluding TWO, including pool purchase) increased to '2,74,493 crore in FY 2025 from '2,23,911 crore in FY 2024, registered a growth of 22.6% on a YoY basis. The organic Retail Loans increased to '2,56,633 crore in FY 2025 from '2,14,942 crore in FY 2024, an increase of 19.4% over the previous year. Retail loan share (including

Pool, staff, LABOD and others) in total domestic loan book increased to 30.1% in FY 2025 from 28.3% in FY 2024. The gold loan under the retail portfolio registered a growth of 55.6% on a YoY basis, reached to '7,076 in FY 2025. The Personal Loan segment marked a robust growth of 21.3% on a YoY basis, reached to '36,122 crore in FY2025. The Auto loan grew by 20.3% o a YoY basis. to reach to '46,549 crore. The Mortgage Loans marked a growth of 18.9%, Home Loan segment registered a growth of 17.3% and Education Loans grew by 15.9% on a YoY% in FY 2025. The detail of the growth of Retail loan segment is given in the below table.

 

Retail portfolio (organic) of the Bank

(' in crore)
Retail Credit Portfolio of the Bank
Segment	FY 2024	FY 2025	YoY (%)
Home Loans*	1,11,791	1,31,123	17.3
Auto Loans*	38,697	46,549	20.3
Mortgages Loan*	18,715	22,255	18.9
Education Loans	9,800	11,360	15.9
Personal Loans	29,784	36,122	21.3
Gold Loans	4,546	7,076	55.6
Others	1,608	2150	33.7
TOTAL RETAIL CREDIT	2,14,942	2,56,633	19.4

 

*Ex-pool purchase (Organic & Excl. TWO)

The key highlights of retail business in FY 2025 include:

Retail loan share in total domestic loan book increased to 26.88% in FY 2025 from 23.95% in FY 2024.

New 13,29,896 number of retail loan accounts have been sanctioned amounting to '1,01,075 Cr during FY 2025. 2,500 Retail Thrust Branches have been identified for focused growth in retail segment. 119 RAPCs contributed 47.05% of total sanctions ('47,551 Cr) with a YoY growth of 21% in RACPC sanctions during FY 2025. The average TAT reduced to <5 days. The Bank has revamped structure and implemented new process for mortgage-based retail loan and sanction at RAPCs.

In our digital front initiative, end-to-end digital processes has been implemented in Personal Loan, Auto Loan, Education Loan, Pension Loan, , Baroda Flexi loan over home securities, Retail Gold Loan, PM Surya Ghar Scheme and in two-wheeler loans. During the FY 2025, the Bank has digitally disbursed '5,472 crore in Personal Loans, '565 crore in Auto Loans, '14 crore in Top-Up Loans, '18 crore in Education Loans, '4 crore in Pension Loans, and '46 crore in Gold Loans through end-to-end digital journeys. This has enhanced customer experience by eliminating the need of Physical documentation and the branches visit.

The Bank has helped students to realise their academic dreams by disbursing education loans of '2,872 crore in FY 2025. The Bank has launched PM Vidya Lakshmi Scheme in education loan. PM Vidya Lakshmi Portal integrated with LLPS for education loan lead flow.

Standalone and composite rooftop solar schemes have been launched under PM Surya Ghar Yojana. The Integration of Loan Origination System (LOS) with Jan Samarth Portal has been done successfully for faster rooftop solar loan sanctions under PM Surya Ghar Muft Bijli Yojana.

In Home Loan segment, '35,112 crore loan was disbursed and 1,02,190 number of new customers were added in FY 2025. In Education Loan 27,459 new customers added and in Personal Loan 5,76,990 new customers were added in FY 2025. New Home Loan Cash Flow Scheme introduced for EWS, LIG, and MIG segments in urban areas. Pradhan Mantri Awas Yojana 2.0 has been launched. CERSAI 2.0-Finacle API integration has been completed.

In Auto Loan segment, '19,638 Crore loan was disbursed, and 1,93,289 number of new customers were added in FY 2025. Baroda Direct Car Loan rolled out to lower acquisition cost from branch-generated leads. Enhanced partnerships with OEMs and dealers to expand Auto Loan business. Supply chain finance leveraged for Auto Loan business acquisition. Digital two-wheeler loan journey launched.

Strengthened lead generation through Corporate DSAs, DSTs, and BCs. Bank has launched Referral DSA (RDSA) channel and lead submission portal. Continued retention and cross-selling strategy for Home, Mortgage, and Auto Loan customers. Product offerings have been aligned with market trends and customer demand.

Project Approval Module deployed in LLPS. Revised ELSC structure implemented on a Pan-India basis. Lead Force App launched for DSAs and DSTs for efficient lead submission. Vendor Management Application introduced for service provider and vendor tracking. Bulk Retail Sourcing Team has been set up to target large-volume retail loan business..

Rural and Agricultural Lending

Bank has a network of 8,424 domestic branches, of which 5,107 rural and semi urban branches are leveraged fully for priority sector and agriculture lending. The Bank’s agriculture advances increased to '1,58,324 Crore as on 31st March 2025 forming about 15.50% of the gross domestic credit.

Bank is the convener of State Level Bankers’ Committee (SLBC) in 3 states i.e. Uttar Pradesh, Gujarat and Rajasthan and Union Territory Level Bankers’ Committee (UTLBC) in the Union Territory of Dadra and Nagar Haveli and Daman and Diu. Bank also shoulders the Lead Bank responsibility in 72 districts across the country.

Bank continues to be one of the leaders in lending to agriculture sector, which received an impetus with the Government’s vision of “Atmanirbhar Bharat”. The Bank has moved beyond granting simple farm based credit to a more diversified rural lending strategy to encourage capital generation to farmers and build a robust infrastructure in agriculture and Animal Husbandry. The Bank also focus more on newly introduced products such as Agriculture Infrastructure Fund (AIF), Animal Husbandry Infrastructure Development Fund Scheme (AHIDF), PM Formalisation

of Micro Food Processing Enterprises (PMFME), National Livestock Mission (NLM), Pradhan Mantri Kisan Urja Suraksha Evem Utthan Mahabhiyan Scheme (PM Kusum), Pradhan Mantri Matsya Sampada Yojana Scheme (PMMSY) and compressed biogas products.

Bank continues to focus on its flagship products like KCC, Financing to Self Help Groups (SHGs), Agri Gold Loans, Farm mechanisation (Tractor loans), Horticulture loans, Financing to Farmer Producer Organization / Farmer producer company (FPO/FPC), Hi-tech Agriculture and Food and agro-processing. During the year, the Bank has issued 4.29 lakh new Kisan Credit Card (KCC) of which 1.18 lakh are Animal Husbandry and Dairy (AHD) KCC issued to farmers engaged in animal husbandry and fisheries activities. As part of microfinance initiatives, Bank has credit linked 56,689 SHGs by granting loans amounting to '2,390.76 crore during FY 2025.

Bank is pursuing tie ups with various private partners to enhance credit linkage of SHGs. Bank has also introduced TAB banking facility, to improve Turnaround Time and to enable hassle free instant Savings Bank Account opening for SHGs. In Tractor loans, rate of interest has been linked with LTV of Tractor for the convenience of farmers. During FY 2025, we have signed MoU with Ministry of Rural Development (MoRD) under "NARI SHAKTI" Scheme of DAY-NRLM for financing individual women entrepreneurs. We have also revised Poultry Scheme & Solar level feeder scheme under component C of PMKUSUM in line with the schemes offered by the other Peer Banks. This scheme was implemented in all Zones. Under Digitization of Agri Lending, Digital Gold loan & Digital BKCC is now live for all Zones. Digital BAHFKCC journey is under CUG testing in RBIH enabled states. Digital journey for Tractor loan, SHG, BKCC renewal & e-NWR is under UAT.

During the financial year, the Bank’s Centre for Agriculture marketing and Processing (CAMP), a dedicated centralized centres for processing of agriculture loans with a special focus on non-traditional and high value Agri advances at its various zones and regions has sanctioned loans to 36,263 farmers, amounting to ' 4,497.48 Cr.

“BARODA KISAN PAKHWADA” is Our Bank’s annual farmer outreach programme which is observed every year. During “BARODA KISAN PAKHWADA”, Branches of our Bank organize various functions/ events of farmers/SHG/ health check-ups of live stocks /Soil Testing and other activities/ meetings to reach out to maximum number of farmers. During FY2025 “BARODA KISAN PAKHWADA” was observed from 11^th Nov. to 22^nd Nov. 2024 in general and from 25^th Nov. to 7^th Dec.2024 in election bound states/constituencies and through this fortnight long festival we have connected with over -2,32,134- farmers Nationwide and cumulatively sanctioned agri loans of over '1225.79 crore.

Priority Sector Lending

Average Priority sector advances of the bank increased to '3,47,466 crore during FY 2025 from ' 3,01,917 crore as of FY 2024 and registered YoY growth of 15.09%.

Advances to SC/ST Communities

The outstanding advances to Scheduled Caste/ Scheduled Tribe (SC/ST) communities went up to ' 25,041 crore as of 31^st March 2025. The SC/ST communities accounted for 18.68%% share in total advances granted to weaker sections by the Bank.

Further, special thrust is given by the Bank in financing SC/ST communities under various Government sponsored schemes such as National Rural Livelihood Mission (NRLM), MUDRA Loan, Startup India and Stand-Up India.

Gold Loan

Bank’s gold loan portfolio (excluding TWO) increased to '63,959 crore, as on 31st March 2025, from '47,618 crore, on 31st March 2024, registering a growth of 34.32%. Within gold loan portfolio, Agriculture gold loans grew by 32.30%, reaching '56,783 crore in FY 2025 from '42,921 crore in FY 2024. Retail gold loan increased to '7,076 crore in FY 2025 from '4,546 crore in FY 2024, registering a growth of 55.65%. During the year, the Bank has added 139 new gold loan disbursing branches, taking the total number of Gold Loan designated branches to 6,129 in FY 2025 from 5,990 branches in FY 2024. The increase in spread of Gold loan designated branches across the country with share of geographies other than southern parts stands at 30.10% in FY 2025 as compared to 28.53% in FY 2024. Average ticket size of a gold loan increased to '2.09 lakhs in FY 2025 from '1.79 lakhs FY 2024. Average amount of gold loan per branch increased to '10.44 crore in FY 2025 from '7.95 crore in FY 2024. Credit quality of the Gold Loan portfolio remained healthy, with a GnPA ratio of 0.19% as on 31st March 2025.

Financial Inclusion (FI)

In order to provide universal banking services to all sections of the society especially to rural, semi-urban and urban poor at an affordable cost, Bank has taken financial inclusion as a social commitment and also an opportunity to tap business through BC model. The Bank has been actively working towards ensuring financial inclusion in the country through its branches and BC network. With the advent of technology, innovative steps are being taken for serving the unbanked areas. Bank expanded its BC network to 48,120 as on March 31, 2025 to cater to rural, semi urban, urban & metro areas across the country.

Bank took the following additional initiatives at BC Point towards promoting financial inclusion:

•    Generation of TDS Certificate at BC Points

•    Generation of Interest Certificate at BC Points

•    The functionality for RE-KYC of Customer is enabled at BC Points

•    AePS Off US Cash Deposit

Performance highlights under financial inclusion during FY 2025:

•    Pradhan Mantri Jan Dhan Yojana (PMJDY) accounts increased from 615.74 lakhs in March 2024 to 643.36 lakhs in March 2025 with YoY growth of 4.49%.

•    PMJDY deposits increased from Rs. 32,337 crore as on March 2024 to Rs. 36,355 crore as on March 2025 with YoY growth of 12.43%.

•    The Bank’s share among PSBs stood at 15.01% in PMJDY accounts and 17.73% for deposits in PMJDY accounts, second highest only after SBI.

•    Zero balance PMJDY accounts of the Bank reduced to 4.71% as on 31st March 2025 as against 4.98% as on 31st March 2024.

•    As on 31^st March 2025, Micro Insurance enrolment under PMJJBY scheme is 70.99 lakhs and under PMSBY scheme is 271.81 lakhs.

Performance of RRBs sponsored by Bank of Baroda

The Bank sponsors three Regional Rural Banks (RRBs) namely Baroda U.P Bank, Baroda Rajasthan Kshetriya Gramin Bank and Baroda Gujarat Gramin Bank in the state of Uttar Pradesh, Rajasthan and Gujarat respectively. The aggregate business of these three RRBs increased to '1,86,088.63 crore as on 31st March 2025 from '1,67,173 crore as on 31st March 2024 i.e. 11.32 % on YoY basis. These RRBs together posted a net profit of '1,317.63 crore during FY 2025, increased by 17.50 % as compared with net profit of ' 1,121.36 crore during FY 2024. The net worth of these RRBs put together improved to '8,262 crore as of 31st March 2025 from the level of '6,887 crore as of 31st March 2024.

Awards received by our sponsored RRBs during FY 2025:

Our three sponsored RRBs have received numerous prestigious appreciations and awards for their efforts in technology upgradation as well as outstanding performance in various Govt. schemes from various bodies like PFRDA, IBA, NRLM during the Financial Year 2025 as under:

A)    Baroda U. P. Bank (BUPB) has received -02- awards from Mnistry of Agriculture on 03.09.2024 for “Best Campaign and Rapid Campaign” for AIF Product from Hon’ble Minister Shri Shivraj Singh Chouhan, whereas Mnistry of State of Housing and urban Affairs has awarded BUPB with “PMSVANidhi PRAISE AWARD 2023-24” on 11.09.2024. BUPB has recently won 9 National Awards from PFRDA for good performance in Atal Pension Yojana (APY) in Financial Year 2025.

B)    Baroda Rajasthan Kshetriya Gramin Bank (BRKGB) has recently won 9 National Awards from PFRDA for good performance in Atal Pension Yojana (APY) in Financial Year 2025.

C)    Baroda Gujarat Gramin Bank (BGGB) has recently won 10 National Awards from PFRDA for good performance in Atal Pension Yojana (APY) in Financial Year 2025.

Stressed Asset Management

The Bank believes that continuous day-to-day monitoring is the first step towards reduction in non-performing loans and thus ensuring good recovery. For this, the Bank undertook various steps and formulated strategies to augment recoveries and reduce slippages.

Bank is strategizing to touch each and every NPA account in a scientific manner. Bank has a special skill-set under an Apex Vertical ‘Stressed Assets Management Vertical’, at Corporate Office. Under the vertical there are -5- Stressed Assets Branches (SAM) with special skill set to cater all accounts under National Company Law Tribunal (NCLT), -12- Stressed Assets Recovery Branches (SARB Branch) at Zonal level to handle NPA accounts other than NCLT with outstanding balance above '5 crore. These Branches are under direct supervision of Corporate Office to reduce TAT. Further -69- Regional Stressed Assets Recovery Branches (ROSARB Branch) at Region level are also stablished to handle NPA accounts with outstanding balance above '20 lacs to '5 crore.

Under Govt of India Digital Initiative, Bank has taken several steps for end-to-end digitalization of the entire recovery and monitoring procedure without paper movement and Real Time basis. In this connection bank has taken following initiatives:

1.    QLICK: It picks several data points from FINACLE on real time basis without manual intervention and calculates Days Past Due (DPD) Report, NPA Movement Chart and Mock Runs - for forecasting daily degradations.

2.    ILMS: Mobile app and Desktop based portal which is an online repository of entire NPA A/Cs irrespective of amount. It provides online 360-degree live monitoring of accounts without any manual intervention, like SARFAESI status, DRT/NCLT status, Provisioning, Daily Recovery, lawyers performance analysis and online submission/ sanction of OTS proposals to reduced the TAT.

3.    Bank is member of BAANKNET (Bank Assets Auction Network) portal of PSB alliance Pvt Ltd. which is being used for auction of properties under Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act (SARFAESI).

4.    E-OTS: A Non-discretionary, and Non-discriminatory Digital E-OTS scheme has been introduced under EASE 7.0, which reinforces our Bank’s leadership in meeting government priorities. Digital processing enables cost and time savings, with payments made via QR code and no need for branch visits. Borrowers can download the sanctioned letter and No Dues Certificate online.

Bank also adopted the following strategies for recoveries and reduce slippages.

1.    To have a proper monitoring of the portfolio of Agriculture, MSME and Retail Loans we have taken a cluster / area approach with dedicated recovery officers.

2.    Proper allocation of small NPA/SMA accounts to Recovery Agents / Feet on Street is done by Portfolio Managers at ZO/RO level to have a monitoring.

3.    Introducing the Pre Lok-Adalat meetings for maximum participation of borrower during the Lok Adalats and resolved the long pending cases under the DRT Lok-Adalats /National Lok-Adalats.

 

4.    Bank has initiated the SARFAESI action in all eligible NPA accounts and continue the action till conclusion / disposal of asset & recovery in the account. We are also listing/ publishing the auction property details on Bank’s website, Newspaper, Radio, social media web portals and as well as leading property broking web sites.

5.    To address the large number of small NPA accounts, Bank has re-introduced in June-2024 its special OneTime Settlement (OTS) scheme “Vasooli Sankalp 2.0” for settlement of unsecured NPA (DBII/DBIII/Loss) / TWO/ PWO accounts having outstanding balance up to '5.00 crore under MSME, '1.00 crore under Retail and '0.25 crore under Agriculture category.

6.    Bank believes in Nation Building by extending hands to stressed entrepreneurs through restructuring as per RBI guidelines. Also to have better and targeted monitoring mechanism & reduction in SMA - I & SMA - II accounts of large corporate are being monitored by Stressed Asset Management Vertical in coordination with Credit Monitoring Vertical to find out the resolution and exploring all prospects of recovery and up gradation.

The movement of NPAs during the last two years is as under:

( 'in crore)
Particulars		FY 2024		FY 2025
Gross NPA		31834		27835
Gross NPA (%)		2.92%		2.26%
Net NPA		7213		6994
Net NPA (%)		0.68%		0.58%
Additions to NPAs		10397		9310
Recovery/ Upgradations		4729		4320
Write offs including TWOs/ PWOs		10518		8980
Recoveries in write off accounts		5098		6373
Provisional Coverage Ratio (including TWO) (%)		93.30%		93.29%
Provisional Coverage Ratio (excluding TWO) (%)		77.34%		74.87%
As per asset classification, the bifurcation of loan book is as given below: ( 'in crore)
Asset Category	FY 2024		FY 2025
Standard Advances	1058672		1202626
Gross NPA	31834		27835
Total Gross Advances	1090506		1230461
Gross NPAs comprising
Sub-standard	7816		6806
Doubtful	13118		12119
Loss	10900		8910
Total Gross NPA	31834		27835

International Banking

The Bank has -84- overseas branches/offices across -17-countries comprising of -39- overseas branches/offices ( including -1- International Banking Unit in GIFT City, Gandhinagar, Gujarat, India and -9- EBSUs in UAE), -45-branches of the Bank’s -7- overseas subsidiaries. In addition, Bank has -1- Joint Venture viz. India International Bank (Malaysia) Bhd. in Malaysia and -1- associate bank viz. Indo Zambia Bank Ltd. in Zambia with -37- branches.

The Bank has presence in the world’s major financial centers of New York, London, Dubai, Singapore and Australia. In addition, Bank has a branch in GIFT City (SEZ), Gujarat, India which is treated as an offshore banking unit and has been chosen as a center for business growth taking into consideration the immense business potential, tax advantage, Government initiatives etc. Bank has taken various proactive steps in creating world class infrastructure for the branch in IFSC including state of the art dealing room for International treasury of global standard.

Bank pursues a strategy of driving growth and value by meeting the international banking requirements of Indian corporates; catering to India linked cross-border trade flows for Indian and locally incorporated companies or firms and being the preferred Bank for NRIs/ Persons of Indian Origin.

Looking into the available business opportunities, Bank has also diversified the advances portfolio by taking exposure on Non-India related syndication loans in the primary and secondary market. Also, various new products have been launched to broaden the product basket on the asset side

Further, in overseas centers, substantial progress has been made in IT up gradation for end-to-end business solution, with a focus on digitization and centralization, to improve productivity and customer experience. Bank is continuously integrating multiple platforms of technology to generate synergies. During the year, Bank has taken various steps to automate the Risk & Compliance monitoring.

Bank has strategically undertaken rationalization of its overseas presence based on a comprehensive evaluation framework. Now, the Bank is restrategising its International Operations in line with the new global environment and focused on rebalancing the portfolio with a view to manage risks, shed low-yield assets and increase profitability.

As of March 31, 2025, the Bank’s total business (net) from international branches was '4,35,770 crore and constituted 16.25% of the global business. Total deposits were at INR 2,29,866 crore while net advances were '2,05,904 crore.

Foreign Exchange Business

With an objective to implement high standards of compliance in line with extant regulatory guidelines with improved operational efficiency, service delivery and quality, our Bank has set up Trade Finance Back Office at GIFT City, Gandhinagar(India’s 1st smart city) along with BCP set up at Bengaluru to cater trade finance services of its pan India customers. The significant developments aimed at enhancing the overall foreign exchange business in the current financial year are as follows:

•    Bank has automated cross border inward remittances below USD10,000.00 for certain purposes. During FY 2025 we have successfully handled 64,885 transactions through Straight through processing as compared to 59,368 transactions in FY 2023-24. This accounts for 19.03% of total transactions processed during the FY 2025 and reflects a significant improvement in turnaround time (TAT).

•    Bank has launched Liberalized Remittance Scheme (LRS) facility through BOB-World enabling individual customers to initiate transactions under LRS for specific purposes viz. gift / family maintenance from their Mobile. A total of 3,759 transactions have been facilitated through the platform in the FY 2025, accounting for 7.38% of the total LRS transactions processed in the year.

•    Bank has launched the Liberalized Remittance Scheme (LRS) facility through Internet Banking application, enabling customers to initiate transactions under LRS for specific purposes viz. gift / family maintenance directly from their Internet Banking portal. The facility is expected to see increased adoption by customers in the coming years.

•    Bank has created an accessible 24/7 SMART TRADE PORTAL to its customers, enabling them to initiate inland as well as forex trade transactions from the comfort of their home or office, reducing the necessity for branch visits. This channel has onboarded a total of 4,700 customers, including 921 during the current financial year, facilitating 12% of the total trade transactions (both inland and foreign) through the portal.

•    The Bank has partnered with NeSL (National E-Governance Services Limited) to enable end-to-end issuance of Bank Guarantees through a fully digital mode, enhancing security and significantly reducing turnaround time (TAT). As part of this initiative, our Bank has set an industry benchmark by rapidly achieving key milestones in the issuance of Electronic Bank Guarantees (e-BGs) on the National E-Governance Services Limited (NeSL) platform. During FY 2024-25, the Bank issued 4,677 Electronic Bank Guarantees (e-BGs), an increase from 2,010 e-BGs issued in FY 2023-24. This brings the total number of e-BGs issued to 6,687 since the commencement of digital issuance through the National E-Governance Services Limited (NeSL) platform. ²

market, derivatives, equity, currency and interest rate futures and other alternate asset classes. The Bank offers various services like interest rate swaps, currency swaps, currency options and forward contracts through authorised branches dealing in foreign exchange across India.

Treasury maintains the regulatory requirements of CRR and Statutory Liquidity Ratio (SLR) and manages the fund position. Treasury borrows/invests in money market and capital market instruments as part of fund management operations.

The total size of the Bank’s domestic investment book as of 31st March 2025 stood at '3,70,478 crore. The share of SLR securities in total investments was 82.74%. The percentage of SLR securities (unencumbered) to Net Demand and Time Liabilities (NDTL) as of 31st March,2025 was at 25.30%. The Bank capitalized on the opportunities offered by yield movements. The Bank managed its portfolio efficiently and maintained yields on interest bearing investments for FY 2025 at 7.09%. During FY 2025, the profit on sale of investment was '2,267.63 crore.

Government Business

The Government Relationships Vertical plays a pivotal role in the strategic framework of the bank. It serves as a cornerstone in meeting the diverse banking needs of both Central and State Governments, as well as Public Sector Undertakings (PSUs) across India. Our comprehensive suite of services encompasses a wide array of financial transactions crucial to the functioning of government bodies.

One of our primary responsibilities involves the seamless processing of payments related to Central Government and State Government pensions, postal transactions, Tax collections (Direct & Indirect ) and Treasury/sub-Treasury transactions. Additionally, we manage various Government savings and investment schemes such as the Public Provident Fund, Senior Citizens’ Saving Scheme, Sukanya Samriddhi Yojana, National Pension System, Atal Pension Yojana, e-Kisan Vikas Patra, RBI bonds Gold Monetization Scheme, Mahila Samman Saving scheme, and Sovereign Gold Bonds. These services not only contribute significantly to the bank’s fee income, with a notable '88.97 crore in FY 2025, but also bolster our reputation and goodwill in the banking sector.

Moreover, our role extends beyond transactional services. We actively assist in the opening of accounts for various State and Central Government organizations, fostering a symbiotic relationship by mobilizing Current Account Savings Account (CASA) deposits for the bank. Our commitment to providing holistic solutions is evidenced by our efforts in facilitating the onboarding of customers to government portals such as the Government e-Marketplace (GEM) portal and the Public Financial Management System (PFMS). These initiatives not only strengthen our existing relationships but also pave the way for establishing new partnerships and expanding our CASA base. As of March 31,2025, the total Government CASA of the bank amounted to '63,180 crore, representing 12.72% of the total bank’s CASA.

Furthermore, our dedication to innovation and technology is paramount. We offer customized IT solutions to government departments nationwide, catering to their specific needs and requirements. By leveraging technology, we enhance efficiency, streamline processes, and ensure the seamless mobilization of government CASA.

As an accredited banker to esteemed ministries such as the Ministry of Health and Family Welfare and the Ministry of Law & Justice. Our focus extends beyond transactional efficiency; we prioritize providing allied services that add value to our government partners. This includes initiatives such as facilitating the onboarding of government departments onto the PFMS Portal, actively canvassing government CASA accounts, and providing comprehensive support to branches engaged in government business.

In essence, our Government Relationships Vertical serves as a trusted partner to government entities, offering a comprehensive suite of banking services tailored to their unique needs. With a steadfast commitment to excellence, innovation, and customer-centricity, we continue to play a pivotal role in the nation’s economic development and governance.

Wealth Management

The Wealth Management vertical continues to be a key Strategic Business Unit of the Bank, with a consistent focus on nett business growth and building stronger Assets Under Management (AUM) across diverse client segments. Supported by an expansive network of 8,400+ branches and a customer base exceeding 170 million, the vertical is committed to delivering best-in-class investment and insurance solutions tailored to the evolving financial needs of its clientele.

Industry Recognition

The Bank’s excellence in Wealth Management has been recognized at national platforms, including: ³

bobWorld Merchant UPI QR

During the FY2025 the Bank has been able to achieve 25.48 Lacs bob World UPI Merchant base and added 7.01 Lakh new merchants on UPI QR platform. As of March 31,2025 a total of 3.56 Lakhs bob World Merchant UPI QR activations have been achieved. The bank has also been able to achieve a total of 24.67 crore valued ' 50581.60 crore Financial transactions through bob World Merchant UPI QR during FY2025.

Sound Box initiative

Bank has launched Sound box facility to its merchants in October 2024 and successfully installed 14K device in FY 2024.During FY ’25 , bank could successfully achieve an installed base 1.04 Lacs sound box devices.

bob World

During the FY’2025, bob World activated user base has been increased by 21.43 lacs users. As of March 31,2025 a total of 327 lacs users have been activated on bob World. The total Financial transactions over bob World platform have crossed 13.62 crore transactions and Non-Financial transactions have crossed 194.39 crore transactions during FY 2024-2025.

Debit cards

As of 31st March 2025, the Bank has a debit card base of 8.82 crore. To boost e-commerce and POS transactions and position the Bank’s debit card as the preferred payment option for customers, the Bank collaborated with various merchants to provide attractive offers for debit cardholders. During the period from April 2024 to March 2025, the Bank launched 25 promotional campaigns in partnership with popular merchants.

In FY 2024-25, the Bank introduced various new debit card variants to cater to diverse customer segments out of which the prominent variants are mentioned as under:

•    Bank of Baroda EaseMyTrip Debit Card, introduced in partnership with EaseMyTrip, offering a mix of travel and hotel booking discounts, complimentary annual subscriptions to OTT platforms, and other value-added benefits.

•    NRI Debit Card, developed in collaboration with MasterCard to specifically address the unique requirements of NRI customers and enhance their overall banking experience.

•    Baroda Kisan Pride Debit Card, exclusively for customers who have availed loans under the Baroda Kisan Pride scheme of the bank.

Baroda FASTag (National Electronic Toll Collection -NETC)

Bank has issued 1.31 lakh FASTag in FY2025 and tag base reached to 12.20 lakh. Our Bank has processed 4.79 crore FASTag toll transactions amounting '530.29 crore in FY2025.

Bharat Connect (Formerly Known as Bharat Bill Payment System (BBPS) )

Bharat Connect (BBPS) is an interoperable platform for repetitive bill payments which offers real time bill payment and

recharge services to customers. BBPS is an RBI initiative product and managed by NBBL (wholly owned subsidiary of NPCI). Our Bank is authorized as Customer Operating Unit (COU) and Biller Operating Unit (BOU) for facilitating BBPS services. In FY2025, Bank has processed 1.96 crore bill payment transactions amounting approx. '11494 crore. Bank has a biller base of 11 active billers on Bank’s BBPS platform.

ATM

The Bank has wide network of 9,316 ATMs and 1,671 Cash recyclers as on 31st March 2025 with very user friendly screens that allow navigation in Hindi, English and the local language of the place of deployment offering a smooth experience for our customers in their day to day banking operation. Our ATMs are enriched with features such as green pin generation, National Electronic Fund transfer, Cash on mobile services where customer can withdraw money from ATM without using Debit card etc. Our Bank has launched the facility of Interoperable Card less Cash withdrawal (UPI ATM) at 7145 locations where customer can withdraw money using UPI QR services (ICCW) of Bank. As of 31st March 2025, all our 9316 ATMs are made live under OPEX model for seamless ATM services and enhanced customer’s experience.

Internet Payment Gateway (IPG)

The Bank’s IPG infrastructure bob World Merchant Gateway is an online service that is being offered to customers to conduct their business online by accepting payments securely in real time. The Internet Payment Gateway provides an interface between merchants and their customers for secure payment processing using online modes.

bob World Merchant Gateway facilitates receiving payment online from Debit/Credit card, Net Banking, UPI, Wallet, AEPS, AADHAR PAY QR code etc. and offline modes i.e. NEFT/ RTGS in a simple and secured manner, which is essential for e-Commerce/online business.

To provide a seamless and customizable service, Bank has tied up with -12- aggregators and master merchants. Bank has on-boarded 1,832 merchants in FY2025 achieving a landmark of 7000+ IPG merchants base with 35% growth in merchant on-boarding and registering an increase in average CASA growth of 20% from '2,981 crore to '3,566 crore on YoY basis.

bob ' Pay:

UPI is a system that powers multiple bank accounts into a single mobile application (of any participating bank), merging several banking features, seamless fund routing and merchant payments into one hood. It also caters to the “Peer to Peer” collect requests which can be scheduled and paid as per requirement and convenience. In FY-25, Bank revamped its UPI app bob World UPI and re-named it bob ? Pay with fresh UI.

During FY-2025, Bank has on boarded 21.34 lacs new users on its UPI Platform which showed approximately 20% growth than previous year.

bob World (Internet Banking):

The total number of Internet Banking users of the bank increased to 120.67 lakh during FY 2025 from 108.46 Lakh during FY 2024.

WhatsApp Banking: • WhatsApp Banking User registration -
WhatsApp Banking Users Registration YOY ( Customers + Non Customers) in Lacs
Year	Customer	Non Customers *	Total User
FY 2021	5.03	1.1	6.13
FY 2022	9.62	4.2	13.82
FY 2023	40.49	3.61	44.1
FY 2024	30.14	6.46	36.6
FY 2025	37.15	8.55	45.70
Â	Total registration	Â	146.35

 

*Non-customers user registration includes registration of users who are not customers of the bank + registration of customers of the bank who are under in-eligible scheme codes for WhatsApp banking.

 

WhatsApp Banking Transactions -
Year	Number of WhatsApp Banking Transactions (in lacs)
FY 2021	47.8
FY 2022	207.5
FY 2023	343.4
FY 2024	701.72
FY 2025	1095.27

Digital Banking Units:

 

Baroda TabIT:

The Bank embarked upon digitizing its customer on boarding process through tablet for instant CASA opening along with bundle of services (Personalized Cheque Book, Personalized Debit Card, WhatsApp Banking, SMS Alert, Internet Banking) and POS, Soundbox ,UPI QR, IPG lead generation through its TAB banking platform - bob World Tab. Bank opened more than 37.96 lakh Savings account and 2.85 Lakh Current account through this platform during the FY2025.

NRE/NRO account: Bank has launched NRE/NRO account opening service through TAB. This functionality will enable NRIs to open their SB accounts through a digital channel thereby providing a seamless experience to our customers. Since its launch 6333 account have been opened in these schemes through Tab Banking

Micro Insurance (PMJJBY/PMSBY): Introduction of Micro Insurance through Tab is a joint initiative from Digital Group and Financial Inclusion and CSR Department with aim of further enhancing accessibility and expanding the reach of Micro Insurance. Since its launch Bank has issued PMSBY-52512and PMJJBY - 25305 through Tab.

Bank has enabled additional modes in existing account opening process through Tab like Biometric Authentication in SHG accounts, CKYC number-based account opening journey in Current/Savings accounts. These functionalities will make account opening process smoother.

Bank has also implemented many services in TAB under EASE 7.0 directives. Major services launched are Locker Allotment, Re-KYC, Debit card Application & Cheque book services.

Bank has recently launched Govt. Scheme Sukanya Samriddhi Yojana (SSA) issuance through TAB banking. As of now, branches have to open SSA through CBS only. SSA account opening through Tablet will allow branches to open account digitally under assisted mode.

Functionality	FY 2025
Saving Bank Account	37.96 L
Current Account	2.91 L
SHG A/c	29,167
NRE/NRO A/c	6333
Fastag	2013
Company account	3299
UPI Merchant On boarding	7.07 L
BHIM Aadhar Lead Generation	50,311
POS Leads	44,222
IPG Lead Generation through TAB	3426

Initially our bank was allotted 8 districts for setting up of Digital Banking Units, subsequently our Bank has set up 10 more DBUs. Now our Bank has Bank of Baroda has most number of DBUs (18) by any Bank in the industry. Total business of '89.22 crore have been canvassed by these DBUs as on 31.03.2025.

Digital Lending

To support the objective of being a pioneer Bank in Digital Lending landscape, Bank has launched Digital Lending Platform in 2020 with the purpose to target and acquire new customers from diverse segments using digital means. Bank has operationalized STP (Straight through Process) Digital Journeys from initial stage of lead generation till disbursement.

At present 70+ digital lending journeys are live in the Bank.

Bank has integrated its Digital Lending Platform with RBIH’s Unified Lending Interface (ULI), 20+ FinTech’s and has 100+ digital integrations, for the purpose of Landownership verification, Farm Yield Reports, digital verification, authentication & analysis of Bank statement, Credit Bureau, e-mandate, GST, ITR, Udyam, e-KYC, v-KYC, PAN, e-stamping / e-signing, etc.

Total of 26+ Lac customers have been sanctioned and disbursed Digital Loans value Rs.30,000+ Cr.

Digital Lending Platform continuously contributing EASE of doing business.

Retail Initiatives:

•    Personal Loan (Pre-approved/non-pre-approved), Education Loan (Premier Institutes & EDP), Auto-Loan (Pre-approved/non-pre-approved), Retail Gold Loan, Pension Loan, Home-Loan Top-up (Pre-approved), Housing Loan (in-principle) and LABOD.

•    Digital Gold & Silver Personal Loan: Bank has designed digital Personal Loan journeys for employees of Central & State Government, PSUs, Autonomous Bodies, high rated corporates, etc.

•    Strengthened underwriting of Pre-Approved Personal Loans to ensure better quality customer onboarding.

MSME Initiatives:

•    Baroda Smart OD - The facility is based on applicants’ GST returns.

•    GST Sahay - Digital journey for invoice-based financing for Current Account Holders to meet their working capital requirements.

•    Digital Mudra Loans - Bank has launched end-to-end digital journeys till disbursement on Digital Lending Platform.

•    MSME Renewals, MSME (in-principle) sanctions.

Agri Initiatives:

•    Digital Gold Loan - Bank has launched a seamless digital journey enabling quick and hassle-free disbursement of gold loans.

•    Digital BKCC - Bank has launched an end-to-end digital solution covering onboarding to disbursement.

Analytics Centre of Excellence (ACoE)

The Bank continues to advance its data-driven journey by implementing an increasing number of AI and ML models, further strengthening its leadership in the field of Artificial Intelligence (AI) and Machine Learning (ML) and continuing to scale its capabilities and deliver impactful business outcomes. For the third consecutive year, the Bank has been honoured with the Best AI/ML Bank - 2024 award by the Indian Banks> Association, reaffirming its position at the forefront of AI-led innovation in the banking sector.

The Bank has made significant progress in its AI adoption journey and have developed GenAI-powered products to enhance both customer and employee experiences. These include Virtual Relationship Manager “ADITI” offering personalized assistance to customers through intelligent interactions, Virtual Agent “ADI” streamlining the customer inquiry process and improving service efficiency and Knowledge Management Bot “Gyan Sahay” which

provides employees with contextual and real-time access to information, thereby boosting productivity and decision making.

By embedding intelligence into its core processes, the Bank continues to deliver seamless, data-driven and future-ready banking experiences for all.

Information Technology

•    Bank has Revamped UPI app with new UI/UX for better adoptability and introduced new services on the UPI platform, such as accepting Transactions from 22 countries for UPI, Cash withdrawal through UPI, Refund functionality in Merchant Portal, Preapproved Rupay credit card instant issuance & linking, P2P voucher issuance, Lite Auto Top-up, Credit Card Bill payment, Credit Card EMI feature, Tap & Pay Feature.

•    Bank introduced additional functionalities in Central Bank Digital Currency (CBDC) referred to as e' (Digital Rupee) viz option to pay through CBDC application under UPI payment, Auto Load in CBDC, P-CBDC deployment, Disbursement of DBT through Digital Rupee tokens.

•    Bank has introduced additional services, enhancements in system controls and security features in its mobile banking application for customers. These include NPS account opening, Update customer profile, Credit Card EMI, Persona based theme for NRIs and Millennial customers, Temporary Block/ Unblock, Revamped UI, IRCTC Integration through bobWorld, GST update through bob World, Online Demat & Trading A/c Opening

•    Bank added new services/ features in Internet Banking Platform to enhance customer experience viz. Remittance under LRS, Credit Card management services, integration with various state treasuries for payments, Implementation of Virtual Debit Card, option for Mutual Fund purchase.

•    Bank has upgraded Loan Life cycle Management (LLPS) to new version and added new services/ products viz. Baroda Scholar Collateral free Education Loan, PM Suryaghar Bundled Scheme, Subsidy details for Education Loan, Area Specific Home Loan etc.

•    Bank has enabled online account opening facility in Hindi Language along with English. It will improve accessibility and aligns with customer preferences to engage easily with the bank’s services.

•    Customer Feedback through QR Code: QR codes have been placed in branches, enabling customers to provide instant feedback about the branch they visited.

•    Bank has enabled Marathi Language for Whatsapp Banking and added New features viz 15G/H Status Inquiry, Interest Certificate Request, Stop Cheque Payment, New Masterstroke Scheme Codes, SSY Balance Inquiry, State-specific banking holiday calendar

•    Bank is continuously enhancing Tablet Banking to offer new features and services to customers i.e.. Enhancements to the NRI TAB feature offer improved services etc.

•    Bank has introduced new services in ATM viz enabling Re-KYC Service through ATMs so customer will be able to do reKYC using debit card through ATMs,. Bank also introduced range of Card Variants viz. EaseMyTrip Debit Card, Phudalvan Debit Card, Exclusive Mastercard for NRI customers etc.

•    Bank is continuously upgrading its infrastructure agility and resilience to support banking services and transactions, for higher uptime and performance.

Cyber Security

The Bank has established a comprehensive Cyber Security Governance framework, integrating a robust management structure, well-defined policies, and operational controls. This framework is tightly aligned with the Bank’s business strategies to ensure end-to-end IT risk management and enterprise-wide cyber resilience. The Bank follows both the NIST Cybersecurity Framework and the RBI Cyber Security Framework, enabling a risk-informed and adaptive approach to security.

To further strengthen its cybersecurity posture, the Bank has adopted enhanced GRC processes, embedding risk and compliance considerations into all critical decision-making layers. A key enabler in this journey is the deployment of an enterprise-wide Extended Detection and Response (XDR) platform, which enhances real-time threat detection, correlation, and automated response across endpoints, networks, and email environments.

Cybersecurity is managed 24x7x365 by a centralized Global Cyber Security Operations Centre (CSOC), fully integrated with all domestic and international business verticals. The CSOC leverages advanced capabilities including Threat Modelling, Digital Risk Monitoring (DRM), and Continuous Automated Red Teaming (CART) to proactively identify and mitigate emerging threats. The Bank’s Data Centre and Disaster Recovery Centre are certified under ISO/ IEC 27001:2022, reflecting a mature information security management system.

In addition to existing controls, the Bank has implemented the following strategic initiatives:

•    Breach and Attack Simulation (BAS) tools are used regularly to validate the effectiveness of security controls and provide actionable insights for risk mitigation.

•    Random Early Detection (RED) team exercises simulate real-world attack scenarios to assess control readiness and refine incident response strategies. ⁴

the Bank’s website) to promote safe banking practices.

•    Data Loss Prevention (DLP) technologies are deployed to ensure sensitive information remains within the Bank’s network, supporting compliance and internal policy enforcement.

•    Network Access Control (NAC) solutions provide visibility and enforce access controls, limiting lateral movement within the network.

•    Advanced tools for Anti-Phishing, External Attack Surface Management (EASM), and DRM are in place to monitor and safeguard the Bank’s digital footprint against external threats.

•    Bank has also won prestigious IBA award ‘Best IT Risk Management Award’ (during FY 2025) recognizing bank’s cyber security strategies with respect to cyber security driven by coordination between IT, Info. Security, Risk & Business teams to safeguard Bank’s digital ecosystem.

Together, these measures significantly enhance the Bank’s cybersecurity capabilities, reduce its attack surface, and support a proactive, intelligence-driven defense strategy aligned with business objectives and regulatory expectations.

Marketing

The year 2025 was characterized by innovative marketing strategies, enhanced brand visibility, and meaningful community engagement, all of which played a key role in reinforcing our reputation as a progressive, customer-centric organization. Our commitment to digital transformation, along with strong media outreach, has further bolstered our brand equity and strengthened our position in the market.

In FY 2025, the Bank executed an ambitious and multifaceted marketing and branding strategy that spanned multiple channels and touchpoints. Our efforts were aligned with key product launches, national events, and festive seasons, ensuring that our campaigns resonated with diverse customer segments across India.

We embarked on an extensive multi-channel advertising campaign that included Television, Radio, Print, and Cinema with a cumulative reach of approx. 200 crore. Our television campaigns, aired across major news & entertainment channels promoting key retail products such as the Systematic Deposit Plan (SDP), Bob Parivar Account, Bob Masterstroke Account & Bob Green Deposit Plan. Additionally, we leveraged events like the IPL 2024, Paris Olympics 2024 and our 117th Foundation Day to create high-impact moments for customer engagement.

Our radio campaigns, including the BIG FM Antakshari & Dhun Badal ke toh Dekho Season 3 & Mahakumbh were well received with our target customers and reached over millions of listeners across the country. Special initiatives such as the tree plantation drive in partnership with Radio City underscored our commitment to social causes while our product-centric jingles reinforced our offerings during

the festive season. Our Foundation Day Tree Plantation drive enabled the Bank to enter into India Book of Records for most number of e-pledges for tree plantation by taking Green Pratigya pledge.

In print, we maintained a strong presence across leading national and regional newspapers, delivering impactful campaigns that highlighted our products and services. Noteworthy campaigns during the festive period, such as “BOB ke Sang, Tyohar ki Umang” featuring Sachin Tendulkar, further solidified our brand image.

Digital transformation has been a cornerstone of our marketing strategy. We have made significant strides in the digital space, with our social media presence reaching a new milestone of 9.32 million followers across various platforms like Face book with 51.19 lakh, Instagram 18.96Lakh, X 9.99Lakh. Youtube 8.24 Lakh, LinkedIn 4.59Lakh and Quora 0.49 Lakh followers/ Subsribers. During FY 2025, the Bank executed over 30 impactful campaigns spanning sports, financial literacy, fraud awareness and cybersecurity. Notable initiatives included #Pinkathon, #FinancialLiteracyWeek, #PehchaanCon, #CyberJagrooktaDiwas, and #StayWiseActWise. High-engagement campaigns like #BOBatMahakumbh2025, #PlayTheMasterstroke, #SabMeinhainKhiladi, and #bobKeSangTyohaarKiUmang boosted digital outreach.

Our strategic engagement with cultural, educational, and sporting events has been instrumental in enhancing our brand’s visibility. We sponsored key cultural events such as the Maharaja Ranjitsinh Gaekwad Baroda Festival of Arts and supported educational initiatives like IIM Bangalore’s VISTA, IIM Ahmedabad’s CHAOS, IIM Kozhikode’s Annual Conference, IIT Bombay’s Mood Indigo, and IIM Lucknow’s CMEE International Conference. These partnerships not only helped us connect with elite student communities but also allowed us to strengthen our position as a patron of arts, culture, and education.

The appointment of cricket icon Sachin Tendulkar as our global brand ambassador was a significant milestone in enhancing our brand appeal. The “Play The Masterstroke” campaign, featuring Sachin, was a major success across all media platforms and contributed to a significant uptick in retail account openings and loan disbursements.

We also continued to build our presence in the sports arena, with a major sponsorship in the International Masters League (IML), which featured our global brand ambassador, Sachin Tendulkar. This partnership provided exceptional brand visibility and engagement through over 200 million viewers. Additionally, our collaborations with grassroots sports initiatives underscored our commitment to fostering youth talent and supporting national athletes.

As part of our digital strategy, we undertook the website centralization initiative, which involved revamping 19 websites to improve user experience and customer convenience. The enhanced features, including improved search functionality, multilingual capabilities, and advanced filters, have led to a 12% improvement in overall website traffic. We also saw a 30% increase in organic traffic, with over 42 million users visiting our website in FY 2025.

The PR strategy for the year focused on strengthening Bank of Baroda’s brand, improving visibility, maintaining its position among India’s Top 5 banks as well as protecting brand reputation. In addition to the Bank’s financial performance, there were a diverse mix of announcements during the year including onboarding Sachin Tendulkar as the Bank’s Global Brand Ambassador, launch of products such as the bob Utsav Deposit Scheme, bob SDP and bob Liquid Fixed Deposits, adopting advanced GenAI technologies, launch of Phygital and all-women branches as well as programmes such as the Baroda Kisan Pakhwada and initiatives undertaken at the Maha Kumbh Mela to support visitors. In FY2025, the Bank consolidated its #2 position in Media Share of Voice among public sector banks.

As we look ahead, we remain focused on enhancing our digital capabilities, expanding our reach, and engaging with customers across multiple touchpoints. Our continued emphasis on social responsibility, financial literacy, and customer-centric initiatives will guide our efforts to build longterm relationships with our stakeholders.

We will also continue to strengthen our partnerships with cultural, educational, and sports institutions, ensuring that Bank of Baroda remains a trusted and progressive brand in the financial services sector.

The Bank has enhanced its reputation and brand visibility through strategic marketing efforts. Bank’s strong financial performance, innovative digital initiatives, new customercentric products and services were effectively promoted and reached to the key segments and target audiences. This successful outreach has resulted in market recognition, earning the Bank numerous prestigious awards, highlighting our achievements in marketing, technology, customer service, financial performance, operational efficiency and innovation. The details of the notable awards received by the Bank during FY 2025 is also given at the end of this report.

Corporate Ethics - “Creating Value with Trust”

Bank of Baroda, one of India’s largest and most trusted public sector banks, has always been committed to maintaining the highest standards of integrity, transparency, and accountability in its operations. In line with its vision to be customer-centric and globally competitive, Bank of Baroda has pioneered, among the PSU Banks, the launch of its Code of Ethics and has a dedicated Corporate Ethics Department, which leads the bank’s ethical agenda. By adopting the “Code of Ethics”, the Bank reinforced its commitment to ethical banking practices, ensuring long-term success and sustainability in a dynamic financial world. The bank has constituted the Apex Level Ethics Committee from a crosssection of the entire workforce, with diverse representations like gender, caste, cadre, geography, function, Persons With Disabilities, sports, and ex-servicemen to uphold the ethical values in the organization.

Our Code of Ethics sets forth our core values, shared responsibilities, global commitments, and promises towards our Five Pillars, i.e.,

• We Barodians

•    Our    Customers

•    Our    Other External Stakeholders

•    Our    Business

•    OurCommunities

On the 117th Foundation Day of the bank on 20th July 2024, the bank adopted one more core value, “RESPECT” to recognize and value the inherent worth and dignity of every employee. Our Code of Ethics document is placed on the Bank’s website.

The Code of Ethics has been structured on a stakeholdercentric approach with the employees at the centre as the ultimate owners of processes and drivers of culture. There is a strong alignment of the Code of Ethics with our Core Values, it sets out a guiding framework for how we behave with our colleagues, our stakeholders, and our expectations from those who work with us. The Code addresses contemporary challenges and ethical dilemmas that the bank and its employees face and outlines the responsibilities they carry when addressing emerging critical issues in the banking operations and important areas like cybersecurity and protecting the environment.

The banking industry has faced numerous challenges over time, yet ethics and trust continue to be its foundation every single day. The Code empowers us to do what is Right and plays a vital role in strengthening our Bank’s brand and reputation. Our leadership has consistently championed the promotion of the Code through various employee engagement initiatives.

Apart from conducting round-the-year education and awareness programmes, one of the most impactful strategies for advancing our ethics agenda is developing strong communication channels. As part of this commitment, the ‘Speak Up!’ initiative, aligned with the Code of Ethics, was introduced to spotlight the various channels within the bank that empower employees to report unethical practices and raise concerns.

To foster a culture of transparency and engagement, the Bank also publishes Baroda Sanskriti, a quarterly inhouse newsletter that features creative contributions from employees. Ethical awareness is further promoted through regular dissemination of Snippets from the Code of Ethics, quizzes, bilingual audiobook of our Code of Ethics, and a suite of digital communication tools such as the ‘Naitik Series’— video stories illustrating ethical dilemmas—and ‘Ethics Talk’, modelled on the TED Talk format that underscores the Bank’s corporate vision and the strategic role of ethics.

A focused training programme on Corporate Ethics was rolled out for branches identified as high risk during the year. Ethics Counsellors are stationed at Corporate and Zonal Offices to offer ongoing support and guidance to employees facing ethical dilemmas, ensuring that ethical business conduct is upheld across the Bank.

To celebrate our values in action, the Bank introduced ‘Living the Values! - Vol 1’ e-booklet, being the part of the ‘Living the Values’ series, features inspiring short stories from employees

that exemplify our core values: Integrity, Customer Centricity, Courage, Passionate Ownership, Innovation, Excellence, and Respect. To ensure the principles of the Code of Ethics reach every level of the organization, the Bank conducts webinars, seminars, specialized training sessions, and mandatory e-learning modules for all staff members. These efforts strengthen our culture of ethics and reinforce our commitment to transparency.

To assess the effectiveness of these initiatives, the Bank conducts an anonymous Annual Ethics Survey for all employees. This allows us to assess ethical behavior, monitor cultural progress, and continuously improve our ethical framework, because, as the saying goes, “What gets measured, gets improved.”

Bank of Baroda is not just a Financial Institution; it is an institution driven by values that define success, its transparency fosters trust, and integrity fuels a sustainable future.

Customer Service

Our Bank constantly endeavours to set industry benchmarks and pioneer innovations across products, processes and service delivery that are imperative to providing seamless experiences to its customers. Customer can interact in 20 languages through IVR/Agent, 11 languages in Bot & in other modes like Video call, Web chat, Email enhances customer experience and ease of use. The Bank ensured time to time addition of AI & Generative AI based features to improve customer’s satisfaction with efficiency.

The highlight of Contact Centre:

1.    The Contact Centre handled 1.48 lakh average inbound customer calls per day during the year and over 1.19 lakh calls daily responded to through IVR.

2.    Average more than 1.89 lakh outbound calls per day for sales and surveys.

3.    Bank is handling around 80% call on IVR.

4.    Contact Centre provided emergency services to 6 overseas territories i.e. Botswana, Mauritius, Uganda, Oman, Fiji & Seychelles.

5.    Contact centre has initiated many new functionalities like- Video call functionality through Phygital branches & Mobile Banking, Any day transaction, despatch information, NRI language selection at IVR, GBM Functionality on IVR, Zero touch NPS Survey

6.    Many special helpdesk at Contact Centre for exclusively helping the NRI/HNI, BC Complaint Desk, VRM Shine Desk, Staff Help Desk, NRI global e-mail desk, bob World internet and bob World mobile banking related issue, Complaints, PMJDY

7.    Contact Centre is providing 24 IVR services and 26 services through agents 24*7

8.    Contact Centre started live Video call and live web chat facility for customers.

9.    Contact Centre is equipped with many Al-based technologies like Speech Analytics, Social Media Tools, Automated Email Tool, Genie training Tool, AURA call quality Tool, Work force management, smart dashboard and many more technologies.

10.    Our Contact Centre complies with RBI and TRAI directives by adopting the 140 and 1600 series numbers since 07.09.2024 & 14.03.2025 respectively.

During FY 2025, the Bank saw significant improvement in the usage of remote channels for managing grievances. Approximately 95.3% of the grievances were resolved within the pre-defined turnaround time. The Bank not only focussed on improving the quantitative performance indicators of grievance redressal but also on improving the quality of resolution to improve customer satisfaction. Service levels across the network of branches are monitored through mystery shopping / service audits and workshops. General Manager, Operations and Services, is designated as Principal Nodal Officer for customer complaints in the Bank. Moreover, all Deputy Zonal Heads and Regional Heads are designated as nodal officers for their respective zones and regions. The Bank has appointed an Internal Ombudsman which is a forum made available for the grievance redressal of customers before they approach the RBI Ombudsman. All complaints, which are rejected or partially accepted by the Bank, are systematically escalated to the Internal Ombudsman for review. This enhances customer confidence in the Bank’s systems and expedites the process of grievance redressal, thus making it even more transparent.

The Bank’s code of commitment to customers and MSMEs, citizen charter, grievance redressal policy, and RBI Integrated Ombudsman scheme are available on the Bank’s website to promote fair banking practices by maintaining transparency in various products, services and policies. At the Board level, the subcommittee of the Board for Customer Services addresses the issues relating to the formulation of policies and assessment of compliance with the aim of consistent improvement in the quality of customer service.

Bank’s ChatBot “ADI” and Virtual Relationship Manager “ADITI” was launched for the first time in the banking sector using AI enabled customer enhancement service is functional on our website. ADI, a text and voice-based chat interface that harnesses the capabilities of Generative AI models. ADI is engineered to deliver a near-real-world interaction experience, significantly enhancing customer engagement and satisfaction. ADITI is innovative digital human, designed to interact with customers using sophisticated Natural Language Processing (NLP) algorithms. ADITI is presented as a computerized 3D graphical illustration, leveraging the power of advanced Generative AI models to provide a lifelike and engaging customer experience.

Bank has launched a new channel on 10.12.2024 to capture feedback from both customers and non-customers via Branch QR Code. This QR Code allows users to provide realtime feedback on five aspects of their experience: Branch Ambience, Ease of Transactions, Staff Behaviour, and ATM Ambience. By scanning the QR Code, users can quickly access a feedback form to rate each attribute and share

comments. This feedback helps us continuously improve our services and enhance customer satisfaction.

Handling Customer Complaints

Customers can very easily lodge their complaints directly with the Bank by visiting its website of the Bank and clicking the appropriate link. Alternatively, the customers may also call the toll-free number and get their complaints lodged in the CRM portal of the Bank. Customers also have the option of sending their complaints to Branches and other offices via any mode. All the complaints will be entered into the CRM portal. The complaints are automatically addressed to the concerned resolver based on the category of complaint selected at the time of lodging the complaint.

Bank also has an Internal Ombudsman mechanism in place, as per regulatory guidelines, to instil confidence in the customers regarding the resolution of their complaints.

Bank has also implemented an Online Dispute Redressal (ODR) mechanism for the speedy resolution of online transaction related complaints. Also, the blocking of Baroda Connect facility has been extended via Interactive Voice Response System (IVR) in the contact centre.

To monitor the quality of resolution being given to the customers, Bank subjects 100% of Non - ADC and ADC complaints to quality check through an AI tool developed by Bank, in collaboration with IIT Mumbai which assess the quality of redressal, thus reducing the time and manpower required. The outcome of the quality check is shared with the concerned resolver group for analysis and improvement in resolution.

Branch Network

The Bank has increased its total domestic branch strength to 8424 in FY 2025 from 8243 branches in FY 2024 by adding 188 branches (merged 07 branches with existing branches) at prominent locations of the country across all branch categories. The details of Bank’s domestic and overseas network as of 31^st March 2025 is given below.

Â	FY 2024		FY 2025
Branches	Number of Branches	% Share in Total	Number of Branches	% Share in Total
Metro	1,789	21.70	1,815	21.55
Urban	1,488	18.05	1,502	17.83
Semi Urban	2,094	25.41	2,179	25.87
Rural	2,872	34.84	2,928	34.76
Total Domestic Branches	8,243	100.00	8,424	100.00
Overseas Branches/ Offices (including branches of overseas subsidiaries)	91	Â	84	Â

Currency Chests

The number of currency chests stood at 137 as on 31st March 2025. These chests support effective cash management in the Bank as well as vaulting cash on behalf of RBI. All the currency chests as well as branches dealing in cash transactions are provided with Note Sorting Machine (NSMs) as per RBI guidelines.

Risk Governance and Internal Controls

A sound internal audit function plays an important role in contributing to the effectiveness of the internal control system. The audit function provides high quality counsel to the management on the effectiveness of risk management and internal controls including regulatory compliance by the bank. The Bank has implemented a Risk Based Internal Audit (RBIA) System in line with the guidelines issued by Reserve Bank of India. The increased focus on risk and the supporting governance framework includes identification, measurement, monitoring and controlling of risks as well as ensuring that risk-taking activities are in line with the Bank’s strategy and risk appetite.

The Internal Audit function provides vital assurance to the Bank’s Board of Directors and Senior Management as to the quality of the Bank’s internal control system. In doing so, the function helps to prevent/reduce the risk of loss and reputational damage to the Bank. It is, therefore, an indispensable and an integral function for the safe and sound operation of a Bank.

Internal Audit Function serves the role of the last line in the 3 lines of defence model.

•    The first line of defence being the Operations / Business Units themselves who have the responsibility to prevent the risk at the source.

•    The second line of defence being the Compliance and Risk Management Function of the Bank.

•    Audit being 3^rd line of defence plays the vital role in the Bank in terms of safeguarding the Bank against risks and assessing the risk profile of the auditee units and Bank itself.

Risk Management and Compliance

Risk Management and Compliance are integral part of the banking business and the Bank aims to achieve an appropriate trade-off between risk and returns. To ensure sustainable and consistent growth, the Bank has developed a sound risk management framework so that the risks assumed by the Bank are properly assessed and monitored. The Bank undertakes business activities within the defined risk appetite limits and policies approved by the Board of Directors of the Bank. Specific committees of the Board have been constituted to facilitate focussed oversight on various risks. The Board has also constituted a Risk Management Committee of the Board which oversees the different type of risks. It is supported by specialist Risk advisor on Board. Policies approved from time to time by the Board of Directors or committees of the Board form the governing framework for

 

Basel III Framework

The Bank’s risk management framework rests firmly on the three Basel pillars, i.e. Pillar I- Minimum Capital Requirement, Pillar II- Supervisory Review and Pillar III-Market Discipline. The Bank is strengthened by a healthy level of capital. The Bank maintains adequate levels of Common Equity Tier I, Additional Tier I and Tier II Capital including required Capital Conservation Buffer. Futuristic capital projection ensures that the Bank is always ready to raise additional capital from the market as per business necessity. The position of risk weighted assets is constantly under strong vigil by the credit risk and capital adequacy team. Adequate capital and rationalised risk weighted assets ensures strong Capital to Risk Weighted Assets Ratio (CRAR) for the Bank.

The Bank has a comprehensive Internal Capital Adequacy Assessment Process and Stress Testing Policy in place. Capital Adequacy is assessed considering Pillar 2 risks such as Liquidity Risk, Interest Rate Risk, Concentration Risk, etc. and stressed conditions (under both normal and adverse scenarios) as per the extant guidelines. A brief outline of the mechanism for identifying, evaluating and managing the major risks within the Bank is given below:

Enterprise Risk Management

The diversity of the Bank’s business lines requires a comprehensive Enterprise Risk Management approach to promote a strong risk management culture to help in the early identification, assessment, measurement, aggregation and management of all risks and to facilitate capital allocation among various business lines.

The bank has instilled a robust risk culture across its organization, ensuring that all three lines of defence are equipped to effectively manage risk. Roles and responsibilities pertaining to risk culture amongst various stakeholders in upholding risk culture are clearly defined. Through continuous training efforts, employees at all levels are equipped with the knowledge and skills necessary to navigate and adhere to the bank’s risk appetite limits. This proactive approach not only enhances risk awareness but also strengthens the overall risk culture, promoting a vigilant and informed workforce.

As part of its ongoing commitment to elevate its Enterprise Risk Management practices, Bank has established a dedicated framework to identify emerging risks and gauge their material significance. This framework is specifically designed to comprehensively identify all risks the Bank is exposed to. Additionally, it provides guidance for conducting materiality assessments to pinpoint key risks that could potentially impact the Bank’s objectives and strategies adversely.

The risk appetite of the Bank is dynamic and will evolve with business profile, strategy, economic environment, and shareholders’ expectations. The risk appetite framework aligns the risk appetite to business and financial planning and requires revising and/or developing Risk Appetite limits with the evolving risk profile ofthe Bank.

Credit Risk

Credit risk is managed through a Board approved framework that sets out policies, procedures and reporting which is in line with best practices. Bank has a strong credit appraisal and risk management framework for identification, measurement, monitoring and control of the risks in credit exposures.

Bank uses various Internal Credit Risk Assessment Models and scorecards to assess borrower-wise credit risk. Various Credit Risk models for internal credit ratings of the borrowers were developed internally/externally. They are reviewed and back tested periodically through comprehensive internal/ external validation. The internal ratings are validated by independent rating validating authority.

The Bank has put in place prudential caps across industries, sectors and borrowers with an objective to build a resilient portfolio and de-risk from portfolio concentration. The Bank has developed in-house models for risk assessment of various Countries, State Governments, Group Borrowers etc. and setting exposure caps. As a part of enhanced exposure monitoring, quarterly reviews are carried out for the Bank’s key exposures, segments, industries and sectors. A dedicated team tracks internal & external developments to assess impact on the portfolio performance and recommend pro-active remedial actions. The Bank also conducts comprehensive Thematic review comprising sector outlook & other event-specific impact studies.

Adequate attention is given to the independence of the risk evaluators and business functions for establishing a sound credit culture and a well-structured credit approval process.

Market Risk

Market Risk implies the risk of loss of earnings or economic value due to adverse changes in market rates or prices of trading portfolio. The change in economic value of different market products is largely a function of change in factors such as interest rates, exchange rates, economic growth and business confidence. The Bank has well defined policies to control and monitor its treasury functions which undertakes various market risk positions.

Mid-Office as a part of Risk Management, measures and monitors interest rate risk in its trading book through risk limits like modified duration, PV01 and Value at Risk (VaR) on a daily basis. The foreign exchange risk is measured and monitored in terms of Net Overnight Open Position limits (NOOPL), VaR limits, Individual Gap Limits (IGL), Aggregate Gap Limits (AGL) and total Aggregate Gap Limit (TAGL) on a daily basis. Equity price risk is measured and monitored through VaR limits. At a transaction level, stop loss limits and dealer wise limits have been prescribed and implemented as per the extant guidelines of the Bank. Under its stress testing framework, the Bank conducts comprehensive stress tests of its trading book portfolio on a quarterly basis. Risk-return analysis of treasury trading portfolio is also conducted on a quarterly basis. The market risk capital charge for the Bank is computed by mid office as per the Standardised Duration Approach (SDA) in line with the regulatory guidelines.

Asset Liability Management

Liquidity Risk is the inability to meet expected and unexpected cash and collateral obligations at reasonable cost. In the Bank, the liquidity risk is measured and monitored through Flow Approach and Stock Approach and other prudential stipulations as per the latest guidelines of the RBI. The Bank has implemented the Basel III Framework on Liquidity Standards - Liquidity Coverage Ratio (LCR), Liquidity Risk Monitoring Tools and LCR Disclosure Standards. The LCR standard aims to ensure that banks maintain an adequate level of unencumbered High - Quality Liquid Assets that can be converted into cash to meet liquidity needs for a 30-calendar days’ time horizon under a significantly severe liquidity stress scenario. The Bank has always been well above the stipulated level of LCR on a solo basis as well as on a consolidated basis. The RBI has also introduced NSFR (Net Stable Funding Ratio) with effect from 01st October 2021 which promotes resilience over a longer-term time horizon whereby Banks are required to fund their activities with more stable sources on an ongoing basis. The NSFR seeks to ensure that Bank maintains a stable funding profile in relation to the composition of its assets and off-balance sheet activities. The Bank’s NSFR has been well above the stipulated level of 100%.

Interest Rate Risk in the Banking Book (IRRBB) arises due to mismatch between rate sensitive assets and rate sensitive liabilities which may adversely impact the earnings/economic value of equity of the Bank with the change in interest rates in the market. For measurement and monitoring of interest rate risk in banking book, the Bank uses risk management tools such as Traditional Gap Analysis, Earning at Risk and Duration Gap Approach. The short-term impact of interest rate movements on Net Interest Income (NII) is worked out through the ‘Earnings at Risk’ approach by taking into consideration parallel shift in yield curve, yield curve risk, basis risk and embedded options risk. The long-term impact of interest rate movements is measured and monitored through change in Market Value of Equity.

Operational Risk

The Bank has a well-defined Operational Risk Management Framework (ORMF) and Operational Risk Management System (ORMS) for effective management of Operational Risk in the organization. ORMF comprises the organizational structure for management of Operational Risk, Governance Structures, Policies, Procedures and Processes whereas ORMS consists of the systems used by the Bank in identifying, measuring, monitoring, controlling and mitigating Operational Risk. The Bank has a web based Operational Risk Management System for data capturing and for systemic and integrated management of Operational Risk. In our endeavour to use the best of technology, Bank is using a web based Operational Risk Management System for Operational Risk Compliance & Governance. Monitoring of Key Risk Indicators Programme (KRI), Risk & Control Self-Assessment Programme (RCSA) and Root Cause Analysis of various loss incidents strengthen the control environment. The Bank has created a repository of Internal Loss Data as part of Operational Risk Management. Ongoing review of products and processes in the light of the

The bank’s Board-approved Environmental, Social and Governance (ESG) Policy guides decision-making, ensures compliance, manages risks, attracts investments, and improves accountability. Key objectives include promoting sustainable banking practices, integrating ESG principles into decision-making, aligning with international sustainability frameworks, and mitigating ESG risks. Our robust targets and metrics across key Environmental, Social, and Governance (ESG) parameters include ambitious goals for renewable energy adoption, carbon emission reductions, and comprehensive capacity building for top management and employees at all levels. In alignment with national climate goals, we have set an aspiration for achieving Net Zero by 2057, coinciding with the 150th year of our bank’s founding. To further strengthen our green finance initiatives, Bank is conducting impact assessment for the projects eligible under the RBI’s Green Financing Framework, ensuring rigorous assessments for proposals within these sectors.

The policy also focuses on fostering an ESG-centric culture and monitoring performance. The Policy is supported by a strong governance framework, featuring a Board-level and Executive-level CSR & Sustainability Committees at the top and Zonal ESG Committees at the field level.

The bank is dedicated to driving positive change through its green initiatives and recognizes the urgent need to address environmental challenges, actively contributing to a sustainable future. As part of this commitment, the bank has launched various initiatives under the ambit of “bob earth”, reaffirming its dedication to protecting and preserving nature for future generations.

We launched our Green Hydrogen Financing Scheme, an

exclusive initiative aimed at supporting projects producing Green Hydrogen for captive consumption. This scheme highlights our dedication to the clean energy transition. In alignment with this vision, the Bank has also undertaken efforts to promote sustainable opportunities, such as financing solar-powered irrigation pumps, compressed biogas plants, and the installation of solar and other renewable energy systems for farmers.

During the financial year, the Bank launched the “Baroda Mahila Swavalamban Scheme,” aimed at providing seamless institutional credit to women entrepreneurs. Furthermore, the Bank is actively supporting sustainability-linked initiatives, including renewable energy, waste management and electric mobility. We remain steadfast in our commitment to developing innovative, sustainability-focused financial products.

We have also placed significant emphasis on Green Deposit Scheme, further solidifying our leadership in promoting environmentally responsible banking solutions. The Green Term Deposit encourages depositors to invest in environmentally friendly projects and activities that contribute to sustainable development.

Our bank became a signatory to the Partnership for Carbon Accounting Financials (PCAF), joining a global effort to standardize the methodology for measuring and disclosing greenhouse gas (GHG) emissions linked to loans and

 

changing business environment further strengthens the risk culture. Efforts are made for inculcation of risk culture, values, beliefs, knowledge, attitudes and understanding about risk among the staff. In order to ensure this, Campaigns are carried out to create awareness in the staff by the means of emails, workshops, on-the-job trainings, webinars, meetings, fliers, magazines, E-Learning modules etc . Also, Risk Council comprising of frontline staff has been formed to further strengthen the Risk Aware Culture through bottom-up approach. Furthermore, through strategic utilization of social media platforms, initiatives have been deployed to increase customer awareness regarding prevalent fraud incidents, accompanied by actionable guidance to mitigate susceptibility to such fraudulent activities.

Business Continuity Plan

Bank has a detailed and effective Business Continuity Management (BCM) framework in place for ensuring continuity of operations and rendering customer service at the Branches and Offices during disruptions. The framework is in line with the guidelines issued by RBI and global best practices. The Bank continuously works towards strengthening the business continuity preparedness. Through the exhibition of the Business Continuity Plan, the bank provides customers with the assurance that their services will persist in being dependable and secure, even in the face of adversity. Basis the understanding of risks, Business Impact Analysis (BIA) conducted and mapping of dependencies across enablers for all the critical processes, helps the Bank to allocate resources more efficiently, investing in resilience-critical areas and cutting non-critical spending. The Bank has ISO 27001:2022 certified Data Centre and Disaster Recovery site. Bank’s Disaster Recovery site is capable of handling the CBS and other functions of the bank in case of any disruption at Data Centre. The Bank achieved ISO 22301:2019 Certification covering Risk Management, Digital Group and Treasury Department.

Sustainability, ESG and Climate Risk

Bank of Baroda, with over a century of legacy, is committed to sustainable and inclusive growth through robust ESG practices. By embedding climate risk considerations into its operations, Bank aims to enhance community resilience, ensure long-term economic progress, and support a low-carbon future. During FY 2024-25, Bank has accelerated its journey toward sustainability and green finance, making bold strides that powerfully reaffirm our unwavering commitment to building a greener, more responsible future. A key initiative was the establishment of a dedicated Climate Risk Cell within our Risk Management Department (RMD), tasked with overseeing the bank’s green finance and sustainability efforts. Additionally, the integration of the Sustainability, ESG & Ethics Department with the RMD aims to create an overarching framework that ensures comprehensive management of environmental, social, and governance risks. These initiatives underscore our commitment to addressing climate change and minimizing its impact on our operations

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The bank has implemented various initiatives to reduce emissions, conserve energy, and minimize water consumption. A key focus area has been the reduction of carbon emissions. Currently, around 274 branches are powered by solar energy, resulting in reduced power consumption and significant reductions in carbon dioxide emissions.

Additionally, the installation of LED lights in all domestic branches has contributed to enhanced energy efficiency. The bank actively promotes sustainability awareness among stakeholders and has organized initiatives such as “Swachhata Abhiyaan” in which 23,000 saplings were planted to foster a culture of sustainable living, environmental preservation, and cleanliness.

The bank places significant emphasis on technology-enabled banking through our platform “bobWorld,” enabling seamless and convenient banking operations for our customers while reducing paper usage for transactions and the need for physical visits to branches. The bank has implemented a paperless approval process internally and has digitized document management, contributing to enhanced operational efficiencyand reduced environmental impact.

Our sustainability efforts are recognized, with our ESG Rating, by ESG Risk Analysis & Insights, an Acuite Group Company, improving from Adequate to Strong, showcasing our efforts in the right direction.

The bank remains committed to being a responsible corporate citizen with sustainability at its core and will continue to work towards minimizing its impact on the environment. To support this commitment, the bank has unveiled the “bob earth Webspace” (https://www.bankofbaroda.in/bob-earth), a dynamic and transparent public platform designed to showcase our sustainability ambitions, highlight ongoing ESG progress, feature our green product offerings, and share real-time data and impactful stories—underscoring our commitment to accountability, innovation, and a greener future.

Compliance

Compliance function in the Bank is one of the key elements in its corporate governance structure. The compliance function in the Bank is adequately enabled and an independent function. The Board of Directors of the Bank oversees the management of the Bank’s Compliance Risk. The Bank has put in place a robust compliance system including a well-documented and Board approved Compliance Policy outlining the Compliance philosophy of the Bank. The tone at the top sets an organization’s guiding values and ethical climate. A “High Level Compliance Committee” under the chair of Executive Director and other members comprising of Senior Executives from business verticals and support functions, maintains oversight on all compliance related issues.

In accordance with Reserve Bank of India guidelines, an independent Compliance Function headed by Chief General Manager designated as Chief Group Compliance Officer (CGCO) has been set up in the Bank.

The compliance function ensures strict observance of all statutory provisions contained in various legislations such as Banking Regulation Act, Reserve Bank of India Act, Foreign Exchange Management Act, Securities and Exchange Board of India Act and Prevention of Money Laundering Act etc. as well as ensures observance of other regulatory guidelines issued from time to time. Bank also ensures adherence to regulations of various Regulatory Authorities where the Bank is having its Offices/ Branches at overseas centres. It also ensures adherence of various guidelines/ instructions issued by IBA (India Banks Association), FEDAI (Foreign Exchange Dealers Association of India), FIMMDA (Fixed Income Money Market and Derivatives Association of India), National, State and Local Body laws and requirements.

To further strengthen the compliance in Bank, dedicated Compliance Officer is posted in each Region, Zone and Overseas Territory. Also, a nodal Officer is identified in each Department of Corporate Office & Head Office for Compliance function. The activities of these Compliance Officials are being monitored from Corporate Office. Similar Compliance Framework is prevalent in Bank’s Domestic and Overseas Subsidiary having dedicated Compliance Officer and Team. Bank is making sustained efforts in improving the compliance culture in Bank by increasing awareness amongst the employees about Compliance. Weekly Newsletter titled “Anuvritti” is published on weekly interval to spread awareness of Compliance Culture in Bank.

KYC/ AML Compliance

The Bank has a well-defined KYC-AML-CFT policy. On the basis of this policy, KYC norms, AML standards and CFT Measures and obligations of the bank under Prevention of Money Laundering Act (PMLA) 2002, are implemented. The Bank electronically files Cash Transaction Reports (CTRs), Counterfeit Currency Reports (CCRs), Non-profit organizations Transaction Reports (NTRs) and cross border wire transfer (EFT) reports to Financial Intelligence Unit India (FIU-IND), New Delhi on its portal every month within prescribed timelines.

The Bank has an established Central Transaction Monitoring Unit (CTMU) and put in place AML Solution for monitoring of transactions and detection of suspicious activities in customers’ accounts on the basis of predefined alert parameters in the system. System based risk categorization (money laundering risk categorization) of customers’ is done on dynamic basis. For Periodic Updation of KYC (ReKYC), Bank has developed an automated process for identification of customers due for ReKYC and sending SMS/email/ physical notices to notify them to complete their ReKYC. Bank also provides Digital / Non-Face-To-Face channels to the Individual customers to complete their Re-KYC without visiting their Bank branch.

Bank has implemented Central KYC (CKYC) process for registration of newly on-boarded customers’ KYC information on Central KYC Registry. CKYC number was allotted to 827.03 lakh customers as of March 31,2025.

 

Bank has also implemented Video based Customer Identification Process (V-CIP) as an alternate method of establishing the customer’s identity for on boarding new Resident Indian Individual customers and facilitating their Periodic Updation of KYC (ReKYC).

Internal Audit

The Bank’s Central Internal Audit Division is headed by Chief General Manager administers various types of Audits

i.e. Internal Audit, IS Audit, Credit Audit, Concurrent Audit & Management Audit. Internal Audit function in the Bank is an independent activity and has sufficient standing and authority within the Bank. The Internal Audit Department, works under the guidance and supervision of the Audit Committee of the Board. Bank’s Internal Audit Function works in close co-ordination with other Assurance functions i.e Risk Management Department & Compliance Department.

Bank’s Central internal Audit Division operates through -25-Zonal Internal Audit Divisions to carry out internal Audit of Branches / offices as per the periodicity decided by RBIA Policy. All Branches, Centralized Units, Administrative Offices are covered under Risk Based Internal Audit. The summarized risk perception of all 8242 Branches & Specialized Integrated Treasury Branch as on 31st March 2025 are as under:

•    Low Risk Branch - 6627 Branches (80.40 %)

•    Medium Risk Branch - 1408 Branches (17.08 %)

•    High Risk Branch - 255 Branches (3.09 %)

•    135- Branches with no Rating (New Branches)

•    Specialized Integrated Treasury Branch was in Low Risk.

Total -1702- Branches and other units (as on 31.03.2025) are covered under Concurrent Audit covering Bank’s 52.54 % Deposit, 64.74 % Advances & overall 58.17 % Business coverage (as on 31.12.2024). All Category B Branches, Currency Chests & Centralized Processing Cells are covered under Concurrent Audit.

Credit Audit is carried out of all Fresh Sanctions/ Existing Accounts including Retail Loans and Restructured Accounts with aggregate exposure of '10.00 crore and above (FB + NFB) and 5% of borrower accounts are randomly selected from fresh Accounts and Reviewed with increase having aggregate exposure of '1.00 crore above but below '10.00 crore (FB + NFB).

All Bank’s branches are subjected to Information System (IS) Audit to assess the IT-related risks as part of the RBIA of the Branches. IS Audit of Data Centre & IT Applications are also carried out periodically by a team of CISA /DISA qualified IS Auditors and external CERT-in Firms.

Few Key initiatives include the following:

•    New Audit Automation Software (eTHIC)- To enhance the capability of Internal Audit function to justify it’s role and live upto the expectations of top management and regulator, we have procured the new Audit Automation System, which will provide us better MIS & desired

•    Roving/surprise Audit by Dy. Head of Zonal Internal Audit Division was initiated for randomly selected 5 to 10 branch on monthly basis, covering at least 10% branches annually.

•    In order to ensure early rectification/compliance for any discrepancy/exception reported by CEMU, and to achieve sustenance of compliance, the frequencies of 65 CEMU reports have been modified from Quarterly/ Monthly to Monthly/Weekly basis.

•    Under Off-site Surveillance system, CIAD identifies the Systemic gaps of Finacle and also various underlying patterns and relationship. The findings are shared with respective verticals for rectification and carrying out root cause analysis (RCA) for plugging the systematic gaps.

•    At the time of planning/approval of audit budget, CIAD identifies, include and share the Key Focus Areas (KFAs) basis the regulatory /stakeholder expectations, emerging risks, area of concern, industry based practice etc to ACE/ACB to be appraised to the auditee units.

•    To have a wholesome view of various types of audits (e.g. RBIA, Concurrent Audit, Expenditure Audit, Management Audit etc.) of Verticals and its departments, a Centralized unit to enhance the quality, coverage & effectiveness of these audits, approval for VIAD (subvertical of CIAD) has been obtained.

External Review of Internal Audit Framework is carried out by External Firm as and when felt necessary. Last such assessment was carried out by M/s E & Y LLP during FY 202223 and as per their assessment Internal Audit Framework in Bank is robust and one of the best in peer Banks.

Credit Monitoring

Credit Monitoring is an important part of the credit management, which is essential to monitor credit portfolio and improve the asset quality of the Bank and minimize credit risk. Credit Monitoring also involves tracking the borrower’s financial behaviour and credit worthiness to identify potential risk. It also ensures compliance with loan terms and end use of funds. It must ensure that the credit assets remain in regular category, to make endeavour for upgrading asset quality of identified stressed accounts and take corrective action to prevent slippage of the accounts. For the purpose of identifying and monitoring the stress accounts, Bank is using various tools and methods so as to maintain good asset quality with containment of probable slippage in effective way.

Tools for efficient monitoring & control process: -

Online availability of SMA & Slippage data to Branches through QLIK sense portal

•    Global SMA 0, 1, 2 are available on daily basis for easy and efficient day to day monitoring of accounts.

•    Technical aspects like review and stock statement of all due accounts are also available on daily basis and progress is being monitored on daily basis.

•    Access to portal has been made available to all the branches for their ease and reduction in their dependency for data from controlling offices.

•    Mock Run data (projected degradation for the month on account of any financial/non- financial reason) is made available on daily basis for follow up and corrective actions.

•    Degradation and upgradation files are shared to concerned Zone / Branches on daily basis.

Early Warning Signal

•    A fully tech based EWS solution is implemented in our Bank since August 2020.

•    Automated alert generation helps in effective monitoring by identifying the Early Warning Signals in the accounts.

•    Risk Categorization of Accounts in HML (High, Medium & Low) are based on the EWS alerts.

•    The existing EWS system has been thoroughly revamped after a detailed audit of our existing system and a thorough review by the top Management. After getting approval from the Competent Authority, the updated EWS system is being rolled out. During revamped health code parameters has been introduced and it is advised to field to incorporate HP rating in process note while taking credit decision

•    EWS portal for international territories has also been launched for better monitoring of advances.

•    The solution helps the Bank in early identification of RFA/fraud in accounts (if any). This solution also enables the branches to closely monitor the accounts with appropriate resolution/ action.

•    A Health Parameter (HP) has also been introduced for borrower which is a combination of internal rating (BOBICON) and EWS rating of a borrower. Further, EWS portal for international territories has also been launched for better monitoring of advances of our overseas branches.

Stock Audit Portal

•    For proper monitoring of stock & data pertaining to stock audit, Bank has developed Stock Audit Portal, which allows online assignment of Stock Audit to empanelled CA’s. Access to empaneled CA for filling and submission of Stock Audit report.

•    Submission of Compliance and CRCs by the Branches and acceptance of same by the Competent authorities ⁵

post-sanction activities for loans. PSR noting is crucial during various loan-related actions such as fresh loan sanctions, reviews (with increase or decrease), the allowance of Temporary Overdraft (TOD), Adhoc loans, excess sanctions, and modifications in terms after the sanctioning process.

CRILC Reporting

Identification of the accounts in SMA category triggers mitigating steps, such as follow-up for regularization, restructuring etc. In terms of RBI’s guidelines, stressed accounts with credit exposure of '5 crore and above are reported to RBI on CRILC platform on a weekly basis.

System based prediction of Asset Classification: Bank has a predictive program to identify the probable slippages showing overdue of more than two months period based on record of recovery as well as for accounts showing technical irregularities such as non-submission of Stock/Book Debt statement, review pendency, insufficient/ no credit in CC accounts, inadequate margins in LABOD/ODBOD accounts etc. These triggers focus on taking timely corrective action to prevent downgrading of such accounts. Those accounts are monitored specifically by various operational units for minimizing the slippage of standard assets.

Other monitoring tools:

•    The Bank has also digitized the stock and book Debt statement submission, which is real time and user friendly.

•    The Bank has also initiated many tools in credit monitoring for robust monitoring like GST, ITR & Statement analyser to analyse, track and monitor the borrower’s accounts periodically.

•    Digital monitoring reports at pre-determined period are regularly evaluated & taken up for corrective measures wherever required in respect of big accounts of '1 crore & above.

•    Bank has launched a Dashboard to monitor the cases of DLP violation to improve credit discipline.

Vigilance

The Vigilance administration in the Bank is professionally managed and an integral part of management function. It promotes clean business transactions, professionalism, productivity and ethical practices apart from control, monitor and supervision of various vigilance functions. The Bank has a very strong and transparent Vigilance Administration headed by Chief Vigilance Officer who oversees all vigilance functions of the Bank as per the guidelines from the Central Vigilance Commission. Participative / Proactive & Preventive vigilance are the important functions of Bank’s vigilance administration. The Chief Vigilance Officer is supported by three Additional Chief Vigilance Officers, who are stationed at Mumbai and Delhi.

The vigilance machinery in the Bank also imparts knowledge at all levels about vigilance functions, extends help to various disciplinary authorities and appropriate authorities to act swiftly and correctly in examining issues arising out of frauds,

of the Bank. The department also provides support for references submitted by the various Zones, Regional Offices, domestic and foreign branches, and subsidiaries of the Bank on the matters related to legal aspects.

Further, in order to meet the digitalization of banking loan process, a set of documents for retail and SME facilities compatible with digital lending platform has been prepared which will enable Bank’s customers to execute the documents through electronic means. Loan Document Manual has been revisited and simplified the documents.

Law Officers of the Bank vet the documents before disbursement of loan amount as per Bank’s Global Credit Policy. In the normal practice either the Law Officer Travels to the concerned branch where the documents have been executed or the Documents are brought at the concerned administrative office where the law officers are posted. In order to pace with the digitalization process, “Portal for Vetting of Loan Documents” has been developed to ease the process by enabling the Law Officers to vet the documents from their office. The basic object of the portal is to ensure vetting / verification of Loan documents in real time through digital mode to expedite the process of vetting and restrict the unnecessary movement of Bank’s officers as well as of the documents.

Additionally, an Advocate Portal has been developed through which advocates are to be empanelled and for assignment of work to the advocates through portal itself.

Further, the Department has been promoting environment of knowledge sharing by issuing ‘Circulars’, quarterly ‘Legal News Flash’, etc. regarding ever changing set of laws, latest amendments and interpretation of laws by Courts affecting the Banking sector. In association with APEX Academy the Department has conducting Training Program for Law Officers to groom them in specific legal fields as well as to make them conversant with ever changing enactments, Rules and Regulations.

As on 31.03.2025, total pending cases (Litigation Against Bank) before the various Courts/Forum/Tribunals are 3989. We succeeded to get disposal of total 608 cases during financial year 2025. Out of the total disposal of cases 399 cases (i.e. 65.62 %) were decided in favour of the Bank, 49 cases (i.e. 8.05 %) were settled and 160 cases (i.e. 26.31 %) were decided against the Bank. Further 12 cases (having monetary value more than one crore and above) out of total decided cases were also disposed of during the Financial Year 2025.

Human Resources Management

The Bank firmly believes that its people are its greatest strength and the cornerstone of its sustained success. With a talented workforce of over 74,000 employees, the Bank remains committed to nurturing, empowering, and engaging its human capital to meet the evolving demands of the banking sector.

In pursuit of this objective, the Bank has institutionalized a series of strategic HR initiatives focused on capacity building, structured recruitment, employee well-being, and inclusive

 

complaints and serious irregularities pointed out in various inspection reports of branches/ offices.

Vigilance setup at Corporate Office headed by Chief Vigilance Officer is supported by Zonal Vigilance department at each zone, which conduct preventive audits of branches at regular intervals and to act proactively on information that controls the damage at bare minimum level.

The vigilance function in the Bank comprises of three aspects:

1.    Preventive Vigilance: Preventive measures hold greater significance in containing damage than detection and punishment of corrupt and other malpractices. Preventive measures such as inspections of sensitive areas of business, identification of sensitive posts and scrutiny of personnel posted thereon, ensuring observance of conduct rules, monthly meetings at branch level to discuss branch specific vulnerabilities, training programs for staff, regular scrutiny of inspections and audit reports, conducting gap analysis of systems and procedures and issuance of advisories for Systemic improvements and undertaking circulars on preventive vigilance to be regularly issued and circulated by various business verticals to reduce the number of vigilance cases.

2.    Detective Vigilance: Detective Vigilance includes conducting regular and surprise inspection in the sensitive area to detect if there have been any instances of corrupt or improper practices by the staff, undertaking prompt scrutiny of annual property returns and take further action if called for, handling complaints, gathering intelligence from own source about the misconduct/ malpractices, getting in-depth investigations done and examining the same for logical conclusion through appropriate action after due process.

3.    Punitive Vigilance: In addition to ensuring that employees at all levels indulging in wilful and malafide transgressions of rules and provisions are not allowed to go unpunished. The Bank also ensures that bonafide decisions taken in normal course of business are evaluated objectively and with required prudence.

The vigilance function in the Bank enables proactive decisions by stressing on strengthening systems and procedures through preventive vigilance administration. It also plays a major role in identifying and plugging loopholes and providing inputs to the top management in framing policies in fraud prevention. The turnaround time of disciplinary cases improved due to proactive communication which helped in motivating the employees with quick redressals. CVO also coordinates with CVC & DFS for necessary guidance & feedback on vigilance related matters and Law Enforcement Agencies like CBI & ABBFF for criminal actions in case of frauds.

Legal Service

The Bank has a vibrant legal department consisting of qualified and experienced legal officers. The main role of the Legal Department is to support and to provide assistance for various matters relating to Opinion, Documentation, Litigation, etc., referred by or in relation to various functional departments

and navigating workplace dynamics. This initiative not only supports individual growth but also reinforces the Bank’s vision of nurturing the next generation of women leaders.

Building on its success, the Prerna Mentorship Program will be expanded in FY 2025-26 with tailored modules for different leadership levels and a new cohort of mentees continuing the Bank’s journey of inspiration and impact.

Career Progression

The Bank remains committed to recognizing and rewarding employee performance through structured career progression opportunities. In addition to vertical growth, employees are offered horizontal movement across functions and overseas placements, providing diverse exposure and contributing to holistic development.

‘Voice of Barodians’ - Employee Engagement Survey

As an employee-centric organization, the Bank firmly believes in fostering two-way communication with its workforce to share perspectives and collaboratively enhance organizational effectiveness. In line with this philosophy, the Bank has been conducting the ‘Voice of Barodians’ Employee Engagement Survey over the past few years.

Insights from these surveys have helped fine-tune existing policies, shape new employee-centric initiatives, and improve workplace practices. Notably, the latest survey conducted in March 2025 reflected a positive shift in employee sentiment, with the overall engagement score rising from 71% to 75%, underscoring growing alignment and trust between the Bank and its employees.

Baroda Anubhuti Program

To strengthen employee engagement across all levels, the Bank launched the Baroda Anubhuti Program, aimed at enriching the overall employee experience through a series of structured engagement activities. These initiatives foster team spirit, build a sense of belonging, and contribute to a more connected and motivated workforce ultimately driving better organizational outcomes.

As part of its commitment to building a Great Place to Work, the Bank also recognizes its responsibility toward the broader community. On significant occasions such as the Bank’s Foundation Day (20th July) and Republic Day, employees actively participate in community service initiatives organized under the Baroda Anubhuti banner.

In FY 2024-25, the Bank undertook several impactful CSR activities through this program, including:

•    Blood Donation Drives - Over 22,700 units of blood collected

•    Tree Plantation Initiatives - Approximately 1,20,000 saplings planted

•    Cleanliness Drives - Conducted 4,700+ drives across various localities

•    Distribution to the Underprivileged - More than 1,25,000 essential items distributed

•    Support to Social Institutions - Over 85,000 items

 

workplace culture. These initiatives are aligned with the Bank’s long-term vision and are designed to attract and retain talent that resonates with its values and growth aspirations.

Through proactive workforce planning, policy enhancements, and a strong emphasis on employee experience, the Bank continues to foster a high-performing and future-ready workforce. Its sustained efforts in this direction have not only strengthened internal capabilities but have also garnered industry recognition for HR and corporate excellence. Bank’s initiative in this direction has been recognized by the industry and Bank has been awarded for

•    “Significant Achievement in HR Excellence” Award by CII on 30.03.2025

•    “GOLDEN PEACOCK AWARD" for 2025 for Corporate Excellence by Institute of Directors (IOD) in India.

•    JOMBAY- WOW WORKPLACE for FY 2023-24 and 2025 consecutively.

Learning and Development

The Bank views employee development as a strategic priority and continues to foster a strong learning culture across the organization. In FY 2025, over 70,000 employees more than 95% of the workforce underwent structured, in-class training, aligned with their job roles through a pan-India training calendar.

To stay ahead in the dynamic banking landscape, the Bank revamped its Learning & Development policy and launched Baroda Gurukul 2.0, an enhanced Learning Management System (LMS) offering blended learning through classroom sessions and digital modules. Complementary initiatives such as weekly quizzes, podcasts, digital libraries, and recognition for top performers have further promoted continuous learning.

The Bank has also strengthened its learning ecosystem with Zonal Training Centres and the Apex Academy in Gandhinagar, and partnered with premier institutions like IIMs, ASCI, IDRBT, and NFSU to enhance training delivery. A key highlight is the “Transforming Tomorrow” Leadership Development Program, in collaboration with IIM Ahmedabad, designed for senior leaders with a focus on action learning.

Additionally, cross-bank training programs on international trade practices were successfully conducted, reinforcing the Bank’s role in industry-wide capability building. These efforts reflect the Bank’s commitment to building a future-ready and high-performing workforce.

Coaching and Mentoring Programme

In line with the commitment to equity, inclusion, and leadership development, the Bank launched Prerna - Path to Inspiration, a structured mentorship initiative aimed at fostering professional growth and empowerment. The inaugural phase focused on senior women leaders mentoring junior women employees, sharing insights, strategies, and personal experiences to help them navigate career challenges and unlock their potential.

Key features of the program include one-on-one mentorship sessions focused on career development, skill enhancement,

donated to old age homes, orphanages, and disability centres

•    Health Check-up Camps - Benefiting 10,000+ individuals

•    Infrastructure Support - Renovation of the library at Govt. Higher Secondary School, Chowara, Ernakulam

Through Baroda Anubhuti, the Bank continues to blend internal engagement with social contribution, reflecting its values of care, inclusivity, and shared progress.

Inter-Zonal Sports and Cultural Tournaments:

The Annual Inter-Zonal Sports and Cultural Tournaments witnessed enthusiastic participation from employees across all zones, reflecting the Bank’s continued commitment to fostering employee well-being and engagement. The series commenced with a vibrant Music and Dance competition hosted by the Jaipur Zone, followed by the Inter-Zonal Carrom Tournament held in Chennai. Subsequent events including Cricket, Drama, Badminton, and Chess tournaments were organized across various zones, with selected teams participating wholeheartedly in each discipline.

These initiatives not only promote camaraderie, team spirit, and cross-functional bonding but also encourage physical activity, mental well-being, and a balanced lifestyle demonstrating the Bank’s focus on the holistic health of its workforce.

National Sports Day Celebrations

The Bank celebrated National Sports Day from 26th to 31st August 2024 through a series of fitness and wellness initiatives, including Walkathons, Tree Plantation drives, Fit India Pledge administration, and a variety of indoor and outdoor sporting events in line with guidelines issued by the Ministry of Youth Affairs & Sports, Government of India.

In a special initiative, the Bank’s sportspersons who have represented India at international events were featured in an audio-visual campaign alongside the Bank’s endorsers Ms. P.V. Sindhu (International Badminton Player) and Ms. Shafali Verma (International Women’s Cricket Player) to inspire a culture of fitness and excellence across the organization.

Incorporation of ‘Respect’ as Bank’s 7th Core Value:

On the 117th Foundation Day of the bank on 20th July 2024, the bank adopted one more core value, “RESPECT” to recognize and value the inherent worth and dignity of every employee. Our Code of Ethics document is placed on the Bank’s website.

The Core values of the Bank now are as follows;

1.    Integrity: We are ethical and transparent in our words and conduct with all our stakeholders.

2.    Customer Centricity: Our customers’ interests lie at the core of all our actions.

3.    Courage: We are resilient in the face of adversity, drawing strength from our Bank’s values.

4.    Passionate Ownership: We display energy, enthusiasm and commitment while working together for our Bank.

5.    Innovation: We create value through new ideas.

6.    Excellence: We strive for continuous improvement in our policies, systems and processes.

7.    Respect: We recognize and value the inherent worth and dignity of every employee.

In response to valuable feedback received during the recent ‘Voice of Barodians’ Employee Engagement Survey, the Bank has introduced ‘Respect’ as its 7th Core Value, unveiled by our MD & CEO on the occasion of the Bank’s 117th Foundation Day.

This addition reflects the Bank’s commitment to fostering an inclusive, supportive, and empowering workplace where every employee feels valued, heard, and recognized. While the existing six Core Values have long guided our operations and stakeholder interactions, the inclusion of ‘Respect’ further reinforces our dedication to cultivating a culture of mutual regard and collaboration across all levels of the organization.

Employee wellness Initiatives

As an organization with progressive HR practices, the Bank places strong emphasis on the well-being of its employees, recognizing that their health and happiness are vital to the Bank’s sustained success. A healthy, engaged workforce drives productivity, fosters resilience, and fuels innovation. By nurturing a culture of wellness, the Bank seeks to enhance both employee lives and organizational vitality.

In alignment with this vision, the Bank observes November as ‘Wellness Month’ a dedicated period to promote physical and mental well-being through various initiatives. Activities organized across the Bank include online yoga and meditation sessions, webinars by health experts, the Swasth Barodian Fitness Challenge, and healthy recipe sharing, all aimed at encouraging holistic wellness.

Owing to the encouraging response from staff, Online Yoga & Meditation Classes have been continued throughout the year. To further enrich the experience, certified yoga instructors from within the Bank’s workforce are occasionally invited to lead sessions, reflecting our culture ofshared learning.

Additionally, the Bank has partnered with reputed hospitals to provide comprehensive health check-ups for employees and their spouses, with the cost fully borne or reimbursed by the Bank. This initiative underscores our long-term commitment to employee health and reinforces our belief that wellness is key to organizational strength.

Employee Assistance Programme

As part of its Employee Assistance Program (EAP), the Bank has introduced Workplace Counselling to support employees in managing stress and mental health challenges. In FY 202425, over 70 workshops on “Holistic Well-Being: Mastering Stress through Mindfulness Meditation” were conducted in collaboration with Truworth Health Technologies Pvt. Ltd., reaching more than 3,330 employees across locations.

Employees accessed counselling services through various channels in-person, phone, video, email, and chat while dedicated online support groups on women empowerment, parenting, and addiction facilitated peer learning and selfhelp.

To further raise awareness, a Mental Health Roadshow -PRAYAS was held in Bengaluru on 12.02.2025, featuring wellness games, recreational activities, and counselling sessions, reinforcing the Bank’s commitment to holistic employee well-being.

Thrust On Diversity & Inclusion

The Bank is committed to building a diverse and inclusive workforce, guided by a transparent and non-discriminatory policy on promotions, career progression, transfers, and employee welfare. A formal Diversity, Equity, and Inclusion (DEI) Policy has been implemented to reinforce this commitment.

Recognizing the unique responsibilities of women employees, the Bank has introduced supportive measures such as Sabbatical Leave, Health Check-up Programs, and Creche facilities. Special provisions are also in place for their deployment and reintegration post-career breaks, including counselling support under the Employee Assistance Program. In FY 2024-25, over 519 women employees benefited from such interventions.

Additionally, the Bank organizes training programs focused on capability building, motivation, and awareness on POSH guidelines, fostering a safe, empowering, and equitable workplace for all.

Ex-Employees

In appreciation of the invaluable contributions of its former employees, the Bank has implemented several welfare measures to support them in their post-retirement years. These include access to Holiday Homes, consultations with Part-Time Medical Consultants, Special Medical Aid, and reimbursement of Medical Insurance premiums.

To enhance convenience, key HR services such as Pension Pay Slip and PPO generation, tax computation, medical premium receipts, TA/DA claims, and Holiday Home bookings have been integrated into the HR Connect mobile application, offering 24x7 access through a user-friendly interface.

Furthering its digital initiatives, the Bank has also integrated Jeevan Pramaan with HR Connect, enabling online submission and auto-verification of Life Certificates, ensuring uninterrupted pension disbursals without the need for physical documentation.

Reservation Cell

An exclusive cell has been functioning to monitor the reservation and other enabling provisions for employees belonging to Scheduled Castes (SC) /Scheduled Tribes (ST) / Person with Disabilities (PWD) /Ex-Serviceman (Ex-SM) and Other Backward Classes (OBC).

Executives in the rank of General Managers are appointed as Chief Liaison Officers for SC/ST/PWD and Ex-Serviceman employees and for OBC employees respectively who ensure compliance of various guidelines pertaining to them.

With effect from 1^st February, 2019 reservation of 10% for Economically Weaker Sections (EWS) in direct recruitment in the Bank was implemented.

The Bank provides reservations for Persons with Disabilities (PwDs) at the rate of 4% of the total vacancies arising in officer, (identified posts), clerical and sub-staff cadre in a year, as per Government guidelines.

Caste category wise count as on March 31,2025
Cadre	Total	GEN	SC	ST	OBC		EWS
Officer	42959	19065	7545	3381	12845		123
Clerk	25319	10450	4140	2624	7977		128
Sub staff	5464	1559	1809	547	1549		0
Total	73742	31074	13494	6552	22371		251
% to total staff strength		42.14	18.30	8.89	30.34		0.34
Cadre			PwD			Ex-SM
Officer			646			1172
Clerk			3048			992
Sub staff			438			104
Total			4132			2268
% to total staff strength			5.60			3.08

Periodical Meetings

The Bank holds Quarterly meetings with the representatives of All India Bank of Baroda SC/ST (AIBOBSCSt) Employees’ Welfare Association and Half Yearly meetings with the representatives of All India Bank of Baroda OBC Employees’ (AIBOBOBC) Welfare Association, for addressing their concerns.

Workshops and Training Programmes

Bank conducts following training programmes every year for members of AIBOBSCST Employees’ Welfare Association and AIBOBOBC Employees’ Welfare Association and Liaison Officers of SC/ STs and OBCs at its various training academies:

•    Pre-promotion training for SC/ST/OBC candidates.

•    Workshop on reservation policy.

•    Training programme on disciplinary proceedings. Document Management System

Our Bank is one of the pioneer PSB to initiate implementation of Document Management System (DMS) (First among PSBs to implement Records Digitisation) by engaging professional companies to manage the records so that our Branches give a neat & clean look providing better feel and experience to our customers.

Under DMS, physical records are barcoded, indexed and moved to the warehouse of Record Storage Agency for storage thereof, which can be retrieved at any time as per Bank’s requirement. The space which is unlocked is being utilized for customer service efficiency, better branch ambience etc.

Records Digitisation/DMS, a major step towards paperless banking under green initiative, encompasses scanning of identified documents (Loan Files/ HR documents/Legal documents and other critical documents) and uploading the scanned data on “Baroda Document Management System (BDMS) server, a digital repository.

This is an ambitious project of our Bank under which around 63.01 Cr images have so far been scanned covering more than -7436- branches/offices. Also, around approx. -3.40- lac sq. ft. of space has been unlocked in identified Branches/ offices ofthe Bank by shifting 2.31 Cr barcoded and indexed files to Vendor’s warehouse

After successful implementation of the Records Digitisation/ DMS in Bank’s identified Branches/Offices, DASKBOARD is being implemented for better monitoring of Records Digitization project at RO/ZO/BCC level.

Premises Re-engineering

•    -09- numbers of PHYGITAL Branches designed PAN India.

•    State of the Art construction of Apex Academy Building at Law Garden, Ahmedabad completed. Inauguration awaited.

•    Various other Projects ongoing PAN India viz. Administrative Building at Dehradun, Ernakulam nearing completion.

•    Construction of Residential Building- Redevelopment Project at Jogeshwari, Mumbai- Work has commenced.

•    Other construction projects viz. Commercial & Residential projects are set to commence shortly at Financial City, Bengaluru, Financial City, Kolkata, Canon Shed Road at Ernakulam, Manoharpura at Jaipur.

•    Construction of 50 RSETI Buildings completed.

•    Over 99% of eligible procurement were made through GeM Portal (1830 crore).

Green/other Initiatives

•    210 Leased Branches in rural/semi urban areas being run on Solar Energy capacity of 1.5 Mega Watts reducing approx. 4739 Tons of Carbon Dioxide Emission since inception.

•    Installed Solar Panels in 76 owned Premises ofthe Bank. Installed capacity 1.73 Mega Watts reducing approx. 1619 Tons of Carbon Dioxide Emission each year

•    Bank has set up Rain Water Harvesting system in 18 Administrative Buildings.

•    More than 1300 Water Efficient Taps & Waterless Urinals installed in several Administrative Buildings saving approx. 30 lakh Liters of water a year.

•    Tree Plantation- 24000 No. of trees/sapling planted in Schools, parks, residential societies etc. - PAN India during the event of Swachhata Pakhwada

•    IGBC Green Building Certification in Bank’s 3 Owned Buildings. -19- other buildings are in process of receiving the approval shortly

•    Introduced Recycled Paper for office use as pilot project in Corporate Office, Ceased the practice of using plastic water bottles under Green initiatives-BOB Earth.

•    Digitization of Security Reports & Returns though Bank’s IT Team

•    Conducted Fire drills at all High-rise Buildings of the Bank all over India.

•    Health Checkup camps for staff members in tie-ups with various Medical Centers/Hospitals conducted.

•    24⁶7 Ambulance facility at BCC.

•    Annual Sports Day organized in the month of December 2024 involving all the staff members along with their families.

•    Various sports and cultural activities’ selection procedure done to participate in Interzonal sports tournament.

•    Automation of work order portal to generate monthly & quarterly procurement reports PAN India.

•    Automation of Lease Management Portal PAN India.

Implementation of Official Language (OL) Policy

Use of Hindi and other Indian Languages for promoting business as well as providing digital products to the customers is a significant characteristic of the Bank’s Official Language policy. This approach has been well appreciated by Government of India and regulatory authorities from time to time. Bank adopted a well-structured Annual Action Plan for Official Language in order to achieve various targets set by the Government of India under its Annual Implementation Programme FY 2025 and the assurances given to the Committee of Parliament on Official Language during its visits to various offices/branches of the Bank.

The Meetings of Central Official Language Implementation Committee, presided over by MD & CEO/ Executive Director of the Bank, were organized regularly on quarterly basis and various new initiatives were taken during the year FY 2025. Bank has made remarkable progress to provide Mobile Banking and transactional SMS services in Hindi and 12 other regional languages. Whatsapp Banking services are now available in Hindi, Gujarati, Bengali, Marathi and English and Internet Banking services are available to our customers in Hindi too. As a new initiative during the period under review, Bank’s Virtual Relationship Manager “Aditi”, Chatbot “Adi”,

ILMS package, Digital lending platform and BC knowledge portal have been made available in Hindi also. All the auto generated emails from various apps and digital channels/ portals of the Bank and loan sanction letters containing terms and conditions generated through Bank’s LLPS package have been made available in bilingual i.e. Hindi & English. The journey of digital Baroda Kisan Credit card and Gold loan have also been made available in Hindi. All the mails sent through the Re-KYC platform have been also made available in bilingual.

Bank had introduced official language rating system for Branches/ offices and ‘Bhashayi Choupal’ programs for staff members, the same were continued during the year. Bank has created a ‘Shabdnaad’ page on the Bank’s website to preserve records of various Official Language (OL) related activities conducted by the Bank at Corporate Office /Zonal Office/Regional Office and Branches, awards and other OL related information pertaining to the Bank.

Bank conducted different campaigns on quarterly basis to increase Hindi correspondence in various departments of the zones (viz. Risk Management, Information Technology, Legal, Credit). Hindi Diwas, World Hindi Day and Mother Language Day were celebrated at various offices/branches all over India and abroad. In order to enhance the creative and writing skills of staff members, the Bank is publishing two corporate magazines - BobMaitri (House Journal) and Akshayyam (Hindi Magazine). Bank is continuously working to enhance the feature of ‘BOB Abhivyakti 2.0’ mobile app, designed for all serving and retired staff members to provide an interesting online reading experience with respect to all magazines/ newspapers/house journals published by the Bank including Bobmaitri and Akshayyam. It has proved to be a significant step in promoting the Go-Green initiative in the Bank.

Bank’s Self-service Passbook printing machine ‘Kiosk’ were enabled for printing of Passbook in Hindi for the convenience of customers. While providing digital banking facilities to customers, bank is offering the facility of sending SMS in Indian languages in all the Financial Inclusion accounts. Bank is providing the facility to generate bilingual certificates/ statements/ reports through mobile banking app. Further, WhatsApp banking service has been made available to customers in Hindi, Gujarati, Marathi and Bengali languages. Bank has made the HR Connect portal bilingual for the use of staff members. Bank’s Hindi website has been given an attractive look and its content has been kept updated resulting in significant increase in number of visitors. Bank has provided customers the facility to opt for SMS and WhatsApp Banking facility in their own language at the time of opening an account through tab banking. Bank has introduced bilingual (Hindi and English) digital journey facility for opening savings account online. Further, the Bank has ensured translation of Bank’s all promotional materials in Hindi and other Indian languages on a regular basis. Bank has ensured to post Hindi content on social media handles from time to time befitting the occasion.

In line with the present Banking requirements, an AI based “Samarthya Toolkit 3.0” (Technical Toolkit) has been developed by the Bank to promote implementation of Official

Language in the Bank and to sensitize staff members about various e-tools for working in Hindi and regional languages. Training to staff members on usage of this tool has been imparted at various levels. In addition, various programs/ competitions were also organized in schools/colleges across the country to connect with the young generation of our country, which helped the Bank to strengthen its brand image among the younger generation and mobilize/increase business.

The efforts of the Bank have been appreciated by the Government of India from time to time. During the year, the Bank was awarded with the First prize under the “Rajbhasha Kirti Puruskar” scheme of the Government of India for its outstanding performance in the field of Official Language Implementation. In addition, the Town Official Language Implementation Committee (TOLIC), Vadodara working under the convenorship of the Bank was awarded with the third prize under the Narakas Rajbhasha Samman Yojna. Similarly, Varanasi, Ahmedabad and Jaipur TOLIC working in convenorship of the Bank were selected for the award by the respective Regional OL Implementation Offices of the Government of India. Our Zonal Offices Baroda & Lucknow and Regional Offices Jaipur & Varanasi were also awarded for their outstanding performance in the field of Official Language implementation by the respective Regional OL Implementation Offices of the Government of India. Bank was conferred with a total 9 awards by the Ministry of Home Affairs in the year 2025 which includes Rajbhasha Kirti Puraskar/ Regional and other awards. Various offices of the Bank received a total of 64 awards from TOLIC, working under the aegis of Ministry of Home Affairs.

Bank organised regular meetings of the 28 TOLICs working under its convenorship and ensured compliance with the instructions laid down by the Government of India in this regard. Bank continued with its unique scheme “Medhavi Vidyarthi Samman Yojana” for popularising Hindi in 71 Universities of the country. Under this scheme, cash prizes and commendation certificates are given to two meritorious students securing first and second positions respectively in M.A. (Hindi) examinations every academic year.

In nutshell, the Bank is committed to fulfil its constitutional responsibilities regarding the use of Official Language and other Indian languages for regulatory compliance, business development and customer convenience.

Corporate Social Responsibility (CSR)

The Bank has a long lega c y and tradition of actively contributing to the soci a l and economic development of the communities through v arious development activities. The Bank as a responsible corporate citizen, continuously strives to contribute towards social welfare & environmental protection, particularly for the upliftment of the underprivileged sections of the society to make sustainable social changes in their lives. Skill development through training for gainful employment, human welfare and other social activities like women welfare, health care etc continues to remain the Bank’s key focus areas. The Bank is helping different organizations engaged in various commu n ity development and socio-

company continued with steady increase in share across cards and spends in the credit card industry. We rank 9th in terms of market share of cards with a share of 2.7% and with a spends share of 1.7%, BOB Card ranks 11th in terms of monthly spends.

The company issued over a million new credit cards in FY 2025 and continued to be among the largest issuers in terms of incremental customer acquisition. The company further consolidated its two-pronged growth strategy (of BoB customers on one side and key partnerships on the other) by focusing on growing both portfolios i.e. proprietary cards, where the focus in FY 2025 has been on paid and premium cards to diversify the composition, and co-branded cards, where the focus has been on growing the customer base.

Over the past year, BOBCARD’s technology initiatives have driven significant transformation across product, infrastructure, digital, and compliance areas. The journey began with a sharp focus on enhancing the customer experience. A seamless sourcing capability was rolled out, enabling paperless journeys that improve open market activation. Two new products namely ETERNA and TIARA were successfully launched on Rupay Network towards our commitment to expanding card offerings and deepening market penetration.

In the digital ecosystem, the mobile app saw strategic enhancements with features like deep linking and smarter EMI options with selfcare service. These additions were designed to improve usability and drive higher customer engagement. Simultaneously, our analytics foundation was strengthened with the introduction of analytics platform, rolling out multiple use cases and empowering data-driven decisions across the enterprise.

Key launches such as BOBCARD UNI cards showcased our agile execution approach. Simultaneously, groundwork was laid for future scalability through enterprise-wide onboarding platforms with centralized business rule engines and de dupe.

Partnerships also played a pivotal role, with Tripstacc and Zaggle integration service offerings for both retail and corporate customers. A new travel and hotel booking platform was conceptualized to offer value-added services to cardholders, marking BOBCARD’s step into lifestyle enablement.

Through business-led innovation, tech-driven execution, and a deep commitment to customer experience, FY 2024-25 was a year of foundational transformation. We now stand well-positioned to scale, secure, and simplify the future of financial services.

FY 2025 was a landmark year for BOBCARD’s brand and marketing efforts, building on its strong foundation as a customer-first credit card brand. The team rolled out award-winning campaigns under the “Reimagine Credit for India” positioning—leveraging insight-led, purpose-driven communications to deepen relevance, trust, and aspiration. These initiatives strengthened brand salience and customer engagement across platforms. Flagship campaigns like #AurKyaChahiye, #LifeIsBetterWithBOBCARD,

 

economic welfare activities for the benefit of weaker sections and rural citizens.

The Bank has 65 Rural Self Employment Training Institutes (RSETIs) in 11 States/UTs across the country to impart skill development training to the youth of rural and semi urban areas for generating self-employment. Since inception, these centres have conducted 26,640 training programmes and imparted training to 7.46 lakh youth, out of which 5.16 lakh have already setup their own ventures or have secured wage employment. During this financial year we have installed IP-Enabled CCTV Camera in 62 RSETIs and solar panel in 12 RSETIs which will augur well for online monitoring of training programme at RSETI by MoRD/NACER and save electricity cost in future.

The Bank has also set up 86 Financial Literacy Centres (FLCs) in 12 States/UTs which provide financial counselling services and education to the people in rural, semi-urban and urban areas about various financial products and services available from the formal financial sector. These centres also take up activities that promote financial literacy, cyber security awareness, and awareness about banking services, digital banking, financial planning and amelioration of debt-related distress of an individual.” During this financial year our FLCs centres across the country conducted 7933 meetings/camps to impart financial awareness to 3,91,580 people.

As per RBI directives, Bank has also set up 196 Centres for Financial Literacy (CFLs) spread across -9- states and -1- Union Territory that are aimed at imparting financial literacy in tribal and backward blocks through innovative and participatory approach.

As a part of Bank’s commitment towards protection of environment, under Environmental, Social, and Governance (ESG) principles, Bank is implementing a project of planting a tree against each Auto loan/Housing loan disbursement.

Bank has also donated to various social causes viz., financial assistance to deserving poor students for their education, donation of passenger vehicle to Children home for traveling to school, donation of medical equipment and healthcare to hospitals, donation of generator set to hospital, donation towards installation of RO Water Purification System, donation towards relief fund in cyclone affected areas and donation towards providing farmers with agricultural tools and capacity building trainings.

Domestic Subsidiaries and Joint Ventures

BOBCARD Limited

BOBCARD Limited (formerly known as BOB Financial Solutions Limited) was established in 1994 as a Non-Banking Financial Company, wholly owned by the Bank. Its primary business is in credit cards with key differentiator being simple, easy-to-understand products that are fairly priced, efficiently serviced, and can easily be availed through a digital-all application process.

FY 2025 was a continued year of growth for BOBCARD consolidating its industry position and budling seamless integration with parent Bank. As per RBI data for Feb’25, the

Brief Highlights of BOBCARD limited for FY 2025 (IGAAP financials) are indicated below:

('in crore)
BOBCARD Ltd.
Particulars	FY 2024	FY 2025
Total Assets	5,217.15	6,671.78
Net Profit/(Loss) for current FY	59.27	56.74
Net NPA levels for current FY	32.65	137.30
Credit rating	Crisil A1 +	Crisil A1 +
	India rating A1 +	India rating A1 +
Return on Assets	1.14%	0.85%

 

BOB Capital Markets Ltd
Particulars	FY 2024	FY 2025
Total Assets (in crore)	169.00	160.88
Net Profit/Loss for FY (in crore)	(12.50)	(8.79)
Customer base (Nos)	2,08,768	3,17,264
Total number of branches (Nos)	3	3

 

#ReimagineTheWomanCard, #ReimagineFestiveFun, etc. delivered strong digital visibility and drove significant social media engagement. The launch of the BOBCARD blog further amplified the brand’s commitment to credit education. These sustained efforts not only fueled business momentum but also earned industry recognition, with multiple wins—Silver and Bronze at the Pitch BFSI Marketing Awards 2024, and a Double Bronze at the Campaign India PR Awards 2025— reimagining BOBCARD’s position as a performance-driven, marketing-led brand.

BOB Capital Markets Ltd.

BOB Capital Markets Ltd. (BOBCAPS), a wholly owned subsidiary of Bank of Baroda, is a SEBI registered Category-I Merchant Banker and also a Stock Broker with memberships of National Stock Exchange (NSE) and Bombay Stock Exchange (BSE).

BOBCAPS offers a wide spectrum of financial services that includes fund raising from primary markets /PE funds, debt syndication, debt resolution, mergers and acquisitions advisory and stock broking (both institutional and retail). It has two operating segments, viz. Investment Banking and Broking.

BOBCAPS continued to receive good traction for its businesses during FY 2025. Investment banking team successfully closed several transactions including marquee IPOs, OFS, Rights Offers, Debt resolutions, Debt syndication, DCM and M&A advisory. Investment Banking Equity team successfully closed IPOs of Bharti Hexacom, Ola Electric & PNG Jewellers; OFS of Cochin Shipyard & GIC; Rights offer of Dhanlaxmi Bank & Shobha Developers and M & A advisory of Caspian Impact. These mandates have led to establishing deal credentials which is important for securing new mandates. For the year, Company incurred a loss, largely on account of creation of technology infrastructure & account-acquisition costs. The Retail Broking business revenue has demonstrated growth during the year and the customer base has significantly grown from 2.08 lacs to 3.34 lacs. The Depository participant business of Bank of Baroda was successfully migrated to the Company in Q4FY 2025 & this business will contribute significantly to Retail revenue in coming years. The Company has revamped its entire retail technology platform with an eye to scale up business.

In Investment Banking League table for IPO & OFS, the Company is ranked amongst Top 15 for the year.

Brief Highlights of BOB Capital Markets Ltd for FY 2025 are indicated below:

Baroda Global Shared Services Ltd.

Baroda Global Shared Services, a wholly owned subsidiary of the Bank of Baroda, is an outcome of a strategic decision made by the Bank in 2017 to integrate back-office services into a single entity, thereby, reducing service replication & business unit silos, creating synergies, and improving economies of scale.

Pioneered as a Shared Services provider in the Public Sector Banking segment, the company has grown as a leading player and a role model for many other Banks within the ecosystem over the 8 years of operations.

As a Shared Services organisation, we continue to create value for the parent Bank through a wide portfolio of products & services including Retail Assets (Sales, Operations & collections); Retail Liabilities Back Office; Trade Finance Back Office; Call Centre operations; Financial Inclusion Services; Government Business Support services; International Banking Support (BOB UK Support Operations).

BGSS locus is in creating value for the parent bank through reduced cost-to-income ratio, reduced credit losses, new business generation & client retention.

During FY2025, the company played a pivotal role in sourcing customers for Home Loan, Auto Loan, Education Loan, Tractor Loan, leveraging its Sales team by contributing ~'14K Cr of business & witnessed a substantial productivity improvement, while keeping COA under control.

In Collections, the company supported the Bank by providing Tele-Calling (SMA0) support & achieved POS resolution of ~'65K Cr. Further, in continuation to our commitment to deliver high business performance, BGSSL’s Corporate Business Correspondent (CBC) operations revenue increased to '8.5 Cr in FY2025, while expanding the number of BC points to 1815.

Continuing with our emphasis on continuous improvement with robust compliance, BGSSL enhanced its productivity/ efficiency across back-office operations by ~14% Y-o-Y and successfully completed surveillance audits for ISO 9001:2015 (Quality Management) across 9 processes, ISO 22301:2019 (Business Continuity) & ISO 27001:2013 (Information

Security).

Realizing the importance of information security, the company has implemented various solutions viz, Realtime Managed Detection and Response driven Cyber Security Operations Centre; Data Loss Prevention solution; Next-Generation Firewall; Secure Web Gateway.

Annual CSAT survey was conducted, wherein an improved score of 91.41 % was achieved. BGSSL achieved a score of 4.40 in Darpan Survey (Employees’ Survey) conducted during FY 2025. The Company successfully implemented Competency Based Talent Acquisition (CBTA) process. It also Implemented a Self-paced Learning Tool - “Gyansagar Eduringo”.

A Snapshot of the BGSS Financial Performance

(' Cr)
Baroda Global Shared Services Ltd. (BGSS)
Particulars	FY2024	FY2025*
Total Income	348.74	285.13
Expenses	323.25	265.55
PBT	25.49	19.58
PAT	19.77	16.00
PAT %	5.67%	5.61%
*FY 2025 figures are unaudited.

BarodaSun Technologies Ltd.

BarodaSun Technologies Limited has been incorporated as a wholly owned subsidiary of Bank of Baroda on July 5, 2017 with the Registrar of Companies, Mumbai, Maharashtra. The company has been formed to deliver system integration and consultancy services on matters relating to ever evolving IT enabled business solutions, software product application and implementation across various lines of business, for Bank of Baroda.

The Company is yet to commence full-fledged operations and it is envisioned to initiate activities like programme / project management and support services to implement enterprisewide IT projects and development of financial products and solutions to effectively cater to various business needs providing technological edge across different business verticals of the Bank.

The Nainital Bank Ltd.

The Nainital Bank Limited (NBL), originally promoted by Late Bharat Ratna Pandit Govind Ballabh Pant in 1922, became a subsidiary of Bank of Baroda in 1973. The Bank’s holding in Nainital Bank Ltd is 98.57%. NBL has its registered office in Nainital and operates in five states: Uttarakhand, Uttar Pradesh, Delhi and National Capital Region (NCR), Haryana, and Rajasthan. NBL has 173 branches as of March 31,2025. The total business of NBL increased to '13,225.68 crore on

March 31,2025, from '13,086.87 crore as of March 31,2024. The Bank posted a net profit of '50.61 crore in FY 2025, compared to a net profit of '47.10 crore during the previous year.

Baroda BNP Paribas Asset Management India Pvt. Ltd (BBNPA AMC)

BBNPP AMC is a majority owned subsidiary of Bank of Baroda. It is a joint venture between Bank of Baroda (50.1% shareholding) and BNP Paribas Asset Management Asia Ltd (49.9% shareholding). The Company is the Asset manager for Baroda BNP Paribas Mutual Fund. Both Bank of Baroda and BNP Paribas AM had existing fund management businesses in India, which were merged in March 2022 to create this JV.

BBNPP AMC builds on the strength of its sponsors. The AMC leverages the vast network and local reach of the Bank of Baroda and global best practices and market knowledge of BNP Paribas Asset Management. Over the years, AMC has aggressively invested in strengthening investment capabilities, product range, reach, and distribution. The AMC managed MF AAUM of Rs 45,541 crs during Jan-Mar 2025, representing a strong growth of 28% yoy. Additionally, the AMC opened a branch in GIFT city and registered as Fund Management Entity (FME) and currently offers portfolio management and advisory services to offshore clients with AUM of Rs 4,105 crs as of Mar 31, 2025. Driven by strong AUM growth and cost discipline, it has resulted in significant cost savings. The positive jaw effect led to a significant jump in profitability for FY 24-25.

Brief Highlights of Baroda BNP Paribas Asset Management India Pvt. Ltd for FY 2025 are indicated below:

Â	Â	(' in crore)
Baroda BNP Paribas Asset Management India Pvt. Ltd.
Particulars	FY 2024	FY 2025**
Total Assets	191.43	258.53
Net Profit for current FY	6.11	51.88
Average Assets under Management (AAuM)	37,903*	49,646*
Equity to overall AAuM (%)	62%	64%
*Includes advisory AAuM of '2,257 crore in Q4 24 and '4,105
crore in Q4 25. **FY 2025 figures are unaudited.

Indian MF industry is seeing accelerated growth driven by the rising aspiration of Indian middle class coupled with increased awareness about Mutual funds. An encouraging trend is that smaller towns are growing faster than the pace of larger cities. India has possibly the best digital transaction infrastructure in the world, leading to rapid digital adoption by clients. Our AMC is leveraging all these trends to create a strong presence in India.

The AMC is committed to building a top-tier fund house that serves both -clients at home in India as well as helps foreign investors access the Indian market.

Baroda BNP Paribas Trustee India Pvt. Ltd.

BNP Paribas Trustee India Pvt. Ltd. was merged with Baroda Trustee India Pvt. Ltd. (a wholly owned subsidiary of the Bank) with effect from 14.03.2022 leading to formation of Baroda BNP Paribas Trustee India Pvt. Ltd. wherein Bank’s share is 50.10% and that of BNP Paribas Asset Management Asia Ltd is 49.90. It is a governing body for Baroda Mutual Fund / BBNPP AMC with a duly constituted Board of Directors, as prescribed under the SEBI (Mutual Funds) Regulations, 1996.

IndiaFirst Life Insurance Company Ltd.

Headquartered in Mumbai, IndiaFirst Life Insurance Co. Ltd., is a domestic subsidiary of Bank of Baroda promoted along with Carmel Point Investments India Private Limited, owned by private equity funds managed by Warburg Pincus LLC. Union Bank of India is an investor in the Company. Total share capital of the Company is '1,435 crore (including share premium).

In FY 2025, IndiaFirst Life posted Total Gross Written Premium of '7,218 crore with YoY growth of 3.5%. The Company maintained 12th rank as compared to last year on Individual New Business APE (Regular premium + Single premium at 10%) amongst private Life Insurers. IndiaFirst Life’s assets under management (AUM) is at '30,968 crore as on 31st March 2025. Company posted Net Profit of '102.3 crore and total Income of '9,238 crore for FY 2025. IndiaFirst Life settled over 41,668 claims in FY 2025 amounting to over INR 801 crore.

IndiaFirst Life was certified as a Great Place to Work (GPTW) for the seventh time in a row, a recognition considered as the gold standard for defining great workplaces across business, academia and government organisations. IndiaFirst Life was recognised among Best Brands of 2024 by The Economic Times. IndiaFirst Life was also named ‘Best Employer in Private Life Insurance’ at the NavaBharat BFSI Conclave & Awards 2025.

India Infradebt Ltd.

India Infradebt Limited (Infradebt) is the first Infrastructure Debt Fund (IDF)- NBFC to commence operations in India. Bank of Baroda and ICICI Bank Limited are the largest shareholders, while other shareholders include Citicorp Finance (India) Limited and Life Insurance Corporation of India. Infradebt finances the relatively safe, completed infrastructure projects which have achieved at least one year of commercial operations. Infradebt has been rated AAA/ Stable outlook by CRISIL and ICRA since inception. Infradebt also enjoys 100% income-tax exemption on all its income.

The synergy with the Bank arises from Infradebt’s focus on lending to strong, stable infrastructure projects - mainly renewable energy projects, road projects and airport projects, thus promoting green energy in India and contributing to nation building. Infradebt business has grown steadily, with a loan book of '25,595 crore, Net Profit of '518 crore and

Return on Equity of 14.9% during FY2025. Infradebt has also been paying dividends continuously for the past eight years.

A brief summary of Bank’s all the domestic subsidiaries and Joint Ventures is given below for FY 2025 :

Awards & accolades received by the Bank

In recognition of Bank’s excellent highlighting our achievements in marketing, technology, customer service, financial performance, operational efficiency and innovation., the Bank was conferred with many awards and accolades during FY 2025 which are given below;

•    Bank of Baroda has been honoured with CXO Security Innovation Award 2024 in the category of IT Infrastructure Security Initiatives.

•    Bank of Baroda has won three awards at The Great Indian BFSI Awards 2024 as given below:

•    Social Media Campaign of the Year - bob x Spotify

•    Influencer Campaign of the Year- PehchaanCon

•    Social Media Campaign of the Year - BOB Ke Sang Tyohaar Ki Umang

•    Bank of Baroda was ranked among three top performers at the All-India CII SECEX 2024. CII SECEX is a national-level critical information infrastructure cybersecurity operations exercises organised by NCIIPC annually.

•    Bank of Baroda won the ‘Best Risk Management Solution Provider’ award at the IBS - India Banking Summit & Awards 2024.

 

(' in crore)
Entity	Owned funds	Total assets	Net profit	Offices	Staff
BOBCARD Ltd.	1441.10	6,671.78	56.74	40	554
BOB Capital Markets Ltd.	140.00	160.88	(8.79)	4	140
**BarodaSun Technologies Limited	4.96	5.06	0.17	1	0
**Baroda Global Shared Services Ltd	74.85	102.68	16.00	4	4195
The Nainital Bank Ltd.	837.34	9360.48	50.61	173	1211
**Baroda BNP Paribas Asset Management India Pvt. Ltd.	208.98	258.53	51.88	18	359
Baroda BNP Paribas Trustee India Pvt. Ltd.	0.36	0.54	0.085	1	1
IndiaFirst Life Insurance Company Ltd.	1,285.00	30,968	102.00	63	4,740
India Infradebt Limited	3708.94	28074.74	518.47	1	31
*3489 On BGSS payroll & 706 third party Employees **FY 2025 figures are unaudited.

•    At the e4m Golden Mikes Radio and Audio Conference & Awards 2024, Bank of Baroda was bestowed with the following awards:

•    Gold Metal - in the category Best Use of Radio for Long Term Effectiveness for BIG FM’s BIG Green Ganesha with Bank of Baroda.

•    Silver Metal - in the category Most Unique Programming Concepts/Ideas for BIG FM’s BIG Antakshari with Bank of Baroda.

•    Silver Metal - in the category Best Program Launch on Radio for BIG FM’s BIG Antakshari with Bank of Baroda.

•    Silver Metal - in the category Best Use of Radio for Launch/Relaunch for BIG FM’s BIG Antakshari with Bank of Baroda.

•    Bronze Metal for Bank of Baroda’s BOB Army campaign on RED FM.

•    Bank of Baroda was named Best Banking Group in India at the World Finance Banking Awards 2024.

•    Bank of Baroda has been awarded “Best Contact Centre of the Year (Banking)” award at the CX Excellence Awards organised by Quantic India.

•    Bank of Baroda won the ‘Best Influencer Campaign’ award for #PehchaanCon at the afaqs! Marketers’ Excellence Awards 2024.

•    Bank of Baroda won the Dun & Bradstreet Public Sector Excellence Award 2024 in the Large Banks (Central PSU) category.

•    Bank of Baroda won the Elets BFSI Rising Leaders’ Award 2024 for exceptional contribution to the BFSI sector.

•    Bank of Baroda won two awards at the FinCrime Expert Conclave: 1) Excellence in Technology Implementation for AML 2) BFSI Team Adopting Emerging Technologies for AML.

•    Bank of Baroda won three awards at The Collection & Recovery Summit India.

i.    Risk Management Framework- Collection Practices in the PSB Category.

ii.    Receivables    Management Function-Business Re

engineering in the PSB Category.

iii.    Portfolio    Management Strategies-Receivable

Management-RAM in the PSB Category.

•    Bank of Baroda enters India Book of Records for the Plantation drive pledge initiative on the occasion of 117th Foundation Day.

•    Bank of Baroda has been awarded ‘First Prize’ under

the Government of India’s ‘Rajbhasha Kirti Puraskar’ Scheme for    the year 2023-2024 for outstanding

performance in Official Language Implementation.

•    Head - Marketing & Branding, Bank of Baroda has been recognised as a leading CMO at the Laqshya Pitch Best CMO Awards 2024.

•    Bank of Baroda has been recognised as one of the Iconic Brands of India at the 7th edition of the ET Now Iconic Brands of India.

•    Head - Marketing & Branding, Bank of Baroda has been selected as one of the ‘Dun & Bradstreet Marketing Mavericks 2024’ at the 2nd edition of the Marketing Mavericks Summit.

•    Bank of Baroda has been declared Runner-Up in the category Best Customer Experience among Large and Mid-Sized Banks at ASSOCHAM’s 19th Annual Summit & Awards on Banking & Financial Sector Lending Companies.

•    Bank of Baroda has been conferred with the ‘Best Performance in Bank’s Category ‘ award for Mutual Fund Business by Bombay Stock Exchange (BSE) for the third consecutive year.

•    Bank of Baroda receives SKOCH Gold Award-2024 for Digital Contact Centre in the BFSI Category.

•    Bank of Baroda Receives India’s Best Brands Award 2024 by ET Now.

•    Bank of Baroda awarded prestigious accolades at Annual IBA Technology Awards 2024.

•    BestBankinAI/MLAdoption-Winner

•    Best Bank in IT Risk Management-Winner

•    Best Technology Bank- Runner-Up

•    Best Tech Talent & Organization- Runner-Up

•    Special Mention- Best Fintech & DPI Adoption.

•    Bank of Baroda wins Golden Peacock HR Excellence Award 2024 under Financial Sector (Banking).

•    Bank of Baroda felicitated at IBEX India 2025 BFSI Technology Awards - Runner-Up position in Most Innovative Use of Technology.

•    Bank of Baroda felicitated at IBEX India 2025 BFSI Technology Awards - Runner-Up position in Outstanding Use of Emerging Technology for Enhanced Customer Service Experience.

•    Bank of Baroda receives Best Data Completeness Award (First Runner Up) in the “PSU Consumer Segment” for FY 2025 by IBA-TransUnion CIBIL.

•    Bank of Baroda declared as Winner Bank in “Net Sales - Equity and Hybrid Mutual Funds” category at the AMFI Mutual Fund Summit 2025.

•    Bank of Baroda has secured the #1 position for People & HR Operations in the EASE 6.0 Index. Additionally, the Bank has been ranked #3 in Customer Service Excellence and Analytics-Driven Business Improvement.

•    Bank of Baroda honoured with ‘Significant Achievement in HR Excellence’ Award by CII.

•    Bank of Baroda received ET Now Best BFSI Brands 2025 Award.

Dividend Distribution Policy

Board of Directors of the bank has recommended a dividend of '8.35 per share for the financial year ended March 31,2025. The total outgo in the form of dividend will be '4,318.09 crore. The payment of dividend is subject to requisite approvals. The dividend distribution policy is given in this Annual Report and is also available on the Bank’s website.

Board of Directors (Appointment / Cessation of Directors during the year)

Appointments

Dr. M.P Tangirala was nominated as Government Nominee Director w.e.f. 13^th May, 2024 by the Central Government u/s 9 (3) (b) of The Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970, to hold the post until further orders.

Shri Ravindran Menon was elected as Shareholder Director u/s 9(3)(i) of The Banking Companies Acquisition and Transfer of Undertakings) Act, 1970, for a period of three years from 16^th May, 2024 to 15^th May, 2027.

Shri Vijay Dube was elected as Shareholder Director u/s 9(3) (i) of The Banking Companies Acquisition and Transfer of Undertakings) Act, 1970, for a period of three years from 9^th July, 2024 to 8^th July, 2027.

Smt. Beena Vaheed was appointed as Executive Director, with effect from 9^th August, 2024 by the Central Government u/s 9(3)(a) of The Banking Companies Acquisition and Transfer of Undertakings) Act, 1970, for a period of three years, or until further orders, whichever is earlier.

Shri Manoranjan Mishra was nominated as RBI Nominee Director w.e.f. 12^th December, 2024 by the Central Government u/s 9 (3) (c) of The Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970, to hold the post until further orders.

Cessations

Shri Ajay K. Khurana ceased to be Executive Director w.e.f. 1^st April, 2024 upon attaining the age of superannuation.

Shri Mukesh Kumar Bansal ceased as a Government Nominee Director w.e.f. 13^th May, 2024 on the appointment of Dr. M.P Tangirala.

Shri Alok Vajpeyi ceased to be a Shareholders Director w.e.f. 9^th July, 2024 on completion of his tenure of -3- years.

Smt. Parvathy V. Sundaram ceased as a RBI Nominee Director w.e.f. 12^th December, 2024 on the appointment of Shri Manoranjan Mishra.

Shri Ajay Singhal ceased to be a Non-Executive Director w.e.f. 21^st December, 2024 on completion of his tenure of -3- years.

Board Evaluation

Bank is following Government of India guidelines dated August 30, 2019 for PSB Governance Reforms - Enhancing governance through improved effectiveness of non-official directors.

Auditors’ Compliance Certificate on Corporate Governance:

The Auditors’ Compliance Certificate regarding the compliance of the conditions of Corporate Governance for the year 2025 is annexed with this report pursuant to “Part E” of Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Business Responsibility and Sustainability Report (BRSR)

Business Responsibility and Sustainability Reporting (BRSR) Report as required by SEBI has been hosted on the website of the bank (www.bankofbaroda. co.in). Any member interested in obtaining a physical copy of the same may write to the Company Secretary of the bank.

Directors’ Responsibility Statement

The Directors confirm that in the preparation of the annual accounts for the Financial Year ended March 31,2025.

a)    The applicable accounting standards had been followed along with proper explanation relating to material departures, if any;

b)    The accounting policies framed in accordance with the guidelines of RBI were followed and the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Bank at the end of the financial year and of the profit and loss of the bank for that period;

c)    The Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of applicable laws to the Bank for safeguarding the assets of the Bank and for preventing and detecting fraud and other irregularities;

d)    The Directors had prepared the annual accounts on a going concern basis; and

e)    The Directors had ensured that internal financial controls followed by the Bank are in accordance with guidelines issued by the RBI in this regard and that such internal financial controls are adequate and were operating effectively. Explanation: For the purposes of this clause, the term “internal financial controls” means the policies and procedures adopted by the Bank for ensuring the orderly and efficient conduct of its business, including adherence to Bank’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information;

 

f) The Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

Acknowledgements

The Directors placed on record their appreciation for the contribution made by Shri Ajay K. Khurana outgoing Executive Director, Shri Mukesh Kumar Bansal outgoing GOI Nominee Director, Smt. Parvathy V. Sundaram outgoing RBI Nominee Director, Shri Alok Vajpeyi outgoing Shareholder Director and Shri Ajay Singhal outgoing Non-Executive Director.

The Directors express their sincere thanks to the Government of India, RBI, Securities and Exchange Board of India, other regulatory authorities and the overseas regulators for their continued co-operation, guidance and support.

The Directors would like to take this opportunity to express sincere thanks to our valued clients for their continued patronage and support.

The Directors acknowledge with deep appreciation for the cooperation extended by all shareholders, Banks and Financial Institutions, Rating Agencies, Stock Exchanges and all well-wishers in India and Abroad. The Directors also take this opportunity to place on record deep appreciation for the hard work and dedication of the employees of the Bank.

Digitization Initiatives

Digitization remained the central pillar of Bank’s wealth strategy for enhanced service efficiency and customer convenience. Notable developments include:

•    SMARTINVEST - The Bank’s digital investment platform now offers a seamless experience via standalone and BOB World-integrated journeys for Mutual Fund transactions and 360° portfolio management. The platform supports both self-service and branch-assisted sales through API-based integration.

•    SMARTINSURE - The platform is live for Life Insurance and is being expanded to cover Non-Life Insurance, with rigorous policy and compliance checks embedded in the journey.

Skilled Workforce & Ethical Sales

A strong emphasis continues to be placed on staff capability building and ethical business practices. The Bank has extended its partnerships with three reputed training organizations to deliver customized learning modules that ensure compliance-led, customer-first advisory services. Despite market volatility, the Wealth Management vertical achieved significant milestones life '752 crore business in Life Insurance Premium mobilisation, '589 crore in Non-Life Insurance Premium mobilisation and Investment AUM of Rs 16,272 crore.

Customer & Stakeholder Engagement

The Bank remains committed to continuous engagement through innovative knowledge-sharing and thought leadership initiatives:

•    “Wealth Insight” - Monthly e-magazine for Radiance customers featuring market outlooks.

•    “Thursday Thoughts” - Weekly emailer designed to spread financial knowledge.

•    “Wealth Bulletin” - A bi-monthly internal publication for the Wealth Management Services (WMS) team.

•    “Leadership Chronicle” - A talk show series featuring thought leaders from banking and finance.

•    “Expert Insight” - A platform for webinars and interactive sessions with market experts covering key financial topics, including Budget analysis and market trends.

Digital Banking products

The Bank is committed to digitisation and continuously strives to migrate transactions to digital channels which leads to better customer experience. The major focus of digital banking is to make Bank’s products available to customers through digital and alternate delivery channels. The key instruments in digital banking are bob World, bob World UPI, Baroda Connect, Debit Cards, Prepaid Cards, BHIM Aadhaar, ATM and Cash Recycler machines, Self Service Passbook Printers(SSPBP), TAB Banking, Internet Payment Gateway (IPG), Bharat Bill Payment Services (BBPS), Baroda FASTag, Bharat QR, Point of Sale (POS), etc.

 

1

External Rating Distribution of Domestic Advances above '50 crore

Total portfolio comprising of A & above in FY 2025 was 94% as against 90% in FY 2024.

Corporate Banking - Structure

During the year, bank has continued with its strategy to focus on Mid Corporate Advances, through -4- Mid Corporate Clusters located at strategic locations i.e. New Delhi (North), Chennai (South), Mumbai (West) and Kolkata (East) and Mid Corporate Branches tagged to them.

Target Market approach

The Bank follows a target market approach which has the following features:

2

   As on 31^st Mar 2025, Bank has established 16 Special Rupee Vostro Accounts for Banks worldwide, to spearhead the Government of India’s drive to promote INR denominated trade transactions via the Special Rupee Vostro Account (SRVA) mechanism.

Domestic Treasury Operations

The Bank operates its treasury operations from a state of

the-art dealing room at its Corporate Office in Mumbai.

The treasury is a prominent player in various markets such

as foreign exchange, interest rates, fixed income, money

3

   “Best Performance in Bank’s Category for Mutual Fund Business” by the Bombay Stock Exchange (BSE) — awarded to Bank of Baroda for the third consecutive year.

•    “Winner - Net Sales - Equity & Hybrid Funds Category” under the Banks category at the inaugural AMFI Partners in Excellence Awards (FY 2023-24).

Strategic Focus Areas

To cater to both retail and affluent clients, the Bank has concentrated efforts on the following key areas:

•    Branch Activation to enhance front-line advisory and sales efforts.

•    Digital Adoption to streamline customer journeys.

•    Client & Employee Engagement Programs to foster stronger relationships.

•    Talent Enhancement ensuring all certified staff serving Radiance and non-Radiance segments are trained and fully equipped with the required skills.

4

   Cyber Insurance coverage is maintained through a reputed insurer to mitigate financial exposure from cyber-related incidents and frauds.

•    Customer Awareness campaigns are conducted across digital channels (SMS, email, social media, ATMs, and

5

   Monitoring of completion of Stock audits and real time basis data collection will be possible with the help of this portal within prescribed guidelines of the Bank.

PSR Portal

The bank has developed a specialized portal designed for

noting and monitoring the Post-Sanction Reporting (PSR)

process. This initiative is aimed at safeguarding the interests

of the bank by ensuring proper and timely reporting of the

6

   Solar Panels of Capacity 125 KWp installed at Bank’s MMO Building, 100 KWp at Barda Apex Academy Building.

---

Mar 31, 2024

“The Directors have pleasure in presenting the One Hundred and Sixteenth Annual Report of the Bank with the audited Balance Sheet, Profit & Loss Account and the Report on Business and Operations for the year ended March 31,2024(FY 2024)”.

Business Performance & Key Financials

(' in crore)
Â		FY 2023	FY 2024
Global Deposits		1203687.79	1326957.84
of which - Internationa! Deposits		156312.58	198444.04
Domestic Deposits		1047375.21	1128513.80
Â	Current Account Deposits	75110.67	76386.30
of which	Savings Bank Deposits	367399.83	390014.49
Domestic CASA Deposits		442510.5	466400.80
Domestic CASA to Domestic Deposits (%)		42.25	41.33
Net Advances		940998.27	1065781.72
Â	Dom Advances	776589.63	880816.61
of which	International Net Advances	164408.64	184965.11
Global Gross Advance		969548.31	1090505.80
Total Business (Global Deposit + Global Gross Advance)		2173236.1	2417463.65
Total Assets		1458561.55	1585797.09
Net Interest Income (NII)		41356.01	44721.53
Other Income		10025.84	14495.37
Of which Trading Gains		1062.50	1491.93
Operating Income (NII + Other Income)		51381.58	59216.90
Operating Expenses		24518.31	28251.68
Operating Profit		26863.54	30965.23
Provisions (Other than Tax)		7136.90	6075.61
of which-Provisions for NPAs and Bad debts written off		4,350.52	6470.86
Profit Before Tax		19726.64	24889.61
Provision for Tax		5617.02	7100.83
Net Profit		14109.62	17788.78
Appropriations/Transfers		Â	Â
Statutory Reserve		3,527.40	4,447.20
Capital Reserve		92.57	104.17
Revenue and Other Reserves		Â	Â
I) General Reserve		7274.12	8,079.23
II) Special Reserve u/s 36 (I) (viii) of the Income Tax Act 1961		300.00	615.92
III) Investment Reserve Account		0.00	563.86
IV) Investment Fluctuation Reserve		30.00	0.00
V) Statutory Reserve (Foreign)		41.28	48.17
Proposed Dividend		2,844.25	3,930.24

Average Cost & Yield of funds and Average Interest earning Assets
Key Performance Indicators	FY 2023	FY 2024
Average Cost of Funds (%)	4.08	5.12
Average Yield on Funds (%)	7.17	8.01
Average Interest Earning Assets (' in crore)	12,49,846	14,05,271
Average Interest Bearing Liabilities (' in crore)	11,81,750	13,26,655

 

Total deposits of the bank increased to '13,26,958 crore in FY 2024 from '12,03,688 crore in FY 2023, there by registered a growth of 10.2 % on a YoY basis. The domestic CASA of the bank grew by 5.4% on a YoY basis, to reach to the level of '4,66,401 crore, in FY 2024. The Domestic Deposit grew by 7.7% on a YoY basis, to '11,28,514 crore, in FY 2024. The Net advance of the bank increased to '10,65,782 crore in FY 2024 from '9,40,998 crore in FY 2023, there by recorded a growth of 13.3% during the period. The Global Gross advance of the Bank reached to the level of '10,90,506 crore in FY 2024 as compared with '9,69,548 crore in FY 2023 by registering a growth of 12.5% on a YoY basis. The Total Business of the Bank grew to '24,17,464 crore in FY 2024 crore from '21,73,236 crore in FY 2023, registered a growth of 11.2% on YoY basis.

Net Interest Income of the Bank increased to '44,722 crore in FY 2024 from '41,356 crore in FY 2023, grew by 8.1% on a YoY basis. Other Income of the Bank increased to '14,495 crore in FY 2024 which was at '10,026 crore in FY 2023, thereby registered a growth of 44.6% on a YoY basis. Operating expenses of the Bank stood at '28,252 crore in FY 2024 as compared with '24,518 crore in FY 2023. Operating Income of the Bank increased to '59,217 crore in FY 2024 from '51,382 crore in FY 2023, registered a growth of 15.2% on a YoY basis.

The Bank reported a Net Profit of '17,789 crore in FY 2024 from '14,110 crore in FY 2023, grew by 26.1% on a YoY basis. The Operating profit of the Bank grew by 15.3% at '30,965 crore in FY 2024 as compared with '26,864 crore in FY 2023.

Key Performance indicators

Key Performance Indicators	FY 2023	FY 2024
Net Interest Margin - Global (%)	3.31	3.18
Cost-Income Ratio (%)	47.72	47.71
Return on Average Assets (ROAA) (%)	1.03	1.17
Return on Equity (%)	18.34	18.95
Book Value per Share (')	148.80	181.48
Basic EPS (')	27.28	34.40

Net Interest Margin (NIM) stood at 3.18% in FY 2024 as against 3.31% in FY 2023. Cost to income ratio stood at 47.71% in FY 2024 from 47.72% in FY 2023, reduced by 1 basis point(bps). Return on Assets for FY 2024 improved by 14 bps to 1.17% in FY 2024 from 1.03% in FY 2023, reflects excellent performance in profitability. Return on Equity increased by 61 bps to 18.95% in FY2024 increased from 18.34% in FY 2023. Book value per share increased to '181.48 in FY 2024 from '148.80 in FY 2023. Earnings Per share increased to '34.40 in FY 2024 from '27.28 in FY 2023.

The average cost of fund and yield of fund stood at 5.12% and 8.01% in FY 2024. Average Interest Earning asset increased to '14,05,271 crore in FY 2024 from '12,49,846 crore in FY 2023. The Average Interest Bearing Liabilities also increased to '13,26,655 crore in FY 2024 from '11,81,750 crore in FY 2023.

The Capital Adequacy Ratio (CAR) of the Bank increased to 16.31% as of March 31, 2024 from 16.24% as of March 31, 2023. CET-1 ratio increased to 12.54% in FY 2024 from 12.24% in FY 2023. The consolidated capital adequacy ratio of the Bank was 16.68 % as of March 31, 2024 while it was 16.73% as of March 31,2023.

During FY 2024, the Bank issued Tier 2 capital of ' 5000 crore. Net worth

The Bank's net worth for Financial Year 2024 was increased to '93,850.76 crore comprising of paid-up equity capital of '1,035.53 crore and reserves of '1,11,188.05 crore (excluding revaluation reserves, foreign currency translation reserves and other intangible assets). The Bank's net worth in the previous Financial Year 2023 was at '76,951.07 crore comprising of paid-up equity capital of '1,035.53 crore and reserves of '97,187.36 crore (excluding revaluation reserves, foreign currency translation reserves and other intangible assets).

Book value per share (Face Value '2) increased to '181.48 in FY 2024 from '148.80 in FY 2023.

Provisions towards Retirement and other benefits

During FY 2024, the Bank made provision towards contribution to gratuity ('1240.75 crore), pension funds ('2425.47 crore), leave encashment, additional retirement benefits and other benefits ('403.19 crore). Total provisions under these categories amounted to '4069.41 crore during FY 2024.

 

Pzinitzil Arl^mmrtx/ Rzitin

(Ratios in %)
Particulars	FY 2023	FY 2024
Capital Adequacy Ratio Basel III	16.24	16.31
CET I	12.24	12.54
Tier I	13.99	14.07
Tier II	2.25	2.24

Divergence in global growth has become more apparent at the start of 2024. Financial conditions still remain tight as major central banks are yet to embark on their rate cut cycles. However, as growth slows and inflation moderates, there remains heightened expectation of easing monetary policy in the coming months. Along with this, loose fiscal and monetary policy in China, and reform measures announced to deal with the ongoing property sector crisis may help boost global growth prospects.

Based on this, IMF projects global GDP growth at 3.2% in 2024 with risks evenly balanced. The report notes that the World has avoided the possibility of a recession supported by surprising resilience in the US economy. Growth in AEs is expected to improve further to 1.7%. This will be led by pickup in US (2.7% versus 2.5% in 2023) and Euro Area to 0.8% (0.4% in 2023). Significantly, Germany, the region's biggest economy is expected to come out of a recession in 2024 as it is projected to grow by 0.2% (-0.3% in 2023), while UK's economy is also expected to perform better with 0.5% growth expected this year (0.1% in 2023). US Fed has also revised upwards its projections for GDP growth in 2024 to 2.1%, from 1.4% expected in Dec'23 policy.

On the other hand, growth in EMDEs is expected at 4.2%, slowing marginally from 4.3% in 2023. This will be due to a slowdown expected in China, Latin America, and Russia. On the other hand, India, Middle East and Central Asian countries are expected to perform well this year. Indian economy is projected to grow by 6.8% for FY25, slightly lower than RBI's projection of 7%.

Inflation is expected to moderate further in 2024, mainly due to progress made in AEs (2.6% versus 4.6% in 2023). While inflation for EMDEs is expected to remain unchanged at 8.3%. Oil prices are projected to decline further by (-) 2.5% in 2024 (-16.4% in 2023), but non fuel commodities may see a build-up in pressure as they are expected to increase by 0.1% in 2024, following (-) 5.7% decline in 2023. This could delay the timing of rate cuts by global central banks, which in turn may impact global growth prospects.

Indian Economy

Growth in the Indian economy remains on a strong footing as the domestic economy continues to showcase resilience backed by strong macro fundamentals. The economy clocked a robust growth of 8.2% in FY24 compared with a growth of 7% in FY23. This will be the third consecutive year when the economy has recorded above 7% growth, post the pandemic induced contraction. Industry has registered a growth of 9.5% against 2.1% in FY23 supported by higher growth in both manufacturing (9.9% from -2.2%) and mining activity (7.1% from 1.9%). Construction sector registered close to double digit growth at 9.9% against 9.4% in the previous year an account of housing sector doing well.

Services sector registered some moderation, but continue to record above 7% growth as reflected by stronger PMI readings for the year (60.3 in FY24 against 57.3 in FY23). Other indicators including domestic passenger traffic, rail freight and GST collections have registered strong growth during this period.

 

Dividend Distribution

Board of Directors of the bank has recommended a dividend of '7.60 per share for the financial year ended March 31,2024. The total outgo in the form of dividend will be '3,930.24 crore. The payment of dividend is subject to requisite approvals.

Management Discussion and Analysis

Global Economy

The world economy proved to be more resilient than earlier thought in 2023-24 period, despite witnessing another major shock of Israel-Hamas war in Oct'23. The Middle East continues to be plagued with such tensions. Apart from external factors, domestic conditions have also impacted growth in each country. For instance, US economy performed much better than what was earlier expected with 2023 growth clocking in at 2.5% following 1.9% increase in 2022. On the other hand, Eurozone and Canada performed poorly. As per IMF's latest World Economic Outlook, growth in Advanced Economies (AEs) slowed to 1.6% in 2023 from 2.6% in 2022. Within this group, growth in Euro Area dropped to a mere 0.1% in 2023 compared with 3.3% in 2022. This was led by contraction in its largest economy (Germany) in 2023 (-0.2%) following 1.8% growth in 2022.

Growth in Emerging and Developing Economies (EMDEs) held up better, expanding by 4.5% in 2023, after increasing by 4.1% in 2022. Improvement in growth in China (from 3% in 2022 to 5.4% in 2023), accounted for most of the pickup in growth in this region. Revival in demand following removal of Covid-19 protocols and, along with loose fiscal policy and certain structural reforms announced helped improve growth. However, reeling property sector crisis and threat to local government financial crisis still remains.

On the prices front, global inflation softened to 6.8% in 2023 from 8.7% in 2022. Both oil and non-fuel prices fell sharply. Oil prices dropped by (-) 16.4% in 2023, following a 39.2% jump in 2022. Non-fuel prices fell by (-) 5.7%, compared with 7.9% increase in 2022. Despite ongoing tensions in Ukraine-Russia region and beginning of Israel-Hamas war in Oct'23, prices remained weak owing to elevated interest rates across countries and weak demand conditions. Inflation in AEs showed significant moderation in 2023 (4.6% versus 7.3% in 2022) compared with EMDEs (8.3% versus 9.8%).

To bring inflation under control, global central banks across the world, kept interest rates elevated in 2023 with a rate cut possibility likely in in 2024. Amongst the AEs, US Fed policy rate is currently at a 23-year high of 5.25-5.5%. Bank of England (BoE) has maintained its policy rate at a 15-year high of 5.25% and ECB has kept it at a 22-year high of 4.5%. Amongst Emerging Markets (EMs), central banks in India and Indonesia had also raised policy rates aggressively.

Global trade volumes dipped in 2023 amidst moderation in global growth and demand. Volume of goods and services trade moderated to 0.3% in 2023 from 5.1% in 2022. This was led by a sharp deceleration in volume of goods and services export of EMDEs to (-) 0.1% in 2023 compared with 4.1% in 2022. Volume of goods and services imports of AEs also declined by (-) 1% in 2023 compared with 6.7% in 2022.

On price front, headline inflation averaged 5.4% in FY24 down from 6.9% in FY23. This is lower than the RBI's upper tolerance band of 6%. After easing down to 4.6% in Q1, headline inflation accelerated to 6.4% in Q2 driven by vegetable inflation along with the sustained pressure noted in prices of cereals, spices and pulses, given lower sowing of kharif crops. However, by Q3 there was a sharp correction (5.4%) in food prices with fuel inflation slipping into deflation. Softening of global commodity prices and supply side interventions by government restricted any price pressure. The ebbing in core inflation is evident with Q3 and Q4 down to 4.1% and 3.4% respectively. For FY25, RBI expects headline CPI to moderate further to 4.5% with risks evenly balanced and assuming a normal monsoon.

India‘s fiscal deficit for Apr-Mar'24 stood at '16.5 lakh crore and around 95.3% of the revised annual target for the year. It stood at 5.6% of GDP in FY24 and has been lower than the revised target of 5.8% at '17.35 lakh crore for the whole year. In FY24, centre's net tax revenues had risen by 14.5%, nontax revenues expanded by 40.8%. For FY25, it is estimated that the fiscal deficit target will be much lower than last year at 5.1% of GDP

India's external position in FY24 remained strong with trade deficit narrowing down to US$ 78.1 bn from US$ 121.6bn in FY23. This was supported by contraction in imports growth which occurred at a much faster pace than exports. Imports growth declined by 5.4% after increasing by 16.8% in FY23 and this was led by lower oil imports, down by 14.1%. On the other hand, exports growth contracted down by 3.1% in FY24 against a growth of 6.9% last year. On the currency front, INR ended lower by 1.5% in FY24 against a depreciation of 7.8% in FY23. Dollar index during this period strengthened by 1.9%.

On monetary policy front, RBI has kept the policy rate and the stance unchanged in the first policy for FY25. It has also retained its growth and inflation projections for FY25 at 7% and 4.5% respectively. We expect the economy to clock a growth of 7.5-7.8% for the same period.

Developments in Indian Banking

In FY24, India's 10Y yield fell by 17 bps to 7.16% and the entire yield curve witnessed considerable flattening in the year. The entire yield curve shifted downwards with significant correction happening towards the long part of the curve due to buoyant demand conditions, especially higher flows of FPI in the debt segment. On liquidity front, in FY24, RBI had conducted liquidity management exercise through VRR and VRRR. Credit growth for SCBs continued to expand in double digit, growing by 16.3% as of Mar 2024 (excluding merger) from 15% last year. It had also grown at a much faster pace than deposit growth (12.9% from 9.6% in the previous year). The weighted average domestic term deposit rates of SCBs on fresh deposits during the year had risen by 14bps (from 6.48% as of March 2023 to 6.62% as of March 2024). Weighted average lending rates of SCBs on fresh rupee loans also rose, to 9.37% as of March 2024 compared to 9.32% as of March 2023.

The higher pace of growth, led to tighter liquidity conditions in H2FY24 and it moved to deficit from surplus. On an average

 

system liquidity deficit was '11,012 crore in FY24 from '1.6 lakh crore in FY23. RBI had raised the incremental CRR to 10% back in Aug'23, this was on incremental deposits over May'19 when the withdrawal/exchange of '2000 note was announced. The objective of this step was to impound the surplus liquidity in the system.

In Nov'23, RBI had raised the capital norms for bank loans, specifically towards personal loans and NBFCs. The risk weight norms were hiked by 25 percentage points with the objective to rein in the growth in unsecured loans as well as credit cards.

RBI in the Financial Stability Report for Dec'23 noted the health of the financial sector continues to be steady amidst sustained growth in bank credit, adequate capital, liquidity buffers, strong earnings, and lower NPAs. Balance sheets of both corporate and banking sector also strengthened and this is prompting a new investment and credit cycle. Apart from this, stress tests results indicate that even under severe stress scenario, capital reserves of SCBs are expected to remain adequate and GNPA ratios are also likely to inch up only marginally. The macro stress tests conducted in the FSR notes that the system-level CRAR in Sep'24 is expected to be at 14.8 per cent (baseline), and would deteriorate to 12.2 (severe stress). The GNPA ratio of SCBs under the baseline scenario is expected at 3.1% and is expected to rise to 4.4% under the severe stress scenario. The results of the macro stress test revealed that Indian banks are well capitalized to handle any macroeconomic shocks, without requiring additional capital infusion.

EASE

The PSBs Reforms Agenda was launched as Enhanced Access and Service Excellence (EASE) in January 2018. The initial set of EASE reforms, EASE 1.0, EASE 2.0, and EASE 3.0 supported capacity building in multiple areas of banking - such as the Introduction of digital-first reforms such as “Diala-Loan”, “Credit @ Click”, technology, analytics, asset quality improvement, outcome-centric HR, and overall governance. These reforms had a significant contribution to increasing performance, transparency, and accountability across the banking landscape.

The fourth edition of EASE 4.0 focused mainly on smart lending backed by analytics; 24x7 banking with resilient technology and cloud-based IT systems; data-enabled agriculture financing; and collaborating with the financial ecosystem.

The EASE 5.0 agenda mainly focusses on Enhancing Digital Customer Experience, Data-driven Integrated and Inclusive Banking with emphasis on supporting small businesses and agriculture. Further, EASE 5.0 continues to drive progress in ongoing agendas such as co-lending partnerships, mobile banking enhancements, payments in semi-urban and rural areas, cloud adoption, digital marketing improvement through Search Engine Optimization and deepening financial inclusion.

In EASE 5.0 index, Bank has secured 3^rd position in FY 23

among all the Public Sector Banks.

The action points under each phase of EASE Programme envisaged deep-rooted transformation in approach and building new capabilities in PSBs.

EASE reforms agenda has contributed immensely towards the Bank's journey in achieving efficiency and ease of operations in almost all areas of operations, helping in providing an enhanced experience to its customers.

EASE 6.0

EASE 6.0 focuses mainly on driving excellence in customer service with digital enablement, Digital and analytics-driven business improvement, Tech and data-enabled capability building and developing people and enhancing HR Operations. EASE 6.0 is broadly divided into -4- themes consisting of a total of 22 Action Points.

Under EASE 6.0, Bank has -

•    Launched Digital Lending Journey for Retail gold loan and KCC journeys through the jansamarth portal.

•    Introduced new functionalities in QMS and promoted the usage of QMS

•    Introduced new services for MSME & NRI customers in Mobile Banking and Internet Banking platforms.

•    Enhanced the Bank's CRM module to improve the customer experience and speed up the resolution of complaints.

•    Enhanced the services provided at call centre viz., providing responses for basic inquiries of the customers through IVR.

•    Developed a deceased claim portal to settle the deceased claims through digital mode for customer convenience and improvement in TAT.

•    Launched various bundled products with additional features in both savings and current segments.

•    Various initiatives undertaken by the bank in succession planning and leadership development.

•    Launched HR connect mobile application for employees.

All through the past 6 years, EASE reform agenda has contributed immensely towards the PSBs' journey in achieving efficiency and ease of operations in almost all areas of operations, helping the Banks in providing an enhanced experience to the customers.

EASE Next (Pillar - II):

Bank-specific 3-year roadmap program: Creation of bank-specific three-year strategic roadmaps, conceptualized to each bank's starting position and business priorities, to enable reforms above and beyond the common reform agenda.

Strategic 3-Year Roadmap: As a part of EASENext's second pillar, the 3-year strategic roadmap is conceptualised. The program has been designed with a view to encourage banks

to adopt transformational initiatives that go beyond the common reform agenda.

For this purpose, 46 wide-ranging financial and non-financial metrics have been identified. Each bank will identify shortterm and long-term targets for each metric, and identify initiatives to drive improvement in these metrics.

Operating Performance & Key Ratios

The highlights of operating performance of the bank are as below:

(' in crore)
Particulars	FY 2023	FY 2024
Interest Earned	89,588.54	1,12,605.94
Interest Expended	48,232.53	67,884.41
Net Interest Income (NII)	41,356.01	44,721.53
Other Income	10,025.84	14,495.37
Trading Gains	1,062.50	1,491.93
Operating Income (NII + Other Income)	51,381.58	59,216.90
Operating Expenses	24,518.31	28,251.68
Employee Expenses	13,357.33	15,816.00
Other Operating Expenses	11,160.98	12,435.68
Operating Profit	26,863.54	30,965.22
Provisions (Other than Tax)	7,136.90	6,075.61
of which-Provisions for NPAs and Bad debts written off	4,350.52	6,470.86
Provision for Standard Advances	527.50	-688.51
Provision for Depreciation on Investment	1,704.03	-31.26
Other Provisions	554.85	324.52
Profit Before Tax	19,726.64	24,889.61
Provision for Tax	5,617.02	7,100.83
Net Profit	14,109.62	17,788.78

Net Interest Income of the Bank increased to '44,722 crore in FY 2024 from '41,356 crore in FY 2023, grew by 8.1% on a YoY basis. The Interest Income increased to '1,12,606 crore in FY 2024 by registering a growth of 25.7% on a YoY basis. The Interest Expense stood at '67,884 crore in FY 2024 which was at '48,233 crore in FY 2023.

Other Income of the Bank increased to '14,495 crore in FY 2024 which was at '10,026 crore in FY 2023, thereby registered a growth of 44.6% on a YoY basis. Operating expenses of the Bank stood at '28,252 crore in FY 2024 as compared with '24,518 crore in FY 2023. Operating Income of the Bank increased to '59,217 crore in FY 2024 from '51,382 crore in FY 2023, registered a growth of 15.2% on a YoY basis.

Total provisions (other than tax) and contingencies declined

to '6,076 crore during FY 2024 from '7,137 crore during FY 2023. Provisions for Non- Performing Assets (NPA) was at '6,471 crore in FY 2024 which was at ' 4,351 crore in FY 2023.

The Bank reported a Net Profit of '17,789 crore in FY 2024 from '14,110 crore in FY 2023, grew by 26.1% on a YoY basis. The Operating profit of the Bank grew by 15.3% at '30,965 crore in FY 2024 as compared with '26,864 crore in FY 2023.

Key Ratios
Key Ratios	FY 2023	FY 2024
Cost of Deposits - Global (%)	3.89	4.92
Cost of Deposits - Domestic (%)	4.09	4.97
Cost of Deposits - International (%)	2.37	4.57
Yield on Advances - Global (%)	7.54	8.53
Yield on Advances (Domestic) (%)	8.25	9.01
Yield on Advances (International) (%)	4.21	6.34
Net Interest Margin - Global (%)	3.31	3.18
Net Interest Margin - Domestic (%)	3.42	3.32
Net Interest Margin -International (%)	1.94	1.97
Cost-Income Ratio (%)	47.72	47.71
Return on Average Assets (ROAA) (%)	1.03	1.17
Return on Equity (%)	18.34	18.95

Cost of deposit (global) stood at 4.92% and Yield on Advances (global) improved to 8.53% in FY 2024. Net Interest Margin (NIM) global stood at 3.18% and NIM domestic stood at 3.32% in FY 2024. Cost to income ratio stood at 47.71% in FY 2024 decreased by 1 bps as compared with FY 2023. Return on Assets for FY 2024 improved by 14 bps to 1.17% in FY 2024 from 1.03% in FY 2023, reflects excellent performance in profitability. Return on Equity increased by 61 bps to 18.95% in FY2024 from 18.34% in FY 2023.

Resource Mobilisation

(' in crore)
SL	Particulars	FY 2023	FY 2024
No	Â	Â	Â
I	Total Deposits	12,03,688	13,26,958
II	International Deposits	1,56,313	1,98,444
III	Total CASA	4,75,097	5,14,366
IV	Total Current Account Deposits	1,04,001	1,20,411

SL No	Particulars	FY 2023	FY 2024
V	Total Savings Bank Deposits	3,71,096	3,93,956
VI	Global CASA %	39.47	38.76
VII	Domestic Deposits	10,47,375	11,28,515
VIII	Domestic CASA Deposits	4,42,511	4,66,401
IX	Dom. Current Account Deposits	75,111	76,386
X	Dom. Savings Bank Deposits	3,67,400	3,90,014
XI	Domestic CASA to Domestic Deposits (%)	42.25	41.33

Total Deposit of the Bank increased to '13,26,958 crore during FY 2024 from '12,03,688 crore during FY 2023, there by recorded a growth of 10.20 % during the period. The International Deposit of the Bank also increased to '1,98,444 crore as on 31.03.2024 from '1,56,313 crore as on 31.03.2023, recording a robust growth of 26.95 % on a YoY basis.

The global CASA of the bank increased to '5,14,366 crore as on 31st March 2024 from the level of '4,75,097 crore as on 31st March 2023, registered a growth of 8.27% on a YoY basis. The global current deposit of the bank increased to '1,20,411 crore as on 31st March 2024 from '1,04,001 crore as on 31st March 2023, marked a growth of 15.78 % on a YoY basis. The global Savings deposit of the bank increased to '3,93,956 crore as on 31st March 2024 from '3,71,096 crore as on 31st March 2023, recorded a growth of 6.16% during the period. The global CASA % to global deposit stood at 38.76% during the period.

Domestic Deposits and Domestic CASA

Domestic Deposit of the Bank increased to '11,28,514 crore as on 31.03.2024 from '10,47,375 crore as on 31.03.2023, registering a growth of 7.75 % during the period.

Bank's domestic CASA deposits increased by 5.40% and rose to '4,66,401 crore as on March 31, 2024. Bank's Domestic CASA ratio to the domestic deposit stood at 41.33% during FY 2024. Current Account deposits registered growth of 1.70% and reached to '76,386 crore, while Savings Bank deposits reached to '3,90,014 crore with an increase of 6.15% as on 31.03.2024.

Low-cost deposit mobilization initiatives

During FY 2024, Bank opened 91.85 Lakhs new CASA accounts. Within this, the thrust was for opening of accounts in paperless mode using VCIP & TAB mode. Bank launched innovative & cutting-edge SB & CA Products viz. 3 new SB Account bob LITE, bob BRO, bob NRI Power Pack, 7 New Current Account bob Lite Current Account, bob Women Power Current Account, bob Smart Current Account, bob Gold Current account, bob Platinum Current Account, bob Rhodium Current Account, bob Diamond Current Account.

Bank also revamped existing CA & Salary SB accounts and given extensive focus in acquiring new accounts.

Special emphasis was placed on increasing the penetration of key CASA enablers, which include POS systems, QR codes with sound boxes, IP and BCMS. Additionally, efforts were made to activate dormant accounts, initiate DEAF activations, and funding of zero balance accounts.

On the digital front, the Bank has significantly increased client acquisition through various digital channels such as VCIP and TAB mode. During the FY-2024, the Bank opened 1,02,299 VCIP SB Accounts and 33,799 B3-Digital Accounts. Bank opened 2,44,582 Current Accounts in FY-2024; of which 82.11 % (2,00,844) accounts opened through TAB mode. Furthermore, 55,93,991 Non-FI SB Account opened in FY 2024; of which 66.92 % (37,43,914) accounts opened through TAB mode.

The Bank introduced the bob Parivar Concept, “My Family, My Bank,” which extends a range of benefits to family members. This initiative includes tiered offerings for Premium Customers, segmenting them based on their CASA balances into three categories: RISE, Shine, and Sparkle. Sparkle customers receive personalized services through assigned personal Relationship Managers to build strong connect and improvise the banking services.

Bank's integration with the Ministry of Corporate Affairs Portal for opening Current Accounts of newly formed companies has resulted in the opening of a total of 5,186 current accounts.

Bank has established a dedicated Defence Banking Vertical, which is headed by a Chief Defence Banking Advisor, a retired Lieutenant General. This vertical is further supported by Deputy Defence Banking Advisors who are posted at key locations to effectively penetrate the Defence segment.

Bank is leading in providing Doorstep Banking Services through the PSB Alliance Doorstep Banking Services initiative. During FY 2024, the Bank successfully completed 35,494 Doorstep Banking services.

Baroda Cash Management Services

The Bank's Cash Management Services business, Baroda DigiNext, which provides a wide range of Omni-channel digital solutions for Corporate and Government customers to manage their cash flows and liquidity, has witnessed rapid growth over the last three years. This solution is utilized by key Government Departments as well as Corporate Entities for managing their Collections. Baroda DigiNext also offers integrated and paperless payment solutions to both government and corporate customers. The Solution provides valuable real-time information on all receipts, including electronic payments, cheques, and cash deposits at all branches.

In FY 2023-24, Baroda Cash Management Services continued to rapidly expand its footprint, acquiring over 2,600 new relationships. More than 9,000 large customers are utilizing the Bank's Cash Management Services, executing over 8 Crore transactions during the year.

Credit Expansion

The Global Gross advance of the bank increased to '10,90,506 crore during FY 2024 from '9,69,548 crore during FY 2023, thereby registering a growth of 12.5% on YoY basis. The gross domestic advance increased to '8,98,116 crore as on 31st March 2024 from '7,95,560 crore as on 31st March 2023, there by marked a growth of 12.9% during the period. The international gross advance of the bank increased to '1,92,390 crore during FY 2024, from '1,73,988 crore during FY 2023, there by registered a robust growth of 10.6% on a YoY basis.

(' in crore)
Credit Portfolio of the Bank
Segment	FY 2023	FY 2024	YoY (%)
Retail*	1,78,037	2,14,942	20.7
Agriculture	1,24,247	1,38,640	11.6
MSME*	1,08,196	1,19,415	10.4
Corporate	3,40,408	3,79,747	11.6
Others	44,672	45,372	1.6
Gross Domestic Advances	7,95,560	8,98,116	12.9
International Gross Advances	1,73,988	1,92,390	10.6
Global Gross Advances	9,69,548	10,90,506	12.5
*Ex-pool purchase (Organic)

The growth in Advance portfolio was led by Retail Advance (organic) which increased to '2,14,942 crore grew by 20.7%, Agriculture advance which increased to '1,38,640 crore grew by 11.6%, MSME (organic) segment which rose to '1,19,415 crore by 10.4%, on a YoY basis in FY 2024. The retail advance including pool purchase was at '2,23,911 crore and MSME including pool purchase was at '1,25,899 crore as on 31.03.2024.

Corporate Loan of the Bank increased to '3,79,747 crore in FY 2024 from '3,40,408 crore in FY 2023, grew by 11.6% on YoY basis.

The Bank has successfully implemented many initiatives to improve its Advance Portfolio with the help of Digital Banking across segments like Retail, Corporate, Priority, MSME, Agriculture etc. Bank has launched Digital Education Loan for Executive Development Program (EDP) of Premier Institutes in India through Digital Lending Platform. Bank has launched a full-fledged Branch Officer Assisted Journey for Digital Personal Loans to conduct the end to end digital journey, which also facilitate the branches to support at different stages of the customer self- service journey. In MSME segment, Bank has integrated JanSamarth Portal with internal loan processing systems to provide, End- To- End Digital Mudra loans upto '10 lakh. In Agri portfolio, Bank has launched Digital Journey for Gold Loan to provide superior banking experience to the customers. Bank has launched digital process for renewal of BKCC loans. The Bank has

also conducted many campaigns and marketing activities at Head Office, Zonal, Regional and branch level to attract new customers in our fold. The continues focus on Branch Banking and Digital Banking together helped the Bank to expand its Advance Portfolio across the sectors during FY 2024.

Corporate Credit

Corporate credit in the Bank is serviced through 33 specialized Corporate Financial Services (CFS) & Mid Corporate branches (MCB) which manage approximately 90% of the total standard corporate credit portfolio of the Bank. The corporate credit portfolio of the Bank increased to '3,79,747 crore in FY2024 as compared with '3,40,408 Crore in FY 2023 there by recorded a growth rate of 11.6% on a YoY basis.

Credit Rating Distribution1	FY 2023	FY 2024
A and above	86%	90%
BBB	7%	5%
Below BBB	3%	3%
Unrated	4%	2%

*External Rating Distribution of Domestic Advances above '50 crore

Total portfolio comprising of A & above in FY 2024 was 90%as against 86% in FY 2023.

Corporate Banking - Revamped Structure

During the year bank has continued with its strategy to focus on Mid Corporate Advances, through -4- Mid Corporate Clusters located at strategic locations i.e. New Delhi (North), Chennai (South), Mumbai (West) and Kolkata (East) and Mid Corporate Branches tagged to them.

Target Market approach

The Bank follows a target market approach which has the following features:

•    Identification of industries / sectors for growth based on industry outlook i.e. the combined output of various industry parameters including market size, growth, demand-supply outlook, cost structure, competition, financial performance, government policies and investment outlay.

•    Sector-wise business plan for target market lending, based on exposure caps, existing exposures and further appetite for fresh acquisitions.

•    Detailed account planning with structured calling plans for meetings, identifying business opportunities, approval and closure.

•    Execution of the business plan under target market approach through dedicated relationship managers across the Bank.

facility and other retail products.

MSME Credit

The MSME portfolio of the Bank (excluding TWO, including pool purchase) increased to '1,25,899 crore in FY 2024 from '1,14,918 crore in FY 2023, registered a growth of 9.56% on a YoY basis. During the year, the Bank has taken the following initiatives to augment MSME business with improved asset quality.

1.    Formation of 330 specialized MSME Branches with exclusive team.

2.    Digitalization of MSME loan journey through the state of art “Tejas “Platform.

3.    Enhanced focus on emerging product segments leading to overachievement of Target.

•    CV/CME segment achieved 116% of the target with a YOY growth of 67%.

•    TreDs has achieved 194% of the target with a YOY growth of 173%.

•    Supply Chain Finance has achieved 149% of the target with a YOY growth of 53%.

4.    Incremental acquisition of CMR 1 to 3 accounts thus improving asset quality. It has grown from 52% in FY23 to 585 in FY24.

Additionally, Bank has achieved almost all the Target under the following key Government schemes-

1.    100% under PMMY Scheme.

2.    99.82% under Standup India.

3.    95.58 % under PM Svanidhi scheme (Disbursement against the applications received).

Retail Credit

The Retail Asset of the Bank (excluding TWO, including pool purchase) increased to '2,23,911 crore in FY 2024 from '1,87,688 crore in FY 2023, registered a growth of 19.30% on a YoY basis. The organic Retail Loans increased to '2,14,942 crore in FY 2024 from '1,78,037 crore in FY 2023, an increase of 20.73% over the previous year. Retail Assets organic portfolio constitutes 23.95% (excluding LABOD and Staff Loan) of domestic Advances as on 31st March 2024.

Retail portfolio (organic) of the Bank

(' in crore)
Retail Credit Portfolio of the Bank
Segment	FY 2023	FY 2024	YoY (%)
Home Loans1	98,014	1,11,791	14.1
Auto Loans1	31,261	38,697	23.8
Mortgages Loan1	16,801	18,715	11.4
Education Loans	8,196	9,800	19.6
Personal Loans	19,645	29,784	51.6
Gold Loans	2,420	4,546	87.9
Others	1,700	1,608	(5.4)
TOTAL RETAIL CREDIT	1,78,037	2,14,942	20.7
*Ex-pool purchase (Organic & Excl. TWO)

The key highlights of retail business in FY 2024 include:

Retail Loan advance share as percentage of total domestic loan book increased to 23.93% in FY 2024 from 22.37% in FY 2023

To ensure customer convenience and eliminating the need for physical documentation and branch visit, During the FY24 ' 8728 Crore of Personal Loan, ' 386 Crore of Auto Loan, ' 38 Crore of Top Up Loan, ' 21 Crore of Education Loan and '8.00 Crore of Pension Loan disbursed through end-to-end digital journey.

During FY 2024 fresh 1427119 Retail loan Accounts sanctioned amounting of 86,829 Crore

Auto Loan, Personal Loan & Total Retail Loan portfolio has shown excellent growth of 23.79%, 51.61% and 20.73% respectively and surpassed industry growth rate.

The bank has helped students to realise their dreams by distributing education loans amounting to '2844 Crore Out of this 41% of disbursed amount were extended to Female students.

Bank's Loan Origination system was integrated with Jan Samarth portal of Government of India for faster sanctioning of rooftop solar loans under PM Surya Ghar Muft Bijli Yojana.

The GNPA in Retail Loan Portfolio (Exc. Pool and LABOD) decreased substantially from 1.50% in March 2023 to 1.20% in March 2024.

Bank has outpaced industry growth in Auto Loan, Personal Loan and Total Retail Advances.

The GNPA in Home Loan reduced from 1.56% in FY2023 to

0.98% in FY2024 through proactive monitoring and best in class underwriting.

In FY2023-2024 bank has disbursed ' 29463 Crore & ' 17733 Crore in Home Loan and Auto Loan respectively.

In Home Loan 101141, Auto Loan 173592, Education Loan 25791 and in Personal Loan 811426 new customers added in FY24.

Digitization of end-to-end process in Personal Loan, Auto Loan, Education Loan, Pension Loan, Home loan Top-up .

Strengthening collaboration with Corporate DSA, DST Channel, BCs for leads.

New Referral DSA channel was started (RDSA) and portal for submission of leads by RDSA launched.

Continuation of Retention strategy and cross-selling for Home, Mortgage loan and Auto Loan customers who are approaching other Bank.

Fixed ROI option introduced in all schemes of Baroda Car Loan

Aligned our products as per market trends and needs.

Implementation of revamped structure for processing & sanction of mortgage-based Retail Loans in RAPCs.

Education Loan ROI aligned in 98 identified institutes for overseas study.

Project Approval module implemented in LLPS.

Revised ELSC structure implemented on Pan India.

“MO GHARA” scheme implemented under Government Housing Assistance in Rural Areas scheme in Odisha State.

Education Loan ROI for premier & scholar scheme aligned with market.

Fixed ROI option introduced under Personal Loan.

Introduction of Fixed Rate option for new as well as existing borrowers in Mortgage Loan as well as Future Rent Receivables.

Introduction of Fixed Rate for Baroda pre-Owned Cars and -2- wheeler loans.

Fixed Rate option is introduced for existing as well as new Education Loan Accounts.

Introduction of Fixed Rate of Interest option in Home Loans.

PM Surya Ghar Yojana- Standalone and composite rooftop solar schemes were launched.

CERSAI Finacle API integration completed.

Business Partners i.e. DSAs & DSTs were provided a mobile application named Lead force App for quicker submission of leads into the Bank's loan processing system.

Auto review functionality was implemented for Auto loans & Personal Loan to improve the operational efficiency and productivity of branches.

Rural and Agricultural Lending

Agriculture & its allied sectors, is the largest livelihood provider in India particularly in the vast rural areas and it also contributes significantly to the Gross Domestic Product (GDP).

Bank has a network of 8,243 domestic branches, of which 4,966 rural and semi urban branches are leveraged fully for priority sector and agriculture lending. The Bank's agriculture advances increased to '1,38,640 crore as on 31st March 2024 forming about 15% of the gross domestic credit.

Bank is the convener of State Level Bankers' Committee (SLBC) in 3 states i.e. Uttar Pradesh, Gujarat and Rajasthan and Union Territory Level Bankers' Committee (UTLBC) in the Union Territory of Dadra and Nagar Haveli and Daman and Diu. Bank also shoulders the Lead Bank responsibility in 75 districts across the country.

Bank continues to be one of the leaders in lending to agriculture sector, which received an impetus with the Government's vision of “Atmanirbhar Bharat”. The Bank has moved beyond granting simple farm based credit to a more diversified rural lending strategy to encourage capital generation to farmers and build a robust infrastructure in agriculture and Animal Husbandry. We are also focusing more on newly introduced products such as Agriculture

Infrastructure Fund (AIF), Animal Husbandry Infrastructure Development Fund Scheme (AHIDF), PM Formalisation of Micro Food Processing Enterprises (PMFME), Pradhan Mantri Kisan Urja Suraksha Evem Utthan Mahabhiyan Scheme (PM Kusum), Pradhan Mantri Matsya Sampada Yojana Scheme (PMMSY) and compressed biogas products.

Bank continues to focus on its flagship products like KCC, Financing to Self Help Groups (SHGs), Agri Gold Loans, Farm mechanisation (Tractor loans), Horticulture loans, Financing to Farmer Producer Organization / Farmer producer company (FPO/FPC), Hi-tech Agriculture and Food and agro-processing. During the year, the Bank has issued 4.59 lakh new Kisan Credit Card (KCC) of which 1.18 lakh are Animal Husbandry and Dairy (AHD) KCC issued to farmers engaged in animal husbandry and fisheries activities. As part of its microfinance initiatives, Bank has credit linked 1,13,726 SHGs by granting loans amounting to '4,105 crore during FY 2024.

Bank is pursuing tie ups with various private partners to enhance credit linkage of SHGs. Bank has also introduced TAB banking facility, to improve Turnaround Time and to enable hassle free instant Savings Bank Account opening for SHGs. In Tractor loans, rate of interest has been linked with LTV of Tractor for the convenience of farmers. During FY 2023-24, Bank has introduced “Baroda Kisan Pride” new product for the large farmers for scientific and progressive methods of farming for high yielding crops. Our Bank is a partner in the development of the digital KCC journey, on the Jan Samarth portal, initiated by the Government of India.

Bank had introduced Centre for Agriculture marketing and Processing (CAMP), a dedicated centralized centres for processing of agriculture loans with a special focus on nontraditional and high value Agri advances at its various zones and regions. During FY 2023-24, CAMP has sanctioned loans to 34,678 farmers, amounting to ' 3,601 Cr.

“BARODA KISAN PAKHWADA” is Our Bank's annual farmer outreach programme which is observed every year. During “BARODA KISAN PAKHWADA”, Branches of our Bank organize various functions/ events of SHG/ health check-ups of live stocks /Soil Testing and other activities/ meetings to reach out to maximum number of farmers. During FY 2023-24 “BARODA KISAN PAKHWADA” was observed from 16.11.2023 to 30.11.2023 and we have conducted 12165 farmer outreach programmes and connected 468207 farmers.

Priority Sector Lending

Average Priority sector advances of the bank increased to ' 3,01,917 crore during FY 2024 from ' 2,73,583 crore as of FY 2023 and registered YoY growth of 10.36%.

Advances to SC/ST Communities

The outstanding advances to Scheduled Caste/ Scheduled Tribe (SC/ST) communities went up to '21,106 crore as of 31^st March 2024. The SC/ST communities accounted for 17.57% share in total advances granted to weaker sections by the Bank.

Further, special thrust is given by the Bank in financing SC/ST

communities under various Government sponsored schemes such as National Rural Livelihood Mission (NRLM), MUDRA Loan, Startup India and Stand-Up India.

Gold Loan

Bank's gold loan portfolio increased to '47,629 crores, as on 31st March 2024, from '38,518 crores, on 31st March 2023, registering a growth of 23.65%. Within gold loan portfolio, Agriculture gold loans grew by 19.79%, reaching '42,921 crore (excluding TWO) in FY 2024 from '35,829 crore in FY 2023. Retail gold loan increased to '4,552 (including TWO) crore in FY 2024 from '2,419 crore in FY 2023, registering a growth of 88.16%. During the year, the Bank has added 86 new gold loan disbursing branches, taking the total number of Gold Loan designated branches to 5,990 in FY 2024 from 5,904 branches in FY 2023. The increase in spread of Gold loan designated branches across the country with share of geographies other than southern parts stands at 28.53% in FY 2024 as compared to 27.11% in FY 2023. Average ticket size of a gold loan increased to '1.74 lakhs in FY 2024 from '1.58 lakhs FY 2023. Average amount of gold loan per branch increased to '7.95 crore in FY 2024 from '6.52 crore in FY 2023. Credit quality of the Gold Loan portfolio remained healthy, with a GNPA ratio of 0.20% as on 31st March 2024.

Financial Inclusion (FI)

In order to provide universal banking services to all sections of the society especially to rural, semi-urban and urban poor at an affordable cost, Bank has taken financial inclusion as a social commitment and also an opportunity to tap business through BC model. The Bank has been actively working towards ensuring financial inclusion in the country through its branches and BC network. With the advent of technology, innovative steps are being taken for serving the unbanked areas. Bank expanded its BC network to 54,345 as on March 31, 2024 to cater to rural, semi urban, urban & metro areas across the country. Bank took the following initiatives towards promoting financial inclusion:

•    Introduced Online Loan Lead portal for BCs.

•    Launched opening of Non-BSBD Account at BC Point.

•    Launched Android based BC Inspection App for monthly inspection of BC points by officials of the Bank and BC Supervisors.

•    As a risk mitigation measure voice over in Bilingual for every transaction was introduced at BC points.

•    Opened 82 additional Center for Financial Literacy (CFL) over and above the existing 114 CFLs.

•    Introduction of Fixed Incentive to Business Correspondents.

•    Standardization of BC Working Hours - 8:00 AM to 8:00 PM

Performance highlights under financial inclusion during FY 2023-24:

•    Pradhan Mantri Jan Dhan Yojana (PMJDY) accounts increased to 616 lakhs in March 2024 from 585 lakhs in March 2023 with YoY growth of 5.29%.

•    PMJDY deposits increased to '32,337 Crore as on March 2024 from ' 27,531 Crore as on March 2023 with YoY growth of 17.46%.

•    The Bank's share among PSBs stood at 15.20% in PMJDY accounts and 17.69% for deposits in PMJDY accounts, second highest only after SBI.

•    Zero balance PMJDY accounts of the Bank reduced to 4.98% as on 31st March 2024 as against 5.22% as on 31st March 2023.

•    As on 31^st March 2024, Micro Insurance enrolment under PMJJBY scheme is 70.44 lakhs and under PMSBY scheme is 253.84 lakhs.

Performance of RRBs sponsored by Bank of Baroda

The Bank sponsors three Regional Rural Banks (RRBs) namely Baroda U.P Bank, Baroda Rajasthan Kshetriya Gramin Bank and Baroda Gujarat Gramin Bank in the state of Uttar Pradesh, Rajasthan and Gujarat respectively. The aggregate business of these three RRBs increased to '1,67,173 crore as on 31st March 2024 from ' 1,48,737 crore as on 31st March 2023 i.e. 12.39 % on YoY basis. These RRBs together posted a net profit of ' 1,121.36 crore during FY 2024, increased by 56.06 % as compared with net profit of ' 718.54 crore during FY 2023. The net worth of these RRBs put together improved to ' 6,887 crore as of 31st March 2024 from the level of ' 5,704 crore as of 31st March 2023.

Awards received by RRBs.

Our three sponsored RRBs put together bagged 43 top performing awards (BGGB -12, BUPB - 19, BRKGB - 12) under various campaigns launched for enrolment of Atal Pension Yojna from Pension Fund Regulatory and Development Authority (PFRDA).

Baroda U. P. Bank (BUPB) has received the award from Hon'ble President of India in New Delhi on 05.11.2023 for outstanding performance under PMFME category amongst all RRBs in India and award from Hon'ble Deputy Chief Minister of Uttar Pradesh on 24.11.2023 for the Excellent Performance under SHG category.

Baroda Rajasthan Kshetriya Gramin Bank (BRKGB) has begged seven prestigious awards in the Annual Technology Awards ceremony organized by IBA on 09^th February, 2024 in the following categories;

1.    Technology Bank of the Year (for consecutive Nine year)

2.    Best Financial Inclusion (for consecutive Fifth year)

3.    Best Fintech & DPIU Adoption

4.    Best Digital Engagement

5.    Technology Talent (Runner)

6.    Best IT Risk Management (Special Mention Category)

7.    Best AI / ML Bank (Special Mention Category)

•    Won 2 awards in IBEX India BFSI Tech awards.

1. Best Technology Bank.

2. Excellence in Financial Inclusion (for RRBs/ Small Finance Bank/ Coop Bank category).

•    National Award for outstanding performance in SHG Bank Linkage 2022-23 in Northern Region.

•    Top Performer in RRB Category PAN India Level under BHARAT Campaign (15.07.2023 to 31.08.2023) for AIF Scheme.

Baroda Gujarat Gramin Bank (BGGB) has begged two prestigious awards in the Annual Technology Awards ceremony organized by IBA on 09^th February, 2024 in the following categories.

1.    Best Technology Talent (Special Mention Category)

2.    Best Technology Bank (Special Mention Category) Stressed Asset Management

The Bank believes that continuous day-to-day monitoring is the first step towards reduction in non-performing loans and in ensuring good recovery. For this, the Bank undertook various steps and formulated strategies to augment recoveries and reduce slippages.

Bank has strategies to touch each and every NPA account in a scientific manner. Hence Bank has having special skill set under an Apex Vertical ‘Stressed Assets Management Vertical', at Corporate Office. In this vertical -5- Stressed Assets Branches (SAM) were set up with special skill set to cater all accounts under National Company Law Tribunal (NCLT), -12- Stressed Assets Recovery Branches (SARB Branch) at zonal level were established to handle NPA accounts other than NCLT with outstanding balance above '5 crore. These Branches are under direct supervision of corporate office to reduce TAT Further -69- Regional Stressed Assets Recovery Branches (ROSARB Branch) at Region level were established to handle NPA accounts with outstanding balance above '20 lacs to '5 crore.

Under Govt of India Digital Initiative, Bank has taken several steps for end-to-end digitalization of the entire recovery and monitoring procedure without paper movement and Real Time basis. In this connection,

1.    “QLICK” It picks several data points from FINACLE on real time basis without manual intervention and calculates Days Past Due (DPD) Report, NPA Movement Chart and Mock Runs - for forecasting daily degradations.

2.    “ILMS” Mobile app and Desktop based portal which is an online repository of entire NPA A/Cs irrespective of amount. It provides online 360-degree live monitoring of accounts without any manual intervention, like SARFAESI status, DRT/NCLT status, Provisioning, Daily Recovery, lawyers performance analysis and online submission/ sanction of OTS proposals it reduced the TAT.

3.    Bank is member of e-Bkray portal which is being used for auction of properties under Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act (SARFAESI).

4. Under EASE 4.0 guidelines, the Bank have developed and deployed automated “One Time Settlement” procedure by providing separate link on Bank's website to ensure early disposal of small ticket size NPA accounts.

Bank also adopted the following strategies for recoveries and reduce slippages.

1.    To have a proper monitoring of the portfolio of Agriculture, MSME and Retail Loans we have taken a cluster / area approach with dedicated recovery officers.

2.    Proper allocation of small NPA accounts to Recovery Agents / Feet on Street to be done by Portfolio Managers at ZO/RO level and properly monitoring them.

3.    Arranging the National Lok-Adalats & Introducing the Pre Lok-Adalat meetings for maximum participation of borrower during the Lok Adalats.

4.    Bank has initiate the SARFAESI action in all eligible NPA accounts and continue the action till conclusion / disposal of asset & recovery in the account. We are also listing/ publishing the auction property details on Bank's website, Newspaper, Radio, social media web portals and as well as leading property web sites.

The movement of NPAs during the last two years is as under:

(' in crore)
Particulars	FY 2023	FY 2024
Gross NPA	36764	31834
Gross NPA (%)	3.79%	2.92%
Net NPA	8384	7213
Net NPA (%)	0.89%	0.68%
Additions to NPAs	11150	10397
Recovery/ Upgradations	10100	4729
Write offs including TWOs	17998	10518
Recoveries in write off accounts	4781	5098
Provisional Coverage Ratio (including TWO) (%)	92.43%	93.30%
Provisional Coverage Ratio (excluding TWO) (%)	77.19%	77.34%
As per asset classification, the bifurcation of loan book is as given below: (' in crore)
Asset Category	FY 2023	FY 2024
Standard Advances	932784	1058672
Gross NPA	36764	31834
Total Gross Advances	969548	1090506
Gross NPAs comprising
Sub-standard	5439	7816
Doubtful	19182	13118
Loss	12143	10900
Total Gross NPA	36764	31834

Bank believes in Nation Building by extending hands to stressed entrepreneurs through restructuring as per RBI guidelines.

In order to address the large number of small NPA accounts, Bank had launched in FY2024 its special One-Time Settlement (OTS) scheme “Vasooli Sankalp” for settlement of unsecured NPA (DBII/DBIII/Loss) /TWO/ PWO accounts having outstanding balance up to '5.00 Crore under MSME, ' 1.00 Crore under Retail and ' 0.25 Crore under Agriculture category. The Bank recovered NPA accounts amounting to '866 crore under Vasooli Sankalp scheme.

To have better and targeted monitoring mechanism & reduction in SMA - I & SMA - II accounts of large corporate are being monitored by Stressed Asset Management Vertical in coordination with Credit Monitoring Vertical to find out the resolution and exploring all prospects of recovery, up gradation.

International Banking

The Bank has -91- overseas branches/offices across -17-countries comprising of -39- overseas branches/offices (including -1- International Banking Unit in GIFT City, Gandhinagar, Gujarat, India and -9- EBSUs in UAE), -52-branches of the Bank's -7- overseas subsidiaries. In addition, Bank has one Joint Venture viz. India International Bank (Malaysia) Bhd. in Malaysia and one associate bank viz. Indo Zambia Bank Ltd. in Zambia with -32- branches.

The Bank has presence in the world's major financial centres of New York, London, Dubai, Singapore and Australia. In addition, Bank has a wholesale branch in GIFT City (SEZ), Gujarat, India which is treated as an offshore banking unit and has chosen the branch as a centre for business growth taking into consideration the immense business potential, tax advantage, Government initiatives etc. Bank has taken various proactive steps in creating world class infrastructure for the branch in IFSC including state of the art dealing room for international treasury of global standard at GIFT city.

Bank pursues a strategy of driving growth and value by meeting the international banking requirements of Indian corporates; catering to India linked cross-border trade flows for Indian and locally incorporated companies or firms and being the preferred Bank for NRIs/ Persons of Indian Origin.

Looking into the available business opportunities, Bank has also diversified the advances portfolio by taking exposure on Non-India related syndication loans in the primary and secondary market. Also, various new products have been launched to broaden the product basket.

Further, in overseas centres, substantial progress has been made in IT up gradation for end-to-end business solution, with a focus on digitization and centralization, to improve productivity and customer experience. Bank is continuously integrating multiple platforms of technology to generate synergies.

Bank has strategically undertaken rationalization of its overseas presence based on a comprehensive evaluation framework. As part of this exercise, in recent years, Bank has closed its operations in Hong Kong, South Africa and a

branch/ office each in UAE, Oman and Mauritius. The Bank is continuously consolidating and re-organising its International Operations in line with the new global environment and focused on rebalancing the portfolio with a view to manage risks, shed low-yield assets and increase profitability.

As of March 31, 2024, the Bank's total business (net) from international branches was ' 3,83,409 Crores and constituted 16.02% of the global business. Total deposits were at '1,98,444 Crores while net advances were ' 1,84,965 Crores.

FOREIGN EXCHANGE BUSINESS

With an objective to implement high standards of compliance in line with extant regulatory guidelines with improved operational efficiency, service delivery and quality, our Bank has set up Trade Finance Back Office at GIFT City, Gandhinagar(India's 1st smart city) along with BCP set up at Bengaluru to cater trade finance services of its pan India customers. The significant developments aimed at enhancing the overall foreign exchange business in the current financial year are as follows:

•    Bank has automated cross border inward remittances below USD10000 for certain purposes. During FY 2324 we have successfully handled 59,368 transactions through Straight through processing, achieving significant improvement in TAT.

•    Bank has launched Liberalized Remittance Scheme (LRS) facility through BOB-World enabling individual customers to initiate transactions under LRS for specific purposes viz. gift / family maintenance from their Mobile. Approximately3700 transactions have been facilitated through the platform.

•    Bank has created an accessible 24/7 SMART TRADE PORTAL to its customers, enabling them to initiate inland as well as forex trade transactions from their office, reducing the necessity for branch visits. This channel has witnessed considerable growth during the year with doubling of the number of customers on-boarded and routing of 10% of the total transactions through the Portal.

•    Bank has partnered with NeSL (National E-Governance Services Limited) to issue Bank Guarantees end to end, via Digital Mode, which will increase the security and reduce TAT In this initiative, our Bank has emerged as the fastest inthe industry to issue 1,000 Electronic Bank Guarantees (e-BGs) on the National e-Governance Services Limited (NeSL) platform for the quarter ended December'23. As of March'24, our cumulative eBG issuance has doubled to2010.

•    As on 31st Mar 2024, Bank has established 13 Special Rupee Vostro Accounts for Banks worldwide to spearhead the Government of India's drive to promote INR denominated trade transactions via the Special Rupee Vostro Account (SRVA) mechanism.

•    Bank has fully centralized processing of inland trade transactions from August 2023, thereby successfully consolidating the processing of both inland and Forex trade finance transactions through the Trade Finance Back Office.

Domestic Treasury Operations

The Bank operates its treasury operations from a state of the-art dealing room at its Corporate Office in Mumbai. The treasury is a prominent player in various markets such as foreign exchange, interest rates, fixed income, money market, derivatives, equity, currency and interest rate futures and other alternate asset classes. The Bank offers various services like interest rate swaps, currency swaps, currency options and forward contracts through authorised branches dealing in foreign exchange across India.

Treasury maintains the regulatory requirements of CRR and Statutory Liquidity Ratio (SLR) and manages the fund position. Treasury borrows/invests in money market and capital market instruments as part of fund management operations.

The total size of the Bank's domestic investment book as of 31st March 2024 stood at '3,56,820 crore. The share of SLR securities in total investments was 84.30%. The percentage of SLR securities (unencumbered) to Net Demand and Time Liabilities (NDTL) as of 31st March, 2024 was at 23.81%. The Bank capitalized on the opportunities offered by yield movements. The Bank managed its portfolio efficiently and maintained yields on total investment for FY 2023-24 at 7.21%(including profit on sale). During FY 2024, the profit on sale of investment and foreign exchange earnings were '1,498 crore and ' 630 crore respectively.

Government Business

The Government Relationships Vertical plays a pivotal role in the strategic framework of the bank. It serves as a cornerstone in meeting the diverse banking needs of both Central and State Governments, as well as Public Sector Undertakings (PSUs) across India. Our comprehensive suite of services encompasses a wide array of financial transactions crucial to the functioning of government bodies.

One of our primary responsibilities involves the seamless processing of payments related to Central Government and State Government pensions, postal transactions, and Treasury/ sub-Treasury transactions. Additionally, we manage various Government savings and investment schemes such as the Public Provident Fund, Senior Citizens' Saving Scheme, Sukanya Samriddhi Yojana, National Pension System, Atal Pension Yojana, e-Kisan Vikas Patra, RBI bonds Gold Monetization Scheme, Mahila Samman Saving scheme , and Sovereign Gold Bonds. These services not only contribute significantly to the bank's fee income, with a notable '124.32 crore in FY 2023-24, but also bolster our reputation and goodwill in the banking sector.

Moreover, our role extends beyond transactional services. We actively assist in the opening of accounts for various State and Central Government organizations, fostering a symbiotic relationship by mobilizing Current Account Savings Account (CASA) deposits for the bank. Our commitment to providing holistic solutions is evidenced by our efforts in facilitating the onboarding of customers to government portals such as the Government e-Marketplace (GEM) portal and the Public Financial Management System (PFMS). These initiatives

 

not only strengthen our existing relationships but also pave the way for establishing new partnerships and expanding our CASA base. As of March 31, 2024, the total Government CASA of the bank amounted to ' 55,435 crores, representing 11.88% of the total bank's CASA.

Furthermore, our dedication to innovation and technology is paramount. We offer customized IT solutions to government departments nationwide, catering to their specific needs and requirements. By leveraging technology, we enhance efficiency, streamline processes, and ensure the seamless mobilization of government CASA.

As an accredited banker to esteemed ministries such as the Ministry of Health and Family Welfare and the Ministry of Law & Justice. Our focus extends beyond transactional efficiency; we prioritize providing allied services that add value to our government partners. This includes initiatives such as facilitating the onboarding of government departments onto the PFMS Portal, actively canvassing government CASA accounts, and providing comprehensive support to branches engaged in government business.

In essence, our Government Relationships Vertical serves as a trusted partner to government entities, offering a comprehensive suite of banking services tailored to their unique needs. With a steadfast commitment to excellence, innovation, and customer-centricity, we continue to play a pivotal role in the nation's economic development and governance.

Wealth Management

Over the years, the Wealth Management Vertical continues to be a Strategic Business Unit in your Bank, with a primary goal of expanding Assets Under Management across various business lines while delivering best of class Insurance & Investment products and services to vast customer base of over 14 million through extensive network of 8200+ branches.

The industry has taken note of your Bank's dedication to Wealth Management Services, by awarding Top Performer award under the category “Equity Champions” for Banks by Cafe Mutual, for outstanding performance in the fiscal year.

To meet the needs of both retail and affluent segments, your Bank is actively recruiting and deploying skilled professionals from the market, while also ensuring that existing staff members possess the necessary certifications and knowledge to effectively serve all segments, including the non-radiance ones.

Embracing digitization is a key aspect of your Bank strategy to enhance distribution processes, aiming for efficiency and seamlessness in customer service. To achieve this, your Bank has partnered with two new aged tech companies, Zopper and Optimum Solution, to offer tailored made digital Insurance & Investment solutions viz., SmartInsure and SmartInvest. The goal of your Bank is encourage digital adoption and migrate transactions to digital channels, thereby enhancing the overall customer experience.

Your Bank always gives strong emphasis in creating a

skilled workforce and believes in maintaining an ethical and transparent sales process. To support this, your Bank has engaged three reputable training and development providers to design customized training modules for staff members, ensuring business with compliance.

In the fiscal year 23-24, your Bank achieved significant milestones, mobilizing premiums of '959 Crores in life insurance segment and '599 Crores in non-life insurance segment. Despite market volatility, with a focus on net sales the Mutual Fund AUM of your Bank stands at an impressive '13,860 Crores.

Your Bank remain committed to fostering engagement with both external and internal stakeholders through a series of unique initiatives during the years as under:

•    “Wealth Insight” - monthly e-magazine for Radiance Customers providing market outlook.

•    “Thursday Thoughts” - weekly e-mailer to spread knowledge on Wealth Business

•    “Wealth Bulletin” - In House bimonthly e-magazine of WMS vertical

•    “Leadership Chronicle”- an insightful talk show featuring prominent personalities from the banking and finance sectors.

•    “Transcend “- Wealth Management tie-up Partners Conclave - 1^st of its kind with an objective to nurture & strengthen partnership across the wealth business, outline wealth business strategy for the next 3-5 years.

•    “Expert Insight” - Webinars /Sessions on various financial aspects with market experts including decoding Annual Budget, Decoding Market Cycle, Market Outlook etc.

•    “Investogram” - A simple, easy to understand, animated guide that meticulously covers the eight vital investment cornerstones, enabling novice as well as seasoned investors to create wealth over the long term.

Digital Banking products

The Bank is committed to digitisation and continuously strives to migrate transactions to digital channels which leads to better customer experience. The major focus of digital banking is to make Bank's products available to customers through digital and alternate delivery channels. The key instruments in digital banking are bob World, bob World UPI, Baroda Connect, Debit Cards, Prepaid Cards, BHIM Aadhaar, ATM and Cash Recycler machines, Self Service Passbook Printers(SSPBP), TAB Banking, Internet Payment Gateway (IPG), Bharat Bill Payment Services (BBPS), Baroda FASTag, Bharat QR, Point of Sale (POS), etc.

bob World

During the FY2024 the Bank has been able to achieve 28.48 Lacs bob World Activations. As of March 31, 2024 a total of 306 Lakhs bob World activations have been achieved. The bank has also been able to achieve a total of 17.09 Crore Financial transactions and 228.64 Crore Non-Financial transactions through bob World during FY2024.

Debit cards

The Bank has an active card base of 9.54 crore as on 31st March 2024, an YoY increase of 15%. To increase e-commerce/POS transactions and to make Bank's debit card as the preferred card of choice for the customer, the Bank tied up with various merchants for providing lucrative offers to debit card customers and launched 35 campaigns during the period from June'23 to March'24 with various popular merchants such as Xiaomi, Zomato, Meesho, Myntra, ClearTrip, EaseMyTrip, JioMart, Tata Cliq, Swiggy, Reliance Digital, and BookMyShow.

In FY 2023-24, Bank has launched “Magalir Urimai NCMC” debit card for women in the state of Tamil Nadu. Bank's Platinum debit card base has increased to 1.62 crore as on 31st March 2024 registering an increase of 30% over the previous year.

Baroda FASTag (National Electronic Toll Collection -NETC)

Bank has issued 1.84 lakh FASTag in FY2024. Our bank has processed 4.45 crore FASTag toll transactions amounting ' 512.39 crore in FY2024.

Bharat Bill Payment System (BBPS)

Bharat Bill Payment System (BBPS) is an interoperable platform for repetitive bill payments which offers real time bill payment and recharge services to customers. BBPS is an RBI initiative product and managed by NBBL (wholly owned subsidiary of NPCI). Our Bank is authorized as Customer Operating Unit (COU) and Biller Operating Unit (BOU) for facilitating BBPS services. In FY2024, Bank has processed 2.39 Crore bill payment transactions amounting approx. ' 5820 crore. Bank has also on-boarded Rajasthan Mahila Nidhi as a biller on Bank's BBPS systems under Loan repayment category for facilitating collection of Self Help Group (SHG) loan repayments through Bank's BBPS systems.

ATM

The Bank has wide network of 9,426 ATMs and 1,607 Cash re-cyclers as on 31st March 2024 with very user friendly screens that allow navigation in Hindi, English and the local language of the place of deployment offering a smooth experience for our customers in their day to day banking operation. Our ATMs are enriched with features such as green pin generation, National Electronic Fund transfer, Cash on mobile services where customer can withdraw money from ATM without using Debit card etc. Our Bank has launched the facility of Interoperable Card less Cash withdrawal (UPI ATM) at 7145 locations where customer can withdraw money using UPI QR services (ICCW) of Bank. As of 31st March 2024, 6517 are made live under OPEX model for seamless ATM services and enhanced customer's experience.

Internet Payment Gateway (IPG)

The Bank's IPG infrastructure bob World Merchant Gateway is an online service that is being offered to customers to conduct their business online by accepting payments securely in real time. The Internet Payment Gateway provides an interface

between merchants and their customers for secure payment processing using online modes.

bob World Merchant Gateway facilitates receiving payment online from debit/credit card, Net Banking, UPI, Wallet, AEPS, AADHAR PAX QR code etc. and offline modes i.e. NEFT/ RTGS in a simple and secured manner, which is essential for e-Commerce/online business.

To provide a seamless and customizable service, Bank has tied up with -12- aggregators and master merchants. Bank has on-boarded 1,911 merchants in FY2024 achieving a landmark of 5000+ IPG merchants base with 1.5 x growth in merchant on-boarding registering an increase of 1.4x average CASA growth from '2,091 Crores to '2,928 Crores on YoY basis.

bob World UPI:

UPI is a system that powers multiple bank accounts into a single mobile application (of any participating bank), merging several banking features, seamless fund routing and merchant payments into one hood. It also caters to the “Peer to Peer” collect requests which can be scheduled and paid as per requirement and convenience. During FY2024, an increase of 36% merchant on-boarding for UPI QR in comparison to FY2023. There is tremendous growth in UPI QR transactions from 6.63 Crores to 10.01 Crores.

During FY2024, Bank has on boarded 18 lacs new users on its UPI Platform.

bob World (Internet Banking):

The total number of Internet Banking users of the bank increased to 108.46 lakh during FY2024 from 99.71 Lakh during FY2023.

Baroda TabIT:

The Bank embarked upon digitizing its customer on boarding process through tablet for instant CASA opening along with bundle of services (Personalized Cheque Book, Personalized Debit Card, Mobile Banking with MPIN, SMS Alert, Internet Banking) and POS, UPI QR, IPG lead generation through its TAB banking platform - bob World Tab. Bank opened more than 37.7 lakh savings account and 2.1 Lakh Current accounts through this platform during the FY2024.

Two new modes of Savings Account opening have been introduced: Aadhaar Biometric authentication and CKYC Search & Download from CKYC Registry. Changes in existing journey of Current account has been implemented for Individual and Sole Proprietorship through TAB. These validations have helped in increasing the successful upload percentage of LEI records on CKYC Registry portal.

Additional features in account opening journey have been introduced such as SMS Alerts in 12 languages in Savings & Current Account, Customer feedback in Current Account as per EASE 6.0 Norms and Lead Generation for Demat & Trading account in Savings account.

Digital Rupee (e'): Central Bank Digital Currency (CBDC) Merchant QR, Demat & Trading Account opening and Digital

journey of Education loan has been initiated through bob World Tab. Govt. Schemes like Sovereign Gold Bond (SGB) Scheme and E-Kisan Vikas Patra Scheme (e-KVP) issuance have been introduced through TAB banking platform - bob World Tab.
Functionality						FY2024
Saving Bank Account						37,72,786
Current Account						2,13,149
SHG A/c						40,938
Fastag						3,514
Company account						1,638
UPI Merchant On boarding						6,56,629
BHIM Aaadhar Lead Generation						36,825
POS Leads						30,782
IPG Lead Generation through TAB						2,912
WhatsApp Banking: • WhatsApp Banking User registration -
Year	WA banking Branch Wise Registration (Customers) in Lacs (A)		WA banking total Registrations of NonCustomers (Lacs)(B)	WA banking total Registration of existing-Customers (Lacs) ( C)			WA banking total no of Registrations (Lacs) (D) = (B)+( C)
FY 2021	5.02		2.06	4.04			6.11
FY 2022	9.64		5.49	8.29			13.78
FY 2023	40.35		5.87	38.14			44.01
FY 2024	30.1		8.24	28.34			36.59
TOTAL	85.11		21.66	78.81			100.49
*Non-customers user registration includes registration of users who are not customers of the bank + registration of customers of the bank who are not eligible for WhatsApp banking. WhatsApp Banking Transactions -
WhatsApp Banking Transactions (Lacs)
Year		Successful end to end transaction			Intermediary API Hits
FY2021		14.65			47.8
FY2022		59.29			207.5
FY2023		189.68			343.4
FY2024		368.08			701.72

 

Digital Banking Units:

Initially our bank was allotted 8 districts for setting up of Digital Banking Units, subsequently our Bank has set up 9 more DBUs. Now our Bank has Bank of Baroda has most number of DBUs (17) by any Bank in the industry. Total business of ' 66.78 crores have been canvassed by these DBUs as on 31.03.2024.

 

Digital Lending

In these times, the paradigm shift in technological advancements has reshaped the global era of digitization. Almost every industry is trying to drive the change through digitization and the banking industry is on the frontline of exploration and innovation.

The financial services industry is undergoing rapid and far-reaching transformation, underpinned by emerging technologies and socio-economic drivers. This transformation is fundamentally changing market structures and opening opportunities for both incumbents & challengers to create innovative, game-changing alternative products & services.

As technology took the front seat, customers started to seek services that did not require them to travel, particularly for their routine banking needs. This evolving landscape of customer preferences led us to build Digital Lending Platform (DLP).

The Digital Platform is helping Bank to cater to existing customer borrowing needs and acquire new customers from diverse segments using digital means, enter new and hitherto untapped markets, and add a prominent digital dimension to Bank's brand identity.

The platform is empowering the borrower to complete the end-to-end loan process from lead, to sanction, and to disbursement in a few clicks with minimal including mandatory documentation using contactless and paperless process from the convenience of their homes/ office, eliminating the need to physically visit the Bank's branch.

At the core of this digital lending platform, fintech are playing a pivotal role in revolutionizing credit ecosystem by creating alternative lending channels that offer significant advantages to both Bank and borrowers.

Initiatives of Digital Lending to improve Bank’s business portfolios;

Retail Initiatives:

•    Bank has launched Digital Education Loan for Executive Development Program (EDP) of Premier Institutes in India through Digital Lending Platform

•    Bank has launched a full-fledged Branch Officer Assisted Journey for Digital Personal Loans to conduct the end to end digital journey, which also facilitate the branches to support at different stages of the customer self- service journey.

•    Bank has done various improvements in the digital journeys of Digital Personal Loan and Digital Auto Loan to improve customer experience

MSME Initiatives:

•    Bank has integrated JanSamarth Portal with internal loan processing systems to provide, End- To- End Digital Mudra loans upto '10 lakh.

Agri Initiatives:

•    Bank has launched Digital Journey for Gold Loan to

provide superior banking experience to the customers.

•    Bank has launched STP journey for BKCC up to ' 1.6 lacs on Jansamarth portal in the states of Karnataka, UP and Maharashtra

•    Bank has launched digital process for renewal of BKCC loans.

Analytics Centre of Excellence (ACoE)

The Bank continues to accelerate in data driven banking with more power and capacity. The Bank has taken strong strides and driven business value through more Machine Learning (ML)/ Statistical models and use cases across various business lines such as Digital lending, Retail /MSME assets, Retail liabilities, Wealth management, Credit monitoring, Collection, Treasury and Risk management. Further, the bank has leveraged its advance ML capabilities in Cross-Sell, Up-Sell, Early Warning Signals, Customer Segmentation, Fraud Analytics, Asset Liability Management etc. Bank is also using Artificial Intelligence (AI) technologies for automation of various processes viz. customer onboarding, contact centre operation, virtual agent services etc. The Bank has also been awarded with the Best AI/ ML bank- 2023 by Indian Banks' Association

Information Technology

•    Bank has implemented Cheque Truncation System under RBI's “One Nation One Grid-CTS” project, i.e. merger of three Regional Grids to a single National Grid and designating Southern Grid as National Grid of our Bank.

•    Bank has introduced Digital Allotment of Locker Portal, wherein customers can see real time pictorial representation of the locker cabinets and book the locker of their choice subject to availability.

•    Bank is consistently introducing new services on the UPI platform, such as UPI Lite, Numeric Mapper, Prepaid/ eRupi vouchers for various government entities, extending UPI transactions to Mauritius territory, Bill-Fetch and Payment for self and others, and introducing the EMI feature for RuPay credit cards issued by Baroda Financial Solutions Ltd. (BFSL).

•    Bank introduced additional functionalities in Central Bank Digital Currency (CBDC) referred to as e' (Digital Rupee) - Merchant on boarding for existing customer through TAB Banking, UPI Interoperability implementation. ²

•    Bank added new services/ features in Internet Banking Platform to enhance customer experience viz. e-KVP account opening, Icegate payment integration, WhatsApp registration, Quick fund transfer facility without beneficiary addition (NEFT/IMPS), Implementation of various alerts for customer awareness, various integration with state treasuries, Integration of National Common Mobility Card (NCMC) and customers can now access their lockers details.

•    Bank has upgraded /revamped the Loan Life cycle Management (LLPS) for MSME customers.

•    Bank has integrated multiple channels, including Internet Banking, Mobile Banking, BC point, Core Banking and TAB banking with Jan Suraksha Portal. This simplifies the enrolment process for customers while applying for the various insurance schemes under this portal.

•    Bank has implemented SDWAN technology across 7,100+ branches to optimize bandwidth usage and better connectivity to Branches for providing better customer service. With these continuous efforts Bank is continuously migrating VSAT branches (secondary) to MPLS for better network performance subjected to feasibility.

•    Bank is continuously enhancing Tablet Banking, and WhatsApp Banking to offer new features and services to customers i.e. launching 7 new Current Account schemes, enabling biometric authentication etc.

•    Bank has launched a Loan EMI reset Consent portal to gather consent from retail loan customers regarding the adjustment of their EMI and tenure.

•    Bank is continuously upgrading its infrastructure agility and resilience to support banking services and transactions, for higher uptime and performance.

Cyber Security

The Bank has a well-defined Cyber Security Governance framework in place that is operated through a combination of management structure, policy framework and operational controls which is aligned with business strategies of Bank for comprehensive IT risk management. To provide cyberresilience & for managing enterprise risk, Bank continuously implements adaptive security controls to mitigate risks, thereby minimizing cyber-attack surface. The Bank follows both NIST (National Institute of Science and Technology, USA) Cyber Security Framework and RBI Cyber Security Framework.

Cyber Security is being monitored and managed on 24X7X365 basis by Cyber Security Operation Center (CSOC) for monitoring active threats in Bank's environment. The Global CSOC is tightly coupled with all the verticals of the bank at domestic and international territories. It is equipped with state-of-art cyber security solutions for threat modelling, detecting, analyzing and mitigation of cyber-threats. Bank's Data Centre and Data Recovery Centre are ISO 27001:2013 certified.

In addition to the existing checks and controls, Bank undertook the following measures to enhance cyber security:

•    Regular Random Early Detection (RED) team exercise carried out to provide valuable and objective insights about vulnerabilities and the efficacy of defences and mitigating controls already in place.

•    Cyber Insurance Policy from a reputed insurance provider to protect business and individuals from Internet-based risks and frauds.

•    Customer Awareness includes Cyber Security awareness messages via SMS & E-mail, social media platforms, websites, ATM's for educating customers about cyber security.

•    Data Leak Prevention (DLP) ensures that no confidential information is leaving the Bank network. Data leakage prevention is helping in application monitoring, email monitoring, malware protection and user access control.

•    Network Access Control (NAC) is helping Bank in providing restricted access to computing resources. It provides visibility, access control, and compliance that are required to strengthen network security infrastructure.

•    Anti-Phishing, External Attack Surface Management (EASM) and Digital Risk Monitoring (DRM) Services.

Marketing

The Bank continued to have its impactful presence across the media spectrum reaching out to its customers through Electronic ( TV , Cinema , Radio, etc.), Print, OOH, digital, and events. During the year, Bank continued to further thrust on its products campaigns such as Home Loan, Car Loan, MSME loans, BOB Bro SB Account, Current Account etc. Bank celebrated ‘Azadi Ka Amrit Mahotsav' during anchor month (July 2023) on Pan India basis with special focus on SLBC states (Gujarat, UP and Rajasthan).

Bank has a history of associating with ace athletes and sportspersons making them brand endorsers and play a crucial part in their sporting career. In order to optimally use the endorsers and effectively reach the Millennials and sports loving youth who are potential Target segment; Bank organised various photoshoots for promoting various products. Bank also curated and created Television Video Commercial and garnered huge visibility and Top of the mind recall. In addition, these endorsers also used Bank's Branded Jerseys during BWF Tournaments during 2024.

Bank of Baroda has always been a strong supporter and enabler of women empowerment through its various products and services. In addition, Bank has always been a strong Launchpad for women in sports like in the case of Ms P V Sindhu who is a renowned sports icon and is associated as Bank's Brand endorser. In order to further deepen the association with our Brand endorser Ms. Shafali Verma and PV Sindhu, Bank released TV Media campaigns during Festival time ‘BOB Ke sang, Tyohar ki Umang', ‘ BOB BRO' and in Q4 ‘ ‘Bharosa Matlab Bank of Baroda' for creating

 

Brand awareness and garner Business, and also to enable Zones & Regions to promote various Products and offers for Business mobilisation during this festive period.

Bank forayed into the sustainability domain through launch of ‘BOB Earth' on Foundation Day 2023 wherein Bank's all green initiatives have been brought under umbrella of ‘BOB Earth'. Bank participated in Bollywood Hungama OTT India fest in association with Hungama as Banking Partner with presence on social media platforms and on-ground event with huge participation of Bollywood celebrities and followed by young audiences across the globe. Bank promoted Baroda Radiance and Wealth Management Products to garner business and visibility.

Bank participated in IIT-Bombay's cultural fest- Mood Indigo which is Asia's largest college cultural festival which has been attracting footfall of about 146000+ students. This unique participation witnessed Bank's advertising on both digital and on-ground channels in an engaging way which resulted in business generation apart from brand visibility and generated more than 3000+ leads.

Bank ‘s participation in Govt. & Private forums under BFSI sector and at corporate events that were through CII, FIBAC, Glopac.etc.

Other events like Bollywood Music Project in Mumbai, Rambagh Golf Club at Jaipur, Literature fest at Pune .etc were targeted towards audiences interested in areas of music, sports and literature for catering to the niche audience. The Bank continuously supports the youth of the country through its various banking and non-banking initiatives. In order to reach these Millenials and sports loving youth; Bank initiated television campaigns during Men's Indian Premier League (IPL) 2023 ,ICC Men's Worl Cup 2023, and India-Australia T20I cricket series.

Also, through sponsorship of various events at large scale and smaller formats across India such Ganeshotsov, Durga puja and Mirchi Rock & Dhol Garba Bank endeavour to create connect with diverse audience and garner Business. Promoted Festive campaign extensively through various BTL activities such as umbrella Branding at prominent places Labughcha Raja

Radio station (Big FM -M/s Reliance Broadcast Network P Ltd) used innovative ideas for in-show Bank's product integration across categories like Home & Car loan, Radiance, Ask Adi, etc. during iconic show ‘Antakshari'. Twice national award winning actor and anchor Annu Kapoor is a living legend who made the game show of Antakshari as one of the most memorable and iconic. Bank associated on this high audience Radio show to address captive family audience.

On the digital front, Bank continued its digital marketing efforts for business conversion leveraging on the digital journeys rolled out for Home Loan, Car, Loan, Personal Loan, MSME, etc. A total of 35+ Campaigns were executed for awareness as well as business conversions for various products & services. More than 5.85 lakhs leads were generated through Digital paid Marketing activities with approximate sanction of '1083 Crore

Further, Bank continued its aggressive social media strategy, promoting its products and services, throughout the year, strengthening its digital presence. The Bank achieved a milestone of 7.2 million followers across platforms by end of March 2024.

Bank has been doing multiple social media campaigns to awareness & engagement and promote women empowerment, gender equality etc. In continuation of its efforts, the 4th edition of digital IP #SaluteHerShakti was organized wherein the Bank provided a platform to bring forward the women who have done commendable work to promote gender equality and meet PV Sindhu and Shafali Verma.

Throughout the year, the Bank's social media strategy effectively showcased the numerous features and offerings of various products and services . In particular, promotional efforts were intensified during the festive season.

 

The details of Bank's social media presence are as below:

Social Media Channels	No. of Followers/ subscribers as on March 31 2024
Facebook followers	40.26 lacs +
Twitter followers	10.76 lacs +
YouTube Subscribers	6.2 lacs +
LinkedIn followers	3.3 lacs +
Instagram followers	10.42 lacs +
Quora Views (started on 1st Jan 2022)	4.87 lacs +

 

In Website operations, Bank has successfully revamped and centralized all its 19 websites including domestic corporate website, international territories/subsidiary websites, and the bob World website under the centralization project. In FY 2023-24 total session in website is 86.50 million and total 37.95 million users visited the website, out of total session 70% traffic is coming from Organic Sources.

The website enhanced features and functionalities now include:

•    Robust search functionality with improved voice search

•    Official blog, Lead Management System (LMS) and sophisticated calculators

•    Multilingual capabilities Advanced filters

•    WCAG 2.0, GDPR compliance, cookie management capabilities

•    Accelerating Digital Growth

•    Regularized Search Engine

•    Optimization (SEO) for all websites Set-up of analytics for data gathering, analysis and action Supporting digital marketing ecosystem with tracking and conversions. ³

Key Highlights of Website Performance:

17% Overall Traffic Improvement in FY2024

19% Organic Traffic Improvement in FY2024

The highest level of organic traffic was attained in the month

of March'24, totalling 6.1 million.

1733 Keywords securing position on 1st page.

Blog organic Sessions 83% Improvement

50+ blogs are appearing in Zero Position (Feature Snippet)

15+ blogs are appearing in Google Search Generative

Experience (SGE)

Hyperlocal Project (Location Management):

•    In November 2023, over 8,500 webpages were created for branches and offices as part of Location Management (Hyperlocal) and subsequently launched.

•    Following the introduction of the Hyperlocal Branch Page, there has been a notable increase in traffic, rising from 19,868 visitors in October 2023 to 380,000 visitors in March 2024.

MoM traffic increase in Locator Pages:

Month	Nov-23	Dec-23	Jan-24	Feb-24	Mar-24
Session	43,299	1,42,736	2,33,679	2,98,466	3,86,626

From a Public Relations perspective, the aim was to build the Bank of Baroda brand, protect brand reputation and be positioned amongst the Top 5 banks in India across the public and private sector, highlighting the Bank's financial performance, the transformation at the Bank as well as communicating other key announcements & initiatives. In FY2024, the Bank cemented its #2 rank in Media Share of Voice among PSBs, after SBI.

As the Bank continues to leverage new age digital marketing and create an equilibrium between the physical and digital marketing, the objective is to be an aspirational brand which engages, empowers and educates digital audience by providing relevant content and fulfill banking needs by constantly analyzing, measuring and improving experience, response and capabilities.

Corporate Ethics

The Code of Ethics is a landmark initiative for a Public Sector Bank in the country. We are proud to be amongst the pioneers in adopting a Code of Ethics and devising an institutional mechanism for handling ethical concerns and issues in the organization. The Code of Ethics has been benchmarked with peer organizations from around the world and has been structured on a stakeholders-centric approach with the employees at the center as the ultimate owners and drivers of culture. There is a strong alignment of the Code of Ethics with our Core Values and the Code sets out a guiding framework for how we behave with our colleagues and stakeholders and our expectations from those who work with us. The Code addresses contemporary challenges that the Bank and its employees face and outlines the responsibilities

they carry when addressing emerging critical issues in areas like cybersecurity and climate change.

The Banking industry has seen a lot of challenges with the changing times but amidst these, ethics and trust remain at the core of the industry on any given day. The Code gives us the strength to do what is “RIGHT” and will help to enhance our Bank's brand and reputation. The Bank's leaders have been supporting the cascade of the Code through multiple employee engagement events.

Apart from conducting round-the-year education and awareness programmes and devising metrics for measurement of Ethics, one of the most powerful strategies for ensuring the success of our ethics agenda is developing effective channels of communication and towards this endeavour, the ‘Speak Up!' initiative in line with the Code of Ethics was organized which highlights the channels available in the Bank to raise complaints and issues against unethical practices. Further, a quarterly in-house journal - ‘Baroda Sanskriti' - is published with creative contributions from the employees. Regular Snippets from the Code of Ethics, quizzes, competitions, bilingual audiobooks on COE and other digital communications like the initiative- ‘Naitik Series' - videos on ethical dilemmas also ensure better awareness of ethics. A focused training programme was devised on Corporate Ethics for the branches which were downgraded to high risk during the year. As part of the Bank's Ethics Agenda -05- Ethics Counsellors were appointed in the field in June 2023, for each of the Zonal clusters - North, South, East, West, and Central, who would help in disseminating the Corporate Ethics message in the field and guide employees in case of ethical dilemmas/issues. The Bank launched ‘Living the Values!’-Vol 1' e-booklet on the Bank>s Foundation Day 2023. This is one of its kind initiative under the series , , , , , and .

Webinars, dedicated training programmes, and mandatory e-learning courses on Ethics being conducted for all staff members ensure that the Code of Ethics is cascaded to all employees and strengthen the culture of ethics and transparency in our Bank.

By creating a corporate culture that encourages employees to behave ethically and speak up against unethical practices, we expect our organization will be able to deliver powerful Environment, Social and Governance (ESG) outcomes that addresses the interests of all our stakeholders.

Customer Service

The Bank constantly endeavours to set industry benchmarks and pioneer innovations across products, processes and service delivery that are imperative to providing seamless experiences to its customers. Customer interactions in 15 languages & through all possible modes like Voice (IVR/ Voice bot /Agent), Video call, Web chat, Email are continuously monitored across channels and channel capabilities (functionalities and the user experience) were enhanced

to ensure ease of banking from home. The Bank ensured time to time addition of AI & Generative AI based features to improve customer's satisfaction with efficiency. Apart from Hindi and English, the language capability was increased to thirteen regional languages.

The highlight of Contact Centre:

1.    The contact centre handled 1.43 lakh average inbound customer calls per day during the year and over 1.13 lakh calls daily responded to through IVR.

2.    Average more than 1.16 lakh outbound calls per day for sales and surveys.

3.    Bank is handling around 78% call on IVR which is highest in industry

4.    Contact Centre provided emergency services to 6 overseas territories i.e. Botswana, Mauritius, Uganda, Oman, Fiji & Seychelles.

5.    24³7 FRMS alerts reviewed by Contact Centre and by immediate blocking the channels saved 2000 +crore customer money from further fraud.

6.    IN I4C bank has handled 1.56 lac alerts and saved the highest customer money in PSU.

7.    Contact center has initiated many new functionality like-Call back, B'day wish

8.    Manty special helpdesk at Contact Centre for exclusively helping the NRI/HNI, bob World internet and bob World mobile banking related issue, Complaints, PMJDY

9.    Contact Centre is providing 24 IVR services and 26 services through agents 24³7

10.    First in industry contact centre started live Video call and live web chat facility for customers.

11.    Now contact centre is equipped with many AI-based technologies like Speech Analytics, Social Media Tools, Automated Email Tool, Genie training Tool, AURA call quality Tool, Work force management, smart dashboard and many more technologies.

During FY 2024, the Bank saw significant improvement in the usage of remote channels for managing grievances. Approximately 94.7% of the grievances were resolved within the pre-defined turnaround time. The Bank not only focussed on improving the quantitative performance indicators of grievance redressal but also on improving the quality of resolution to improve customer satisfaction. Service levels across the network of branches are monitored through mystery shopping/service audits and workshops. General Manager, Operations and Services, is designated as Principal Nodal Officer for customer complaints in the Bank. Moreover, all zonal heads and regional heads are designated as nodal officers for their respective zones and regions. Further, the names of respective nodal officers along with their contact numbers are displayed in all the branches of the bank. The Bank has appointed an Internal Ombudsman which is a forum made available for the grievance redressal of customers before they approach the RBI Ombudsman. All complaints,

which are rejected or partially accepted by the Bank, are systematically escalated to the Internal Ombudsman for review. This enhances customer confidence in the Bank's systems and expedites the process of grievance redressal, thus making it even more transparent.

The Bank's code of commitment to customers and MSMEs, citizen charter, grievance redressal policy, and RBI Integrated Ombudsman scheme are available on the Bank's website to promote fair banking practices by maintaining transparency in various products, services and policies. At the Board level, the subcommittee of the Board for Customer Services addresses the issues relating to the formulation of policies and assessment of compliance with the same with the aim of consistent improvement in the quality of customer service.

Bank's ChatBot “ADI” is already functional on its website. ADI assists customers in navigating through various pages of the website while providing an interactive experience to the customers. A few features of “ADI” are an instant response to our customers' queries, convenience to chat, available 24*7, digital assistance, and a seamless chatting experience. Bank has also tied up with True Caller services for outbound sales calls. This means that whenever a call is made via an authorized phone no. of the bank, Bank's Logo and a “blue tick” will be visible to the customers on their phone screens, thus assuring the customers that the call is genuine. This will also prevent customers from falling prey to fraud.

The Bank has also changed its toll-free number. It is now an 8-digit number instead of the earlier 11-digit number. This was done after it had come to notice that fraudsters obtain a number similar to Bank's toll-free number and try to dupe customers posing as Bank officials. This has been done with a view to safeguard our customers from vishing.

Handling Customer Complaints

Customers can very easily lodge their complaints directly with the Bank by visiting its website of the Bank and clicking the appropriate link. Alternatively, the customers may also call the toll-free number and get their complaints lodged in the CRM portal of the Bank. Customers also have the option of sending their complaints to Branches and other offices via any mode. All the complaints will be entered into the CRM portal. The complaints are automatically addressed to the concerned resolver based on the category of complaint selected at the time of lodging the complaint.

Bank also has an Internal Ombudsman mechanism in place, as per regulatory guidelines, to instil confidence in the customers regarding the resolution of their complaints.

Bank has also implemented an Online Dispute Redressal (ODR) mechanism for the speedy resolution of online transaction relate complaints. Also, the blocking of Baroda Connect facility has been extended via Interactive Voice Response System (IVR) in the contact centre.

To monitor the quality of resolution being given to the customers, Bank subjects 100% of Non - ADC complaints and 5-10% of ADC complaints to quality check. The outcome of the quality check is shared with the concerned resolver group. To make the process of quality check more efficient

and less laborious, the Bank, in collaboration with IIT -Bombay has developed an AI Tool, which will assess the quality of redressal, thus reducing the time and manpower required.

Branch Network

As of March 31, 2024, the branch network of the bank is as under:

Â	FY 2023		FY 2024
Overseas Branches	Number of Branches	% Share in Total	Number of Branches	% Share in Total
Metro	1,787	21.79	1,789	21.70
Urban	1,471	17.94	1,488	18.05
Semi Urban	2,075	25.31	2,094	25.41
Rural	2,867	34.96	2,872	34.84
Total	8,200	100.00	8,243	100.00
Overseas Branches/ Offices (including branches of overseas subsidiaries)	93	Â	91	Â

The Bank opened new 61 domestic branches and merged 18 branches with existing branches during FY 2024.

Currency Chests

The number of currency chests stood at 138 as on 31st March 2024. These chests support effective cash management in the Bank as well as vaulting cash on behalf of RBI. All the currency chests as well as branches are provided with Note Sorting Machine (NSMs) as per RBI guidelines.

Risk Governance and Internal Controls

The increased focus on risk and the supporting governance framework includes identification, measurement, monitoring and controlling of risks as well as ensuring that risk-taking activities are in line with the Bank's strategy and risk appetite. Often referred to as the “three lines of defense”, each of the three lines has an important role to play. These are:

i.    First line of defense - This comprises of the Business verticals and Operating units, as they are required to own and ensure the effective management of risk and compliance with regulations, Bank's policies and guidelines.

ii.    Second line of defense - This comprises of the risk management function and compliance function. It is responsible for identifying, measuring, monitoring and reporting risk on an enterprise-wide basis independently from the first line of defense.

iii.    Third line of defense - An independent assurance is provided by the internal audit function by conducting internal risk-based and other audits. The reviews provide assurance to the Board that the overall governance framework, including the risk governance framework, is

effective and that policies and processes are in place and consistently applied. The role of audit function is defined and overseen by the Audit Committee of the Board.

Risk Management and Compliance

Risk Management and Compliance are integral part of the banking business and the Bank aims to achieve an appropriate trade-off between risk and returns. To ensure sustainable and consistent growth, the Bank has developed a sound risk management framework so that the risks assumed by the Bank are properly assessed and monitored. The Bank undertakes business activities within the defined risk appetite limits and policies approved by the Board of Directors of the Bank. Specific committees of the Board have been constituted to facilitate focussed oversight on various risks. The Board has also constituted a Risk Management Committee of the Board which oversees the different type of risks. It is supported by specialist Risk advisor on Board. Policies approved from time to time by the Board of Directors or committees of the Board form the governing framework for each type of risk.

Basel III Framework

The Bank's risk management framework rests firmly on the three Basel pillars, i.e. Pillar I- Capital Adequacy, Pillar II- Supervisory Review and Pillar 11 I-Market Discipline. The Bank is strengthened by a healthy level of capital. The Bank maintains adequate levels of Common Equity Tier I, Additional Tier I and Tier II Capital including required Capital Conservation Buffer. Futuristic capital projection ensures that the Bank is always ready to raise additional capital from the market as per business necessity. The position of risk weighted assets is constantly under strong vigil by the credit risk and capital adequacy team. Adequate capital and rationalised risk weighted assets ensures strong Capital to Risk Weighted Assets Ratio (CRAR) for the Bank.

The Bank has a comprehensive Internal Capital Adequacy Assessment Process and Stress Testing Policy in place. Capital Adequacy is assessed considering Pillar 2 risks such as Liquidity Risk, Interest Rate Risk, Concentration Risk, etc. and stressed conditions (under both normal and adverse scenarios) as per the extant guidelines. A brief outline of the mechanism for identifying, evaluating and managing various risks within the Bank is given below:

Enterprise Risk Management

The diversity of the Bank's business lines requires a comprehensive Enterprise Risk Management approach to promote a strong risk management culture to help in the early identification, assessment, measurement, aggregation and management of all risks and to facilitate capital allocation among various business lines. All material risk appetite limits are approved within the overarching Risk Appetite Framework and are adequately hedged. Moreover, the Risk Appetite limits are in alignment with the Business Projections.

The bank has instilled a robust risk culture across its organization, ensuring that all three lines of defence are equipped to effectively manage risk. Roles and

responsibilities pertaining to risk culture amongst various stakeholders in upholding risk culture are clearly defined. Through continuous training efforts, employees at all levels are equipped with the knowledge and skills necessary to navigate and adhere to the bank's risk appetite limits. This proactive approach not only enhances risk awareness but also strengthens the overall risk culture, promoting a vigilant and informed workforce.

As part of its ongoing commitment to elevate its Enterprise Risk Management practices, Bank has established a dedicated framework to identify emerging risks and gauge their material significance. This framework is specifically designed to comprehensively identify all risks the Bank is exposed to. Additionally, it provides guidance for conducting materiality assessments to pinpoint key risks that could potentially impact the Bank's objectives and strategies adversely.

Climate Risk

The Bank recognizes the need for addressing climate risk to foster sustainable business growth and is committed to minimizing the impacts arising out of it. Accordingly, the Bank has started taking steps to mitigate the climate risks by incorporating environmental factors into its credit assessment processes and it is being further strengthened in view of the challenges emerging in Environmental, Social and Governance (ESG) space.

Through initiatives like green finance, the bank is focusing on offering green and sustainable products to support renewable energy generation, energy efficiency, clean mobility, and other environmentally friendly practices. These efforts aim to strengthen the bank's financial resilience in the face of a changing climate. Bank has been actively collaborating with national and international agencies to address climate risk.

The Bank is establishing a Climate Risk & Sustainability cell as part of Risk Management function for alignment of its risk management practices with climate risk/incorporation of climate risk into its existing risk management practices.

ESG Risk rating of our bank has been reviewed by Sustainalytics, and improved from High Risk to Medium Risk, ranking at 329 amongst 1060 Peer Banks, as updated on February 27, 2024.

Credit Risk

Credit risk is managed through a Board approved framework that sets out policies, procedures and reporting which is in line with best practices. Bank has a strong credit appraisal and risk management framework for identification, measurement, monitoring and control of the risks in credit exposures.

Bank uses various Internal Credit Risk Assessment Models and scorecards to assess borrower-wise credit risk. Various Credit Risk models for internal credit ratings of the borrowers were developed in-house. They are reviewed and back tested through comprehensive validation including external validation. Bank has recently upgraded its Internal Credit Rating system by adding three MSME score card models to bring in efficiency and strong data management system. The

 

internal ratings are validated by independent rating validating authority.

The Bank has put in place prudential caps across industries, sectors and borrowers with an objective to build a resilient portfolio and de-risk from portfolio concentration. The Bank has developed in-house models for risk assessment of various Countries, State Governments, Group Borrowers etc. and setting exposure caps. As a part of enhanced exposure monitoring, quarterly reviews are carried out for the Bank's key exposures, segments, industries and sectors. A dedicated team tracks internal & external developments to assess impact on the portfolio performance and recommend pro-active remedial actions. The Bank also conducts comprehensive Thematic review comprising sector outlook & other event-specific impact studies. Bank has taken initiatives for automation of CRAR and Exposure computation.

Adequate attention is given to the independence of the risk evaluators and business functions for establishing a sound credit culture and a well-structured credit approval process.

Market Risk

Market Risk implies the risk of loss of earnings or economic value due to adverse changes in market rates or prices of trading portfolio. The change in economic value of different market products is largely a function of change in factors such as interest rates, exchange rates, economic growth and business confidence. The Bank has well defined policies to control and monitor its treasury functions which undertakes various market risk positions.

Mid-Office as a part of Risk Management, measures and monitors interest rate risk in its trading book through risk limits like modified duration, PV01 and Value at Risk (VaR) on a daily basis. The foreign exchange risk is measured and monitored in terms of Net Overnight Open Position limits (NOOPL), VaR limits, Individual Gap Limits (IGL), Aggregate Gap Limits (AGL) and total Aggregate Gap Limit (TAGL) on a daily basis. Equity price risk is measured and monitored through VaR limits and portfolio size limits, etc. At a transaction level, stop loss limits and dealer wise limits have been prescribed and implemented as per the extant guidelines of the Bank. MidOffice also conducts back testing of the VaR numbers on a daily basis. Under its stress testing framework, the Bank conducts comprehensive stress tests of its trading book portfolio on a quarterly basis. Risk-return analysis of treasury trading portfolio is also conducted on a quarterly basis. The market risk capital charge for the Bank is computed by mid office as per the Standardised Duration Approach (SDA) in line with the regulatory guidelines.

Asset Liability Management

Liquidity Risk is the inability to meet expected and unexpected cash and collateral obligations at reasonable cost. In the Bank, the liquidity risk is measured and monitored through Flow Approach and Stock Approach and other prudential stipulations as per the latest guidelines of the RBI. The Bank has implemented the Basel III Framework on Liquidity Standards - Liquidity Coverage Ratio (LCR), Liquidity Risk Monitoring Tools and LCR Disclosure Standards. The LCR

standard aims to ensure that banks maintain an adequate level of unencumbered High - Quality Liquid Assets that can be converted into cash to meet liquidity needs for a 30-calendar days' time horizon under a significantly severe liquidity stress scenario. The Bank has always been well above the stipulated level of LCR on a solo basis as well as on a consolidated basis. The RBI has also introduced NSFR (Net Stable Funding Ratio) with effect from 01st October 2021 which promotes resilience over a longer-term time horizon whereby Banks are required to fund their activities with more stable sources on an ongoing basis. The NSFR seeks to ensure that Bank maintains a stable funding profile in relation to the composition of its assets and off-balance sheet activities. The Bank's NSFR has been well above the stipulated level of 100%.

Interest Rate Risk in the Banking Book (IRRBB) arises due to mismatch between rate sensitive assets and rate sensitive liabilities which may adversely impact the earnings/economic value of equity of the Bank with the change in interest rates in the market. For measurement and monitoring of interest rate risk in banking book, the Bank uses risk management tools such as Traditional Gap Analysis, Earning at Risk and Duration Gap Approach. The short-term impact of interest rate movements on Net Interest Income (NII) is worked out through the ‘Earnings at Risk' approach by taking into consideration parallel shift in yield curve, yield curve risk, basis risk and embedded options risk. The long-term impact of interest rate movements is measured and monitored through change in Market Value of Equity.

Operational Risk

The Bank has a well-defined Operational Risk Management Framework (ORMF) and Operational Risk Management System (ORMS) for effective management of Operational Risk in the organization. ORMF comprises the organizational structure for management of Operational Risk, Governance Structures, Policies, Procedures and Processes whereas ORMS consists of the systems used by the Bank in identifying, measuring, monitoring, controlling and mitigating Operational Risk. The Bank has a web based Operational Risk Management System for data capturing and for systemic and integrated management of Operational Risk. In our endeavour to use the best of technology, we have procured a web based Operational Risk Management System for Operational Risk Compliance & Governance. Monitoring of Key Risk Indicators Programme (KRI), Risk & Control SelfAssessment Programme (RCSA) and Root Cause Analysis of various loss incidents strengthen the control environment. The Bank has created a repository of Internal Loss Data as part of Operational Risk Management. Ongoing review of products and processes in the light of the changing business environment further strengthens the risk culture. Efforts are made for inculcation of risk culture, values, beliefs, knowledge, attitudes and understanding about risk among the staff. In order to ensure this, Campaigns are carried out to create awareness in the staff by the means of emails, workshops, on-the-job trainings, webinars, meetings, fliers, magazines, E-Learning modules etc . Furthermore, through strategic utilization of social media platforms, initiatives have

been deployed to increase customer awareness regarding prevalent fraud incidents, accompanied by actionable guidance to mitigate susceptibility to such fraudulent activities.

Business Continuity Plan

Bank has a detailed and effective Business Continuity Management (BCM) framework in place for ensuring continuity of operations and rendering customer service at the Branches and Offices during disruptions. The framework is in line with the guidelines issued by RBI and global best practices. The Bank continuously works towards strengthening the business continuity preparedness. Through the exhibition of the Business Continuity Plan, the bank provides customers with the assurance that their services will persist in being dependable and secure, even in the face of adversity. Bank optimises resource allocation with Business Continuity Plan. Basis the understanding of risks, Business Impact Analysis (BIA) being conducted and enabler dependencies mapping for all the critical processes helps banks allocate resources more efficiently, investing in resilience-critical areas and cutting non-critical spending. The Bank has ISO 27001:2013 certified Data Centre and Disaster Recovery site. Bank's Disaster Recovery site is capable of handling the CBS and other functions of the bank in case of any disruption at Data Centre.

Compliance

Compliance function in the Bank is one of the key elements in its corporate governance structure. The compliance function in the Bank is adequately enabled and an independent function. The compliance function ensures strict observance of all statutory provisions contained in various legislations such as Banking Regulation Act, Reserve Bank of India Act, Anti Money Laundering Act etc. as well as other regulatory guidelines issued from time to time. It also ensures adherence to the Bank's internal policies and fair practices code. The Bank has compliance policy, outlining the compliance philosophy of the Bank, role and set-up of the compliance vertical, composition of its staff and their specific responsibilities.

The compliance function advises senior management and the Board on the position of Bank's compliance with applicable laws, rules and global standards and keeps them informed of developments in the area. It also educates employees about compliance issues by conducting periodic training and workshops for business staff and designated compliance officers. Knowledge management tools has also been uploaded on the Bank's website. The Bank has implemented a web-based compliance management solution for certification and monitoring of various regulatory, statutory and internal guidelines at each level in the Bank for further strengthening the compliance function. The Bank has also automated the process for obtaining information from the “Insiders” as defined in the Securities and Exchange Board of India (SEBI) Code of Fair Disclosure and Conduct.

Amongst several activities, the domestic compliance function conducts on-site compliance test checks on more than 101 parameters on KYC-AML guidelines and other parameters of

compliance through Regional Compliance Officers (RCOs) by using web-based tool - Onsite Compliance Testing and Reporting System. As many as 25% branches are randomly selected on a quarterly basis. Bank also conducts onsite compliance test check of various functions on half yearly basis. Off-site compliance test check of around 52 parameters on issues related to KYC/AML guidelines and other parameters of compliance is carried out on a monthly basis through the web-based tool - Offsite Compliance Reporting and Monitoring System. The above activities helps in maintaining a robust compliance posture of the Bank.

An annual group wide compliance plan is prepared and regular monitoring is carried out for ensuring adherence to the plan. Bank also undertake Compliance Risk Assessment (CRA) of the Bank annually by sourcing the parameters from RBI's Tranche-III data template, Onsite/Offsite/Vertical Test check reports etc. and derive CRA score. Bank also uses CRA matrix to prepare Risk Oriented Activity Plan for timely compliance of non-complied Regulatory parameters.

Bank has also taken various new initiatives such as creation of Data Analytics Cell (DAC) for data dump analysis in order to identify the gaps in the system and processes and to take corrective action. Product analysis is carried out to ensure that the new / existing product is working as per the expectation and fulfilling all Regulatory guidelines. Similarly, Circular vetting is done to ensure that the guidelines issued by the vertical commensurate with the RBI / Statutory guidelines. Moreover, some Important Regulatory and/ or Statutory guidelines had been identified, being of prime importance, since any breach in these guidelines may invite adverse observation of the Regulator. These guidelines are termed as Key Compliance Indicators (KCI) and monitored at periodic interval to take corrective action immediately incase of breach/deviation. These activities shall help the Bank in further strengthening the compliance posture of the Bank.

Bank has also developed a portal to collect the data from field functionaries on penalties, displeasure letters, warning letters, etc. on real time basis. It enables the Bank to monitor the data centrally and to take corrective action immediately.

In the process of capacity building, the Bank imparted training to all compliance officers and nominated officials to various external training programmes conducted by reputed institutions on latest developments in the areas of compliance. In order to promote professionalism, the Bank is encouraging staff members to pursue professional courses from reputed institutes like Indian Institute of Banking and Finance (IIBF), Association of Certified Anti-Money Laundering Specialists (ACAMS) etc.

There were no significant incidents reported during FY 202324 relating to compliance failure other than a monetary penalty of '4.34 crore (Rupees Four crore and thirty four lakh only) for non-compliance with certain directions issued by RBI on ‘Creation of a Central Repository of Large Common Exposures - Across Banks' dated September 11, 2013 read with ‘Central Repository of Information on Large Credits (CRILC) - Revision in Reporting' dated February 13, 2014, ‘Loans and Advances - Statutory and Other Restrictions',

and ‘Reserve Bank of India (Interest Rate on Deposits) Directions, 2016'. Further, onboarding of customers onto the ‘bob World’ mobile application is suspended based on certain material supervisory concerns observed in the manner of onboarding of customers onto mobile application with effect from 10^th October 2023.

KYC/ AML Compliance

The Bank has a well-defined KYC-AML-CFT policy. On the basis of this policy, KYC norms, AML standards and CFT Measures and obligations of the bank under Prevention of Money Laundering Act (PMLA) 2002, are implemented. The Bank electronically files Cash Transaction Reports (CTRs), Counterfeit Currency Reports (CCRs), Non-profit organizations Transaction Reports (NTRs) and cross border wire transfer (EFT) reports to Financial Intelligence Unit India (FIU-IND), New Delhi on its portal every month within prescribed timelines.

The Bank has an established Central Transaction Monitoring Unit (CTMU) and put in place AML Solution for monitoring of transactions and detection of suspicious activities in customers' accounts on the basis of predefined alert parameters in the system. System based risk categorization (money laundering risk categorization) of customers' is done on dynamic basis. For Periodic Updation of KYC (ReKYC), Bank has developed an automated process for identification of customers due for ReKYC and sending SMS/email/ physical notices to notify them to complete their ReKYC. Bank also provides Digital / Non-Face-To-Face channels to the Individual customers to complete their Re-KYC without visiting their Bank branch.

Bank has implemented Central KYC (CKYC) process for registration of newly on-boarded customers' KYC information on Central KYC Registry. CKYC number was allotted to 736.08 lakh customers as of March 31,2024.

Bank has also implemented Video based Customer Identification Process (V-CIP) as an alternate method of establishing the customer's identity for on boarding new Resident Indian Individual customers.

Internal Audit

The Bank's Central Internal Audit Division headed by General Manager / Chief General Manager administers various types of Audits i.e. Internal Audit, IS Audit, Credit Audit, Concurrent Audit & Management Audit. Internal Audit function in the Bank is an independent activity and has sufficient standing and authority within the Bank. The Internal Audit Department, works under the guidance and supervision of the Audit Committee of the Board. Bank's Internal Audit Function works in close co-ordination with other Assurance functions i.e Risk Management Department & Compliance Department.

Bank's Central internal Audit Division operates through -22-Zonal Internal Audit Divisions to carry out internal Audit of Branches / offices as per the periodicity decided by RBIA Policy. All Branches, Centralized Units, Administrative Offices are covered under Risk Based Internal Audit. The summarized risk perception of all 8242 Branches & Specialized Integrated Treasury Branch as on 31st March 2024 are as under:

•    Low Risk Branch - 6933 Branches (84.11 %)

•    Medium Risk Branch - 1006 Branches (12.20 %)

•    High Risk Branch - 262 Branches (3.18 %)

•    41- Branches with no Rating (New Branches)

•    Specialized Integrated Treasury Branch was in Low Risk.

Total -1216- Branches and other units are covered under Concurrent Audit covering Bank's 51.02 % Deposit, 70.20 % Advances & overall 59.51 % Business coverage. All Category B Branches, Currency Chests & Centralized Processing Cells are covered under Concurrent Audit.

Credit Audit is carried out of all Fresh Sanctions/ Existing Accounts including Retail Loans and Restructured Accounts with aggregate exposure of '10.00 Crores and above (FB + NFB) and 5% of borrower accounts are randomly selected from fresh Accounts and Reviewed with increase having aggregate exposure of '1.00 Crore above but below '10.00 Crores (FB + NFB).

All Bank's branches are subjected to Information System (IS) Audit to assess the IT-related risks as part of the RBIA of the Branches. IS Audit of Data Centre & IT Applications are also carried out periodically by a team of CISA /DISA qualified IS Auditors and external CERT-in Firms.

Few Key initiatives include the following:

•    Revised framework of Concurrent Audit is implemented and Daily & weekly Report is introduced apart from existing Monthly Reporting.

•    Audit Automation Software is implemented for Audit, tracking of Compliance & Dashboard.

•    Centralized Exceptional Monitoring Unit is established for ongoing monitoring of exceptions as per system data based on pre-defined logic under -70- parameters.

•    Offsite Surveillance Cell is established for offsite surveillance and data analysis as per different scenarios.

External Review of Internal Audit Framework is carried out by External Firm as and when felt necessary. Last such assessment was carried out by M/s E & Y LLP during FY 202223 and as per their assessment Internal Audit Framework in Bank is robust and one of the best in peer Banks.

Credit Monitoring

Monitoring of the credit portfolio is essential to maintain and improve the asset quality of the Bank and minimize credit risk. The main objective of Credit Monitoring function is to maintain asset quality, ensure Compliance of sanction terms and end use of funds. It must ensure that the credit assets remain in regular category, to make endeavour for upgrading asset quality of identified stressed accounts and take corrective action to prevent slippage of the accounts. The Department has been using various tools and methods for identifying and monitoring stressed accounts with signs of weakness/ potential default/ delinquencies to ensure good asset quality coupled with containment of probable slippages effectively.

Tools for efficient monitoring & control process: -

Early Warning Signal: A fully tech based EWS solution is implemented in our Bank since August 2020. Our EWS system is fully automated with inbuilt well-defined workflow providing a complete solution. Alerts are generated based on both internal (CBS and CREMON) and External Data (MCA, news feeds) sources. The alerts generated in an account helps the Bank for identifying incipient weakness and initiate proactive timely remedial measures. The solution helps the Bank in early identification of RFA/fraud in accounts (if any). This solution also enables the branches to closely monitor the accounts with appropriate resolution/ action. During the current financial year, the Bank has revamped EWS portal with adding more features to improve its efficiency and effectiveness to identify stress and early delinquencies in the accounts. In addition, a Health Parameter (HP) has also been introduced for borrower which is a combination of internal rating (BOBICON) and EWS rating of a borrower. Further, EWS portal for international territories has also been launched for better monitoring of advances of our overseas branches.

CRILC Reporting: Identification of the accounts in SMA category triggers mitigating steps, such as follow-up for regularization, restructuring etc. In terms of RBI's guidelines, stressed accounts with credit exposure of '5 crore and above are reported to RBI on CRILC platform on a weekly basis.

Analytical Dashboard: Bank has devolved various analytical Dashboard for identification of stressed accounts (Viz SMA Dashboard, Future Demand Dashboard, Collection efficiency Dashboard, Technical stress Dashboard for focused monitoring.

System based prediction of Asset Classification: Bank has a predictive program to identify the probable slippages showing overdue of more than two months period based on record of recovery as well as for accounts showing technical irregularities such as non-submission of Stock/Book Debt statement, review pendency, insufficient/ no credit in CC accounts, inadequate margins in LABOD/ODBOD accounts etc. These triggers focus on taking timely corrective action to prevent downgrading of such accounts. Those accounts are monitored specifically by various operational units for minimizing the slippage of standard assets.

Credit Audit: The purpose of Credit Audit is to ensure compliance of pre and post disbursement terms of sanction terms/ covenants, whether the disbursing officer, before parting with the Bank's funds, has taken all necessary measures for creation/ perfection of security with a view to ensure enforceability of the said securities as per sanction terms. This facilitates prompt corrective action, wherever required, without waiting for the regular Audit/ Inspection, which usually takes place with a time lag. Credit Audit is integrated with the Core Banking System/Finacle to monitor it on real time basis.

Stock Audit: We ensure that Stock & Receivables audit is conducted timely as per given periodicity in all the eligible accounts and active/ preventive steps are taken wherever warranted. The stock audit is applicable for standard advance

accounts having working capital exposure of '1 crore and above. It is required to be conducted annually for such accounts with exposure below '5 crore, while for accounts of '5 crore and above, it is to be conducted on a half yearly basis. Assets showing inherent signs of weakness, such as out of order position, overdue Bills under Letters of Credit, invocation of guarantees, review overdue etc., which pose a threat to the Bank's asset quality, are followed up at various platforms & levels.

Daily classification of SMA or NPA: The Bank has automated system for identification of borrower accounts as SMA or NPA as part of day-end process for the relevant date to have better transparency in identification of asset quality as per RBI guidelines.

Other monitoring tools:

•    Bank has appointed Agency for Special Monitoring (ASMs) for specialized monitoring in accounts of '250 crore & above for verification of transaction monitoring, inspections etc.

•    The Bank has also digitized the stock and book Debt statement submission, which is real time and user friendly.

•    The Bank has also initiated many tools in credit monitoring for robust monitoring like GST ITR & Statement analyser to analyse, track and monitor the borrower's accounts periodically.

•    Digital monitoring reports at pre-determined period are regularly evaluated & taken up for corrective measures wherever required in respect of big accounts of '1 crore & above.

•    Bank has launched a Dashboard to monitor the cases of DLP violation to improve credit discipline.

Vigilance

The Vigilance administration in the Bank is professionally managed and an integral part of management function. It promotes clean business transactions, professionalism, productivity and ethical practices apart from control, monitor and supervision of various vigilance functions. The Bank has a very strong and transparent Vigilance Administration headed by Chief Vigilance Officer who oversees all vigilance functions of the Bank as per the guidelines from the Central Vigilance Commission. Participative / Proactive & Preventive vigilance are the important functions of Bank's vigilance administration. The Chief Vigilance Officer is supported by Additional Chief Vigilance Officer.

The vigilance machinery in the Bank also imparts knowledge at all levels about vigilance functions, extends help to various disciplinary authorities and appointing authorities to act swiftly and correctly in examining issues arising out of frauds, complaints and serious irregularities pointed out in various inspection reports of branches/ offices.

Vigilance setup at Zonal level conducts preventive audit of all branches at regular intervals and to act proactively on information controls the damage at bare minimum level.

The vigilance function in the Bank consists of three sections:

1.    Preventive Vigilance: Preventive measures hold greater significance in containing damage than detection and punishment of corrupt and other malpractices. Preventive measures such as inspections of sensitive areas of business, identification of sensitive posts and scrutiny of personnel posted thereon, ensuring observance of conduct rules, monthly meetings at branch level to discuss branch specific vulnerabilities, training programs for staff, regular scrutiny of inspections and audit reports and circulars on preventive vigilance regularly issued and circulated by various business verticals were undertaken to reduce the number of vigilance cases.

2.    Detective Vigilance: Detective Vigilance includes conducting regular and surprise inspection in the sensitive area to detect if there have been any instances of corrupt or improper practices by the staff, undertaking prompt scrutiny of annual property returns and take further action if called for, gathering intelligence from own source about the misconduct / malpractices, examining the same for logical conclusion through appropriate action after due process.

3.    Punitive Vigilance: In addition to ensuring that employees at all levels indulging in willful and mala fide transgressions of rules and provisions are not allowed to go unpunished, the Bank also ensures that bona fide decisions taken in normal course of business are evaluated objectively and with required prudence.

The vigilance function in the Bank enables proactive decisions by stressing on strengthening systems and procedures through preventive vigilance administration. It also plays a major role in identifying and plugging loopholes and providing inputs to the top management in framing policies in fraud prevention. The turnaround time of disciplinary cases improved due to proactive communication which helped in motivating the employees with quick redressals.

Legal Service

The Bank has a vibrant legal department consisting of qualified and experienced legal officers. The main role of the Legal Department is to support and to provide assistance for various matters relating to Opinion, Documentation, Litigation, etc., referred by or in relation to various functional departments of the Bank. The department also provides support for references submitted by the various Zones, Regional Offices, domestic and foreign branches, and subsidiaries of the Bank on the matters related to legal aspects.

Further, in order to meet the digitalization of banking loan process, a set of documents for retail and SME facilities compatible with digital lending platform has been prepared which will enable Bank's customers to execute the documents through electronic means. Loan Document Manual has been revisited and simplified the documents.

In order to pace with the digitalization process, “Portal for Vetting of Loan Documents” has been developed with the help of IT Department to ease the process by enabling the

Law Officers to attend the same from their office without physically visiting the Branches. The portal was launched on 28.04.2023 and made mandatory for vetting of documents as per Bank's Global Credit Policy through the Portal only. Phase II of the portal is under process, which will include the provision for uploading of documents pertaining to ‘Review with Increase, ‘Takeover of account from other bank/FI', ‘Consortium' and ‘Creation of security after disbursement'.

Additionally, in the existing Advocate Portal, second phase with regard to assignment of work and reviewing advocates' performance are made available.

Further, the Department has been promoting environment of knowledge sharing by issuing ‘Circulars', ‘Legal News Flash', etc. regarding ever changing set of laws, latest amendments and interpretation of laws by Courts affecting the Banking sector. In association with APEX Academy and a reputed Law Firm, initiated Training program for Law Officers to groom them in specific legal fields as well as to make them conversant with ever changing enactments, rules and regulations.

As on 31.03.2024, total pending cases (Litigation Against Bank) before the various Courts/Forum/Tribunals are 3608. We succeeded to get disposal of total 873 cases during financial year 2023-24. Out of total disposed of cases 618 cases (i.e. 70.8 %) were decided in favour of Bank, 62 cases (i.e 7.10 %) were settled and 193 cases (i.e 22.10 % ) were decided against Bank. Further, 10 cases (having monetary value more than one crore and above) out of total decided cases were also disposed of during the Financial Year 2024.

Human Resources Management

Bank considers its employees as most valuable asset. Bank has a talented workforce of over 74000 employees. The Bank has initiated various capacity building programmes to retain and groom its talent pool which is aligned with the aspiration and growth story of the Bank. In order to infuse fresh blood and new talent, Bank is following a comprehensive plan to ensure that the recruitment process is strategic and effective, aligned with the organization's long-term goals. Bank is also onboarding external talent in strategic areas to supplement the existing human capital.

The Bank has taken proactive steps in maintaining positive employee relations, addressing workplace issues, resolving conflicts and fostering a positive workplace environment. Timely revision of perquisites and benefits, revision of employee policies with more employee centric provisions and initiatives in the direction of maintaining employee wellness and fitness, workplace counselling, engagement activities, life cycle based training programme have been undertaken to create robust and competent workforce which is fully engaged to meet the dynamic challenges of the Banking industry.

Bank has resorted to various measures to rightfully engage the talent and the same has resulted in better financial performance. Bank's initiative in this direction has been recognized by the industry and Bank has been awarded for ‘Best Community Impact Initiative' under Employee

Happiness Award by Kamikaze B2B Media. Bank has also been certified as ‘Great Place to Work' for the second time in a row by the Great Place to Work Institute India.

In addition to the above, the following important employee centric initiatives have also been undertaken during the year, which bear a direct and significant impact on Bank's performance.

Learning and Development

Bank of Baroda believes that employee development is an integral part of the organization's strategic plan. The Bank endeavors to create a learning organization and to build organizational capability for setting performance standards. The Bank believes in creating career principles and utilizing a mix of available channels to impart training.

More than 58,326 Bank's employees received training through the Apex Academy, 18 Zonal Academies and 4 Baroda Satellite Learning Units, along with eLearning through Baroda Gurukul in this financial year which helped in improving their performance.

In FY 2024, Bank has leveraged its Learning Management System (Baroda Gurukul) to facilitate learning and development across the Bank, which has helped Bank to align training needs as per business goals and ensuring compliance. Significant utilization of digital process and LMS platform helped Bank to impart learning to staff in timely manner and extending benefit of cost optimization to shareholders.

The Bank has designed role based specialized training programmes for Business Heads viz. Regional Heads / DRMs / Branch Heads etc. The Bank has been placing a strong emphasis on the acquisition of new age skills and IDP based training to enhance its human capital. In line with this, it has introduced simulation games that replicate real-life business scenarios to better educate its staff. To further enhance the learning experience, the Bank has adopted a blended learning approach that combines traditional and digital methods, with 365*24 availability.

In a collaborative effort to synergize external resources and promote a hybrid learning model, the Bank has partnered with prominent organizations such as AAFM, CRISIL and NIIT to provide training to its Wealth Management Executives. This pilot phase will allow the Bank to refine its approach and fine-tune the training process to better serve the learning and development needs of its employees.

Overall, the Bank is committed to providing its employees with the necessary training and development opportunities to succeed in their roles and achieve their career aspirations.

Coaching and Mentoring Programme

In order to create a future proof leadership pipeline for various critical roles, a scientific succession plan has been adopted whereby a sufficient succession pool of executives for each of the critical roles has been created. Bank has also resorted to Competency Assessment of its executives and Individual Developmental Plans have been created for

enabling them in taking up higher assignment. Bank has also initiated Coaching & Mentoring Programme for its executives by way of engaging internal as well as External Coaches for this purpose.

Career Progression

Concerted efforts have been taken by the Bank for fostering career progression of employees for rewarding them for their performance and motivation. Horizontal movement of officers across different functions and overseas placements opportunities are provided to employees for wider exposure.

‘Voice of Barodians’ - Employee Engagement Survey

As an employee centric organization, Bank firmly believes in participating in a two-way communication with employees for sharing views & experiences and to chalk out better ways of accomplishing our organizational goals. Bank has been conducting ‘Voice of Barodians' Employee Engagement Surveys along these lines over the last few years and based on the survey outcome, has fine-tuned the existing policies and practices, launched new initiatives for the benefit of our employees. As per the outcomes of the latest ‘Voice of Barodians' Employee Engagement Survey carried out in March 2024, the overall employee engagement score for the Bank stood at 71%.

Baroda Anubhuti Program

To enhance employee engagement at all level, Bank has introduced Baroda Anubhuti Program which has been designed with an objective of augmenting ‘Employee Experience' through various ‘Engagement Activities'. These activities aid in fostering the team spirit and belongingness at every level of the Bank, resulting in improved employee engagement and better financial performance.

In furtherance to being certified as Great Place to Work, Bank also focuses on its responsibility towards the society. Every year on the occasions of Bank's Foundation Day on 20^th July and the Republic Day, various Community Service Activities were carried out and all employees wholeheartedly participated in these activities. During the year 2023-24, Bank has carried out following CSR activities under Baroda Anubhuti Program:

•    Blood Donation - more than 18,000 units of Blood

•    Distribution of Saplings/ Tree Plantation - around 49,500 saplings planted

•    Cleanliness Drives - more than 4,000 drives in various localities

•    Distribution of materials and miscellaneous items to poor and needy - more than 1,00,000 items

•    Distribution of materials and miscellaneous items to old age homes, orphanages, disability centres etc. - more than 77,000 items

•    Conducting Health Check-up Camps - more than 8,000 people were covered

•    Renovation of Iron Bridge to Kadamakudy Island Village in collaboration with Indian Navy - Ernakulam

Employee Wellness Initiatives

As an organization with progressive HR practices, Bank has always placed a strong emphasis on the well-being of its employees and has consistently implemented initiatives to inspire them to lead healthier lifestyles. This commitment to employee wellness is rooted in our belief that the health and happiness of our staff members are fundamental to our collective success. We believe that by fostering a culture of well-being, we are not only enriching the lives of our employees but also strengthening the overall vitality and resilience of our organization.

Every year Bank is celebrating November as ‘Wellness Month' for our employees during which various wellness programmes viz. Yoga Classes, Online Webinars & Talks with experts on Health and Wellness issues are being organized to sensitize the employees for maintaining better mental and physical health.

Bank has entered into tie-up with leading hospitals where employees can undergo comprehensive Health Check-up along with their spouse, the cost of which is being reimbursed / borne by the Bank.

Employee Assistance Programme

Bank has introduced ‘Workplace Counselling' for the employees under the ‘Employee Assistance Program' (EAP) helping employees seek counselling for mental health issues and coping mechanisms.

During calendar year 2023, a focused outreach program was conducted in association with ‘EAP India' (the service provider) by conducting workshops for the employees on the topic ‘From Stress to Strength: Using Emotional Intelligence to Thrive under Pressure'. More than -100- workshops were conducted across the country covering 4,600+ employees.

Employees have utilized EAP India's counselling services to overcome their issues related to their mental and psychological health. These counselling services were facilitated through multiple channels such as face-to-face counselling, phone-call and video conferencing, emails and chats. Additionally, online support groups were formed on Women Empowerment, Parenting support and Addiction support aiding self-generating solutions within the groups.

Further, in order to raise awareness about mental health issues, Mental Health Roadshows “Road Trip to Happiness” in Mumbai and Vadodara were organized featuring mental games, recreational activities, movie time and nutritionist counselling.

School Tie-up for admission of Children of employees

In continued pursuit to be an employer of choice and as a part of employee centric initiative, Bank has entered into a tie-up arrangement with two renowned and reputed chain of schools having PAN India presence viz. ‘Ryan International Group of Institutions' and ‘VIBGYOR Group of Schools' which enables hassle free admissions to the wards of the employees at the time of their relocation on transfer.

Thrust On Diversity & Inclusion

Bank is committed to create diverse workforce and follows a non-discriminatory and equal opportunity policy for all its employees and is transparent in all issues relating to promotion, career path, transfer policy and employee benefit / welfare schemes. The Bank has also put in place a DEI Policy for promoting Diversity, Equity and Inclusion. Further, in recognition of the concomitant responsibilities of women, the Bank has put in place various facilities to support women employees such as Sabbatical Leave, Health Check-up programme for women employees, establishment of Creche facility etc. among other initiatives.

The Bank has put in place special provision for deployment of women. Bank has also taken Women centric initiatives under Bank's Employee Assistance Program for creating a nurturing environment for women to come together to share experiences, exchange knowledge and uplift each other in both personal and professional aspects of life, discussing and addressing issues like self-care, burnout, workplace, and personal challenges etc. and Counselling to women employees joining after career break (post Maternity/ sabbatical leave) to help our lady employees in coping with the emotional and logistical challenges associated with returning to work. The Bank is working on Work from Anywhere option to lady employees post expiry of maternity leave.

The Bank conducts special training programme on capability building and motivation for its women employees and also creates awareness on POSH guidelines.

Ex-Employees

To acknowledge the invaluable services rendered by exemployees & to recognize their contribution, the Bank extends several welfare schemes to them such as Holiday Home facilities, consultation with Part Time Medical Consultants of the Bank, Special Medical Aid & Reimbursement of Medical Insurance Premium paid by them.

The Bank is always considerate towards bringing convenience to its retired staff members. Hence, in order to make HR services convenient for them, important services like generation of Pension Pay Slip, PPO, Tax computation, Holiday Home booking and submission of TE/DA claims is integrated in HR Connect application which can be accessed on mobile 24x7.

Reservation Cell

An exclusive cell has been functioning to monitor the reservation and other enabling provisions for employees belonging to Scheduled Castes (SC) /Scheduled Tribes (ST) / Person with Disabilities (PWD) /Ex-Serviceman (Ex-SM) and Other Backward Classes (OBC).

Executives in the rank of General Managers are appointed as Chief Liaison Officers for SC/ST/PWD and Ex-Serviceman employees and for OBC employees respectively who ensure compliance of various guidelines pertaining to them.

With effect from 1^st February, 2019 reservation of 10% for Economically Weaker Sections (EWS) in direct recruitment in the Bank was implemented.

The Bank provides reservations for Persons with Disabilities (PwDs) at the rate of 4% of the total vacancies arising in officer, (identified posts), clerical and sub-staff cadre in a year, as per Government guidelines.

Caste category wise count as on March 31,2024
Cadre	Total	GEN	SC		ST	OBC		EWS
Officer	42067	18916	7422		3317	12386		26
Clerk	25996	10907	4273		2695	8053		68
Sub staff	6164	1814	2009		610	1731		0
Total	74227	31637	13704		6622	22170		94
% to total staff strength		42.62	18.46		8.92	29.87		0.13
Cadre				PwD			Ex-SM
Officer				1090			605
Clerk				1037			3040
Sub staff				114			506
Total				2241			4151
% to total staff strength				3.02			5.59

Periodical Meetings: The Bank holds Quarterly meetings with the representatives of All India Bank of Baroda SC/ST (AIBOBSCST) Employees' Welfare Association and Half Yearly meetings with the representatives of All India Bank of Baroda OBC Employees' (AIBOBOBC) Welfare Association, for addressing their concerns.

Workshops and Training Programmes: Bank conducts following training programmes every year for members of AIBOBSCST Employees' Welfare Association and AIBOBOBC Employees' Welfare Association and Liaison Officers of SC/ STs and OBCs at its various training academies:

•    Pre-promotion training for SC/ST/OBC candidates.

•    Workshop on reservation policy.

•    Training programme on disciplinary proceedings. Document Management System

The Bank is one of the pioneer PSBs in initiating implementation of Document Management System (DMS) (First among PSBs to implement Records Digitisation) by engaging professional companies to manage the records with an aim to give our Branches a leaner look having better feel and experience to our customers. Under Records Management System (RMS) physical records are barcoded, indexed and moved to Vendor's warehouse for storage thereof, which can be retrieved any time as per Bank's requirement. The space which is unlocked, is being utilized for customer service efficiency, better branch ambience etc.

Document Management System (DMS), is a major step towards paperless banking under green initiative, encompasses scanning of identified documents (Loan Files/ HR documents/Legal documents and other critical documents) and uploading the scanned data on “Baroda Document Management System (BDMS) server, a digital repository.

This is an ambitious project of our Bank under which around 56.60 Cr images have so far been scanned covering more than -7042- branches/offices. Also, around -3.19- lac sq. ft. of space has been unlocked in identified Branches of the Bank.

After successful implementation of Records Management System (RMS) / Document Management System (DMS) in Bank's Metro & Urban and identified branches of Semiurban, it is now being implemented in the remaining 1530 Semi-Urban and Rural Branches /offices of the Bank.

Premises Re-engineering

•    Could create State of the Art Office for IFSCB Unit at GIFT City, Gandhinagar.

•    Renovation of Bank's Heritage Building at MMO, Horniman Circle, Mumbai, creating space for accommodating around 160 Staff.

•    Construction of Bank's Commercial cum Residential Building at Ramnagar, Coimbatore been completed.

•    Construction of 5 RSETI Buildings completed.

•    Over 95% of eligible procurement were made through GeM Portal (1263 Crores).

Green/other Initiatives

•    177- Branches in rural/semi urban areas being run on Solar Energy reducing approx. 3500 Tons of Carbon Dioxide Emission.

•    Installed Solar Panels in several Leased & owned Premises of the Bank. Installed capacity 293 KW in owned Buildings & 1.3 MW in Bank's leased premises.

•    Solar Panels of Capacity 35 Kwp installed at Bank's Zonal Office at Mangalore.

•    Bank has set up Rain Water Harvesting system in 18 Administrative Buildings.

•    Waterless Urinal (276 Nos) installed in several Administrative Buildings saving approx. 30 lakh Liters of water a year.

•    Tree Plantation- 43499 No. of trees/sapling planted in Schools, parks, residential societies etc. - PAN India during the period 15.11.2023 to 15.12.2023.

•    Digitization of Security Reports & Returns though Bank's IT Team

•    Conducted Fire drills at all High-rise Buildings of the Bank all over India.

•    Health Checkup camps for staff members in tie-ups with various Medical Centers/Hospitals conducted.

•    24*7 Ambulance facility at BCC.

•    Annual Sports Day organized in the month of Nov 2023 involving all the staff members along with their families.

•    Implementation of Self Booking Tool (SBT) for Air Ticket Booking at BCC, Mumbai.

Implementation of Official Language (OL) Policy

Use of Hindi and other Indian Languages for promoting business as well as providing digital products to the customers is a significant characteristic of the Bank's Official Language policy. This approach has been well appreciated by Government of India and regulatory authorities from time to time. Your Bank adopted a well-structured Annual Action Plan for Official Language in order to achieve various targets set by the Government of India under its Annual Implementation Programme 2023-24 and the assurances given to the Committee of Parliament on Official Language during its visits to various offices/branches of the Bank.

The Meetings of Central Official Language Implementation Committee, presided over by MD & CEO/ Executive Director of the Bank, were organized regularly on quarterly basis and various new initiatives were taken during the year FY 202324. Your Bank has made remarkable progress to provide Mobile Banking and transactional SMS services in Hindi and 11 other regional languages. Whatsapp Banking service and Internet Banking services are available to our customers in Hindi too. As a new initiative during the period under review, Bank's Chatbot facility, Digital lending platform, BCMS portal and BC knowledge portal have been made available in Hindi also. All the auto generated emails from various apps and digital channels/portals of the Bank and loan sanction letters containing terms and conditions generated through Bank's LLPS package have been made available in bilingual i.e. Hindi & English.

As a part of various initiatives taken during the year, Town Official Language Implementation Committee (TOLIC), Vadodara, working under the convenorship with your Bank, organized a national seminar on ‘Importance of ESG in Corporate Sector: Present and Future'. Representatives of member offices of all TOLICs functioning under Regional Implementation Office (West), Mumbai participated in the event.

Bank had introduced official language rating system for Branches/ offices and ‘Bhashayi Choupal' programs for staff members, the same were continued during the year. Bank's Self-service Passbook printing machine ‘Kiosk' were enabled for printing of Passbook in Hindi for the convenience of customers. Your bank has created a ‘Shabdnaad' page on the Bank's website. This page will preserve records of various Official Language (OL) related activities conducted by the Bank at Corporate Office and also in the entire Bank, awards and other OL related information pertaining to the Bank.

Your Bank has published the articles received for the All India Seminar on ‘Digital Loan' in the form of e-book. Your Bank conducted different campaigns on quarterly basis to increase Hindi correspondence in various departments of the zones (viz. Marketing, Recovery, Security, Mortgage). Hindi Diwas, World Hindi Day and Mother Language Day were celebrated at various offices/branches all over India and abroad. In order to enhance the creative skills of staff members, your Bank is publishing two corporate magazines - BobMaitri (House Journal) and Akshayyam (Hindi Magazine). Your Bank is continuously working to enhance the feature of ‘BOB

Abhivyakti 2.0' mobile app, designed for all serving and retired staff members to provide an interesting online reading experience with respect to all magazines/newspapers/ house journals published by the Bank including Bobmaitri and Akshayyam. It has proved to be a significant step in promoting the Go-Green initiative in the Bank.

While providing digital banking facilities to customers, your bank is offering the facility of sending SMS in Indian languages in all the Financial Inclusion accounts. Your bank is providing WhatsApp banking services in English, Hindi and Gujarati languages. Your Bank has made the HR Connect portal fully bilingual for the use of staff members. Bank's Hindi website has been given an attractive look which is contributing to significant increase in its hits. Your Bank has provided customers the facility to opt for SMS and WhatsApp Banking facility in their own language at the time of opening an account through tab banking. Your Bank has introduced bilingual (Hindi and English) digital journey facility for opening savings account online. Besides, keeping in mind the highest number of calls received in Hindi language at the Contact Centre, your Bank has organized a language training programme for the staff working in contact centre. Your Bank has developed YouTube videos and PPT of various banking products in Hindi language for customer awareness. Further, your Bank has ensured translation of all Bank's promotional materials in Hindi and other Indian languages on a regular basis. Your Bank has ensured to post Hindi content on social media handles from time to time befitting the occasion.

Your Bank conducted an internal survey from 05.12.2023 to 10.12.2023 on various parameters among the staff members of the Bank regarding the quality and utility of the Hindi version of the internal circulars issued by the Bank to obtain feedback on the nature of language of the circular. Your Bank also conducted a survey regarding availability of Bank's digital channels in Indian languages to get feedback about the Indian language user interface of our digital channels and get a useful data on their quality, usages etc. Based on the suggestions received in these surveys, necessary corrective action is being ensured by the Bank.

A “Samarth Toolkit/Branch Samarth” (Technical Toolkit) has been developed by the Bank to promote implementation of Official Language in your Bank and to sensitize staff members about various e-tools for working in Hindi and regional languages. The training for staff members on this tool was continued during this year also. In addition, various programs/ competitions were also organized in schools/colleges across the country to connect with the young generation of our country, which helped the Bank to strengthen its brand image among the younger generation and mobilize/increase business.

The efforts of your Bank have been appreciated by the Government of India from time to time. During the year, your Bank was awarded with the second prize under the “Rajbhasha Kirti Award” scheme of the Government of India for its outstanding performance in the field of Official Language Implementation. In addition, the Town Official Language Implementation Committee (TOLIC), Vadodara working under the convenorship of the Bank was awarded

dedicated core committee has been formed to provide operational support to the Board level committee in fulfilling its objectives effectively.

The Bank has implemented various initiatives to reduce emissions, conserve energy, and minimize water consumption. A key focus area has been the reduction of carbon emissions. Currently, around 177 branches located in rural and semi-urban areas are powered by solar energy, resulting in reduced power consumption and significant reductions in carbon dioxide emissions. Through the utilization of renewable energy sources, we have successfully eliminated approximately 4500 tons of carbon dioxide emissions. Additionally, the installation of LED lights in all domestic branches has contributed to enhanced energy efficiency.

The Bank actively promotes sustainability awareness among the stakeholders and has organized initiatives such as “Swachhata Pakhwada” to foster a culture of sustainable living, environmental preservation, and cleanliness. These efforts have engaged citizens in cleanliness drives at public parks, railway stations, and beaches, in addition to organizing health check-up camps. The Bank aims to inspire and encourage active participation in creating a cleaner and healthier environment.

The Bank places significant emphasis on technology-enabled banking through our platform “bobWorld”. This enables seamless and convenient banking operations for our customers while reducing paper usage for transactions and the need for physical visits to branches. The Bank has implemented a paperless approval process internally and has digitized the document management, contributing to enhanced operational efficiency and reduced environmental impact.

As part of the bank's commitment to environmental conservation, the Bank initiated the “Plant a Tree Program.” For every auto or home loan disbursed, the Bank planted a fruit-bearing tree on behalf of its customers. The customers receive a Green Tree Plantation certificate that contains details of the tree planted on their behalf. Each tree is geotagged and secured using blockchain technology to ensure authenticity. Customers can track their planted tree online, view its exact geolocation, and even visit the tree personally using the provided coordinates. The Bank has planted over 1.5 lakh trees. Through this program.

The BOB Earth is a sub-brand of our Bank that promotes, and emphasizes sustainability. Plantation of - 43499 No. of trees/saplings in Schools, parks, residential societies etc., PAN India during the period 15.11.2023 to 15.12.2023, as part of the Green Campaign under BOB Earth Initiative, we strive to make a positive impact on the environment while promoting a greener and healthier future for all. The Bank continually strives to integrate responsible practices, reduce its carbon footprint, and actively engage in initiatives that benefit our planet and society as a whole.

 

with the first prize under the Narakas Rajbhasha Samman Yojna. Similarly, Varanasi, Jaipur and Bareilly, TOLIC working in convenorship of the Bank were selected for the award by the respective Regional OL Implementation Offices of the Government of India. Our Zonal Offices Baroda, Chandigarh and Navsari Region were also awarded for their outstanding performance in the field of Official Language implementation by the respective Regional OL Implementation Offices of the Government of India. Your Bank was conferred with a total of 15 awards by the Ministry of Home Affairs in the year 202324 which includes Kirti/Regional and other awards. Various offices of the Bank received a total of 35 awards from TOLIC, working under the aegis of Ministry of Home Affairs. 5 staff members of your Bank were declared as winners of the Kanthasth-2.0 competition organized by the Government of India, Ministry of Home Affairs, Department of Official Language (among the total declared winners).

Your Bank has ensured the regular meetings of the 29 TOLICs working under the convenorship of the Bank and compliance with the instructions laid down by the Government of India in this regard. Bank continued with its unique scheme “Medhavi Vidyarthi Samman Yojana” for popularising Hindi in 71 Universities of the country. Under this scheme, cash prizes and commendation certificates are given to two meritorious students securing first and second positions respectively in M.A. (Hindi) examinations every academic year.

Overall, your Bank is committed to fulfil its constitutional responsibilities regarding the use of Official Language and other Indian languages for regulatory compliance, business development and customer convenience.

Sustainability - ESG - An environmental friendly approach

The Bank recognizes the pressing importance of addressing climate change and acknowledges global warming as one of the most significant threats to businesses and communities worldwide. In recent times, climate change risk has emerged as a critical challenge for the financial industry. In response, the Bank is deeply comm i tted to minimizing the impact of climate change risk a nd actively working towards the sustainable development of its banking operations. Our objective is to achieve economic growth while ensuring the preservation of environmental and social ecosystems.

As a responsible policy measure, the bank strictly adheres to guidelines that prohibit financing borrowers involved in the establishment of new units producing or consuming Ozone Depleting Substances (ODS). Similarly, small and medium-scale units engaged in the manufacturing of aerosol units using Chlorofluorocarbons (CFC) are not eligible for Bank financing. These measu r es align with our commitment to reducing the greenhouse effect and contribute to a more sustainable future.

To strengthen our commitment to sustainability, the Bank has established the CSR and Sustainability Committee at the Board level. This committee plays a pivotal role in implementing sustainable strategies and integrating responsible Environment, Social, and Governance (ESG) practices throughout the organization. Furthermore, a

Corporate Social Responsibility (CSR)

The Bank has a long legacy and tradition of actively contributing to the social and economic development of the communities through various development activities. The Bank as a responsible corporate citizen, continuously strives to contribute towards social welfare & environmental protection, particularly for the upliftment of the underprivileged sections of the society to make sustainable social changes in their lives. Skill development through training for gainful employment, human welfare and other social activities like women welfare, health care etc continues to remain the Bank's key focus areas. The Bank is helping different organizations engaged in various community development and socioeconomic welfare activities for the benefit of weaker sections and rural citizens.

The Bank has 65 Rural Self Employment Training Institutes (RSETIs) in 11 States/UTs across the country to impart skill development training to the youth of rural and semi urban areas for generating self-employment. Since inception, these centres have conducted 24,263 training programmes and imparted training to 6.76 lakh youth, out of which 4.65 lakh have already setup their own ventures or have secured wage employment. Out of -65- RSETIs, -64- RSETIs are graded as “AA” (outstanding) by Ministry of Rural Development, GOI based on the overall performance/functioning and -1- RSETI

i.e. RSETI Pasighat will be rated during FY 2024-25 being new RSETI.

The Bank has also set up 85 Financial Literacy Centres (FLCs) in 12 States/UTs which provide financial counselling services and education to the people in rural, semi-urban and urban areas about various financial products and services available from the formal financial sector. These centres also take up activities that promote financial literacy, awareness about banking services, digital banking, financial planning and amelioration of debt-related distress of an individual.

As per RBI directives, Bank has also set up 196 Centres for Financial Literacy (CFLs) spread across -9- states and -1- Union Territory that are aimed at imparting financial literacy in tribal and backward blocks through innovative and participatory approach.

Bank has also donated to various social causes viz., financial assistance to deserving poor students for their education, donation of medical equipment and healthcare, donation towards smart classes, donation of water coolers and RO systems for hospitals and donation towards relief fund in cyclone affected areas.

Domestic Subsidiaries and Joint Ventures

BOBCARD Limited

BOBCARD Limited (formerly known as BOB Financial Solutions Limited) was established in 1994 as a Non-Banking Financial Company, wholly owned by the Bank. Its primary business is in credit cards with key differentiator being simple, easy-to-understand products that are fairly priced, efficiently serviced, and can easily be availed through a digital-all application process.

FY 2024 was a continued year of growth for BOBCARD consolidating its industry position and budling seamless integration with parent Bank. As per RBI data for FY24, the company continued with steady increase in share across cards and spends in the credit card industry. We rank 9^th in terms of market share of cards with a share of 2.5% and with a spends share of 1.5%, BOB Card ranks 11^th in terms of monthly spends.

The company issued approximately 10.9 lakh new credit cards in FY24 and continued to be among the largest issuers in terms of incremental customer acquisition. The company further consolidated its two-pronged growth strategy (of BoB customers on one side and key partnerships on the other) by focusing on growing both portfolios i.e. proprietary cards, where the focus in FY24 has been on paid and premium cards to diversify the composition, and co-branded cards, where the focus has been on growing the customer base.

Credit Card on UPI (CC-UPI) was launched for RuPay Credit Cardholders in May 2023. More than 1282 (count) have been spent on CC-UPI in FY24 with ever highest spends milestone of ' 221 crores achieved in March 2024.

The company continued to invest in technology for enhancing customer experience and improving products and processes. Virtual Credit Card, new versions of the Mobile App, Launch of Visa empower card & Rupay Business Card and automation of key processes were some of the highlights of FY24.

The company launched over 2K offer communications across 50+ spend categories to its cardholders during the festive months. These offers were across regular and EMI spends. Multiple communication channels, including social media, were used to reach customers across the country. BOBCARD also launched rebranding announcement with the thematic campaign proposition ‘Remember to Reimagine.' Refreshed all brand assets to adopt a new visual identity, serving as a catalyst to amplify our new brand identity and drive awareness & consideration.

Brief Highlights of BOBCARD limited for FY 2024 (IGAAP financials) are indicated below:

(' in crore)
BOBCARD Ltd.
Particulars	FY 2023	FY 2024
Total Assets	3,520.45	5,217.15
Net Profit/(Loss) for current FY	24.62	59.27
Net NPA levels for current FY	68.55	32.65
Credit rating	Crisil A1 +	Crisil A1 +
Â	India rating A1 +	India rating A1 +
Return on Assets	0.71%	1.14%

BOB Capital Markets Ltd.

BOB Capital Markets Ltd. (BOBCAPS), a wholly owned subsidiary of Bank of Baroda, is a SEBI registered Category-I Merchant Banker and also a Stock Broker with memberships of National Stock Exchange (NSE) and Bombay Stock Exchange (BSE).

BOBCAPS offers a wide spectrum of financial services that includes fund raising from primary markets /PE funds, debt syndication, stressed asset resolution, equity valuation, mergers and acquisitions advisory and stock broking (both institutional and retail). It has two operating segments, viz. Investment Banking and Broking & Distribution.

BOBCAPS continued to receive good traction for its businesses during FY 2024. Investment banking team successfully closed several transactions including marquee IPOs, QIP debt resolutions, debt syndication, DCM and M&A advisory. IB Equity successfully closed IPOs of IREDA & IRM Energy which were over subscribed. This has led to earning of deal credentials which is important for securing new mandates. The Company incurred a loss, largely on account of creation of technology & Account acquisition infrastructure. Both Instituitional & Retail Broking business revenue have grown significantly with focus on revenue. The retail client base has doubled during the year & the Company is revamping its entire retail technology platform to scale up business.

Brief Highlights of BOB Capital Markets Ltd for FY 2024 are indicated below:

BOB Capital Markets Ltd
Particulars	FY 2023	FY 2024
Total Assets (in Crore)	179.34	169.00
Net Profit/Loss for FY (in Crore)	1.25	(12.50)
Customer base (Nos)	1,00,929	2,08,768
Total number of branches (Nos)	3	3

Baroda Global Shared Services Ltd.

Baroda Global Shared Services, a wholly owned subsidiary of the Bank of Baroda, is an outcome of a strategic decision made by the Bank in 2017 to integrate back-office services into a single entity, thereby, reducing service replication & business unit silos, creating synergies, and improving economies of scale.

BGSS locus is in creating value for the parent Bank through reduced cost-to-income ratio, reduced credit losses, new business generation & client retention.

In line with this objective of value creation for the Bank, FY2024 was a year of consolidation & growth with focus on expansion & operational excellence while emphasis on continuous evolution. Continuous improvement cerebration coupled with robust risk & governance framework is enabling BGSS to follow its growth trajectory which is evident from BGSS topline CAGR growth of ~56% (since FY2020).

During the financial year, the organization has been involved

in implementation of several marquee transactions/projects

including:

1.    Certified as Great Place to Work - (GPTW 24-25).

2.    DST business had witnessed a turnaround in profitability with productivity improvement & keeping COA under control and resulting in an enhance value for the Bank.

3.    Collections Tele-Calling- SMA 0 POS resolution increased to '62,000 Cr in FY2024 from '53,000 Cr in FY2023.

4.    Forayed into international territories with launch of BOB UK Data Enrichment & Contact Centre operations.

5.    Process re-engineering through deployment of automation & Lean Six Sigma methodology and enhanced productivity /efficiency of ~10% Y-o-Y (centralized operations).

6.    ISO 9001:2015 Certification across 9 processes completed meeting process quality standards.

7.    ISO 27001:2013 certification & deployed SOC (Security Operations Centre) exhibiting BGSS commitment to information security.

8.    Operational resilience & robust governance through ISO 22301:2019 BCMS Certification.

9.    Annual CSAT survey was conducted with 92.8% of the audience appreciating BGSS performance and following in Excellent & Very Good category.

10.    Augmented learning culture and introduced an integrated LMS (Learning Management System) platform for Digital Learning Academy.

11.    Improved Gender Diversity (26%).

12.    Extended support to the Bank by swiftly deploying BGSS manpower across 108 Retail Assets RAPC centres (pan India).

13.    Extended Digital Outbound calling for assisting existing Bank's customers for various digital products inter alia CBDC, Platinum Debit Card, WhatsApp Banking.

14.    Launched pilot for NR Global Helpdesk operations.

A Snapshot of the BGSS Financial Performance

(' Cr)
Baroda Global Shared Services Ltd. (BGSS)
Particulars	FY2023	FY2024
	Audited	Audited
Total Income	254.81	348.74
Expenses	242.88	323.25
PBT	11.7	25.5
PAT	9.51	19.77
PAT %	3.73%	5.67%

BarodaSun Technologies Ltd.

BarodaSun Technologies Limited has been incorporated as a wholly owned subsidiary of Bank of Baroda on July 5, 2017 with the Registrar of Companies, Mumbai, Maharashtra. The company has been formed to deliver system integration and consultancy services on matters relating to ever evolving IT enabled business solutions, software product application and implementation across various lines of business, for Bank of Baroda.

The Company is yet to commence full-fledged operations and it is envisioned to initiate activities like programme / project management and support services to implement enterprisewide IT projects and development of financial products and solutions to effectively cater to various business needs providing technological edge across different business verticals of the Bank.

The Nainital Bank Ltd.

The Nainital Bank Limited (NBL), originally promoted by Late Bharat Ratna Pandit Govind Ballabh Pant and others in 1922, became a subsidiary of Bank of Baroda in the year 1973. The Bank's holding in Nainital Bank Ltd is 98.57%. NBL has its registered office at Nainital and has operations in five states: Uttarakhand, Uttar Pradesh, Delhi and National Capital Region (NCR), Haryana and Rajasthan. NBL has -171- branches as on March 31, 2024. The total business of NBL increased to ' 13086.87 crore on March 31, 2024 from '12,305.42 crore as on March 31, 2023. The Bank posted a net profit of '47.10 crore in FY 2024 against a net profit of ' 46.30 crore during the previous year.

Baroda BNP Paribas Asset Management India Pvt. Ltd (BBNPA AMC)

BBNPP AMC is a majority owned subsidiary of Bank of Baroda. It is a joint venture between Bank of Baroda (50.1% shareholding) and BNP Paribas Asset Management Asia Ltd (49.9% shareholding). The Company is the Asset manager for Baroda BNP Paribas Mutual Fund. Both Bank of Baroda and BNP Paribas AM had existing fund management businesses in India, which were merged in March 2022 to create this JV

BBNPP AMC builds on the strength of its sponsors. The AMC leverages the vast network and local reach of the Bank of Baroda and global best practices and market knowledge of BNP Paribas Asset Management. Over the years, AMC has aggressively invested in strengthening investment capabilities, product range, reach, and distribution. The AMC managed MF AAUM of '35,646 crs during Jan-Mar 2024, representing a strong growth of 45% yoy. Additionally, the AMC also offers advisory services to offshore clients with AUM of '2,257 crs as of Mar 31,2024. Driven by the strong AUM growth and cost discipline, the operations of AMC became profitable during the year.

Brief Highlights of Baroda BNP Paribas Asset Management India Pvt. Ltd for FY 23-24 are indicated below:

Â	Â	(' in crore)
Baroda BNP Paribas Asset Management India Pvt. Ltd.
Particulars	FY 2023	FY 2024
Total Assets	187.36	191.43

Baroda BNP Paribas Asset Management India Pvt. Ltd.
Particulars	FY 2023	FY 2024
Net Profit for current FY	(6.88)	6.11
Average Assets under Management (AAUM)	26,436*	37,903*
Equity to overall AAUM (%)	56%	56%
*Includes advisory AAUM of '1,929 crores in '2,257 crores in FY2024.		FY2023 and

Indian MF industry is seeing accelerated growth driven by the rising aspiration of Indian middle class coupled with increased awareness about Mutual funds. An encouraging trend is that smaller towns are growing at more than double the pace of larger cities. India has possibly the best digital transaction infrastructure in the world, leading to rapid digital adoption by clients. The AMC is leveraging all these trends to create a strong presence in India. The AMC is committed to building a top-tier fund house that serves both -clients at home in India as well as helps foreign investors access the Indian market.

IndiaFirst Life Insurance Company Ltd.

Headquartered in Mumbai, IndiaFirst Life Insurance Co. Ltd., is a domestic subsidiary of Bank of Baroda promoted along with Carmel Point Investments India Private Limited, owned by private equity funds managed by Warburg Pincus LLC. Union Bank of India is an investor in the Company. Total share capital of the Company is '1,433 Crores (including share premium)

In FY 2024, IndiaFirst Life posted Total Gross Written Premium of ' 6,974 crore with YoY growth of 14.8%. The Company improved its rank by 1 position to 11^th rank as compared to last year on Total New Business GWP amongst private Life Insurers. IndiaFirst Life's assets under management (AUM) is at '27,073 Crores as on 31st March 2024. Company posted Net Profit of ' 112.31 crore and total Income of ' 10,009 crore for FY 2024.

IndiaFirst Life was certified as a Great Place to Work (GPTW) for the sixth time in a row, a recognition considered as the gold standard for defining great workplaces across business, academia and government organisations along with being recognised among the ‘Top 50 of India's Best Workplaces in BFSI' by GPTW. The Company was also recognised among Best Brands of 2023 by The Economic Times.

India Infradebt Ltd.

India lnfradebt Limited (Infradebt) is the first Infrastructure Debt Fund (IDF) NBFC to commence operations in India. Bank of Baroda and ICICI Bank are the largest shareholders, while other shareholders include Citicorp Finance (India) Limited and Life Insurance Corporation of India. Infradebt finances the relatively safe, completed infrastructure projects which have achieved at least one year of commercial operations. Infradebt has been rated AAA/Stable outlook by CRISIL, ICRA and India Ratings since inception. Infradebt also enjoys 100% income-tax exemption on all its income.

The synergy with the Bank arises from Infradebt's focus on lending to strong, stable infrastructure projects - mainly renewable energy projects and road projects, thus promoting green energy in India and contributing to nation building. Infradebt business has grown steadily, with a loan book of

' 20,938 crores, Net Profit of ' 441.71 crores and Return on Equity of 14% during FY2024. Infradebt has also been paying dividends continuously for the past seven years.

A brief summary of Bank's all the domestic subsidiaries and Joint Ventures is given below:

(' in crore)
Entity	Owned funds	Total assets	Net profit	Offices	Staff
BOBCARD Ltd.	1070.90	5217.14	59.27	44	487
BOB Capital Markets Ltd.	148.29	169.63	-12.50	4	129
BarodaSun Technologies Limited	4.74	4.82	0.155	1	0
Baroda Global Shared Services Ltd	58.85	148.49	19.78	2	4634 (3342 On roll & 1292 Third Party)
The Nainital Bank Ltd.	776.85	9306.82	47.10	171	1170 ( including MT & officers)
Baroda BNP Paribas Asset Management India Pvt. Ltd.	158.42	198.24	6.11	9	275
Baroda BNP Paribas Trustee India Pvt. Ltd.	0.28	0.40	0.03	1	1
IndiaFirst Life Insurance Company Ltd.	1,181.30	28,143.70	112.31	29	4,720
India Infradebt Limited	3206.35	22981.68	441.71	1	30

Awards

In recognition of Bank's excellent performance in financial, digital front and other unique initiatives, the Bank was conferred with many awards and accolades durinq the FY 2024 which are qiven below;

Month

AWARDS RECEIVED DURING FY 2024

Q1 FY 24

•    Ms. Swapna Bandopadhaya, General Manager, presented with Advantage Club's Exceptional Women Award in Human Resources. •    Bank of Baroda receives the Best Contact Centre of the Year award 2023 at the Digital Customer Experience Confex & Awards 2023 organised by Gain Skills Business Media Pvt Ltd. •    Bank of Baroda received two awards at the Express Computer - BFSI Technology Awards 2023 in the Enterprise Mobility and Analytics/Big Data categories. •    Bank of Baroda won the Best Retail Financier award amongst PSU Banks at the Annual Financiers Awards 2022 organised by JCB India. •    Bank of Baroda was felicitated at the ET Best BFSI Brands 2023 for its leadership in the Banking sector. •    Bank of Baroda received two awards at the 7th edition of Adgully's-DIGIXX 2023 awards. o Gold - in the Search/Display Marketing category for Baroda Car Loan o Silver - In the Best use of Social Media (BFSI) category - #SaluteHerShakti campaign. •    Bank of Baroda received three awards at the ACEF Global Customer Engagement Forum & Awards: o Best Event Promotion for Sun Run 2.0 (Silver Award) o Best Use of Celebrity Endorsement for Sun Run 2.0 (Bronze Award) o Best Innovative Radio Campaign (Silver Award) for 115 hours of non-stop RJ Marathon on the occasion of the Bank's 115th Foundation Day. •    Bank of Baroda wins Gold at the 7th Annual Drivers of Digital awards organised by Inkspell Media in the category “Best Use of Animation or Graphics” for its # dilsedigital campaign. •    Bank of Baroda wins Bronze at the 7th Annual Drivers of Digital awards organised by Inkspell Media in the category “Best Use of Video Marketing on Social Platform” for its #PehchaanCon campaign. •    Bank of Baroda wins Gold in the Radio-Innovation category for Best Use of Sponsorship in an On-Air/On-Ground Radio Campaign for LALBAUGH LIVE at the Golden Mikes Awards 2023. •    Bank of Baroda wins Silver in the Radio-Creativity category for Best Single Commercial-Insurance, Banking & Financial Services for the 115 Hours of RJ Marathon campaign at the Golden Mikes Awards 2023. •    Bank of Baroda wins Bronze in the Radio-Promotion category for Best on Ground Promotion for/by a Brand-Single Radio Station for the Foundation Day at the Golden Mikes Awards 2023. •    Bank of Baroda Wins the 'Best Customer Service Initiative of the Year (Banking)' Award by Quantic India. •    Bank of Baroda has bagged the Atal Pension Yojana Annual for FY 2022-23 by Pension Fund Regulatory & Development Authority (PFRDA) •    Bank of Baroda wins two awards at The Great Indian BFSI Awards - 1) The Great Indian Internal Communication Campaign of the Year for #IAmSocial and 2) The Great Indian BFSI Lead Generation Campaign of the Year for BOB Home Loan •    Bank of Baroda wins CXO TV's Cloud Innovation Awards 2023 in the Smart Digital Category •    Bank of Baroda has been awarded with the “Great Place to Work” Certification 2023 for the 2nd year in a row by Great Place to Work Institute. Bank has also been awarded with “India's Best Employers Among Nation Builder 2023” and “India's Best Employers in Public Sector Undertaking 2023” •    Shri Akhil Handa, Chief Digital Officer, Bank of Baroda received the AI100 Award 2023 India, recognizing him as one of India's top 100 influential AI leaders by MachineCon India 2023. •    Bank of Baroda awarded third place in the State Level Best Banker award for the year 2022-23 for its contribution to the MSME sector, organised by Industries and Commerce Department of Tamil Nadu Government.

Month	AWARDS RECEIVED DURING FY 2024
Q2 FY 24	•    Bank of Baroda wins following awards at the Emerging Asia Banking Awards, organised by Indian Chamber of Commerce o The Best Bank - India award in the Large Public Sector Bank category o The Best Performance on CASA-India in the Large Public Sector Bank category o First runner-up in The Best Performance on Profitability-India in the Large Public Sector Bank category o First Runner-up in The Best Performance on Risk Management-India in the Large Public Sector Bank category o First Runner-up in The Best Performance on Asset Quality-India in the Large Public Sector Bank category. o Second Runner-up in The Best Performance on Growth-India in the Large Public Sector Bank category. •    Bank of Baroda bags Maverick award by Exchange4media for Best Marketing Campaign for a BFSI Brand for Digital Car Loan •    Bank of Baroda wins Gold in the mCube Awards organised by Inkspell Media for its campaign #SaluteHerShakti under the category of Best ATL Campaign for a Financial Enterprise •    Bank of Baroda wins Gold in the mCube Awards organised by Inkspell Media for bob World under the category of Best Display Marketing in Digital •    Bank of Baroda wins Gold in the mCube Awards organised by Inkspell Media for its campaign #SmashItWithSindhu under the category of Best Innovation/Creativity in a Social Media Campaign •    Bank of Baroda has been honoured with two awards, Best CX Strategy of the Year 2022-23 and Best Organisation in Customer Satisfaction at the Digital Customer Experience Confex & Awards 2023 organised by Gain Skills Business Media Pvt Ltd. •    7.Bank of Baroda has bagged the Best Digital Bank award at the 8th Edition of the TechMeet & Technology Excellence Awards organised by ASSOCHAM. •    Shri Ian De Souza, Chief Financial Officer, Bank of Baroda has won Dalal Street Investment Journal's (DSIJ) 2023 CFO Award in Large Cap Category. •    9.Bank of Baroda wins Employee Happiness Awards 2023 organised by Kamikaze B2B Media in the Best Community Impact Initiative category. •    10.Bank of Baroda is felicitated with Network 18, Second Edition of Green Ribbon Champion for contribution to Green Bank of the year. •    11 .Bank of Baroda bags the Government of India's prestigious Rajbhasha Kirti Puraskar. Bank is awarded with the second prize under the ‘Rajbhasha Kirti Puraskar' Scheme of the Government of India for the year 2022-23 in the Nationalized Banks category.
Q3 FY 24	•    Bank of Baroda wins The Financial Express India's Best Banks Awards 2021-22 for ‘Savings Product'. •    Bank of Baroda has been honoured with prestigious award by CafeMutual, recognising the Bank as leading Mutual Fund Distributor (across peer Banks) basis Equity Net Sales performance in FY 2022-23. •    Bank of Baroda won the Governance Now BFSI Awards 2023 under the category "Digital Bank”. •    Bank of Baroda won the Silver metal for paid digital campaign for Baroda Car Loan at Pitch BFSI Marketing Awards 2023. •    Bank of Baroda felicitated under the Most Engaging Content category for the social media marketing campaign for bob World in India Content Leadership Awards 2023 by INKSPELL. •    Bank of Baroda felicitated with the prestigious "National Award for Outstanding Performance in the SHG (Self Help Group) Bank Linkage Programme” for 2022-23 by Deendayal Antyodaya Yojna - National Rural Livelihoods Mission, Ministry of Rural Development, Government of India. •    Bank of Baroda received the “Progressive Places to Work 2023” award by ET Edge (The Times Group) •    Bank of Baroda won the 7th IDC Future Enterprise Awards under the category “Best in Future of Customer Experience” for its Digital Lending Platform.

Month

AWARDS RECEIVED DURING FY 2024

Q4 FY 24

•    Bank of Baroda bags Best Savings Bank Award at Navabharat BFSI Summit & Awards 2023 •    Bank of Baroda was named "Best Bank” in the Large Public Sector Banks category by the State Forum of Bankers' Clubs Kerala (SFBCK) based on the Bank's performance in the financial year 2022-23. •    Bank of Baroda was named ‘India's Leading Public Bank (Large)' at the 16th Dun & Bradstreet BFSI & Fintech Summit 2024 for its outstanding performance for the period 1st April 2022 to 31st March 2023 •    Bank of Baroda was recognised as the Winner (Public Sector) at the IBEX India 2024 BFSI Technology Awards under the category “Excellence in Financial Inclusion”. •    Bank of Baroda has been recognised as the winner of the Elets BFSI CXO Award in the category “Excellence in Innovation & Customer Engagement initiative”. •    Bank of Baroda was named the winner for “Best AI & ML Bank” and “Best Technology Talent” among Large Banks at the Indian Banks' Association's (IBA) 19th Annual Banking Technology Awards 2023. The Bank also received a Special Mention in four award categories - Best Technology Bank, Best IT Risk Management, Best Fintech & DPI Adoption and Best Financial Inclusion. •    Bank of Baroda has been honoured with ‘Best Central Public Sector Bank of India - Banking & Finance' Award at the 5th IPSE (India Public Sector Enterprises) Awards. •    Bank of Baroda was awarded the Best Use of Experiential Marketing and Best Performance Marketing Campaign of the Year award at the ASSOCHAM Branding & Marketing Summit cum Excellence Awards. •    Bank of Baroda has been recognised as ET NOW Best BFSI Brands for 2024 at the 7th edition of The ET Now Best BFSI Brands Conclave. •    Bank of Baroda emerges victorious at the ET BRANDEQUITYcom's ET Trendies Award for Cause-based Marketing for the Bank’s # PehchaanCon Influencer Campaign

Dividend Distribution Policy

Board of Directors of the bank has recommended a dividend of '7.60 per share for the financial year ended March 31,2024. The total outgo in the form of dividend will be '3,930.24 crore. The payment of dividend is subject to requisite approvals. The dividend distribution policy is given in this Annual Report and is also available on the Bank's website.

Board of Directors (Appointment / Cessation of Directors during the year)

Appointments

Shri Debadatta Chand was appointed as Managing Director and Chief Executive Officer w.e.f. 1^st July, 2023 by the Central Government u/s 9(3)(a) of The Banking Companies Acquisition and Transfer of Undertakings) Act, 1970, for a period of three years, or until further orders, whichever is earlier.

Smt. Nina Nagpal was elected as Shareholder Director u/s 9(3) (i) of The Banking Companies Acquisition and Transfer of Undertakings) Act, 1970, for a period of three years from 24^th December, 2023 to 23^rd December, 2026.

Shri Sanjay Vinayak Mudaliar was appointed as Executive Director, with effect from 31^st January, 2024 by the Central Government u/s 9(3) (a) of The Banking Companies Acquisition and Transfer of Undertakings) Act, 1970, for the remainder period of term i.e. upto 31^st December, 2025, or until further orders, whichever is earlier.

Cessations

Shri Sanjiv Chadha ceased as Managing Director & Chief

Executive Officer w.e.f. 30^th June, 2023 upon attaining the age of superannuation.

Smt. Soundara Kumar ceased to be a Shareholders Director w.e.f. 24^th December, 2023 on completion of her term of directorship

Shri Joydeep Dutta Roy ceased to be Executive Director of the Bank w.e.f. 31^st January, 2024, upon his taking over charge as Executive Director of Indian Overseas Bank.

Shri Srinivasan Sridhar ceased to be a Shareholders Director w.e.f. 21^st February, 2024 upon his resignation consequent to his appointment as Non-Official Director / Non-Executive Chairman of Indian Overseas Bank.

Dr. Hasmukh Adhia ceased to be Part-Time Non-Official Director as well as Non-Executive Chairman of the Bank w.e.f. 1^st March, 2024, on completion of his term of appointment on 29^th February, 2024.

Board Evaluation

Bank is following Government of India guidelines dated August 30, 2018 for PSB Governance Reforms - Enhancing governance through improved effectiveness of non-official directors.

Auditors’ Compliance Certificate on Corporate Governance:

The Auditors' Compliance Certificate regarding the compliance of the conditions of Corporate Governance for the year 2023-24 is annexed with this report pursuant to “Part E” of Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information;

f) The Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

Acknowledgements

The Directors placed on record their appreciation for the contribution made by Dr. Hasmukh Adhia outgoing NonExecutive Chairman, Shri Sanjiv Chadha outgoing Managing Director & Chief Executive Officer, Shri Joydeep Dutta Roy outgoing Executive Director and Smt. Soundara Kumar and Shri Srinivasan Sridhar outgoing Shareholder Directors.

The Directors express their sincere thanks to the Government of India, RBI, Securities and Exchange Board of India, other regulatory authorities and the overseas regulators for their continued co-operation, guidance and support.

The Directors would like to take this opportunity to express sincere thanks to our valued clients for their continued patronage and support.

The Directors acknowledge with deep appreciation for the cooperation extended by all shareholders, Banks and Financial Institutions, Rating Agencies, Stock Exchanges and all well-wishers in India and Abroad. The Directors also take this opportunity to place on record deep appreciation for the hard work and dedication of the employees of the Bank.

 

Business Responsibility and Sustainability Report (BRSR)

Business Responsibility and Sustainability Reporting (BRSR) Report as required by SEBI has been hosted on the website of the bank (www.bankofbaroda. co.in). Any member interested in obtaining a physical copy of the same may write to the Company Secretary of the bank.

Directors’ Responsibility Statement

The Directors confirm that in the preparation of the annual accounts for the Financial Year ended March 31,2024.

a)    The applicable accounting standards had been followed along with proper explanation relating to material departures, if any;

b)    The accounting policies framed in accordance with the guidelines of RBI were followed and the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Bank at the end of the financial year and of the profit and loss of the bank for that period;

c)    The Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of applicable laws to the Bank for safeguarding the assets of the Bank and for preventing and detecting fraud and other irregularities;

d)    The Directors had prepared the annual accounts on a going concern basis; and

e)    The Directors had ensured that internal financial controls followed by the Bank are in accordance with guidelines issued by the RBI in this regard and that such internal financial controls are adequate and were operating effectively. Explanation: For the purposes of this clause, the term “internal financial controls” means the policies and procedures adopted by the Bank for ensuring the orderly and efficient conduct of its business, including adherence to Bank's policies, the safeguarding of

1

   The Bank focuses on overall yield from the customer rather than interest income by offering ancillary services like supply chain finance, value chain finance, CMS

2

   Bank has introduced additional services, enhancements in system controls and security features in its mobile banking application for customers. These include integrating credit cards, facilitating NPS subscriptions, incorporating the Liberalised Remittance Scheme (LRS), providing a currency converter, enhancing the mutual fund journey, generating provisional interest certificates for housing loans, offering a digital calendar/planner to track maturity dates of FD/RD/loan EMI due dates in calendar view, and allowing users to create their own events/reminders.

3

   Improving the page load speed time by implementing the best SEO practices.

---

Mar 31, 2019

DIRECTORS’ REPORT

The Directors have pleasure in presenting the One Hundred and Eleventh Annual Report of your Bank with the audited Balance Sheet, Profit & Loss Account and the Report on Business and Operations for the year ended March 31,2019 (FY2019).

Financial Performance

A snapshot of the Bank’s financial performance is as below:

                                                                                                     Rs. in crore

Particulars	31.03.18	31.03.19	Growth (%)
Deposits	5,91,314.8	6,38,689.7	8.0%
of which- Domestic Deposits	4,66,973.8	5,17,966.6	10.9%
International Deposits	1,24,341.0	1,20,723.2	(2.9%)
Domestic Deposits	4,66,973.8	5,17,966.6	10.9%
of which- Current Account Deposits	31,193.1	34,327.6	10.1%
Savings Bank Deposits	1,61,130.0	1,74,076.2	8.0%
CASA Deposits	1,92,323.1	2,08,403.8	8.4%
Domestic CASA to Domestic Deposits (%)	41.2	40.2	Â
Advances	4,27,431.8	4,68,818.7	9.7%
of which- Domestic Advances	3,24,238.5	3,70,185.0	14.2%
International Advances	1,03,193.3	98,633.8	(4.4%)
Total Assets	7,19,999.8	7,80,987.4	8.5%
Net Interest Income (NII)	15,521.8	18,683.8	20.4%
Other Income	6,657.2	6,090.9	(8.5%)
of which-Fee Income	3,249.7	3,576.1	10.0%
Forex Income	909.2	693.2	(23.8%)
Trading Gains	1,877.6	989.5	(47.3%)
Recovery from PWO	620.7	832.0	34.0%
NII + Other Income	22,179.0	24,774.7	11.7%
Operating Expenses	10,173.4	11,288.0	11.0%
Operating Profit	12,005.6	13,486.8	12.3%
Provisions	14,796.4	12,788.7	(13.6%)
of which- Provisions for NPAs & Bad debts written off	14,211.7	12,192.4	(14.2%)
Profit Before Tax	(2,790.7)	698.2	Â
Provision for Tax	(358.9)	264.6	Â
Net Profit	(2,431.8)	433.5	Â
Appropriations/ Transfers	Â	Â	Â
Statutory Reserve	0	108.4	Â
Capital Reserve	0	210.4	Â
Revenue and Other Reserves	Â	Â	Â

 

I) General Reserve	(2431.8)	0	Â
II) Special Reserve u/s 36 (i) (viii) of the Income Tax Act 1961	0	182.1	Â
Proposed Dividend	0	0	Â

                                                                               Rs. in crore

Key Performance Indicators	31.03.18	31.03.19
Average Cost of Funds (%)	4.56	4.83
Average Yield (%)	6.84	7.28
Average Interest Earning Assets	6,37,987.0	6,86,743.0
Average Interest Bearing Liabilities	6,16,243.9	6,48,495.6
Net Interest Margin (%)	2.43	2.72
Cost-Income Ratio (%)	45.87	45.56
Return on Average Assets (ROAA) (%)	(0.34)	0.06
Return on Equity (%)	(7.64)	1.18
Book Value per Share (Rs.)	120.28	138.42
Basic EPS (Rs.)	(10.53)	1.64

The benefit of structural changes undertaken by the Government and Reserve Bank of India (RBI) finally bore fruit in FY 2019. The implementation of the Insolvency and Bankruptcy Code (IBC) has led to improvement in cash recovery in the banking system. In addition, the ratio of nonperforming loans to advances for Scheduled Commercial banks (SCBs) has also started to come down and now stands at 10.8% as on September 2018 from 11.5% as on March 2018. The steady uptick in credit growth during the year in conjunction with decline in non-performing loans implies underlying improvement in the operating performance of the banking system. However, deposit growth continues to remain a challenge. Banks have raised interest rates on deposits to mobilise them and this will lead to higher inflow of resources to the banking system.

Domestic deposits of the Bank increased by 10.9% in FY 2019 compared with an increase of 6.1% in FY 2018. Domestic credit growth was above industry growth at 14.2% which led to a 20.4% increase in net interest income (NII). Both domestic as well as international margins expanded. The net interest margin (NIM) improved from 2.43% to 2.72% in FY 2019. The cost to income ratio decreased marginally to 45.56%.

The Bank posted an operating profit of Rs.13,486.8 crore registering an increase of 12.3%. Total provisions (other than tax) and contingencies decreased by 13.6% and provisions for NPAs reduced by 14.2%. The Bank posted a net profit of Rs.433.5 crore.

Capital Adequacy Ratio (CAR)

                                                                   Ratios in %

Â	31.03.18	31.03.19
Capital Adequacy Ratio -Basel III	12.13	13.42
CET-I	9.23	10.38
Tier - I	10.46	11.55
Tier - II	1.67	1.87

The Capital Adequacy Ratio (CAR) and CET-1 of the Bank stood at 13.42% and 10.38% respectively as on March 31, 2019. The consolidated group capital adequacy ratio was higher at 14.52%. The Bank’s net worth as of March 31, 2019 was Rs.36,620 crore comprising of paid-up equity capital of Rs.530 crore, reserves of Rs.31,047 crore (excluding revaluation reserves, foreign currency translation reserves and other intangible assets) and share application money pending allotment worth Rs.5,042 crore. The book value of the share (FV Rs.2) was Rs.138.42.

Dividend

Bank is not eligible to pay dividend for the financial year 2018 19 on account of not meeting the eligibility criteria stipulated by RBI for this purpose.

Management Discussion and Analysis

Global Economy

The global economy slowed down to 3.6% in Calendar Year (CY) 2018 after growing at 3.8% in CY17. The slowdown was markedly visible in the second half of the calendar year. According to IMF, global growth is likely to slip further to 3.3% in CY19, before picking up to 3.6% in CY20. The dip in global growth was largely on account of a slowdown in growth in Europe and China. The US housing sector has also seen some deceleration after yields increased as a result of successive rate hikes by US Federal Reserve. Other factors that have contributed to the global slowdown are Brexit, imposition of tariffs by US and China and run-off of US fiscal stimulus. According to IMF, growth is likely to pick-up in H2CY19 on the back of accommodative monetary policies by major central banks, prospects of a positive US-China trade deal and China’s fiscal stimulus to boost domestic consumption. Growth in Emerging Market and Developing Economies (EMDEs) is expected to rebound to 4.8% in CY20 from 4.5% in CY18 and 4.4% in CY19. Advanced Economies (AEs) will continue to witness modest growth which is expected to level at 1.7% in CY20 versus 2.2% in CY18 and 1.8% in CY19. Downside risks to global growth may emerge from escalating trade tension between US and other countries, a no-deal Brexit and geopolitical risks driving oil prices higher.

Indian Economy

The Indian economy witnessed a growth of 7% in FY 2019, down from 7.2% in FY 2018. This is the slowest pace of growth in over 5 years. The drop is primarily on the back of a slowdown in the agriculture sector which is expected to clock only 2.7% growth in FY 2019, much lower than the 5% growth in FY 2018. The area sown under both Kharif and Rabi declined due to spatially distributed and below normal rainfall. Manufacturing which was hitherto driving growth in the larger part of the year is also seeing a slowdown now as both external and domestic demand seems to have slowed down. Construction is the only bright spot on the back of higher spending by state governments.

With growth coming off, retail inflation has also fallen to 3.4% in FY 2019 as compared to 3.6% in FY 2018. This was led by benign food inflation at around 0.2% in FY 2019 compared to 1.8% in FY 2018. Core inflation on the other hand remained elevated at 5.8% in FY 2019 as against 4.6% in the previous year. Higher oil prices in H1FY 2019 and stickiness in the health and education components drove the core CPI higher. However, core inflation has been steadily coming off towards the end of the year.

Domestic consumption has seen a cyclical slowdown with drop in auto sales and non-oil-non-gold and electronic imports. However, the announcement of measures such as “Pradhan Mantri Kisan Samman Nidhi (PM-KISAN) and expected upturn in government spending in the next quarters may provide the requisite boost to the economy. In addition, the government’s effort towards providing affordable housing and building infrastructure are also likely to support investment demand in the economy in the near term.

Developments in Indian Banking

With growth and inflation coming-off, RBI has reduced policy rates. The anticipation of change in stance and reduction in policy rates did lead to decline in 10-year government bond yields which had increased substantially in H1FY 2019 and had peaked at 8.18%. This was driven by increasing liquidity deficit on the back of FPI outflows. Higher oil prices and NBFC liquidity woes also contributed to upward pressure on yields. As a result, the RBI undertook durable liquidity infusion in the form of Open Market Operation (OMO) purchases of Rs.2.99 lakh crore and US$ swap. These measures coupled with the slowdown in global growth and the dovish outlook by major global central banks led to decline in yields in the latter half of FY 2019.

Credit growth of the banking system continued to improve in the year, from 10.0% as on March 31, 2018 to 13.2% as on March 31, 2019. Deposit growth that was lagging behind also showed an improvement to 10.0% as in March 2019 compared with 5.8% as in March 2018. This has been possible due to higher interest rates offered by banks.

The increase in credit growth is driven by government’s recapitalisation to the extent of Rs.1.06 lakh crore in Public Sector Banks (PSBs) in FY 2019. The structural reforms undertaken by the government and RBI are also visible in underlying improvement in stressed assets of the banking system. RBI has projected that the gross NPA ratio for the SCBs would fall to around 10.3% in March 2019 from 11.5% in March 2018. The slippage ratio has declined from 7.6% in March 2018 to 4.1% in September 2018. The Provision Coverage Ratio (PCR) has also increased significantly from the levels in March 2018. All these indicators point to a much stronger recovery in the banking system in the coming years.

Another significant reform in the year was further consolidation of the banking system which a number of Committees have recommended in the past from Narsimham Committee to Nayak Committee. The Government moved in this direction by way of a three-way merger between Bank of Baroda and Dena Bank and Vijaya Bank. With this amalgamation, Bank of Baroda has now become the second largest PSB in the country.

In view of the reforms undertaken by the government and RBI not only for resolution and recovery of non-performing assets but also a digital driven lending push and consolidation, the banking system is likely to see underlying improvement in profitability in the medium-term.

Business Performance

The highlights of business performance of the Bank are as below:

Resource Mobilisation and Credit Expansion

                                                                                    Rs. in crore

Particulars	31.03.18	31.03.19	Growth (%)
Deposits	5,91,314.8	6,38,689.7	8.0%
of which- Domestic Deposits	4,66,973.8	5,17,966.6	10.9%
International Deposits	1,24,341.0	1,20,723.2	(2.9%)
Domestic Deposits	4,66,973.8	5,17,966.6	10.9%
of which- Current Account Deposits	31,193.1	34,327.6	10.1%
Savings Bank Deposits	1,61,130.0	1,74,076.2	8.0%
CASA Deposits	1,92,323.1	2,08,403.8	8.4%
Domestic CASA Deposits (%)	41.2	40.2	Â
Advances	4,27,431.8	4,68,818.7	9.7%
of which- Domestic Advances	3,24,238.5	3,70,185.0	14.2%
International Advances	1,03,193.3	98,633.8	(4.4%)
Total Assets	7,19,999.8	7,80,987.4	8.5%

Domestic CASA balances registered a growth of 8.4% over the previous year. The CASA Ratio was maintained well above 40.0% for the financial year. Term Deposits posted a growth of 12.7% which is almost twice as much as the previous year. In order to augment the CASA portfolio, the Bank has opened 94,52,510 new CASA accounts during FY 2019. The Bank has taken several steps to improve its processes and strengthen the product proposition to meet the increasing requirements of customers. The account opening process for savings account has been digitised through tablets leading to a turnaround time of a few minutes. More than 70% accounts (Non FI) are opened digitally through tablets. The Bank has also initiated issuance of non-personalised debit cards. The Bank is planning to commence opening of current accounts through tablets.

The Bank also introduced new segmented offerings for women, senior citizens, expats and the salaried class to augment deposits. These schemes have received a encouraging response from our customers. Bank of Baroda has also rolled out Doorstep Banking Service for retail customers on a pilot basis.

The Bank has launched online opening of Demat and Trading Account this year and has become a pioneer among other scheduled Banks to extend such facility to the customers. In Application Supported by Blocked Amount (ASBA), the Bank was awarded by the Bombay Stock Exchange (BSE) for being a top performer in the primary market segment of IPO/FPO bids for FY 2018 .

Credit Expansion:

During FY 2019, the Bank continued to gain market share with a well-diversified credit portfolio. Domestic advances of the Bank increased by 14.2% during the year compared with an industry growth of 13.2%. The growth was led by retail and was well spread across other business verticals. Retail loan growth was 24.2%, led by home and auto loans at 22.2% and 49.4% respectively while corporate loan growth was 15.6%. The ratio of retail loans to total domestic loans increased from 19.6% to 21.5% during the year. The international loan book declined by 4.4% on account of continued focus of the Bank on re-balancing of assets and decline of Buyers’ Credit book.

The total assets of the Bank increased by 8.5% from Rs.7,19,999.8 crore on March 31, 2018 to Rs.7,80,987.4 crore as on March 31, 2019.

Operating Performance:

The highlights of operating performance of the Bank are as below:

                                                                                                           (Rs. in crore)

Particulars	31.03.18	31.03.19	Growth (%)
Interest Earned	43,648.5	49,974.1	14.5%
Interest Expended	28,126.8	31,290.3	11.2%
Net Interest Income (NII)	15,521.8	18,683.8	20.4%
Other Income	6,657.2	6,090.9	(8.5%)
of which- Fee Income	3,249.7	3,576.1	10.0%
Forex Income	909.2	693.2	(23.8%)
Trading Gains	1,877.6	989.5	(47.3%)
Recovery from PWO	620.7	832.0	34.0%
Operating Income (NII + Other Income)	22,179.0	24,774.7	11.7%
Operating Expenses	10,173.4	11,287.9	11.0%
Employee Expenses	4,606.9	5,039.1	9.4%
Other Operating Expenses	5,566.5	6,248.9	12.3%
Operating Profit	12,005.6	13,486.8	12.3%
Provisions	14,796.4	12,788.7	(13.6%)
of which-Provisions for NPAs & Bad debts written off	14,211.7	12,192.4	(14.2%)
Provision for Standard Advances	(369.0)	(35.49)	Â
Provision for Depreciation on Investment	768.2	138.5	(82.0%)
Other Provisions	185.5	493.3	166.1%
Profit Before Tax	(2,790.7)	698.2	Â
Provision for Tax	(358.9)	264.6	Â
Net Profit	(2,431.8)	433.5	Â

 

Key Performance Indicators	31.03.18	31.03.19
Cost of Deposits - Global (%)	4.50	4.68
Cost of Deposits - Domestic (%)	5.48	5.33
Cost of Deposits - International (%)	1.33	1.89
Yield on Advances - Global (%)	7.13	7.65
Yield on Advances (Domestic) (%)	8.87	8.67
Yield on Advances (International) (%)	2.70	4.12
Net Interest Margin - Global (%)	2.43	2.72
Net Interest Margin - Domestic (%)	2.88	2.93
Net Interest Margin - International (%)	1.10	1.71
Cost-Income Ratio (%)	45.87	45.56
Return on Average Assets (ROAA) (%)	(0.34)	0.06
Return on Equity (%)	(7.64)	1.18

The interest income of the Bank increased by 14.5% from Rs.43,648.5 crore in FY 2018 to Rs.49,974.1 crore in FY 2019. The yield on advances increased to 7.65% from 7.13%. The yield on domestic advances was 8.67% during FY 2019 against 8.87% during FY 2018. The reduction was on account of underlying change in credit mix to high quality borrowers. The yield on international loan book increased reflecting the run-off of low margin products such as Buyers’ Credit.

Total interest expenses stood at Rs.31,290.3 crore in FY 2019 as against Rs.28,126.8 crore in FY 2018. The domestic cost of deposits decreased to 5.33% in FY 2019 from 5.48% in FY 2018. The cost of deposits in the international book increased from 1.33% to 1.89% in line with the global interest rate environment. NII of the Bank increased by 20.4% from Rs.15,521.8 crore during FY 2018 to a level of Rs.18,683.8 crore during FY 2019. The NIM improved from 2.43% to 2.72% during FY 2019. The domestic and international NIM improved from 2.88% to 2.93% and 1.10% to 1.71% respectively. Other income of the Bank decreased by 8.5% to Rs.6,090.8 crore on account of decline in treasury gains by 47.3% to Rs.989.5 crore. Recovery from written-off accounts was higher at Rs.832 crore registering an increase of 34%.

Operating expenses increased by 11.0% to Rs.11,287.8 crore in FY 2019. Employee cost increased by 9.4% during the year to Rs.5,039.1 crore and other operating expenses increased by 12.3% to Rs.6,248.9 crore. The operating profit of the Bank grew by 12.3% to Rs.13,486.8 crore during FY 2019. Total provisions (other than tax) and contingencies decreased by 13.6% to Rs. 12,788.7 crore while provision for NPAs decreased by 14.2% to Rs.12,192.4 crore in FY 2019. As a result, the Bank posted a net profit of Rs.433.5 crore in FY 2019 against a net loss of Rs.2,431.8 crore in FY 2018.

Medium and Long-Term Strategy of the Bank

The Bank continues to pursue a multi-pronged strategy to build a future-ready, world class banking institution. The Bank believes in the power of data, digitisation and technology to transform banking. Bank of Baroda continues to invest in not only enhancing its IT backbone but also in creating cutting-edge digital platforms and partnering with leading technology players and/or fintech startups to provide the next generation of products and experience to customers. The Bank has established two state-of-the-art Centres of Excellence for Analytics and IT to help in rapidly scaling its capabilities in these areas. The Bank aims to build platforms wherein customers can do a range of transactions online and have access to information at their fingertips. Bank of Baroda is creating a learning organisation and investing in enhancing the skills of its workforce. The Bank also emphasises on centralisation and digitisation of operations to ensure that employees become more focused on customer facing roles.

Project Navoday - The Bank’s Transformation Journey Thus Far

For achieving medium and long-term strategic goals, the Project Management Office (PMO) of Project Navoday tracks all multidimensional initiatives undertaken across Business Units and Support Functions such as IT, HR, Operations & Services.

As part of the transformation journey, in addition to the strategic initiatives taken under various businesses, a pivotal role is being played out by Shared Services Centre in terms of centralisation and digitisation which eventually leads to better customer experience in the form of lower turnaround time for customers. The Bank is making a paradigm shift in facilitating the operating units to shift focus towards a ‘Sales and Service’ model. Deposit accounts are opened with Tablets in digital mode and processing of loans is being done in Centralised Processing Centres. Back-office work has moved away from branches which opens up time for branches to focus on more productive activities such as sales and marketing. The Bank benefits in the form of higher productivity and a better control environment.

Strategic tie-ups with market players in the field of agriculture, E-commerce and Fintech are enabling the Bank to augment its business besides improving market share. Strategic rationalisation of International Operations along with fungible credit limits have paved the way for more profitable operations across overseas territories.

A revamped Rewards, Recognition and Employee engagement framework reinforces the philosophy of ensuring that employees grow with the Bank. The Bank has put in place customer segmentation with a focus on hyper personalisation to crosssell products. Centres of Excellence in IT and Analytics are driving technological adoption and cutting-edge tools to improve business performance.

The Bank is leveraging the impetus gained to widen the spectrum of these initiatives in the backdrop of the amalgamation w.e.f. 1st April 2019.

Corporate Credit

Corporate credit in the bank is serviced through 10 Corporate Financial Services (CFS) branches and 4 Emerging Corporate Branches which manage about 80% of the total corporate credit portfolio of the bank. The corporate credit portfolio of the Bank increased by 15.6% during FY 2019 to Rs.185,943 crore.

During the year under review, the corporate credit portfolio reaped the benefits of transformation initiated in preceding years. With this revamp in approach towards corporate credit delivery, the risk profile of the portfolio further improved during the FY 2019 as observed in the rating distribution of domestic credit portfolio as below:

Credit Rating Distribution*	31.03.2017	31.03.2018	31.12.2018
A & above	39.27%	52.37%	60.21%
BBB	15.77%	14.90%	13.82%
Below BBB	21.80%	19.72%	15.86%
Unrated	23.16%	13.01%	10.11%

*External rating distribution of advances above Rs.5 crore,

Target Market approach: FY 2020

During the year, the target market approach has been further sharpened based on the objectives of improving credit performance, ensuring profitable deployment of capital, optimising overall yield and profitability and increasing bank’s market share in the performing and growing sectors. The structural framework adopted for the same is as follows:

-    Identification of industries / sectors based on industry outlook i.e. the combined output of various industry parameters including market size, growth indices, demand-supply outlook, cost structure, competition, financial performance, govt. policies and investment outlays.

-    Sector-wise business plan for target market lending based on exposure caps, existing exposures, and further appetite for fresh acquisitions for the current financial year.

-    Identification of corporates with defined pre-selection criteria such as ratings, financial parameters i.e. revenue, profit after tax (PAT), net worth, gross capital, financial ratios, viz. leverage ratio (debt-equity ratio, Net Debt / EBITDA, profitability ratio (Net profit/Sales, gross profit/Sales), operating profit margin, cash accrual / debt etc. and due diligence.

-    Precise Account Planning with structured calling plans for meetings, identifying business opportunities, approval and closure.

-    Execution of the business plan under target market approach through dedicated relationship managers across the Bank.

Under the above approach adopted by the Bank, nine sectors with 476 corporates were identified and 121 leads were generated out of which 87 leads amounting to Rs.33,127 crore were converted into business. Moving ahead with this strategy, 809 corporates (including mid-corporate clients) have been listed as target in FY 2020.

With a view to provide enhanced customer experience for International Trade Customers, and also to ensure seamless transactions management from initiation of requests to successful execution, the Bank launched a fully digitised and integrated trade system - BarodalNSTA (Baroda Integrated Solution for Trade Finance Access) which is compliant with SWIFT. BarodalNSTA provides secure online access via a front-end portal to clients for initiating transaction requests resulting in operational consistency and better governance with enhanced security and validations. It is a user-friendly application with attractive and convenient dashboards, providing real time tracking of transactions for customers with multiple features like comprehensive MIS, reports, courier tracking, calendar (for due date maintenance), etc.

MSME Credit

The Bank targets the MSME sector through 42 dedicated SME Processing Cells named ‘SME loan factories’, and a wide network of branches servicing the MSME segment with a target market approach.

Supporting the Government's efforts under MUDRA scheme on employment generation, the Bank lent Rs.6,023 crore to the sector. The Bank has also extended credit of Rs.1,154 crore to SC, ST and women entrepreneurs under the Stand-up India programme since the launch of the scheme. The MSME credit portfolio of the Bank increased to Rs.55,455 crore as on March 31, 2019, from Rs.51,730 crore as on March 31, 2018. The Bank has added 93,994 new MSME customers to its base in FY 2019. To provide access to working capital to MSMEs at competitive rates on Trade Receivables electronic Discount System (TReDS), the Bank has onboarded itself on all the three TReDS platforms. As on March 31, 2019, the TReDS business accounted for Rs.223 crore.

In support of the Government’s initiative to augment MSME units by speedy sanction of MSME loans through the ‘PSBloansin59minutes’ portal, the Bank was ranked first, out of all PSBs, as on March 31, 2019. To ease working capital constraints of MSME, arising out of GST implementation, the Bank has devised a special product for financing against GST receivables for the MSME segment. The supply chain business has an outstanding book of Rs.452 crore as on March 31, 2019 and is backed by a fully digitised supply chain financing product which has provided a new vehicle for sourcing of MSME customers, specifically vendors and suppliers of anchor corporates.

In addition, the Bank has 6 Area Specific Schemes for financing SME clusters. The total number of products increased to 26 including specialised products to cater to MSME units during the last financial year, denoting the thrust of the Bank on this segment. We have also adopted a new pricing strategy named CIBIL MSME Rank (CMR) based pricing for MSME enterprises with credit exposure above Rs.25 lakh and up to Rs.5 crore, which enables MSME businesses to have access to bank finance at competitive rates starting from as low as MCLR plus 0.05%. To reach out to newer business segments and to deliver the benefit of lower interest rates in comparison to NBFCs, the Bank is co-originating with different NBFCs and entered into co-origination arrangements with certain NBFCs.

The Bank has commissioned a dedicated team for financing commercial vehicles and construction and mining equipment for the MSME segment. For this purpose, Bank has entered into a strategic alliance with Tata Motor Finance Ltd. for capturing new business in the commercial vehicles segment. Further, the Bank has on-boarded clients under a new scheme ‘Value Chain Finance’ which is specifically designed for customers with maximum turnover of up to Rs.2,000 crore.

To ensure better reach to MSME market segments, the Bank has established a separate specialised team dedicated to sales and loan processing, deployed at SME Loan Factories. To ensure consistency in underwriting, faster turnaround time and timely collections, the Bank has implemented centralisation of MSME loan processing through Integrated SME Loan Factory (ISMELF) at 2 centres viz. Mumbai and New Delhi. The Bank is also participating in MSME schemes such as ‘One District One Product’ promoted by the Uttar Pradesh Government to ensure higher penetration. Government Schemes Processing Cells (GSPC) have been set up across India to enable seamless processing of Pradhan Mantri Mudra Yojana, Standup India, Pradhan Mantri Employment Generation Programme, National Urban Livelihoods Mission and State-specific Government sponsored schemes. Under the Support & Outreach Campaign for MSMEs, a Gol initiative, launched on November 2018, the Bank was assigned 100 districts and 100 days with key deliverables.

Retail Credit

The Bank has been undertaking a number of transformational initiatives to improve its market share in retail segment. Foreseeing the importance of retail lending in the economy, the Bank adopted a focused approach in the retail lending space since April 2016 and considerably increased the retail book from Rs.68,765 crore in March 2018 to Rs.85,390 crore as on March 31, 2019.

The initiatives include redesigning of products and processes to enhance the customer satisfaction by allowing higher eligibilities, lower pricing and standardised processing. Some of the steps undertaken by the Bank are as mentioned below.

-    Risk Based Pricing

-    Setting up of Centralised Processing Cell at Gandhinagar and Hyderabad

-    Empanelment of Direct Selling Agents (DSAs)

-    Empanelment of Contact Point Verification (CPV) agencies

-    Implementation of Loan Lifecycle Processing Systems

-    Focused and strategic approach on takeovers

-    Implementation of a pre-approved credit programme

-    Setting up of a dedicated call centre for collections

The Home Loan book has grown by 22.2% to Rs.54,612 crore as on March 31, 2019. The continued efforts on increasing Auto Loans has resulted in a growth of 49.4% with an increase in market share from less than 1% to approximately 3%. The disbursement of Auto Loans has also grown by 169.2%. Fresh sanctions for Education Loans have grown by 106.8%. The target given by the Ministry for Education Loans has been surpassed by 48%. In case of mortgage loans, the book has grown by 74.3%.

Rural and Agricultural Lending

The Bank has a network of 1845 branches in rural and 1546 branches in semi-urban areas which are leveraged for priority sector and agriculture lending. During FY 2019, the Bank opened 22 new rural and semi-urban branches. The Bank’s agriculture advances grew by 14.2% from Rs.49,583 crore as on March 31, 2018 to Rs.56,623 crore as on March 31, 2019. The Bank achieved all mandatory targets under Agriculture, Priority Sector, Small and Marginal Farmers (S&MF), Micro Enterprises, Loans to Non-corporate Farmers and weaker sections of the society during FY 2019 and earned a net commission of Rs.33.0 crore by selling net Priority Sector Lending Certificates (PSLC) worth Rs.7,700 crore.

The Bank is the Convener of State Level Bankers’ Committee (SLBC) in the states of Uttar Pradesh and Rajasthan and shoulders the Lead Bank responsibility in 48 districts across the country.

The Bank continues to be a leader in lending to the agriculture sector which received an impetus with the Government’s target of doubling the income of the farmers by FY 2022. The Bank has moved beyond granting simple farm credit, to a more diversified rural lending strategy by focusing on new products across rural customer segments like farm mechanisation, horticulture loans, warehouse receipt financing, food and agro-processing and adopting a community-based lending model for the small farmers and communities.

During the year, Bank issued 2.29 lakh Kisan Credit Cards. Baroda Kisan RuPay Card, an ATM enabled smart card, was issued to 13.46 lakh farmers. As a part of its microfinance initiatives, the Bank linked 26,630 Self Help Groups (SHGs) by granting loans amounting to Rs.482.69 crore. To facilitate credit linkages of Farmer Producer Organisations (FPOs), the Bank tied up with the Small Farmers’ Agribusiness Consortium (SFAC) for providing Credit Guarantee for collateral free loans and also as a preferred bank for the state of Maharashtra. The total Agricultural Advances as on March 31, 2019 were well above the regulatory requirements.

The Bank’s agriculture and rural strategy continues to focus on developing an ecosystem of alliances and partnerships with multiple players with the objective of increasing farm productivity; enhancing the income of farmers and serving the rural economy.

The Bank is developing an agri-digital platform - ‘Baroda Kisan’. The platform in partnership with strategic players aims to become a one-stop shop to cater to all major needs of a farmer ranging from notifications, weather forecast information, crop health, soil moisture, pest infection information, mandi prices crop specific advisory, input buying (like seeds, fertilizers, pesticides), equipment renting advisory services and innovative financing options for sale of agriculture produce.

Bank of Baroda observed a Kisan Pakhawada’ from October 1, 2018 to October 16, 2018 and celebrated the last day of the fortnight as Baroda Kisan Diwas to coincide with the International Food Day. In FY 2019, a total of 8,018 choupals were covered with participation of 2,38,974 farmers through 1,621 Kisan Melas, 339 Health Camps (soil / animal / farmer), 4,884 farmer meetings and 310 financial literacy camps.

The Bank has been awarded the Inclusive Finance India Award for Innovation and Inclusiveness in Priority Sector Lending by Bank (Public Sector) for 2018 by Access Assist. The Bank also received 4 awards including the Runner up in Overall Best Social Bank under the Large Banks category during the 14th ASSOCHAM Annual Banking Summit cum Social Banking Excellence Awards - 2018.

Priority Sector Lending

Priority sector advances of the Bank stood at Rs.1,47,109 crore as of March 31, 2019. The Bank was well above the mandated levels of priority sector advances and its other sub-components.

 Advances to SC/ST Communities

The outstanding advances to SC/ST communities went up from Rs.5,765 crore as of March 31, 2018 to Rs.7,212 crore as of March 31, 2019. The SC/ST communities accounted for 18.31% share in total advances granted to weaker sections by the Bank.

Furthermore, special thrust is laid by the Bank in financing SC/ ST communities under various Government sponsored schemes such as National Rural Livelihood Mission (NRLM), MUDRA Loan, Start-up India and Stand-up India. During this year, the Bank entered into various tie-ups with State Rural Livelihood Missions (SRLMs) in Tamil Nadu, Odisha, Chhattisgarh, Punjab and Uttar Pradesh for providing finance to women SHGs to further the mission of women empowerment. The Bank also tied up with SEWA for financing solar units for women salt workers (members of SEWA) in the Rann of Kutch, Gujarat.

Financial Inclusion (FI)

The Bank has increased the FI coverage by deploying 15,356 BC agents catering to 21,895 villages and other semi-urban and urban areas and also through 583 Branches in under-banked areas across the country. Total number of Basic Savings Bank Deposit (BSBD) accounts under financial inclusion stand at 372.6 lakh with an aggregate balance of Rs.12,690 crore as on March 31, 2019. The number of zero balance accounts have reduced from 11.53% in the previous year to 9.21% this year.

The Bank has taken a number of initiatives to harness the power of digitisation to deepen financial inclusion in the year.

-    Digitised instant account opening through eKYC authentication and Aadhaar seeding with PIN generation through tablets, account opening kiosks and business correspondent (BC) outlets with instant enrollment under Micro Insurance and debit card issuance.

-    Deployed micro and table-top ATMs in rural areas through BCs and expanded the Business Correspondent using Information and Communication (BC-ICT) model by adding 700 agents during the year.

-    Enabled increased utilisation of bank accounts, expansive cash-in cash-out network comprising 15,356 BCs who use 8,823 PINPAD and 1,882 portable Micro ATM devices.

-    Provision of 185 VSATs to BC agents functioning in grey areas across the country.

FY 2019 Performance Highlights under Financial Inclusion

-    101.2% of target achieved in respect of total BC outlets.

-    91.3% and 132.4% of targets achieved for BSBD account opening and amount under the same through branches respectively

-    The Bank achieved 233.9% and 284.6% of the target set for FY 2019 for BSBD account opening and amount under the same through BC points respectively.

Highlights of Performance under Pradhan Mantri Jan Dhan Yojana (PMJDY)

The Bank had 300.83 lakh accounts under PMJDY as on March 31, 2019, as against 239.29 lakh at the end of previous year, an increase of 25.7%. The Bank’s market share in incremental PMJDY accounts and outstanding deposits was 10.7% and 11.9% respectively. Outstanding balance in PMJDY accounts was Rs.9,312 crore as of March 31, 2019 as against Rs.6,595 crore at the end of previous year, an increase of 41.2%. RuPay debit Cards issued under PMJDY accounts increased to 276.62 lakh from 221.50 lakh. Aadhaar seeding in PMJDY accounts increased to 88.0% during the year from 83.9% last year.

Coverage through Social Security Schemes

The position of enrollment under social security schemes of the Government as on March 31, 2019 is as under:

Â	31.03.2018	31.03.2019
Pradhan Mantri Suraksha	59.52	90.37
Bima Yojana (in lakh)	Â	Â
Pradhan Mantri Jeevan Jyoti	18.14	25.30
Bima Yojana (in lakh)	Â	Â

Setting up Aadhaar Enrollment Centres

Banks, vide Gazette notification dated July 14, 2017 of Government of India, have been mandated to set up Aadhaar enrollment and update centres inside the branch premises with at least one centre in every 10 branches. Accordingly, the Bank has set up 608 Aadhaar enrollment centres as of March 31, 2019.

Performance of RRBs Sponsored by Bank of Baroda

The Bank has sponsored three Regional Rural Banks (RRBs): Baroda Uttar Pradesh Gramin Bank, Baroda Rajasthan Kshetriya Gramin Bank, and Baroda Gujarat Gramin Bank. The aggregate business of these three RRBs rose to Rs.62,298 crore as of March 31, 2019 from Rs.55,063 crore as of March 31, 2018, registering a growth of 13.1%. The three RRBs together posted a net profit of Rs.208.61 crore during FY 2019 against Rs.208.55 crore in the previous year. The net worth of these RRBs put together improved from Rs.2,401.78 crore as of March 31, 2018 to Rs.2,620.57 crore as of March 31, 2019.

International Operations

The Bank has 100 overseas branches/offices across 21 countries comprising of 45 overseas branches in 13 countries, 54 branches of the Bank’s eight overseas subsidiaries and one International Banking Unit (IBU) in GIFT City (SEZ), Gandhinagar, Gujarat, India which deals exclusively in foreign currency. In addition, the Bank has one Joint Venture viz. India International Bank (Malaysia) Bhd. in Malaysia and one associate bank viz. Indo Zambia Bank Ltd. in Zambia with 30 branches.

During FY 2018 and FY 2019, the Bank has undertaken strategic rationalisation of its overseas presence based on a comprehensive evaluation framework. During the year, Bank closed down its Offshore Banking Unit at Bahamas, wholesale banking unit in Bahrain, and surrendered banking license of subsidiary at Ghana which had three branches. Further, Muttrah branch at Oman was merged with the Greater Muttrah branch and Durban branch was merged with Johannesburg branch in South Africa. The rationalisation of operations based on the strategic review is continuing.

The Bank has presence in the world’s major financial centres of New York, London, Singapore, Brussels and Dubai. In the international arena, our Bank pursues a strategy of driving growth and value by meeting the international banking requirements of Indian corporates; catering to India linked cross-border trade flows for Indian and locally incorporated companies or firms and being the preferred Bank for NRIs/ Persons of Indian Origin. The Bank is continuously consolidating and reorganising its International Operations in line with the new global environment and focused on rebalancing the portfolio with a view to manage risks, shed low-yield assets and increase profitability.

As of March 31, 2019, the Bank’s total business from international branches was Rs.2,19,356 crore and constituted 19.8% of the global business. Total deposits were at Rs.1,20,723 crore while net advances were Rs.98,633 crore. It was a year of consolidation for the international operations.

The total deposits were lower by 2.9% whereas total advances fell by 4.4%. The reduction in business is mainly on account of rationalisation of the Bank’s overseas centres, UK subsidiarisation and run-off of Buyers’ Credit.

Incorporation of Subsidiary in UK

The Bank’s wholly owned new retail subsidiary at UK viz. Bank of Baroda (UK) Ltd. has been operationalised with effect from 17.12.2018. The retail business of the UK operations has shifted to the new subsidiary and wholesale business is retained under branch mode. The UK operations now comprise of 1 branch of the Bank and 10 branches of subsidiary.

Treasury Operations

The Bank operates its Treasury operations from a state-of-the-art dealing room at its Corporate Office in Mumbai. The Treasury is a prominent player in various markets e.g. Foreign Exchange, Interest rates, Fixed Income, Money Market, Derivative, Equity, Currency and Interest rate Futures and other alternate asset classes. The Bank is offering various services like interest rate swaps, currency swaps, and currency options, forward contracts through authorised branches dealing in foreign exchange across India.

The treasury is responsible for managing the funds position of the Bank and ensuring safety, liquidity and optimal yield on these funds. It maintains Statutory Reserve Requirements and invests in corporate bonds, commercial papers, equity, venture capital, mutual funds, etc. as a part of the fund management operations. The total size of the Bank’s Domestic Investment Book as of March 31, 2019 stood at Rs.1,72,412 crore. The share of SLR securities in total investments was 85.89%. The percentage of SLR securities (unencumbered) to NDTL at March 31, 2019 was at 27.98%.

The Bank demonstrated its capabilities in effectively dealing with extreme adverse circumstances in the market. The Bank has been able to capitalise on the opportunities offered by yield movements. The Bank managed its portfolio efficiently and maintained average yields on interest bearing investment for FY 2019 at 8.13% (including profit on sale). During FY 2019, the profit on Sale of Investment and Foreign exchange earnings are Rs.994 crore and Rs.445 crore respectively.

Government Business

The Government Business is an important part of the Bank’s strategy. It caters to the banking requirements of Central/ State Government and PSUs across India. The Bank is authorised to collect direct taxes through its designated branches and is an accredited banker to the Ministry of Health and Family Welfare.

The Bank is partnering with various departments at the Central and State levels in developing e-solutions in-line with the digital initiatives of the Government of India, leading to transparency and efficiency. MOUs with EPFO, Employees’ State Insurance Corporation, IRCTC, National Agriculture Market, Government e-Marketplace and Inland Waterways Authority of India have been signed to enhance fresh business opportunities.

During the year, Bank has developed customised software for the e-LC solution for Ministry of Defence. Bank of Baroda is the only Public Sector Bank to launch e-KVP utility through banks. The Bank has integrated itself on the e-PCS portal of Indian Port Association for all the 3 major ports across India. An MOU with the Kandla Port has been signed.

The Bank has been recognised by Pension Fund Regulatory Development Authority for the Achievement of the Targets under APY.

Wealth Management

During the year, the Wealth Management Department has been at the forefront in providing investment and insurance services to our customers. The Bank’s flagship programme, ‘Baroda Radiance’ continues to cater to the requirements of High Net Worth Individuals through a dedicated structure of relationship managers. The Bank aims at providing best-in-class solutions and services to its customers for which it is building digital solutions. Some of the initiatives taken during the year are:

-    'Baroda Wealth Solution', a digital platform, is implemented to enable seamless distribution of investment and insurance products to all customers. This platform will also be available to Bank’s customers in Mobile Banking and Internet Banking.

-    Bank extended the coverage of the product 'Group Credit Life' and 'Group Criti Care' to its retail borrowers, covering the credit risk in case of eventuality (life or critical illness).

-    Bank launched five health insurance products with portability and continuity benefits. This enables customers to migrate their health insurance policies to an insurer of their choice.

Stressed Asset Management

With an increase in non-performing loans over the years, the Bank has revamped its strategy to augment recoveries and reduce slippages. For this, the Bank has created a ‘Stressed Assets Management Vertical’, where all major and medium sized NPA accounts of Rs.10 lakh and above and all SARFAESI eligible accounts are handled by specialised units called Stressed Assets Recovery Branches (SARB) set up at Zonal and Regional level. The remaining accounts i.e. accounts below Rs.10 lakh are handled by respective branches with the help of Business Correspondents and outsourced Call Centres. Non-performing loans continued to decline for the Bank with gross NPA ratio declining to 9.61% as on March 31, 2019 from 12.26% as on March 31, 2018. Similarly, Net NPA ratio improved to 3.33% in March 2019 as compared to 5.49% in March 2018.

The movement of NPAs during the last two years are as under:

                                                                                                  (Rs. in crore)

Particulars	31.03.2018	31.03.2019
Gross NPA	56,480	48,233
Gross NPA (%)	12.26	9.61
Net NPA	23,483	15,609
Net NPA (%)	5.49	3.33
Additions to NPAs	24,239	13,614
Recovery/ Upgradations	5,530	8,759
Write offs including TWOs	4,948	13,102
Recoveries in written off accounts	621	832
Provision Coverage Ratio (including TWO) (%)	67.21	78.68
Provision Coverage Ratio (excluding TWO) (%)	58.42	67.64

As per asset classification, the bifurcation of loan book is as given below:

                                                      (Rs. in crore)

Asset Category	31.03.2018	31.03.2019
Standard advances	4,04,264	4,53,473
Gross NPA	56,480	48,233
Total Gross Advances	4,60,744	5,01,706
Gross NPAs comprising of
Sub-standard	13,131	9,014
Doubtful	35,447	32,398
Loss	7,903	6,821
Total Gross NPA	56,480	48,233

In order to address a large number of small NPA accounts, the Bank launched OTS schemes viz. Lakshya I and II (Lakshya Agriculture, Retail & MSME) during FY 2019. The Bank settled 109,327 accounts under these schemes with an aggregate settlement amount of Rs.639 crore and recovery and upgradation of Rs.543 crore. An application called One Time Settlement Tracking System has been implemented wherein customers can initiate settlement proceedings online. The Bank has also set up a legal war-room for real-time tracking of recovery proceedings and to aid accelerated decision making (378 high value suit-filed accounts were being monitored by the War Room).

The Bank has set up a solution provider cell to augment recoveries to ensure minimal slippages and to provide resolution strategies for large NPA accounts, with exposure above Rs.30 crore. For timely collections from retail and SME customers, a 350-member call centre with multi-lingual support has been set up. This is supported by feet-on-street staff to drive on-ground collections. A special taskforce of about 800 officials of the Bank has been deployed for recovery of small NPA and potential NPA accounts. Business Correspondents are incentivised for collections in crop loans.

The Bank has strengthened its NPA management with daily dashboards like Days Past Due (DPD) Report, NPA Movement Chart and Mock Runs for forecasting degradations to ensure reduction in slippages and improvement in collections. Further, the Bank is in the process of developing a mobile application which would enable the collection agents on the field to collect the amount based on data fed from the system and also update recovery details.

The Bank is in the process of implementing an Integrated Litigation Management system (ILMS), a pilot run of which has been completed. With this system, all the cases filed in DRT, suit filed cases with other courts and the status of action initiated by Bank under SARFAESI Act, etc. can be monitored on a real time basis.

In addition, the Bank has put in place the following measures on an ongoing basis to facilitate recovery of non-performing assets:

-    Assigning Nodal Officers at each DRT for follow-up of legal cases on a daily basis so as to minimise the delay in obtaining decrees and execution and to maximise recoveries.

-    Taking assistance from Advocates/Consultants to liaise with Official Liquidators (OL) to get the recoveries realised by OLs.

-    Liasoning with Official Liquidators, organising Recovery Camps across branches, close monitoring of stressed accounts and recovery agents at all levels and monthly e-auctions, especially in DRT suit filed NPA accounts.

-    Number of Wilful Defaulters declared during the current FY 2019 is 399, increasing the aggregate numbers substantially to 750. This number stood at 303 as on March 31, 2018.

Information Technology (IT)

The Bank is constantly evolving its products, systems and structure to meet the growing aspirations of the customers.

Digitisation of banking services is driving continuous upgradation of the IT infrastructure. Some of the major initiatives during the year include:

-    The Bank has upgraded its erstwhile Loan Management System (LMS) with a new Loan Lifecycle Processing System. This new system streamlines loan origination and tracking processes to enable faster loan disbursals and end-to-end processing of loan proposals using image-based workflow and Business Process Management (BPM) tool to improve Turn Around Time (TAT).

-    The Bank is implementing a Decision Management System which provides business policy owners with the ability to author, test, execute, and maintain score models, strategies and rules integrated with the LMS. This will substantially improve decision quality, consistency and efficiency of operations.

-    The Bank is in the process of upgrading the existing Internet Banking (Baroda Connect) with an advanced version, an enhanced user interface and a basket of new functionalities.

-    The Bank is in the process of implementing Oracle CRM for Branches, Contact Centres (CCs), Retail Loan Factories (RLFs), Small Medium Enterprise Loan Factories (SMELFs), City Sales Offices (CSOs) and Regional Offices.

-    In order to handle large volumes, the Bank upgraded to Unified Payments Interface (UPI) version 2.0. It aims to simplify and provide a single interface across all NPCI systems besides creating interoperability and providing superior customer experience.

-    The Bank has implemented a Centralised Communication Management (CCM) solution which facilitates automation of various communication/e-communication to customers on a monthly basis.

-    The Bank is in the process of implementing an API Banking platform to accelerate digital transformation and build capabilities to unlock the true value of digital assets, create business agility and promote innovation and collaboration.

-    The Bank has implemented an automated reconciliation platform called Universal Transaction Reconciliation System (UTRS). This platform offers the capability to quickly configure two-way or multi-way reconciliation, thereby reducing risk and increasing compliance.

-    The Bank has embarked upon the journey of cloud adoption. The Bank has implemented e-mail, e-learning Management services and collaboration technology solutions on the public/ community cloud. The Bank has also implemented archival solution for email communication to strengthen compliance.

-    The Bank is in the process of implementing a Mobile Device Management solution (MDM) which will enable employees to securely access various banking applications using corporate-owned and employee-owned (BYOD) mobile devices from remote locations, thus increasing productivity and efficiency. This will also help the Bank in reducing cost of operations and business risks.

-    The Bank has best-in-class technology infrastructure for Data Centre conforming to Uptime Institute Tier-3 standards. The Bank has also built a Disaster Recovery Site in different seismic zones with redundancy built in every single point of failure to ensure uninterrupted service delivery to our customers. Bank of Baroda has additionally built Near Disaster Recovery Centre for Core Banking (Domestic & International) System and Treasury system to ensure zero data loss as part of its Business Continuity Planning and Disaster Recovery strategy.

The Bank has implemented state-of-the-art Data Centre tools for Network Management at its Data Centre and branches/offices. In addition, the Bank has also implemented application performance management for synthetic monitoring of internet banking and core banking applications. The Bank has set up two centres of excellence to build a future ready organisation.

IT Centre of Excellence (ITCoE)

The Bank has setup an ITCoE which works closely with business units to identify and implement related technologies for driving revenues and gaining efficiencies. The ITCoE aims to develop differentiated, market-leading technology solutions while driving business outcomes. ITCoE is bringing together a wide variety of cutting-edge skills such as design thinking, mobility, DevOps, Business Process Management and emerging technologies like Robotics Process Automation, API & Platform banking to execute on the twin mandates of improving business efficiency and taking new use-cases to market at speed.

Analytics and Artificial Intelligence Centre of Excellence (A&AICoE)

Under the ACoE, the Bank has established an enterprise-wide, data and analytics technology platform with petabyte scale - the Big Data Lake. Powered by leading data technologies and techniques like Data Lake, Machine Learning and IT, the ACoE aims at helping the Bank in traversing the journey from Data to Insights and from Actions to Results. ACoE is working with multiple lines of businesses to identify and realise new value-creation opportunities, and to build the Bank's capability in leveraging analytics to increase revenue, reduce costs and improve risk profiling.

Cyber Security

Over the years, the Bank has built a strong foundation for cyber security comprising of a comprehensive set of information security measures to counter cyber-attacks. The Bank has a well-defined cyber security governance framework in place that is operated through a combination of management structure, policy framework and operational controls.

In order to detect and prevent cyber incidents, the Bank has upgraded its Captive Security Operations Centre to Cyber Security Operations Centre (C-SOC) which operates on a 24x7 basis. During the year, the Bank has further added new technologies to C-SOC to identify, manage, respond and resolve cyber security incidents quickly and more efficiently. Further, the Bank has placed the following controls to enhance cyber security:

-    Data Centre and Disaster Recovery operations are ISO 27001:2013 certified - (set of international best practices related to Information Security).

-    Implemented multi-layered security architecture to protect IT Assets.

-    Periodic audits of applications and infrastructure to identify weaknesses in the existing system and to take steps to rectify deficiencies.

-    Phishing sites, rouge mobile apps and social media sites are monitored for malicious activities/contents and the same are taken down on detection through anti-phishing and brand protection services.

-    Advanced security solution implemented to detect and prevent Bank’s critical infrastructure from persistent threats and zero-day attacks.

-    Data Leakage Prevention solution to detect and prevent unauthorised usage or misuse of business sensitive information.

-    Technology for detection of anomaly in network traffic and its behaviour to detect network level attacks.

-    Implemented technology to protect the systems from Distributed Denial of Service (DDoS) and obtained clean pipe to ensure uninterrupted customer service.

The Bank has also taken various initiatives for educating customers through various channels such as SMS, ATM slips, ATM screens, Digital Displays, Website etc. Employees are sensitised in the field of cyber security through circulars, mandatory E-Learning courses, quarterly IS awareness magazine “Cyber Chunks” and Audio Visual Film among others. The Bank participates in the cyber security drills conducted by agencies such as IDRBT, CERT-In to test its capabilities and further strengthen defence against cyber-attacks. The Bank has an emergency response team and cyber crisis management plan in place and their effectiveness is periodically tested through drills.

Digital Transformation

The Bank is committed to digitisation and continuously strives to migrate transactions to digital channels which lead to better customer experience. As against a target of 50 crore digital Transactions allotted to the Bank for FY 2019 by the Ministry of Electronics and Information Technology (MeitY), the Bank achieved 107.6% of its target in February 2019.

The major focus of Digital Banking is to make our products available to customers through digital and mobile channels such as Mobile banking, Unified Payment Interface, BHIM Aadhaar, Multi-Function Kiosk, Self Service Passbook Printers, etc. The progress on digital initiatives is as follows:

-    Mobile Banking: The Bank’s new Mobile banking application MConnectPlus is available in 13 languages and has been extended to NRI customers. The user base has grown by 116% with 108% increase in transactions. Overall transaction amount increased by 120% to Rs.42,162 crore.

-    Unified Payment Interface (UPI): The Bank has extended its UPI application to all its RRBs .The Bank has tied up with TrueCaller app for providing UPI facility in September 2018. To increase customer convenience, the Bank went live on UPI 2.0 as an issuer on 20.03.2019. Overall transactions increased to Rs.122,408 crore.

-    Baroda Pay Point: During the year, the Bank launched Baroda Pay Point - a mobile/web-based fee collection portal for the payment and administrative needs of educational institutes and to help in canvassing additional CASA business and revenue income.

-    Debit Cards: The Bank offers a wide range of chip-based Debit Cards with customised offers to meet the changing lifestyles of the customers. The Bank has issued more than 72 million debit cards (including 44 million Rupay cards). The Bank launched RuPay qSPARC card - the National Common Mobility Card (NCMC) to enable customers to have a single card instead of a Debit and a Prepaid card separately.

-    Bharat Bill Payment System (BBPS): The BBPS System of the Bank has been certified both as a Customer Operating Unit (COU) and a Biller Operating Unit (BOU) by nPcI. The Bank is providing BBPS services in Mobile Banking, BHIM UPI, Net Banking and UMANG application through Net banking. The volume and value of transactions under BBPS increased by 296% and 261% during the year respectively.

-    Baroda FASTag (National E Toll Collection - NETC): The Bank has implemented and launched NETC on 12.07.2018 and branded it as Baroda FASTag.

-    ATMs: The Bank has 8,166 ATMs and 1,406 Cash Recyclers in India and with an availability of 95%. Our multifunction ATMs are focused on making banking a smooth experience.

-    Hi-Tech Digital Branch: The Bank has evolved an innovative concept by setting up Hi-tech Digital branches equipped with advanced gadgets like Artificial Intelligence Robot named Baroda Brainy and Digital Lab with free Wi-Fi services. In addition, the digital branches have self-service kiosks and an expert area which is equipped with Remote Tellers (Video Assistants) to assist the customers in a more interactive manner.

-    NACH eMandate: Bank of Baroda went live for eMandate Internet Banking on March 21, 2018. The Bank also went live with API Mandate (Internet Banking) as a destination bank on February 6, 2019.

-    Baroda Prepaid Card: The Bank offers three types of Prepaid cards to its customers.

a.    Baroda Gift Card: A perfect gifting option which can be used to make purchases or payments across the country.

b.    Baroda TravelEasy Card: A prepaid international currency card, which is available in three currencies i.e. US Dollars (USD), Euro, Sterling Pound (GBP). It is a reloadable and competitively priced card and can be issued to resident customers travelling abroad.

c.    Baroda Reloadable Card: A prefunded card that is ideal for recurring overheads like pocket money, travel allowances, daily/monthly wages, meal allowances, etc.

-    Cashless Villages: The Bank has transformed 281 villages into cashless villages by providing various digital products like Debit card, Mobile Banking, Internet Banking, UPI, BHIM QR, BHlM Aadhaar, POS machines, etc.

-    Digitisation of Records: As a step towards moving to paperless banking and freeing space at branches to make way for customer friendly lay out, digitisation of records has been undertaken by setting up a Document Management System (DMS). This is an ambitious project of the Bank under which around 22 crore papers have already been scanned covering over 3,200 branches. Over 2 lakh sq. ft. of space has been unlocked in the identified Branches.

FinTech

The Bank is cognisant of the transformational impact of FinTech on financial services industry. The Bank has played a pioneering role in collaborating with these players by becoming the first PSB to establish a dedicated FinTech vertical in 2016. As of March 2019, the Bank had 40+ partnerships with diverse FinTech startups working across lending, payments and innovative services. Some of our major initiatives during the year included:

-    Payments: The Bank became the first PSB to go live on Truecaller Pay for enabling digital payments using BHIM Baroda Pay UPI services. This tie-up gives us access to over 60 million, tech-savvy customers across the country. The Bank generated transactions of Rs.166 crore in first 6 months of going live.

-    BoB Innovation Centre: The Bank signed an MOU for setting up the BoB Innovation Centre (BoBIC) in collaboration with IIT, Mumbai at their campus. BoBIC is a first of its kind BFSI- Academia partnership which is powered by a strong ecosystem and aims to promote a culture of innovation and entrepreneurship in India.

Shared Services

The Bank has set-up a wholly owned subsidiary Baroda Global Shared Services Ltd. (BGSS) to focus on four core areas: ‘customer service, efficiency, speed & managing risk’. The Bank’s digitisation and centralisation strategy is embedded with shared services. A number of processes have moved to backoffice operations at the state-of-the-art Shared Services Centre (SSC) in GIFT City, Gandhinagar and Hyderabad. Centralisation has not only reduced the cost of transactions but enhanced risk management, controls and compliance practices.

During the year, the SSC made significant progress on centralisation of back office processes and enhancing risk management framework for the Bank. The centralisation of following functions has been undertaken at SSC:

1.    Migration of all deposit account opening, trade and forex transactions (foreign) and retail mortgage loans processing.

2.    Pension operations.

3.    Digital Banking and Credit Card Operations.

4.    Call centre for customers.

A pilot for agriculture operations, domestic trade, other branch transactions (FD, account maintenance etc.) and MSME Operations with selective branches/ region is underway. The SSC has more than 800 full time employees (FTEs) in non-voice (transaction processing) and ~ 750 FTEs in its call centre at GIFT City with Business Continuity Planning (BCP) presence in Mumbai and Hyderabad, centralising more than 65% of identified processes and activities.

During FY 2019, SSC has started a state of the art, 24X7 facility serving customers with focus on digital processing

There has been an improvement in turnaround time (TAT) along with reduction in error rates with specialisation of roles and enforcement of improved ‘First Time Right’ (FTR).’ Time and motion studies have been conducted of each transaction/ product in order to help in continuously improving the utilisation and productivity.

Operational Highlights:

1.    BGSS is operational round the clock and ISO Certified.

2.    Focus on automation of repeated tasks for better productivity across segments and setting up of express channels for priority processing. SSC is working on Robotics, AI and machine learning based applications in conjunction with the IT team.

3.    More than 650 Bank staff were released to the branches for sales and other services.

4.    Automation of cheque book, welcome kit, email/ SMS alerts has been activated for trade & forex customers.

SSC also enhances the risk management framework of the Bank by instituting stronger controls at every stage of a transaction/ process.

Marketing

The Bank has adopted an integrated marketing strategy across products and services that spans multiple customer touch points. We create narratives that emphasise on services rendered by us and help in engaging with our customers to strengthen their relationship with the brand.

During FY 2019, Bank was present across all mediums of communication including print, digital, out-of-home (OOH), television and radio with a host of both brand and product led campaigns to increase both aided and unaided recall for the brand. The Bank continues to create awareness by showcasing real life inspirational stories of its beneficiaries on two sponsored shows - ‘Hunnarbaaz’ on DD National and “Hum Hain Hunnarbaaz - Koshish Hamari Safalta Aapki” on CNBC Awaaz. Our brand ambassadors P. V. Sindhu and K. Srikanth helped us in reaching out to diverse audiences.

During the year, the Bank conceptualised and executed an extremely well received campaign with the themes -‘‘Behtar Se Behtareen” and “Power of Three” to announce the tripartite amalgamation of Vijaya Bank and Dena Bank with Bank of Baroda. The creative execution with children as protagonists is not only endearing but also stresses on the shared heritage of the three brands which enhance brand recall.

In line with our focus on digitisation and the large base of Gen Y customers, the department continues to leverage the digital marketing ecosystem to put up the building blocks for data-led and metric-driven digital marketing. The Bank ran 50+ digital campaigns through the year with the objective of establishing Bank of Baroda as an aspirational brand which engages, empowers and educates digital audiences by providing relevant content and fulfills banking needs by constantly analysing, measuring and improving experience, response and capabilities. The Bank is focussed on both Search Engine Optimisation and organic growth on social media channels to cover netizens and engage with them. The Bank’s Social Media Presence is summarised below:

Social Media Channels	No of likes / Followers as on 31.03.2019
Facebook Likes	10,52,000+
Twitter Followers	68,000+
YouTube Subscribers	24,300+
LinkedIn Followers	48,000+
Instagram Followers	49,200+

Branch Network

As of March 31, 2019, the branch network of the Bank is as under:

Â	31.03.2018		31.03.2019
	Number of Branches	% Share in Total	Number of Branches	% Share in Total
Domestic Branches	Â	Â	Â	Â
Metro	1167	21.35%	1203	21.66%
Urban	930	17.01%	959	17.27%
Semi-urban	1537	28.11%	1546	27.84%
Rural	1833	33.53%	1845	33.23%
Total	5467	100.00	5553	100.00
Overseas Branches/ Offices (including branches of overseas subsidiaries)	106	Â	100	Â

The Bank opened 92 new domestic branches and merged six of them with existing branches.

Currency Chests

The number of currency chests with the Bank increased from 98 to 100 with the addition of two currency chests at Vadakara (Kerala) and Kennedy Avenue (Amritsar) during the year. These chests support effective cash management in the Bank as well as vaulting cash on behalf of RBI. All the currency chests as well as branches are provided Note Sorting Machines (NSMs). Moreover, these currency chests have also helped the Bank in efficient management of cash at branches.

Corporate Social Responsibility (CSR)

The Bank has a long legacy and tradition of contributing actively to the social and economic development of the communities through various developmental activities. The Bank as a responsible corporate citizen continuously strives to contribute to the welfare of the society, particularly the upliftment of the underprivileged sections of the society to make sustainable social changes in their lives. Skill development through training for gainful employment, human welfare and other social activities for women and farmers continue to remain the Bank’s key focus areas. The Bank is helping different organisations engaged in various community development and socio-economic welfare activities for the benefit of weaker sections and rural citizens.

The Bank has established 49 Baroda Swarojgar Vikas Sansthan (BSVS) and RSETI centres in seven states of the country. These centres impart skill development programmes to youth from rural and semi-urban areas for generating self-employment. Till date these centres have conducted 12,990 training programmes and imparted training to 3,64,995 youth, out of which 2,37,507 have already secured employment or setup their own ventures. The settlement ratio is at 65%. Our 25 BSVS centres have been graded as “AA/A” (outstanding) based on the overall performance/functioning of the RSETIs, during FY 2018. 20 Baroda RSETIs operate from the Bank’s own premises.

The Bank has set up 51 Financial Literacy and Credit Counseling Centres (FLCCs) in eight states which provide financial counseling services and education to the people in rural and urban areas about various financial products and services available from the formal financial sector. These centres also take up activities that promote financial literacy, awareness about banking services, digital banking, financial planning and amelioration of debt-related distress of an individual.

Risk Governance and Internal Controls

The increased focus on risk and the supporting governance framework includes identifying the responsibilities of different parts of the Bank for addressing and managing risk. Often referred to as the ‘three lines of defence’, each of the three lines has an important role to play. These are:

i.    First line of defence - This comprises of all the Bank’s employees as they are required to own and ensure the effective management of risk and compliance with regulations, the Bank’s policies and guidelines.

ii.    Second line of defence - This comprises of the risk control owners, the risk management function and the compliance function. It is responsible for identifying, measuring, monitoring and reporting risk on an enterprise-wide basis independently from the first line of defence.

iii.    Third line of defence - An independent assurance is provided by the internal audit function by conducting internal risk-based and other audits. The reviews provide assurance to the Board that the overall governance framework including the risk governance framework is effective and that policies and processes are in place and consistently applied. The role of the audit function is defined and overseen by the Audit Committee of the Board.

Risk Management and Compliance

Risk is an integral part of the banking business and the Bank aims to achieve an appropriate trade-off between risk and returns. To ensure sustainable and consistent growth, the Bank has developed a sound risk management framework so that the risks assumed by the Bank are properly assessed and monitored. The Bank undertakes business activities within the defined risk appetite limits and policies approved by the Board of Directors of the Bank. Specific committees of the Board have been constituted to facilitate focused oversight on various risks. The Board has also constituted a Risk Management Committee of the Board which oversees the interlinkages among different type of risks. It is supported by onboarding specialists in the area. Policies approved from time to time by the Board of Directors or committees of the Board form the governing framework for each type of risk.

The Bank has a comprehensive Internal Capital Adequacy Assessment Process and stress test policy. The Pillar 2 risks such as Liquidity Risk, Interest Rate Risk, Concentration Risk and Capital Adequacy under both normal and stressed conditions are assessed as per the extant policies. A brief outline of the mechanism for identifying, evaluating and managing various risks within the Bank is as follows.

Enterprise Risk Management and Risk Appetite Statement The diversity of our lines of business requires a comprehensive Enterprise Risk Management approach to promote a bank-wide strong risk management culture to help in the early identification, assessment, measurement, aggregation and management of all risks and to facilitate capital allocation among various lines of business. All risks are approved within the overarching Risk Management Framework and are adequately hedged.

The Bank is constantly endeavouring to create a strong risk awareness culture by imparting trainings to the employees at all levels.

Credit Risk

Credit Risk is managed through a Board approved framework that sets out policies, procedures and reporting which is inline with international best practices. Adequate attention is given to the independence of the risk evaluators and business functions for establishing a sound credit culture and a well-structured credit approval process. Credit risk measurement models are validated by independent model validators for their discriminatory power, accuracy and stability.

The Bank’s experience in internal ratings over the years has enabled the Bank to obtain the regulator’s approval for running the Foundation Internal Rating (F-IRB) approach of credit risk under Basel II guidelines from March 31, 2013. Under the IRB approach, the banks develop their own empirical model to quantify required capital for credit risk.

The Bank has put in place prudential caps across industries, sectors and borrowers to manage credit concentration risk. The portfolio review cell carries out detailed reviews on sectoral exposure, credit concentration, rating distributions and migration.

The Bank has also implemented the Risk Adjusted Return on Capital (RARoC) framework for corporate credit exposures for evaluating credit risk exposures from the point of ‘economic value addition’ to the shareholders.

Market Risk

Market Risk implies the risk of loss of earnings or economic value due to adverse changes in market rates or prices of trading portfolio. The change in economic value of different market products is largely a function of change in factors such as interest rates, exchange rates, economic growth and business confidence. The Bank has well defined policies to control and monitor its treasury functions which undertake Market Risk positions.

The Bank measures and monitors interest rate risk in its trading book through duration, modified duration, PV01 and Value at Risk (VaR) on a daily basis. The foreign exchange risk is measured and monitored in terms of net overnight open position limits (NOOPL), VaR limits, Aggregate Gap Limits (AGL), Individual Gap Limits (IGL) on a daily basis. Equity price risk is measured and monitored through VaR limits and portfolio size limits, etc. At a transaction level, stop loss limits and dealer-wise limits have been prescribed and implemented. Under its stress testing framework, the Bank conducts comprehensive stress tests of its trading book portfolio on a quarterly basis.

Asset Liability Management

Liquidity Risk is the inability to meet expected and unexpected cash and collateral obligations at reasonable cost. At the Bank, the liquidity risk is measured and monitored through Flow Approach and Stock Approach and other prudential stipulations as per RBI’s extant guidelines. The Bank has implemented the Basel Ill Framework on Liquidity Standards - Liquidity Coverage Ratio (LCR), Liquidity Risk Monitoring Tools and LCR Disclosure Standards. The LCR Standard aims to ensure that banks maintain an adequate level of unencumbered High - Quality Liquid Assets that can be converted into cash to meet liquidity needs for a 30-calendar days’ time horizon under a significantly severe liquidity stress scenario specified by supervisors. The Bank has always been well above the stipulated level of LCR on a solo basis as well as on a consolidated basis.

Interest Rate Risk in the Banking Book (IRRBB) arises due to mismatch between rate sensitive assets and liabilities which may adversely impact the earnings/economic value of equity of the Bank with the change in interest rates. The Bank uses risk management tools such as Traditional Gap Analysis, Earning at Risk and Modified Duration of Equity for the measurement and monitoring of Interest rate risk in the banking book. The shortterm impact of interest rate movements on Net Interest Income [NII] is calculated through the ‘Earnings at Risk’ approach by taking into consideration parallel shift in yield curve, yield curve risk, basis risk and embedded options risk. The long-term impact of interest rate movements is measured and monitored through change in Market Value of Equity (MVE).

Operational Risk

The Bank has implemented a web-based Operational Risk Management system called SAS Enterprise Governance, Risk and Compliance (EGRC) for systemic and integrated management of Operational Risk. To mitigate and control operational risk at a transaction level, Bank of Baroda has established a Centralised Transaction Monitoring Unit for monitoring of all domestic transactions from the KYC/ AML/ CFT perspective. The Bank has segregated customer interface (front office) from the execution of transactions (back office) by centralising a number of back office functions. The Centralised Trade Finance Back Office (TFBO) for forex transactions has been set up to minimise operational risk in forex transactions. Roll out of Key Risk Indicators Programme (KRI), Risk Control and Self-Assessment Programme (RCSA) and root-cause analysis has further strengthened the control environment.

For improved fraud risk management, the Bank has completed the implementation of the first phase of Enterprise Fraud Risk Monitoring Solution (EFRMS) and the second phase is under implementation.

Basel III Implementation

The Basel Ill capital regulations have been implemented by Indian banks with effect from April 1, 2013. This implementation requires enhanced quality and quantity of capital on one side and enhanced disclosures on the other. For augmenting and improving the core capital of Banks, new measures for the inclusion of FCTR, DTA and Revaluation Reserves were introduced by RBI in March 2016. The Bank has started maintaining Capital Conservation Buffer (CCB) from March 2016 onwards and will reach the minimum prescribed level of 2.5% by FY 2020.

The Bank also maintains the regulatory mandated liquidity coverage ratio (LCR) as per the transitional arrangements prescribed by RBI.

Compliance

The compliance function is one of the key elements in the Bank’s corporate governance structure. The Bank has put in place a robust compliance system including a well-documented Compliance Policy, outlining the compliance philosophy of the bank, role and set up of the Compliance Department, composition of its staff and their specific responsibilities.

The compliance function advises senior management and the Board on the Bank’s compliance with applicable laws, rules and global standards and keeps them informed of developments in the area. It also educates employees about compliance issues by conducting periodic trainings and workshops for business staff and designated compliance officers. Knowledge management tools for this purpose have also been uploaded on the Bank’s site. The Bank has implemented a web-based compliance management solution for certification and monitoring of various regulatory, statutory and internal guidelines at each level in the Bank for further strengthening the compliance function.

KYC/ AML Compliance

The Bank has a well-defined KYC-AML-CFT Policy. On the basis of this Policy, KYC norms, AML standards and CFT measures and obligations of the Bank under Prevention of Money Laundering Act (PMLA) 2002, are implemented in the Bank. The Bank has elaborate systems to generate Cash Transaction Reports (CTRs) electronically for submission to Financial Intelligence Unit-lndia (FIU-IND). The Bank electronically files Counterfeit Currency Reports (CCRs), Non-profit Organisations Transaction Reports (NTRs) and cross border wire transfer (EFT) reports to FIU-IND, New Delhi on its portal every month within prescribed timelines.

The Bank has established a Central Transaction Monitoring Unit (CTMU) and put in place an AML Solution for monitoring and detection of unusual transaction patterns in customers’ accounts and generation of system-based transaction alerts on the basis of predefined alert parameters in the system.

System-based risk categorization of customers’ accounts is done on half yearly basis. Re-KYC of High Risk Customers is being done on half yearly basis after carrying out Money Laundering Risk Categorization Exercise, as per extant guidelines of the RBI. For this purpose, Bank has developed automated process flow for identification and generation of Notices for such customers to notify them for submission of requisite KYC Documents.

The Bank has also implemented Aadhar based e-KYC in collaboration with UIDAI on voluntary declaration of customers for e-KYC authentication.

The Bank is in the process of allotting Unique Customer Identification Code (UCIC) to all its existing customers as per the RBI guidelines and has implemented a Central KYC Registry for allotment of CKYC Numbers to individual customers, as per prescribed RBI guidelines. The guidelines in respect of beneficial owners are scrupulously followed.

Internal Audit

The Bank’s Central Internal Audit Division (CIAD) is responsible for internal audit. CIAD administers various streams of audits besides Risk Based Internal Audit (RBIA) of branches and offices. The Audit Committee of the Board oversees overall internal audit function and guides in developing effective internal audit, concurrent audit, IS Audit and all other audit functions of the Bank. The committee monitors the functioning of the Audit Committee of executives and internal audit department in the Bank.

CIAD operates through thirteen Zonal Internal Audit Divisions to carry out internal audit of branches/offices as per the periodicity decided by the Risk Based Internal Audit Policy. All branches of the Bank are covered under Risk Based Internal Audit. Out of the 4,881 branches audited during FY 2019, 4,151 branches (85.0%) were in Low Risk, 627 branches (12.9%) were in Medium Risk, 101 branches (2.1%) were in High Risk and 2 branches (0.04%) were in Very High-Risk category.

The Bank had engaged an independent firm as a knowledge partner for comprehensive review of the Audit function in-line with the processes focusing on centralisation of activities by use of technology, imaging solutions and digitisation. The audit transformation process was completed and audits under the revised approach commenced during the financial year.

Customer Service

The Bank is focused towards providing excellent customer experiences. It has been our constant endeavour to set industry benchmarks and pioneer innovations across products, processes and service delivery that are imperative to providing seamless experiences to our customers. We have been actively engaged in understanding and identifying gaps between customer needs and expectations through the Voice of the customers and employees, embedding customer experience goals in the organisation’s goals, building a “Client First Culture” and redesigning experiences (product design, systems and processes) for enhanced customer delight.

This year, the focus has been on “EASE of Banking” to improve experiences across every customer touch point. Several initiatives were undertaken round the year to ensure EASE - Enhanced Access and Service Excellence. The Bank has secured the second place among public sector banks in the ‘EASE of Banking Index, a strategic initiative undertaken by Government of India to imbibe best practices and provide superior customer experiences in Public sector Banks.

Some of the steps taken in this direction by the Bank are:

- The Bank has a wide array of financial services including Insurance and Investments and provides one-stop shop access to customers. The Bank has customised the service and marketing strategy for select customer segments, in order to meet their expectations. “Baroda Radiance” has been launched across all major cities and investment and wealth management services are now available to all our customers. Bank has on-boarded best-in-class investment advisors and relationship managers. A dedicated phone banking team also is now available for assisting Baroda Radiance customers.

-    Banking from home and mobile has been made more comfortable with the addition of multiple frequently used options and functionalities (nomination registration, request for account transfer, closure of term deposits, new one glance account statement across relationships) to the Bank’s popular mobile banking application. The internet and various other digital applications are being enhanced with new functionalities to provide better user experience.

-    Bank’s Contact Centre supports six regional languages in addition to English & Hindi. It is available 24*7 to handle emergencies (card blocking, reissuance, stop payments), enquiries or grievances. We also support four overseas locations - Mauritius, Botswana, Oman and Uganda.

-    The Bank has undertaken an end-to-end revamp of the grievance machinery with more convenience for customers. Some of the features include a comprehensive and well-established policy, real-time complaint status tracking, time bound auto escalation, options to attach documents, option to provide feedback on resolution quality and also an option to reopen a complaint.

-    At the apex level, the Bank has formed the Customer Service Committee, a sub-committee of the Board which addresses the issues relating to the formulation of policies and assessment of their compliance with the aim of consistent improvement in the quality of customer service. The Bank has also set up a Standing Committee on Procedures and Performance Audit of Customer Service. Its members include two eminent public personalities, all Executive Directors and the seven Functional Heads of the Bank. This Committee reviews practices and procedures prevalent and takes timely and effective compliance of the RBI instructions on Customer service. In addition, there are Branch Level Customer Service Committees for directly getting feedback from customers.

-    While the Bank is focused on enhancing the convenience of banking from home, the Bank is also monitoring the service levels across the network of branches through mystery shopping/service audits. The Bank is ensuring better ambience, more seating area and better basic amenities to all customers with special focus on “EASE” for senior citizens and the differently abled. Some of the flagship branches are undergoing a facelift and are being deliberately designed to provide a competitive edge while enhancing customer experience.

-    The Bank is driving hassle-free banking through alternate delivery channels (apart from ATMs and cash re-cyclers)-self-service pass books, multi-functional kiosks, tab banking, Baroda Pay Point, tie ups with BHIM Aadhar, enhanced UPI app and other initiatives of national importance such as Bharat Bill Payment System.

-    The Bank has transformed 281 villages into cashless villages by providing various digital products like Debit Cards, Mobile Banking, Internet Banking, UPI, BHIM QR, BHIM Aadhaar and POS machines.

-    As mentioned earlier, the Bank is continuously upgrading its IT infrastructure and driving digitisation in its processes. The Bank has launched a new loan processing system making end-to-end tracking of applications and loan disbursals faster. An enterprise wide CRM will also be rolled out shortly to improve quality of interactions and experiences at every touch point.

- The Bank has an ongoing ‘Client-First’ drive and continuous feedback is sought from customers and employees on experiences delivered at various touch points. The Bank publishes a Client-First Newsletter “Pratham”, which discusses best practices in the service industry and features stories on Barodians “living the client-first” values.

A customer’s journey with a bank involves multiple stages from queries about the Bank’s offerings to delivery of products and services. The Bank endeavours to meet the customer’s expectations at each stage of the journey and to ensure customer “wow”.

The Bank secured the 4th position in Forrester’s India CX Index, 2018 Rankings of Indian Banks. The Forrester’s CX Index score measures how successfully a company delivers customer experiences that create and sustain loyalty.

Vigilance

The vigilance function in the Bank aims at proactively supporting bona fide decisions and simultaneously acting as a deterrent for ensuring that no wrongdoing takes place. The thrust remains on identifying leakages within the organisation that may lead to financial losses and taking corrective and preventive action to plug them.

Regular vigilance audits are undertaken for sensitive branches and employees are sensitized on preventive aspects of vigilance through newsletters, circulars, meetings, etc. The number of staff accountability cases has been brought down by ensuring speedy disposal of vigilance matters. An exclusive portal ‘BoB e-Vigil’, incorporating online vigilance clearance, disciplinary proceedings status, and complaint management system has been operationalised.

Human Resources

The Bank has a rich talent pool with over 55,000+ employees on its rolls. The Bank continuously undertakes multiples initiatives for strengthening and developing its human resources viz., recruitment, addressing training needs of employees, employee engagement and capability building.

The second ‘Voice of Barodians’ Survey witnessed 87% employee participation where the Bank’s workforce expressed their perceptions, views and suggestions on a wide range of aspects impacting them. As a result of various HR interventions initiated by the Bank, the overall employee engagement level has increased from 55% in the last survey to 63%. The Bank has been awarded among the Best 50 PCI (People Capital Index) Companies by Jombay.

The following initiatives have been taken during the year which have direct and significant impact on Bank’s performance: Manpower Planning and Recruitment The Bank has built a new scientific manpower planning model designed to estimate skill-based manpower needs at various levels. This would help the Bank in taking key strategic decisions viz. recruitment, deployment, promotions, trainings, etc.

The Bank recruited 1,281 Officers and 1,617 in Clerical Cadre as Business Associates through direct recruitment during FY 2019. The Bank also hired specialised staff with expertise in niche and key focus areas to strengthen its capabilities and bench strength.

Baroda GEMS Growth and Empowerment Management System

The Bank has introduced a scientifically measurable Performance Management System (PMS) for all officers on a digital platform - Baroda GEMS (Growth and Empowerment Management System) to establish a transparent and performance driven culture. The role perquisites for Branch Heads are also linked with Baroda GEMS, to enable accurate measurement of achievement of KRAs.

Job Family

During the year, the concept of allocating employees to job families has been introduced in the Bank to enable well-rounded grooming of the employees and to provide them with better career opportunities through flexibility of movements across roles which are mapped out for each job family and ensure structured and timely deployment, exposure and development. Baroda Rewards for Individual & Team Excellence - BRITE The Bank has always been a front-runner in acknowledging employees’ contribution and believes that employees are strategic partners in quest for excellence. To instill the spirit of the core values and cover multiple dimensions of employee performance and motivation, a comprehensive suite of rewards and recognition programmes named as ‘Baroda Rewards for Individual & Team Excellence- BRITE’ has been institutionalised during the year to recognise both outstanding individual and team performance.

Baroda Anubhuti Programme

It is an employee engagement programme designed to foster the spirit of team bonding and collaboration, and creating a happy and fun workplace. Various initiatives like employee of the month, spot recognition -capturing ‘WoW’ moments, fun hour at all branches/offices, local community service/ social activities are undertaken to enhance the overall employee engagement levels. Mandatory community service programmes are carried out through all branches/offices once in six months.

Under the banner of Baroda Anubhuti, the Bank has been also conducting Annual Sports Day on the 4th Saturday in November and six Inter Zonal Sports & Cultural Tournaments in various disciplines across the country.

Wellness and Fitness Drives

The Bank has launched many initiatives for managing employee health and well-being, which include a mandatory health checkup scheme for employees and their spouses. During the year, through a Group Term Insurance cover, the Bank offered all permanent employees with the Life Insurance cover of Rs.20 lakh. The medical treatment needs of employees are met through a Group Medical Insurance Policy. The Bank regularly conducts Health checkup camps, fitness drives, yoga sessions, etc. to promote the health and well-being of our employees. Creche facility

During the year, as part of its employee friendly welfare measures, the Bank set up a state-of-the-art onsite creche facility at its Corporate Office in Mumbai in order to provide day care facilities for small children of employees. The Bank plans to extend this facility at the Head Office, Baroda and other select centres.

Learning and Development

The Bank’s approach to training identifies the functional, mandatory and behavioral training needs for employees at different levels of career development and addresses these requirements in a systematic manner. Mandatory training has been aligned to specific and critical job roles. The Bank also runs mandatory certification programs that are necessary before deployment in critical roles. The Bank is also investing in sharpening soft skills of its employees.

The Bank has undertaken various initiatives to build a learning environment through various innovative and digital channels like Baroda Gurukul, Baroda Margdarshak, Baroda Radio, Barodapedia, Baroda YouTube, a digital library, and weekly quizzes for knowledge updation.

Our e-learning platform hosts more than 280 modules and more than 8 lakh courses were completed by employees during FY 2019.

‘We Lead’ - Comprehensive Leadership Development Programme

The Bank has identified over 2,700 potential leaders to take over leadership positions in future through four distinctive programmes:

-    Baroda Senior Leadership Programme- for officers in Scales VI & VII

-    Baroda Emerging Leaders Programme- for officers in Scales IV

-    Baroda Rising Stars Programme- for officers in Scales IV

-    Sayaji Rao Gaekwad Scholars Programme - for Officers in Scales I, II & II

The first phase of the comprehensive leadership development programme - ‘We Lead’ has been completed and actions have been initiated for the next phase to extend the coverage of the programme.

Baroda Alok Chandra Bravery Award

During the year, the Bank instituted the ‘Baroda Alok Chandra Bravery Award’ to recognise exemplary acts of bravery beyond the call of duty by displaying courage for furthering, safeguarding and protecting the interests of the Bank. The Award is named in the memory of Late Shri Alok Chandra, who during the year, laid down his life while protecting Bank’s interests, while posted in Arwal Branch, Patna Region.

Career Progression

Concerted efforts have been taken by Bank for fostering career progression of employees, for rewarding them for their performance and motivating them. Horizontal movement of Officers across different functions is encouraged to provide them with wider exposure. During the FY 2019, promotion exercises were completed and 3,564 employees promoted in all scales and cadres.

HR policies and systems

The Bank is constantly updating its policies and systems to make them ‘Best in Class’. During FY 2019, various policies viz., Transfer, Promotion, policy on Equal Opportunities were put in place / updated to keep up with the changing times. Under the aegis of Staff Welfare Fund, the Bank has standardised the facilities at the Bank’s Holiday Homes and also, opened five more Holiday Homes during the year in Munnar, Panchmarhi, Shillong, Dharmshala and Baroda. The total number of Holiday Homes now stand at 50.

The Bank’s Human Resource Centralised Processing Cell (HRCPC) department processes all staff loan applications and other online TA/DA claims on the same day of receiving the applications, maintaining the TAT and contributing to employee satisfaction.

The Bank has continuously improved its HR technology platform, “Human Resources Network for Employee Services (HRNes)”. In order to address employees’ concerns and grievances, Bank has also put in place an online employee grievance redressal mechanism, named as “Baroda Samadhan”.

Thrust on Diversity

The Bank follows a non-discriminatory and equal opportunity policy for all its employees. The Bank is transparent in all issues relating to promotion, career path, transfer policy and employee benefit / welfare schemes. The Bank has also introduced ‘Job Roles’ for visually impaired employees. Further, the Bank has been increasing its recruitment of women employees. The percentage of women in the overall staff composition has increased to 23.7% in FY 2019 from 23.0% in FY 2018 and 22.7% in FY 2017.

In order to retain women employees at all levels and in recognition of the concomitant responsibilities of women, the Bank has also put in place various facilities to support women employees such as sabbatical leave and health check-up programmes for women employees among other initiatives. Besides, a day-care creche facility has been operationalised as mentioned earlier.

Reservation Cell

An exclusive Reservation Cell has been set up to monitor the reservation and other enabling provisions for SC/ST/PWD/ Ex-Serviceman and OBC employees. Executives in the rank of General Manager are appointed as Chief Liaison Officers for SC/ST/PWD and ex-serviceman employees and OBC employees, respectively, who ensure compliance of various guidelines pertaining to them. With effect from February 1, 2019, reservation of 10% for Economically Weaker Sections (EWSs) in all exercises for direct recruitment in the Bank is implemented.

The Bank provides reservations for Persons with Disabilities (PWDs) at the rate of 4% of the total vacancies arising in Officer, (identified posts) Clerical and Sub-Staff Cadre in a year, as per Government guidelines.

Caste Category wise Count as on 31.03.2019
Cadres	SC	ST	OBC	Ex - SM
Officer	4975	2292	7831	377
Clerk	3116	1780	4844	1742
Sub-staff	2303	831	2133	577
Grand Total	10394	4903	14808	2696
% to Total Employees	18.9	8.9	27.0	4.9

Periodical Meetings: The Bank holds Quarterly Meetings with the representatives of All India Bank of Baroda SC/ST Employees’ Welfare Association and half yearly meeting with the representatives of All India Bank of Baroda OBC Employees’ Welfare Association, as per the Government Guidelines.

Workshops & Training Programmes: Bank conducts following training programmes every year for members of AIBOBSCST Employees’ Welfare Association and AIBOBOBC Employees’ Welfare Association and Liaison Officers of SC/ STs and OBCs at Apex Academy, Gandhinagar:

-    Pre-Promotion Training for SC/ST candidates

-    Workshop on Reservation Policy

-    Training programme on Disciplinary proceedings

The Standing Committee on Social Justice and Empowerment met our Bank’s representatives on 15th January, 2019 at Jamnagar on priority sector lending to SCs, STs, OBCs, Minorities and Persons with Disabilities.

Premises Re-engineering

In an effort to improve the ambience of customer touch points, 360 identified branches across the country are being refurbished with special emphasis on maintaining a uniform look and feel in all branches. An Ambience Manual has been issued to standardise the ambience of branch premises keeping in view the ease of banking operations, use of new technology and customer convenience. The Bank has also undertaken a number of green initiatives during the year and successfully completed the construction of the new Regional office at Udaipur and a Disaster Recovery centre at Hyderabad. Bank in an attempt to reduce carbon footprint, uses energy efficient equipment, solar energy, and LED light fixtures in its branches. Use of recycled waste water and production of bio gas from solid waste are also explored in Bank’s major commercial buildings.

Implementation of Official Language (OL) Policy

The Bank continued to make exemplary progress in the implementation of the Official Language Policy of the Government of India and fulfilled all the assurances given to the Committee of Parliament on Official Language. Use of Hindi and other Indian languages for business growth as well as for providing digital products to the customers is a significant characteristic of the language policy adopted by our Bank. This has been appreciated by regulatory authorities.

Our initiatives included organising an All India seminar for banking faculties on ‘Opportunities for Credit Flow to Agriculture Sector’, publishing e-books/ books on various topics like Agricultural Best Practices, Baroda Kisan Diwas related literature as well as active participation in the 11th Vishwa Hindi Sammelan held at Mauritius.

This year, the Bank instituted one more award namely “Maharaja Sayajirao Lok Bhasha Samman” for honouring an eminent personality from other than the Hindi speaking community for contributing in the promotion and preservation of Hindi/Regional/Tribal languages, in addition to the “Maharaja Sayajirao Bhasha Samman” scheme of the Bank.

During the year, the Bank was awarded the First Prize by the Government of India under linguistic region ‘B’. Similarly, TOLIC, Varanasi was awarded with First Prize. Besides this, our Faizabad Regional Office, Zonal Office, Lucknow, TOLIC Jaipur, TOLIC, Baroda and TOLIC, Rajkot also received awards from Government of India through its Regional Implementation Offices.

The Bank’s House Journal ‘BoBMaitri’ and Hindi Patrika ‘Akshayyam’ received awards from Association of Business Communicators of India (ABCI) during the year in three different categories.

Domestic Subsidiaries and Joint Ventures

BOB Financial Solutions Ltd.

BOB Financial Solutions Limited (BFSL), formerly known as Bobcards Limited, is a wholly owned subsidiary of the Bank. It is a non-banking financial company and its primary business lines include credit cards, personal loans and merchant acquiring. During the year, it revamped its business strategy. BFSL’s credit cards base grew 84% YoY helped largely by a 1,200 strong field force deployed across 1,700+ branches of the Bank. BFSL introduced value added features, in the form of rewards points and various schemes through marketing partnerships with leading consumer brands which resulted in a 37% increase in spends on credit cards in H2 vs H1 (FY 2019). BFSL entered into a tripartite agreement with the Bank and TransUnion-CIBIL, for launching ‘Project Nirmaan’ - an initiative to pre-approve Bank’s customers for credit cards. More than 66,000 credit cards were issued under this programme. Further, a personal loan product was piloted for the BFSL employees and a select set of pre-approved credit card customers during FY 2019.

A plethora of technology initiatives were taken by the company to improve customer experience (like EMI on Card, Green Pin, Chabot, lending solution, revamped website and customer service portal), to reduce customer service turnaround times (robotics based solution, customer originations platform) and to enhance employee experience (HR Platform, centralised Help Desk).

BOB Capital Markets Ltd.

BOB Capital Markets Ltd. (BOBCAPS), a wholly owned subsidiary, is the investment banking arm of the Bank. It is a SEBI registered Category-I merchant banker. BOBCAPS offers the entire spectrum of financial services that include Initial Public Offerings, Private Placement of Debt, Corporate Restructuring, Business Valuation, Mergers & Acquisitions, Project Appraisal and Loan Syndication. BOBCAPS also undertakes advisory services on Securitisation and Structuring of Debts. It has five lines of businesses viz. Investment Banking - Equity; Investment Banking

- Debt; Institutional Broking, Retail Broking and Wealth Management.

During FY 2019, BOBCAPS completed five debt syndication transactions amounting to Rs.4,196 crore while the Stressed Asset Resolution team executed 5 transactions. The Company has secured 10 mandates for IPOs / FPOs / OFS, PE fund raise and M&A transaction resulting in a robust deal pipeline in equities. Institutional broking has ramped up its new client empanelments and revenue run rate during the year. It has recently commenced coverage of foreign institutional investors based outside India. In retail broking, rise in client acquisitions and business volumes are being driven by enhanced products and services like 3-in- 1 Demat, Trading and Bank Account, Prepaid brokerage, online account opening platform and quality research. The Company’s investment advisory team supports the Wealth Management vertical of the Bank.

The Nainital Bank Ltd.

The Nainital Bank Limited (NBL), originally promoted by Late Bharat Ratna Pandit Govind Ballabh Pant and others in 1922, became a subsidiary of Bank of Bank of Baroda in the year 1973.The Bank’s holding in Nainital Bank Ltd. is 98.57%. The total business of NBL increased to Rs.10,931 crore on March 31, 2019 from Rs.10,772.10 crore as on March 31, 2018. The net profit of the Bank was Rs.26.89 crore in FY 2019 against a profit of Rs.48.90 crore during the previous year. The Bank opened 2 new branches during FY 2019. During the year, NBL was ranked 3rd in the category of the Best Performing Private Bank in terms of average Aadhar generation and update by UIDAI for The Aadhaar Excellence Awards, 2018.

Baroda Global Shared Services Ltd.

Established during FY 2017, Baroda Global Shared Services Ltd. (BGSS), a wholly owned subsidiary of the Bank, commenced its operations during last financial year. BGSS’s strategy is to focus on four core sectors - customer service, efficiency, speed & managing risk. It is providing services to the Bank by helping it in digitising and centralising its backoffice operations at the state-of-the-art Shared Services Centre (SSC) GIFT City, Gandhinagar and at a second centre at Hyderabad. Centralisation has not only reduced the cost of transactions but enhanced risk management, controls and compliance practices.

Baroda Asset Management India Ltd.

Baroda Asset Management India Limited (“Baroda AMC”) became a wholly owned subsidiary of the Bank with effect from September 28, 2018 after buying out the 51% stake by the bank from its joint venture partner UniCredit S.p.A. (the parent company of Pioneer Global Asset Management S.p.A.). The Baroda AMC acts as the investment manager to Baroda Mutual Fund (“Baroda MF”), a mutual fund registered with the Securities and Exchange Board of India. The Average Assets under Management (AUM) of Baroda MF for FY 2019 were Rs.12,345 crore, registering an annual growth of 7%. Growth in average AUM under equity schemes was over 40%. Baroda AMC continues to expand its third-party distribution network, with particular focus on IFAs. The AUM from this segment has been growing steadily. With the completion of rationalisation and the scheme categorisation exercise and the regulatory changes around Total Expense Ratio, Baroda AMC will be better positioned to compete in the market. IndiaFirst Life Insurance Company Ltd.

Headquartered in Mumbai, IndiaFirst Life Insurance, is one of the country’s youngest life insurance companies, with a paid-up share capital of Rs.625 crore. The company is promoted by two of India’s largest public-sector banks - Bank of Baroda and Andhra Bank, which hold 44% and 30% stake in the company, respectively. During the year, IndiaFirst Life’s erstwhile founding partner Legal and General, UK, divested the 26% stake it held in the company. This stake was acquired by Carmel Point Investments India Private Limited incorporated by Carmel Point Investment Ltd, a body corporate incorporated under the laws of Mauritius and owned by private equity funds managed by Warburg Pincus LLC. The company’s is currently ranked 12th in Individual New Business (Annual Premium Equivalent), among the private players with Assets under Management (AUM) at Rs.15,039 crore as on March 31, 2019.

IndiaFirst Life was named the “Most Innovative Life Insurer of The Year (2018) - International" by Life Insurance International, UK, a body dedicated to offering benchmark intelligence centered exclusively on the global life insurance fraternity, besides being recognised among the “Best Brands 2018”, by the Economic Times, and being certified as a “Great Place to Work”.

India Infradebt Ltd.

India lnfradebt is the first Infrastructure Debt Fund (IDF) -NBFC and was sponsored by Bank of Baroda along with ICICI Bank. Citicorp Finance (India) Limited and LIC of India are other shareholders. It has been rated AAA by CRISIL, ICRA and India Ratings since its inception. It finances the relatively safe, completed infrastructure projects which have achieved one year of commercial operations and enjoys 100% income-tax exemption. The synergy with the Bank arises from its focus on lending to strong, stable infrastructure projects - mainly NHAI road projects and renewable energy projects. The company has delivered healthy growth in its first full five years of operations. Its loan book as on March 31, 2019 was Rs.9,809.5 crore and net profit for FY 2019 was Rs.223.7 crore.

Barodasun Technologies Ltd.

Barodasun Technologies Ltd. is a wholly owned IT subsidiary incorporated on 05.07.2017. The Bank has set-up a Centre of Excellence (CoE) to identify new emerging trends and provide technology differentiation. The CoE would provide design thinking skills, process design, architectural skills and core development capacity in current and future technologies to help businesses in leveraging technology for realising business outcomes.

A brief summary of domestic subsidiaries and Joint Ventures is as below:    (' in crore)

Entity (with date of registration)	Owned funds	Total assets	Net profit	Offices	Staff
BOB Financial Solutions Ltd	247.7	441.6	4.1	38	446
BOB Capital Markets Ltd.	153.8	161.33	(2.92)	1	114
The Nainital Bank Ltd.	624.0	8101.8	26.9	4	916
Baroda Global Shared Services Ltd.	12.0	14.1	1.5	3 locations (Gift City, Gandhinagar/ Hyderabad / Mumbai)	424
Baroda Asset Management India Ltd.	64.2	76.4	4.9	5	70
Baroda Trustee India Pvt. Ltd.	0.1	0.2	0.0	1	0
IndiaFirst Life Insurance Company Ltd.	663.5	15626.3	61.6	29	2101
India Infradebt Ltd.	1636.6	10403.4	189.9	1	21

Awards and Accolades

Date	Awards 2018-19
17.03.2019	“Best Banking & Finance Legal Team of the Year” award at the 8th Annual Indian Legal Era Awards 2018-19.
08.03.2019	Business Today Jury award for best Fintech Engagements.
20.02.2019	Multiple honours at the IBA Banking Technology 2019 Awards: -    Winner - Most Customer Centric Bank Using Technology” -    Runners Up - “Best Payment Initiatives” -    Baroda Rajasthan Gramin Bank adjudged ‘Best Technology Bank of the Year’
18.02.2019	CSR Excellence Award - TV9.
30.01.2019	Ms. Nikita Raut, Chief Manager, HR and Head, Mumbai Academy, topped Jombay’s Top 40 under 40 award for HR Professionals
25.01.2019	Finnoviti Award for ‘Fintech Initiatives’ at the Banking Frontiers’ Finnoviti Conference 2019.
28.01.2019	Leadership Capital and Out Performers awards at Atal Pension Yojana Awards 2018-19.
18.01.2019	5 honours at the 58th Association of Business Communicators of India (ABCI) Awards in the following categories - Indian Language Publications, Features (English), Features (Language), Headlines and Corporate Film.
11.01.2019	‘Best Home Loan Products 2018’ at FE Best Banks Award 2018.
11.12.2018	‘Inclusive Finance India Award-Best Bank in Priory Sector Lending’ for innovation & inclusiveness in PSBs category, at Inclusive Finance Summit, 2018.
08.12.2018	‘Best Bank in Supply Chain Finance” in the 4th edition of Asian Supply Chain Thought Leadership Summit & Awards -2018 held by the Institute of Supply Chain Management.
10.11.2018	“Best PSU Bank under MSME” & Best Bank Agriculture’ finance at Divya Bhaskar Eminence Awards 2018.
19.11.2018	Fiji Territory received the Business Excellence Award 2018 from President of Fiji.
16.11.2018	APY "Rise Above Rest Campaign" Award and APY "Best Performing Bank Award” for the campaign” Maker of Excellence" - PFRDA, Government Of India.
04.10.2018	Best Performing Bank at the UIDAI’s Aaadhar Excellence Awards 2018.
14.09.2018	Kirti Award - First Prize for official language implementation for the year 2017-18.
28.06.2018	Shri P. S.Jayakumar, MD & CEO, was conferred with "CEO of the Year" and the Bank bagged the "Retail Bank of the Year" at India Banking Summit & Awards 2018.
27.06.2018	The bilingual in-house journal ‘BoBMaitri’ and Hindi Magazine ‘Akshayyam’ were awarded with First and Special prizes respectively under All India House Journal Competition organised by RBI.
29.05.2018	“Apex India CSR Excellence Award 2017” for CSR Activities for BSVS (RSETI) Project.
11.05.2018	Recipient of National Award for Best Performance in SHG- Bank Linkages 2017-18 Public Sector Banks by Deendayal Antodaya Yojana, National Rural Livelihoods Mission.
14.05.2018	Appreciation & Honour from the World Trade Centre for launching” Digitised Supply Chain Finance” at 7th Global Economic Summit 2018.
13.04.2018	Winner of "Litigation Dept of the Year 2018" and First Runners Up - “In House Dept of the Year”, at the 7th Edition of IDEX Legal Awards.

Dividend Distribution Policy

As required under Regulation 43A of the SEBI (listing Obligations and Disclosure Requirements), 2015, the Bank has a dividend distribution policy in place which sets out the parameters and circumstances that will be taken into account by Board in determining distribution of dividend to its shareholders. The policy is given in this Annual Report and is also available on the Bank’s website at https://www.bankofbaroda.com/policy-documents.htm.

Board of Directors (Appointment /Cessation of Directors during the year)

Appointments

Shri Debasish Panda was nominated as Government Nominee Director w.e.f. 5th April, 2018 by the Central Government u/s 9 (3) (b) of The Banking Companies Acquisition and Transfer of Undertakings) Act, 1970, to hold the post until further orders.

Shri Shanti Lal Jain was appointed as Executive Director w.e.f. 20th September, 2018 by the Central Government u/s 9 (3) (a) of The Banking Companies Acquisition and Transfer of Undertakings) Act, 1970 for a period of -3- years i.e. up to 19th September, 2021.

Shri Vikramaditya Singh Khichi was appointed as Executive Director w.e.f. 1st October, 2018 by the Central Government u/s 9 (3) (a) of The Banking Companies Acquisition and Transfer of Undertakings) Act, 1970 for a period of -3- years i.e. upto 30th September, 2021.

Shri P.S. Jayakumar continues to be the Managing Director & CEO on extension of the term of his office w.e.f. 13th October, 2018 for a period of -1- year i.e. till 12th October, 2019.

Shri Srinivasan Sridhar was elected as Shareholder Director under section 9 (3) (i) of The Banking Companies Acquisition and Transfer of Undertakings) Act, 1970, for a period of -3-years from 12th December, 2018 to 11th December, 2021 Dr. Hasmukh Adhia was appointed as Non-Executive Chairman w.e.f. 1st March, 2019 by the Central Government u/s 9 (3) (h) of The Banking Companies Acquisition and Transfer of Undertakings) Act, 1970, for a period of -3- years.

Cessations

Shri Lok Ranjan ceased to be a Government Nominee Director w.e.f. 5th April, 2018 on the appointment of Shri Debasish Panda in his place.

Shri Ashok Kumar Garg ceased to be Executive Director w.e.f. 30th June, 2018 upon attaining the age of superannuation. Shri Ravi Venkatesan, ceased to be Non-Executive Chairman w.e.f. 14th August, 2018 on completion of his tenure of 3 years.

Shri Mayank K. Mehta ceased to be Executive Director w.e.f. 30th September, 2018 upon attaining the age of superannuation.

Smt. Usha A. Narayanan Director, ceased to be a Shareholders Director w.e.f. 12th December, 2018 on completion of her tenure of 3 years.

Board Evaluation

With the objective to continuously improve Board governance, an evaluation of the Board’s performance; performance of its committees and individual directors including independent directors is being conducted by an external consulting firm. The parameters of evaluation have been aligned with the provisions of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and new SEBI Guidance Note on Board Evaluation dated January 5, 2017.

Auditors’ Compliance Certificate on Corporate Governance:

The Auditors’ Compliance Certificate regarding the compliance of the conditions of Corporate Governance for the year 2018-19 is annexed with this report pursuant to “Part ”E” of Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Business Responsibility Report

Business Responsibility Report as required by SEBI has been hosted on the website of the Bank (www.bankofbaroda. co.in). Any member interested in obtaining a physical copy of the same may write to the Company Secretary of the Bank.

Directors’ Responsibility Statement

The Directors confirm that in the preparation of the annual accounts for the Financial Year ended March 31, 2019:

a)    The applicable accounting standards had been followed along with proper explanation relating to material departures, if any;

b)    The accounting policies framed in accordance with the guidelines of RBI were followed and the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Bank at the end of the financial year and of the profit and loss of the Bank for that period;

c)    The directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of applicable laws to the Bank for safeguarding the assets of the Bank and for preventing and detecting fraud and other irregularities;

d)    The directors had prepared the annual accounts on a going concern basis; and

e)    The directors had ensured that internal financial controls followed by the Bank are in accordance with guidelines issued by RBI in this regard and that such internal financial controls are adequate and were operating effectively.

Explanation: For the purposes of this clause, the term “internal financial controls” means the policies and procedures adopted by the Bank for ensuring the orderly and efficient conduct of its business, including adherence to Bank’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information;

f)    The directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

Acknowledgements

The Directors place on record their appreciation for the contributions made by the outgoing Chairman and NonExecutive Director Shri Ravi Venkatesan and other outgoing Directors viz. Shri Lok Ranjan, Shri Ashok Kumar Garg, Shri Mayank K. Mehta and Smt. Usha A. Narayanan.

The Directors express their sincere thanks to the Government of India, RBI, Securities and Exchange Board of India, other regulatory authorities and the overseas regulators for their continued co-operation, guidance and support.

The Directors would like to take this opportunity to express sincere thanks to our valued clients for their continued patronage and support.

The Directors acknowledge with deep appreciation the cooperation extended by all shareholders, banks and financial institutions, rating agencies, stock exchanges and all well-wishers in India and abroad.

The Directors also take this opportunity to place on record deep appreciation for the hard work and dedication of the employees of the Bank.

For and on behalf of the Board of Directors,

P. S. Jayakumar

Managing Director & CEO

 

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Mar 31, 2018

The Directors have pleasure in presenting the One Hundred and tenth Annual Report of your Bank with the audited Balance Sheet, Profit & Loss Account and the Report on Business and operations for the year ended March 31, 2018 (FY 2018).

Financial Performance

A snapshot of our Bank’s financial performance is as below:

(Rs. in crore)

Particulars	31.03.17	31.03.18	Growth (%)
Deposits	6,01,675.2	5,91,314.8	(1.7)
of which- Domestic Deposits	4,40,092.2	4,66,973.8	6.1
International Deposits	1,61,583.0	1,24,341.0	(23.1)
Domestic Deposits	4,40,092.2	4,66,973.8	6.1
of which - Current Account Deposits	26,761.8	31,193.1	16.6
Savings Bank Deposits	1,46,831.9	1,61,130.0	9.7
CASA Deposits	1,73,593.6	1,92,323.1	10.8
Domestic CASA to Domestic Deposits (%)	39.44	41.18
Advances	3,83,259.2	4,27,431.8	11.5
of which- Domestic Advances	2,77,523.7	3,24,238.5	16.8
International Advances	1,05,735.5	1,03,193.3	(2.4)
Total Assets	6,94,875.4	7,19,999.8	3.6
Net Interest Income (NII)	13,513.4	15,521.8	14.9
Other Income	6,758.1	6,657.2	(1.5)
of which-Fee Income	2,837.4	3,249.7	14.5
Forex Income	975.9	909.2	(6.8)
Trading Gains	2,618.0	1,877.6	(28.3)
Recovery from PWO	326.8	620.7	90.0
NII Other Income	20,271.5	22,179.0	9.4
Operating Expenses	9,296.4	10,173.4	9.4
Operating Profit	10,975.1	12,005.6	9.4
Provisions	8,502.4	14,796.4	74.0
of which: Provisions for NPAs & Bad debts written off	7,679.8	14,211.7	85.1
Profit Before Tax	2,472.7	(2,790.7)	-
Provision for Tax	1,089.6	(358.9)	-
Net Profit	1,383.1	(2,431.8)	-
Appropriations/ Transfers
Statutory Reserve	345.8	0
Capital Reserve	353.7	0

Revenue and Other Reserves
I) General Reserve	0	(2,431.8)
II) Special Reserve u/s 36 (I) (viii) of the Income Tax Act 1961	350.9	0
Proposed Dividend	332.8	0

(Rs. in crore)

Key Performance Indicators	31.03.17	31.03.18
Average Cost of Funds (%)	4.82	4.56
Average Yield (%)	6.85	6.84
Average Interest Earning Assets	6,15,834.7	6,37,987.0
Average Interest Bearing Liabilities	5,95,250.0	6,16,243.9
Net Interest Margin (%)	2.19	2.43
Cost-Income Ratio (%)	45.86	45.87
Return on Average Assets (ROAA) (%)	0.20	(0.34)
Return on Equity (%)	4.53	(7.64)
Book Value per Share (Rs.)	132.46	120.28
EPS (Rs.)	6.00	(9.19)

The financial year FY 2018 had been an eventful year. The credit growth in the banking sector picked up during second half of the financial year. However, on account of base effect and currency withdrawal in the beginning of the year, the deposit growth during the year touched a multi decade low. With the Insolvency and Bankruptcy Code (IBC) becoming operational and RBI mandating resolution of large part of NPAs of banking system to be resolved at NCLT it provided a momentum to the resolution process. During the last quarter of the financial year, the RBI aligned its guidelines on resolution of stressed assets with IBC repealing its earlier guidelines on resolution of such assets. It front ended the recognition of NPAs in the system and impacted the profitability of banks in the short run. In the above environment, Bank performed well with improvement in core operating efficiency.

The net interest income (NII) of the Bank increased by 14.9% during the year. The other income marginally declined by 1.5% on account of lower treasury gains due to hardening of bond yields in the second part of the financial year. However, core fee income increased by 14.5%. Recovery from technically written off accounts increased by 90%. The operating expenses registered increase of 9.4%.

The Bank posted an operating profit of Rs.12,006 crore registering an increase of 9.4%. Total provisions increased by 74% and higher GNPA pool led to increase in provisions for NPAs by 85%, leading to Bank posting loss of Rs.2,431.8 crore. On account of this, there was no amount transferred to statutory and capital reserves and the loss amount was appropriated from general reserve.

Reflecting on the improved operating performance, the net interest margin (NIM) improved from 2.19% to 2.43%. This was led by reduction in the average cost of funds to 4.56% from 4.82% and almost flat average yield on funds. The cost to income ratio remained steady at 45.87%.

Capital Adequacy Ratio (CAR) in %

	31.03.17	31.03.18
Capital Adequacy Ratio -Basel III	12.24	12.13
CET-I	8.98	9.23
Tier - I	9.93	10.46
Tier - II	2.31	1.67

The capital adequacy ratio of the Bank at 12.13% continues to be above regulatory requirements as of March 31, 2018. The Tier 1 capital was 10.46% and Common Equity Tier 1 (CET-1) was 9.23%. The consolidated group capital adequacy ratio was higher at 12.87%.

During the year, Bank made preferential allotment of 34,13,56,534 shares of Rs.2 at a price of Rs.157.46 per share amounting to Rs.5,375 crore to Government of India. Accordingly paid up equity share capital of the Bank increased by Rs.68.27 crore. Bank also raised Rs.1,350 crore through issuance of Additional Tier-1 bonds.

Bank’s net worth as of March 31, 2018 was Rs.31,820.2 crore comprising of paid-up equity capital of Rs.530.36 crore and reserves of Rs.31,289.9 crore (excluding revaluation reserves, foreign currency translation reserves and other intangible assets). The book value of the share (FV Rs.2/-) was Rs.120.28.

Dividend

Bank is not eligible to pay dividend for the financial year 201718 on account of not meeting the eligibility criteria stipulated by Reserve Bank of India for this purpose.

Dividend Distribution Policy

As required under Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements), 2015, Bank has dividend distribution policy in place which sets out the parameters and circumstances that will be taken into account by Board in determining distribution of dividend to its shareholders. The policy is given in this Annual Report and is also available on the Bank’s website at www.bankofbaroda. com/download/Dividend.pdf

Board of Directors (Appointment /Cessation of Directors during the year)

Appointments

Shri Lok Ranjan was nominated as Director w.e.f. August 26, 2017 by The Central Government u/s 9 (3) (b) of The Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 to hold the post until further orders.

Smt. Soundara Kumar was elected as Shareholder Director under section 9 (3)(i) of The Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970, for a period of 3 years from December 24, 2017 to December 23, 2020.

Shri Bharatkumar D Dangar was elected as Shareholder Director under section 9 (3)(i) of The Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970, for a second term of 3 years from December 24,2017 to December 23,2020.

Cessations

Shri Mohammad Mustafa Director, ceased to be a Government Nominee Director w.e.f. August 26, 2017 on the appointment of Shri Lok Ranjan in his place.

Shri Prem Kumar Makkar Director, ceased to be a Non Workmen Director w.e.f. September 19, 2017 on completion of the tenure of -3- years.

Dr. R. Narayanaswamy Director, ceased to be a Shareholders Director w.e.f. December 24, 2017 on completion of the tenure of -3- years.

Board Evaluation

In FY 2017, the Bank engaged a reputed external consulting firm to conduct an independent evaluation of the Board, its committees and individual directors. In FY 2018, this evaluation was followed up by an independently administered questionnaire by the same consulting firm. The questionnaire was completed by all the directors. The questionnaire included a range of topics to evaluate the performance of the Board. These includes:-

- Composition & Effectiveness

- Governance

- Relations with Management Committees

- Continuous Improvement

The responses received from the Board members were compiled and a report was submitted by the consulting firm to all Directors on the Board. The Directors discussed the Report and agreed on a set of actions to drive further improvement in Board effectiveness.

Auditors’ Compliance Certificate on Corporate Governance:

The Auditors Compliance Certificate regarding the compliance of the conditions of Corporate Governance for the year 2017-18 is annexed with this report pursuant to “Part ”E” of Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Business Responsibility Report

Business Responsibility Report as required by SEBI has been hosted on the website of the Bank (www.bankofbaroda. co.in). Any member interested in obtaining a physical copy of the same may write to the Company Secretary of the Bank.

Directors’ Responsibility Statement

The Directors confirm that in the preparation of the annual accounts for the Financial Year ended March 31, 2018:

a) The applicable accounting standards had been followed along with proper explanation relating to material departures if any;

b) The accounting policies framed in accordance with the guideline of Reserve Bank of India were followed and the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Bank at the end of the financial year and of the profit and loss of the Bank for that period;

c) The directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of applicable laws to the Bank for safeguarding the assets of the Bank and for preventing and detecting fraud and other irregularities;

d) The directors had prepared the annual accounts on a going concern basis; and

e) The directors had ensured that internal financial controls followed by the Bank are in accordance with guidelines issued by Reserve Bank of India in this regard and that such internal financial controls are adequate and were operating effectively.

Explanation. For the purposes of this clause, the term “internal financial controls” means the policies and procedures adopted by the Bank for ensuring the orderly and efficient conduct of its business, including adherence to Bank’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information;

f) The directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

Acknowledgements

The Directors place on record their appreciation for the contributions made by the outgoing Directors viz. Shri Mohammad Mustafa, Shri Prem Kumar Makkar and Dr. R. Narayanaswamy.

The Directors express their sincere thanks to the Government of India, Reserve Bank of India, Securities and Exchange Board of India, other regulatory authorities and the overseas regulators for their continued co-operation, guidance and support.

Bank would like to take this opportunity to express sincere thanks to its valued clients for their continued patronage and support.

The Directors acknowledge with deep appreciation of the cooperation extended by all shareholders, banks and financial institutions, rating agencies, stock exchanges and all the well wishers in India and abroad.

The Directors also take this opportunity to place on record deep appreciation for the hard work and dedication of the employees of our Bank which enabled our Bank to record growth with quality year after year despite economic challenges and consolidate its position as one of the premier banks in the country.

For and on behalf of the Board of Directors,

P. S. Jayakumar

Managing Director & CEO

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Mar 31, 2017

The Directors have pleasure in presenting the One Hundred and Ninth Annual Report of your Bank with the audited Balance Sheet, Profit & Loss Account and the Report on Business and operations for the year ended March 31, 2017 (FY 2017)

Financial Performance

The snapshot of our Bank’s financial performance is as below:

Rs. in crore

Particulars	31.03.16	31.03.17	Growth (%)
Deposits	5,74,037.87	6,01,675.17	4.81
of which- Domestic Deposits	3,94,843.97	4,40,092.15	11.46
International Deposits	1,79,193.90	1,61,583.02	(9.83)
Domestic Deposits	3,94,843.97	4,40,092.15
of which - Current Account Deposits	19,285.57	26,761.77	38.76
Savings Bank Deposits	1,13,253.07	1,46,831.82	29.65
CASA Deposits	1,32,538.64	1,73,593.59	30.98
Domestic CASA to Domestic Deposits (%)	33.57	39.44
Advances	3,83,770.18	3,83,259.22	(0.13)
of which- Domestic Advances	2,63,268.38	2,77,523.73	5.42
International Advances	1,20,501.80	1,05,735.49	(12.25)
Total Assets	6,71,376.48	6,94,875.42	3.50
Net Interest Income (Nil)	12,739.85	13,513.41	6.07
Other Income	4,998.86	6,758.06	35.19
of which-Fee Income	3,599.28	3,813.22	5.95
Trading Gains	1,178.86	2,618.01	122.05
Recovery from PWO	220.72	326.83	47.96
Nil Other Income	17,738.71	20,271.47	14.27
Operating Expenses	8,923.14	9,296.40	4.18
Operating Profit	8,815.58	10,975.07	24.49
Provisions	15,513.64	8,502.37	(45.19)
of which: Provisions for NPAs & Bad debts written off	13765.89	7679.79	(44.21)
Profit Before Tax	(6,698.06)	2,472.70	-
Provision for Tax	(1,302.53)	1,089.56	-
Net Profit	(5,395.54)	1,383.14	-
Appropriations/ Transfers
Statutory Reserve	0	345.78
Capital Reserve	0	353.65
Revenue and Other Reserves
I) General Reserve	(5,395.54)	0
II) Special Reserve u/s 36 (I) (viii) of the Income Tax Act 1961	0	350.92
III) Investment Reserve 0 0 Account

IV)Transfer from Excess Appropriation of previous year	7.79	0
Proposed Dividend	0	332.78
Key Performance Indicators
Average Cost of Funds	5.08	4.82
Average Yield (%)	7.09	6.85
Average Interest Earning Assets	6,21,234.89	6,15,834.65
Average Interest Bearing Liabilities	6,16,002.63	5,95,249.99
Net Interest Margin (%)	2.05	2.19
Cost-lncome Ratio (%)	50.30	45.86
Return on Average Assets (ROAA) (%)	(0.78)	0.20
Return on Equity (%)	(17.64)	4.53
Book Value per Share (Rs.)	132.74*	132.46*
EPS (Rs.)	(23.89)*	6.00

*Post split of face value of the share to Rs. 2/-

The financial year 2016-17 had been a mix of opportunities and challenges. With asset quality challenges in the banking industry continuing, credit growth has been at multi decade low of 5.08% during FY 2017 on account of weak corporate demand. Despite the challenges, Bank performed well during the year leveraging its retail franchise.

The net interest income (Nil) of the bank increased by 6.07% to Rs. 13,513.41 crore as of March 31, 2017 while other income increased by 35.19% to Rs. 6,758.06 crore backed by 122.05% rise in treasury income to Rs. 2,618.01 crore as well as 5.95% growth in core fee income to Rs. 3,813.22 crore. Operating expenses increased by 4.18% to Rs. 9,296.40 crore.

Our Bank posted an operating profit of Rs.10,975.07 crore during FY2017 registering a growth of 24.49%. The provision cost (other than taxes) declined significantly by 45.19% to Rs. 8,502.37 crore compared to Rs. 15,513.64 crore last year and Bank posted a profit before tax of Rs. 2,472.70 crore. After making provision for tax of Rs. 1,089.56 crore, net profit for the year ended March 31, 2017 was Rs. 1,383.14 crore.

For the year ended March 31, 2017, the return on average assets was 0.20% while return on equity was 4.53%. The earnings per share (FV Rs. 2/-) were Rs. 6.00.

Capital Adequacy Ratio (CAR)

Ratios in %

	31.03.16	31.03.17
Capital Adequacy Ration-Basel III	13.17	12.24
CET-I	10.29	8.98
Tier-I	10.79	9.93
Tier-II	2.38	2.31

Capital Adequacy Ratio under Basel III was well above the regulatory requirements at 12.24% as of March 31, 2017. Tier 1 ratio was at 9.93% and common equity Tier 1 (CET-1) was at 8.98% under Basel III framework. Bank raised Rs.2,000 crore of debt capital by way of AT-1 bonds in two tranches of Rs.1,000 crore each in December 2016 and March 2017.

Bank’s Net Worth as of March 31, 2017 was Rs.30,519.80 crore comprising paid-up equity capital of Rs.462.09 crore and reserves (excluding revaluation reserves, FCTR & Net of Intangible assets) of Rs.30,057.71 crore. The book value of share (FV Rs.2/-) was Rs.132.46.

Dividend

Board of Directors of the bank has recommended a dividend of Rs.1.20 per share for the financial year ended March 31, 2017. The total outgo in the form of dividend, including taxes, will be Rs.332.79 crore. The payment of dividend is subject to requisite approvals.

Compliance

An independent compliance function is a key component of the bank’s second line of defence. This function is responsible for, among other things, ensuring that the bank operates with integrity and in compliance with applicable, laws, regulations and internal policies. The Board of Directors of the Bank oversees the management of the Bank’s compliance risk.

Our Bank has put in place a Board approved compliance policy outlining the compliance philosophy of the Bank. Compliance function in the Bank is an integral part of governance along with internal control and compliance risk management process. It ensures observance of regulatory / statutory provisions contained in various legislations viz. Banking Regulation Act, Reserve Bank of India Act, Foreign Exchange Management Act, Securities and Exchange Board of India Act and Prevention of Money Laundering Act and also the regulations of the various regulators where the Bank is having its offices / branches in overseas centers. It also ensures standards and codes prescribed by BCSBI (Banking Codes and Standard Board of India, IBA (Indian Banks Association), FEDAI (Foreign Exchange Dealers Association of India), FIMMDA (Fixed Income Money Market and Derivatives Association of India).

Bank is in the process of putting up a web based compliance management system to further strengthen the compliance function in the Bank.

The compliance function advises senior management and the Board on the Bank’s compliance with these applicable laws, rules and standards as well as keeping them informed of developments in the area. It also helps educating employees about compliance issues by conducting periodic trainings and workshops for business staff as well as designated compliance officers. Knowledge management tools for this purpose have also been uploaded on the Bank’s site.

Compliance function has an important role in supporting corporate values, policies and processes that help ensure that the Bank acts responsibly and fulfils all applicable obligations.

KYC/AML Compliance

Our Bank has well defined KYC-AML-CFT Policy, which is the foundation on which the Bank’s “Implementation of KYC norms, AML standards, CFT measures and obligation of the Bank under Prevention of Money Laundering Act (PMLA) 2002” is based. Bank electronically generates Cash Transaction Reports (CTRs) for submission to Financial Intelligence Unit-lndia (FIU-IND). AML Solution for generating system-based alerts on the basis of transactions in the accounts of the customers is in place. A central transaction monitoring unit (CTMU) also monitors of the transactions/ alerts generated in AML Solution and escalation of STRs, if found suspicious, to the Principal Officer. System-based risk categorization of Bank’s customers’ accounts is done on half yearly basis. Bank files Counterfeit Currency Reports (CCRs) and Non Profit Organizations Transaction Reports (NTRs) to FIU-IND, New Delhi every month. It generates cross border wire transfer reports every month through electronic mode for submission to FIU-IND, New Delhi. CBS system has been modified suitably so as not to accept cash deposits of Rs.50,000/- and above in absence of PAN / Form No. 60/61.

For further strengthening KYC compliance, online verification of PAN from NSDL has been operationalised. Bank has implemented Aadhaar based e-KYC in collaboration with UIDAI. Real-time checking of names from UNSCR list is available in all the branches as a step towards CFT Online scanning of the customer’s name with the names of the individuals/ entities appearing in the sanctions list or any other blacklist issued by Govt. Authorities, while opening of accounts has been put in place which generates the AML Alerts on predefined criteria. The Bank is in the process of allotting Unique Customer Identification Code (UCIC) to all its existing customers as per the RBI guidelines.

Bank has also carried out an independent review of its KYC, AML, & CFT policy and practices for the domestic branches and six overseas territories (UK, UAE, South Africa, Mauritius, Hong Kong and Bahamas) through independent reputed consultancy firms and taken steps to stream line the processes where required.

Internal Audit - The Third Line of Defence

The third line of the defence consists of an independent and effective internal audit function. Among other things, it provides independent review and objective assurance on the quality and effectiveness of the Bank’s internal control system, the first and second lines of defence and the risk governance framework as well as strategic and business planning and decision-making processes. The internal auditors are not involved in developing, implementing or operating the risk management function or other first or second line of defence functions.

Our Bank carries internal audit function through a Central Internal Audit Division (CIAD). CIAD administers various streams of audits besides Risk Based Internal Audit (RBIA) of branches and offices. Audit Committee of the Board oversees overall internal audit function of the Bank. The committee guides in developing effective internal audit, concurrent audit, IS Audit and all other audit functions of the Bank. The committee monitors the functioning of the Audit Committee of Executives and internal audit department in the Bank.

CIAD operates through thirteen Zonal Internal Audit Divisions to carry out internal audit of branches/offices as per the periodicity decided by the Risk Based Internal Audit Policy. All branches of the Bank are covered under Risk Based Internal Audit. Out of 4,566 branches audited during 2016-17, 3,669 branches (80.35%) were in Low Risk, -851-branches (18.64%) were in Medium Risk and 46 branches (1.01%) were in High Risk category.

During the year, Bank engaged an independent firm as a knowledge partner for comprehensive review of the Audit function in line with the processes focusing on centralization of activities by use of technology, imaging solutions and digitization. The whole gamut of audit approach will undergo a change with extensive use of technology, analytics, sampling and advanced audit methodology. Internal audit processes thus are being revamped aided by technology.

For streamlining the concurrent audit function with the objective of improved oversight and consistency in approach, Bank has revamped this mechanism whereby a single firm is appointed to conduct concurrent audit of all branches in a Zone. A single audit firm would bring in the benefits of uniformity of approach and with more accountability. It will bring in benefits of unified view on control & compliances, observations of irregularities and patterns if any.

Customer Service

Our Bank is sensitive and responsive to the customer needs and believes that technology, products, processes and human resources must be leveraged for delivering superior banking experience to its customers.

During the year, an independent study on Customer Satisfaction and Brand Health across all products lines was commissioned by the Bank through an independent reputed agency. The survey covered all the geographies across products like savings bank, current account, wealth management products, home loans, auto loans, agri loan, traders loan, mortgages, MSME and mid-large corporates. The findings of the survey provided valuable insights on customer satisfaction levels, loyalty levels and experience levels across the product lines and geographies. Bank is taking necessary steps to further improve the customer satisfaction levels with an aspiration to be the “Most Admired Service Brand” in the banking Industry.

At the Board level, the sub-committee of Board for customer service addresses the issues relating to the formulation of policies and assessment of their compliance with the aim of consistent improvement in the quality of customer service.

Our Bank has also set up a Standing Committee on Procedures and Performance Audit on Customer Services, comprising of two eminent public personalities as members along with all the Executive Directors and seven General Managers of Bank. This Committee oversees timely and effective compliance of the RBI instructions on Customer Service and also reviews the practices and procedures prevalent in Bank and takes necessary corrective steps on an ongoing basis. The suggestions emanating from the Branch Level Customer Service Committee meetings, which are held every month, are placed before the Standing Committee on Procedure and Performance Audit on Customer Services on quarterly basis. The feedback of the committee meetings is then put up to the Customer Service Committee of the Board of Directors.

For redressal of customer complaints, Our Bank has a policy in place on customer grievance redressal and the same is placed on the Bank’s website. Bank is also having a well structured Customer Grievance Redressal Mechanism, due to which the outstanding complaints have also come down significantly. The General Manager, Operations & Services, is designated as Principal Nodal Officer for customer complaints in our Bank. Moreover, all Zonal Heads and Regional Heads are designated as Nodal Officers for their respective Zones and Regions. Further, the names of all Nodal Officers along with their contact numbers are displayed in all the branches of our Bank.

Our Bank views each complaint seriously and undertakes root cause analysis of the complaints for suitable remedial measures including updation of the systems, procedures and sensitization of employees. Our Bank has a web based online complaint registration and redressal portal named as Standardized Public Grievance Redressal System (SPGRS) for lodgment of complaint by the customers online. SPGRS also has a facility to capture suggestions/ feedbacks.

Our Bank has appointed an Internal Ombudsman designated as Chief Customer Service Officer (CCSO). The Bank’s internal ombudsman is a forum made available to customers for grievance redressal before they approach the Banking Ombudsman. All complaints, which are rejected or partially accepted by the Bank, are examined by the Internal Ombudsman. It enhances the confidence of the customers in the Bank’s systems and hastens the process of grievance redressal, making it more transparent.

Our Bank is also a member of the Banking Codes and Standards Board of India (BCSBI) and has adopted the “Code of Commitment to the Customers” and the “Code of Bank’s Commitment to MICRO and Small Enterprises” prescribed by the BCSBI. These have been placed on our Bank’s website and also made available to customers at the branches. BCSBI monitors the implementation of the codes inter-alia by visits to branches to find out the status of ground-level implementation of codes and studies complaints received from customers and orders / awards issued by Banking Ombudsmen / Appellate Authority to find out whether there is any system-wide deficiency. During the rating exercise in 2016, our Bank has been rated “above average” in overall PSB category.

Vigilance

Our Bank gives importance to preventive vigilance to inculcate awareness on the compliance to internal systems and processes. In this connection, after root cause analysis of incidents of frauds, Bank has a system of conveying to the operating units about the deficiencies observed in observance of systems and procedures as a preventive vigilance measure. The employees are also sensitized about preventive vigilance through vigilance newsletter, circulars, meetings etc.

The concept of whistle blower is another effective tool for preventive vigilance. Our Bank has a well-defined whistle blower policy which acts as a deterrent for employees who may be prone to carrying out malicious activities. Bank has designed software which is used for lodgments of complaints online by the employees under whistle blower policy.

With the objective of bringing awareness among the staff about preventive vigilance and also to put forth consequences of flouting the rules and regulations which may lead to perpetration of frauds by unscrupulous elements, sensitive branches of the Bank are identified on the basis of risk perception and preventive vigilance audits are conducted.

To bring about greater transparency in procurement and tendering processes in the Bank, notice inviting tenders/ details of tenders awarded by the Bank and summary of tenders/ contracts concluded are put on the Bank’s website. Standardized Public Grievance Redress System (SPGRS) for uniform implementation in PSBs is also operational.

Vigilance in the Bank aims at ensuring proper justice and fair play in the organization, protecting the innocent; supporting quality decisions and striving to bring the real offenders to book thereby eliminating forces that thwart integrity and cause loss to the Bank.

Human Resources

Our Bank truly believes that our human resources is our biggest differentiator having a direct and significant impact on our Bank’s overall performance, both current and future. Our Bank has a rich reservoir of human resources comprising over 51,000 employees. As we march forward to realize the rising expectations of our stakeholders, it is imperative that our employees are motivated and fully engaged in the present dynamic and competitive environment. Bank’s HR team has been working hard to address the challenges from a human resources standpoint through a plethora of initiatives viz. recruitment and onboarding of talent in the wake of a large number seasoned bankers who are superannuating, focus on strengthening performance management through Project SparshPlus, addressing training needs, leadership development across the Bank, succession planning and higher levels of employee engagement aided by our first ever formally conducted employee engagement survey “Voice of Barodians”. Our Bank continues to take the lead in the conceptualization and execution of various HR transformation efforts, many of which have begun during FY 2017 and mark a first for Public Sector Banks in the country.

There were several positives that emerged from the “Voice of Barodians” Survey 2016 and also some areas that need to be strengthened further through a variety of action plans. These measures also include capability building initiatives to take on higher order challenges in the Bank’s transformation journey. Bank’s intent is to ensure that the employee experience across all levels is further enhanced so as to create a fun and happy place to work in. Towards this end, the Bank launched a series of initiatives for the employees, who are the main drivers for the Bank’s Business and the chief brand ambassadors for the Bank. These include:

Baroda Anubhuti Programme

This is an Employee Engagement programme for enhancing the employee experience at the workplace with initiatives such as Employee of the Month, Spot recognition - capturing “WoW” moments, “Zero Hour” (Fun hour) at all our branches/ offices, local “community service / social activity” by employees, sports and wellness activities

WELEAD - A comprehensive Leadership Programme

Our Bank has introduced a comprehensive Leadership Development Initiative ‘WeLead’, based on behavioural competencies with the objective of building a robust and sustainable pipeline of leaders for the future. This is through the following 4 distinctive programmes:

- Baroda Senior Leadership Programme - for Officers in Scales VI & VII of mandatory courses required for each critical role. Our Bank has been continuously upgrading our capabilities in the area of Learning and Development and has adopted several innovative efforts for this.

Launch of ‘Sparsh Plus’

The Bank has also unveiled ‘Sparsh Plus’ with the objective of revamping the performance and talent management systems in our Bank, aided by the best-in-class technology and digital tools. Our intent is to ensure that our people processes and systems provide our staff with role clarity and empower them to perform their role more effectively, help employees in their development and enable them to enhance their overall contribution.

Bridging the talent deficit and augmenting skillsets

While our Bank has been undertaking hiring on a sustained basis year on year, to cater to business requirements, various recruitment exercises were undertaken during the year to address the emerging manpower needs of our Bank such as recruitment of specialist officers and probationary officers among others.

Our Bank has also on-boarded specialists from the market having skill sets, knowledge and competencies for various critical positions in the Bank with the objective of augmenting our internal team’s capabilities in various strategic areas for the future and for adopting the best practices in the Market/Industry.

Sayajirao Gaekwad Fellowship Programme

Our Bank has instituted the Sayajirao Gaekwad Fellowship Programme in March 2017 in support of Startup India and Standup India initiatives. The Fellowship Programme seeks to encourage young professionals with entrepreneurial ideas to gain a one year experience in the banking and financial services industry and obtain organizational support in development of their start up idea. In addition, the selected Fellows are supporting the execution of several strategic initiatives currently underway in the Bank.

Employee Helpline (HR-Helpline)

Our Bank has launched a central HR helpline for all the employees for resolving their queries/ issues on HR matters, support them in times of distress and help them tide over any emergency situation or any other hardship, which may impede their personal or professional life. There is a dedicated team at corporate office which monitors the Employee Helpline on real time basis and resolves the issues/grievances/queries promptly.

Career Progression

Concerted efforts have been taken by our Bank for fostering career progression of employees to reward them for their performance and also to motivate them further to progress in their careers by fulfilling both the organizational as well as personal aspirations. Our Bank not only provides opportunities for upward movement in the hierarchy but also ensures horizontal movement of Officers across different functions to provide them wider exposure and carve out a definite career path for them.

Thrust on Diversity

Our Bank follows non-discriminatory and equal opportunity policies for all employees. Every employee in the organization has equal access to the available opportunities - whether they concern career progression, perquisites and benefits, welfare schemes, training, grievance redressal or other amenities. Promotion, career path, deployment and transfer policies are made open and transparent and all employees in the Bank are made aware of the same for uniform implementation.

In order to create a more diverse workplace, our Bank has been progressively increasing its recruitment of women employees over the last few years. The percentage of women in the overall staff composition has increased to 22.70% in FY 2017 from 22.05% in FY2016.

In order to retain women employees at all levels and in recognition of the concomitant responsibilities of women, our Bank has put in place various facilities to support women employees such as sabbatical leave, health check program for women employees and other initiatives.

Implementation of Official Language (OL) Policy

During the year FY 2017, our Bank made outstanding progress in implementing the Official Language Policy of Government of India. Besides compliance of various statutory requirements under Official Language Policy of the Union Government and directives issued by Reserve Bank of India, our Bank promoted Hindi as a tool for business development and connecting with the customers.

Our Bank adopted a well-structured Annual Action Plan for Official Language in order to achieve various targets set by the Government of India under its Annual Action Plan 2016-17 and the assurances given to the Committee of Parliament on Official Language during its visits to various offices/branches of the Bank. Our Bank has made significant progress in achieving many of the major targets of the Annual Action Plan. Our Bank has fulfilled all the assurances given to the Committee of Parliament on Official Language within the stipulated time frame.

The Meetings of Central Official Language Implementation Committee were organized regularly on quarterly basis. Under the guidance received from the Committee, several new initiatives were taken during FY 2017. Bank took important initiatives of providing M-Clip Services in Hindi and Baroda M-Connect Plus services in Hindi and Gujarati. Mobile Pass book services are being extended to our customers in Hindi and six other Regional Languages. The Bank also provided Online complaint module i.e. SPGRS services in Hindi for convenience of the customers. All alternate delivery channels viz. Self passbook printing machines, cheque deposit machines, cash deposit machines, Multi function Kiosks, Account Opening Kiosks etc. were equipped with Hindi user interface for the convenience of customers. All ATMs of the Bank were enabled for printing of transaction slips and mini statements in Hindi and major regional languages for the convenience of customers selecting Hindi or the language concerned as the language of their choice for interaction with the machine. As a major IT enabled initiative, Bank launched transactional SMS services in Hindi and 11 other Regional Languages on the occasion of World Hindi Day 2017.

During the year, our Bank organized an All India Seminar on “Demonetization and Digital India” in New Delhi wherein representatives/speakers/participants from different Public Sector Banks took part. An Inter Bank Seminar was organized at Corporate Office, Mumbai on “Importance and Challenges of Language in Digital Era”, which was attended by the Heads/representatives of OL and IT Departments of various PSBs/FIs in Mumbai. This initiative earned accolades from the RBI and Government of India and Parliamentary Committee on Official language. Our Bank celebrated World Hindi Day in January, 2017 at its overseas territories which was attended by eminent personalities related to Hindi Literature and valued customers and officials of Indian Embassies.

Our Bank has instituted an award namely “Maharaja Sayajirao Bhasha Samman” in memory of its founder Maharaja Sir Sayaji Rao Gaekwad-lll. The award consists of a Citation/ Memento and cash award of Rs. 1.51 lakh. During the year, Bank honoured Shri Ashutosh Rana, the eminent Actor and poet with this award.

Bank has expanded the ambitious initiative of regional language training to its employees across various linguistic regions so that they learn the basics of the concerned regional languages which would help them in discharging their duties well while dealing with the local customers.

The Third Sub-Committee of the Committee of Parliament on Official Language visited Bank’s branches/offices at Mount Abu and Alwar during the year. The Committee appreciated the efforts put in by the Bank for progressive use of Hindi. All the assurances given to the Committee have been fulfilled within the prescribed time frame. Our Bank was awarded Second prize for ‘ A’and ‘B’ linguistic Regions and consolation prize for Region ‘C’ by Reserve Bank of India (RBI) under the RBI Rajbhasha Shield Competition. Besides, Bank’s bilingual house journal Bobmaitri also received Third Prize. Jaipur, Varanasi, Goa, Guwahati, and Jodhpur offices of our Bank received awards from Govt. of India through its Regional Implementation Offices for their outstanding work. Bank also received Second Prize from Maharashtra State Level Bankers Committee. Bank continued with its unique scheme “Medhavi Vidyarthi Samman Yojana” for popularising Hindi amongst the students’ community. Under this scheme, cash prizes and commendation certificates are given to the two of the students securing First and Second positions in M.A. (Hindi) examinations. This scheme, at present, is applicable in 64 universities of the country.

In compliance to the directives of Government of India as per Annual Action Plan, Bank carried out Official Language inspection of overseas branches at Fiji, Australia and New Zealand to promote and propagate Hindi amongst local staff members and conducted Hindi Workshop for them. Our Bank published books in Hindi during the year viz.”Grameen Vipananevam Banking Vyavasay” by Corporate Office, “Banking Paridrishya” by Jaipur, “Banking ke Vividh Aayam” by Baroda, “Banking - NayaDaur, NayaParivesh” by Pune and “Maangjama Rashiyan - Banking ka Aadhar” by New Delhi offices for providing qualitative/informative reading material in Hindi language.

Domestic Subsidiaries and Joint Ventures

The performance of the Bank’s Domestic Subsidiaries and Associates was satisfactory during FY 2017.

BOB CARDS Limited is a wholly owned subsidiary of the Bank and is into the business of issuance of Credit Cards and Merchant Acquiring. Gradually, widening its scope of work based on the skill-sets and expertise acquired in the payment card industry over a period of time, Bobcards Ltd. undertook ancillary activity of providing support services to our Bank’s debit card operations.

Envisaging huge growth opportunities for cards and digital payments in India, the Company is gearing up to be a consumer credit and payment leader in the evolving market landscape by introducing new business lines under the NBFC domain besides revamping the existing businesses. Bobcards Ltd. aims to be a consumer finance company for Credit Card (CC) and Personal Loans (PL) business. In addition, it will provide product and servicing capabilities for POS business and sourcing of Retail/SME products for the Bank.

FY 2017 witnessed various initiatives undertaken by the company for its overall growth. In the wake of demonetization, in order to promote cashless transactions, Bank launched a nationwide campaign for enrollment of new POS merchants during November and December 16 whereby more than 60,000 new POS installations were carried out and POS base increased to over 85,000. Post-demonetization, the POS transaction volumes scaled up to Rs.30 crore per day as against earlier volume of ’8 crore. The number of transactions also increased from 25,000 per day to 2 lakh transactions per day. The monthly transaction volume increased from Rs.244 crore to Rs.700 crore. Bobcards has successfully expanded its POS Product Suite by adding m-POS (Mobile POS Terminals) and QR based acquiring (m-VISA& Bharat QR Code). The company continued to focus on issuance of quality cards, resultant to which transaction volumes through Credit Card Business increased significantly. The process of tapping the potential in the travel segment has been initiated to bring more such agents to our fold. Total 24,770 new cards have been issued till February 2017 despite the shift in thrust for POS installation after de-monetization. As a mass marketing initiative, Bobcards has tie-up with XLRI, Jamshedpur for issuance of Co-branded cards to its alumni.

Providing prompt and courteous service to customers continued to be the major strength of the Company, which not only enabled it to emerge as a customer friendly organization but also helped in retaining quality customers. Quick grievance redressal approach resulted in high level of customer satisfaction and response.

BOB Capital Markets Limited is a wholly owned subsidiary established by Bank in 1996. Main businesses of BOBCAPS are Investment Banking (Debt Restructuring, Project Finance, M&A, Debt Capital Markets and Equity Capital Markets), Institutional & Retail Equity Broking and Distribution of Financial Products. The Company also has a license for Portfolio Management Services (PMS).During FY 2017, the Company has embarked on a significant scale up in its key businesses. The company has successfully strengthened its teams in businesses such as Investment Banking, Broking and Wealth Management / Distribution- to be able to leverage strengths of our Bank and establish BOBCAPS as one of the leading and most respected player in its businesses.

The Nainital Bank Limited was promoted by Late Bharat Ratna Pandit Govind Ballabh Pant and others became an Associate Bank of Bank of Baroda in the year 1973. Shareholding of our Bank in Nainital Bank Ltd. is 98.57%. The Total Business of Bank which was Rs.8,049.22 crore as of Martch 31, 2016 has increased to Rs.10,132.66 crore as of March 31, 2017, showing growth of 25.88%. Bank has opened 11 new branches &established -5-Loan processing units by the name Naini Loan Points (NLPs). Bank also installed 13 white label ATMs with collaboration with TCPSL. Bank issued 22,688 debit cards to its customers during FY 2017.

Baroda Pioneer Asset Management Company Limited, a Joint Venture with Pioneer Global Asset Management SpA, is in its eighth year of operation. In light of a good year for the Mutual Fund Industry, Baroda Pioneer Asset management Company has also been able to increase its AUM. The average AUM of the company for FY 2017 was Rs.10,535 crore. Further, the company has improved its asset mix, with share of liquid reducing and that of fixed income going up. This helped the company to maintain its budgeted margins during the year. The company continued to focus on developing the banking and IFA channels for distribution. This helped in getting the flows in the fixed income and equity segments. The company’s SIP book is also growing steadily and has seen inflows from beyond the top 15 towns of the country. Gathering assets in equity funds and building the momentum in fixed income segment continues to be the top agenda for the company. The company continues to explore enhanced technological solutions to continuously improve its service delivery.

India First Life Insurance Company Ltd a joint venture company with Andhra Bank and Legal & General group, commenced its business operations on November 16, 2009 and has received an overwhelming response for its products across the country. India First is amongst the fastest Life Insurance Company to break even in the 5^th year of operation and its industry ranking is 8^th among the private players with market share of 4.5% and AUM (Asset under Management) at Rs. 9,061 crore as of March 31, 2017.

India Infradebt Limited (Infradebt) It is the first Infrastructure Debt Fund (IDF) under a non-banking finance company structure set up and was promoted by ICICI Bank Limited, Bank of Baroda, Citicorp Finance (India) Limited and Life Insurance Corporation of India in which Bank is holding 30% stake. The Company’s principal activity is to re-finance part of the debt liabilities of the Infrastructure Projects which have completed one year of commercial operations. The Company has made aggregate disbursements of Rs. 4,712 crore to 22 road projects under PPP format awarded by NHAI, 18 renewable energy projects and two other Infrastructure projects (Hospitals) as of March 31, 2017. As of March 31, 2017, India Infradebt Ltd. has raised a total of Rs. 4,205 crore of funds through Non-Convertible Debentures.

Baroda Global Shared Services Ltd. It is a newly formed wholly owned subsidiary of our Bank. The subsidiary is formed with the objective of migrating some of the back-office processes to handle through a centralized set up. The Company is yet to be operationalised.

A brief synopsis of domestic subsidiaries, associates and Joint Ventures is as below:

(Rs. in lakh)

Entity (with date of registration)	Owned Funds	Total Assets	Net Profit	Offices	Staff
BOB Capital Markets Ltd. (11.03.1996)	16,317	16,554	560	1	57
BOBCARDS Ltd. (29.09.1994)	23,647	35,651	2,644	38	135
Baroda Pioneer Asset Management Co. Ltd. (05.11.1992)	4,864	6,150	107	3	75
Baroda Pioneer Trustee Co Pvt Ltd. (23.12.2011)	8	11	1	1	0
IndiaFirst Life Insurance Co. Ltd. (05.11.2009)	55,061	1,11,248	3,517	24	1,294
The Nainital Bank Ltd. (31.07.1992)	56,969	7,699	4,846	353	922
India Infradebt Ltd. (31.10.2012)	42,006	4,93,942	4,810	1	17
BOB Shared Services Ltd. (15.03.2017) Operations yet to be started	12			1	-

Awards and Accolades

During FY 2017, our Bank has won following awards and accolades on both business and financial parameters.

Date	Awards
15.02.2017	Bank was awarded 2nd prize by Maharashtra State Level Bankers Committee in the area of Official Language Implementation during 2015-16 under Rajbhasha Shield Yojana under Public sector Category held in Pune.
14.02.2017	Bank was awarded for “Excellence in Banking, (PSU Sector)” and “Excellence in Education Loan” at 7th My FM Stars of the Industry awards for Excellence in Banking, Insurance and Financial Services held in Mumbai on 14th February, 2017.
08.02.2017	Bank was awarded Amity Corporate Excellence Award for being the First Bank to Launch Digital Portal Branch by Amity University, Noida & Greater Noida Campus. The Award received during 17th International Business Horizon Inbush Era World Summit 2017 on 8th to 10th February 2017 held at Noida.
16.12.2016		Bank was awarded in three categories: Skoch Award Platinum- Banking Category; Skoch Award Platinum for Cash on Mobile and Skoch Award Platinum for Digital Portable Branch by Skoch Group. The Award received during Skoch Technologies for Growth Award 2016 held at New Delhi on 16th December, 2016.
26.10.2016		Bank won -4- Awards at the 56th Association of Business Communicators of India (ABCI) Awards as under: 1. Bank’s Wall Calendar 2016 - Bronze 2. Bilingual Publications - Bronze 3. Special Column (English) - Bronze 4. Features (Language) -Akshayyam - Silver
23.09.2016		Bank received The Best Official Language Implementation’ award and special award for Bank’s Hindi Magazine ‘Akshayyam’ for the year 2016 by reputed Literary Organization “Aashirwad” at Mumbai.
31st Aug to 6th Sept. 2016		Bank ranked 21st amongst Best Indian Brands 2016 in Brand Equity - The Economic Times dated 3151 August to 6th September, 2016.
01.09.2016		Bank was awarded runner-up-award - ‘Public Sector Bank’ category for the year 2013-14 at ‘FE India’s Best Bank’ by The Financial Express (FE) a function held in Mumbai on 01.09.2016

Registrar & Share Transfer Agent, Share Transfer System and Redressal of Investors’ Grievances

Bank has established Investors’ Services Department, headed by the Company Secretary at Corporate Office, Mumbai wherein Shareholders can mail their requests / complaints for resolution at the address given below. They can also lodge their complaints online through SPGSR.

Dividend Distribution Policy

As required under Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements), 2015, our Bank has a dividend distribution policy in place which sets out the parameters and circumstances that will be taken into account by Board in determining distribution of dividend to its shareholders. The policy is given in this Annual Report and is also available on the Bank’s website at www.bankofbaroda. com/download/Dividend.pdf

Board of Directors (Appointment /Cessation of Directors during the year)

Appointments

Prof. Biju Varkkey was nominated as a Part Time Non-Official Director w.e.f. 25.04.16 by the Central Government u/s 9(3)(h) and (3-A) of section 9 of The Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970/1980, for a period of 3 years or until further orders, whichever is earlier.

Shri Gopal Krishan Agarwal was nominated as Parttime Non-Official Director w.e.f. 26.07.16 by the Central Government u/s 9(3)(g) of The Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970/1980, under Chartered Accountant category for a period of three years or until further orders, whichever is earlier.

Shri Ashok Kumar Garg was appointed as Executive Director by the Central Government u/s 9(3)(a) of The Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970/1980, w.e.f. 9^th August, 2016 for a period upto 30.06.2018 i.e. the date of his superannuation or until further orders, whichever is earlier.

Smt. Papia Sengupta was appointed as Executive Director by the Central Government u/s 9(3)(a) of The Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970/1980, w.e.f. 1^st January, 2017 for a period upto 30.09.2019 i.e. the date of her attaining the age of superannuation or until further orders, whichever is earlier.

Shri Ajay Kumar was nominated as Director by the Central Government u/s 9(3)(c) of The Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970/1980, w.e.f. 13^th January, 2017 to hold the post until further orders.

Cessations

Shri Bhuwanchandra B Joshi. Executive Director, ceased to be Executive Director w.e.f. 1^st January, 2017 on his attaining the age of superannuation from the Bank’s service.

Smt. Surekha Marandi, Director, ceased to be a Director w.e.f. 13^th January, 2017 on the appointment of Shri Ajay Kumar in her place.

Board Evaluation

Bank engaged the services of a reputed external specialist firm to conduct an independent Board evaluation and review of overall effectiveness of the Board. The firms global methodology for conducting board reviews was followed for this purpose. This entailed effectiveness assessment of the following areas of the Board - a) Board strategy and alignment, b) Management of the Board by the Chairperson, c) Functioning of the Board committees, d) Relationship between the Board and the management team, e) Quality of the Board processes, f) Board composition and g) Quality of discussions/decisions taken by the Board in key areas like risk management, talent etc. In addition, at an individual level, members of the Board were assessed in areas like a) Overall engagement and alignment, b) Quality of their contribution, c) Openness in listening and receiving feedback, d) Ability to challenge and take/oppose tough decisions etc.

For conducting the assessment a combination of three methods was followed. This included in depth structured one on one interviews with all members of the Board. In addition, key personnel of the Bank such as the CFO and Company Secretary were also interviewed. The review team attended Board meetings and committee meetings to observe and study the Board dynamics in a live environment. The minutes of the previous Board and committees meetings and the Board materials used to present policies and support decisions were analyzed.

The results of the review were shared with the Chairman and the Board members in a daylong session. As part of this session a workshop was conducted in September 2016 to determine and align on key next steps and actions that the Board and management agreed to undertake following from the Board review. A follow on session was conducted in April 2017 to assess the effectiveness of the actions. It was unanimously concluded that significant progress had been made in a short span of time.

Auditors’ Compliance Certificate on Corporate Governance:

The Auditors Compliance Certificate regarding the compliance of the conditions of Corporate Governance for the year 2015-16 is annexed with this report pursuant to “Part ”E” of Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Business Responsibility Report

Business Responsibility Report as required by SEBI has been hosted on the website of the Bank (www.bankofbaroda. co.in). Any member interested in obtaining a physical copy of the same may write to the Company Secretary of the Bank.

Directors’ Responsibility Statement

The Directors confirm that in the preparation of the annual accounts for the Financial Year ended March 31, 2017:

a) the applicable accounting standards had been followed along with proper explanation relating to material departures if any;

b) the accounting policies framed in accordance with the guideline of Reserve Bank of India were followed and the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Bank at the end of the financial year and of the profit and loss of the Bank for that period;

c) the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of applicable laws to the Bank for safeguarding the assets of the Bank and for preventing and detecting fraud and other irregularities;

d) the directors had prepared the annual accounts on a going concern basis; and

e) the directors had ensured that internal financial controls followed by the Bank are in accordance with guidelines issued by Reserve Bank of India in this regard and that such internal financial controls are adequate and were operating effectively.

Explanation. For the purposes of this clause, the term “internal financial controls” means the policies and procedures adopted by the Bank for ensuring the orderly and efficient conduct of its business, including adherence to Bank’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information;

f) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

Acknowledgements

The Directors place on record their appreciation for the contributions made by the outgoing Directors viz. Shri Bhuwanchandra B Joshi and Smt. Surekha Marandi.

The Directors express their sincere thanks to the Government of India, Reserve Bank of India, Securities and Exchange Board of India, other regulatory authorities and overseas regulators for their continued co-operation, guidance and support.

Bank would like to take this opportunity to express sincere thanks to its valued clients and customers for their continued patronage and support.

The Directors acknowledge with deep appreciation of the cooperation extended by all shareholders, banks and financial institutions, rating agencies, stock exchanges and all the well wishers in India and abroad.

The Directors also take this opportunity to place on record deep appreciation for the hard work and dedication of the employees of our Bank which enabled our Bank to record growth with quality year after year despite economic challenges and consolidate its position as one of the premier banks in the country.

For and on behalf of the Board of Directors,

R S. Jayakumar

Managing Director & CEO

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Mar 31, 2014

The Directors have pleasure in presenting the One Hundred and Sixth Annual Report of your Bank with the audited Balance Sheet, Profit & Loss Account and the Report on Business and operations for the year ended March 31,2014 (FY14).

Performance Highlights

- Total Business (Deposit Advances) increased to Rs 9,65,900 crore reflecting a growth of 20.43% (y-o-y).

- Gross Profit and Net Profit were Rs 9,291 crore and Rs 4,541 crore respectively. Net Profit registered a growth of 1.35% over the previous year.

- Credit-Deposit Ratio stood at 86.15% as against 82.03% last year.

- Retail Credit posted a growth of 20.96% constituting 16.6% of your Bank''s Gross Domestic Credit in FY14.

- MSME Credit posted a growth of 21.21% constituting 20.3% of your Bank''s Gross Domestic Credit in FY14.

- Net Interest Margin (NIM) as per cent of interest earning assets in global operations was at the level of 2.36% and in domestic operations at 2.87% during FY14.

- Net NPAs to Net Advances stood at 1.52% this year against 1.28% last year.

- Capital Adequacy Ratio (CAR) as per Basel II stood at 12.87%.

- Capital Adequacy Ratio (CAR) as per Basel III stood at 12.28%

- Net Worth improved to Rs 34,933 crore registering a rise of 13.7%.

- BookValue improved from Rs729.11 to Rs 813.50 on year.

- Business per Employee moved up from Rs 1,689 lakh to Rs 1,865 lakh on year.

Segment-Wise Performance

The Segment Results for the year FY14 reveal that the contribution of Treasury Operations was Rs 1,527.24 crore, that of Corporate/Wholesale Banking was minus Rs 461.11 crore, that of Retail Banking was Rs 3,359.84 crore, and of Other Banking Operations was Rs 2,458.02 crore. Your Bank earned a Profit after Tax (PAT) of Rs 4,541.08 crore after deducting Rs 1,386.68 crore of unallocated expenditure and Rs 956.23 crore towards provision for tax.

Dividend

Your Bank''s Directors have proposed a final dividend of Rs 10.50 per share. The final dividend together with interim dividend of Rs 11 per share paid in January 2014 results in total dividend of Rs 21.5 per share (on the face value of Rs 10/-per share) for the year ended March 31st, 2014. The total outgo in the form of dividend, including taxes, will be Rs 1,083.68 crore.

Capital Adequacy Ratio (CAR)

Your Bank''s Capital Adequacy Ratio (CAR) was comfortable at 12.87% under Basel II and at 12.28% under Basel III as on 31st March 2014. Moreover, your Bank''s Tier 1 ratio was at 9.28% and common equity Tier 1 was at 8.95% under Basel III framework.

Your Bank''s Net Worth as at 31st March 2014 was Rs 34,933.06 crore comprising paid-up equity capital of Rs 430.68 crore and reserves (excluding revaluation reserves) of Rs 34,502.38 crore. An amount of Rs 3,457.40 crore was transferred to reserves from the profits earned.

Provisions towards Retirement and Other Benefits

During the year FY14, your Bank made provision towards contribution to gratuity (Rs 100.72 crore), pension funds (Rs 1,014.76 crore), leave encashment (Rs 106.18 crore) and additional retirement benefits (Rs 54.71 crore) on actuarial basis. Total provisions under these four categories amounted to Rs 1,276.37 crore during the year FY14, against Rs 1,205.63 crore during FY13. Total corpus available with your Bank at the end of March 2014 under these heads was: Rs 1,532.62 crore (gratuity), Rs 7,893.50 crore (pension funds), Rs 735.69 crore (leave encashment) and Rs 647.17 crore (additional retirement benefit).

Key Financial Ratios

Particulars FY 14 FY13

Return on Average Assets (ROAA) (%) 0.75 0.90

Average Cost of Funds (%) 5.37 5.75

Average Yield (%) 7.68 8.29

Average Interest Earning Assets (Rs crore) 5,07,082.68 4,24,761.33

Average Interest Bearing Liabilities (Rs crore) 5,02,176.05 4,15,246.10

Net Interest Margin (%) 2.36 2.66

Cost-Income Ratio (%) 43.44 39.79

BookValue per Share (Rs) 813.50 729.11

EPS (Rs) 107.38 108.84



A Dedicated Cell for Training & Development

Looking to the importance of Training and Development in the context of large scale recruitment in the Bank combined with the need for grooming of the existing work force in the context of the growing competition, your Bank created a new cell for "Learning" and a new functional position as Chief Learning Officer (CLO) in the Bank during FY14. The CLO is of the level of a General Manager and supports the organization through learning interventions.

The broad mandate of this new vertical is as follows.

- Institutionalizing and enhancing E-learning for effective knowledge management.

- Fostering a learning environment across the organization through innovative interventions.

- Helping customers to understand and use your Bank''s products and services through customer education.

- Aligning training with operational priorities by designing suitable courses through collaboration with other functional heads.

- Steering the Baroda Academy towards the objectives for which it was set up.

Your Bank has 15 training establishments spread all over the country including its apex Staff College at Ahmedabad. The Staff College has successfully completed its glorious journey of 49 years and stepped into the Golden Jubilee year on 21st November, 2013. Golden Jubilee year was launched by your Bank''s Chairman & Managing Director on the same day. A series of learning events took place throughout the year to commemorate the Golden Jubilee year. During the year, a new Training Centre was commissioned at Bangalore.

Faculty members of the Bank have authored good number of research papers that were presented in national and international conferences and subsequently published as well.

The training system in your Bank extensively uses case study methodology and has built up a pool of case studies developed by faculty members to make training highly experiential and simulation-based.

A good number of innovative steps have been taken by the Bank in the domain of training over the years. The training system of your Bank bagged a National Award for Innovative Training Practices in various industries by securing third position, awarded by the Indian Society for Training & Development (ISTD) during the year FY14.

Large Scale Training on Products

Your Bank carried out a campaign called "ASCEND" for large scale product training to impart product knowledge to the front line officers on Retail Liability, Retail Asset and e-Business products. The campaign was run entirely by the trainers and operational bankers, and it covered 5,987 employees amounting to about 95% of the target group.

Similarly two rounds of All India quiz christened "Baroda Gyani" were organized to bring more awareness on product knowledge. More than 4,000 employees from sub-staff to officers participated in this competition upgrading their product knowledge. E-learning modules on retail products were also launched for this purpose.

Adoption of new Training Policy

Your Bank has a Board approved comprehensive training policy. It covers entire spectrum of training activities that include a) laying down streamlined processes, b) a full-fledged training structure, c) capacity building, d) measurement of training efficacy and, e) intervention methodology.

Special Thrust on Development of SC/ST/Other Backward Communities

Your Bank is committed to the constitutional safeguards and social objectives for development and welfare of persons belonging to SCs, STs and other backward classes in the Society. Around 49 programmes covering 1,221 SC and 573 ST employees were conducted during FY14 to prepare them for promotion exercise. Similarly, 9,602 SC employees, 3,795 ST employees and 10,292 OBC employees were imparted training during FY14 in various key banking areas.

Training to Customers: "Customer Connect" Campaign

As part of customer education, the training system ran a campaign during Feb-Mar 2014 to impart training to customers for using net banking and mobile banking services. More than 15,342 customers were trained at various centres and the initiative will continue throughout the calendar year.

Capability Building Initiatives

To build knowledge power of its employees, your Bank has been focusing on comprehensive grooming of the staff in key banking areas like credit, forex, Priority Sector, Retail Banking, CBS, Financial Inclusion, Risk Management etc. Besides, your Bank conducts comprehensive training programme called "On-Boarding Programme" for newly recruited officers and clerks using in-house resources and through a tie-up with reputed external agencies. The Bank conducted more than 2,337 in-house training programs during the year FY14 covering 49,044 participants in addition to the external training of officers and executives at various business schools in India and abroad. Your Bank is at an advanced stage to take the next big step in the area of e-learning to augment its capabilities to reach out to every single employee.

External Training

During FY14, around 988 staff members were nominated to various external training programmes. Your Bank considers External Training an integral part of capacity building, wherein employees at all levels are exposed to such programmes to learn and adopt the best practices existing in the industry.

Some of the noteworthy and dedicated programmes organised during the year FY14 were:

- Top Management Programme for General Managers and Deputy General Managers of your Bank at ISB, Hyderabad from 13th to 18th May 2013.

- Top Management Programme for two batches of newly promoted Assistant General Managers and Chief Managers at International Management Institute (IMI), New Delhi from 13th to 17th May 2013 and from 20* to 24th May 2013.

- A Leadership Development Programme for newly promoted Assistant General Managers of the Bank from 7th to 12th October 2013 at Centre for Organization Development, Hyderabad.

- Integrated Treasury Bourse Programme in association with Trinity Academy, Mumbai from 26th August to 5th September 2013 for treasury officers.

- Talent management training on ''Communication and Influence'' and ''People Development and Team Focus'' for the identified officers during Oct-Dec2013.

- Executive Development Programme on Rational Emotive Behavior Therapy (REBT) from 5th to 7th December 2013 at University of Mumbai.

- A dedicated Programme for Agriculture Officers of your Bank from 2nd to 7th December 2013 at Manipal Academy of Banking, Bangalore.

- Nearly 3,000 new clerks were on-boarded in tie-up with NIIT-I FBI thus covering all the new clerks who joined the Bank post June, 2013. More than 800 existing clerks were trained under a refreshers'' course "UTKARSH" by I FBI.

- A programme on "Positive Approach to Vigilance Administration for Disciplinary Authorities" on 18th & 19th October 2013 at New Delhi.

- A Faculty Development Programme was conducted from 16th to 21st December2013 by M/s Fourth Quadrant Training Pvt. Ltd.

Business Process Re-engineering (Project Navnirmaan)

Ever since your Bank changed its brand identity, there has been a tremendous growth in its brand recall value, which in turn gave rise to enhanced expectations from all stakeholders. The expectations were further strengthened by your Bank''s tag line as India''s International Bank and its mission to be a ''National Bank of International Standards''. However, your Bank has responded well to these expectations by restructuring its products and processes in an optimum fashion.

Actually, the process of change began with the setting up of Retail Loan Factories in 2007. Subsequently, your Bank commissioned a comprehensive change programme in June 2009 that sought to rebuild the Bank for the future underthe name Project Navnirmaan.

This project touched all aspects of your Bank''s processes, structures and systems with an objective to simplify processes, improve branch productivity and provide best- in-class service to its customers.

The change programme has been successful and this initiative has been one of the major factors to help your Bank bag a number of awards and accolades establishing itself truly as India''s International Bank.

The major achievements under the project Navnirmaan during FY14 are enumerated as under.

- Baroda-Next Branch: Around 1,433 metro and urban branches have been rolled out as Baroda Next branches in your Bank until end of FY14.

- Branch Front-end Automation: The Queue Management System (QMS), Cheque Deposit Machines and Personalized Pass Book Printers were installed in 9,840 and 1,200 branches, respectively.

- City Back Office (CBO): Clearing operations were centralized for all branches (linked to CBO). At present, there are 85 CBOs operational throughout the country.

- Regional Back Office (RBO): Two RBOs at Bareilly and Ahmedabad were added during the year taking the total strength to 12. Altogether 3,653 branches are linked for CASA opening and 4,263 branches linked for PCB (Personalized Cheque Book) issuance.

- Credit centralization Pilot (RLF/SMELF): The Retail and SME credit centralization pilot of your Bank initiated in FY14 is under progress at the Loan Factories in Baroda.

- Sustainability of NAVNIRMAAN initiatives/impact:

Process Compliance Audit (PCA) - A certification procedure for Baroda Next branches was introduced through which process compliance/adherence by branches are being evaluated by your Bank''s inspecting officers. Till date, 907 branches have been covered under the PCA.

- Train the Trainers Programme: A two days'' programme was held at Staff College Ahmadabad from 29th to 30* June, 2013-in connection with holding workshops at all zones for branch heads, sales heads, relationship managers, customers service and branch hosts of Baroda Next branches.

- Change Leader-cum-RBDM Conclave: A two days'' conclave was held at Staff College, Ahmadabad during 12-13 August, 2013.

- Contact Centre: Your bank has two Contact Centres at Lucknow and Vadodara. In addition to the existing basket of service, Mobile Banking assistance service has been added during the year. The service timing has been increased to 6am to 10pm (from earlier 8am to 8pm) for better customer convenience.

- E- Lobby: Your Bank has started 45 independent E-Lobbies in different zones. It offers the following six services- Cash Dispenser (ATM), Bunch Note Acceptor (BNA), Self Service Automatic Passbook Printing Kiosk, Cheque Deposit Machine (CDM), Internet Banking Kiosk and Phone Banking facility.

- Innovation Committee: With a view to encourage a culture of innovation across the organization, your Bank set up an Innovation Committee in March 2014 with the following objectives - developing new products and services, innovation in internal processes that add value to customers and the Bank, innovation in service delivery that delights the customers.

Marketing

During FY14, your Bank continued to promote its brand and various products and services through various marketing initiatives. This involved effective utilization of different media vehicles such as Print, Electronic (TV, Radio, Online etc.) and OOH, apart from supporting the "Below-the-Line" (BTL) activities undertaken by the Zones and Regions.

The highlights of various marketing / communication activities undertaken during FY14 are given below:

Your Bank, encouraged from the success of its initiative of FY13i.e. BRAND Engagement Program, launched the next edition of ''Bank of Baroda Canvas Competition'' during January 2014 to continue and harness the potential of long- term relationship formed with the younger audience as well as their influencers i.e. parents and teachers. This year again the momentum was to build long-term relationship with both existing and new educational institutions and as such, students across the country were invited to submit their entries through their respective schools on a pre- determined topic and winning entries were selected on National/Regional levels by a select panel of judges. The brand-association formed with the target audience through involvement of the Bank''s mascot i.e. ''Stickman" increased significantly this year and participants were invited to name the stickman. A judicious mix of on-ground activities at the Zonal and Regional levels were used in the campaign to maximize the number of entries in the said competition.

In addition to the above initiative, your Bank undertook various Product Promotion Campaigns to promote its products and services amongst target audience through advertising across different geographies. Besides focusing on providing information on various products and services, particularly Saving Deposits, Current Deposits, Home Loans, Car Loans and SME Loans, new product-lines like Consumer Durable loans and Alternate Delivery Channels (ADCs) were aggressively promoted. Furthermore, special customer segments were also targeted viz; Special Campaigns for Doctors and NRIs etc. through judicious use of various media vehicles on Pan India basis. Information relating to expansion of branch network, both domestic and overseas, was also given due publicity largely through print medium which helped enhancing your Bank''s brand image and visibility.

Your Bankalso participated in various events such as Pravasi Bhartiya Diwas 2014, FICCI-IBA Banking Conference 2013, World Ranking Snooker Tournament-Indian Leg, India-Australia Cricket Series 2013, MINT Annual Banking Conclave, BKC Financial Institutions Employees Marathon and Standard Chartered Mumbai Marathon 2014, among many other events to continue the brand association with the customers and stakeholders thereby increasing the recall value.

During FY14, as part of its public relations task, your Bank had wide media coverage of its activities across the country, which helped in enhancing your Bank''s brand image.

Awards and Industry Recognition for Bank of Baroda

Your Bank won several awards and recognitions during FY14 from the reputed media houses and other prestigious organizations on various business and financial parameters for its steady and all round performance, superior management thereby contributing to the growth of the economy.

Given below are some select awards won by your Bank during the year FY14:

- Your Bank''s Chairman & Managing Director Shri S S Mundra, ranked 41st in the list of Top 100 India Inc''s Most Powerful CEOs as per CD-ET (Corporate Dossier- Economic Times) Inc''s Survey 2013, published in Economic Times issue dated 12.07.2013. He was also ranked 3rd amongst CEOs of Public Sector Banks as per the survey.

- Your Bank ranked 20th amongst ''Best Indian Brands'' - Brand Equity Economic Times Survey. This was published in Economic Times issue dated 31st July 2013.

- Your Bank won a Special Award for Best IT Team among Public Sector Banks at IDRBT Banking Technology Excellence Awards 2012-13.

- Your Bank was recognized as the Best Public Sector Bank under the category ''Global Business Development'' by Dun & Bradstreet - Polaris Financial Technology Banking Awards 2013.

- The Reserve Bank Rajbhasha Competition, 28.08.2013, Mumbai gave your Bank the following prizes.

a) First Prize in Region ''C

b) Second Prize in Region ''A'' & ''B''

c) Third Prize for ''AKSHAYYAM'' in Hindi House - Bilingual House Journal Competition

d) Third Prize for ''BOBMAITRI'' in - Bilingual House Journal Competition

- The Sunday Standard Best Bankers'' Awards - Best Banker - HR constituted by The New Indian Express Group, was conferred on Shri S S Mundra, Chairman & Managing Director of your Bank during FY14.

- Your Bank received an award in Indira Gandhi Rajbhasha Shield Competition, 14.09.2013, New Delhi.

- First Prize for the Year 2011-12 was given for your Bank''s exemplary performance in Official Language Implementation.

- In the ASSOCHAM 9th Annual Banking Summit-cum- Social Banking Excellence Awards 2013, 16.09.2013, New Delhi, your Bank was the Winner in Public Sector Banks Category in recognition of its distinguished and commendable work done in the field of ''Social Banking''.

- Your Bank improved its ranking from 66th to 52nd in The Asian Banker - Region''s Largest Bank category, in September 2013 special issue 122 of The Asian Banker.

- Your Bank won the following awards during the 53rd Annual Awards Nite of the Association of Business Communications of India (ABCI), 18.10.2013, Hotel Taj, Colaba, Mumbai.

a) Special Column (English) - BronzeTrophy for BOBMAITRI

b) Special Column (Language) - Silver Trophy for Apni Baat - Akshayyam

c) Headlines - Bronze Trophy for Corporate Ad (Stamp Creative)

- Your Bank was ranked No.3 in THEBWReal500 - India''s 50 Biggest Financial Companies published in Business World Issue dated 04.11.2013.

- Your Bank was ranked No.50 in BT500 India''s Most Valuable Companies published in Business Today November 10 2013 issue.

- Your Bank was rated as the 3rd Fastest Growing Large Bank and 4th ''Best Bank- in Large Bank Category'' in a Survey of India''s Best Banks by - BW-PwC Survey. This Survey was published in Business World issue dated 30th December 2013.

- Your Bank was ranked 22nd in Brand Equity Top Service Brands published in Brand Equity Issue dated 18.12.2013, retaining its brand ranking position as that of last year.

- Your Bank was ranked 28th in Fortune India 500 lists published in Fortune India Magazine Special issue December 2013.

- Your Bank received the MSME Banking Excellence Award -2013 as the Best Bank in MSME by Chamber of Indian Micro Small and Medium Enterprises on 09.01.2014 at New Delhi.

- Your Bank was ranked 27th in India''s Biggest 500 Companies - Top 500 company listing 2013 published in ET 500 Magazine issue January 2014.

- Your Bank was awarded "Best Bank - Public Sector" by ABP News in Banking, Financial Services & Insurance Awards on 14.02.2014 in Mumbai.

- Your Bank was awarded for "Excellence in Banking (PSU)" by My FM Stars of the Industry award on 14.02.2014 in Mumbai.

- Your Bank was awarded for "Excellence in Home Loan Banking" by My FM Stars of the Industry award on 14.02.2014 in Mumbai.

- Your Bank received the ''Global Excellence & Leadership Award'' in the category of ''50 most talented CSR Professionals of India'' by World CSR Congress in Mumbai on 18/02/2014.

- Your Bank was ranked 53rd on Net Revenue and 45th on Market Capitalization in FE 500 list published in Financial Express Magazine February 2014 issue.

- Your Bank was ranked No.1 in the Public Sector Bank Category in FE-EY Best Banks Survey 2012-13 published in The Financial Express Magazine March 2014 issue.

- Your Bank''s Eastern UP Zone, Lucknow was awarded the 1st Prize by Government Of India for Implementation of Official Language (Hindi) in Banks for the year 2012- 13 by Official Language Dept, Ministry of Home Affairs, Government of India at a function held in Chandigarh.

Premises Re-Engineering and Ambience Enhancement

The major achievements of your Bank in the area of "Premises re-engineering and ambience enhancement" during the year FY14 are as given below.

- Construction of office building cum currency chest at Varanasi was completed. This building is equipped with ultra modern gadgets and systems with energy efficient equipments and rain water harvesting system. The eco-friendly materials were used in its construction. Your Bank''s presence by this building in Varanasi is admired by one and all. Now, it has become one of the landmark buildings of the city.

- As per the directives from Ministry of Finance, your Bank linked its corporate office with all zonal and regional offices through State-of-the Art Video Conferencing (VC) systems based on MPLS Connectivity. Interaction of functional heads through VC has made the decision making process more efficient, quick and cost effective.

- During FY14, your Bank adopted all technology centric initiatives in the form of e-tendering, e-procurement etc. and this was implemented in a phased manner.

- You Bank ensured that all payments to vendors are made through RTGS/NEFT.

- In tune with your Bank''s policy to have its administrative offices in owned premises, your Bank purchased land at Bangalore (Karnataka), Hyderabad (AP), Faizabad (UP) Indore (MP), Udaipur (Rajasthan), Dehradun (Uttrakhand), Jaipur (Rajasthan) and New Raipur (Chhatisgarh), Bareilly (UP) and Ernakulam (Kerala) for construction of commercial /residential buildings.

- Looking to the ever increasing rentals, area optimisation of every corner of the available premises is being ensured by your Bank. Layouts are being revisited while renovation and furnishing of branches and offices is being done by introducing eco-friendly and ergonomically designed sleek furniture items. The area norms for acquisition of the premises have also been reviewed and implemented.

- To have uniformity in systems and procedures pan- India, Premises Policy Guidelines, Constructions Manual, Refurbishment Manual were designed and formulated. Agencies have been identified for quick procurement of the furniture items and to have similar and identical design to get aesthetically pleasant look and vibrant indoor environment.

Projects implemented during FY14

- The construction of office building cum currency chest at Varanasi.

- Construction of residential complex at Janakpuri, New Delhi.

- The construction of multi-storey integrated office building at Jaipur.

- Construction of BSVS at Ajmer, Dungarpur, Banswada and Pratapgarh.

- The setting-up of e-lobbies at 45 various locations in the country.

- Your Bank purchased residential flats at various places for newly transfered officers.

Projects under implementation

- Construction of BSVS at Alirajpur, Jaipur, Surat, Bharuch and Jhabua.

- Construction of administrative and residential buildings at New Raipur.

- Construction of residential cum commercial complex at Indore (MP).

- Construction of own building for Disaster Recovery Site at Hyderabad.

- Renovation of Bank of Baroda Institute of Information Technology at Gandhinagar (Gujarat).

- Construction of Regional Office Building at Faizabad.

- Renovation of residential building and flats at Nehru Enclave, Lucknow.

Future Plans for Estate Management

- To facelift the Bank''s Building at Parliament Street, New Delhi.

- To redevelop the Bhandup Staff Quarters building, Mumbai, thereby to construct about 138 residential flats for transfered officers/executives.

- The redevelopment of Jogeshwari Staff Quarters, Mumbai, to construct a building for residential and commercial use.

- To construct the training centre at Bangalore.

- Construction of BSVS at various centres across India as per the directives from the Government of India.

- To set up the Baroda Academy (i.e., training Centre) at Gandhinagar (Ahmedabad), Bangalore, Greater Noida and Bhubhneshwar.

Brick & Mortar Branch Expansion

Given below is the information on your Bank''s brick and mortar distribution channels as on 31 st March, 2014, which is observed to be closer to common customers as compared to the E-Banking channels that are generally preferred by the tech savvy urban masses.

Area Classification Number of % Share in (India) Branches Total

Metro 980 20.11

Urban 849 17.42

Semi-urban 1273 26.11

Rural 1772 36.36

Total 4874 100.00

Overseas 60 --

Domestic Subsidiaries and Associates

The performance of your Bank''s Subsidiaries, Joint Ventures and Associates was quite satisfactory during FY14.

BOBCARDS Ltd. turned around during FY11 due to the recovery in NPA accounts. Subsequently, it posted profits during FY12 and FY13. During FY14, the company focused on all qualitative aspects of business development, which resulted in better profitability, quality card base and ME base. The Company introduced a range of Titanium Cards, Signature Cards, Assure Cards, Corporate Platinum Cards and Bobcards Elite with premium features like added privileges and offers. Special schemes for corporate and HNI customers were also launched during the year. The Company has drawn up aggressive plans for the enlargement of Card and Merchant Base for the coming year.

BOB Capital Markets Ltd. was professionally strengthened during the year by deputing a team of Project Finance Department and embarked upon undertaking techno- economic viability (TEV) studies, debt restructuring and corporate finance services on a large scale for various customers. Throughout the year, the focus remained on investment advisory services, debt and equity syndication and capital market activities. The Company commenced institutional broking business and also launched an Online Institutional Trading platform from October 2009. The On-Line Retail Trading platform, which was commercially launched on July 20, 2012 was extensively modified to make it much simpler and easier to use by customers to have the benefit of user-friendly retail trading platform. The company, functioning in a very competitive market, is ever alert to opportunities in the market and is poised to grow bigger in the coming years.

The Nainital Bank Ltd. was promoted by Late Bharat Ratna Pandit Govind Vallabh Pant and others and became Associate Bank of Bank of Baroda in the year 1973. Today, the shareholding of Bank of Baroda in Nainital Bank Ltd. is 98.57% and is a subsidiary of the Bank. The State of Uttarakhand, vide its communique dated August 3, 2012, has notified that The Nainital Bank Limited be treated at par with other PSU Banks. The Bank has initiated branch expansion initiatives and has already established a Regional Office at Dehradun and has aggressive plans to ramp up its scale of operations. The Bank has launched e-stamping facility in 15 branches and has initiated several new IT initiatives e.g Mobile banking & e-banking etc. The Bank also took various initiatives to increase its retail segment particularly in housing loan & consumer loan to high income salaried employees of Government Departments & PSU as well as professionals.

Baroda Pioneer Asset Management Company Ltd. a joint venture with Pioneer Global Asset Management SpA, is in its sixth year of operation. During the year under review, the Company was able to strengthen its AUM (Asset under Management) significantly which rose by 75.0% on year on year basis as of March''14and was able to add one lakh folios despite weak sentiments prevailing in both debt and equity markets. The key to this growth was strong focus on the institutional segment which helped the Company to grow its debts and money market products coupled with focus on Systematic Investment Plans (SIPs) for retail investors. The Company has increased the number of investor servicing points from 77 to 203 during the year. There was a substantial growth in Company''s average assets under management (AAUM) during the year which has placed it among the top 20 mutual funds in India and is ranked 19th for the month of March, 2014. The Company''s (AAUM) growth was robust on year on year basis and was at 11% whereas industry growth was at 10.0%, as per the AMFI (Association of Mutual Funds of India) website. With equity markets remaining volatile, SIPs continue to be one of the best ways for the Company to channelize customers'' savings into the equity market.

India First Life Insurance Company Ltd., a joint venture company with Legal & General group, commenced its business operations on 16th November 2009 and has received an overwhelming response for its products across the country. The Company has won Model Insurer Award (Asia) for the three successive years. India First garnered new business registering a year on year growth of 67.0%. Its industry-wide new business ranking improved from 9th position last year to 7th position in the current year (Feb ''14). Increase in the new business (NB) premium has improved the market share from 3.0% last year to 5.0% current year (Feb''14). Number of customers grew by 46.0% year on year on account of new distribution tie-ups which include RRBs/ NBFCs/Brokers through Alternate Channel Distribution. Renewal collection grew by 23.0% year on year leading to increase in premium income for the Company and subsequent increase in the policy and premium persistence. The Company''s total revenue increased by 46.0% (y-o-y). Company''s major initiative with the Bank includes launch of premium option through mobile banking for Bank of Baroda customers and financial inclusion branch module.

India Infradebt Limited is a joint venture company with ICICI Bank Limited, ICICI Home Finance Company Limited, Citicorp Finance (India) Limited and Life Insurance Corporation of India. The Company was incorporated on October 31, 2012 in Mumbai and has been issued registration certificate No.N-13.02039 dated 08.02.2013 by the Reserve Bank of India to operate as an Infrastructure Debt Fund - Non Banking Financial Company (IDF-NBFC). The Company''s principal activity is to re-finance part of the debt liabilities of the Project Companies.

India Infradebt Limited (Infradebt) is India''s first Infrastructure Debt Fund structured as Non Banking Financial Company (IDF-NBFC). Infradebt closely worked with National Highways Authority of India, Ministry of Finance (MoF) and Ministry of Road Transport & Highways towards the successful implementation of IDF framework.

During the year, it became the first IDF-NBFC to be rated "AAA" by CRISIL in July 2013 for its proposed debenture issue. Subsequently, in December 2013, ICRA also assigned a rating of AAA to the debenture issue programme of Infradebt consequent to the efforts of Infradebt in convincing various authorities.

Infradebt is primarily focusing on sectors like roads and ports. During the year, the Board Credit & Risk Committee has approved provision of financial assistance to a few proposals in the roads sector, in addition to the sanction provided to HEL (Himalayan Expressway Ltd.). Furthermore, Infradebt would constantly keep identifying additional projects for takeout financing and envisages closing additional transactions over the next few months.

Baroda Pioneer Trustee Company Pvt. Ltd. Baroda Pioneer Trustee Company Pvt. Ltd. is the trustee to Baroda Pioneer Mutual Fund. As a trustee, the Company ensures that the transactions entered into by Baroda Pioneer Asset Management Company Limited are in accordance with the SEBI (Mutual Funds) Regulations, 1996 and also reviews the activities carried on by the AMC.

(Rs lakh)

Entity (with date of Country Owned Total Net Profit Offices Staff registration) Funds Assets

BOB Capital India 14,277 .82 15,791 .55 686.64 1 38

Markets Ltd. (11.03.1996)

BOBCARDSLtd. India 17,292 .00 21,939 .00 2,811.00 37 191 (29.09.1994)

Baroda India 6,626 .40 7,258 .67 (-)982.46 1 85

Pioneer Asset Management Co. Ltd. (05.11.1992)

Baroda Pioneer India 5.70 11.95 2.22 1 0 Trustee Co Pvt Ltd. (23.12.2011)

India First Life India 60,500 .00 7,11, 617.59 2,547.35 48 1,549 Insurance Co. Ltd. (19.06.2008)

The Nainital Bank India 44,528 .00 5,34, 259.00 6,542.00 116 843 Ltd. (31.07.1922)

India Infradebt Ltd. India 32,893 .74 33,157 .37 2,092.67 1 11 (31.10.2012)

During the period under review, your Bank made noteworthy progress regarding implementation of Official Language Policy of Government of India. Besides compliance of various statutory requirements of Official Language Act and Rules, your Bank took the initiative of promoting and utilizing Hindi as a tool for establishing better connect with customers and ensuring them the best possible service.

Your Bank prepared a well-structured annual action plan for the achievement of various targets set by the Government of India under its Annual Implementation Programme 2013-14 and the assurances given to the Committee of Parliament on Official Language during its visits to various offices/ branches of the Bank. Through continuous monitoring and regular efforts at various levels, your Bank could achieve all the major targets of the Programme and fulfilled all the assurances given to the Committee of Parliament on Official Language.

The Meetings of Central Official Language Implementation Committee, presided over by Chairman and Managing Director of the Bank, were organized regularly on quarterly basis. Under the guidance received from the Committee, several new initiatives were taken during the year FY14. Your Bank took a major initiative of automating the Quarterly Hindi Progress report submission system in the Bank. The Bank implemented Pragati online package'' across the Bank. The package was made available on the Bank''s wide area network. All the operating units, administrative offices were provided user ID and passwords for submitting Rajbhasha Reports. Your Bank started sending systems- generated letters pertaining to opening of accounts in bilingual (Hindi-English) format through its Regional Back Offices. Through this package, every month lakhs of letters were generated in bi-lingual form which helped the Bank in meeting to a great extent its targets set under the Official Language programme. Your Bank brought more branches under the coverage of an IT programme used to generate and print pass-books and account statements in Hindi at the branches situated in linguistic regions A and B. For the convenience of customers, the facility of getting transaction slips in Hindi from ATMs was expanded further and now majority of your Bank''s ATMs are covered under it. Your Bank introduced display of screen in additional four Indian Languages i.e Telugu, Tamil, Malyalam and Kannada during the year. Your Bank also prepared an Inward- Outward package viz. Document Management System for maintaining records of inward/outward letters as per the linguistic region-wise reporting requirements of its OL policy.

To increase financial literacy amongst masses, your Bank prepared cartoon booklets, animation films in Hindi and also in some regional languages on developing the habit of saving, features of Kisan Credit Card and on the need of timely repayment of loans. These cartoon booklets and animation films were christened as "Chhoti Bachat badi Khushhali", " Aam ke aam guthliyon ke daam" and " Samay Par Karj Ka Bhugtan, Jindagi Bane Aasaan" in their Hindi edition. Marathi, Gujarati, Bangla, Punjabi editions of these booklets/films were also released. These Booklets/animation films were sent to Regional Offices/ Zonal Offices of the Bank for their effective utilization.

Your Bank has been pioneer in spreading and promoting the use of Hindi through the forum of Nagar Rajbhasha Samitis. During the year under review, your Bank, with the approval of Home Ministry, Government of India constituted four new Nagar Rajbhasha Samitis. These committees are functioning at Jodhpur, Rajkot, Surat and Bareilly under the convenorship of your Bank. Nagar Rajbhasha Samiti, Baroda and Jaipur are the oldest TOLICs (i.e., Town Official Language Implementation Committees) working underyour Bank''s convenorship.

The Third Sub-Committee of parliament on official language visited your Bank''s branches/offices at Chitrakoot and Anand. The Committee also reviewed efforts of your Bank''s Corporate Office in its visit to Mumbai. The Committee was full of praise of the efforts put in by your Bank for promotion of the use of Hindi language.

Your Bank''s efforts were well recognised by Government of India and Reserve Bank of India also. Government of India awarded your Bank with the 1st Prize in the Indira Gandhi Rajbhasha Shield Competition consecutively for the second year. Your Bank''s Chairman and Managing Director (CMD) received this award from Honorable President of India at a function held at Vigyan Bhawan, New Delhi on Hindi Diwas 2013. Further, your Bank was awarded first prize for '' C Region and second prizes for Region ''A'' and B'' by Reserve Bank of India (RBI) under the RBI Rajbhasha Shield Competition. The Bank''s In-House Magazine BOBMAITRI'' and Hindi Magazine ''Akshayyam'' were also awarded with the third prize by the RBI. Your Bank''s CMD received these awards from the Governor of RBI. These magazines also won two awards from Association of Business Communicators of India.

Your Bank continued with its flagship scheme "Medhavi Vidyarthi Samman Yojana" for popularising Hindi amongst the students'' community. Under this scheme, cash prizes and commendation certificates signed by your Bank''s CMD are given to those students who have scored highest marks in M.A.(Hindi). This scheme, at present, is applicable in 64 universities of the country.

Your Bank has published three books in Hindi during the year viz.''Proudyogiki aur Grahak Seva", "Thodi Si Dhoop" and "Maharaja Sayaji Rao Gaekwad III", for providing qualitative reading material in the Hindi language.

Board of Directors

Shri Bhuwanchandra B. Joshi appointed as a Whole Time Director (designated as Executive Director) w.e.f. 05.08.2013 by the Central Government u/s 9 (3) (a) of

The Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970, to hold office up to 31.12.2016 i.e. the date of his superannuation or until further orders, whichever is earlier.

Dr. K. P. Krishnan, IAS, nominated as a non executive Director, representing Government of India, w.e.f. 19-02- 2014, vice Shri Alok Nigam, IAS.

Shri Sudhir Kumar Jain appointed as a Whole Time Director (designated as Executive Director) ceased to be a Director with effect from 08.07.2013 on his elevation as Chairman and Managing Director of Syndicate Bank.

Shri Ajay Mathur, a part time non- official Director/Non executive director, ceased to be a Director with effect from 04.05.2013 on completion of his term.

Shri Satya Dev Tripathi, a part time non- official Director/ non executive director ceased to be a Director with effect from 30.08.2013 on completion of his term.

Shri V.B. Chavan, a part time non- official Director / Non executive director ceased to be a Director with effect from 31.01.2014 on attaining the age of superannuation.

Shri Alok Nigam, IAS, a part time non- official Director/ Non executive director ceased to be a Director with effect from 18.02.2014 on the nomination of Dr. K.P. Krishnan, IAS, in his place.

Directors'' Responsibility Statement

The Directors confirm that in the preparation of the annual accounts for the year ended March 31, 2014:

- The applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

- The accounting policies framed in accordance with the guidelines of the Reserve Bank of India, were consistently applied.

- Reasonable and prudent judgment and estimates were made so as to give true and fair view of the state of affairs of your Bank at the end of financial year and of the profit of your Bank for the year ended on March 31, 2014;

- Proper and sufficient care was taken for the maintenance of adequate accounting records in accordance with the provisions of the applicable laws governing banks in India; and

- The accounts have been prepared on a going concern basis.

Acknowledgement

The Directors express their sincere thanks to the Government of India, Reserve Bank of India, Securities and Exchange Board of India, other regulatory authorities, various financial institutions, banks and correspondents in India and abroad for their valuable guidance and support.

The Directors acknowledge with appreciation the assistance and cooperation extended by all stakeholders of your Bank like customers, shareholders and well wishers in India and abroad.

The Directors place on record deep appreciation for the hard work and dedication of the members of your Bank''s staff at different levels, which enabled your Bank to record high quality, consistent growth year after year despite economic challenges and consolidate its position as one of the premier banks in the country.



For and on behalf of the Board of Directors,



S. S. Mundra

Chairman and Managing Director

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Mar 31, 2013

The Directors have pleasure in presenting the One Hundred and Fifth Annual Report of your Bank with the audited Balance Sheet, Profit & Loss Account and the Report on Business and operations for the year ended March 31,2013 (FY13). Performance Highlights - Total Business (Deposit Advances) increased to Rs 8,02,069 crore reflecting a growth of 19.3% (y-o-y). - Gross Profit and Net Profit were Rs 8,999.15 crore and Rs 4,480.72 crore respectively. Net Profit registered a growth of -10.5% over the previous year. - Credit-Deposit Ratio stood at 82.03% as against 86.86% last year. - Retail Credit posted a growth of 6.7% constituting 16.6% of your Bank's Gross Domestic Credit in FY13. - MSME Credit posted a growth of 30.3% constituting 19.7% of your Bank's Gross Domestic Credit in FY13. - Net Interest Margin (NIM) as per cent of interest earning assets in global operations was at the level of 2.66% and in domestic operations at 3.11% during FY13. - Net NPAs to Net Advances stood at 1.28% this year against 0.54% last year. - Capital Adequacy Ratio (CAR) as per Basel II stood at 13.30%. - Net Worth improved to Rs 30,714.19 crore registering a rise of 17.2%. - Book Value improved from Rs 637.37 to Rs 729.11 on year. - Business per Employee moved up from Rs 1,466 lakh to Rs 1,689 lakh on year. Segment-Wise Performance The Segment Results for the year FY13 reveal that the contribution of Treasury Operations was Rs 1,070.13 crore, that of Corporate/Wholesale Banking was minus Rs 103.95 crore, that of Retail Banking was Rs 3,085.71 crore, and of Other Banking Operations was Rs 2,221.71 crore. Your Bank earned a Profit after Tax (PAT) of Rs 4,480.72 crore after deducting Rs 1,442.37 crore of unallocated expenditure and Rs 350.51 crore towards provision for tax. Dividend Your Bank's Directors have proposed a dividend of Rs 21.50 per share (on the face value of Rs 10/-per share) for the year ended March 31st, 2013. The total outgo in the form of dividend, including taxes, will be Rs 1,059.62 crore. Capital Adequacy Ratio (CAR) Your Bank's Capital Adequacy Ratio (CAR) was comfortable at 13.30% under Basel II as on 31st March 2013. Your Bank's Net Worth as at 31st March 2013 was Rs 30,714.19 crore comprising paid-up equity capital of Rs 422.52 crore and reserves (excluding revaluation reserves) of Rs 30,291.67 crore. An amount of Rs 3,421.10 crore was transferred to reserves from the profits earned. Provisions towards Retirement and Other Benefits During the year FY13, your Bank made provision towards contribution to gratuity (Rs 133.00 crore), pension funds (Rs 683.96 crore), leave encashment (Rs 204.38 crore) and additional retirement benefits (Rs 184.29 crore) on actuarial basis. Total provisions under these four categories amounted to Rs 1,205.63 crore during the year FY13, against Rs 991.94 crore during FY12. Total corpus available with your Bank at the end of March 2013 under these heads was: Rs 1,506.13 crore (gratuity), Rs 6,770.08 crore (pension funds), Rs 709.73 crore (leave encashment), and Rs 592.45 crore (additional retirement benefits). Key Financial Ratios Particulars FY13 FY12 Return on Average Assets (ROAA) (%) 0.90 1.24 Average Cost of Funds (%) 5.75 5.64 Average Yield (%) 8.29 8.55 Average Interest Earning Assets (Rs crore) 4,24,761.33 3,47,223.21 Average Interest Bearing Liabilities (Rs crore) 4,15,246.10 3,43,397.26 Net Interest Margin (%) 2.66 2.97 Cost-Income Ratio (%) 39.79 37.55 Book Value per Share (Rs) 729.11 637.37 EPS (Rs) 108.84 127.84 Corporate Social Responsibility (CSR) As a responsible corporate citizen, your Bank is considering donation to National/State Relief Funds and to any individual, trust, society, charitable/social institutes of repute engaged in social activities for the benefit of vast variety of people. Donations are given to promote various activities. They are extended essentially as a social welfare measure on a non- commercial basis to individual trusts, social work organizations/ institutions, etc. In particular, your Bank has been giving donations for the following purposes: - For the spread of education - including for the girl child and womenfolk in remote villages. - To reputed colleges/public schools and other similar institutions. - To reputed hospitals engaged in charity or in service of weaker sections - Assisting families of soldiers died in wars and handicapped soldiers - Old age homes - Preservation of places of historical interest like gardens, forts, temples etc. - Promotion of efforts for protection, conservation and cleaning of environment including plantation/re-plantation, rivers, lakes, forests, sanctuaries etc. - Adoption of gardens in cities where your Bank's name can be publicized - Family planning activities - For measures promoting prevention of cruelty to animals and for setting up and maintaining animal and bird Hospitals - For promoting the promotion and use of non exhaustible sources of energy like solar power, gobar gas plants in rural areas - Vaccination projects for controlling spread of diseases/ epidemics - Providing support to organizations extending support to handicapped persons like blind, lame, deaf and dumb, etc. or suffering from any other disabilities - Promotion of measures for pollution control - Other matters/ projects of social and human value During the Financial Year FY13, your Bank disbursed donations amounting to Rs.699.74 lakh to various organizations engaged in the field of education, health, women welfare etc. The activity-wise disbursement of donations are as follows. Sr. Activity No. of Amount No. Donations (Rs lakh) 1. Education 4 24.00 2. Health 3 4.50 3. Women Welfare 1 2.00 4. Social Welfare Activities 5 669.24 TOTAL 13 699.74 Besides these activities, your Bank has established Baroda Swarozgar Vikas Sansthan for imparting training to unemployed youth, free of cost, for gainful self employment and entrepreneurship skill development which help them improve their family economic status and also gives a boost to various regional economies within these locations. All the Lead Districts of your Bank have Baroda Rural Self Employment Training Institute (R-SETI ). Your Bank has also established Baroda Gramin Paramarsh Kendra for knowledge sharing, problem solving and credit counseling for rural masses across the country. In order to spread awareness among the rural mass on various financial and banking services and to speed up the process of financial inclusion, your Bank has also established Financial Literacy and Credit counseling Centres (FLCC). As on 31st March, 2013 your Bank had 45 FLCCs. Asset Quality Management The year FY13 was a challenging year for the Indian banking industry from the perspective of Asset Quality due to a fragile economic environment. However, your Bank continued its practice of rigorous monitoring and recovery of the NPA portfolio to prevent any serious deterioration in its asset quality. Yet, an overstretched economic downturn did impact your Bank's asset quality to some extent during FY13. Indian banks, in general, witnessed heavy incidence of slippages in FY13 due to volatile financial markets both within and outside India, higher inflation and higher interest rate regime throughout the year FY13. In spite of various depressed economic parameters, the fresh slippages during the year, were at 2.29% of the opening Standard Advances of your Bank. Against the backdrop of high slippages, the ratio of Gross NPA to Gross Advances was at 2.40% as on 31st Mar, 2013. Consequently, the ratio of Net NPA to Net Advances increased to 1.28% by end-Mar, 2013. However, your Bank's Loan Loss Coverage ratio (including the technical write-offs) was at 68.24% in FY13 - a relatively higher level, if compared to your Bank's peers from the PSU banking segment. During the year under review, your Bank laid down a comprehensive structure of recovery and credit monitoring function at the Branch, Region, Zone and Corporate levels. Besides this, the Nodal officers at each DRT centre were advised to follow-up the legal cases on day to day basis so as to minimize the delay in obtaining decrees and execution thereof in order to expedite and maximize recoveries. For Recoveries of all DRT Suit filed NPA accounts, the assets charged to the banks are now being sold through E-auction to get a fair market value of assets charged to the Bank. Additionally, ARCs have been appointed as recovery agents and consultants have been appointed for liaison with Official Liquidator to speed up the recoveries. Your Bank continued its emphasis on follow-up mechanism to explore recovery prospects of NPA accounts. The system of monitoring of large value NPA accounts of say Rs 25 lakh and above, directly from the corporate office has ensured proactive action by branches, advocates and recovery agents. Therefore, the cash recovery in NPA accounts during FY13 was Rs 625.57 crore, higher than the cash recovery of Rs 580.46 crore during FY12. The upgradation was also higher at Rs 341 crore during FY13 compared to Rs 336 crore during FY12. During FY13, your Bank laid specific focus on recovery of small accounts by organizing Lok Adalats and Recovery Camps at village/town level. Your Bank also launched an incentive linked recovery scheme called "Sankalp - V", to enlist personalized attention of each and every staff member in pursuing recovery efforts of small value accounts with an outstanding up to Rs 15 lakh. The cash recovery made during the year FY13 under the scheme was very impressive at over Rs 231 crore. The asset classification wise breakup of advances portfolio of your Bank is as under. (Rs. crore) Asset Category (Gross) 31st March 2013 31st March 2012 Standard 324828.74 286542.59 Gross NPA 7982.58 4464.75 Total 332811.32 291007.34 Gross NPA is comprising of: Sub-standard 4981.15 2661.82 Doubtful 2628.33 1318.71 Loss 373.10 484.22 Total Gross NPA 7982.58 4464.75 Information Technology Your Bank has undertaken a total end-to-end business and IT strategy project covering your Bank's domestic, overseas and subsidiary operations. - Your Bank has built the best of technology infrastructure by implementing a state-of-the-art Data Centre conforming to Uptime Institute Tier-3 standard and also a Disaster Recovery Site in different seismic zone with redundancy built in every single point of failure to ensure uninterrupted banking service delivery to customers. After successfully migrating Data Centre to new Data Centre in the Bank's own premises, your Bank had undertaken Disaster Recovery Centre expansion during the year to support its business growth and technology expansion. - Your Bank has undertaken various other technology initiatives like windows server virtualization, desktop virtualization and backup consolidation as green initiatives and also to improve Data Centre operational efficiency, Application virtualization, Bandwidth up-gradation, ASM & RAC Implementation, migration of Bank wide network to new technology based on MPLS for improving uptime and on demand upgrade has been successfully implemented. Enterprise Management System was upgraded and new modules deployed to effectively manage and monitor Bank's growing IT infrastructure. - The Core Banking infrastructure has been upgraded by your Bank from PA-RISC to Itanium servers in all 23 Overseas Territories for supporting additional business volumes. Various new Regulatory initiatives like Linking of UID numbers, Account number portability, Capturing KYC related information, Simplified account opening procedures, Addition of village codes in core banking system, Implementation of Adhaar Payment Bridge System(APBS), Centralization of Loan Processing at RLF and SMEs, Biometric Authentication for CBS Login at Branches, Deployment of NPSLite (a scheme to provide financial security for economically disadvantaged people for protecting their future during old age), automated processing of payments to NREGA, NPS and MGPSYS beneficiaries etc were added during the year. Core Banking Solution was implemented in Sydney Branch, Australia. The robust technology platform has enabled your Bank to open 100th International Branch during the year. Your Bank's RRBs are also on CBS Platform and as notified by GOI, your Bank has successfully migrated RRBs of Central Bank of India and Punjab National Bank with 350 branches into one of RRBs' of your Bank. Alternate Delivery channels - Internet Banking - BARODA CONNECT The Internet Banking, viz., Baroda Connect (Retail portal) has been completely revamped in your Bank to enhance its look and feel and user-friendliness. Your Bank continued to add more facilities under its Internet Banking channels. Other enhanced features such as Tax payments of various States, Integration of GRIPS (Government Revenue Receipts for West Bengal), Credit to Loan accounts, Bill payments, Online donations to Prime Minister Relief Fund, India Life Insurance premium payment through e-banking, IMPS(Immediate Payment services) through e-banking were added during the year. Your Bank's Internet banking facility is made available on all Smart-phones/ tablets offering comfort of anywhere Banking to its customers. Internet Banking has also been implemented in total 13 overseas territories viz. Tanzania, Uganda, Kenya, Mauritius, Seychelles, Botswana, New Zealand, UAE, FIJI and by adding Transaction based Internet Banking in UK, Oman and Ghana and view based in Australia during the Financial Year. View Based e-banking is also provided in all Bank sponsored RRBs. In order to enhance security and confidence in Internet Banking, your Bank introduced enhanced security features by deploying Fraud Management Solution, including two factor authentications in India and 5 Overseas territories viz. UAE, UK, New Zealand, Kenya and Uganda by enabling ARCOT OTP, PULL OTP and SMS OTP. Your Bank has initiated the process of implementing Fraud Management Solution for remaining six overseas territories where transaction-based e-Banking is implemented. View-based Internet Banking for US territory, PPF through e-banking, Inter-Bank fund transfer through Internet Banking for UAE have also been initiated by your Bank. Your Bank also proposes to implement Transaction based Internet banking for its sponsored RRBs, with two-factor authentication. - Mobile Banking - BARODA M-CONNECT As one more alternate delivery channel, many features were added to Mobile Banking by your Bank to provide various facilities to customers, viz., IMPS i.e. Immediate Payment Services Person to Account (P2A) fund transfer, enabling mobile banking application in all i-Phones and i-Pads in addition to Blackberry, Android, Windows, enabling of NUUP(National Unified USSD Platform) etc. Your Bank is also in process of implementing P2M (person to Merchant) fund transfer under IMPS and has acquired India First Life Insurance as the first merchant. Your Bank proposes to enable Mobile Banking application for Windows8, Implementation of Mobile banking in Uganda and UAE etc. It has also initiated implementation of Mobile banking in its sponsored RRBs. - ATM The ATM Switch is upgraded in your Bank to a higher version along with Hardware up-gradation with many enhanced features for better performance, speedy ATM transactions and ease of ATM expansion during the year. The ATM switch is upgraded for India, UAE, Oman, Mauritius, Fiji, Tanzania, Botswana, T&T and New Zealand. Many customer centric initiatives such as implementation of Rupay ATM Cards, Rupay POS and Rupay KCC Cards, Brown label ATMs, Collection of Insurance premium for IndiaFirst Life Insurance Policy holders through ATMs, ATM Transaction receipt printing in HINDI, Regional Language Screen selection for Gujarati, Marathi and Tamil, Talking ATMs for visually impaired persons, implementation of Fraud management Solution in ATMs/ POS in India have been added during the year. Your Bank has successfully launched Rupay ATM and Rupay KCC cards for its RRBs also. Your Bank has also proposed some more Customer Centric initiatives like Immediate Payment Services (IMPS) through ATMs, Regional Language screen selection in ATMs (for Malyalam, Telugu, Kannada, Bengali), Cheque book request through ATMs, NEFT through ATMs, Rupay e-commerce, multi-factor authentication for card not present transactions, Visa Debit card for UAE, BSP(Bank South Pacific) Interchange Implementation for FIJI, Prepaid card withdrawals through ATMs, Chip Based Card Implementation in India, Oman and Mauritius, Card to Card fund transfer, Bill Payment through ATMs etc. Payment Systems - All branches of your Bank (which are CBS-compliant) are enabled for interbank remittances through RTGS and NEFT. The RTGS and NEFT have also been interfaced with your Bank's internet banking portal. The Straight through Processing (STP) of NEFT & RTGS have been implemented for the Bank as well as RRBs. RTGS & NEFT has also been implemented in Uganda. - Internet Payment Gateway services for debit cards/credit cards are increasingly offered to merchants and internet shopper as a safe and secure channel for online purchases. - Cash Management System is a full-function web enabled cash management solution offered to your Bank's customers, covering services like Receipt Management (Collections), Payment Management and Invoice Management (Receivable and Payable Management). - New Credit Card Management System has been implemented to provide comprehensive management and support for your Bank's Credit Card operations. - The SWIFT facility for worldwide inter-bank financial communication is provided at Foreign Exchange Authorized Branches in India as also in 22 overseas territories by adding UK and Australia during the year. - The Payment Messaging Solution (PMS) is implemented in 22 overseas territories by adding UK and Australia during the year & all authorized branches in India. PMS facilitates validation and formatting of SWIFT messages generated from CBS as per SWIFT standards, and also goes through AML check. - During the year under review, a grid based Cheque Truncation System (CTS) was implemented in all MICR Centres in Southern States, Kolkata, Ludhiana and Chandigarh in addition to Delhi. Your Bank has also initiated the process of implementation of CTS in Mumbai and Western Grid of Maharashtra, Gujarat and Madhya Pradesh. - Automated Cheque Processing Centre (Inward & Outward) was implemented in Mumbai and Surat and Ahmedabad were added during the year, as a part of Business Process Re-engineering under its Project Navnirmaan. - For regulatory compliance, the Anti Money Laundering (AML) has been implemented in India and 22 overseas territories by adding Belgium during the year. Your Bank has also implemented Risk Management solution. Your Bank has also implemented Phase I AML solution in all its sponsored RRBs and implementation for Phase II AML is in progress. Other Initiatives - Your Bank has implemented Customer Relationship Management as a new initiative for providing better services to customers through a contact centre over phone in order to improve their satisfaction and loyalty. Existing customers/Prospective customers may call on Toll Free no. (1800223344 & 18001024455) wherein following services can be availed of. - Issuance of a cheque book - Enquiry about products and services - Account Enquiry - Balance, Transaction, Amount in Clearing etc. - Hot-listing of ATM cards - Stop payment marking / un-marking - Request for issuance of debit card. - Request for re-generation of debit card PIN - Support for e-banking users - Re-generation of mobile banking password - On-line (paperless) TPIN generation facility Other information regarding products and services of your Bank is also provided to prospective customers/account holders. The CRM applications is linked to sales offices like Retail Loan Factories (RLFs), City Sales Offices (CSOs) wherein the leads generated at contact centre on the basis of enquiry about the products by customers are transferred to these offices for further processing. Your Bank has also completed a launch of recovery processes through contact centre wherein customers are informed about the EMI and due amounts. This shall facilitate customers to deposit EMI/due amount on demand dates. - The Retail Depository Services are made available to your Bank's Retail as well as Corporate customers. With a centralized depository application, branches are equipped to provide depository services for both NSDL as well as CDSL. With Online Trading System, your Bank will be able to provide complete suite of online services to the customers for trading in instruments like equities, mutual funds, bonds and initial public offering (IPOs). - For improving your Bank's service delivery, the Back Office functions have been centralized at City Back Offices and Regional Back Offices. Your Bank now has 70 City Back Offices and 10 Regional Back Offices. The personalized cheque book issuance has been centralized. Your Bank has also started centralized FCNR operations. - The Integrated Global Treasury Solution has been implemented in UK, UAE, Bahamas, Bahrain, Hongkong, Singapore, Belgium and in India, reducing the cost of operations and better fund management. - Enterprise wide GL Solution has been implemented. This provides variety of inputs to your Bank for strategic decision making in business development and also generates enterprise wide consolidated reports. - The Centralized Payroll, Salary module, e-TDS module and Leave Module have been implemented for all your Bank's offices in India. - The Human Resource Networking for Employees Service has been implemented with the objective of creating a central database of the Bank employees for facilitating decision-making, promotion and selection exercise as also for automating other HR processes. - Your Bank had also undertaken as a part of its business strategy, Data Warehouse for providing flexible and interactive source of strategic information, Customer Relationship Management for better customer insight and uniform customer view across channels. - Your Bank has upgraded existing applications like Exchange, e-Business suite with enhanced features, encompassing Customer Relationship Management, HRNes and Enterprise wide GL modules. - The IT setup has been developed for account opening process and transactions, both online and offline, to be carried out through Business Correspondent thus enabling Financial Inclusion. The Mobile Van Banking is launched in Gujarat, UP & Bihar on a pilot basis as the Bank's Financial Inclusion initiative. - Your Bank has fully automated its Loan Processing (Retail, Agri and SME) modules for better and quick customer service. Your Bank also provides a single click Online loan Application feature for Home Loan, Auto Loan and Education Loan. Your Bank has also initiated automation of Loan processing for MID-Corporate and Corporate customers. Information Security - A robust Information Security Management System was put in place during the year under review to protect the technology against security threat. A Comprehensive Audit by External Agencies is being successfully carried out by your Bank for its Core Banking Solution and all other applications as well as for Data Centre/Disaster Recovery centre Infrastructure. - Your Bank has set up a Security Operation Centre (SOC) for enhanced IT security. - Your Bank's both Data Centre and Disaster Recovery Centre are ISO 27001 certified. - Your Banks has Implemented Fraud Management Solution for Internet Banking, ATM & POS. In order to enhance security and confidence in Internet Banking, your Bank introduced Fraud Management Solution, including two factor authentications in India and five Overseas territories viz. UAE, UK, New Zealand, Kenya and Uganda by enabling ARCOT OTP, PULL OTP and SMS OTP. - As a security measure, Your Bank has also enabled SMS Alerts delivery facility to its customers for all transactions made through alternate delivery channels and for all CBS transactions worth Rs.5000 and more. - Your Bank is regularly conducting VAPT (Vulnerability assessment & Penetration Testing) of external facing applications, eBanking log monitoring etc. - Your Bank has enabled a Fraud Risk Management system for day-to-day monitoring of suspicious transactions at Branches for protecting interest of customers. - While cyber-attacks have become more unpredictable and electronic payment systems vulnerable to new types of misuse, it is imperative that banks introduce certain minimum checks and balances to minimise the impact of such attacks and to arrest/minimise the damage. To minimise the damage, your Bank has initiated following additional security measures which will be enabled shortly. - All new debit and credit cards will be issued for domestic usage unless international usage is specifically sought by the customer. - Convert existing MagStrip Cards to EMV Chip card. - PIN enabled POS - Enabling additional security as addition of Digital signatures for Corporate Internet Banking. Direct Benefit Transfer - Your Bank has initiated Direct Beneficiary Transfer under Aadhaar Payment Bridge System (APBS) and wages payment for Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA). - For MGNREGA transactions, your Bank has started Pilot Project for Sanganer Block in State of Rajasthan during the year and processed 9,593 transactions amounting Rs. 86,54,676/- - Under APBS, your Bank has linked 1, 31,735 Adhaar Card and provided credit to 6,635 beneficiary amounting Rs 49,01,659/- - Your Bank has also initiated another project for Direct Beneficiary transfer in association with Central Project Scheme Monitoring System (CPSMS). E-business Your Bank's e-business department provides different types of Alternate Delivery Channels (ADC) such as ATMs, Internet Banking (Baroda Connect), Mobile Banking, RTGS/NEFT, Phone Banking, Internet Payment Gateway (IPG), Contact Centres etc. In addition to this, the e-banking department of your Bank looks after Depository Services, Cash Management Services. This year, your Bank introduced different variants of Debit Cards i.e. Maestro PIN Debit Card and RuPay Debit Card. In addition to this, your Bank also launched a new variant of Pre-paid Card i.e. Baroda Travel Easy US Dollar Travel Card. Also, Online Trading facility for Retail customers of your Bank was launched in July 2012. The performance of various sections under the e-Business Department during FY13 is summarised below. ATM/DEBIT Card Operations Particulars 31/03/2012 31/03/2013 Addition during the year No. of ATMs 2,012 2,630 618 operationalised No. of Debit 80.44 103.76 23.32 Cards Issued (lakh) New Initiatives & Achievement during FY13 a) Maestro PIN Debit Card: Launched in April'12 b) RuPay Debit Card : Launched in September'12 c) Onsite ATM - Installation of Cheque Drop Box in all onsite ATMs d) Issuance of debit cards in Nagrik Bachat Khata with effect from 5th Dec, 2012. Baroda Connect (Internet Banking) Particulars 31/03/2012 31/03/2013 Addition during the year No. of Users 8,10,430 10,76,635 2,66,205 No. of A/cs 32,49,216 45,79,969 13,30,753 Linked New Initiatives during FY13 a) Credit/transfer to loan account through Baroda Connect. b) Online FDR for NRIs/PIO enabled. c) Online payment of premium of India First Insurance BARODA RTGS/NEFT Particulars 2011-12 2012-13 RTGS NEFT RTGS NEFT No. of Inward 16,62,070 61,37,139 21,83,550 1,31,42,497 Transactions No. of Outward 21,47,527 29,48,252 27,45,872 53,77,922 Transactions Avg Transactions per 7,720 28,376 9,929 76,361 day (Inward) -during last month i.e. March Avg Transactions per 9,338 13,211 11,713 25,092 day (Outward) - during last month i.e. March Baroda Cash Management Services - During FY13, the total number of transactions in BCMS was 30.91 lakh as against 14.19 lakh during FY12, with a total turnover was Rs.27,480.62 crore as against Rs 10,355 crore during FY12 and a profit of Rs 97.27 lakh was earned during FY13. - The number of customer has increased from 206 as on 31/03/12 to 308 as on 31/03/13. - It is proposed to extend these services to 100 more centres in a phased manner. Baroda e-Gateway (Internet Payment Gateway) - As on 31st March 2013, a total of 148 Merchants were registered as against 124 as on 31st March 2012 and the total turnover during FY13 was Rs 50.85 crore. A Profit of Rs 65.68 lakh was earned during FY13 from this activity. Other New Initiatives taken during FY13 - Online Trading launched for Retail Customers. - Baroda Travel Easy US Dollar Travel Card has been launched. - Debit Card failed transaction complaint registration through Contact Centre has been started. - Contact Centre for NRIs has also been launched. - Standardized Public Grievance Redressal system has been launched from Contact Centre (for registration of customer complaints). - Recovery of Retail Loans (EMIs) through ECS has been started on pilot basis in two Zones of your Bank, notably, the Greater Mumbai and Northern Zones in April 2013. - Your Bank is ready for a pilot launch of National Automated Clearing House (ECS credits). - The Complaints registration through Contact Centre (SPGRS Portal) has also been initiated in your Bank. Proposed Initiatives/Strategies for FY14 - To launch 50 e-lobbies (with ATM, Bulk Note Acceptor, Self Service Passbook Printer Kiosk, Internet Banking Kiosk, Cheque Deposit Machine & Phone Banking facility). - Installation of Self Service Passbook Printer Kiosks in all Baroda Next Branches. - To install 50-100 Bulk Note Acceptors. ATM/Debit Card - Card to Card transfer - ATM Bill Pay - Non-Personalized Debit Card - Biometric ATMs/Debit Card - NEFT through ATM - Talking ATM - Request for Cheque book through ATM Baroda Connect (Internet Banking) - Online premature payment of Fixed Deposit Receipt - Online facility of Saving Bank and Recurring Deposit - Providing convenient login without one-time-password with the help of QNA (for registered customers). - Revamping pages of "Baroda Connect" Corporate portal. - IMPS payments through Net Banking. Baroda M-Connect (Mobile Banking) - Enabling Merchant Payments - Implementation of Fraud Management Solution Baroda Pre-paid Cards - Online issuance of Baroda Gift Card - Issuance of reloadable cards. Contact Centre - Outbound calls for Recovery and Sales. - Web Chat - SMS/Voice/Emails blasts - Expanded IVR (i.e. Mini Statement, request for account statement) Human Resources Human resource Development is a critical element of your Bank's overall strategy for ensuring profitable and qualitative growth. Today, your Bank is endowed with a competent and highly motivated employee base of around 43,108 people who are engaged in handling its mammoth business operations. Your Bank has adopted a very balanced people strategy to create a composite and responsible Human Resource culture in the Bank that can drive growth and also adequately face various challenges of the current times, viz. the large retirements, massive induction of talent, huge training requirements and challenges of succession and productivity. A comprehensive HR strategy and Framework has been drawn up to take care of all these challenges in an integrated manner through a focused HR transformation project called Project SPARSH which is unique and path-breaking in the entire industry. This journey of HR Transformation was started in August'2011 and over the last one year, various landmark HR initiatives have been launched in your Bank which are futuristic and designed to make Bank of Baroda one of the best places to work for its employees. For this, your Bank wants to create cutting edge HR policies and processes through which it can become a role model for all other banks and in the process, leverage the full potential of its human capital to substantially improve the employee productivity. Formulation of Talent Management system: Developing the next line of leaders in the Bank Your Bank took a big step for developing the next line of leaders for the future by putting in place a Talent Management system which proactively identifies future potential leaders to effectively mitigate the risks arising out of the anticipated leadership gaps in the next five years and also grooms these future leaders through a systematic development agenda. Through a systematic and structured process, the Bank was able to clearly identify around 15.0% to 20.0% people in specific scales of officers viz. in Scales III, IV, V and VI as the future leaders. A grooming plan has been laid down for each of them. The process is envisaged as an annual exercise so that the pool of identified people and the various talent management activities envisioned are continuously reviewed and refined. A first of its kind "Baroda Annual Leadership Conclave" was conceptualized to provide the members of the Talent pool to broaden their perspectives on banking and industry trends and help them connect and network with their peers and senior leadership in the Bank, and the first such conclave was held in Mumbai on 11-12 August, 2012. Strategic workforce planning and Recruitment strategy A scientific manpower planning model was developed by your Bank to estimate manpower needs by level, skills and by branch. With its help, your Bank has also undertaken the strategic workforce planning for the next few years to feed into various other HR functions like recruitment planning, career progression vacancies and postings & deployment. Your Bank has put in place a clearly defined Recruitment strategy which looks at broad-basing recruitment from different channels, hiring of larger numbers in view of the emerging requirements as thrown up by the strategic workforce planning and also articulating a clearly-defined Employer Value proposition with the acronym "F I R S T" as shown below: A specially designed 'Career portal' has been launched on the Bank's website which defines this Value proposition further with clearly laid out sections related to why your Bank should be the preferred choice for any prospective applicant, what is the career path, the recruitment channels available, different facets of working at Bank of Baroda and testimonials from Bank's existing employees. All these strategies are designed to improve Bank's Employer Branding significantly. In order to tackle the challenge of making the large number of fresh recruits productive in the quickest possible time, your Bank initiated a very structured "on-boarding programme" consisting of both functional and cultural components which enabled them to be work-ready quickly and also helped in their cultural assimilation within the Bank. "Baroda Manipal School of Banking" The Baroda Manipal School of Banking is a special initiative taken jointly by Bank of Baroda and Manipal Global education to train students for a Banking career in Bank of Baroda on a "first-day, first-hour" productivity model. The students undergo a focused one-year programme which is tailored to the Bank's requirements and which leads to the award of a post-graduate diploma in Banking and Finance, before they are absorbed in your Bank as Probationary officers. This innovative Resourcing channel was initiated during the year FY12 but after completing the one year course, the students have started joining the Bank from FY13 onwards. Around three batches of students numbering 526 have already joined the Bank while another four batches of students numbering around 864 are undertaking the said one-year course at present. Capability Building Initiatives With the objective of bringing the desired focus and developmental orientation, your Bank rebranded its training system as "Baroda Academy" and launched various training initiatives under this Baroda Academy umbrella in order to create a learning organization, help in better grooming and development of its people and thereby significantly improve organization's performance. On the processes side, several landmark initiatives were introduced like publication of a comprehensive annual training calendar, introduction of self-nominations as an additional channel of training nominations, introduction of the system of training credits, introduction of tests at the end of every training program, creation of a pool of expert practitioners as Associate Faculty, enhancement and standardization of course content, drive for building a directory of Case Studies for use in training programmes, preparation of a Training policy, Training Manuals, etc. All these initiatives have brought about a renewed focus to the Training and development function and helped in making training a very potent tool for human capital development in the Bank. Various IT tools have been put in place to streamline the training processes and enable large-scale implementation of all the training initiatives. On specific capability building initiatives, your Bank has, in line with the renewed focus given to training, carried out substantial training and developmental activities during FY13, which included comprehensive grooming programmes in the area of Credit, Forex, Dealings, Branch Management, Planning, Risk Management, etc. besides soft skills programmes and ensuring all-round development and grooming of young officers and new recruits. Your Bank conducted 2,198 training programmes in- house (through its network of 12 Training Centres across the country, one IT training center and an Apex Training College at Ahmedabad) and thereby trained 43,465 people during the year. Besides, your Bank also sent around 2015 employees for undergoing training in various reputed external training institutes of the country and even abroad. As part of the overall grooming plan for the Talent pool members, customized programmes were conducted through specialized external training institutions covering specific developmental areas. Select Deputy General Managers and Assistant General Managers of your Bank were sent to undergo a Top Management programme at one of India's best B-Schools viz. ISB, Hyderabad whereas in another initiative, your Bank trained an additional 150 specially identified people across the Bank to undergo a focused Mentoring programme so that they could act as 'mentors' to newly recruited officers, taking the total number of trained mentors in the Bank to around 500. Leadership Development (Project UDAAN) Taking into account the critical need for building leadership competencies in people, your Bank had launched a comprehensive leadership development program named as 'Project UDAAN' in FY12, covering Branch Heads of all Urban/Metro Branches and all Assistant General Managers and Deputy General Managers with the objective of creating leaders for the future. The programme was structured around three modules of leadership viz. 'Leading Self', 'Leading Others' and 'Leading Business' and each of the three modules are being addressed through a combination of off-site forum events and coaching clinics. The programme covered around 960 participants across seven zones of your Bank during the year FY12 and the same was continued in FY13 to cover an additional 760 more participants in another five batches. Such a massive and comprehensive leadership development effort is first of its kind for an Indian state-owned Bank. Implementation of HR Technology Your Bank has created a very comprehensive HR technology platform covering HRM, Training, Payroll & Leave modules christened as the Human Resources Network for Employee Services (HRNes). This technology platform has enabled automation of various HR functionalities and various modules/ various new processes were automated/ implemented during the year. Recruitment Drive Your Bank has been undertaking focused hiring efforts on a sustained basis year on year, to cater to superannuation, sustained business growth and rapid Branch expansion. Various recruitment exercises were undertaken during the year to address the emerging manpower requirements in your Bank. Recruitment of Specialist officers, probationary officers, recruitment of young MBAs directly from the campuses of renowned Business Schools were initiated to meet the needs of your Bank, both in terms of replacements for normal attrition and factoring in the business growth needs. Your Bank recruited 1,246 Officers in various Grades/Scales (both Generalists & Specialists), 1,731 Clerks and 700 Subordinate staff members during FY13. The recruitment process is continued in the year 2013-14 also with various recruitment projects underway for filling up almost 2,800 posts of officers and 3,500 posts of clerks. Framework for Career Progression Special efforts were made during the year under review to fulfill the growing aspirations of the employees for faster career progression, thereby, motivating employees for higher productivity. Your Bank has been regularly promoting people in all grades / scales, year after year, without a break, in order to keep on continuously rewarding its top performers and make them assume higher responsibilities faster. In keeping with this trend, a large number of promotion exercises were undertaken during FY13 also resulting in the elevation of around 3,793 people within the Bank in all cadres/grades/scales, as depicted in the table below. Sub-Staff to Clerk 160 Clerk to Officer 553 JM-I to MM-II (Officer to Manager) 1332 MM-II to MM-III (Manager to Sr Manager) 1055 MM-III to SM-IV (Sr. Manager to Chief Manager) 480 SM-IV to SM-V (Chief Manager to Asstt. Gen. 160 Manager) SM-V to TEG-VI (Asstt. Gen. Manager to Dy. Gen. 35 Manager) TEG-VI to TEG-VII (Dy. Gen. Manager to General 18 Manager) Special Thrust on Development of SC/ST/Other Backward Communities Your Bank is committed to the constitutional safeguards and social objectives for development and welfare of persons belonging to SCs, STs and other backward classes in the society. Your Bank is one of those banks in the entire banking industry that have the highest number of employees belonging to SCs and STs, which itself shows the commitment of the Bank towards their development and upliftment. Some of the highlights of your Bank's efforts for development and welfare of people belonging to SCs and STs are enumerated as under. Reservation in Employment Your Bank observes all guidelines stipulated by the Government of India for reservation of posts in employment in All India recruitment and local recruitment. Around 15.0% posts are reserved for SCs and 7.5% posts are reserved for STs in all India recruitments as also for selection to Baroda Manipal School of Banking (i.e., another channel of resourcing started by the Bank). For other recruitments made on regional basis, appropriate percentage prescribed for various States is being observed. Special efforts are made like offering pre-recruitment orientation training to SC/ST applicants for recruitment in your Bank. Relaxation in age limit and qualifications are given and interviews of SC/ST candidates are taken on relaxed standards in order to ensure that appointment of candidates to the reserved posts happens. In the Interview Panel for recruitment, a member belonging to SC/ST is invariably associated. Candidates belonging to SC/ST, who are called for interview, are reimbursed traveling expenses. In addition to providing reservation in employment, your Bank is also providing reservation and other enabling mechanisms in career growth and promotions to SC and ST employees as per the existing guidelines. Pre-promotion training before participating in promotion exercises is also provided to these candidates. Around 10.0% of the available residential accommodation of your Bank is reserved for the SC/ST candidates. The staff strength and representation of SCs and STs as of 31st March 2013 is as under. Cadre Total SC SC % ST ST% Officers 17933 3044 16.97 1261 7.03 Clerks 16869 2392 14.18 1158 6.86 Substaff 8306 2836 34.14 769 9.26 Total 43108 8272 19.19 3188 7.39 SC/ST Cell An exclusive SC/ST Cell in your Bank has been set up to monitor the reservation and other enabling provisions for SC/ ST employees. An executive in the rank of General Manager is appointed as Chief Liaison Officer for SC/ST employees to ensure compliance of various guidelines pertaining to the SC/ ST employees. A Liaison Officer for SC/ST has been appointed in each Zone of the Bank who takes care of all matters and grievance redressal of SC/ST employees of that Zone. Meeting with SC/ST Welfare Association With a view to have direct dialogue and review of reservation and other special provisions for SC and ST, your Bank holds quarterly meetings with the representatives of SC/ST Welfare Association of the Bank. Your Bank's Chairman and Managing Director and Senior Executives including the Chief Liaison Officer for SC/ST participate in such meetings. Bharat Ratna Dr. Babasaheb Ambedkar Memorial Trust Your Bank has established the "Bharat Ratna Dr. Babasaheb Ambedkar Memorial Trust" in 1991 for promoting welfare activities for the benefit of SC/ST employees and their family members. Apart from scholarships to children of employees belonging to SC/ST, the Trust also provides scholarship to needy students belonging to SC/ST community, in general, in major centres of the country. Visit of National Commission for Scheduled Castes The National Commission for Scheduled Castes visited your Bank at various places during the year as shown in the following table to review the implementation of the reservation policy of the Government of India for SCs in your Bank, had discussions and interactions and examined the level of implementation of the policies and programmes. Sr Place of Meeting Date No 01 Jaipur 26.05.2012 02 Dehradhun 25.07.2012 03 Bangalore 22.08.2012 04 Bhopal 27.09.2012 The National Commission for SCs for verification of Rosters and other working service safeguards visited the Bank at Baroda on 05.12.2012 and also at Jaipur on 31.01.2013. The suggestions and guidance of the Commission are being scrupulously observed by your Bank. Various other commissions and parliamentary committees formed for promoting the welfare of different backward classes and safeguarding the interest/working conditions of different sections of society also visited your Bank as per the details given below and were apprised of the steps taken by the Bank in implementing all the relevant government guidelines and the different welfare measures adopted by the Bank to ensure their overall development and meeting of social objectives. - The National Commission for Safai Karamcharis at Goa on 11.02.2013 - Study visit of the Committee on Government Assurances, Rajyasabha (for Persons with disabilities) at Mumbai on 22.01.2013 - Meeting with Parliamentary Committee on Welfare of OBCs at Mumbai on 07.02.2013. Business Process Re-engineering (Project NAVNIRMAAN) After almost four years of the BPR-led transformation, your Bank now stands tall in the Indian Banking space. First ever Annual Conference of Indian Public Sector Banks on Business Process Reengineering (BPR) was hosted by Bank of Baroda in Mumbai on 14 July, 2012, along with Union Bank of India under the aegis of the Ministry of Finance, Government of India. Key areas of the "NAVNIRMAAN" Transformation - Your Bank has created the "Baroda-Next" line of branches with a modular design, clear front/back office separation, comfortable customer waiting area, suitable frontline automation and dedicated sales & service teams at all metro and urban centres. - It has carried out the upgradation of Back Offices through: - Process Redesign - Workflow-based Systems replacing Manual process and use of machines. - Enlargement (to make room for new work-step migration) - Your Bank has aggressively rolled out the Baroda-Next Branches and Back Offices across the country. - Your Bank has created a Sustainability enabler e.g. Documentation, Technology enablement, Performance Management and Training and Re-training. - Your Bank has rolled out the Sales processes at branch and enterprise-wide Sales Accountability Model (Baroda-Next Sales Operating Model). - Your Bank undertakes periodic customer and Employee Satisfaction Surveys for impact evaluation. The BPR performance of your Bank has created a positive impact both in terms of business growth and customer/ employee satisfaction through the following. - Baroda-Next Branch- Around 1,382 metro/urban branches have been rolled out as Baroda Next branches in your Bank so far. - Branch Front-end Automation- The Queue Management System (QMS) & Cheque Deposit Machine (CDS) machines are installed in 93 and 40 branches, respectively. - City Back Office (CBO) - Clearing operations have been centralized for all branches (linked to CBO). Three CBOs at Mumbai, Ahmadabad and Surat have been automated. - Regional Back Office (RBO) - Altogether 2,925 and 3,900 branches are linked for CASA opening and PCB (Personalized Cheque Book) issuance, respectively. - Credit centralization Pilot (RLF/ SMELF) - The Retail and SME credit centralization pilot is under progress at the Loan Factories in Baroda. - Rollout Sales Operating Model at each Baroda Next branch- The Sales Operating Model at 32 Regions covering 739 Baroda-Next branches has been rolled out. - Mid-corporate vertical- Separate Mid-corporate vertical has been created and 15 Mid-corporate branches have been opened at important locations. - Academy of Excellence- Continuous sensitization, training and capability building at all levels remain an integral part of the Baroda Next rollout programme. It involves a Zonal /Regional Kick-off, Branch Meeting; Boot camp, Branch-based Training, External Sales Trainings and Conclaves. - Sustainability of Navnirmaan initiatives/impact- A certification procedure for Baroda Next branches has been introduced in terms of which process compliance/ adherence are being evaluated by your Bank's Internal inspectors and CSAT/ESAT are being evaluated externally by the Market Research Agencies. Marketing During FY13, your Bank continued to promote its brand and various products and services through advertising, customer engagement programs and in-branch display. In the process, your Bank endeavoured to use different media vehicles such as Print, Electronic and OOH apart from supporting the on- ground activities undertaken by branches in the Zones/Regions. The highlights of various marketing/communication activities undertaken during FY13 are given below. Your Bank initiated a unique Brand Engagement Program titled 'Bank of Baroda Canvass Competition' on 14th November 2012 - Children's Day, to create a platform for building a long-term relationship with a younger audience as well as their influencers i.e. parents/teachers. The Competition was designed to invite entries from school children across the country on a pre-determined topic and winning entries were selected on National/Zonal/Regional levels by a select panel of judges. Your Bank's mascot i.e. 'Stickman' was also leveraged extensively during the Competition to help establish a brand- association with the Target audience. A judicious mix of Print & Radio Media was used in the Campaign to maximise the number of entries in the Competition. Around cities, where our Regional Offices are present, were primarily targeted. A total of 1.98 Lakh students representing over 3,000 schools from across the country participated in the Competition, during a short span of 45 days, giving your Bank an opportunity to engage with them in the near future. Your Bank undertook various Product Promotion Campaigns to promote its products and services amongst target audience through advertising across different geographies. The focus was on providing information on various products and services, particularly Savings Deposits, Current Deposits, NRI Deposits, Home Loan, Car Loan, SME Loans and Alternate Delivery Channels through judicious use of various media vehicles. Information relating to expansion of branch network, both domestic and overseas, was also given due publicity largely through print medium which helped in enhancing your Bank's brand image & visibility. Your Bank also took the initiative of educating its customers through publication of special literature on Alternate Delivery Channels and products & services relating to SME segment. It also participated in various events such as Pravasi Bhartiya Diwas 2013, FICCI - IBA Banking Conference, Dun & Bradstreet - Exporter's Excellence Awards, MINT Annual Banking Conclave, CII's Manufacturing Summit and Standard Chartered Mumbai Marathon 2013, among many others to interact with customers and also for creating brand association with them. During FY13, as part of its Public Relations task, your Bank had wide Media Coverage of its activities across the country which helped in maintaining the Bank's Brand image. Your Bank also won several awards from reputed Media Houses and other Organizations during the Year on various business parameters, a list of which is appended below. Awards and industry Recognition for Bank of Baroda Your Bank received several awards during FY13, for its consistent outstanding and all-round performance (both business and financial), superior management, dedication to excellence and contribution to rural economy and financial inclusion. Given below are a few select awards won by Bank during the year FY13 - Bloomberg UTV Financial Leadership Award -Best PSU Bank - 07.04.012, Mumbai - Best CIO Award of BFSI sector from Institute of Public Enterprises, 2012 - June, Hyderabad - Reserve Bank Rajbhasha Shield - 29.06.2012, Mumbai a) First Prize in Region A b) Second Prize in Region B c) Consolation Prize in bilingual house journal - Bob Maitri - The Sunday Standard FINWIZ 2012 Awards - 20.08.2012, New Delhi - Best Indian Bank - Large (Runner Up) - Best Public Sector Banker - Large (Runner Up) - Dun & Bradstreet - Polaris Financial Technology Banking Awards - 24.08.2012, Mumbai a) Best Public Sector Bank under the category Global Business Development b) Overall Best Public Sector Bank - Banking Technology Award-2011 by IBA - 27.08.2012, Mumbai a) Use of Technology in Training & e-learning - Winner b) Best Customer Relationship initiatives - 1st Runner up c) Best use of Business Intelligence - 1st Runner up d) Best use of mobility tech in Banking - 2nd Runner up e) Best Risk management & Security initiatives - 2nd Runner up - Silver Trophy for effective implementation of Automated storage Management & Oracle RAC from SKOCH Digital Inclusion Award- 2012, 04.09.2012, New Delhi - Business India Best Bank Award 2012 - 14.09.2012, Mumbai - Indira Gandhi Rajbhasha Shield Competition, New Delhi a) First Prize - 14.09.2012 b) Second Prize for Akshayyam in Hindi House - Journal Competition - (Association of Business Communicators of India) ABCI Awards 2012, 19.10.2012 a) Special Column (English) - Bobmaitri, Silver Trophy b) Special Column (Language) - Akshayyam, Silver Trophy c) Corporate Web-site - Bank of Baroda website, Silver Trophy - Forbes India Leadership Award - Best CEO Public Sector, 28.09.2012, Mumbai to Shri M D Mallya - CNBC TV18 - 'India Best Banks and Financial Institutions Award 2012' - Best Public Sector Bank, 17.10.2012, Mumbai presented to Shri M D Mallya - Best Large Bank 2012 - Business World November 26th 2012 Issue - Best Large Bank 2012 - Business Today - KPMG - December 2012 - Best Public Sector Bank Award by State Forum of Bankers Club, Kerala, December 2012, at Ernakulam - Business Standard Banker of the Year (2011-12) was conferred on Shri. M D Mallya, Former CMD of Bank of Baroda in January 2013. Conferred on 23.03.2013. - My FM Stars of the Industry Award for Excellence in Banking (PSU) - Silver awarded by Radio FM on 14.02.2013 in Mumbai - My FM Stars of the Industry Award for Excellence in Home Loan Banking - Bronze awarded by Radio FM on 14.02.2013 in Mumbai - FE Best Banks Award 2011-12 for 'Best PSU Bank' awarded by Financial Express Group on 20.02.2013 in Mumbai - "Strategic Communication and Leadership Award" by Asian Confederation of Business and World CSR Congress at Corporate Affairs Award Ceremony, Mumbai on 18/02/2013 - The Most Efficient Public Sector Bank by Dalal Street Investment Journal on 23/03/2013. - National Award for 2011-12, conferred for excellence in the field of Khadi & village Industries by Khadi & Village Industries Commission on 3rd April,2013 Premises Re-Engineering and Ambience Enhancement Given below are the major achievements of your Bank in the area of "Premises re-engineering and ambience enhancement" during the year FY13. - Your Banks' administrative office cum residential complex at Jamshedpur was completed. It was equipped with ultra modern gadgets and systems with energy efficient equipments, rain water harvesting system and eco- friendly materials. Your Bank's presence by this building in the Steel City is admired by one and all. Now, it has become landmark building of Jamshedpur city. - As per the directives from Ministry of Finance, your Bank linked its Corporate Office and all Zonal and Regional Offices through State-of-the Art Video Conferencing systems with MPLS Connectivity. Interaction of functional heads through VC has expedited the decision making process in a more efficient and cost effective manner. - Your Bank is also marching towards technology based initiatives in the form of e-tendering, e-procurement, etc., and implemented these initiatives in a phased manner during FY13. - All payments to vendors are being made through RTGS/ NEFT or credit to beneficiary account. - In tune with your Bank's policy to have its administrative offices in owned premises, your Bank purchased land at Bangalore (Karnataka), Hyderabad (AP), Faizabad (UP) Indore (MP), Udaipur, Haldwani (Uttrakhand ), Dehradun (Uttrakhand), Jaipur (Rajasthan) and New Raipur (Chhatisgarh) for construction of commercial buildings. - Looking to the ever increasing rentals, a need is being felt to use every nook and corner of the available premises. Layouts were revisited while renovation and furnishing of branches/offices was done by introducing eco-friendly and ergonomically designed sleek furniture items. The area norms for acquisition of the premises were also reviewed and implemented. - To have uniformity in systems and procedures pan-India, Premises Policy Guidelines, Constructions Manual, Refurbishment Manual were formulated and agencies for modular and chairs were also identified for quick procurement of the furniture items and to have similar and identical design to get aesthetically pleasant look. Projects implemented during FY13 - Your Bank constructed a commercial complex at Mylapore, Chennai having Zonal Office, Branch & Currency Chest. - A residential complex at Cenotaph Road, Chennai was constructed wherein there were three 3-BHK flats, twelve 2-BHK and one General Guest house, and state of the art VIP guest house. - Your Bank constructed a residential complex at East of Kailash, New Delhi wherein there are 14 executive flats (four 3BHK flats, ten 2BHK flats) and one top executives/ guest house. - The construction of commercial cum residential complex at (Tata Nagar) Jamshedpur was wherein there are 23 2-BHK flats. Projects under implementation - The construction of residential complex at Janakpuri, New Delhi of your Bank is in the advanced stage of completion. - The construction of office building cum currency chest at Varanasi is also nearing the completion. - The construction of Multi storey integrated office building at Jaipur is in the advanced stage of completion. - The construction of BSVS at Ajmer, Banswada, Dungarpur, Pratapgarh are also under implementation. - The construction of administrative and residential buildings at New Raipur is under implementation. - The construction of residential cum commercial complex at Indore (MP) is under implementation. Future Plans for Estate Management - To facelift the Bank's Building at Parliament Street, New Delhi - To redevelop the Ram Nagar Premises at Coimbatore, to have optimum utilisation of available space for Branch/ officers' flats. - To construct an own building for Disaster Recovery Site at Hyderabad. - To renovate the Bank of Baroda Institute of Information Technology at Gandhinagar (Gujarat) - To undertake the redevelopment of Bhandup Staff Quarters building, Mumbai, thereby to construct about 138 residential flats for transferee Officers/ Executives. - To undertake the redevelopment of Jogeshwari Staff Quarters, Mumbai, to construct a building for residential and commercial use. - To construct a training centre at Bangalore. - To construct an Administrative Regional Office Building at Faizabad. - To construct the BSVS at various centres across India as per the directives from the Government of India. Domestic Subsidiaries and Associates The performance of "Subsidiaries, Joint Venture & Associates" of Bank of Baroda was satisfactory during FY13. The BOBCARDS Limited turned around during FY11 and made profit during FY12 and FY13. The Company has focused on all qualitative aspects of business development, which has resulted in better profitability, quality card base and ME base. The Company has introduced a range of Platinum Cards with premium features like added privileges & offers. The Company has drawn up aggressive plans for enlargement of Card & Merchant Base. The BOB Capital Markets Ltd. has been activated by recruiting a professional team. The focus is on investment advisory services, Debt & Equity Syndication and Capital market activities. The Company commenced institutional broking business and has also launched an Online Institutional Trading Platform from October 2009. The Company commercially launched an On-Line Retail Trading platform on July 20, 2012. The Nainital Bank Ltd. was promoted by Late Bharat Ratna Pandit Govind Vallabh Pant and others and became Associate Bank of Bank of Baroda in the year 1973. Today, the shareholding of Bank of Baroda in Nainital Bank Ltd. is 98.57% and is a subsidiary of the Bank. The State of Uttarakhand, vide its communique dated August 3, 2012, has notified that The Nainital Bank Limited be treated at par with other PSU Banks. The Bank has initiated branch expansion initiatives and has already established a Regional Office at Dehradun and has aggressive plans to ramp up its scale of operations. The Bank has launched e-stamping facility in 15 branches and has initiated several new IT initiatives such as Mobile banking & e-banking, etc. Baroda Pioneer Asset Management Company Ltd. is a joint venture with Pioneer Global Asset Management SpA and is in its fifth year of operation. During the year under review, the Company was able to strengthen its AUM significantly which rose by 75.0% on year on year basis as of Mar'13 and was able to add one lakh folios despite weak sentiments prevailing in Debt & Equity markets. The key to this growth was strong focus on the institutional segment which helped the Company grow its debts & money market products coupled with focus on Systematic Investment Plans for retail investors. Several new NFOs were launched during the year and two new channels were added to take care of the third party products. The Company has increased the number of investor servicing points from 77 to 203 during the year under review. IndiaFirst Life Insurance Company Ltd. is a joint venture company with Andhra Bank and Legal & General Group, U.K. It commenced its business operations on 16th November 2009 and has received an overwhelming response for its products across the country. The Company has outperformed the industry by having maximum year on year growth of 34.0%. The Company was the 22nd entrant in the Life Insurance space & has become the 8th largest player among private players within a span of less than four years. The IndiaFirst has launched MagicBoard, a one- of- its kind portable sales process tool. The Company has won Model Insurer Award (Asia) for the 3rd successive year. India Infradebt Ltd. is a joint venture company with ICICI Bank Ltd., ICICI Home Finance Company Ltd., Citicorp Finance (India) Ltd. and Life Insurance Corporation of India. The Company was incorporated on Oct 31, 2012 in Mumbai and has been issued registration certificate No. N-13.022039 dated 08.02.2013 by the RBI to operate as an infrastructure Debt Fund - Non Banking Financial Company (IDF-NBFC). The Company's principal activity is to refinance part of the debt liabilities of the project companies. (Rs. lakh) Entity (with date of Owned Total Net Country Offices Staff registration) Funds Assets Profit BOB Capital Markets India 13,591.17 15,018.28 596.79 1 30 Ltd., 11 Mar, 1996 BOBCARDS Ltd 29 India 14,546.46 16,019.04 1,922.74 33 102 Sept, 1994 Baroda Pioneer Asset Mgmt Co. Ltd., 5 Nov, India 1,749.46 2,525.75 -1,871.98 1 88 1992 lndiaFirst Life India 37,586.92 4,19,621.90-3,958.40 35 1,476 Insurance Co. Ltd., 19 June, 2008 Nainital Bank Ltd, 31 India 40,065.36 4,31,808.79 5,106.10 107 830 July, 1922 India Infra debt Ltd. India 30,801.66 30,813.10 801.66 1 1 31.10.2012 Implementation of Official Language (OL) Policy During the period under review, your Bank made significant progress with regard to implementation of Official Language policy and ensured compliance of various statutory requirements of Official Language Act/Official Language Rules. Your Bank could achieve all major targets set by the Government o India under its Annual Implementation Programme and fulfilled the assurances given to the Committee of Parliament on Official Language. In recognition of your Bank's outstanding performance, the Bank was awarded 1st prize in Indira Gandhi Rajbhasha Shield by Shri Pranab Mukherjee, Hon'ble President of India. Your Banks' in-House Hindi Magazine-Akshayam was also awarded Second prize at the hands of Shri Pranab Mukherjee, Hon'ble President of India for the year FY12. During the year FY13, your Bank's In-House Magazine 'BOBMAITRI' and Hindi magazine 'AKSHYAAM' got 3rd prize in the RBI Rajbhasha shield Competition. The Town Official Language Implementation Committees functioning at Jaipur and Baroda under your Bank's convenorship were awarded 1st prize for their outstanding performance by the Department of Official Language, Government of India. Your Bank's Zonal Office at Pune, Regional office at Jodhpur and Zonal office at Ahmedabad too got 1st, 2nd and 3rd prizes, respectively. Your Bank's in-House Hindi Magazine 'Akshayyam' was awarded with 'Gold Prize under Indian Language Publication category by the 'ABCI' and 'Apni Baat' with silver prize under special column (Language) category. In addition to the above two magazines, a publication of your Bank's Hindi web Magazine Baroda Hindi.com has been popularsing the use of Hindi language through technology. The Hindi magazines are regularly published by different Town Official Language Implementation Committees functioning under your Banks' convenorship. The Town Official Language Implementation Committees functioning under the convenorship of your Bank discharged their responsibilities excellently. During the year, three newly constituted Town Official Language Implementation Committees started functioning at Jalandhar, Varanasi and Haldwani under your Bank's Convenorship and now your Bank is the Convenor of nine Town Official Language Implementation Committees. The Third Sub-Committee of Parliament on Official Language visited your Bank's branches at Jaisalmer, Vikas Nagar and Rudraprayag and appreciated the efforts put in by the Bank in the area of Official Language Implementation. Your Bank was able to come out with a Programme to generate and print pass books and account statements in Hindi at the branches situated in linguistic regions A and B, through Finacle System on the CBS platform. During the year under review, your Bank started printing the ATM slips in Hindi for the convenience of customers and introduced a display of ATM screen in Gujarati and Marathi languages in addition to Hindi and English. During the year, 'Pragati online package' was also developed for consolidation of quarterly progress report regarding the use of Hindi and online submission of Hindi reports. During FY13, Hindi version of your Bank's Book of Instructions was uploaded on the Bank's Intranet. During the year FY13, your Bank published two books in Hindi namely "Financial Inclusion & Indian Languages" and "Samvaad" for prorogating the use of Hindi in the Indian banking industry. Board of Directors Shri S. S. Mundra appointed as the Chairman and Managing Director of the Bank w.e.f. 21.01.2013 by the Central Government u/s 9 (3) (a) of The Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 to hold the office till 31.07.2014 i.e. the date of his superannuation or until further orders, whichever is earlier. Shri P. Srinivas appointed as a Whole Time Director (designated as Executive Director) w.e.f. 18.06.2012 by the Central Government u/s 9 (3) (a) of The Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970, to hold office up to 30.06.2016 i.e. the date of his superannuation or until further orders, whichever is earlier. Shri Sudhir Kumar Jain appointed as a Whole Time Director (designated as Executive Director) w.e.f. 18.06.2012 by the Central Government u/s 9 (3) (a) of The Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 for a period of five years, or until further orders, whichever is earlier. Shri Ranjan Dhawan appointed as a Whole Time Director (designated as Executive Director) w.e.f. 01.11.2012 by The Central Government u/s 9 (3) (a) of The Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970, to hold office up to 30.09.2015 i.e. the date of his superannuation or until further orders, whichever is earlier. Shri N. S. Srinath, a Whole Time Director (designated as Executive Director) ceased to be a Director with effect from 01.06.2012 on completion of his term. Dr. (Smt.) Masarrat Shahid, a part time non- official Director ceased to be a Director with effect from 29.10.2012 on completion of her term. Shri Rajiv Kumar Bakshi , a Whole Time Director (designated as Executive Director), ceased to be a Director with effect from 01.11.2012 on completion of his term. Shri M. D. Mallya, Chairman and Managing Director, ceased to be a Director with effect from 01.12.2012 on completion of his term. Directors' Responsibility Statement The Directors confirm that in the preparation of the annual accounts for the year ended March 31, 2013: - The applicable accounting standards have been followed along with proper explanation relating to material departures, if any; - The accounting policies framed in accordance with the guidelines of the Reserve Bank of India, were consistently applied. - Reasonable and prudent judgment and estimates were made so as to give true and fair view of the state of affairs of your Bank at the end of financial year and of the profit of your Bank for the year ended on March 31, 2013; - Proper and sufficient care was taken for the maintenance of adequate accounting records in accordance with the provisions of the applicable laws governing banks in India; and - The accounts have been prepared on a going concern basis. Acknowledgement The Directors express their sincere thanks to the Government of India, Reserve Bank of India, Securities and Exchange Board of India, other regulatory authorities, various financial institutions, banks and correspondents in India and abroad for their valuable guidance and support. The Directors acknowledge with appreciation the assistance and cooperation extended by all stakeholders of your Bank like customers, shareholders and well wishers in India and abroad. The Directors place on record deep appreciation for the hard work and dedication of the members of your Bank's staff at different levels, which enabled your Bank to record high quality, consistent growth year after year despite economic challenges and consolidate its position as one of the premier banks in the country. For and on behalf of the Board of Directors, S. S. Mundra Chairman and Managing Director

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Mar 31, 2012

The Directors have pleasure in presenting the One Hundred and Fourth Annual Report of Your Bank with the audited Balance Sheet, Profit & Loss Account and the Report on Business and Operations for the year ended March 31,2012 (FY12).

Performance Highlights

- total Business (Deposit Advances) increased to Rs 6,72,248 crore reflecting a growth of 25.86%.

- Gross Profit and Net Profit were Rs 8,580.62 crore and Rs 5,006.96 crore respectively. Net Profit registered a growth of 18.04 % over previous year.

- Credit-Deposit Ratio stood at 86.86% as against 86.77% last year.

- Retail Credit posted a growth of 9.97% constituting 17.36% of your Bank's Gross Domestic Credit in FY12.

- Net Interest Margin (NIM) as per cent of interest earning assets in global operations was at the level of 2.97% and in domestic operations at 3.51%.

- Net NPAs to Net Advances stood at 0.54% this year against 0.35% last year.

- Capital Adequacy Ratio (CAR) as per Basel II stood at 14.67%.

- Net Worth improved to Rs 26,203.67 crore registering a rise of 32.67%.

- Book Value improved from Rs 504.43 to Rs 637.37 on year.

- Business per Employee moved up from Rs 1,229 lakh to Rs 1,466 lakh on year.

Segment-Wise Performance

The Segment Results for the year FY12 reveal that the contribution of Treasury Operations was Rs 887.72 crore, that of Corporate/Wholesale Banking was Rs 965.87 crore, that of Retail Banking was Rs 2,782.37 crore, and of Other Banking Operations was Rs 2,959.73 crore. Your Bank earned a Profit after Tax (PAT) of Rs 5,006.96 crore after deducting Rs 1,569.89 crore of unallocated expenditure and Rs 1,018.84 crore towards provision for tax.

Dividend

Your Bank's Directors have proposed a dividend of Rs 17 per share (on the face value of Rs 10/-per share) for the year ended March 31st, 2012. The total outgo in the form of dividend, including taxes, will be Rs 812.29 crore.

Capital Adequacy Ratio (CAR)

Your Bank's Capital Adequacy Ratio (CAR) was comfortable at 14.67% under Basel II as on 31st March 2012.

Your Bank's Net Worth as at 31st March 2012 was Rs 26,203.67 crore comprising paid-up equity capital of Rs 412.38 crore and reserves (excluding revaluation reserves) of Rs 25,791.29 crore. An amount of Rs 4,194.67 crore was transferred to reserves from the profits earned.

Provisions towards Retirement and Other Benefits

During the year FY12, your Bank made provision towards contribution to gratuity (Rs 145.63 crore), pension funds (Rs 671.88 crore), leave encashment (Rs 93.46 crore) and additional retirement benefits (Rs 80.97 crore) on actuarial basis. Total provisions under these four categories amounted to Rs 991.94 crore during the year FY12, against Rs 1,160.42 crore during FY11. Total corpus available with your Bank at the end of March 2012 under these heads was: Rs 1,416.85 crore (gratuity), Rs 5,935.62 crore (pension funds), Rs 566.01 crore (leave encashment), and Rs 446.62 crore (additional retirement benefits).

Key Financial Ratios

Particulars FY12 FY11

Return on Average Assets (ROAA) (%) 1.24 1.33

Average Cost of Funds (%) 5.64 4.67

Average Yield (%) 8.55 7.76

Average Interest Earning Assets (Rs crore) 3,47,223.21 2,82,109.79

Average Interest Bearing Liabilities (Rs crore) 3,43,397.26 2,80,098.94

Net Interest Margin (%) 2.97 3.12

Cost-Income Ratio (%) 37.55 39.87

Book Value per Share (Rs) 637.37 504.43

EPS (Rs) 127.84 116.37

Business Performance

Given below are the details of your Bank's major achievements on business front during the year FY12.

Resource Mobilisation and Asset Expansion

The share of Bank's Deposits in total resources stood at 86.04% as of 31st March 2012. The Total Deposits grew from Rs 3,05,439.48 crore to Rs 3,84,871.11 crore, reflecting a growth of 26.01% over the previous year. Of this, Savings Bank Deposits - an important constituent of low cost deposits - grew by 15.71% from Rs 64,454.04 crore to Rs 74,579.53 crore. The share of low cost deposits (Current Savings) in Total Deposits was at 26.90% and in Domestic Deposits at 33.18%.

Your Bank's Total Advances expanded by 25.67% during FY12 led by 19.28% expansion in Domestic Advances and 43.92% expansion in Overseas Advances.

Composition of Funds - Global

Particulars End End Growth March 2011 March 2012 (%) (Rs crore) (Rs crore)

Deposits 3,05,439.48 3,84,871.11 26.01

- Domestic 2,33,323.30 2,80,135.26 20.06

- Overseas 72,116.18 1,04,735.85 45.23

Borrowings 22,307.85 23,573.05 5.67

Global Advances

Particulars End End Growth March 2011 March 2012 (%) (Rs crore) (Rs crore)

Advances 2,28,676.36 2,87,377.29 25.67

- Domestic 1,69,407.86 2,02,075.39 19.28

- Overseas 59,268.50 85,301.90 43.92

Wholesale Banking

A strong corporate credit culture and healthy growth in credit

- moderately above Banking industry average have been the consistent differentiators of Bank of Baroda for the past four years.

In fact, your Bank's Wholesale Banking Division offers a full range of loan products and services such as Term Loans, Short-Term Loans, Demand Loans, Working Capital Facilities, Trade Finance Products, Treasury Products, Bridge Loans, Syndicated Loans, Infrastructure Loans, Cross Currency/ Interest Rate Swaps, Foreign Currency Loans, Loan Against Future Rent Receivables and many more to its large and mid corporate clients depending upon their needs. The product offerings are flexible and suitably structured taking into account the customers' risk profiles and specific needs.

Based on the superior product delivery, passionate service orientation, timely and speedier sanctions with a customer-centric approach, your Bank has made significant achievements in providing an array of Wholesale Banking products and services to several multinationals, domestic business houses and prime public sector companies.

The Department places major thrust on faster delivery through efficient channels and adoption of better practices in credit administration. During FY12, the efforts were also made to improve the speed of decision making without compromising the quality of decision.

During FY12, the non-food credit growth, in general, remained low in the Indian banking industry. However, even during this phase, your Bank's Wholesale Banking Division created 130 new relationships through its Fast Track Desk. The department sanctioned fresh/increased credit facilities to the tune of Rs 60,955 crore during the year to various sectors /industries with projects /units spread across the country.

Under Wholesale Banking, the corporate customers are identified as large and mid corporates. Those having annual sales turnover of between Rs 150 crore to Rs 500 crore are classified as mid-corporates, and those with sales turnover over Rs 500 crore are classified as large corporates.

Sensing the need to focus and serve the potential mid corporate segment, your Bank took an important initiative of opening specialized Mid Corporate Branches in various potential locations throughout the country. These branches are equipped with mix of experienced and professionally qualified staff. Attaching high importance to the segment, your Bank arranged for training in soft skills plus domain-expertise knowledge for its staff identified for these specialized branches through an International Management Consultancy firm.

Your Bank also opened one more specialized CFS (Corporate Financial Services) Branch taking total number of CFS Branches to eleven.

Your Bank's Wholesale Banking Department also has a full-fledged 'Project Finance Division' (PFD). The PFD is well equipped with professionals from various disciplines and undertakes TEV (i.e. Technical Evaluation & Viability) studies for clients of your Bank as well as that of other banks. The Department is also equipped with Syndication Desk to syndicate domestic funding requirement of the clients. The Department earns significant fee-based income by carrying out TEV studies, vetting of projects and through syndication deals.

Your Bank attaches higher degree of importance to the quality of appraisal and efficient processing of credit proposals at all levels to maintain the asset quality and realizes the importance of skilled and motivated employees to achieve the same. Keeping this in view, your Bank continued its thrust on regular grooming of Credit and Forex Officers. Your Bank also continued to recruit specialized officers from campuses and lateral recruitment of professionals cum experienced staff.

Retail Business

As in the past, Retail Business continued to be one of the important segments of overall business during FY12. Your Bank's performance under its Retail Banking Segment during the year under consideration is as under.

Growth under Retail Lending

Your Bank's Retail Loan Book consisted of five key products (namely Home Loan, Auto Loan, Education Loan, Traders Loan and Mortgage Loan) which together constituted 74.0% of total retail loans and other products namely LABOD/ ODBOD that constituted 21.0% of total retail loans during FY12. Besides, the products like Baroda Personal Loan and other miscellaneous product viz. Doctors Loan, Loan against Government securities etc contributed around 5.0% to total retail loans.

Total Retail Loan outstanding as on 31st Mar, 2012 was Rs 35,668 crore as against the level of Rs 32,435 crore as on 31st Mar, 2011. A growth of Rs 3,233 crore (9.97%) was registered under total retail loans during FY12 as against a growth of 33.76% (Rs 8,187 crore) registered during FY11. The growth in retail business of your Bank during FY12 was in line with the overall segmental business trend witnessed by the Indian banking industry.

Growth under Five Key Retail Products

Under five key products which constituted 74.0% of total retail loans, an absolute growth of Rs 3,102 crore (13.43%) was registered during the year FY12 as against a growth of Rs 4,095 crore (21.56%) during the previous financial year.

Under Home Loans, an absolute growth of Rs 1,594 crore (12.71%) was registered during the year FY12 as against a growth of Rs 2,227 crore (21.59%) during the previous year.

Under Auto Loans, an absolute growth of Rs 384 crore (18.76%) was registered in FY12 as against a growth of Rs 612 crore (42.58%) during FY11.

Under Baroda Traders Loans, an absolute growth of Rs 876 crore (18.63 %) was registered in FY12 as against a growth of Rs 852 crore (22.15%) during FY11.

Under Baroda Mortgage Loans, an absolute growth of only Rs 97 crore (4.68%) was registered during FY12 as against a growth of Rs 176 crore (9.40%) during FY11.

Under Education Loans, an absolute growth of Rs 150 crore (8.72%) was registered during FY12 versus a growth of Rs 226 crore (15.11%) during FY11.

Under LABOD /ODBOD, a growth of Rs 2,307 crore was registered. Under Baroda Personal Loans, a negative growth of Rs 2,183 crore was posted over the level of 31st Mar, 2011 due to repayment of Loan for Earnest Money Deposits during the year FY12. The repayments of short term loans primarily led to low growth under the total retail loans during the year under consideration.

NPA under the Retail Loan

The amount of Non Performing Assets as on 31st Mar, 2012 under Retail Loan was Rs 682 crore (1.91%) versus the level of

Rs. 662 crore (2.13%) as on 31st Dec, 2011 and Rs 649 crore (2.17%) as on 30th Sept, 2011. As on 31st Mar, 2011,the NPA was at the level of Rs 580 crore(1.79%).

Savings Bank Deposits

Your Bank's overall Saving Deposits stood at a level of Rs 72,570 crore as on 31.03.2012 registering a growth of Rs 9,611 crore (15.27%) over the level of Rs 62,959 crore as on 31.03.11. During the last FY 2010-11, a growth of Rs11,717 crore i.e. 22.87% was registered over the level of 31.03.2010.

Retail Term Deposits

Retail Term Deposit of your Bank stood at the level of Rs 1,18,727 crore as on 31st Mar, 2012 as against the level of Rs 95,325 crore as on 31st Mar, 2011 registering a growth of Rs 23,402 crore i.e. 24.55% versus the growth of Rs 12,295 crore i.e. 14.80% registered during the last financial year.

Under Total Retail Deposits i.e. Retail Term Deposit plus Savings Deposits, an absolute growth of Rs 33,013 crore i.e. 20.85% was posted during FY12 as against the growth of Rs 24,012 crore i.e.17.88.% registered during FY11.

Initiatives in Retail Banking during FY12

New Products Launched

- Baroda First Wealth Pack, a combo of two products namely Baroda First Savings Bank and Baroda First Regular Deposit jointly with two Insurance Products namely ULIP & Term Insurance Plan was launched on 2nd Jan, 2012. Until end-Mar, 2012, a total of 53,516 Packs were sold by your Bank.

- Baroda Samriddhi Quarterly Recurring Deposit & Baroda Samriddhi Half yearly Recurring Deposit Schemes were launched on 6th March 2012 primarily to facilitate Agriculturists, Self Employed & Professionals etc.

- Sales Operating Model was launched at 163 Baroda Navnirman Branches for developing Sales & Service culture to generate Business Leads.

Product Modification

- During FY12, a proposal was approved for increasing the maximum limit under Baroda Home Loan to Resident Indians and NRIs/PIOs at all Metro and Urban Centers from the existing Rs100 lakh to Rs300 lakh.

- Prepayment charges for foreclosure of Home Loan Accounts were completely waived with effect from 15th Dec, 2011.

Business Initiatives

- Savings Bank Deposit Campaigns: For mobilizing low cost deposits, a Savings Bank Deposit Campaign was launched on 1st Jun, 2011 for two months. The period of this campaign was later extended upto 31st Aug, 2011 foreseeing the challenge of mobilizing savings bank deposits in a rising interest rate scenario. To accelerate the pace of Savings Bank accretion, Savings Bank campaign was reintroduced during 2nd Jan, 2012 to 31st Mar, 2012, besides the launch of a special incentive scheme

i.e. "Evening with CMD & Picnic with staff" for the award winning branches & regional offices.

- Retail Loan campaign: With a view to harness the potential of ongoing festive season and to augment your Bank's Retail Loan Book with a special focus on Home Loans and Car Loans, a Retail Loan Festival Campaign was launched during 26th Sept to 30th Nov, 2011. Going by the success of Retail Loan Campaign, it was further extended till 31st Mar, 2012, with a modification by increasing ROI concession from 0.25% to 0.50% in Auto Loans. Both the SB Deposit Campaign and the Retail Loan Campaigns yielded good results.

- Opening of New City Sales Offices: Nine City Sales Offices were opened at Haldwani, Raebareilly, Faizabad, Raipur, Bhopal, Indore, Bengaluru, Ghaziabad & Rajkot during FY12.

- Opening of New Retail Loan factories: Three new Retail Loan factories were opened at Haldwani , Dehradun and Nasik during FY12.

- Delegation of Additional Discretionary Powers for Concessions: All Zonal Heads of your Bank were delegated with powers for considering concession to the extent of 100bps in the applicable interest rate on Baroda Trader Loan for mobilizing fresh business & to augment Retail Loan Book during FY12.

- Providing Group Life Insurance Cover: The Facility of Group Credit Life Insurance cover was approved for Auto

Loans and Personal Loan Borrowers, in addition to facility presently available for Home Loans & Education Loans. During FY12, a total of 18 death claims were settled by the insurers.

- Strategies adopted for Prevention of Frauds: A system of verification of various steps undertaken by the branches for fraud prevention under Retail Loans through a checklist was also introduced.

- Under the Home Loan Suraksha Beema Scheme (A Tie- up Arrangement with National Insurance Co. Ltd) a total of ten Accidental Death Insurance claims were settled by the insurer during the year under consideration.

Wealth Management Services

As a part of its customer centric measures, your Bank has been providing Wealth Management Services for its HNI & affluent customers since June 2004. At present, your Bank provides various 3rd party products in Life Insurance, Non Life Insurance including Health Insurance, Mutual Funds & Equity Trading under tie-up arrangements with different partners. Moving ahead further in the segment, your Bank also formed two joint ventures with leading international brands in Mutual Fund and Life Insurance.

The Baroda Pioneer Asset Management Co. Ltd., your Bank's joint venture in mutual fund in association with Pioneer Investments of Italy and the India First Life Insurance Co. a joint venture in life insurance with Andhra Bank and L&G of U.K. have successfully positioned themselves in the Indian marketplace with consistently improving performance since their inception.

The year FY12 was destabilizing for Indian equities with wild fluctuations impacting the overall sentiment of investors. In these testing times, your Bank changed its strategies by focusing on mutual fund investments through a SIP route to safeguard the customers from the unpredicted movement in the market. The strategies were successful with a large number of customers yielding benefits and your Bank's business performance in the format being intact while nurturing a disciplined saving/ investing habit amongst its customers. During the last two years, your Bank has been endeavoring to widen the scope of ASBA (application supported by Blocked Amount) facility by extending it to a number of designated branches and enabling an on-line ASBA Facility for its net banking customers. During FY12, your Bank introduced Syndicate ASBA Facility for those customers who wish to make IPO/FPO/NFO application through other intermediaries such as brokers.

It is heartening to note that the initiatives of your Bank under its Wealth Management segment have been encouragingly contributing to its overall non-interest income.

MSME Business

The Micro, Small and Medium Enterprises (MSME) segment is a vital component of Indian economy. This sector accounts for around 40.0% of the nation's total industrial production, 34.0% of industrial exports, 95.0% of industrial units and 35.0% of total employment in manufacturing and services sectors. The contribution of Services Sector within the SME segment is quite significant; especially the IT enabled services, hospitality services, tourism, couriering, transportation, etc.

To give a focused attention to emerging SMEs in India, your Bank has been considering other commercial units with a turnover up to Rs 150 crore at par with the SMEs. To promote the growth of SME Sector, your Bank has launched a special and novel delivery model, viz. SME Loan Factory, which at present, is operational in 46 centres of your Bank and well accepted in the market place. The SME Loan Factory is an innovative model for streamlining processes and for timely sanctions of SME loan proposals. The model comprises of the Central Processing Cell for speedy appraisal and sanctioning of proposals within the stipulated deadline and a sales team to follow up on leads generated by branches. Given its success, your Bank has plans to open more such loan factories in the ensuing year. Your Bank has SME Loan Factories at all major business centres across the country, viz. Agra, Ahmedabad, Allahabad, Bangalore, Bareilly, Baroda, Bhilwara, Bhubhaneshwar, Bulsar, Bharuch, Chandigarh, Chennai, Coimbatore, Dehradun, two Factories in Delhi, Ernakulam,Gandhidham,Gorakhpur Hyderabad, Haldwani,Indore, Jaipur, Jamshedpur, Jamnagar, Jodhpur, Kanpur, Kolhapur, Kolkata, Lucknow, Ludhiana, 3 Factories in Mumbai, Meerut, Mehsana, Nagpur, Nashik, Pune,Patna, Rajkot, Raipur, Surat, Shahajahanpur, Varanasi and Vishakhapatnam. These SME Loan Factories sanctioned loans aggregating Rs 18,619 crore during FY12 as against Rs 14,530 crore in the previous year.

Growth of Business

The total outstanding in MSME Sector works out to Rs 34,512 crore as on 31st March 2012. The growth in lending to MSME Sector during the last three years is given in the table below.

Year Growth (%, YoY)

2009-10 43.98%

2010-11 29.63%

2011-12 26.11%

The percentage growth of MSME credit during FY10 was relatively high as the advances up to Rs 20 lakh to Retail Trade were classified for the first time under the "Micro & Small Enterprises Sector" during this year in line with the RBI's revised guidelines issued during September, 2009. The growth rate was normalized during the year FY11.

The Bank took the following initiatives in its SME business

segment during the year under review.

- The SME advances of Rs 34,512 crore as of end-Mar 2012 reflected a growth of Rs 7,147 crore (26.11%) over the SME advances of Rs 27,365 crore in the previous year.

- The advances of Rs15,455 crore to Micro Enterprises in total credit of Rs 28,047 crore to MSE sector stood at 55.10% in FY12 comfortably reaching the mandatory target fixed by the RBI.

- The SME advances as on 31st Mar, 2012 contributed 16.8% to the gross domestic advances of your Bank.

- The advances to Micro & Small enterprises reached the level of Rs 28,047 crore as against the government set mandatory target of Rs 27,000 crore by end-Mar, 2012.

- I n FY12, your Bank opened ten New SME Loan Factories and eight New SME Specialized Branches.

- Your Bank introduced a New Product named as "Baroda Channel Financing" on pilot basis during FY12 to further promote its MSME business.

- Your Bank also introduced "Baroda Entrepreneur Awards" for Micro & Small Enterprises

Initiatives in MSME Financing During FY12

1. Your Bank introduced five new customer-centric area- specific products to suit the local cluster needs during FY12 while renewing the existing ten customer-centric area specific products.

2. Your Bank sponsored a Workshop on "Management Skills to source financing and Management of Technology by SMEs" for entrepreneurs arranged by AIMA at Hyedrabad, Ahemedabad, Jaipur.

3. Your Bank introduced "Protrack"{an e-tracking system for SME credit proposals} with a view to have a firm control over turnaround time.

4. Your Bank celebrated SME Festival from 1st January

2012 to 31st March, 2012 in order to give boost to SME advances. Some concessions in rate of interest and service charges were also announced for loans sanctioned during the festival period.

5. Your Bank participated in the Workshops arranged by the CGTMSE on Bank Credit to Micro & Small Enterprises and the Role of Credit Guarantee.

6. Your Bank focused on collateral free credit under the CGTMSE scheme through special campaign.

7. To achieve total customer relationship through enhanced cross selling, several meetings at different locations were conducted and various trade bodies were involved at the national and the state level.

8. Your Bank undertook continuous knowledge updating and skill building of processing/ marketing officers attached to its SME factories through external training and special courses at the training centers and staff college.

9. Your Bank introduced monthly performance ranking to share performance of SME Loan Factories amongst all and to recognize/ felicitate/ award the best performing SME Loan Factory on Half yearly/ annual basis.

10. The MOU was entered by your Bank with the NSIC for sourcing applications of MSME borrowers from it.

11. Your Bank released a booklet called Practical Guide to help entrepreneurs by giving them information on Your Bank's SME products and also on the CGTMSE scheme.

12. Your Bank also signed a MOU with four credit rating agencies for rating of the SME accounts.

Rural and Agricultural Lending

As you all are aware, your Bank has always been a frontrunner in the area of Priority Sector and Agriculture lending. It has been harnessing the vast potential of the rural market through its wide network of 1,270 rural branches and 1,045 semi-urban branches.

Even during FY12, your Banks opened 314 new branches in rural and semi-urban areas.

Your Bank is the proud Convener of State Level Banker's Committee (SLBC)in the states of Uttar Pradesh and Rajasthan. Your Bank shoulders the Lead Bank Responsibility in 45 districts in the states of Gujarat (12),Rajasthan (12), Uttar Pradesh (15), Uttaranchal (2), Madhya Pradesh (2) and Bihar (2).

Your Bank has also sponsored five Regional Rural Banks (RRBs) in various states with a network of 1,300 branches and total business of Rs 21,700 crore as of end-March, 2012.

Performance of Priority Sector Lending in FY12

Priority Sector Advances of your Bank surged from Rs 57,364 crore as at the end-March 2011 to Rs 68,527 crore as at the end-March 2012 and formed 43.37% of the Adjusted Net Bank Credit (ANBC) against the mandated target of 40.00%.

Agriculture Advances: The Direct Agriculture advances of your Bank rose to Rs 21,423 crore with a rise of 24.86%over the previous year with an absolute growth of Rs 4,266 crore during the year. The total agriculture advances of your Bank recorded a growth of 18.38% over the previous year and rose to Rs 29,036 crore as at end-March 2012. Your Bank's Direct Agricultural advances formed 13.56% of ANBC as at end-March 2012 against the mandated target of 13.50%. Even the Total Agricultural Advances were at 18.06% of ANBC against the mandated target of 18.00%.

Under its flagship agriculture loan product "Baroda Kisan Credit Card", your Bank issued as many as 3,09,685 Credit Cards during FY12 to provide credit to farmers. Your Bank financed as many as 3,73,283 new farmers during FY12. As a part of its microfinance initiatives, your Bank credit linked 19,455 Self Help Groups with an amount of Rs 214 crore during FY12 thereby taking the total number of SHGs credit linked to 1,54,397 amounting to Rs1,171 crore.

Business and Social Initiatives

Your Bank introduced various initiatives/strategies during FY12 to harness the emerging opportunities for rural and agriculture lending. Some of them are mentioned below.

1. To augment the Agriculture advances, your Bank conducted special campaigns viz. Kharif and Rabi campaign for crop loans under which the disbursements of Rs 3,676 crore and Rs 2,013 crore were made respectively. Another Campaign for Investment Credit was also launched under which disbursements of Rs 1,178 crore were made.

2. Your Bank organized 5,944 Village Level Credit Camps and disbursed Rs 3,338 crore to 2,84,062 borrowers during FY12.

3. Your Bank identified 450 Thrust Branches across India to enhance Agriculture lending which constituted 33% of total Agriculture lending as at end-March 2012.

4. Your Bank formulated various area-specific schemes tailor made to the needs of local requirements, particularly where there is a concentration of industries like Rice Mills, Cold storages, cotton ginning units, Poultry units, etc. Suitable concessions in rate of interest, charges, etc. were allowed under these schemes to garner maximum possible business. As many as 22 area specific schemes were formulated to increase your Bank's agricultural lending.

Baroda Grameen Paramarsh Kendra (BGPK) is another initiative undertaken by your Bank to help the rural community by providing credit counseling, financial literacy and other services like information on the prices of agricultural produces, scientific farming, etc. Your Bank had 52 BGPKs as on 31st March, 2012.

About ten more Baroda Swarojgar Vikas Sansthan (BSVS),Baroda R-SETI Centers were opened during FY12. With this, the total number of BSVS has gone up to 46. Thus, each of your Bank's Lead Districts now has a R-SETI as per the GOI guidelines. Ajmer BSVS centre is exclusively for women entrepreneurs. The BSVS are primarily the institutes for training the youth and imparting knowledge and skills required for taking up self-employment ventures. During FY12, 42,786 youth beneficiaries were trained out of which 25,791 have established self-employment ventures. Out of the total 1,22,228 beneficiaries trained by these centers so far, 75,050 have established their self employment ventures.

Financial Literacy and Credit Counseling Centres (FLCC)-"SARATHEE"

Based on the guidelines issued by the RBI, your Bank has established 39 FLCCs, christened as "SARATHEE" to impart financial literacy and credit counseling services to the needy to help them avail financial services from Banking system and also to provide counseling services to those who are under financial distress due to debt burden.

Your Bank has opened these centers under its BSVS trust and counseling services are provided to the concerned free of cost.

Your Bank has opened 21 new FLCCs during FY 12, taking the total number of FLCCs to 39 by end-Mar, 2012.Your Bank will be opening FLCCs in each of its lead district in due course.

Business Facilitators Model

This model has been implemented across the country to accelerate Financial Inclusion of the excluded segment as well as to augment agriculture portfolio. Business Facilitators will mainly canvass loan applications for your Bank for which Bank will pay them compensation. Individuals including retired Bank and Government staff, NGOs, Farmers clubs and SHGs are engaged as agents to greatly improve your Bank's outreach in the rural/semi-urban areas.

Micro Loan Factory

Your Bank has a opened Micro Loan Factoryat Rae Bareilly and Sultanpur in U.P. The Micro Finance Loan Factory has a mobile van with facilities and all related stationeries/ documents on SHG financing. It is manned by officers who are duly authorised to sanction and disburse loans upto Rs 25,000 to SHGs on the spot and at their door steps.

Performance of RRBs Sponsored by the Bank

Your Bank has sponsored five RRBs as under.

- Baroda Uttar Pradesh Gramin Bank,

Head Office: Raebareli.

- Baroda Rajasthan Gramin Bank,

Head Office: Ajmer.

- Baroda Gujarat Gramin Bank,

Head Office: Bharuch.

- Nainital-Almora Kshetriya Gramin Bank,

Head Office: Haldwani.

- Jhabua-Dhar Kshetriya Gramin Bank,

Head Office: Jhabua.

The aggregate business of these five RRBs rose to Rs 21,693 crore as of March, 2012 from Rs 18,803 crore as at end-March, 2011, registering a growth of 15.37%.

The five RRBs together posted a Net Profit of Rs 120 crore during FY12 as against Rs 117 crore earned during FY11.

The "Net Worth" and the "Reserves and Surplus" of all these RRBs put together improved from Rs 730 crore at end-March, 2011 to Rs 883 crore at end-March, 2012 and from Rs 453 crore at end-March, 2011 to Rs 566 crore at end-March, 2012, respectively.

Bank's Efforts towards Financial Inclusion (FI) Targeted villages and models adopted

- As per the original communication received from RBI in January 2010, your Bank prepared a Financial Inclusion (FI) plan to cover 20,000 villages under Financial Inclusion within a span of three years commencing from 2010-11 to 2013-14.

- However, the Finance Minister in his speech on Union Budget for FY11 gave emphasis on the coverage of villages having population of more than 2,000 under FI by March 2012.

- Accordingly, 2,864 villages having population of more than 2,000 were allocated to your Bank through SLBCs for provision of basic banking services by March 2012.

- Out of the above, 1,200 villages were targeted to be covered in FY11 and the rest in FY12.

- Your Bank has adopted ICT based Business Correspondent (BC) model and Mobile Banking van model for coverage of the allotted villages. Wherever feasible, new branches are also being opened.

Service Providers

- Your Bank has selected M/s TCS and M/s HCL Info systems as the service providers for end to end solution under the BC model. The service area has been allocated to these service providers.

- Out of 2,864 villages allocated to your Bank by SLBCs, 1,979 villages are allotted to M/s tcs and 885 villages to M/s HCL.

Technology and Data Security

- The FI data and transactions are integrated to your Bank's CBS (Core Banking Solution) through an FI server/ Gateway of the service provider. The FI server is kept in the Data Centre of your Bank for which the vendor will have only limited access to the application software for the purpose of maintenance. The data will be under the control of your Bank. Hence the data security is well taken care of.

- Smart cards are issued to the customers after uploading the accounts in CBS and KYC verification by the link branches.

Business Correspondents (BC)

- The service provider has appointed corporate BCs at the state/zonal level. The field level business agents are selected in consultation with your Bank's link branches following the BC selection policy approved by the Board.

- The technical training to BCs is provided by the service provider as and when BCs are appointed. Your Bank's R-SETI, Training Centres and Baroda Grameen Paramarsh Kendras (BGPK) have been providing training on banking products and customer service. The BCs are also encouraged to take up the BC certificate programme of IIBF {Indian Institute of Banking & Finance, Mumbai} through accredited training establishments. All your Bank's BSVS centres are accredited by IIBF for this purpose.

Training of Your Bank Staff in Financial Inclusion

- Training to about 1,079 Branch Managers involved in FI activity was completed by Your Bank's training centres during FY12.

- Your Bank has tied-up with National Institute of Rural Development (NIRD), Hyderbad for designing and conducting special training programme for its officers on FI.

- Your Bank has also introduced e-learning module on FI on your Bank's intranet portal for educating the staff.

Monitoring the Implementation under Financial Inclusion

- Your Bank has a clear structure for implementation and monitoring of Financial Inclusion.

- In order to have an effective supervision of the BCs, retired bank officials are appointed as BC supervisors for every 10-15 BC agents.

- Your Bank's Chairman & Managing Director (CMD), Executive Directors (EDs) and General Managers (GMs) at the Corporate Office are visiting villages in different states.

- Besides, all the regional heads and zonal heads are also visiting the villages in their respective regions/ zones and monitoring the activities regularly.

- Your Bank's Board reviews the implementation of Financial Inclusion in your Bank every month on various parameters suggested by the Ministry of Finance, Government of India.

Publicity

- Specially designed banners/posters/leaflets are being used by your Bank's Zones/Regions/Branches at various stages of FI.

- Leaflets/posters have been prepared in regional languages and distributed in the villages.

- Usage of publicity material has helped to keep the people updated with the FI concept and also to remain informed about the FI enrolment dates, venue etc.

- Your Bank's Swabhiman logo is being used in village sign boards, BC ID cards, T- shirts, Caps etc.

Financial Literacy Efforts

- Your Bank has opened 39 Financial Literacy and counseling Centres (FLCC) out of 45 lead districts of the Bank.

- Your Bank has also established 46 R-SETIs (Baroda Swarojgar Vikas Sansthan) of which 42 are in its lead districts which will also facilitate financial literacy efforts.

- Village level meetings are organized by your Bank in all the identified villages to create awareness on the banking products and services.

- Camps are also organized in the villages at the time of enrolment.

Mobile Banking Vans

- Your Bank has introduced Mobile Banking vans for increasing the pace of Financial Inclusion.

- These vans will have connectivity to CBS through CDMA technology and they visit the villages on specified dates and time. The services are provided by your Bank's own staff travelling in the van.

- Five such Vans have been made operational and they cover around 41 villages. (One in Gujarat, two in UP,one in Bihar and one in Goa.)

Performance

- Your Bank has completed coverage of 100% villages allotted under financial inclusion well before the dead line of end- Mar, 2012. More than 7.61 lakh FI accounts have been opened in these villages as against the target of 7.10 lakh.

Ultra Small Branches (USBs)

The technology based BC model is an evolving concept and various issues were encountered by your Bank in implementation of FI through this model. The Ministry of Finance, Government of India as well as the RBI were issuing various guidelines from time to time to make implementation of financial inclusion more effective. In the strategy and guidelines on financial inclusion issued by Ministry of Finance in Oct, 2011,there was a suggestion to open brick and mortar branches in larger habitations with population of 5,000 and above in the under-banked districts. However, keeping the viability of brick and mortar branches in such villages, they further issued guidelines on opening of thin structures called Ultra Small Branches in all the villages allotted for financial inclusion.

USB Model Adopted by the Bank

- A BC is appointed in a village and provided with POS machine/ hand held terminal to provide banking services in the village through USB.

- The place for USB is identified preferably in Gram Panchayat or Common Service Centre in village.

- The board is displayed inside each USB indicating various banking services being provided by your Bank at USB. There is also a board giving details of BC, his contact number, name/contact number of link branch, fixed day/ time of visit by officer etc. for the convenience of villagers.

- The business correspondent is providing services like cash deposits, payments up to certain limit, remittances, account balance enquiry, mini-statement etc.

- A bank officer from the link branch visits the USB once in week at pre-fixed time and day for financial inclusion activities in village, as specified by the Ministry of Finance.

- Minimum furniture such as table, three to four chairs etc. have been provided in an ultra small branch.

Initiatives Taken for Effectiveness of USBs

- The village level publicity campaign has been conducted to create awareness amongst the villagers, with the help of Gram Panchayats as well as in some cases block development offices.

- The signboard along with swabhimaan logo is displayed at a prominent place in the village indicating details of the BC and link branch along with working hours.

- The BCs are provided with a brief profile of the villages including population of village, number of households in village, number of KCCs/ GCCs issued in respective village and other details, so that they can perform with better focus on village needs.

- All USBs are mapped for weekly visits by the officers of respective link branch. We have also devised a proper reporting system for monitoring these visits by the respective regional offices and corporate office.

- All the BCs are provided with the uniform T-Shirts, Caps and Identity cards in all the villages.

- The uniform posters about the services available at USBs are provided to all the zones and regions in local languages for displaying at the USBs.

- In order to overcome shortages and cater to the requirement of manpower in officer cadre, we are starting capacity building programmes to train other cadres to perform the job role of officers in the same spirit as desired by the MOF from visiting officer. The preference would be given to local staff as far as possible so that they can converse in the local language and get appropriately connected with villagers. This will also facilitate a confidence building amongst the villagers about the FI initiatives of your Bank/ Govt. of India. The pilot project of such capacity building initiative would be started in Gujarat and rolled out in other states upon success of said pilot project.

Advances to SC/ST Communities during FY12

The outstanding advances granted by your Bank to SC/ST communities have been growing year after year. This is evident from the fact that the outstanding advances granted to these beneficiaries went up from Rs 3,760 crore as at end-March, 2011 to Rs 4,336.02 crore as at end-March, 2012. In fact, the SC/ST communities accounted for a share of 27.0% in the total advances granted to weaker sections by the Bank during the year under review. Furthermore, a special thrust is laid by your Bank in financing SC/ST under various government sponsored schemes namely Swaranjayanti Gram Swarojgar Yojana (SGSY),Swarna Jayanti Shahari Rojgar Yojana (SJSRY), Prime Minister Employment Generation Programme (PMEGP), etc. Baroda Swarojgar Vikas Sansthans (BSVS) have been giving due preference to SC/ST communities while selecting the trainees. It is heartening to indicate that so far, these centres have trained 55,761 youths under the SC/ST category.

International Business

The global economy has not fully come out of the turmoil witnessed following the global financial crisis in 2008 in spite of the prompt measures taken by several countries around the world. Even in such challenging scenario, the International Operations of your Bank could achieve excellent results during FY12 and again proved the Bank's resilience to global shocks.

In order to achieve the stated goals, it was necessary to continuously understand the economic and banking environment in which your Bank operates, take lessons and make suitable changes in the business approach and actions. Your Bank kept a continuous watch on the trends emerging in the economic/financial sectors of the countries of its operation by factoring in the impact of global events.

Your Bank is in an advantageous position having large network of overseas branches and strong customer base built over the years. Your Bank has taken various technological and other initiatives at its overseas centres to garner a larger share of the business.

The excellent performance was possible during FY12 due to the Bank's focused attention and persistent efforts to stretch and improve upon its own capabilities and the support that it received from all its stakeholders.

The International Operations of your Bank are keeping pace with the fast changing environment to become increasingly more competitive in global terms and aiming for higher growth with profitability

The Branch Expansion plan was continued during the year to take advantage of the business opportunities. During the year FY12, five new branches/offices were opened, including four branches of the subsidiaries. Your Bank primarily concentrated on expanding the network in countries where it is already present to tap the opportunities offered by the upcoming centres and enhance the market share in the country of operation.

Business and Profit Performance

During FY12, the total business (Deposits Advances) of your Bank's overseas branches registered a growth of 44.64%. The Customer Deposits increased by 40.41%, Total Deposits by 45.23 % and Advances by 43.92%. The growth numbers look slightly aggressive because of the depreciation of rupee to the tune of 14.11% between end-March, 2011 and end-March, 2012.

During FY12, the International Operations contributed a sizeable 28.27% to the Bank's global business in line with its business aspirations.

Total Assets

Total Assets of your Bank's International Operations increased from Rs 91,273 crore as of March 2011 to Rs 1,28,398 crore as on March 2012 registering a growth of 40.67% during the year.

Profit

The Gross Profit for the year FY12 registered a healthy growth of 48.51% over the level of previous year. The Net Profit too recorded commensurate growth of 45.19% during the year. Your Bank was able to improve the spreads and also show good increase in Other Income.

Contribution of international operations to your Bank's global Net Profit is 23.35%.

Asset Quality

In the current scenario of economic downturn and uncertainties, there was a stringent monitoring of assets by the Bank's Top Management to safeguard your Bank's interest. Your Bank has put in place an efficient loan processing, credit audit and credit monitoring mechanism.

Borrowal accounts experiencing liquidity mismatch/crunch due to recessionary trends prevailing in the global economy/delay in projects for reasons beyond their control were restructured during the year FY12 based on their future cash flows and keeping the RBI guidelines in the matter in focus. These accounts as well as the accounts restructured in previous years were monitored regularly to maintain the asset quality and avoid any slip back.

Gross Advances during the year increased by 43.73% over the level of Mar'11, which means your Bank could maintain the healthy growth trend even during the challenging times. There were a few slippages and the Gross NPAs of your Bank as percentage to Total Advances marginally increased from 0.62% as of Mar'11 to 0.68% as on Mar'12.

International Presence

Your Bank's international presence covered 24 countries through its 89 offices during FY12 as under.

Bank's Overseas Branches/Offices 55

Bank's Representative Offices 2

Branches of Bank's Overseas Subsidiaries 32

Total 8

In addition to the above, your Bank's associate in Zambia has 14 branches.

Overseas Expansion

During the year FY12,your Bank opened five new branches/ offices (including that of the subsidiaries). An Electronic Banking Service Unit (EBSU) was opened at Hamriya Free Zone, Sharjah (UAE) and four branches of the subsidiaries were opened at Ovino Market (Uganda), Kakamega (Kenya), Nyali (Kenya) and Mon Repos (Guyana). The Representative Office in Malaysia was closed during the year as the Joint Venture Bank, namely, 'India International Bank (Malaysia) Bhd.' is expected to commence operations during the year FY13.

Future Plans in Overseas Business

Your Bank has initiated steps for further expanding its overseas network to tap the opportunities for canvassing business and enhancing the profitability. Necessary infrastructure is being created for further expanding the network in UAE, Oman, Mauritius, Uganda, New Zealand, Tanzania, Botswana and Ghana.

Your Bank has received 'In Principle' approval for up gradation of its Representative Office in Australia to a branch. An approval of RBI is awaited for opening of two additional branches in U.K. New centres are being identified in countries where your Bank is already present and also in new territories for further expanding the branch network.

Syndication Centre

Your Bank has Global Syndication Centres at London and Dubai which focus on the business of Syndication Loans in International Market. The Offshore Banking Unit in Singapore has been further strengthened to play a more active role in canvassing the business. The International Merchant Banking Cell (IMBC) set up at the Bank's Corporate Office, Mumbai plays a supportive role to the Regional Syndication Centres and also canvasses substantial business as there was increased demand from Indian Corporates for Foreign Currency resources.

The Bank's IMBC also actively participates in loan origination.

Products and Services

Your Bank has taken several steps to leverage the technology for introduction of products and services to meet the requirements of customers in the area of operation.

Your Bank's products and services are compatible with those offered by multi-national banks and local banks. These are being popularized through marketing campaigns in electronic and print media.

Technology

- The number of ATMs at overseas territories and subsidiaries increased to 76 (45 onsite and 31 offsite) as on 31st March, 2012 from 68 (42 onsite and 26 offsite) as on 31st March, 2011.

- The Global Treasury Solution is implemented by your Bank at UK, UAE, Bahamas, Bahrain, Hong Kong, Singapore and Belgium.

- The Centralized SWIFT activity is operating from the Data Centre of your Bank.

- All Territories/Subsidiaries except UK and USA are routing their Swift operations through SWIFT Cell, Data Centre.

- The Payment Messaging System implemented is a middleware between Core Banking Solution (Finacle) and SWIFT, which help in "Straight Through Processing of Incoming and Outgoing SWIFT Messages" with Anti Money Laundering check. It is implemented in all Territories/ Subsidiaries, except in UK and USA.

- The Anti Money laundering Erase (Batch mode) is implemented in all the overseas centres of your Bank except in Belgium and USA.

- An "Anti Money Laundering Online List Matching Solution" is also implemented in all the overseas centres with the exception of USA.

E-Banking in Overseas Operations

Your Bank is gradually implementing and popularizing the e-banking services at its overseas centres.

Transaction based e-banking has been implemented in UAE, UK, Mauritius, Fiji, Seychelles, Uganda, Kenya, Botswana and New Zealand. It is in the process of being implemented in Oman and Tanzania. (At present, a view based e-banking is available at both these centres).

In T&T, Guyana and South Africa, it will be introduced in the next phase which will start shortly.

The transaction based e-banking is being implemented gradually at the Overseas Centres looking to their retail base and the cost effectiveness.

Risk Management in Overseas Operations

Your Bank implemented Basel II guidelines at all its overseas territories with effect from 31st March 2008 and has already adopted Standardised Approach for Credit Risk, Standardised Duration Method for Market Risk and Basic Indicator Approach for Operational Risk.

The Risk Management Systems and their implementation are being continuously strengthened. A separate Risk Management Department has been set up at all centres to effectively deal with the credit, market and operational risk. Risk Managers are posted at all the overseas territories and subsidiaries of your Bank.

During the year under review, BOB RAM Model was implemented at all the overseas centres for capturing vital information related to advances accounts and their pricing.

An ASCROM Model for Asset Classification and Credit Monitoring is also in the advanced stage for implementation at your Bank's overseas centres.

Regulatory Compliance

Your Bank is well known for its regulatory compliance and has always followed home country regulations rigorously.

Your Bank has a dedicated compliance team at major overseas centres for ensuring regulatory compliance across all the businesses and operations. They are responsible for identification and assessment and compliance related matters from a regulatory compliance perspective and monitoring and reporting.

All the overseas centres have prudential policies in place as per the local regulatory requirements. The territories/subsidiaries ensure that these are periodically reviewed in line with the type of business undertaken, changing scenario and taking into account modifications if any in the regulatory guidelines.

Treasury Operations

Your Bank operates a State of the Art Dealing Room at Baroda Sun Tower at its Corporate Office in Mumbai. Through this dealing room your Bank is well positioned to scale up its Treasury Operations. The Treasury handles your Bank's domestic treasury operations and covers activities in various markets i.e. Foreign Exchange, Interest Rates, Fixed Income, Derivatives, Equity and other alternative asset classes. The advanced technology platforms are used by your Bank to offer a basket of financial products to its clients including Interest rate swaps, currency swaps, forwards and options.

Your Bank has also put in place a sophisticated Automated Dealing system to offer auto generated real time foreign exchange rates to the clients of its authorised branches spread across the country. As a customer friendly initiative, during the year FY12, enhancements were made in the "Global Treasury Solution" facilitating instant flow of information about credits received by your Bank in favour of its customers through its foreign correspondents.

Under the Business Process Re-engineering, your Bank has successfully implemented Global Treasury solution across major financial centres. The Global Treasury Platform is running smoothly in Mumbai, London, Bahamas, Brussels, Dubai, Bahrain, Singapore, Hongkong and New York.

During the year FY12, managing growth and price stability emerged as the key challenges against the backdrop of a slowing economy weighed down by the impact of tight monetary policy and slower economic growth. The advance estimates of Indian economy suggest a growth of approximately 6.9% in FY12, after having grown at the rate of 8.4% in each of the two preceding years. This indicates a slowdown compared not just to the previous two years but 2003 to 2011 (except FY09 a year of global financial crisis). During FY12, the RBI hiked interest rates by 125 bps taking repo rate to 8.50% before signaling a pause in Dec, 2011. To infuse liquidity into the system, the RBI reduced CRR [Cash Reserve Ratio] by a cumulative 125 bps in the last quarter of FY12 and conducted open market operations to the extent of Rs 1,29,252 crore.

Your Bank's Treasury offers customized solutions using available products viz IRS, CIRS, Forwards and Options to meet the Interest rate and Foreign Exchange risk mitigation requirements of the corporate clients. During FY12, your Bank's Treasury Division was active in taking benefit of the arbitrage opportunities available between various Treasury market asset classes including Money Market CBLO, Call, Market Repo, Government Securities and Forex markets. The Treasury actively utilised the market movements and used Overnight Indexed swaps, INBMK swaps for harnessing available hedging and trading opportunities.

Tight monetary policy coupled with a higher than announced borrowing program resulted in the benchmark 10 year Government security touching a high level of 9.0% in Nov, 2011. Against this backdrop, the Treasury focused on maintaining appropriate duration of portfolio, keeping minimal adverse impact on valuation and maintaining a good average yield on investment portfolio. The average yield on Domestic SLR investments was 7.87%. During FY12, the Treasury earned Rs 6,032 crore as Interest/Discount earnings, while the Profit on Sale of Investment and Exchange Earnings were Rs 622 and 412 crore, respectively.

The Indian Equity markets were subdued for most part of FY12. This was due to the cumulative impact of weaker recovery of the US economy, European sovereign debt crisis and muted FII inflows into the emerging markets including India. The FII inflows picked up during the last quarter resulting in the market moving to higher levels. The Equity Desk of the Treasury actively churned its portfolio and booked profits at regular intervals whenever an opportunity emerged in the markets.

The unfolding of the euro zone crisis and uncertainty surrounding the global economy have impacted the Indian economy causing drop in growth, higher current account deficit (CAD) and declining capital inflows. As in 2008, the transmission of the crisis has been mainly through the Balance- of-payments (BoP) channel. Export growth too decelerated in the third quarter of FY12, while imports remained high, primarily because of very high international oil prices. At the same time, foreign institutional investment flows declined, straining the capital account and the rupee exchange rate that touched an all-time low of Rs 54.23 per US dollar on 15 December 2011 during intra-day trading

The Foreign exchange desk of the Treasury retained its position as one of the premier market players in the Forex desks of the Public Sector Banks. The Proprietary trading desk was active in cashing in of available arbitrages, using volatility in the markets and mobilised resources in a tight liquidity position impacting the Indian markets. The turnover of the Foreign Exchange deskof your Bank's Treasury increased by nearly 14.0% on y-o-y basis during FY12.

Your Bank's Treasury Mid-Office monitors market exposures and limits fixed by the Board of Directors, on a real time basis. The Risk Management parameters, including Value-at-risk (VaR) are used to measure Market Risk on all portfolios. These measures are backed up by the Back Testing on risk numbers and Stress Testing of various investment and currency portfolios.

Corporate Social Responsibility (CSR)

As a responsible corporate citizen, it has been the vision of your Bank to empower the community through socio-economic development of underprivileged and weaker sections. In its continued efforts to make a difference to the society at large, your Bank intensified its efforts further in this direction in FY12.

Your Bank has established Baroda Swarozgar Vikas Sansthan (Baroda R-SETI) for imparting training to unemployed youth, free of cost for gainful self employment and entrepreneurship skill development which help them improve their family economic status and also gives a boost to various regional economies within these locations. All the Lead Districts of your Bank have R-SETI each. About 46 such Sansthans have been established by your Bank in which more than 1,22,000 youth have been trained and around 75,000 have been gainfully self employed.

Your Bank has established 52 Baroda Gramin Paramarsh Kendra for knowledge sharing, problem solving and credit counseling for rural masses across the country. In order to spread awareness among the rural mass on various financial and banking services and to speed up the process of financial inclusion, your Bank has also established 21 Financial Literacy and Credit counseling Centres (FLCC)during FY12 making the total number of FLCCs to 39.

Asset Quality Management

The year FY12 has been a challenging year for the banking industry to maintain the Asset Quality due to a fragile economic environment. However, your Bank has continued its practice of rigorous monitoring and recovery of the NPA portfolio besides preventive mechanism for restricting slippages at the minimum level. Your Bank has continued its leadership position in the NPA management area in the Indian banking sector.

Indian banks, in general, witnessed heavy incidence of slippages in FY12 due to volatile financial markets both within and outside India, higher inflation and higher interest rate regime throughout the year FY12. In spite of various depressed economic parameters impacting the Bank, fresh slippages, during the year,were kept under control at 1.44% of the opening Standard Advances of your Bank. Against the backdrop of high slippages, the ratio of Gross NPA to Gross Advances was at 1.53% as on 31st Mar, 2012.Consequently, the ratio of Net NPA to Net Advances marginally increased to 0.54% by end-Mar, 2012.

Your Bank continued to maintain the Loan Loss Provisioning ratio at higher level than the mandated norms set by the RBI during FY11. Its Loan Loss Provisioning ratio was higher at 80.05% as on 31st Mar, 2012 after taking into account the Prudential/ Technically Written-off advances.

During the year under review, your Bank laid down a comprehensive structure of recovery and credit monitoring function at the Branch, Region, Zone and Corporate levels. Besides this, the Nodal officers at each DRT centre were assigned the role of a follow-up of legal cases on day to day basis so as to minimize the delay in obtaining decrees and execution thereof in order to expedite and maximize recoveries. Additionally, Lok Adalats, Recovery Camps and Village Chaupal Meets were regularly conducted by your Bank's branches to reduce long pending cases and expedite recoveries in small accounts.

Your Bank continued its emphasis on follow-up mechanism to explore recovery prospects of NPA accounts. The system of monitoring of large value NPA accounts of say Rs 25 lakh and above directly from the corporate office has ensured proactive action by branches, advocates, recovery agents, etc. Therefore, the cash recovery in NPA accounts during FY12 was Rs 580 crore, much higher than the cash recovery of Rs 455 crore during FY11. The upgradation was substantially higher at Rs 336 crore during FY12 compared to Rs 189 crore during FY11.

During the year FY12, your Bank laid specific focus on recovery of small accounts by organizing Lok Adalats and Recovery Camps at village/town level. Your Bank also launched an incentive- linked recovery scheme called "Sankalp - IV" to enlist personalized attention of each and every staff member in pursuing recovery efforts of small value accounts with an outstanding up to Rs 15 lakh. The cash recovery made during the year FY12 under the scheme was very impressive at Rs 191 crore.

The asset classification wise breakup of advances portfolio of your Bank is as under.

(crore)

Asset Category (Gross) 31st March 2012 31st March 2011

Standard 2,86,542.59 2,28,173.03

Gross NPA 4,464.75 3,152.50

Total 2,91,007.34 2,31,325.53

Gross NPA is comprising of:

Sub-standard 2,661.82 1,097.23

Doubtful 1,318.71 1,336.64

Loss 484.22 718.63

Total Gross NPA 4,464.75 3,152.50

Information Technology

Your Bank has undertaken a total end-to-end business and IT strategy project covering your Bank's domestic, overseas and subsidiary operations.

- Your Bank has built the best of technology infrastructure by implementing a state-of-the-art Data Centre conforming to Uptime Institute Tier-3 standard and also a Disaster Recovery Site in different seismic zone with redundancy built in every single point of failure to ensure uninterrupted banking service delivery to customers. After successfully migrating Data Centre to new Data Centre in the Bank's own premises during previous financial year, your Bank had undertaken Disaster Recovery Centre expansion during the year to support its business growth and technology expansion.

- Your Bank has also undertaken various other technology initiatives like windows server virtualization, desktop virtualisation and backup consolidation as green initiatives and also to improve Data Centre operational efficiency. Bank wide network was migrated to new technology based on MPLS for improving uptime and on demand upgrade. Enterprise Management System was upgraded and new modules deployed to effectively manage and monitor Bank's growing IT infrastructure.

- The Core Banking System was migrated to higher version with enhanced features. Various new modules like Fixed Assets maintenance, sales tracker module, centralized service tax, EBRC (Bank Realisation Certificate) module, account number portability, workflow automation for New Pension Scheme - Swavalamban were implemented during the year.

- I n order to enhance security and confidence in Internet Banking, your Bank introduced enhanced security features by deploying Fraud Management Solution, including two factor authentications. Your Bank continued to add more facilities under its Internet Banking channels. Internet Banking, viz., Baroda Connect, now provides speedy and secured facility to transfer funds to self, third party (within BOB) and inter-bank. Other facilities available are online opening of Fixed Deposits, Railways Freight Payment, online payment of Direct and Indirect Taxes and certain State Government Taxes, utility bills, rail tickets, online shopping, donation to temples and institutional fee payment. Corporates also have the facility of direct salary uploads, trade finance. Various State Tax payments have been enabled during the year. The SMS Alerts, RTGS/ NEFT transactions are also provided in internet banking portal. ASBA (Application Supported by Blocked Amount) functionality has been provided in Baroda Connect for Online subscription to Initial Public Offers and Follow-on Public Offers for applying for Equity Shares. Transaction based Internet Banking has also been implemented in Uganda, Botswana, New Zealand, UAE, Kenya, Mauritius, Seychelles, Fiji and UK providing facilities such as fund transfer to self and third party, bill payments, corporate salary upload and online shopping. View based internet banking has been implemented overseas in Oman and Tanzania.

- Mobile Banking - BARODA M-CONNECT - one more alternate delivery channel was added to provide various facilities to customers, viz., Balance Enquiry, Mini Statement, Linking of Multiple Accounts, Fund Transfer, Request to the Bank, Bill Payments, Ticket Booking, Shopping, Feedback/ Complaints etc. The IMPS was also enabled through Mobile Banking for interbank fund transfer.

- The AT

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Mar 31, 2011

The Directors have pleasure in presenting the One Hundred and Third Annual Report of the Bank with the audited Balance Sheet, Profit & Loss Account and the Report on Business and Operations for the year ended March 31, 2011 (FY11).

Performance Highlights

- Total Business (Deposit+Advances) increased to Rs 5,34,116 crore reflecting a growth of 28.30%.

- Gross Profit and Net Profit were Rs 6,981.61 crore and Rs 4,241.68 crore respectively. Net Profit registered a growth of 38.7% over previous year.

- Credit-Deposit Ratio stood at 86.77% as against 84.47% last year.

- Retail Credit posted a growth of 33.8% constituting 18.88% of the Banks Gross Domestic Credit in 2010-11.

- Net Interest Margin (NIM) as per cent of interest earning assets in global operations was at the level of 3.12% and in domestic operations at 3.72%.

- Net NPAs to Net Advances stood at 0.35% this year against 0.34% last year.

- Capital Adequacy Ratio (CAR) as per Basel I stood at 13.02% and as per Basel II at 14.52%.

- Net Worth improved to Rs 19,750.63 crore registering a rise of 43.27%.

- Book Value improved from Rs 378.44 to Rs 504.43 on year.

- Business per Employee moved up from Rs 981 lakh to Rs 1,229 lakh on year.

Segment-Wise Performance

The Segment Results for the year 2010-11 reveal that the contribution of Treasury Operations was Rs 882.51 crore, that of Corporate/Wholesale Banking was Rs 1,525.49 crore, that of Retail Banking was Rs 1,517.89 crore, and of Other Banking Operations was Rs 2750.61 crore. The Bank earned a Profit

after Tax (PAT) of Rs 4,241.68 crore after deducting Rs 1,026.18 crore of unallocated expenditure and Rs 1,408.64 crore towards provision for tax.

Dividend

The Banks Directors have proposed a dividend of Rs 16.50 per share (on the face value of Rs 10/-per share) for the year ended March 31st, 2011. The total outgo in the form of dividend, including taxes, will be Rs 753.35 crore.

Capital Adequacy Ratio (CAR)

The Banks Capital Adequacy Ratio (CAR) is comfortable at 14.52% under Basel II as on 31st March 2011. During the year, the Bank strengthened its capital-base by raising Rs 1,500 crore through unsecured subordinated bonds and Rs 711.50 crore through innovative perpetual bonds.

The Banks Net Worth as at 31st March 2011 was Rs 19,750 crore comprising paid-up equity capital of Rs 392.81 crore and reserves (excluding revaluation reserves) of Rs 19,357.82 crore. An amount of Rs 3,488.33 crore was transferred to reserves from the profits earned.

Provisions towards Retirement and Other Benefits

During the year 2010-11, the Bank has made provision towards contribution to gratuity (Rs 382.90 crore), pension funds (Rs 788.55 crore), leave encashment (Rs.-21.20 crore) and additional retirement benefits (Rs 10.17 crore) on actuarial basis. Total provisions under these four categories amounted to Rs 1,160.42 crore during the year 2010-11, against Rs 402.71 crore during 2009-10. Total corpus available with the Bank at the end of March 2011 under these heads was: Rs 1,289.75 crore (gratuity), Rs 5,177.08 crore (pension funds), Rs 506.31 crore (leave encashment), and Rs 396.13 crore (additional retirement benefits).

Key Financial Ratios

Particulars 2010-11 2009-10

Return on Average Assets (ROAA) (%) 1.33 1.21

Average Interest Bearing Liabilities (Rs crore) 2,80,098.94 2,15,886.21

Average Cost of Funds (%) 4.67 4.98

Average Interest Earning Assets (Rs crore) 2,82,109.79 2,16,735.54

Average Yield (%) 7.76 7.70

Net Interest Margin (%) 3.12 2.74

Cost-Income Ratio (%) 39.87 43.57

Book Value per Share (Rs) 504.43 378.44

EPS (Rs) 116.37 83.96



Operations and Services

Customer-Centric Initiatives

As always, efficient customer service and customer satisfaction are the primary objectives of the Bank in its day to day operations. The Bank is highly responsive to the needs and satisfaction of its customers, and is committed to the belief that all technology, processes, products and skills of its people must be leveraged for delivering superior banking experience to its customers without fail.

Recently, the Bank has taken several measures to improve customer service at the branches and at the same time, strengthened the customer complaint redressal machinery for fast disposal of customer complaints.

Efforts to Improve Customer Service at Branches

The feedback on quality of customer service at branches is obtained through the Branch Level Customer Service Committee meetings that are held every month in which customers from various cross sections of the society are invited including Senior Citizens and Pensioners. The suggestions/views generated during the meetings are collated and appropriate follow up action is taken to examine the feasibility to implement the suggestions for improving the quality of customer service rendered at the branches.

The Bank is focused towards providing excellent customer service through all delivery channels and has been making continuous efforts for enhancing the level of customers satisfaction by leveraging technology to provide e-products and alternative delivery channels best suited to the diverse needs of different customers. The varied interests and expectations of customers are taken care of by improving upon the various processes and procedures.

Compliance

The Bank is a member of the Banking Codes and Standards Board of India (BCSBI) and has adopted the Code of Commitment to the Customers revised by the BCSBI in August 2009 and also, Code of Banks Commitment to MICRO and Small Enterprises. The Code has been placed on the Banks website and also made available to customers at the branches.

While announcing the Annual Monetary and Credit Policy for the year 2010-11, the Governor, Reserve Bank of India, had proposed that Banks should devote exclusive time in their Board Meetings once in every six months to review and deliberate on issues concerning Customer Service/Customer Care. To comply with this, two such six-monthly reviews were undertaken by the Banks Board for the sub-periods January-June 2010 and July-December 2010 during the Board Meetings dated 20th November 2010 and 26th March 2011, respectively.

Customer Service Committee of the Board

The Bank has a Sub-Committee of Board for Customer Service which is headed by the Banks Chairman and Managing Director with the following members as on 31st March 2011.

1. Shri M. D. Mallya - Chairman and Managing Director

2. Shri Rajiv Kumar Bakshi - Executive Director

3. Shri N. S. Srinath - Executive Director

4. Dr Masarrat Shahid - Director

5. Shri Maulin Vaishnav - Director

This Sub-Committee addresses the issues relating to the formulation of policies and assessment of its compliances which brings about consistent improvement in the quality of customer service. It also monitors the status of the number of deceased claims pending for settlement beyond 15 days pertaining to Depositors/Locker Hirers/Depositors of safe custody articles, and reviews the status of implementation of Awards passed by Banking Ombudsman. The Committee also addresses issues relating to systemic deficiencies existing in the Bank, if any brought out by such Awards. The details of the attendance of the meetings of “Customer Service Committee of the Board” held on 21st June 2010, 4th September 2010, 27th December 2010 and 26th March 2011 during financial year 2010-11 are as follows.



Meetings Name of the held Director Period period Meetings of their attended tenure

Shri M. D. Mallya 01-04-2010 4 4 to 31-03-2011

Shri Rajiv Kumar Bakshi 01-04-2010 4 4 to 31-03-2011

Shri N.S. Srinath 01-04-2010 4 4 to 131-03-2011

Dr Masarrat Shahid 01-04-2010 4 4 to 31-03-2011

Shri Maulin Vaishnav 03-09-2010 2 2 to 31-03-2011

Shri A. Somasundaram 01-04-2010 1 1 to 30-07-2010



Standing Committee on Customer Service

The Bank has also set up a Standing Committee on Procedures and Performance Audit on Customer Services, comprising of three eminent public personalities as members along with both the Executive Directors and four General Managers of the Bank. This Committee oversees timely and effective compliance of the RBI instructions on Customer Service and also reviews the practices and procedures prevalent in the Bank and takes necessary corrective steps on an on-going basis.

The suggestions emanating in the Branch Level Customer Service Committee meetings are obtained by the Head Office on quarterly basis from Regional Offices and placed before the Standing Committee on Procedure and Performance Audit on Customer Services. The feedback of the Committee meetings is then put up to the Customer Service Committee of the Board of Directors.

Customer-Centric Initiatives and Redressal of Complaints

- The Bank has put in place a Customer Grievance Redressal Policy, approved by the Board, and a well structured Customer Grievance Redressal Mechanism. The General Manager in charge of the Operations and Services” is designated as Nodal Officer for customer complaints regarding the Bank. At Zonal and Regional levels, Zonal Heads and Regional Heads are designated as Nodal Officers for their respective Zones and Regions. The names of all Nodal Officers along with their contact numbers are displayed in all the branches.

- A Note on Review of Customer Services & Grievances Redressal Machinery is placed before the Board of Directors every quarter giving position of customer complaints received at Regional Offices and Head office and the follow up measures with important initiatives taken by the Bank for improving the customer services during the period.

- To eradicate customer complaints fully and ensure hassle free customer service, analysis is done on the complaints received from the customers and suitable timely action is taken so that there is no repetition of such complaints in future.

- The Bank has Board approved policies on Customer Services and the same are placed on the Banks website.

Based on the feedback and suggestions from the grass root level customer committees and various studies/surveys, a slew of customer centric initiatives and measures were taken by the Bank during the year under review to improve customer service at its branches.

KYC-AML-CFT

Know Your Customer (KYC) norms/ Anti-Money Laundering (AML) standards/ Combating of Financing of Terrorism (CFT) measures and obligation of Bank under PMLA, 2002.

The Bank has Board approved KYC-AML-CFT Policy in place. The said Policy is the foundation on which the Banks implementation of KYC norms, AML standards, CFT measures and obligation of the Bank under Prevention of Money Laundering Act (PMLA) 2002 is based.

The major highlights of KYC-AML-CFT implementation across the Bank are as under.

- Generation of Cash Transaction Reports (CTRs) electronically for submission to Financial Intelligence Unit (FIU), through the electronic medium.

- Installation/Implementation of “AML Solution” for generating system based alerts.

- System-based detection and submission of Suspicious Transaction Reports (STR) to the Financial Intelligence Unit (FIU).

- System based Risk Categorization (from AML Measure) of Banks customers accounts every half year.

- Filing of Counterfeit Currency Reports (CCRs) to FIU- IND, New Delhi.

The full KYC compliance entails staff education as well as customer education for which the following measures have been taken by the Bank.

- A comprehensive list of KYC documents is uploaded on the Banks website (www.bankofbaroda.com) for the benefit of customers.

- A KYC-AML page is created at the Banks Intranet for posting reference material on KYC-AML-CFT education.

- Regular Training Sessions are conducted on KYC-AML-CFT guidelines at the Banks training establishments.

- Training is being arranged for the Banks Senior Officials/Executives at RBI, IBA and National Institute of Bank Management (NIBM).

- Sustained efforts are made to create expertise at the Banks Head Office for Corporate Oversight and also for the KYC Audit of branches.

Government Business

The Banks Government Business department has primarily focused on three activities, notably, Control and Maintenance, Business Development and Pension Back Office during the year 2010-11.

To facilitate its activities, the Department created a special vertical for its operations in New Delhi, headed by an Assistant General Manager for ensuring better liaison with various ministries and departments of Government of India. The main achievement of this department during the year 2010-11 may be summarized as follows.

1) The Bank received authorisation for payment of pension to all Central Civil Pensioners in the country.

2) Also, the Railway Board, RBI and CGA authorised the Bank to undertake pension payment to the Railway

Pensioners under Single Window Scheme (SWS) under which reimbursement of pension paid would be available at CAS, Nagpur.

3) Processing of pension of more than 55,000 Railway Pensioners would also be done at CPPC under the Single Window System (SWS) with effect from April, 2011.

4) During the review period, the Bank got authorisation for e-payment of State Taxes in the States of Tamil Nadu, Kerala, Uttarakhand, Karnataka, Andhra Pradesh, West Bengal and Delhi.

5) Conclusion of Agreement with Stock Holding Corporation of India (SCHIL) for sale of e-stamps. This business has commenced in the State of Gujarat.

6) Special Savings Bank Product for Pensioners “Baroda Pensioners Savings Bank Account” was launched where pensioners get overdraft equivalent to two- month pension.

7) Collection of RTO Fees in the State of Gujarat and Tamil Nadu.

8) Moreover, the Bank is now the Direct Agency Bank for Railway Receipt and Payment Business instead of Sub Agent of State Bank of India at nine locations.

9) For the benefit of the Pan Indian Customers, a proposal has been sent to Ministry of Finance for authorising 700 additional branches for PPF/SCSS Business.

10) The Bank implemented a revised accounting procedure and system for Postal as well as Railway Receipt & Payment Business for automated reimbursement process and to eliminate losses due to a negative float.

11) Commencement of the Payment of Income Tax through ATMs.

12) The customers were enabled to view their 26AS Statement of Income Tax deposited through the Banks Internet Banking facility - Baroda Connect.

13) The Bank was authorized for collection of Custom Duty through e-mode at all locations in the country.

Vigilance

Vigilance activity in the Bank is an integral part of the managerial function and primarily aims at (1) ensuring integrity, (2) protecting the innocent (i.e., supporting quality decisions), (3) eliminating forces that thwart integrity, and (4) preventing the losses -- both the financial as well as reputational for the Bank.

A rational distinction is drawn between a business loss, which has arisen as a consequence of a bona-fide commercial decision, and an extraordinary loss, which has occurred due to mala-fide, motivated or reckless performance of duties. On the one hand, to keep the morale of the employees high and on the other hand, to weed out the attempts of the unscrupulous persons, efforts are made to bring the departmental action to its logical conclusion expeditiously.

The Vigilance machinery in the Bank is effectively performing its proactive role in new risk prone areas emerging in computerized/ e-Banking environment, in addition to sensitising all categories of staff members with the various preventive measures. The Bank has been taking suitable steps towards preventive, detective and punitive vigilance as per the Government of India guidelines.

With a view to share the various modus operandi of ingenious frauds with the staff members, Quarterly Vigilance Newsletter has been introduced by the Vigilance Department of the Bank to keep the staff alert so that they should not fall prey to such attempts. The Bank has also introduced a scheme for granting rewards to employees for detecting and foiling attempts of frauds/prevention of frauds with a view to encourage the vigil and alertness displayed by the employees while performing the duties and thereby detecting/foiling the attempted frauds. With the awareness, alertness and diligence exhibited by the operating staff, 58 fraudulent attempts by unscrupulous elements were thwarted, during the year April 2010 to March 2011, which saved the Bank from substantial financial loss.

Business Performance

Given below are the details of the Banks major achievements on business front during 2010-11.

Resource Mobilisation and Asset Expansion

The share of Banks deposits in total resources stood at 85.22% as of 31st March 2011. The total deposits grew from Rs 2,41,261.93 crore to Rs 3,05,439.48 crore, posting a growth of 26.60% over the previous year. Of this, Savings Bank Deposits

- an important constituent of low cost deposits grew by 22.67%

- from Rs 52,543.92 crore to Rs 64,454.04 crore. The share of low cost deposits (Current plus Savings) in Total Deposits (Domestic plus Overseas) was at 28.68% and in Domestic Deposits at 34.36%.

During the year 2010-11, interest rates offered on the most popular buckets of retail term deposits of commercial banks in India increased by 200 to 250 bps making low cost deposits a less attractive proposition. Across the banking industry, the

share of low cost deposits (CASA) to total deposits shrank sharply during 2010-11. Even for Bank of Baroda the domestic CASA share marginally declined from 35.63% to 34.36% on a year on year basis.

The Banks Global Advances expanded significantly and much above the banking industry average by 30.65% during 2010-11 led by 28.69% expansion in domestic advances and 36.59% expansion in overseas advances.

Unlike the experience of Indian banking industry, Bank of Barodas Total Credit growth (at 30.65%) was in proper alignment with its Total Deposit growth (at 26.60%) during 2010-11.

Composition of Funds - Global

Particulars End End Growth March March 2010 2011 (Rs crore) (Rs crore)

Deposits 2,41,261.93 3,05,439.48 26.60%

- Domestic 1,85,500.25 2,33,323.30 25.78%

- Overseas 55,761.68 72,116.18 29.33%

Borrowings 13,350.09 22,307.85 67.10%

Global Advances

Particulars End End Growth March March 2010 2011 (Rs crore) (Rs crore)

Advances 1,75,035.28 2,28,676.36 30.65%

- Domestic 1,31,643.62 1,69,407.86 28.69%

- Overseas 43,391.66 59,268.50 36.59%

Wholesale Banking

A strong corporate credit culture and consistent growth in credit way above the banking industry average have been the key differentiators of Bank of Baroda.

The Banks Wholesale Banking Division offers a full range of loan products and services such as Term Loans, Short- Term Loans, Demand Loans, Working Capital Facilities, Trade Finance Products, Treasury Products, Bridge Loans, Syndicated Loans, Infrastructure Loans, Cross Currency/ Interest Rate Swaps, Foreign Currency Loans, Loan Against Future Rent Receivables and many more to its large and mid corporate clients depending upon their needs. The product offerings are flexible and suitably structured taking into account the customers risk profiles and specific needs.

Based on the superior product delivery, passionate service orientation, timely and speedier sanctions with a customer- centric approach, the Bank has made significant achievements into providing an array of Wholesale Banking products and services to several multinationals, domestic business houses and prime public sector companies.

The Wholesale Banking Department started the year 2010-11, with a motto - “Year of Strengthening Corporate Relationship”

and the focus was to improve the share of business from the existing customers, thereby, strengthening the relationship with them and also building new relationships by targeting the Corporates who were hitherto not banking with the Bank.

Under Wholesale Banking, the Corporate Customers are identified as Large and Mid Corporates. Those having annual sales turnover of over Rs 150 crore but up to Rs 500 crore are classified as Mid Corporates, and those having a sales turnover of above Rs 500 crore are classified as Large Corporates.

During 2010-11, the Wholesale Banking Division sanctioned fresh facilities to 239 first time entrants amounting to Rs 36,318.67 crore through its Fast Track scheme and achieved increase in the existing accounts to the tune of Rs 41,660.31 crore, thus, the total sanctions from the department reaching a figure of Rs 77,978.98 crore. This exceeds the total sanctions for the previous year by almost Rs 7,900 crore. The major sanctions were given to sectors like iron & steel, metals & metallic products, commercial real estate and infrastructure segments like power, roads, telecommunication, etc.

Reduction in Turnaround Time in Wholesale Banking

The Department placed a major thrust on faster delivery through efficient channels and adoption of better practices in credit administration. Efforts were also made to improve the speed of decision making without compromising the quality of decision. Simplification of credit proposal formats was carried out, so that all vital information was captured with a sense of objectivity, thereby quickening the decision-making process. This helped the Bank a great deal in reducing the turnaround time. The Department targets to reduce the time taken for according a sanction to less than 25 days.

Project Finance Division

The Project Finance Division, a part of the Wholesale Banking Department earned total fee income of Rs 19.14 crore during 2010-11 through conducting 156 TEV (i.e., Technical Evaluation & Viability) studies and vetting of projects and syndication deals. This is in comparison to the fees of Rs 6.84 crore earned during 2009-10 out of TEV, vetting of projects and

also Syndication deals. The Division finalized 15 syndication deals during the year as against three deals during the last year. Furthermore, the fee receipts during the year have increased to Rs 14.67 crore as against Rs 3.98 crore last year. Out of the total booked Syndication fees of Rs 30.42 crore, the amount already received was Rs 14.67 crore and the balance amount of Rs 15.75 crore will be received during the year 2011-12.

Marketing Efforts in Wholesale Banking

The Department is planning to have a full-fledged Market Intelligence Unit and a vibrant Marketing Team to target newer companies from the perspective of significant business opportunities, especially in loan syndication. The Project Finance Division attached to the department has been tracking the Projects Today database on a regular basis and identifying upcoming projects. The Relationship Officers identified to handle various states of India and attached to Wholesale Banking Department are also on the move to their respective states to have a continuous liaison with the existing units and to help the Zonal Offices in those states in targeting the new customers.

Other Initiatives

Additionally, the Banks Wholesale Banking Division took the following initiatives during 2010-11 to strengthen this portfolio further.

1) A substantial improvement was brought about in communication channels between the Corporate Office and Operating Units of the Bank by creating separate e-mail IDs for different purposes like agreement in principle, modifications and submission of credit proposals, etc.

2) A dedicated focus was given to upgradation of skills and knowledge levels of officers working in the Department including the new campus recruits.

3) A thrust was placed on regular grooming of Credit Officers and Forex Officers to handle the credit portfolio of large number of branches.

4) A Plan was made to open additional Corporate Financial Services branches in North Mumbai, Greater Noida and Surat.

5) The Department closely tracked the Mid Corporate segment accounts by identifying the segment as a separate line of business. It is now proposing to open 14 exclusive Mid-Corporate branches during the year 2011-12, for which licenses were obtained from the RBI.

6) The Department organized several customers meeting and one-to-one meetings between the Corporates and the Members of Top Management of the Bank to have first-hand information on their business and credit requirements.

7) The Department took active interest in recruiting specialized officers from campuses and Institute of Chartered Accountants of India (ICAI) and placing

them in vital areas of credit administration across the branches/administrative offices, etc., for bringing in new blood and filling the vacancies arising out of attrition and retirement.

Retail Business

As in the past, the Retail Business continued to be one of the thrust areas for achieving business growth during the year 2010-11. The Banks performance during Financial Year 2010- 11 under Retail Banking Segment is as under.

Growth under Retail Lending

Retail Loan outstanding was Rs 32,434.84 crore as on 31st March, 2011, as against the level of Rs 24,247.71 crore as on 31st March, 2010. A growth of 33.76% (Rs 8,187.12 crore) was registered during 2010-11 as against a growth of 23.53% (Rs 4,619.76 crore) registered during the previous year. The growth under five key products (excluding LABOD/ODBOD etc) was 21.56% (Rs 4,094.72 crore) over the level of Rs 18,992.00 crore at end-March, 2010. During the same period of 2009-10, growth under the five key products was 22.65% (Rs 3,507.36 crore) over the level of Rs 15,484.63 crore as of end-March, 2009.

NPA under the Retail Loan

The amount of Non Performing Assets as on 31st March, 2011 under Retail Loan was Rs 579.83 crore (1.79%) as against the level of Rs 511.77 crore (2.11%) as on 31st March, 2010.

Savings Bank Deposits

The Banks Domestic Savings Deposits stood at a level of Rs 62,959.07 crore as on 31st March, 2011 registering a growth of 22.83% (Rs 11,702 crore) over the level of Rs 51,257.55 crore as on 31st March, 2010.

Initiatives in Retail Banking during 2010-11 New Products Launched

- A new Retail Asset Product styled as Baroda Traders Loan against the Security of Gold Ornaments/ Jewellaries was launched during 2010-11. Also, its variant termed as “Baroda Advance against Gold Ornaments /Jewellaries” was launched at all Metro and Urban branches of the Bank.

- A Retail Asset scheme under Baroda Personal Loan styled as Baroda Loan to Retirees for Pension Option was introduced on 4th December, 2010 for a limited period up to 11th December, 2010.

- Education Loan Interest Subsidy Scheme for students belonging to Economically Weaker Sections was launched as per the directives of Ministry of Human Resource Development, Government of India.

- A new Term Deposit Product styled as Baroda Utsava Deposit Scheme for 444 days was introduced on 15th October 2010 at the interest rate of 8.10% which was revised from time to time and last increased to 9.35% with effect from 1st March, 2011. A fresh deposit of Rs 19,918 crore was mobilized up to end-March, 2011 under the product.

- Two new Retail Liability Products under Savings Bank Segment styled as Baroda Pensioners Savings Account and a Life Insurance linked Savings product styled as Baroda Jeevan Suraksha Savings Account under a tie-up arrangement with IndiaFirst Life Insurance Company were launched on 15th January 2011.

Business Initiatives

- To mobilise low cost deposits aggressively, a Savings Bank Deposit Campaign was launched on 21st June, 2010 for the period of three months. An amount of Rs 1,944 crore as fresh Savings Bank Deposit was mobilized during this campaign. A second Savings Bank Deposit Campaign was launched from 1st December, 2010 to 31st March, 2011, which generated a fresh Savings Bank Deposit to the tune of of Rs 3,081 crore under 1,014,589 accounts.

- For augmenting Retail Loan Portfolio, a Retail Loan Festival Campaign was launched from 1st October, 2010 to 31st December, 2010. During the campaign, a total of Rs 1,218 crore was disbursed under both Home and Auto Loans. Another Retail Loan Campaign specially focused on Home Loans and Auto Loans was launched from 1st February 2011 to 31st March, 2011. A fresh business of Rs 891.74 crore was generated during this campaign.

- To increase the attractiveness, maximum period of deposits under Recurring Deposit and Yatha Shakti Jama Yojna were increased to 120 months from the existing 36 months.

- Interest Rate Structure on Car Loans was revised from Quantum Based Interest Rates to Tenor Based Interest Rates with effect from 1st September, 2010.

- To facilitate the borrowers, an Online Auto Loan Application Module was made live with effect from 9th August, 2010.

- A Tie-up Arrangement was made with IndiaFirst Life Insurance Company for providing Life Insurance Cover to the Banks Home Loan borrowers.

- A “Reward & Recognition Scheme” for the Banks staff under Group Credit Insurance scheme in a tie-up arrangement with Kotak Life Insurance and IndiaFirst Life Insurance was initiated with effect from 1st October, 2010.

- The Bank opened a new Gen-next branch in NOIDA during

the first quarter of 2010-11 and now the total number of Gen Next Branches is eight.

- Five new Retail Loan Factories at Karol Bagh New Delhi, Raipur, Ludhiana and Nasik were opened during 2010- 11, whereas one existing RLF at Jodhpur was closed. With this the total tally of the Banks Retail Loan Factories (RLFs) is 35.

- Existing accounts of Home Loans and Education Loans were also brought into the ambit of Group Credit Life Insurance Cover under the tie-up arrangement with Kotak Life Insurance and IndiaFirst Life Insurance with effect from 31st December, 2010.

Wealth Management Services

As a part of customer centric measures, the Bank has been providing Wealth Management Services to its high net worth (HNI) and affluent customers as a Total Financial Solution at one place since June 2004. At present, the Bank provides through the network of its branches, various third party products in Life Insurance, Non Life Insurance including Health Insurance, Mutual Funds and Equity Trading under the tie-up arrangements with different partners.

Moreover, during the last couple of years, the Bank has formed two joint ventures (JV) with the leading international brands in the Mutual Fund and Life Insurance segments.

Baroda Pioneer Asset Management Co. Ltd., a joint venture in Mutual Fund in association with Pioneer Investments of Italy, and IndiaFirst Life Insurance Co., a joint venture in Life Insurance with Andhra Bank and L&G of U.K. have successfully positioned themselves in the Indian market with encouraging performance even in the initial stages of their business.

The extension of ASBA (Application Supported by Blocked Amount) facility (i.e., the supplementary process of applying in IPO/FPO/Right issues) to 2,100 more branches during the year, has enabled almost all branches to provide the additional value added services to its customers. This is a step further in our endeavor to protect customers interest and provide them with new services. The Bank also launched during the year an on-line ASBA Facility for its Net Banking customers, which provides the convenience of a simple, instant, secure and 24x7 facility to apply for IPO/FPO/NFO to the Barodaconnect (i.e., the Banks internet banking platform) customers from the comfort of their homes/residences.

The Bank has also established Baroda Gold Lounge in 13 select strategically located branches, which are distinct dedicated spaces to provide par excellence investment advisory services to HNI customers of the Bank. Initiatives taken by the Bank under the Wealth Management Services have started contributing encouragingly to its non-interest income.

MSME Business

The Micro, Small and Medium Enterprises (MSME) segment is a vital component of Indian economy. This sector accounts for around 40.0% of total industrial production, 34.0% of industrial exports and 95.0% of industrial units and 35.0% of total employment in manufacturing and service sectors of India. The contribution of services sector within the SME segment is

quite significant, especially the IT enabled services, hospitality services, tourism, couriering, transportation, etc.

To give a focused attention to emerging SMEs in India, the Bank has been considering other commercial units with a turnover up to Rs 150 crore at par with the SMEs. To promote the growth of SME sector, the Bank has launched a special and novel delivery model, viz. SME Loan Factory, which at present, is made operational in 36 centres of the Bank and well accepted in the market place. The SME Loan Factory is an innovative model for streamlining processes and for timely sanction of SME loan proposals. The model comprises of the Central Processing Cell for speedy appraisal and sanctioning of proposals within the stipulated deadline and a sales team to follow up on leads generated by the branches. Going by the past success, the Bank is planning to open more such loan factories in the ensuing year. The Bank has SME Loan Factories at all major business centres across the country viz. Agra, Ahmedabad, Bangalore, Bareilly, Baroda, Bhilwara, Bhubhaneshwar, Bulsar, Chandigarh, Chennai, Coimbatore, Dehradun, two Factories in Delhi, Hyderabad, Indore, Jaipur, Jamshedpur, Jamnagar, Jodhpur, Kanpur, Kolhapur, Kolkata, Lucknow, Ludhaina, 3 Factories in Mumbai, Nagpur, Nashik, Pune, Rajkot, Raipur, Surat, Varanasi and Vishakhapatnam. These SME Loan Factories together sanctioned loans aggregating Rs 14,530 crore during 2010-11 as against Rs 11,071 crore in the previous year.

Growth of Business

The total outstanding in MSME Sector works out to Rs 27,365 crore as on 31st March 2011. The growth in lending to MSME Sector during the last three years is given in the table below.

Year Growth (%, YoY)

2008-09 24.18%

2009-10 43.98%

2010-11 29.63%

The percentage growth of MSME credit during 2009-10 was relatively high as the advances up to Rs 20 lakh to Retail Trade were classified for the first time under the “Micro & Small Enterprises Sector” in 2009-10, in line with the RBIs revised guidelines issued during September, 2009. The growth rate

was normalized during the year 2010-11.

The Bank took the following initiatives in its SME business segment during the year under review.

Initiatives in MSME Financing During 2010-11

1. During this year, the Bank introduced five new customer- centric, area-specific products to suit the local cluster needs along with the renewal of eight existing customer-centric area-specific products.

2. The Bank sponsored a workshop on “Management Skills to Source Financing and Management of Technology by SMEs” for entrepreneurs organized by the AIMA at Faridabad.

3. The Bank introduced “Protrack” - an e-tracking system for the SME credit proposals with a view to have control over the turnaround time.

4. The Bank celebrated SME Festival from 1st January 2011 to 28th February 2011 in order to give boost to SME advances. Some concessions in the rate of interest and service charges were announced for loans sanctioned during the celebration period.

5. The Bank participated in the Workshops arranged by CGTMSE on Bank Credit to Micro & Small Enterprises and the Role of Credit Guarantee.

6. The Bank accorded higher importance to Increase the flow of credit to MSME with a special emphasis on Micro Enterprises.

7. The Bank focused on collateral free credit under the CGTMSE scheme through a special campaign.

8. The Bank achieved total customer relationship through enhanced cross selling, locational meetings, involvement of trade bodies at the national and state levels.

9. The Bank placed emphasis on continuous knowledge updating and skill building of processing/marketing officers attached to its SME factories with the help of external and internal training outfits.

Rural and Agricultural Lending

The Bank has always been a frontrunner in the area of Priority Sector and Agriculture lending, harnessing the vast potential of the rural market through its wide network of 1,171 rural branches

and 832 semi-urban branches. The Bank has opened 157 new branches in rural and semi-urban areas during 2010-11. The Bank is the convener of the State Level Bankers Committee (SLBC) in UP and Rajasthan. The Bank also shoulders the Lead Bank Responsibility in 45 districts in the states of Gujarat (12), Rajasthan (12), Uttar Pradesh (15), Uttaranchal (2), Madhya Pradesh (2) and Bihar (2).

Moreover, there are five Bank sponsored Regional Rural Banks (RRBs) in various states with a network of 1,223 branches and total business of Rs 18,800 crore as of end-March, 2011.

Performance of Priority Sector Lending in 2010-11

Priority Sector Advances of the Bank surged from Rs 48,552.36 crore as at the end-March 2010 to Rs 57,363.60 crore as at the end-March 2011 and formed 43.57% of the Adjusted Net Bank Credit (ANBC) against the mandated target of 40.00%.

Agriculture Advances (both direct and indirect) of the Bank recorded a growth of 13.47% over the previous year and rose to Rs 24,529.22 crore as at end-March 2011. However, the Banks lending to Direct Agriculture depicted a stronger growth of 28.72% (y-o-y) to Rs 17,157.83 crore during 2010-11.

Under its flagship agriculture loan product “Baroda Kisan Credit Card”, the Bank issued as many as 2,44,558 Credit Cards during 2010-11 to provide credit to farmers. The Bank financed as many as 2,72,415 new farmers during the year under review. As a part of its microfinance initiatives, the Bank credit-linked 19,257 Self Help Groups (SHGs) with an amount of Rs 163.77 crore during 2010-11, thereby taking the total number of SHGs credit-linked to 1,34,942 amounting to Rs 956.96 crore.

Business and Social Initiatives

Besides posting a healthy business growth, the Bank undertook several initiatives during 2010-11 to harness the emerging opportunities for rural and agriculture lending. Some of them are mentioned below.

1. To augment its Agriculture advances, the Bank conducted special campaigns, viz. Kharif and Rabi campaigns for crop loans, under which the disbursements of Rs 2,317 crore and Rs 1,231 crore were made, respectively. Another Campaign for Investment Credit was also undertaken under which disbursements of Rs 993 crore were made.

2. The Bank organized 3,323 Village Level Credit Camps and disbursed Rs 3,169 crore to 2,30,599 borrowers during 2010-11.

3. The Bank identified 450 Thrust Branches across India to enhance Agriculture Lending which constituted 34.0% of the total Agriculture Lending as at end-March 2011.

4. The Bank formulated various area-specific schemes, tailor made to the needs of local requirements, particularly where there is a concentration of industries like Rice Mills, Cold storages, cotton ginning units, Poultry units, etc. Moreover, suitable concessions in the rate of interest, service charges, etc., were allowed under these schemes to garner maximum possible business. As many as 22 area specific schemes were formulated to increase the lending to agriculture sector.

5. Baroda Grameen Paramarsh Kendra (BGPK) - was another initiative undertaken by the Bank to help the rural community by providing credit counseling, financial literacy and other services like information on the prices of agricultural produces, scientific farming, etc. The Bank established 52 BGPKs as on 31st March, 2011.

6. Furthermore, eleven more Baroda Swarojgar Vikas Sansthan (BSVS), Baroda R-SETI centres were opened during the year under review. With this, the total number of BSVS went up to 36. Besides, Raebareli and Ajmer BSVS were created exclusively for women entrepreneurs. The BSVS are primarily the institutes for training the youth and imparting knowledge and skills required for taking up self-employment ventures. During the year 2010-11, around 42,212 youth beneficiaries were trained out of which 28,331 have established self-employment ventures. It is heartening to see that out of the total 79,442 beneficiaries trained by these centres so far, 50,035 have already established their self employment ventures.

Financial Literacy and Credit Counseling Centres (FLCC)-“SARATHEE”

Based on the guidelines issued by the RBI, the Bank has established 18 FLCCs, christened as “SARATHEE” to impart financial literacy and credit counseling services to the needy people to help them avail financial services from the banking

system and also to provide counseling services to those who are under financial distress due to the debt burden. The Bank has opened these centres under its BSVS trust. Free counseling services are being provided to the concerned free of cost. The Bank opened 14 new FLCCs during 2010-11, taking the total number of FLCCs to 18 as on end-March 2011. The Bank has firmed up a plan to open FLCCs in each of its lead districts in due course.

Business Facilitators Model

This model has been implemented across India to accelerate the process of Financial Inclusion of the excluded segment as well as to augment the Banks agriculture portfolio. Business Facilitators will mainly canvass loan applications for the Bank for which the Bank will pay them compensation. Individuals including retired bankers and Government employees, NGOs, farmers clubs and SHGs are engaged as agents to improve the Banks outreach in the rural and semi-urban areas.

Micro Loan Factory

Additionally, the Bank has opened Micro Loan Factories at Raebareli and Sultanpur in U.P. The Micro Finance Loan Factory has a mobile van with facilities and all related stationeries/ documents on the SHG financing. It is manned by officers who are duly authorised to sanction and disburse loans up to Rs 25,000 to SHGs on the spot and at their doorsteps.

Performance of RRBs Sponsored by the Bank

The Bank has sponsored five RRBs as under.

- Baroda Uttar Pradesh Gramin Bank, Head Office: Raebareli.

- Baroda Rajasthan Gramin Bank, Head Office: Ajmer.

- Baroda Gujarat Gramin Bank, Head Office: Bharuch.

- Nainital-Almora Kshetriya Gramin Bank, Head Office: Haldwani.

- Jhabua-Dhar Kshetriya Gramin Bank, Head Office: Jhabua.

The aggregate business of these five RRBs rose to Rs 18,803.05 crore as of end-March, 2011 from Rs 16,244.41 crore as at end-March, 2010, registering a year on year growth of 15.75%.

The five RRBs together posted a net profit of Rs 116.53 crore during 2010-11 as against Rs 118.93 crore earned during 2009-10. The “Net Worth” and the “Reserves and Surplus” of all these RRBs put together improved from Rs 609.12 crore at end-March, 2010 to Rs 729.96 crore at end-March, 2011 and from Rs 354.43 crore at end-March, 2010 to Rs 452.68 crore at end-March, 2011, respectively.

Banks efforts towards Financial Inclusion

The Bank has formulated a three-year Financial Inclusion (FI) Plan as per the RBI guidelines issued in 2010 that was approved by the Banks Board. However, keeping in view the mandate given by the Government of India, the SLBCs allotted

2,864 villages to the Bank, each having population more than 2,000 that are to be covered under the FI Plan by March 2012, of which 1,200 villages were targeted to be covered by March 2011. The Bank comfortably surpassed this target and extended banking services to 1,228 villages during the year 2010-11. The remaining villages are proposed to be covered in the year 2011-12.

To reach out to such unbanked villages, two delivery channels have been adopted i.e. ICT based Business Correspondent (BC) Model which is based on the Application Service Provider (ASP) model with Biometric Smart Card based technology wherein Business Correspondents visit villages with Point of Service (POS) devices for carrying out transactions. Under this model, the customers can operate their accounts using their Smart Cards though the biometric authentication. The second delivery channel adopted is Mobile Banking. Under this, the Mobile Vans move within a cluster of villages in close proximity to the Banks existing branches. The Vans with the Banks staff visit the identified villages during some fixed days in a week for providing banking services. At present, a Mobile van has been deployed in Charada branch of Mehsana, Gujarat and three more vans have been deployed at Allahabad, Varanasi and Bihar.

As per the directive of the Government of India, the Banks Chairman and Managing Director, Executive Directors and Corporate General Managers have been visiting the villages

under the FI Plan regularly to oversee the implementation and progress of the Banks FI mission.

Advances to SC/ST Communities during 2010-11

The outstanding advances granted by the Bank to SC/ST communities have been growing healthily year after year. This is evident from the fact that the outstanding advances granted to these beneficiaries went up from Rs 3,100 crore as at end- March, 2010 to Rs 3,760 crore as at end-March, 2011.

In fact, the SC/ST communities accounted for a share of 28% in the total advances granted to Weaker Sections during the year under review.

Furthermore, a special thrust is laid by the Bank in financing SC/ ST communities under various government sponsored schemes namely Swaranjayanti Gram Swarojgar Yojana (SGSY), Swarna Jayanti Shahari Rojgar Yojana (SJSRY), Prime Minister Employment Generation Programme (PMEGP), etc.

It is heartening to note that the Baroda Swarojgar Vikas Sansthans (BSVS) have been giving due preference to SC/ ST communities while selecting the trainees. So far, these centres have trained 29,721 youths under the SC/ST category of which 18,735 have already established their self employment ventures.

International Business

The improvement in global economic scenario, strong economic revival especially in the advanced countries and a substantial growth in the International Trade flows supported growth of business and profitability of International Operations. The Bank leveraged on its long experience of international banking, strong and loyal customer base, time-tested business model, technological initiatives to live up to its position as the Indias International Bank.

During 2010-11, there was a better than expected growth in the business and profits of the Banks International Operations. The asset growth was further assisted by Foreign Currency requirements of Indian Corporates for their overseas expansion, and, also, to take advantage of the difference in cost of resources. To meet the requirements of borrowers, the Bank raised Foreign Currency resources in timely fashion at overseas centres at the finest terms supported by the Banks strong credit story.

The Bank kept continuous watch on economic, social and political developments around the world to safeguard its business interests. The business model was aligned and risk management functions were further strengthened to take care of any shocks in the ever-changing international scenario.

The overseas branch network was further expanded to 85 branches/offices offering further opportunities for generating profitable growth of business.

Business and Profit Performance

During 2010-11, the total business (Deposits + Advances) of the Banks Overseas Branches registered a growth of 32.51% (y-o-y). The Customer Deposits increased by 23.44%, Total Deposits by 29.33 % and Advances by 36.59%. The International Operations contributed 24.6% to the Banks global business as on 31st March, 2011.

Total Assets

Total Assets of the Banks International Operations increased from Rs 68,375 crore to Rs 91,273 crore registering a growth of 33.49% during the year.

Net Profit

The Gross Profit for the year 2010-11 registered a healthy growth of 23.94% over the level of previous year. The Net Profit, however, declined by 7.32% due to an unfavourable statistical base effect. During the year 2009-10, the Net Profit had increased sharply because of the reversal of provisions made under Mark to Market of Investments. The contribution of international operations to the Banks Total Net Profit stood at 19.15% during 2010-11.

Asset Quality

Consistent with its past practices, the Bank took all the necessary safeguards at the time of asset creation and ensured monitoring of assets on an ongoing basis to be in readiness for any eventualities in the economic scenario around the world.

The accounts restructured in previous years as per the RBI norms were continuously monitored during 2010-11 to ward off any deterioration in the asset quality. In NPA accounts, there were continuous efforts for upgradation/recoveries as per the norms in the country of operation. As a result, the Gross NPAs to Total Advances were contained at 0.62% as on March 2011. The Net NPAs too were modest at 0.19%.

International Presence

With the commencement of operations in New Zealand, the Bank extended its overseas presence to 26 countries with 85 branches/offices as under.

Banks Overseas Branches 54

Banks Representative Offices 3

Branches of Banks Overseas Subsidiaries 28

Total 85

In addition to the above, the Banks associate in Zambia has 12 branches.

Overseas Expansion

During the year 2010-11, the Bank opened seven new branches/ offices (including the ones for its overseas subsidiaries). A branch was opened at Ilford, Essex (U.K.) and five Electronic Banking Service Units (EBSUs) in UAE at RAKIA, Ras Al Khaimah, Al Qusais, Dubai, Sh. Zayed Road, Dubai, Al Karama, Dubai and National Paints, Sharjah. The subsidiary in New Zealand - Bank of Baroda (New Zealand) - commenced operations with the opening of branch at Auckland.

Future Plans in Overseas Business

In order to serve the ever increasing expatriate Indian population and corporates around the world and canvass more diversified business for the Bank, ambitious overseas expansion plans have been drawn by the Bank. It proposes to further expand its network by opening additional branches in countries where it is already present, and, also wants to enter new territories. Steps have been initiated for opening of two branches and two EBSUs in UAE, one branch in Oman and one branch in Mauritius. The work related to the opening of eight new branches of the subsidiaries is at an advanced stage. The subsidiaries in Uganda, Kenya and New Zealand will be opening two branches each and in Botswana and Guyana, one additional branch will be opened.

The Banks applications for setting up of a subsidiary in Suriname and Canada, opening of a branch in Qatar and upgradation of a Representative Office in Australia to a branch are under process by the host country regulators. The Bank has already initiated steps for identification of new centres for overseas expansion.

Syndication Centre

The Banks Global Syndication Centres at London and Dubai, supported by the Offshore Banking Unit at Singapore and other branches in major financial centres, are actively catering to the needs of Indian and local corporates for Foreign Currency funds. The International Merchant Banking Cell (IMBC), set up at the Banks Corporate Office, Mumbai, plays an active role in the business on account of raising of substantial resources by Indian Corporates. The IMBC now actively participates in the loan origination.

Products and Services

After implementation of the Core Banking Solution in its overseas operations, the Bank launched various new products and services to meet the requirements of diversified groups of customers. New products, developed after extensive market research, have found wide acceptability with local population.

Technology Upgradation in Overseas Operations

- The number of ATMs at overseas territories and subsidiaries increased to 68 (42 onsite and 26 offsite) as on 31st March, 2011 from 55 (36 onsite and 19 offsite) as on 31st March, 2010.

- Global Treasury Solution was implemented at the Banks operations in UK, UAE, Bahamas, Bahrain, Hong Kong, Singapore and Belgium. The Banks subsidiary in Uganda has also initiated process for implementation of

Treasury Module as per the requirements of the country of operation.

- Implementation of a Centralized SWIFT activity was completed and made operational from the Banks Data Centre in Mumbai.

- Except UK and US Territories, all Territories/Subsidiaries have started routing their Swift operations through the SWIFT Cell, Data Centre. The XMM application was implemented in the place of SAM and PC Connect.

- The Payment Messaging System too was implemented. It is a middleware between Core Banking Solution (Finacle) and SWIFT which helps in Straight-Through-Processing of incoming and outgoing SWIFT messages with Anti Money Laundering check. The same was implemented in all the overseas territories/subsidiaries except in UK and USA.

- The Anti Money laundering Erase (Batch mode) was implemented in all the overseas centres except, Belgium and USA.

- Anti Money Laundering Online List Matching Solution too was implemented at all the centres of the Bank except USA.

E-Banking

- The Bank has made “View based E-Banking” available in its operations in Fiji, Oman, Tanzania and UK.

- The Bank has implemented “Transaction-based Internet Banking” in Uganda, Botswana, UAE, New Zealand, Kenya, Mauritius and Seychelles.

- The Bank has firmed up its plan to cover all the remaining overseas centres under this facility during 2011-12.

Risk Management in Overseas Operations

The Bank has put in place an appropriate risk management system, comprising of necessary elements of active Board and senior management oversight, adequate policies, procedures and limits, adequate management information systems and comprehensive internal control for risk identifications, risk measuring, risk monitoring and risk control for its overseas operations. The Bank has implemented BASEL II guidelines in all the Overseas Territories with effect from 31st March, 2008 and has adopted Standardised approach for Credit Risk, Standardised Duration Method for Market Risk and Basic Indicator Approach for Operational Risk.

To prepare for the adoption of the advanced approaches, the Bank has developed customized BOB RAM internal Rating Module for its UK and UAE territories, covering major portion of the overseas business. In a phased manner, the BOB RAM will be introduced in all the other territories. The Bank has posted highly skilled and qualified Risk Managers in all the major overseas territories, to put in place the requisite risk management practices in overseas operations and to comply with the extant guidelines of host and home country regulators.

Regulatory Compliance

The compliance structure of the Bank is based on the extant guidelines of the home countrys regulator. All the overseas

territories have put in place the centre-specific compliance policies consistent with the corporate compliance policy of the Bank. A compliance function is being carried out by the designated compliance officer in the territory. The Bank scrupulously follows all the Anti Money Laundering and Know Your Customers guidelines of the Host and Home country regulators.

Treasury Operations

The global economic scenario presented a mixed picture during 2010-11. While growth in emerging market economies (EMEs) remained strong, it was on an upswing in the US and the Euro areas. However, the sharp increase in oil prices during the course of the year as a result of the events in the Middle East and North Africa added tremendous uncertainty to the pace of global recovery. Coupled with rising prices of food and commodity, the spike in oil prices significantly heightened the inflationary concerns. Balancing the concerns on twin challenges of taming inflation and managing economic growth, the RBI started hiking policy rates since March 2010. During the year 2010-11, the RBI cumulatively hiked the repo rate by 175 bps and the reverse repo by 225 bps, albeit in a calibrated fashion.

The advance estimate of the GDP growth for 2010-11, given by the Central Statistical Organisation, Government of India is at 8.6%. The benchmark 10 year G-Sec yield moved touching a high of 8.25% and a low of 7.37% with an average yield of approximately 7.90% during the year under review. Against this backdrop of rise in yields and rate hikes, the Bank Treasurys focus was to enhance the overall yield on its SLR portfolio. The average yield on Domestic SLR investment portfolio for the year was 7.68%. Keeping in view the macro economic situation, the Modified Duration of SLR investments under Available for Sale category was kept at 2.62 years. During the year, the Bank earned Rs 4,645.83 crore by way of Interest/Discount earned on Investments, Rs 457.24 crore as Profit on Sale of Investment and Rs 307.61 crore as Foreign Exchange earnings. The Treasury actively utilised the market movements and used the Overnight Index Swaps and INBMK Swaps for hedging and trading opportunities. The Treasury offers customized solutions using available instruments viz. IRS, CIRS, Forwards & Options to meet Interest Rate and Foreign Exchange Risk Mitigation requirements of corporate clients. The Treasury actively tried to benefit from the arbitrage opportunities available between various asset classes including Money market, CBLO, Market Repo, Government Securities and resources generated through the USD/INR swaps.

During the year under review, the Treasury mobilized long term resources for the Bank through a mix of Upper Tier II and Perpetual Bond instruments. The total amount raised was Rs 2,211.50 crore in four tranches at the finest terms supported by the Banks strong credit story.

Post financial crisis of 2008, the Indian economy showed strong growth for a second consecutive year. However, the Industrial production slowed down in the second half of 2010-11 impacted by the rising input cost pressures. There were robust FII inflows in the first half of the financial year 2010-11. Reflecting the

investor confidence, the BSE Sensitive Index touched a high of 21,108 during the year. However, the equity investors booked profits and there was a net FII outflow in the last quarter of 2010- 11 on account of events in the Middle East and North Africa, high oil prices and continuing inflation. Taking advantage of the market movements, the Equity Desk of the Banks Treasury actively churned its portfolio and recorded good profits. During the year, the Banks Equity Desks turnover increased by more than 60.0% over previous year, and it doubled its profit over the corresponding period.

The Foreign Exchange Desk of the Banks Treasury too retained its prominence as a key market maker in the Indian Banking Industry. The Proprietary trading desk was active in encashing the arbitrage between the Futures and OTC markets. The Foreign Exchange Desk was able to manage the volatility efficiently with more than 25.0% increase in the turnover in both the Inter-Bank and Merchant Desks. The Inter-Bank to Merchant Forex turnover ratio for the Bank was 8.28 against Market ratio of 2.85.

During the year 2010-11, the Bank inaugurated a new State of the Art Dealing Room at Baroda Sun Tower at its Corporate Office in Mumbai. Through this new Dealing room, the Bank is well positioned to scale up its Treasury Operations in the coming years. The Treasury handles the Banks Domestic Treasury Operations and covers activities in various markets i.e. Foreign Exchange, Interest Rates, Fixed Income, Equity and other alternative assets. The advanced technology platforms are being used by the Bank to offer a basket of financial products to its clients including Interest Rate and Currency Swaps, Forwards and Options. Through the enhanced Automated Dealing System, the Bank is able to offer auto generated real time foreign exchange rates to its clients through the authorised branches in India.

Under the Business Process Reengineering (BPR), the Bank has successfully implemented a Global Treasury Solution across major financial centres. The Global Treasury Platform is running smoothly in Mumbai, Europe (London and Brussels), Dubai, Bahrain, Singapore, Bahamas and Hong Kong. During the year 2010-11, the roll out of the Global Treasury Platform was initiated in the Banks New York operations.

The Treasury Mid Office monitors market exposures and limits fixed by the Banks Board of Directors on real time basis. The

Risk Management measures such as Value at Risk (VaR) is used to measure Market Risk on all portfolios. These measures are backed up by the Back Testing on risk numbers and Stress Testing of portfolios.

Corporate Social Responsibility (CSR)

Like in business, the Bank aspires to score high on Corporate Conscience. As a responsible corporate citizen, it is the vision of the Bank to empower the community through socio-economic development of underprivileged and weaker sections. In its continued efforts to make a difference to the society at large, the Bank further intensified its efforts in this direction during the year 2010-11.

The Bank has established Baroda Swarozgar Vikas Sansthan (Baroda R-SETI) for imparting training to unemployed youth, free of cost for gainful self employment and entrepreneurship skill development which help them improve their family economic status and also gives a boost to the local economies from where they operate.

So far, 36 such Santhans have been established by the Bank in which more than 79,000 young persons have been trained and around 50,000 have been gainfully self employed.

The Bank has established 52 Baroda Gramin Paramarsh Kendra for knowledge sharing, problem solving and credit counseling for rural masses across the country. In order to spread awareness among the rural masses on various financial and banking services and to speed up the process of financial inclusion, the Bank has also established 14 Financial literacy and Credit counseling Centres (FLCCs) during the year 2010- 11 taking the total number of FLCCs to 18.

Asset Quality Management

Bank of Baroda has rightly earned a reputation for excellence in the Asset Quality management. Even during the year 2010- 11, the Bank was able to maintain the best asset quality in the Indian banking system by smartly and strategically managing its Non Performing Asset (NPA) portfolio.

A close monitoring and follow up systems for recovery of NPA together with a well-defined mechanism to catch early warning signals to prevent slippages has helped the Bank to maintain its NPA at the lowest possible levels.

In spite of higher slippages observed in general in the Indian banking industry because of continuing adverse effects of economic downturn and high volatility in the financial indicators, the Bank could restrict its Gross NPA to 1.36% of Gross Advances as at 31st March, 2011 - the same level as in the previous year. Even its Net NPA ratio was contained at 0.35% as at 31st March, 2011 versus 0.34% as on 31st March, 2010.

The Banks outstanding performance in the asset quality management was reflected in the modest level of incremental delinquency ratio at 1.09% in 2010-11 as against 1.17% in 2009-10. This ratio is measured as “Additional Delinquencies as a per cent of the Opening Standard Advances of the Bank at the beginning of the year”.

Consistent with its past record, the Bank maintained higher Loan Loss or Provision Coverage Ratio against its NPA portfolio than the mandatory norm of 70% set by the RBI. The Banks NPA Coverage Ratio as on 31st March, 2011 was 74.91% as against 74.90% as on 31st March, 2010. The Loan Loss or Provision Coverage Ratio taking into account the technical write-offs worked out to 85.0% as on 31st March, 2011 as against 87.0% as on 31st March, 2010.

The Bank also adopted a strong follow-up mechanism for speedy recovery/resolution of its NPAs by expediting the legal action as well as through the compromise/OTS route. This strategy yielded the Bank Cash Recovery of over Rs 455.49 crore during 2010-11 as aga

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Mar 31, 2010

The Directors have pleasure in presenting the One Hundred and Second Annual Report of the Bank with the audited Balance Sheet, Profit & Loss Account and the Report on Business and Operations for the year ended March 31, 2010 (FY10).

Performance Highlights

- Total Business (Deposit+Advances) increased to Rs 4,16,080 crore reflecting a growth of 24.0%.

- Gross Profit and Net Profit were Rs 4,935 crore and Rs 3,058 crore respectively. Net Profit registered a growth of 37.3% over previous year.

- Credit-Deposit Ratio stood at 84.55% as against 81.94% last year.

- Retail Credit posted a growth of 23.5% constituting 18.15% of the Bank’s Gross Domestic Credit in FY10.

- Net Interest Margin (NIM) in global operations as per cent of interest earning assets was at the level of 2.74% and in domestic operations at 3.12%.

- Net NPAs to Net Advances stood at 0.34% this year against 0.31% last year.

- Capital Adequacy Ratio (CAR) as per Basel I stood at 12.84% and as per Basel II at 14.36%.

- Net Worth improved to Rs 13,785.14 crore registering a rise of 20.6%.

- Book Value improved from Rs 313.82 to Rs 378.44 on year.

- Business per Employee moved up from Rs 911 lakh to Rs 1,068 lakh on year.

Segment-Wise Performance

The Segment Results for the year 2009-10 (FY10) reveal that the contribution of Treasury Operations was Rs 1,048 crore, that of Corporate/Wholesale Banking was Rs 1,585 crore, that of Retail Banking was Rs 779 crore, and of Other Banking

Operations was Rs 2,732 crore. The Bank earned a Profit after Tax (PAT) of Rs 3,058 crore after deducting Rs 1,906 crore of unallocated expenditure and Rs 1,180 crore towards provision for tax.

Dividend

The Bank’s Directors have proposed a dividend of Rs 15/- per share (on the face value of Rs 10/-per share) for the year ended March 31st, 2010. The total outgo in the form of dividend, including taxes, will be Rs 639.26 crore.

Capital Adequacy Ratio (CAR)

The Bank’s Capital Adequacy Ratio (CAR) is comfortable at 14.36% under Basel II as on 31st March 2010. During the year, the Bank strengthened its capital-base by raising Rs 1,000 crore through unsecured subordinated bonds and Rs 900 crore through innovative perpetual bonds.

The Bank’s Net Worth as at 31st March 2010 was Rs 13,785.14 crore comprising paid-up equity capital of Rs 365.53 crore and reserves (excluding revaluation reserves) of Rs 13,419.61 crore. An amount of Rs 2,419.07 crore was transferred to reserves from the profits earned.

Other Prudential Measures

As a prudent measure, the Bank has made provision towards contribution to gratuity (Rs 131.93 crore), pension funds (Rs 120.21 crore), leave encashment (Rs 134.29 crore) and additional retirement benefits (Rs 16.28 crore) on actuarial basis. Total provisions under these four categories amounted to Rs 402.71 crore during the year 2009-10, against Rs 550.60 crore during 2008-09. Total corpus available with the

Key Financial Ratios

Particulars 2009-10 2008-09

Return on Average Assets (ROAA) (%) 1.21 1.09

Average Interest Bearing Liabilities (Rs crore) 2,15,886.21 1,71,666.55

Average Cost of Funds (%) 4.98 5.81

Average Interest Earning Assets (Rs crore) 2,16,735.54 1,75,818.59

Average Yield (%) 7.70 8.58

Net Interest Margin (%) 2.74 2.91

Cost-Income Ratio (%) 43.57 45.38

Book Value per Share (Rs) 378.44 313.82

EPS (Rs) 83.96 61.14

Bank at the end of March 2010 under these heads is: Rs 948.54 crore (gratuity), Rs 2,835.10 crore (pension funds), Rs 488.31 crore (leave encashment), and Rs 340.56 crore (additional retirement benefits).





Board of Directors

Shri N. S. Srinath, was appointed by the Central Government as Whole time Director, designated as Executive Director on 07th December 2009, under section 9(3) (a) of the Banking Companies (Acquisition & Transfer of Undertakings) Act, 1970, to hold the position till 31st May 2012 or until further orders, whichever is earlier. He was appointed consequent upon Shri V Santhanaraman, ceasing to be a Director on his attaining superannuation on 31st August 2009.

Shri Alok Nigam, IAS was nominated by the Central Government as a Director on 09th December 2009 under section 9(3) (b) of the Banking Companies (Acquisition & Transfer of Undertakings) Act, 1970 representing the Central Government vice Shri Amitabh Verma, IAS who ceased to be a Director on the nomination of Shri Nigam. Shri Nigam shall hold office until further orders from the Central Government.

Dr. (Smt.) Masarrat Shahid was nominated by the Central Government, as a part time non-official Director on 29th

October, 2009 under section 9(3) (h) of the Banking Companies (Acquisition & Transfer of Undertakings) Act, 1970. Dr. Shahid was nominated for a second term of three years from 29th October, 2009 to 28th October 2012 or until further orders, whichever is earlier.

Shri Amarjit Chopra, who was nominated as Director for a period of three years on 13th October 2006, by the Central Government under section 9 (3) (g) of the Banking Companies (Acquisition & Transfer of Undertakings) Act, 1970, ceased to be a Director on 12th October 2009, on the expiry of his term of appointment.

Directors’ Responsibility Statement

The Directors confirm that in the preparation of the annual accounts for the year ended March 31, 2010:

The applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

The accounting policies framed in accordance with the guidelines of the Reserve Bank of India, were consistently applied.

Reasonable and prudent judgement and estimates were made so as to give true and fair view of the state of affairs of the Bank at the end of financial year and of the profit of the Bank for the year ended March 31, 2010;

Proper and sufficient care was taken for the maintenance of adequate accounting records in accordance with the provisions of the applicable laws governing banks in India;

and

The accounts have been prepared on a going concern basis.

Acknowledgement

The Directors express their sincere thanks to the Government of India, Reserve Bank of India, Securities and Exchange Board of India, other regulatory authorities, various financial institutions, banks and correspondents in India and abroad for their valuable guidance and support.

The Directors acknowledge with appreciation the assistance and cooperation extended by all stakeholders of the Bank like customers, shareholders and well wishers in India and abroad.

The Directors place on record deep appreciation for the hard work and dedication of the members of the staff at different levels, which enabled the Bank to record high quality, consistent growth even during the turbulent times and consolidate its position as one of the leading banks in the country.

For and on behalf of the Board of Directors,

M. D. Mallya

Chairman and Managing Director Mumbai 25th May, 2010